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Real Estate Exam > Vocabulary > Flashcards

Vocabulary Flashcards

1
Q

A valuation principle that says having nicer, more expensive homes nearby can increase the value of a property

A

Principle of Progression

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2
Q

Federally Chartered corporation which creates a secondary market for existing mortgages. It does not loan money directly, but rather buys DVA, FHA, and conventional loans

A

FNMA or “Fannie Mae”

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3
Q

Loss in value resulting from functional problems caused by age or poor design, such as a property with a one-car garage in a 4 bedroom house

A

Functional Obsolecence

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4
Q

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

A

dual agent

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5
Q

Situation in which a buyer takes title to property but the existing loan stays in the name of the seller, so the seller is primarily liable for the loan.

A

Subject to

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6
Q

Fact that a reasonable person would think was relevant to a decision being made, such as un-repaired water damage in the attic of a home for sle. If knowing something could casue a person to change their mind about a transaction, it is legally counted as:

A

Material Fact

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7
Q

A deed in which the grantor warrants only against defects that occurred during their ownership, not against any defects in clear title that existed before their ownership.

A

Special Warranty Deed

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8
Q

Legal rights of the real estate title holder. Includes the right of possession, the right of control, the right of exclusion, the right of enjoyment and the right of disposition

A

bunde of rights

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9
Q

4 rights included in the bundle of rights include:

A

-Right of possession
-Right of exclusion
-Right of enjoyment
-Right of disposition

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10
Q

States that a contract must be legal. If a contract has an illegal purpose, it is void.

A

Lawful Object

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11
Q

A contract for the sale of real estate under which the sale price is paid in periodic installments by the purchaser, who is in possession and holds equitable title, although actual title is retained by the seller until final payment.

A

Contract for deed

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12
Q

Condo documents that serve as the operational procedures describing the rights and prohibitions of the co-owners in a condo association.

A

CC&Rs (Covenants, Conditions, and Restrictions)

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13
Q

An agreement created by actions of the parties involved, without written record or any actual verbal agreement.

A

Implied contract

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14
Q

A loan with a fixed rate of interest over a pre-determined period of time, aka: partially amortized loan. At the end of the period, the borrower must refinance or pay off the remaining balance.

A

Balloon Loan

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15
Q

Account Maintained by the mortgage company to collect recurring costs such as insurnace and tax payments that are necessary for you to keep your home, but are not technically part of the mortgage.

A

Impounds

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16
Q

A tenant’s right to occupy real estate during the term of a lease, generally considered to be a personal property interest.

A

Leasehold Estate

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17
Q

the rate of return a property will produce on the owner’s investment.

A

Capitalization rate

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18
Q

The principal unit of the rectangular survey system. A square with six-mile sides and an area of 36 square miles.

A

Township

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19
Q

Private agreements that restrict the use of real property and are often put in place by developers to maintain certain standards in a neighborhood

A

Deed Restrictions

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20
Q

The MARIA method for determining if something is a fixture of the property. MARIA stands for:

A

-Method of Attachment
-Adaptability
-Relationship
-Intention
-Agreement

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21
Q

Occurs when a property’s use doesn’t align with current zoning laws but was legally established under prior zoning regulations

A

Non-Conforming Use

22
Q

Designed to promote fair competition and prevent monopolies.

A

Anti-trust Regulations

23
Q

Homes built before ____ may have lead-based paint and sellers whose homes were built prior to this year must provide buyers with a lead-based paint disclosure.

A

1978

24
Q

A loss in property value caused by external factors, outside of the homeowner’s control, such as the building of a nearby highway or declining neighborhood conditions.

A

Economic Obsolescence

25
Q

A loss to a property when it becomes outdated or less useful due to design or architectural features, such as having just one bathroom in a 3-bedroom home.

A

Functional Obsolescense

26
Q

Gives one party, usually the buyer, the right, but not the obligation to purchase a property at a set price within a specific timeframe. Common where buyers ned time to secure financing or decide on a property’s suitability.

A

Option Contract

27
Q

A contract where only one party is bound by a promise to sell if the buyer chooses to exercise the option, such as an options contract, where the buyer is given time to secure financing

A

Unilateral Contract

28
Q

Mixing client funds with personal funds (illegal)

A

Commingling

29
Q

A _____ contract is one that is legally unenforceable from the beginning (A contract to do something that is illegal). A _____ contract is valid and enforceable unless one party chooses to void it due to specific circumstances. (Misrepresentation, Fraud, Duress, or a contract is entered with a minor)

A

Void
Voidable

30
Q

A pre-agreed amount set in a contract that one party will pay to the other in the event of a breach.. Provide a measure of certainty and protection for both buyers and sellers, ensuring that parties are compensated for their losses

A

Liquidated Damages

31
Q

A written promise fromt he borower to repay a specified amount of money, typically with interest, to the lender. Outlines the terms of repayment, including the interest rate and payment schedule

A

Promissory Note

32
Q

Insurance that private lends require from the homeboyers who make a downpayment of less than 20% of the home’s purchase price. Found on conventional loans, this insurance allows buyers to purchase homes with a smaller down payment and protects thte lender in case the borrower defaults on the loan.

A

Private Mortgage Insurance (PMI)

33
Q

A mortgage that has an interest rate thtat may chage periodically, depending on the financial index tied to the loan. They typically start with a lower fixed rate for an initial period and then adjust anually.

A

Adjustable Rate Mortgage (ARM)

34
Q

A benchmark interest rate that reflects general market conditions and serves as a baseline for lenders to determine the interest rates on ARMs. This rate can fluctuate along with economic factors

A

Index rate

35
Q

Conditions that must be et for a real estate contract to become binding, such as an inspection, buyer financing, or an appraisal. If the conditions aren’t met, the buyer can typically withdraw fromt the contract without penalty.

A

Contingency

36
Q

Looks at recent sales of similar properties (comparables) to estimate value.

A

Sales Comparison Approach

37
Q

Estimates what it would cost to replace or reproduce the property, considering depreciation to estimate value. Used for new construction and public buildings (schools, hospitals, libraries, etc)

A

Cost Approach

38
Q

Value is based on the income the property generates and is mainly used for investment properties.

A

Income Approach

39
Q

A type of loan that covers multiple properties and typically includes a partial release clause.

A

Blanket Mortgage

40
Q

A clause within a blanket mortgage allowing the borrower to relase certain properties from the mortgage onece speific conditions are met.

A

Partial release clause

41
Q

A type of mortgage used to finance the construction of a new property

A

Construction mortgage

42
Q

A loan that covers both real estate and personal property (for appliances or furniture) as part of the same agreement

A

Package mortgage

43
Q

A loan where the borrower makes payments on the original mortgage and receivesa secondary mortgage from the seller

A

Wraparound mortgage

44
Q

Clause explicitly stating the intent to transfer ownership of the property from the rantor to the grantee. Without which, the deed would not effectively convey ownership rights, making it invalid.

A

Granting clause

45
Q

A right granted to a property owner to use a neighboring property fo a specific purpose, such as access or utilities.

A

Easement Appurtenant

46
Q

Temporary permission or authorization to use someone’s proty for a specific purpose

A

license

47
Q

A federal law that prohibits lenders from discriminating against credit applicants based on factors such as race, color, religion, national origin, sex, marital status, age, or receipt of public assistance

A

ECOA - Equal Credit Opportunity Act

48
Q

A federal law that governs the procedures and disclosures involved in real estate transactions, particularly those involving residential properties

A

RESPA - Real Estate Settlement Procedures Act

49
Q

Law requiring lenders to disclose the terms and costs of credit transactions, including the annual percentage rate (APR) and other finance charges.

A

Truth-in-Lending Act

50
Q

Also known as a limited warranty deed, includes warranties from the seller but only for a specific period of time during which the seller owned the property

A

Special Warranty Deed

51
Q

Conveys the property from the seller to the buyer, but doesn’t expressely include any warranties about the title.

A

Bargain and sale deed

52
Q

A type of deed commonly used to transfer ownership interest in a property without providing any warranties or guarantees about the title.

A

Quitclaim Deed

Real Estate Exam (3 decks)

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