Vocabulary

Question 1

pg. 106

is a summary report of what
the title search reveals. It includes all recorded liens and encumbrances and lists records searched

Answer 1

Abstract of Title

Question 2

pg. 106

A writte.n sum-mary of the history of all conv.eyances and legal pr0ceedings affecting a sp3cific parcel
of reAl estate is called

Answer 2

abstract of title

Question 3

-Method
for cl@iming tax deductions for certain property purchased
before 1987 – in which it was possible to claim g.reater
deducti0ns in the early years of ownership – gradually
reducing the amount deducted in eAch ye@r of useful life.

Answer 3

accelerated cost recovery system (ACRS)

Question 4

pg. 215

Th3 clause in a mortgage or d33d
of trust that c@n be enforced to make the entire debt due
immediately if the borrower defaults on an installment
payment or other 0bligation.

Answer 4

acceleration clause

Question 5

pg. 27

Acquiring title to additions or impro\/ements
to real property as a result of the annexation of fixtures
or the accretion of alluvial deposits along the b@nks of
str3ams.

Answer 5

accession

Question 6

Unit 16 Glossary Review

Th3 process of c0nverting a future income stre@m into an expression of present value is income _ _ _

Answer 6

capitalization

Question 7

Unit 16 Glossary Review

The c0st of replacing an 1mprovement with another of similar qu@lity but not an exact r3plica is _ _ _

Answer 7

replacement cost

Question 8

L0ss in $ value d.ue to causes ext3rnal t0 the pr0perty is

Answer 8

economic obsolescence

Question 9

a meth0d of valuing a property by comparing th.e subject pr0perty to similar pr0perties th@t have recently s0ld is the

Answer 9

market data approach

Question 10

What does BPO stand for?

Answer 10

broker’s price opinion

Question 11

What does NOI stand for?

Answer 11

Net Operating Income

Question 12

The increase or addition of land by the
deposit of sand or soil washed up naturally from a river,
lake, or sea.

Answer 12

accretion

Question 13

pg. 23

Loss in a property’s
value resulting from physical deterioration, external
depreciation, and functional obsolescence.

Answer 13

accrued depreciation

Question 14

pg. 317

On a closing statement, items
of expense that are incurred but not yet payable,
such as interest on a mortgage loan or taxes on real
property.

Answer 14

accrued items

Question 15

pg. 87

A formal declaration made before
a duly authorized officer, usually a notary public, by a
person who has signed a document.

Answer 15

acknowledgment

Question 16

pg. 77

A measure of land equal to 43,560 square feet,
4,840 square yards, 4,047 square meters, 160 square rods,
or 0.4047 hectares.

Answer 16

acre

Question 17

pg. 106

A court action that establishes
ownership when ownership cannot be traced through an
unbroken chain of title.

Answer 17

action to quiet title

Question 18

pg. 104

The legal process that results
in a tenant’s being physically removed from leased
premises.

Answer 18

actual eviction

Question 19

pg. 104

Express information or fact; that which
is known; direct knowledge.

Answer 19

actual notice

Question 20

pg. 290

A tax levied according to value,
generally used to refer to real estate tax. Also called the
general tax.

Answer 20

ad valorem tax

Question 21

pg. 200

Any provision added to an existing contract
without altering the content of the original. Must be
signed by all parties.

Answer 21

addendum

Question 22

pg. 219

What does ARM stand for?

Answer 22

adjustable-rate mortgage

Question 23

pg. 219

A loan
characterized by a fluctuating interest rate, usually one
tied to a bank or savings and loan association cost-of
funds index.

Answer 23

adjustable-rate mortgage (ARM)

Question 24

pg. 356

What does ALJ stand for?

Answer 24

administrative law judge

Question 25

# pg. 356 The official who presides over a hearing involving a government agency and someone affected by a decision of that agency. The ALJ hears evidence, including the testimony of witnesses, and renders a decision.

Answer 25

administrative law judge (ALJ)

Question 26

# pg. 96 A court-selected person who assists with the settlement of an estate of a person who died without leaving a will.

Answer 26

administrator

Question 27

# pg. 93 The actual, open, notorious, hostile, and continuous possession of another’s land under a claim of title. Possession for a statutory period may be a means of acquiring title.

Answer 27

adverse possession

Question 28

# pg. 258 A written statement, made under oath by a seller or grantor of real property and acknowledged by a notary public, in which grantors (1) identify themselves and indicate marital status, (2) certify that since the examination of the title, on the date of the contract no defects have occurred in the title, and (3) certify that they are in possession of the property (if applicable).

Answer 28

affidavit of title

Question 29

# pg. 264 What does ABA stand for?

Answer 29

affiliated business arrangement

Question 30

# pg. 264 Practice of one company offering a package of services to consumers.

Answer 30

affiliated business arrangement (ABA)

Question 31

# pg. 137 The relationship between a principal and an agent wherein the agent is authorized to represent the principal in certain transactions.

Answer 31

agency

Question 32

An agency relationship created after the fact

Answer 32

agency by ratification

Question 33

# pg. 137 One who acts or has the power to act for another. A fiduciary relationship is created under the law of agency when a property owner, as the principal, executes a listing agreement or management contract authorizing a licensed real estate broker to be his or her agent. A prospective property buyer may authorize a real estate broker to act as the buyer’s agent to find a suitable property.

Answer 33

agent

Question 34

# pg. 76 Designated airspace over a piece of land. An air lot, like surface property, may be transferred.

Answer 34

air lots

Question 35

# pg. 21 The right to use the open space above a property, usually allowing the surface to be used for another purpose.

Answer 35

air rights

Question 36

# pg. 84, 92 The act of transferring property to another. Alienation may be voluntary, such as by gift or sale, or involuntary, as through eminent domain or adverse possession.

Answer 36

alienation

Question 37

# pg. 217 The clause in a mortgage or deed of trust stating that the balance of the secured debt becomes immediately due and payable at the lender’s option if the property is sold by the borrower. In effect, this clause prevents the borrower from assigning the debt without the lender’s approval.

Answer 37

alienation clause

Question 38

A system of land ownership in which land is held free and clear of any rent or service due to the government; commonly contrasted to the feudal system. Land is held under the allodial system in the United States.

Answer 38

allodial system

Question 39

# pg. 199 A change to the existing content of a contract (i.e., if words or provisions are added to or deleted from the body of the contract). Must be initialed by all parties.

Answer 39

amendment

Question 40

# pg. 109 What does ALTA stand for?

Answer 40

American Land Title Association

Question 41

# pg. 109 A title insurance policy that protects the interest in a collateral property of a mortgage lender who originates a new real estate loan.

Answer 41

American Land Title Association (ALTA) policy

Question 42

# pg. 352, 377 What does ADA stand for?

Answer 42

Americans with Disabilities Act

Question 43

# pg. 352, 377 Act addresses rights of individuals with disabilities in employment and public accommodations.

Answer 43

Americans with Disabilities Act (ADA)

Question 44

# pg. 218 A loan in which the principal, as well as the interest, is payable in monthly or other periodic installments over the term of the loan.

Answer 44

amortized loan

Question 45

# pg. 25 Process of converting personal property into real property.

Answer 45

annexation

Question 46

# pg. 246 What does APR stand for?

Answer 46

annual percentage rate

Question 47

# pg. 246 The relationship of the total finance charges associated with a loan. This must be disclosed to borrowers by lenders under the Truth in Lending Act (TILA).

Answer 47

annual percentage rate (APR)

Question 48

# pg. 313 The appraisal principle holding that value can increase or decrease based on the expectation of some future benefit or detriment produced by the property.

Answer 48

anticipation

Question 49

# pg. 124 Laws designed to preserve the free enterprise of the open marketplace by making illegal certain private conspiracies and combinations formed to minimize competition. Most violations of antitrust laws in the real estate business involve either price-fixing (real estate professionals conspiring to set fixed compensation rates) or allocation of customers or markets (real estate professionals agreeing to limit their areas of trade or dealing to certain areas or properties).

Answer 49

antitrust laws

Question 50

# pg. 149 (see designated agency)

Answer 50

appointed agency

Question 51

# pg. 12 (see basis)

Answer 51

adjusted basis

Question 52

# pg. 302 An estimate of the quantity, quality, or value of something. The process through which conclusions of property value are obtained; also refers to the report that sets forth the process of estimation and conclusion of value.

Answer 52

appraisal

Question 53

# pg. 302 An opinion of a property’s market value given to a lender or client with detailed market information.

Answer 53

appraisal report

Question 54

# pg. 2? (302?) An independent person trained to provide an unbiased estimate of value.

Answer 54

appraiser

Question 55

# pg. 302 What does AIR stand for?

Answer 55

Appraiser Independence Requirements

Question 56

# pg. 302 Regulations issued by Fannie Mae that must be followed by appraisers to ensure accurate and objective appraisals.

Answer 56

Appraiser Independence Requirements (AIR)

Question 57

# pg. 11 An increase in the worth or value of a property due to economic or related causes, which may prove to be either temporary or permanent; opposite of depreciation.

Answer 57

appreciation

Question 58

# pg. 20 A right, privilege, or improvement belonging to, and passing with, the land; “runs with the land.”

Answer 58

appurtenance

Question 59

A level surface or piece of ground; the size of a surface; the amount of a two-dimensional object.

Answer 59

area

Question 60

# pg. 24 People’s desire for one area over another, based on a number of factors such as history, reputation, convenience, scenic beauty, and location.

Answer 60

area preference

Question 61

# pg. 403 A mineral once used in insulation and other materials that can cause respiratory diseases.

Answer 61

asbestos

Question 62

# pg. 314 The combining of two or more adjoining lots into one larger tract to increase their total value.

Answer 62

assemblage

Question 63

# pg. 291 The value set on property for taxation purposes.

Answer 63

assessed value

Question 64

# pg. 291 The imposition of a tax, charge, or levy, usually according to established rates.

Answer 64

assessment

Question 65

# pg. 291 A factor (number) by which the assessed value of a property is multiplied to arrive at a value for the property that is in line with statewide tax assessments. The ad valorem tax would be based on this adjusted value. An equalization factor may be applied to raise or lower assessments in a particular district or county.

Answer 65

assessment equalization factor

Question 66

# pg. 190 The transfer in writing of interest in a bond, mortgage, lease, or other instrument.

Answer 66

assignment

Question 67

# pg. 2 A licensed real estate salesperson who is employed by or associated with the broker to perform brokerage activities on behalf of or for the broker.

Answer 67

associate licensee

Question 68

# pg. 217 Acquiring title to property on which there is an existing mortgage and agreeing to be personally liable for the terms and conditions of the mortgage, including payments.

Answer 68

assumption of mortgage

Question 69

# pg. 295 The act of taking a person’s property into legal custody by writ or other judicial order to hold it available for application to that person’s debt to a creditor.

Answer 69

attachment

Question 70

# pg. 163 A listing agreement clause stating that the agreement will continue automatically for a certain period of time after its expiration date. In many states, use of this clause is discouraged or prohibited.

Answer 70

automatic extension clause