Real Estate Vocab

Question 1

Functional Obsolesence

Answer 1

Loss in value resulting from functional problems cause by age or poor design (ex. a 4 bedroom property with a one car garage)

Question 2

Dual Agent

Answer 2

When a real estate licensee works with both the buyer and the seller

Question 3

Implied Contract

Answer 3

An agreement created by actions of the parties involved, but there is no written record nor any actual verbal agreement. An implied contract is a legal substitute for a contract that is assumed to have been drawn.

Question 4

Balloon Loan

Answer 4

Also known as a partially amortized loan. Has a fixed rate of interest over a period of time. At the end of a balloon period, the borrower must refinance or pay off the remaining balance. In other words at the end of the period the rest of the loan is due

Question 5

Capitalization Rate

Answer 5

The rate of return a property will produce on the owners investment