Real Estate Test General Real Estate Terms Flashcards
accelerated cost recovery system (ACRS)
method for claiming tax deductions for certain property purchased before 1987 in which it was possible to claim greater deductions in the early years of ownership, gradually reducing the amount deducted in each year of useful life
agency by ratification
an agency relationship created after the fact
allodial system
a system of land ownership in which land is held free and clear of any rent or service due to the government; commonly contrasted to the feudal system. land is held under the allodial system in the United States
blue-sky laws
common name for those state and federal laws that regulate the registration and sale of investment securities
boot
money or property given to make up any difference in value for equity between 2 properties in an exchange
confession of judgement clause
permits judgement to be entered against a debtor without the creditor’s having to institute legal proceedings
consumer
an individual who purchases goods or services that are not for resale
controlled business arrangement
an arrangement that offers consumers a package of services (e.g. a real estate firm, title insurance company, mortgage broker, and home inspection company)
cost
the total amount of money incurred for products or services
decedent
a person who has died
default
the nonperformance of a duty, whether arising under a contract or otherwise; failure to meet an obligation when due
determinable fee estate
a fee simple estate providing that the property returns to the original grantor or heirs when a specified condition occurs, indicating that the property is no longer being used for the purpose prescribed
easement by implication
an easement that occurs when a party’s actions reflect the intention to create an easement
duress
unlawful constraint or action exercised upon a person whereby the person is forced to perform an act against her will. a contract entered into under duress is voidable
estoppel
method of creating an agency relationship in which someone states incorrectly that another person is his agent and a third person relies on that representation
estoppel certificate
a document in which a borrower certifies the amount owed on a mortgage loan and the rate of interest
execution
the signing and delivery of an instrument. also, a legal order directing an official to enforce a judgement against the property of a debtor
federal funds rate
the rate recommended by the federal reserve for the member banks to charge each other on short-term loans. these rates form the basis on which the banks determine the percentage rate of interest they will charge their loan customers
feudal system
a system of ownership usually associated with precolonial England, in which the king or other sovereign is the source of all rights. the right to possess real property was granted by the sovereign to an individual as a life estate only. upon the death of the individual, title passed back to the sovereign, not to the decedent’s heirs
financing
the business of providing the funds that make real estate transactions possible
fiscal policy
the government’s policy in regard to taxation and spending programs. the balance between these two areas determines the amount of money the government will withdraw from or feed into the economy, which can counter economic peaks and slumps
forcible detainer
removal of a tenant from a rental property by the landlord if the tenant has breached one of the terms of the lease agreement, in compliance with statutory law
formal will/ witnessed will
a document having written instructions of property disbursements upon the death of the owner. the document must be signed and witnessed
good and indefeasible title
a title that cannot be annulled or rendered void
good faith estimate (GFE)
an estimate of all closing fees that was formerly provided to a borrower within 3 days of the loan application as was required by the Real Estate Settlement Procedures Act (RESPA)
graduated-payment mortgage (GPM)
a loan in which the monthly principal and interest payments increase by a certain percentage each year for a certain number of years and then level off for the remaining loan term
habitability
a property that is suitable for living in or on
home mortgage disclosure act
a federal law, implemented at its creation by regulation c of the federal reserve, that requires lenders to annually disclose the number of loan applications and loans made in certain areas to avoid the practice of redlining. on July 21,2011, the rule-making authority of the law was transferred to the consumer financial protection bureau
HUD-1
a form that was formerly used to itemize fees and services charged to a borrower and seller during a real estate transaction
implied warranty of habitability
a theory in landlord/tenant law in which the landlord residential property implies that the property is habitable and fit for its intended use
income property
property held for current income as well as a potential profit upon its sale
incorporeal right
a nonpossessory right in real estate (e.g. an easement or a right-of-way)
investment
money directed toward the purchase, improvement, and development of an asset in expectation of income or profits
life cycle costing
in property management, comparing one type of equipment with other based on both purchase cost and operating cost over its expected useful lifetime
mortgage banker
a mortgage loan company that originates, services, and sell loans to investors
mortgage broker
an agent of a lender who brings the lender and the borrower together. the broker receives a fee for this service
ostensible agency
a form of implied agency relationship created by the actions of the parties involved rather than by written agreement or document
owelty lien
a lien created by the order of the court to make an equitable partition of property when otherwise an agreeable partition is impossible or impractical. the owelty lien allows the party acquiring the interest of a co-owner to place a lien on the entire property
panic peddling
the illegal practice of soliciting people in a neighborhood to sell their homes because of fear or alarm; also referred to as blockbusting
participation mortgage
a mortgage loan wherein the lender has a partial equity interest in the property or receives a portion of the income from the property
patent
a grant or franchise of land from the U.S. government
percolation test
a test of the soil to determine whether it will absorb and drain water adequately to use a septic system for sewage disposal
price
the amount of money paid for an item or service
profit
making a gain from an investment after subtracting expenses
property reports
the mandatory federal and state documents compiled by subdividers and developers to provide potential purchasers with facts about a property prior to a purchase
public ownership
government-owned property
pyramiding
the process of acquiring additional property by the refinancing property already owned and investing the loan proceeds in additional properties
ratification
method of creating an agency relationship in which the principal accepts the conduct of someone who acted without prior authorization as the principal’s agent
real estate mortgage investment conduit (REMIC)
a tax entity that issues multiple classes of investor interests (securities) backed by a pool of mortgages
real estate recovery fund
a fund established in some states from real estate license revenues to cover claims of aggrieved parties who have suffered monetary damage through the actions of a real estate professional
rent schedule
a statement of proposed rental rates, determined by the owner or the property manager or both, based on a building’s estimated expenses, market supply and demand, and the owner’s long-range goals for the property
representation
the role of a real estate professional acting on behalf of a client in a real estate transaction
reproduction cost
the construction cost at current prices of an exact duplicate of the subject property
resolution trust corporation (RTC)
created din 1989 by the financial institutions reform, recovery, and enforcement act (FIRREA) to liquidate the assets of failed savings and loan associations. In 1995, the responsibilities of RTC were transferred to the savings association insurance fund of the federal deposit insurance corporation
sales price
release or discharge when a note has been fully paid, returning to the borrower all interest in the real estate originally conveyed to the lender. entering this release in the public record shows that the debt has been removed from the property
seller’s broker
the real estate broker who represents only the seller in transactions
seller’s disclosure notice
documents completed by the seller of a home listing any known issues of the property, including home improvements made
settlement statement (HUD-1)
the special HUD form, recently replaced by a new form created by the consumer financial protection bureau, that itemized all charges to be paid by a borrower and a seller in connection with the settlement of a real estate transaction. also called the HUD-1 form
shared appreciation mortgage (SAM)
a mortgage loan in which the lender, in exchange for a loan with a favorable interest rate, participates in the profits (if any) the borrower receives when the property is eventually sold
subdivision and development ordinances
municipal ordinances that establish requirements for subdivisions and development
spot zoning
granting a particular parcel a classification that differs from the classification of other land in the immediate area; may be considered illegal
tenant
one who holds or possesses land or tenements by any kind of right or title
uniform commercial code (UCC)
a codification of commercial law, adopted in most states, that attempts to make uniform all laws relating to commercial transaction, including chattel mortgages and bulk transfers. security interests in chattels are created by an instrument known as a security agreement. to give notice of the security interest, a financing statement must be recorded. article 6 of the code regulates bulk transfers- the sale of a business as a whole, including al fixtures, chattels, and merchandise
value
the power of a good or service to command other goods in exchange for the present worth of future rights to its income or amenities
warranty clause
a part of the deed in which the seller warrants the title conveyed to the buyer
waste
an improper use or an abuse of a property by a possessor who holds less than fee ownership, such as a tenant, life tenant, or vendee. such waste ordinary impairs the value of the land or the interest of the person holding the title or the reversionary rights
