Real Estate Market Flashcards
(255 cards)
1
Q
1 of 255Functional Classification
A
The process by which all roads are grouped into classes or systems according to the character of service they are intended to provide. Functional class defines the part that any particular road or street should play in serving the flow of trips through a highway network.
2
Q
2 of 255Lessor
A
One who conveys the rights of occupancy and use to others under lease agreement.
3
Q
3 of 255Fixture
A
Any piece of personal property which becomes permanently affixed to a piece of real property.
4
Q
4 of 255Aesthetic Value
A
The additional value a property enjoys based on subjective criteria such as look or appeal.
5
Q
5 of 255Second Mortgage
A
A loan secured by the equity in a home, when a primary mortgage already exists.
6
Q
6 of 255Average Daily Traffic (ADT)
A
A 24-hour traffic volume that should be qualified by stating a time period.
7
Q
7 of 255State Rule
A
In condemnation, the process of determining just compensation by estimating the value of the portion to be acquired as part of the whole property plus the net severance damages; maybe referred to as a taking plus damages rule. See also before and after rule.
8
Q
8 of 255Highest and Best Use of Land or Site as Though Vacant
A
Among all reasonable, alternative uses, the use that yields the highest present land value, after payments are made for labor, capital, and coordination. The use of a property based on the assumption that the parcel of land is vacant or can be made vacant by demolishing any improvements.
9
Q
9 of 255Which of the following value types is based on the replacement cost of physical items that are subject to loss?
A
Insurable value
10
Q
10 of 255Consequential Damages
A
Damage to property arising as a consequence of a taking over and above direct damages.
11
Q
11 of 255Blighted Area
A
Any region of a city or town that has fallen into disrepair or otherwise has become undesirable.
12
Q
12 of 255Automated Valuation Model (AVM)
A
- Computer software that queries property and market data, analyzes comparable property and market information to assign a value or range of value to a particular property, or generates metrics applicable to assessing the credibility of valuation-related statements. 2. An AVM is a computer software program that analyzes data using an automated process. For example, AVMs may use regression, adaptive estimation, neural network, expert reasoning, and artificial intelligence programs. The output of an AVM is not, by itself, an appraisal. An AVM’s output may become a basis for appraisal or appraisal review if the appraiser believes the output to be credible for use in a specific assignment. An appraiser can use an AVM as a tool in the development of an appraisal or appraisal review. However, the appropriate use of an AVM is, like any tool, dependent upon the skill of the user and the tool’s suitability to the task at hand.
13
Q
13 of 255Which of the following is not included in demographic influences that appraisers need to consider?
A
Family stigmatization
14
Q
14 of 255Closing Costs
A
All appropriate costs generated by the sale of property which the parties must pay to complete the transaction. Costs may include appraisal fees, origination fees, title insurance, taxes and any points negotiated in the deal.
15
Q
15 of 255Contingency
A
Something that must occur before something else happens. Often used in real estate sales when a buyer must sell a current home before purchasing a new one. Or, when a buyer makes an offer that requires a complete home inspection before it becomes official.
16
Q
16 of 255Which one of the following types of value refers to the nominal value of a property that has reached the end of its economic life?
A
Salvage
17
Q
17 of 255Pipeline Easement
A
The right to construct, operate, and maintain a pipeline over the lands of others within prescribed geographical limits. The language of the easement determines the extent of the rights granted.
18
Q
18 of 255Purpose of an Appraisal
A
The objective of an assignment – e.g., in an appraisal assignment, to develop an opinion of the defined value of any real property interest.
19
Q
19 of 255Which of the following is most similar to the concept of return on capital?
A
Interest rate
20
Q
20 of 255Recorder
A
A local government employee whose role it is to keep records of all real estate transactions within the jurisdiction.
21
Q
21 of 255Which term refers to the lump sum that an investor receives at the termination of an investment?
A
Reversion
22
Q
22 of 255Amortization
A
The repayment of a loan through regular periodic payment.
23
Q
23 of 255Down Payment
A
An amount paid in cash for a property, with the intent to mortgage the remaining amount due.
24
Q
24 of 255Spot Zoning
A
An exception to the general zoning regulations; permits specific, usually small, parcels of land to be zone for a use that is not permitted in the surrounding area. See also zoning variance.
25
25 of 255Remnant
A remainder that has negligible economic utility or value due to its size, shape, or other detrimental characteristics; also called on economic remainder or uneconomic remnant. See also remainder.
26
26 of 2551031 Exchange
A section of the U.S. Internal Revenue Service Code that allows investors to defer capital gains taxes on any exchange of like-kind properties for business or investment purposes. Taxes on capital gains are not charged on the sale of a property if the money is being used to purchase another property - the payment of tax is deferred until property is sold with no re-investment.
27
27 of 255Debt
An obligation to repay some amount owed. This may or may not be monetary.
28
28 of 255Errors and Omissions Insurance
An insurance policy taken out by appraisers to cover their liability for any mistakes made during the appraisal process.
29
29 of 255Which of the following is not considered general data?
Comparable sales
30
30 of 255Which of the following terms means that the title reverts to the state when a person dies without a will and leaves no heirs?
Eminent domain
31
31 of 255Ginnie Mae
Government National Mortgage Association (GNMA) - A wholly owned corporation created in 1968 within the U.S. Department of Housing and Urban Development to serve low-to moderate-income homebuyers.
32
32 of 255Which of the following is not an important factor in national and regional trends that affect real estate values?
Foreign exchange rates
33
33 of 255Clear Title
Ownership of property that is not encumbered by any counterclaim or lien.
34
34 of 255Prime Rate
The interest rate that banks and other lending institutions charge other banks or preferred customers.
35
35 of 255Mortgagor
The entity that borrows money in a real estate transaction.
36
36 of 255Principal
The amount owed on a mortgage which does not include interest or other fees.
37
37 of 255Market Value
1. The most probable price that the specified property interest should sell for in a competitive market after a reasonable exposure time, as of a specified date, in cash, or in terms equivalent to cash, under all conditions requisite to a fair sale, with the buyer and seller each acting prudently, knowledgeably, for self-interest, and assuming that neither is under duress. 2. A type of value, stated as an opinion, that presumes the transfer of a property (i.e., a right of ownership or a bundle of such rights), as of a certain date, under specific conditions set forth in the definition of the term identified by the appraiser as applicable in an appraisal. An appraiser is cautioned to identify the exact definition of market value, and its authority, applicable in each appraisal completed for the purpose of market value. (USPAP)
38
38 of 255Which of the following is general data that an appraiser should consider when performing an appraisal?
Economic influences
39
39 of 255Full Taking
The entire taking of the full real property interest of a parcel for public use under the power of eminent domain; requires the payment of compensation. See also partial taking.
40
40 of 255Appreciation
The natural rise in property value due to market forces.
41
41 of 255Special Use Permit
Permission granted by a local zoning agency that authorizes a use as a special exemption to the applicable zoning. A special use permit in a residentially zoned area might allow for construction of a church or hospital. Such uses are considered conditional uses, only permitted upon the approval of the zoning authority. Sometimes referred to as a conditional use permit.
42
42 of 255Master Plan
A comprehensive, long-range official plan that guides the physical growth and development of the community, combined with the basic regulatory and administrative controls needed to attain the physical objectives; includes land-use plan, thoroughfare plan, community facilities plan, and public improvements program. Master plans are usually revised periodically (e.g., every five years). In some jurisdictions, the master plan takes precedence over the existing zoning. See also comprehensive plan.
43
43 of 255Regression
In appraisal, the concept that the value of a superior property is adversely affected by its association with an inferior property of the same type. See also progression.
44
44 of 255Range of Value
In final reconciliation, the range in which the final market value opinion of a property may fall; usually stated as the interval between a high and low value limit.
45
45 of 255Credit
A loan of money for the purchase of property, real or personal. Credit is either secured by an asset, such as a home, or unsecured.
46
46 of 255Letter of Transmittal
Any type of written letter, memorandum, or statement that serves as a notice of delivery from the appraiser to the client of a report containing an opinion or conclusion concerning real estate; often a brief document in the introduction to an appraisal report that formally presents the report to the person for whom the appraisal was prepared.
47
47 of 255Primary Data
Information that is gathered in its original form by the analyst. See also secondary data.
48
48 of 255Commercial Property
Income-producing property such as office buildings, retail buildings, hotels, banks, restaurants, service outlets, and owner-occupied properties that are capable of becoming income-producing should the owner so decide; usually zoned for business purposes.
49
49 of 255Highest and Best Use of Property as Improved
The use that should be made of the property as it exists. An existing improvement should be renovated or retained so long as it continues to contribute to the total market value of the property, or until the return from a new improvement would more than offset the cost of demolishing the existing building and constructing a new one.
50
50 of 255Physical Possibility
One of the criteria for highest and best use of a property must meet; the land must be able to accommodate the size and shape of the ideal improvement.
51
51 of 255Which of the following is the definition of a 'leased fee estate'?
The rights enjoyed by the owner of a leased property
52
52 of 255Final Reconciliation
The last phase in the development of the value opinion in which two or more value indications derived from market data are resolved into a value opinion, which may be either a final range of value for a single point estimate.
53
53 of 255Distressed Property
A mortgaged property which has been foreclosed on.
54
54 of 255Partial Taking
The taking of part of any real property interest for public use under the power of eminent domain; requires the payment of compensation.
55
55 of 255Fee Simple Estate
Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat.
56
56 of 255Foreclosure
The process whereby a lender can claim the property used by a borrower to secure a mortgage and sell the property to meet the obligations of the loan.
57
57 of 255Real Property Rights Conveyed
An element of comparison in the sales comparison approach; comparable properties can be adjusted for differences in the real property rights involved in a transaction.
58
58 of 255Grantor
Any person who gives away ownership of a piece of property.
59
59 of 255Lender
The person or entity who loans funds to a buyer. In return, the lender will receive periodic payments, including principal and interest amounts.
60
60 of 255Bundle of Rights Theory
The concept that compares property ownership to a bundle of sticks with each stick representing a distinct and separate right of the property owner, e.g., the right to use real estate, to sell it, to lease it, to give it away, or to choose to exercise all or none of these rights.
61
61 of 255Scarcity
An economic principal that dictates the price of a good or service through the interaction of supply and demand. When an item is scarce, its price tends to rise, given a constant demand. Real Estate is a classic example of scarcity.
62
62 of 255Estate
1. A right or interest in property. Defines an owner's degree, quantity, nature, and extent of interest in real property. There are many different types of estates, including freehold (fee simple, determinable fee, and life estate) and leasehold. To be an estate in land, an interest must allow possession (either now or in the future) and be differentiated primarily by its duration. 2. The net worth of an entity at appointment time. Possessions left to heirs upon death are often referred to as the estate.
63
63 of 255Highway Easement
A right granted or taken for the construction, maintenance, and operation of the highway.
64
64 of 255Co-Maker
A second party who signs a loan, along with the borrower, and becomes liable for the debt should the borrower default.
65
65 of 255Condemnation
The official process by which a property is deemed to be uninhabitable or unusable due to internal damage or other external conditions. The process by which a government agency takes private property for public use.
66
66 of 255Plat
1. A plan, map, or chart of a city, town, section, or subdivision indicating the location and boundaries of individual properties. 2. A map or sketch of an individual property that shows property lines and may include features such as soils, building locations, vegetation, and topography. 3. A map intended to show the division of land into lots or parcels. Upon recordation with the appropriate authorities, land included in the plat can thenceforth be legally described by reference to the plat, omitting a metes and bounds description.
67
67 of 255Agent
A person who has been appointed to act on behalf of another for a particular transaction.
68
68 of 255Lien
Any claim against a piece of property resulting from a debt or other obligation.
69
69 of 255Salvage Value
The price expected for a whole property (e.g., a house) or a part of a property (e.g., a plumbing fixture) that is removed from the premises usually for use elsewhere.
70
70 of 255Which of the following is defined as the study of the supply and demand conditions for a specific type of property in a specific area?
Market analysis
71
71 of 255Absorption Rate
The ratio of the number of properties in an area that have been sold against the number available. Used to show the volatility of a market.
72
72 of 255What form of zoning adjustment is likely to result in an increase in value?
Downzoning
73
73 of 255Parcel Identification Number
A numeric or alphanumeric label that uniquely identifies a parcel. Government property assessors use various systems, many with common features. A growing number of these systems include geocoding. The Government Survey system is often used as a basis for parcel identification.
74
74 of 255Loss of Access
Depriving an abutting owner of the inherent rights of ingress and to egress from the highway or street.
75
75 of 255Commission
A percentage of the sales price or a fixed fee negotiated by an agent to compensate for the effort expended to sell or purchase property.
76
76 of 255Mortgagee
The entity that lends money in a real estate transaction.
77
77 of 255Which of the four agents of production is the last agent to be satisfied?
Capital
78
78 of 255Desktop Appraisal
An appraisal in which the appraiser's scope of work does not include an inspection of the subject property or comparables.
79
79 of 255Closing
The process whereby the sale of a property is consummated with the buyer completing all applicable documentation, including signing the mortgage obligation and paying all appropriate costs associated with the sale (CLOSING COSTS).
80
80 of 255Highest and Best Use
The reasonably probable and legal use of vacant land or an improved property that is physically possible, appropriately supported, financially feasible, and that results in the highest value. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum productivity. Alternatively, the probable use of land or improved property - specific with respect to the user and timing of the use - that is adequately supported and results in the highest present value.
81
81 of 255Prospective Opinion of Value
A value opinion effective as of a specified future date. The term does not define a type of value. Instead, it identifies the value opinion as being effective at some specific future date. An opinion of value as of a prospective date is frequently sought in connection with projects that are proposed, under construction, or under conversion to a new use, or those that have not yet achieved sellout or a stabilized level of long-term occupancy.
82
82 of 255Deed-In-Lieu (of Foreclosure)
A document given by a borrower to a lender, transferring title of the property. Often used to avoid credit-damaging foreclosure procedures.
83
83 of 255Escrow
An amount retained by a third party in a trust to meet a future obligation. Often used in the payment of annual taxes or insurance for real property.
84
84 of 255Mitigation of Damages
The legal responsibility of a plaintiff to make reasonable efforts, after an injury or breach of contract, to alleviate the effects of the injury or breach. If the defendant can show that the plaintiff failed to mitigate damages, the plaintiff’s recovery may be reduced.
85
85 of 255Amortization Term
The length of time over which an amortized loan is repaid. Mortgages are commonly amortized over 15 or 30 years.
86
86 of 255Inspection
The examination of a piece of property, its buildings or other amenities.
87
87 of 255Earnest Money Deposit
A cash deposit made to a home seller to secure an offer to buy the property. This amount is often forfeited if the buyer decides to withdraw his offer.
88
88 of 255Adjusted Basis
The value of an asset (property or otherwise) that includes the original price plus the value of any improvement, and less any applicable depreciation.
89
89 of 255Loan-To-Value Ratio (LTV)
The comparison of the amount owed on a mortgaged property to its market value.
90
90 of 255Equity Buildup
The natural increase in the amount of equity an owner has in a property, accumulated through market appreciation and debt repayment.
91
91 of 255Field Review
An appraisal review for which the scope of work includes inspection of the exterior and sometimes interior of the subject property and possibly inspection of the comparable properties to confirm the data provided in the report. A field review is generally performed using a customized checklist that covers the items examined in the desk review and may also include confirmation of market data, research to gather additional data, and verification of the software used in preparing the report.
92
92 of 255Lessee
One who has the right to occupancy and use of the property of another for a period of time according to a lease agreement.
93
93 of 255Which of the following statements about local zoning ordinances is incorrect?
Zoning may allow the same area to have multiple uses.
94
94 of 255Certificate of Reasonable Value (CRV)
Usually based on an independent appraisal, a CRV for a particular property establishes the maximum amount which can be secured by a VA mortgage.
95
95 of 255Liquid Asset
Any asset which can be quickly converted into cash at little or no cost, or cash itself.
96
96 of 255General Lien
A broad-based claim against several properties owned by a defaulting party.
97
97 of 255Veterans Affairs, Department of (VA)
The successor to the Veteran's Administration, this government agency is responsible for ensuring the rights and welfare of our nation’s veterans and their dependents. Among other duties, the VA guarantees home loans made to veterans.
98
98 of 255American Society of Appraisers
An organization of appraisal professionals and others interested in the appraisal profession.
99
99 of 255Insurable Title
The title to property which has been sufficiently reviewed by a title insurance company, such that they are willing to insure it as free and clear.
100
100 of 255Realtor
A real estate agent or broker who is a member of the National Association of Realtors.
101
101 of 255Which of the following is not true regarding eminent domain?
Fair market value must be compensated
102
102 of 255Which of the following steps in the valuation process occurs last?
Reconciliation of the results.
103
103 of 255Which study examines the profitability of a proposed property?
Feasibility study
104
104 of 255Recording
The filing of a real estate transaction with the appropriate government agent (normally the RECORDER). A real estate transaction is considered final when it is recorded.
105
105 of 255Larger Parcel
In governmental land acquisitions, the tract or tracts of land that are under the beneficial control of a single individual or entity and at the same, or an integrated, highest and best use. Elements of consideration by the appraiser in making a determination in this regard are contiguity, or proximity, as it bears on the highest and best use of the property, unity of ownership, and unity of highest and best use. In most states, unity of ownership, continuity, and unity of use are the three conditions that establish the larger parcel for the consideration of severance damages. In federal and some state cases, however, contiguity is sometimes subordinated to unitary use.
106
106 of 255Scope of the Project Rule
In eminent domain, any decrease or increase in the fair market value of real property, prior to the date of valuation, caused by the project for which the property is to be acquired, or by the likelihood that the property would be acquired for the project other than that due to physical deterioration within the reasonable control of the owner. (See Uniform Relocation Assistance and Real Property Acquisition Policy Act of 1970 (P.L. 91-646) 42 U.S.C. §4651 (3).)
107
107 of 255Home Inspection
A complete examination of a building to determine its structural integrity; uncover any defects in materials, systems or workmanship; uncover any potential infestations or damage from infestations; uncover any potential health, safety, environmental or building code issues. A home inspection is NOT what an appraiser does.
108
108 of 255Damages
In condemnation, the loss in value to the remainder in a partial taking of property. Generally, the difference between the value of the whole property before the taking in the value of the remainder after the taking is the measure of the value of the part taken and the damages to the remainder. Note that different regions of the country and different courts may use terms such as consequential damages and severance damages differently.
109
109 of 255Which type of value is used for tax appraisals?
Assessed value
110
110 of 255Oral Appraisal Report
A report that is transmitted orally. See also written appraisal report.
111
111 of 255Executor (Personal Representative)
An individual or other legal person designated in a will to settle the estate of the deceased person.
112
112 of 255Lease
A contract in which the rights to use and occupy land or structures are transferred by the owner to another for a specified period of time in return for specified rent.
113
113 of 255Maximum Productivity
One of the four criteria the highest and best use of a property must meet; the selected land-use must yield the highest value of the possible uses.
114
114 of 255Certified General Appraiser
Generally, any professional who has met the local or state requirements, and passed the appropriate certification exam, and is capable of appraising any type of property.
115
115 of 255Private Mortgage Insurance (PMI)
A form of mortgage insurance provided by private, non-government entities. Normally required when the LOAN TO VALUE RATIO is higher than 80%. Insurance provided by a private mortgage lender to protect against loss caused by a borrower's default on a residential or commercial mortgage loan.
116
116 of 255Bill of Sale
A physical receipt indicating the sale of property.
117
117 of 255Principal, Interest, Taxes, and Insurance (PITI)
The most common constituents of a monthly mortgage payment.
118
118 of 255Appraisal Principles
The basic building blocks of the property valuation process, including property inspection, market analysis and basic economics.
119
119 of 255Broker
An individual who facilitates the purchase of property by bringing together a buyer and a seller.
120
120 of 255NonLiquid Asset
Any asset which cannot be quickly converted into cash at little or no cost.
121
121 of 255Homeowner's Association
An organization of homeowners in a particular neighborhood or development formed to facilitate the maintenance of common areas and to enforce any building restrictions or covenants.
122
122 of 255Contribution
The concept that the value of a particular component is measured in terms of the amount it adds to the value of the whole property or as the amount that its absence would detract from the value of the whole. The principle of contribution is the basis for the adjustment process in the sales comparison approach.
123
123 of 255Interim Use
The temporary use to which a site or improved property is put until it is ready to be put to its future highest and best use.
124
124 of 255Final Opinion of Value
The opinion of value derived from the reconciliation of value indications and stated in the appraisal report; may be expressed as a single point, as a range, or in relation to a benchmark.
125
125 of 255Which of the following terms is defined as the most probable price for which property should sell to a knowledgeable buyer in a competitive market?
Market value
126
126 of 255Certificate of Title
A document designating the legal owner of a parcel of real estate. Usually provided by a title or abstract company.
127
127 of 255Which of the following is not a component of supply?
Absorption
128
128 of 255Real Estate Agent
A licensed professional who facilitates the buying and selling of real estate.
129
129 of 255Homeowner's Insurance
A policy which covers a homeowner for any loss of property due to accident, intrusion or hazard.
130
130 of 255Preservation Easement
A voluntary legal agreement that becomes part of the chain of title thereby protecting a historic, archaeological, or cultural resource. Tax benefits may arise from granting a preservation easement to a qualified organization dedicated to historic preservation. As differentiated from a conservation easement.
131
131 of 255Secondary Data
Information that is not gathered in its original form by the analyst. See also primary data.
132
132 of 255Just Compensation
In condemnation, the amount of loss for which a property owner is compensated when his or her property is taken. Just compensation should put the owner in as good a position as he or she would be if the property had not been taken.
133
133 of 255Point
A percentage of a mortgage amount (one point = 1 percent).
134
134 of 255Going-Concern Value
1. The market value of all the tangible and intangible assets of an established an operating business with an indefinite life, as if sold in aggregate; more accurately termed the market value of the going concern. 2. The value of an operating business enterprise. Goodwill may be separately measured but is an integral component of going concern value when it exists and is recognizable.
135
135 of 255Mortgage Life Insurance
A policy that fulfills the obligations of a mortgage when the policy holder dies.
136
136 of 255Accretion
The natural growth of a piece of land resulting from forces of nature.
137
137 of 255Open Space
Any land which has not had any significant buildings or structures erected on it. Most often used to describe desirable neighborhood features like parks.
138
138 of 255Financial Feasibility
One of the four criteria the highest and best use of a property must meet; the ability of a property to generate sufficient income to support the use for which it was designed.
139
139 of 255Limiting Condition
A condition that limits the use of a report.
140
140 of 255Community Property
In many jurisdictions, any property which has been acquired by a married couple. The ownership of the property is considered equal unless stipulated otherwise by both parties.
141
141 of 255Construction Loan
A loan made to a builder or homeowner that finances the initial construction of a property, but is replaced by a traditional mortgage one the property is completed.
142
142 of 255Personal Representative (Executor)
An individual or other legal person designated in a will to settle the estate of a deceased person.
143
143 of 255Legal permissibility
One of the four criteria the highest and best use of a property must meet; a property use that is either currently allowed or most probably allowed under zoning codes, building codes, environmental regulations, and other applicable laws and regulations that govern land use.
144
144 of 255Which of the following is true regarding supply and demand in the real estate market?
An increase in supply results in increased demand
145
145 of 255Rural
An area outside of an established urban area or metropolitan district that typically lacks urban and suburban services such as sewers, city water, public transportation, etc.
146
146 of 255Marketability Analysis
A process for examining the productive attributes of the specific property, its demand and supply, and its geographic market area. Marketability analysis is an essential part of the highest and best use conclusion for every valuation appraisal.
147
147 of 255Chattel
Any personal property which is not attached to or an integral part of a property. Chattel is not commonly taken into consideration when appraising the value of real property.
148
148 of 255Market Participants
The parties involved in the transfer of property rights. Includes buyers, sellers, lessors, lessees, and brokers and their agents.
149
149 of 255Federal Housing Administration (FHA)
A sub-agency of the U.S. Department of Housing and Urban Development created in the 1930's to facilitate the purchase of homes by low-income, first-time home buyers. It currently provides federally subsidized mortgage insurance for private lenders.
150
150 of 255Special Assessment
1. An assessment against real estate levied by a public authority to pay for public improvements, e.g., sidewalks, street improvements, sewers; also called betterment tax. 2. An amount levied against individual owners in a condominium or cooperative to cover their proportionate shares of a common expense.
151
151 of 255Proximity Damage
An element of severance damage that is caused by the remainder's proximity to the improvement being constructed (e.g., a highway); may also arise from proximity to an objectionable characteristic of a site or improvement (e.g., dirt, dust, noise, vibration).
152
152 of 255Sale Price
The actual price a property sells for, exclusive of any special financing concessions.
153
153 of 255Interest Rate
A percentage of a loan or mortgage value that is paid to the lender as compensation for loaning funds.
154
154 of 255Fee Simple
A complete, unencumbered ownership right in a piece of property.
155
155 of 255Real Estate
An identified parcel or tract of land, including improvements, if any. (USPAP)
156
156 of 255Deposit
Cash given along with an offer to purchase property, Also called EARNEST MONEY.
157
157 of 255Desk Review
An appraisal review in which the reviewer's scope of work does not include an inspection of the subject property.
158
158 of 255Which of the following value types assumes a less than adequate market exposure time?
Liquidation value
159
159 of 255Legal Description
The description of a piece of property, identifying its specific location in terms established by the municipality or other jurisdiction in which the property resides. Often related in specific distances from a known landmark or intersection.
160
160 of 255Severance
1. The act of removing anything attached or affixed to land, or a part of the land itself, that causes a change of its character from real property to personal property. 2. The separation of mineral ownership from land ownership; a conveyance of land in which mineral rights are expected or reserved. 3. The termination of a joint tenancy or a tenancy in common.
161
161 of 255Encumbrance
Any claim or liability that affects our limits the title to property. An encumbrance can affect the title such as the mortgage or other lien, or it can affect the physical condition of the property such as an easement. An encumbrance cannot prevent the transfer of possession, but it does remain after the transfer.
162
162 of 255Condominium Conversion
Commonly, the conversion of a rental property such as an apartment complex into a CONDOMINIUM-style complex where each unit is owned rather than leased.
163
163 of 255Government Mortgage
Any mortgage insured or guaranteed by a government agency, such as the FHA or VA.
164
164 of 255Certified Residential Appraiser
A sub-classification of appraiser who is only licensed to appraise residential property, usually up to four units.
165
165 of 255Condominium
1. A form of ownership in which each owner possesses the exclusive right to use and occupy an allotted unit plus an undivided interest in common areas. 2. A multi-tenant structure, or a unit within such a structure, with a condominium form of ownership.
166
166 of 255Deed of Release
A document which dismisses a lien or other claim on a property.
167
167 of 255Seondary Mortgage Market
An economic marketplace where mortgage bankers buy and sell existing mortgages.
168
168 of 255Real Property
The interests, benefits, and rights inherent in ownership of real estate. (USPAP)
169
169 of 255Collateral
An asset which is placed at risk to secure the repayment of a loan.
170
170 of 255Neighborhood Life-Cycle
The evolution of neighborhood use and demographics over time. Economic fluctuations, municipal zoning changes and population shifts can affect the life cycle.
171
171 of 255Geographic Information Systems (GIS)
A system or process that electronically captures, stores, analyzes, manages, and presents data linked to location, primarily and map form. Layers of the illustrative information can be selected and displayed such as aerial photography, topographic maps, flood maps, streets and roads, earthquake information, zoning overlays, political boundaries, and other forms of geographically referenced data.
172
172 of 255Mortgage Insurance Premium (MIP)
A fee that is often included in mortgage payments that pays for mortgage insurance coverage.
173
173 of 255Progression
In appraisal, the concept that the value of an inferior property is enhanced by its association with better properties of the same type. See also regression.
174
174 of 255Forfeiture
The loss of property or money due to the failure to meet the obligations of a mortgage or loan secured by that property.
175
175 of 255Which of the following is not a consideration when determining highest and best use?
Environmentally friendly
176
176 of 255Probate
The legal process of settling an estate after a person has died. A petition must be filed with the court and a personal representative must be appointed. The personal representative is responsible for the following: 1. Collection of inventories and appraisal of assets of the person who has died. 2. Protection of the estate's assets. 3. Payment of decedent's debts. 4. Distribution of the remaining assets to the proper parties as provided by law.
177
177 of 255Zone
A specific area within a municipality or other jurisdiction which conforms to certain guidelines regarding the use of property in the zone. Typical zones include single-family, multi-family, industrial, commercial and mixed-use.
178
178 of 255Mortgage Insurance
A policy that fulfills that obligations of a mortgage when the policy holder defaults or is no longer able to make payments.
179
179 of 255Property
Any item which is owned or possessed.
180
180 of 255Like-Kind Property
Any property which is substantially similar to another property.
181
181 of 255Federal Deposit Insurance Corporation (FDIC)
The U.S. Government agency created in 1933 which maintains the stability of and public confidence in the nation's financial system by insuring deposits and promoting safe and sound banking practices.
182
182 of 255Amortization Schedule
The breakdown of individual payments throughout the life of an amortized loan, showing both principal contribution and debt service (interest) fees.
183
183 of 255Special Benefits
In eminent domain valuation, the benefits that arise from the peculiar relation of the land in question to the public improvement, usually resulting from a change in its highest and best use. Special benefits may accrue to multiple parcels (such as all four quadrants of a newly constructed freeway interchange) because the parcels are directly benefitted in a similar manner, if not the same degree.
184
184 of 255Expert Testimony
Testimony of persons who are presumed to have special knowledge of, or skill in, a particular field due to education, experience, or study. The Daubert and Kumho Tire decisions of the US Supreme Court discussed four considerations in determining the reliability of expert testimony - testing, peer review, error rates, and acceptability and the relevant scientific community.
185
185 of 255Partial Interest
Divided or undivided rights in real estate that represent less than the whole (a fractional interest). A shared ownership in a piece of property. May be divided among two or more parties.
186
186 of 255Relocation Service
Any company or agency that assists corporate employees in relocating from one place to another. Services may include hiring and coordinating real estate agents, moving companies, utilizes and the like.
187
187 of 255Chain of Title
The complete history of ownership of a piece of property.
188
188 of 255First Mortgage
The primary loan or mortgage secured by a piece of property.
189
189 of 255Mineral Rights
The legal right to exploit and enjoy the benefits of any minerals located below the surface of a parcel of land.
190
190 of 255Mortgage Broker
A person or organization that serves as a middleman to facilitate the mortgage process. Brokers often represent multiple mortgage bankers and offer the most appropriate deal to each buyer.
191
191 of 255Bridge Financing
An interim loan made to facilitate the purchase of a new home before the buyer's current residence sells and its equity is available to fund the new purchase.
192
192 of 255Quitclaim Deed
A legal document which transfers any ownership an individual has in a piece of property. Often used when the amount of ownership is not known or is unclear.
193
193 of 255Rail Easement
The right for the construction, maintenance, and operation of a rail line on a property.
194
194 of 255Appraisal Report
The end result of the appraisal process usually consists of one major, standardized form such as the Uniform Residential Appraisal Report form 1004, as well as all supporting documentation and additional detail information. The purpose of the report is to convey the estimated value of the subject property and support that estimate with corroborating information.
195
195 of 255Bona Fide
Made or carried out in good faith; sincere.
196
196 of 255Metes and Bounds
A traditional way of describing property, generally expressed in terms of distance from a known landmark or intersection, and then following the boundaries of the property back to its point of beginning.
197
197 of 255Misrepresentation
A statement by one party in a transaction that is incorrect or misleading. Some misrepresentations are deemed to be intentional and thus may constitute fraud. Others, however, some are rendered through simple mistakes, oversights or negligence.
198
198 of 255County State Aid Highway (CSAH)
Specialized form of county road that is part of the state aid system. County State Aid routes are eligible for funding from the County State Aid Highway Fund.
199
199 of 255Leasehold Estate
A type of property ''ownership'' where the holder actually has a long-term lease on the property.
200
200 of 255Which of the government's powers allows it to establish zoning ordinances and building codes to protect the safety and health of the public?
Condemnation
201
201 of 255Conventional Mortgage
A traditional, real estate financing mechanism that is not backed by any government or other agency (FHA, VA, etc.).
202
202 of 255Caveat Emptor
Literally translated: ''Let the buyer beware.'' A common business tenet whereby the buyer is responsible for verifying any and all claims by the seller of property.
203
203 of 255Pole Line Easement
An easement for the construction, maintenance, and operation of a pole line, usually for the transmission of electric power.
204
204 of 255Remainder
1. A future possessor read interest in real estate that is given to a third-party and matures upon the termination of a limited or determinable be. For example, A gives B a life estate in A’s farm for B’s lifetime. A also gives C an interest in the farm to take effect upon B’s death. C has a remainder interest. 2. In eminent domain condemnation, that portion of a larger parcel remaining in the ownership of the property owner after a partial taking. See also larger parcel.
205
205 of 255Personal Property
1. Owned items which are not permanently affixed to the land. 2. Identifiable tangible objects that are considered by the general public as being "personal" - for example, furnishings, artwork, antiques, gems and jewelry, collectibles, machinery and equipment; all tangible property that is not classified as real estate. (USPAP) 3. Consists of every kind of property that is not real property; movable without damage to itself or the real estate; subdivided into tangible and intangible. Also called personalty.
206
206 of 255Flood Insurance
Supplemental insurance which covers a homeowner for any loss due to water damage from a flood. Often required by lenders for homes located in FEMA-designated flood zones.
207
207 of 255Neighborhood
A subsection of a municipality that has been designated by a developer, economic forces or physical formations.
208
208 of 255Eminent Domain
The right of government to take private property for public use upon the payment of just compensation. The Fifth Amendment of the U.S. Constitution, also known as takings clause, guarantees payment of just compensation upon appropriation of private property.
209
209 of 255Ranch House
An architectural style typified by a single-story, low-roof construction. Popular in the western U.S.
210
210 of 255Fixed-Rate Mortgage (FRM)
A mortgage which has a fixed rate of interest over the life of the loan.
211
211 of 255Affirmation
A declaration that a certain set of facts are truthful.
212
212 of 255Conformity
The appraisal principle that real property value is created and sustained when the characteristics of the property conform to the demands of its market.
213
213 of 255Leased Fee Interest
A freehold (ownership interest) for the possessory interest has been granted to another by creation of a contractual landlord-tenant relationship (i.e., a lease).
214
214 of 255Which phase of the economic cycle does a buyer's market occur?
Decline
215
215 of 255Certificate of Occupancy
Issued by an appropriate jurisdictional entity, this document certifies that a building complies with all building codes and is safe for use or habitation.
216
216 of 255Deed of Reconveyance
A document which transfers ownership of a property from a Trustee back to a borrower who has fulfilled the obligations of a mortgage.
217
217 of 255Joint Tenancy
A situation where two or more parties own a piece of property together. Each of the owners has an equal share and may not dispose of or alter that share without the consent of the other owners.
218
218 of 255Setback
Zoning regulations that designate the distance a building must be set back from the front, rear, and sides of the property lines.
219
219 of 255Competition
1. Between purchasers or tenants, the interactive efforts of two or more potential purchasers or tenants to make a sale or secure a lease. 2. Between sellers or landlords, the interactive efforts of two or more potential sellers or landlords to complete a sale or lease. 3. Among competitive properties, the level of productivity and amenities or benefits characteristic of each property considering the advantageous or disadvantageous position of the property relative to the competitors.
220
220 of 255Which principle of value best describes the affect an industrial plant would have on residential property values in a surrounding neighborhood?
Supply and demand
221
221 of 255Which of the following is defined as the land and anything permanently attached to the land?
Real estate
222
222 of 255Deed
A document indicating the ownership of a property.
223
223 of 255Affordability Analysis
A calculation used to determine an individual's likelihood of being able to meet the obligations of a mortgage for a particular property. Takes into account the down payment, closing costs and on-going mortgage payments.
224
224 of 255Grantee
Any person who is given ownership of a piece of property.
225
225 of 255Deed of Surrender
A document used to surrender any claim a person has to a property.
226
226 of 255Fannie Mae
A private, shareholder-owned company that works to make sure mortgage money is available for people to purchase homes. Created by Congress in 1938, Fannie Mae is the nation's largest source of financing for home mortgages.
227
227 of 255Owner Occupied
The state of property wherein the owner occupies at least some portion of the property.
228
228 of 255Marketability
The relative desirability of a property (for sale or lease) in comparison with similar or competing properties in the area. That is, a property with poor marketability would be inferior to competing properties in terms of location, condition, access, etc. Conversely, a property with good marketability has superior features or condition in comparison with competing properties.
229
229 of 255Annual Percentage Rate (APR)
The rate of annual interest charged on a loan.
230
230 of 255Equity
The difference between the fair market value of a property and that amount an owner owes on any mortgages or loans secured by the property.
231
231 of 255Housing Starts
Newly constructed housing units; includes both single-family and multifamily domiciles.
232
232 of 255Metropolitan Area
The accumulated land in and around a city or other municipality which falls under the political and economic influence of that entity.
233
233 of 255Sale-Leaseback
A financing arrangement in which real property is sold by its owner-user, who simultaneously leases the property from the buyer for continued use. Under this arrangement, the seller receives cash from the transaction and the buyer is assured a tenant.
234
234 of 255Mortgage
A financial arrangement wherein an individual borrows money to purchase real property and secures the loan with the property as collateral.
235
235 of 255Asset
Any item of value which a person owns.
236
236 of 255Deed of Trust
A document which transfers title in a property to a trustee, whose obligations and powers are stipulated. Often used in mortgage transactions.
237
237 of 255Insurable Value
That portion of the value of an asset or asset group that is acknowledged or recognized under the provisions of an applicable loss insurance policy.
238
238 of 255Redevelopment
The development or improvement of cleared or undeveloped land in an urban renewal area; technically includes the direction of buildings and other development and improvement of the land by private or public redevelopers to whom the land has been made available.
239
239 of 255HUD-1 Statement
A standardized, itemized list published by the U.S. Department of Housing and Urban Development (HUD), of all anticipated closing costs connected with a particular property purchase.
240
240 of 255Planned Unit Development (PUD)
A type of building development designed as a group of complementary land uses, such as housing, schools, recreation, retail, office, and industrial parks, contained within a single master development. A coordinated, real estate development where common areas are shared and maintained by an owner's association or other entity.
241
241 of 255Reasonable
In law, just, rational, appropriate, ordinary, or usual in the circumstances. It may also refer to care, cause, compensation, doubt (in criminal trial), and a host of other actions or activities.
242
242 of 255Wilma and Paul agree on how much Wilma is going to pay Paul for Paul's house. Wilma and Paul have agreed on the:
price.
243
243 of 255Which of the following is not one of the four essential elements of value?
Transferability
244
244 of 255Default
The condition in which a borrower has failed to meet the obligations of a loan or mortgage.
245
245 of 255Mortgage Banker
A financial institution that provides primary and secondary mortgages to home buyers.
246
246 of 255Original Equity
The amount of cash a home buyer initially invests in the home.
247
247 of 255Before and After Rule
In eminent domain valuation, a procedure in which just compensation is measured as the difference between the value of the entire property before the taking and the value of the remainder after the taking.
248
248 of 255Change
The result of the cause and effect relationship among the forces that influence real property value.
249
249 of 255Servicer
A financial institution which collects mortgage payments from borrowers and applies the appropriate portions to principal, interest and any escrow accounts.
250
250 of 255Drive By Appraisal
An appraisal in which the scope of work includes an exterior-only viewing of the subject property.
251
251 of 255Master Association
An umbrella organization that is made up of multiple, smaller homeowners associations. Often found in very large developments or condominium projects.
252
252 of 255Delinquency
The state in which a borrower has failed to meet payment obligations on time.
253
253 of 255Real Estate Market
Buyers and sellers of particular real estate and the transactions that occur among them.
254
254 of 255Adjustable-Rate Mortgage (ARM)
A type of mortgage where the interest rate varies based on a particular index, normally the prime lending rate.
255
255 of 255Corporate Relocation
A situation where a person's employer pays all or some of the expenses associated with moving from one location to another, usually over a substantial distance. Relocation expenses often include the amounts, such as brokerage fees, incurred in the selling and buying of the employee's primary residence.
