Terms C

Question 1

Expenditures creating future value. Incurred when a property owner spends money to upgrade a building in an effort to add value and/or extend the useful life of the building.

Answer 1

Capital Expense (CAPEX)

Question 2

A profit that results from a the sale of a property where the amount realized from the sale exceed the purchase price.

Answer 2

Capital Gain

Question 3

The difference between a lower selling price and a higher purchase price, resulting in a financial loss to the seller.

Answer 3

Capital Loss

Question 4

Money set aside by a property owner for long-term capital expenditures to a property.

Answer 4

Capital Reserve Budget

Question 5

The percentage which is the sum of the discount rate, the effective tax rate and the recapture rate representing the relationship between net operating income and present value.
Formula: Value = Income / Rate

Answer 5

Capitalization Rate

Question 6

The net result when income from an investment property is subtracted from the expenses. The result is used to determine the rate of return on an investor’s money.

Answer 6

Cash Flow

Question 7

A percentage return on money invested in a property by an investor.
Formula: Cash Flow / Down Payment

Answer 7

Cash on Cash Return

Question 8

A Latin terms that means “ let him beware.” Caveats have many applications in law and finance, pertaining to all parties involved being aware of all of the facts of a transaction. Caveat is usually interpreted as a sort of warning or cautionary expression.

Answer 8

Caveat

Question 9

Let the buyer beware. The buyer must examine the goods or property and buy at the buyer’s own risk.

Answer 9

Caveat Emptor

Question 10

Upon the establishment of a cease and desist zone by the Secretary, a list of homeowners who have filed owner’s statements expressing their wish not to be solicited by real estate brokers or salespersons. Soliciting of listed homeowners by licensees is prohibited. Violators of such prohibition are subject to licensure suspensions or revocation.

Answer 10

Cease and Desist List

Question 11

Small relatively permanent statistical subdivisions of a country or equivalent entity that are updated by local participants prior to each decennial census. The primary purpose of the census tracts is to provide a stable set of geographic units for the presentation of statistical data.

Answer 11

Census Tract

Question 12

A document issued by a governmental authority that a building is ready and fit for occupancy.

Answer 12

Certificate of Occupancy (CO)

Question 13

The sequence of historical transfers of title to a property. It runs from the present owner back to the original owner of the property.

Answer 13

Chain of Title

Question 14

The process by which a salesperson’s license changes sponsorship.

Answer 14

Change of Association

Question 15

Personal property, such as household goods.

Answer 15

Chattel

Question 16

A colorless, odorless, viscous liquid used as an insecticide. It may be toxic to humans and wildlife as a result of its effect on the nervous system.

Answer 16

Chlordane

Question 17

A fluid, containing hydrocarbons, that absorbs heat from a reservoir at low temperatures and rejects heat at higher temperatures. When emitted into the atmosphere, CFCs cause depletion of the stratospheric ozone layer.

Answer 17

Chloro-flouro Carbons (CFCs)

Question 18

The safety valves for electrical systems. It interrupts an electric circuit when an unusual condition arises such as lightning and malfunctioning appliances. Unlike a fuse, it can be reset.

Answer 18

Circuit Breaker

Question 19

A federal law that prohibits all discrimination on the basis of race.

Answer 19

Civil Rights Act of 1866

Question 20

Federal law designed to control air pollution on a national level.

Answer 20

Clean Air Act (CAA)

Question 21

The one by whom a broker is employed.

Answer 21

Client

Question 22

A document commonly used in real estate transactions, detailing the fees, commissions, insurance, etc. that must be transacted for a successful transfer of ownership to take place.

Answer 22

Closing Statement

Question 23

To mingle or mix, for example, a client’s funds in the broker’s personal or general account.

Answer 23

Commingling

Question 24

A sum due a real estate broker for services in that capacity.

Answer 24

Commission

Question 25

Spaces in a commercial building shared by the tenants or residents of the building. Common areas include lobbies, corridors, stairs, elevators,etc.

Answer 25

Common Areas

Question 26

Also known as Common Areas; refers to the spaces in a building shared by residents of the building. Common areas include lobbies, corridors, stairs, elevators,etc.

Answer 26

Common Elements

Question 27

A property evaluation that determines property value by comparing similar properties sold within the last year.

Answer 27

Comparative Market Analysis

Question 28

Enacted in 1980, a federal law designed to clean up sites contaminated with hazardous substances.

Answer 28

Comprehensive Environmental Response, Compensation and Liability Act (CERCLA)

Question 29

Taking private property for public use, with fair compensation to the owner; exercising the right of eminent domain.

Answer 29

Condemnation

Question 30

A form of fee simple ownership of part of structure having multiple units. Owners have title to their own units plus a share of common elements.

Answer 30

Condominium

Question 31

A residential establishment that includes both a condominium and cooperative ownership structures. Typically the condop refers to the residential portion of a building which is treated as a single condominium unit owned through a cooperative-ownership structure.

Answer 31

Condop

Question 32

An agent is obligated to safeguard his/her principal’s lawful confidences and secrets. Therefore, a real estate broker must keep confidential any information that may weaken a principal’s bargaining position. The duty of confidentiality precludes a broker who represents a seller from disclosing to a buyer that the seller can, or must, sell a property below the listed price. Conversely, a broker who represents a buyer is prohibited from disclosing to a seller that the buyer can, or will, pay more than what has been offered for a property.
The duty of confidentiality does not include an obligation by a broker who represents a seller to withhold know material facts about the condition of the seller’s property from the buyer, or to misrepresent the property’s condition. To do so constitutes misrepresentation and may impose liability on both the broker and/or the seller.

Answer 32

Confidentiality

Question 33

Created by the local legislature to advice in the development, management, and protection of the community’s natural resources and to prepare an inventory and map of open spaces.

Answer 33

Conservation Advisory Council

Question 34

Anything given to induce another to enter into a contract such as money or personal services.

Answer 34

Consideration

Question 35

A loan secured by real estate which is for the purpose of funding the construction of improvements or building(s) upon the property.

Answer 35

Construction Mortgage

Question 36

Any disturbance of the tenant’s possession of the leased premises by the landlord whereby the premises and rendered unfit or unsuitable for the purpose for which they were leased.

Answer 36

Constructive Eviction

Question 37

Information or knowledge of a fact imputed by law to a person because the person could have discovered the fact by proper diligence and inquiry.

Answer 37

Constructive Notice

Question 38

A provision in a contract that requires the occurrence of a specific event before the contract can be completed.

Answer 38

Contingency

Question 39

Post license education required by salespersons and brokers. New York State demands 22.5 hours of continuing education.

Answer 39

Continuing Education

Question 40

The transfer of the title of land from one to another. The means or medium by which title of real estate is transferred.

Answer 40

Conveyance

Question 41

A real estate agent who sells a property. The selling agent may be (1) the subagent or listing agent of the seller; (2) a buyer’s agent; or (3) a dual agent. Also called a selling agent or participating agent.

Answer 41

Cooperating Agent

Question 42

A dwelling unit owned by a corporation in which an owner owns stock commensurate with the value of his or her apartment compared to the value of the building as a whole. The stockholder has a proprietary lease to the apartment.

Answer 42

Cooperative

Question 43

A maintenance task performed to identify, isolate, and rectify a problem with a property so that the property can be restored to an acceptable condition.

Answer 43

Corrective Maintenance

Question 44

The total dollar expenditure for labor, materials, legal services, architectural design, financing, taxes during construction, interest, contractor’s overhead and profit, and entrepreneurial overhead and profit (may or may not equal value).

Answer 44

Cost

Question 45

A method of estimating the value of real property be calculating a current construction cost, subtracting accrued depreciation and adding a land value obtained from the market. This method works best when improvements are relatively new and estimates of depreciation are thus more likely to be accurate.

Answer 45

Cost approach

Question 46

A type of offer made in response to another offer, which was seen as unacceptable. A counteroffer revises the initial offer, making it more appealing for the person making the new offer.

Answer 46

Counteroffer

Question 47

A local unit with the responsibility for protecting, assuring, and improving the health of its citizens.

Answer 47

County Health Department

Question 48

Agreements written into deeds and other instruments promising performance or nonperformance of certain acts, or stipulating certain uses or non-uses of the property.

Answer 48

Covenant

Question 49

Limitations and rules on a group of homes by a builder, developer, neighborhood association and/or homeowner associations; when living in a building, a buyer gives up certain freedoms to be part of a shared community.

Answer 49

Covenants, Conditions and Restrictions (CCRs)

Question 50

Shallow space between the underside of the first floor of a house and the ground.

Answer 50

Crawl Space

Question 51

An agreement that a person will borrow money and repay it to the lender over time.

Answer 51

Credit

Question 52

A blind alley; a street with only one outlet.

Answer 52

Cul-de-sac

Question 53

A husband’s interest upon the death of his wife in the real property of an estate that she either solely owned or inherited provided they bore a child capable of inheriting the estate.

Answer 53

Curtesy

Question 54

The party the agent brings to the principal as seller or buyer of the property.

Answer 54

Customer