Vocab Words Flashcards
Abandonment
The owner of a property gives up their rights and interest in the property, usually with the intent to terminate their ownership.
what it includes:
To be legally abandoned, the owner must clearly show that they intentionally and knowingly gave up their rights to the property.
Abrogation
Tenants cannot sign away their rights in advance of signing the lease.
Abstract of title
A chronological record of a property’s legal history, including all the legal documents and transactions associated with it.
What it includes:
A property’s abstract of title includes every legal action, deed, mortgage, tax sale, title transfer, and encumbrance. It also lists the property’s previous owners and any liens against it.
When it’s used:
An abstract of title is typically used to determine if a property has any claims against it before making an offer. It can also be used to ensure that everything is in order with the property before closing on it.
Who creates it:
Lawyers usually created abstracts of title when a property was being sold to prove the seller’s title.
Abutting
two pieces of land that touch or share a border. They are right next to each other. This is important for property boundaries and zoning rules.
Accelerated depreciation
A way to write off the value of income property faster for tax purposes.
This method reduces taxes sooner compared to the straight-line method, which spreads the value loss evenly over time.
If the property is sold for a profit, the extra depreciation might be taxed as regular income.
This is important for managing taxes on investment properties.
Acceleration clause
A part of a mortgage or loan agreement. If the borrower defaults (fails to pay) the entire loan amount, the lender can demand the full amount of the loan, including interest, to be paid immediately. This protects lenders if payments are missed.
Accretion
The natural addition of land when sand or soil is deposited by a river, lake, or sea. This process increases the size of the property over time. It’s important for properties near water.
Accrued depreciation
The decrease in a property’s value over time. It’s the difference between what it would cost to replace the property today and its current market value. This shows how much the property has lost in value since it was new.
Acknowledgment
A statement made by a person to a notary public or other authorized official. The person declares that they signed a document willingly and voluntarily. This is important for verifying the authenticity of documents like deeds or contracts.
Act
The Real Estate License Act of 2000. It is the law that governs real estate practices in Illinois, setting rules for licensing, conduct, and operations for real estate professionals.
Actual eviction
The legal process where a landlord (lessor) removes a tenant from a rental property because the tenant has failed to meet the terms of the lease. This happens after a court order and involves physically removing the tenant from the property.
Actual notice
A person knows about something because they were directly told or have clear information about it. As opposed to just hearing about it indirectly.
Adjustable-rate mortgage
A loan where the interest rate changes after a set period. The rate can go up or down, but there are limits (caps) on how much it can change at each adjustment. This type of mortgage can result in lower initial payments, but payments may increase over time.
Administrator
A person chosen by the county court to manage and settle the estate of someone who died without a will. They manage the deceased’s property, pay debts, and distribute assets according to state law.
Ad valorem tax
A tax based on the value of property. It is commonly used to refer to real estate taxes, also known as general taxes, where the amount of tax is determined by how much the property is worth.
Adverse possession
Allows someone to gain ownership of land if they openly occupy it for a certain period (usually several years) without the real owner’s permission. The occupation must be continuous, visible, and hostile to the owner’s rights. If these conditions are met, the occupant can claim legal ownership.
Affidavit
A written statement that someone signs and swears is true in front of an official, like a notary public. It is used to provide evidence or confirm facts in legal matters.
Agency
A relationship where a broker or licensee represents a consumer in a property transaction. The consumer gives consent, either directly or indirectly, to the broker or licensee to act on their behalf. This can be in writing or understood through actions.
Agent
A person who represents or acts on behalf of another person, known as the principal. The agent’s authority can be given directly or implied through actions. For example, when a property owner signs a listing or management contract, they make a real estate broker their agent to handle the property.
Agreement of sale
A written contract where the buyer agrees to purchase a property, and the seller agrees to sell it, based on the terms and conditions outlined in the agreement.
Air lot
A specific area of space above a piece of land. Just like land on the ground, air lots can be bought, sold, or transferred. Air rights are also known as Transferable Development Rights (TDRs).
Air rights
The right to use the space above a property. This allows the landowner to use or sell the space above, often for building or other uses, while the land below can be used for something else..
Alienation
the act of transferring property to someone else. This can be voluntary, like selling or gifting the property, or involuntary, like through government action (eminent domain) or adverse possession.
Alienation clause
A part of a mortgage or deed of trust that says the full loan balance must be paid immediately if the property is sold. It stops the borrower from transferring the debt to someone else without the lender’s approval.
Alluvion
New soil deposits that build up over time, usually from water like rivers or lakes. This happens through the process of accretion, where sand or soil is added to the land.
Amenities
Features that make a property more appealing or valuable. These can be physical things like a swimming pool or parking, or benefits like a good location or nearby schools.
Americans with Disabilities Act
A federal law passed in 1992. It aims to prevent discrimination against people with disabilities by ensuring they have equal access to jobs, public places, transportation, and government services.
Amortization
The process of paying off a loan through regular payments over time. Each payment reduces the loan balance until it’s fully paid off.
Amortized loan
A loan where you make regular payments, usually monthly, that cover both the loan amount (principal) and the interest. Over time, the loan is paid off completely
Antitrust laws
designed to protect free competition by making illegal practices that reduce competition. Common violations include price-fixing (where brokers agree on set commission rates) or dividing markets (where brokers agree to work in separate areas or with certain clients). These laws help keep the market fair for everyone.
Appraisal
an estimate of a property’s value. It’s the process used to determine how much a property is worth, It’s done by a professional who looks at factors like the property’s condition and location to determine how much it is worth. The result is usually written in a report.
Appraised value
The estimated current worth of a property, determined by a professional appraiser.
Appreciation
The increase in a property’s value over time due to factors like a strong economy, high demand, or improvements to the property. which can be temporary or permanent.
opposite of depreciation, where value decreases.
Appurtenant
Something that is attached to and part of a property, like a garage or shared condo spaces. These features are included with the property when it is sold.
Arbitration
A way to resolve disputes between two parties using an impartial third party. Both sides agree that the third party’s decision will be final and binding.
Assemblage
When two or more pieces of land are combined into one larger parcel. This is often done to increase the property’s value or potential use.
Assessment
A tax or fee that is charged on a property, usually based on its value. Local authorities decide how much to charge using fixed rates.
Assignment
The written transfer of rights or interest in a legal document, like a bond, mortgage, or lease, from one party to another.
Assumption of mortgage
When a buyer takes over the seller’s mortgage and agrees to pay the remaining loan. If the property is sold for less than the mortgage amount, the buyer is responsible for the difference. The lender must approve this transfer of responsibility before the seller is no longer liable for the loan.
Attachment
When a debtor’s property is taken by the court and held as security while a creditor’s lawsuit is ongoing. This ensures the property can be used to pay the debt if the creditor wins the case.
Attorney-in-fact
A person who has been given the power of attorney to act on behalf of someone else in legal matters, like signing documents or making decisions.
Attorney’s opinion of title
A written statement from a lawyer. It confirms whether the seller has the legal right to sell the property and if the title is clear of any issues.
Automatic extension
A clause in a listing agreement that automatically renews the contract for a certain time after it ends. Some places do not allow or encourage using this clause
Avulsion
The sudden loss of land caused by natural forces like an earthquake, flood, or landslide. This happens quickly and can change the shape of the property.
Balloon payment
A large final payment on a mortgage loan. It is bigger than regular payments because the loan was not fully paid off during the term and the remaining balance is due at the end.
Bargain and sale deed
Transfers property from the seller to the buyer but doesn’t guarantee there are no legal issues with the property. It shows the seller has the right to sell the property. The seller can add extra guarantees if they choose.
Base line
An imaginary line running east and west, crossing a principal meridian. It is used by surveyors to help locate and describe land using the rectangular survey system.
Benchmark
A fixed reference point used by surveyors to measure changes in elevation or height. It helps ensure accurate land measurements.
Beneficiary
A person who benefits from a trust, receiving money or property. It can also refer to a lender who gives a loan for real estate and gets a note and deed of trust in return.
Bequest
A part of a will that specifies how personal property should be given to someone after the person’s death.
Bilateral contract
An agreement where both parties promise to do something. Each party’s promise is exchanged for the other party’s promise to perform their part.
Bill of sale A
A written document that transfers ownership of personal property from one person to another.
Binder
A preliminary agreement that often includes an earnest money deposit. It shows the buyer’s good faith and intention to complete the purchase of a property.
Blanket mortgage
Covers more than one piece of property. It allows for each property to be partially released from the mortgage when a certain amount of the loan is paid off.
Blind advertisement
An ad used by a licensee that doesn’t include the full business name of the sponsoring broker. For online ads, it must include a link to a page with all required disclosures. If the broker is part of a franchise, the ad must also show the franchise name along with the individual firm’s name.
Blockbusting
The illegal practice of convincing homeowners to sell their properties by making false claims about minority groups moving into the neighborhood. This is done to create fear and profit from the sale.
Blue-sky laws
State rules that make sure investment securities are registered and sold legally. These laws protect investors from scams or fraud.
Board
The Real Estate Administration and Disciplinary Board. It oversees real estate licenses and handles disciplinary actions to make sure rules are followed. It was created under Section 25-10 of the Real Estate License Act (RELA).
Branch office
A secondary location where real estate business is done, separate from the main office. It must be managed by a licensed real estate broker who works for the broker in charge of the main office
Breach of contract
When one party does not fulfill their promises or obligations in a contract without a valid legal reason.
Broker
a person or business that, for payment or the expectation of payment, helps others with real estate transactions. This includes:
1.Selling, buying, renting, or leasing real estate.
2.Listing or advertising properties for sale or rent.
3.Negotiating real estate deals.
4.Collecting rent for properties.
5.Assisting with leads or opening properties for marketing.
6.Providing broker price opinions or market analyses.
Key Point: Brokers must operate under state laws and can handle real estate activities for others
Brokerage
The business of helping people buy, sell, or lease real estate for a commission or fee. It involves acting as an intermediary between buyers and sellers, landlords and tenants, or other parties in a real estate transaction.
Brokerage agreement
A written or oral contract between a sponsoring broker and a client (consumer). It outlines the real estate services the broker will provide in exchange for compensation, either directly or indirectly.
Broker price opinion
An estimate of a property’s value, created by a real estate broker. It looks at the property’s condition, the local market, and recent sales of similar properties.
Purpose: Helps determine a property’s likely selling price.
Not an appraisal: It’s less detailed than a formal appraisal and doesn’t require an appraiser’s license.
Used for: Making decisions about selling, buying, or refinancing a property.
Note: A broker is paid for the sale or rental of property, but not just for giving a BPO unless it’s part of a real estate transaction.
Budget loan or budget mortgage
A type of mortgage where your monthly payment covers not just the loan itself (principal and interest), but also a portion of additional costs like:
Principal (the amount borrowed)
Interest (the cost of borrowing)
Taxes, insurance, and other expenses (like assessments)
This helps you pay everything in one monthly payment, known as a PITI payment (Principal, Interest, Taxes, and Insurance). It’s useful because it ensures important expenses like taxes and insurance are paid on time.
Buffer zone
An area between two different types of land uses. It helps separate them to reduce conflicts.
For example, a park might be used as a buffer zone between a residential area and a commercial district to keep the two areas from directly affecting each other.
Building code
A set of rules that outlines the minimum standards for constructing buildings. These rules ensure the safety, health, and well-being of people by regulating things like building materials, electrical systems, plumbing, and fire safety.
Building code
A set of rules that outlines the minimum standards for constructing buildings. These rules ensure the safety, health, and well-being of people by regulating things like building materials, electrical systems, plumbing, and fire safety.
Building restrictions
Rules that limit what can be built on a property. These rules can come from zoning laws, deed agreements, or leases, and can control things like the size, type, and use of buildings. They are meant to keep buildings safe, organized, and in line with the area’s overall plan.
Bulk zoning
Refers to zoning regulations that control how much space can be used for buildings on a piece of land. It helps prevent overcrowding by limiting the size, height, and placement of buildings, ensuring there is enough room between structures and that the area remains balanced and livable.
Bundle of legal rights
The idea that owning land means having a collection of rights related to the land. These rights include:
Possession – The right to own and use the property.
Control – The right to make decisions about the property within the law.
Enjoyment – The right to use the property in a way that brings enjoyment, without interference from others.
Instead of just owning the physical land, these rights give the landowner full control over how the property is used.
Buy-down mortgage
A loan where the interest rate is lowered by paying some interest upfront. There are two types:
1.Temporary Buy-Down – The lower interest rate
only applies for the first few years of the loan.
2.Permanent Buy-Down – The lower interest rate
applies for the entire life of the loan.
This helps the borrower save money on interest, especially in the early years.
Capacity of parties
A person’s legal ability to enter into a valid contract. Most people have full capacity to make contracts and are considered “competent parties.” However, certain individuals, such as minors or those with mental impairments, may not have the legal ability to contract.
Capital gains
The tax on the profit made from selling an asset, such as real estate or stocks, for more than what it was originally purchased for. The tax applies to the profit (gain) earned from the sale.
Capital improvement
Any upgrade or addition to a property that increases its value or extends its useful life. Examples include adding a new roof, upgrading the kitchen, or installing a new heating system. These improvements can increase the property’s value and may be tax-deductible when you sell the property.
Capital investment
The money spent to buy or improve a property or business. It includes things like buying land, building, or making upgrades to make the property more valuable. This investment helps generate future profits.
Capitalization
The process of calculating the present value of future income from a property. In real estate, it’s used to estimate a property’s value based on how much income it can generate.
formula is:
Income ÷ Rate = Value
It helps determine how much a property is worth today based on expected future profits.
Capitalization rate
The capitalization rate (or cap rate) is the rate of return a property is expected to generate on the owner’s investment. It helps estimate the profitability of an investment property.
Formula:
Cap Rate = Net Operating Income ÷ Property Value
A higher cap rate means a higher potential return, and a lower cap rate suggests a lower return.
Cash flow
The net income generated from an investment after subtracting all operating and fixed expenses from the gross income.
Positive Cash Flow: When income is greater than
expenses, meaning the investment is profitable.
Negative Cash Flow: When expenses exceed
income, meaning the investment is losing
money.
It’s a key factor in evaluating the financial success of an investment property.
Casualty insurance
A type of insurance that protects property owners from losses or injuries caused by events like theft, vandalism, or accidents.
1.It helps cover the financial impact of
unexpected damages or losses to property.
2.This insurance is important for safeguarding
against various risks not related to natural
disasters.
Caveat emptor
Caveat emptor is a Latin phrase that means
“Let the buyer beware.”
1.It means that the buyer is responsible for
checking the quality and condition of a
property before purchasing it.
2.Buyers must be cautious and do their own
research as they are responsible for any risks
involved in the transaction.
Caveat venditor
Caveat venditor is a Latin phrase that means
“Let the seller beware.”
1.It means the seller must be careful and ensure
that the product or property they are selling is
as described and free of defects.
2.Sellers are responsible for making accurate
representations about what they are offering to
avoid legal issues.
Certificate of eligibility
A document given to veterans by the government.
1.It shows if the veteran is eligible for a VA loan.
2.This certificate is required for veterans to apply
for VA loans, which are loans backed by the
government and offer favorable terms such as
no down payment or lower interest rates.
Certificate of occupancy
A document given after a building is inspected.
- It confirms the building meets building codes
and is safe to live in or use.
2.This certificate is required before anyone can
move in or use the property.
Certificate of reasonable value
A Certificate of Reasonable Value (CRV) is issued by the Veterans Administration (VA).
1.It states the value of a property as determined
by a VA-approved appraiser.
2.This certificate is used when getting a VA
mortgage to ensure the property is worth the
loan amount.
Certificate of reduction
a document issued by the lender.
1.It verifies the current loan balance.
2.It is used to show how much the borrower still
owes on the loan.
Certificate of sale
A Certificate of Sale is given to a purchaser at a tax foreclosure sale.
1.It does not convey title to the property.
2.It certifies that the holder received title after
the redemption period passed.
3.The purchaser paid the property taxes during
that period.
Certificate of title
An opinion about the status of a property’s title, based on a review of public records.
1.It confirms whether the title is clear or if there
are any legal issues.
2.It is based on an examination of public records.
Cession deed
It is used when land is donated to the government.
1.It transfers ownership of the land to a
government entity.
2.It is commonly used for public purposes like
parks or government buildings.
Chain of title
The sequence of property transfers that trace the current owner’s ownership back to the original source.
1.It shows all the past conveyances and legal
documents.
2.Helps prove the validity of the current property
title.
Chattel
Personal property that is movable, such as furniture, electronics, or clothing.
1.Unlike real property (land and buildings),
chattel is not attached to land.
2.It can be bought, sold, or transferred.
City Planning Commission
A local government group that helps guide and manage the growth and development of land within a city.
1.They make decisions on land use, zoning, and
building projects.
2.Their goal is to ensure organized, safe, and
sustainable development within the
municipality.
Client
A person who is being represented by a licensed real estate professional (like a broker or agent). The client receives services and advice from the licensee, who works on their behalf.
Cloud on title
A claim or issue that may affect the ownership of a property, making the title unclear or questionable. It could be a legal dispute, unpaid liens, or other encumbrances that need to be resolved for clear ownership.
Codicil
A document that makes changes or additions to an existing will.
1.It can update, explain, or clarify parts of the
will, but does not cancel the entire will.
2.It must be signed and witnessed just like the
original will.
Coinsurance clause
Collateral
Commercial property
Commingled property
Commingling
Commission
Common elements
Common law
Community property
Community Reinvestment Act
Comparables
Comparative market analysis
Compensation
Competent parties
Condemnation
Conditional-use permit
Condominium
confidential information
conformity
consideration
constructive eviction
constructive notice
consumer
contingency
contract
contract for deed
contract for exchange of real estate
contract rent Rental
conventional insured mortgage
conventional life estate
conventional mortgage
conventional uninsured mortgage
conversion
conveyance
cooperative
corporation
correction lines
cost approach
counseling
counteroffer
covenant
covenant of quiet enjoyment
cul-de-sac
curable depreciation
curtesy
Customer
cycle
datum
dba
debenture
debt
debt service
decreasing returns
deed
deed in trust
deed of re-conveyance
deed of trust
deed restrictions
default
defeasance
defeasible fee estate
deficiency judgment
delinquent taxes
delivery
delivery in escrow
demand
density zoning
department
depreciation
descent
designated agency
designated agent
designated managing broker
determinable fee estate
devise
diminishing returns
dual agency
economic obsolescence
emblements
eminent domain
employee
employee status
employment contract
encroachment
Encumbrance Any
Equal Credit Opportunity Act
equalization
equitable lien
equitable right of redemption
equitable title
equity
erosion
errors and omissions insurance
escalation clause
escheat
escrow
escrow moneys
estate for years
estate in land
estate in severalty
estoppel certificate
ethical
eviction
evidence of title
exchange
exclusive-agency buyer agency agreement
exclusive-agency listing
exclusive brokerage agreement
exclusive buyer agency agreement
exclusive-right-to-sell listing
exculpatory clause
executed contract
execution
executor
executory contract
executrix
expenses
expressed contract
familial status
Federal Fair Housing Act
Federal Home Loan Bank System
Federal Home Loan Mortgage Corporation
Federal Housing Administration (FHA)
federal income tax
Federal National Mortgage Association (FNMA)
Federal Reserve banks
fee simple estate
fee simple absolute
fee simple defeasible with a special limitation
fee simple subject to a condition subsequent
FHA appraisal
FHA loan
fiduciary relationship
financing statement
first mortgage
fixture
floor area ratio (FAR)
forcible entry and detainer
foreclosure
formal will
fractional sections
fraud
freehold estate
front feet
functional obsolescence
future interest
gap
general agent
general contractor
general lien
general partnership
general warranty deed
GI-guaranteed mortgage
government lot
Government National Mortgage Association (GNMA) Ginnie Mae
graduated lease
graduated payment mortgage
grant
grant deed
grantee
granting clause
grantor
gross lease
gross rent multiplier (GRM)
ground lease
growing-equity mortgage
guaranteed sale plan
guardian
habendum clause
heir
highest and best use
holdover tenancy
holographic will
homeowners’ insurance policy
homeowners warranty program
homestead
HUD
hypothecation
implied contract
implied grant
improvement
inactive
income approach
increasing returns
incurable depreciation
indefeasible fee
indemnification
independent contractor
index lease
industrial property
installment contract
installment sale
insurable title
insurance
intangible property
interest
interim financing
inter vivos trust
intestate
invalid
invalidate
investment
involuntary alienation
involuntary lien
IRS tax lien
joint tenancy
joint venture
judgment
judgment clause
judicial sale
laches
land
land contract
landlocked
latent defect
law of agency
lawyer’s opinion of title
leads
lease
leased fee interest
leasehold estate
leasehold interest
lease option
lease purchase
legal description
legality of object
legal life estate
legatee
lessee
lessor
leverage
levy
license
licensee
licensed activities
lien
Lienee
lienor
lien-theory state
life estate
life tenant
liquidated damages
liquidity
lis pendens
listing agreement
listing broker
listing presentation
littoral rights
loan-to-value
lock-in clause
lot-and-block description
managing broker
management agreement
marketable title
market-date approach
market price
market rent
market value
master deed
master plan
mechanic’s lien
medium of advertising
metes-and-bounds description
mill
millage rate
ministerial acts
misrepresentation
money judgment
money market
month-to-month tenancy
monument A
mortgage
mortgage bankers
mortgage broker
mortgage fraud
mortgagee
mortgage lien
mortgagor
multiple listing
municipal ordinances
mutual rescission
negative amortization
negligence
net income
net lease
net listing
nonconforming loan
nonconforming use
non-disturbance clause
nonhomogeneity
nonjudicial foreclosure
nonrecourse loan
notarize
notary public
note
notice of abandonment
novation
obligee/promisee
obligor/promissor
obsolescence
offer and acceptance
office
officer’s deed
one hundred percent-commission plan
open buyer agency agreement
open-end mortgage
open listing
open mortgage
option
optionee
optionor
ownership
package mortgage
participation financing
partnership
party wall
patent defect
payee
payee
percentage lease
periodic estate
person
personal property
physical deterioration
plat
plat book
plottage
point
point of beginning
police power
power of attorney
premises
prepayment penalty
prepayment privilege clause
prescription
prescriptive title
price fixing
primary mortgage market
principal
principal meridian
principle of conformity
principle of substitution
priority
private mortgage insurance (PMI)
probate
procuring cause
progression
property management
property tax
proprietary lease
proration
prospectus
public utility easement
puffing
pur autre vie
purchase-money mortgage
pyramiding
qualification
quiet enjoyment
quiet title lawsuit
quitclaim deed
range
ready, willing, and able buyer
real estate
real estate broker
real estate investment trust (REIT)
Real Estate Settlement Procedures Act (RESPA)
reality of consent
real property
REALTOR
receiver
reconciliation
recording
recovery fund
rectangular survey system
redemption period
redlining
regression
regular employee
release
reliction
relocation service
remainder
remainder interest
renewal period
rent
rent control
rent schedule
replacement cost
reproduction cost
rescission
reservation in a deed
residential leasing agent
restriction
reverse mortgage
reversion
reversionary right
rezoning
right of first refusal
right of survivorship
riparian rights
sale and leaseback
sales comparison approach
sales contract
salesperson
sandwich lease
satisfaction
secondary mortgage market
Secretary
section
security deposit
selling broker
separate property
servient tenement
setback
severalty
severance
shared participation mortgage
short sale
situs
sole ownership
special agent
special assessment A
special warranty deed
specific lien
specific performance suit
sponsorship
sponsoring broker
squatter’s rights
statute of frauds
statute of limitation
statutory lien
statutory right of redemption
steering
stigmatized property A
straight-line method
strict foreclosure
subagent
subcontractor
subdivision
subletting
subordination
subrogation
substitution
suit for partition
suit for possession
suit for specific performance
suit to quiet title
summation appraisal
supply
surety bond
survey
syndicate
tacking
tangible property
taxation
tax deed
taxes
tax lien
tax rate
tax shelters
team
tenancy at sufferance
tenancy at will
tenancy by the entirety
tenancy in common
tenant
tenement
termination (lease)
termination (listing)
term mortgage
testamentary trust
testate
testator
testatrix
time is of the essence
time-share estate
time-share use
title
title insurance
title-theory states
Torrens system
township
township lines
trade fixtures
transaction broker
transfer taxes
trust
trust deed
trustee
trustee’s deed
trustor
Truth-in-Lending Act
unconventional mortgage
unenforceable contract
undivided interest
Uniform Commercial Code (UCC)
unilateral contract
unity of ownership
universal agent
useful life
usury
valid contract
valid deed
valid lease
VA loan
variance
vendee
vendor
voidable contract
void contract
voluntary lien
voluntary transfer
waiver
warranty deed
warranty of habitability
waste
will
wraparound mortgage
writ of attachment
writ of execution
year-to-year tenancy
zoning ordinance
