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124 Cards in this Set
- Front
- Back
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Universal Agent
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A person empowered to do anything the principal could do personally.
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Subagent
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One who is employed by a person already acting as an agent. Typically a reference to a salesperson licensed under a broker (agent) who is employed under the terms of a listing agreement.
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Special agent
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One who is authorized by a principal to perform a single act or transaction; a real estate broker is usually a special agent authorized to find a buyer for a particular property.
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Puffing
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Exaggerated or superlative comments or opinions.
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Principal
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1. A sum loaned or employed as a fund or an investment, as distinguished from its income or profits. 2.The original amount (as in a loan) of the total due and payable at a certian date. 3. A ain party to a transaction- the person for whom the agent works.
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Agency
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The relationship between a principal and an agent wherein the agent is authorized to represent the principal in certian transactions. 43
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Agency coupled with an interest
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An agency relationship in which the agent is given an estate or interest in the subject of the agency (the property). 51
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Buyer's Agents
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A residential real estate broker or salesperson who represents the prospective purchaser in a transaction. The buyer's agent owes the buyer-principal the common-law or statutory agency duties. 54
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Client
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The Principal
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Customer
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The third party or nonrepresented consumer for whom some level of service is provided. 45
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Designated agent
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A licensee authorized by a broker to act as the agent for a specific principal in a particular transaction. 52
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Dual Agency
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Representing both parties in a transaction. This is unethical unless both parties agree to it, and it is illegal in many states. 54
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Express agency
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An agency relationship based on a formal agreement between the parties. 44
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Express agreement
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An oral or written contract in which the parties state the contract's terms and express their intentions in words. 44
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Fiduciary relationship
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A relationship of trust and confidence, as between trustee and beneficiary, attorney and client, or principal and agent. 46
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Fraud
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Deception intended to cause a person to give up property or a lawful right. 59
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General agent
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One who is authorized by a principal to represent the principal in a specific range of matters. 52
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Implied agency
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Based on the actions of the parties that imply that they have mutually consented to an agency relationship, an implied agency relationship is formed. 44
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Implied agreement
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A contract under which the agreement of the parties is demonstrated by their acts and conduct. 44
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Latent defect
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A hidden structural defect that could not be discovered by ordinary inspection and that threatens the properties soundness or the safety of its inhabitants. Some states impose on sellers and licensees a duty to inspect for and disclose latent defects. 60
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Law of agency
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The same as agency. The relationship between a principal wherein the agent is authorized to represent the principal in certain transactions. 43
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Listing agreement
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A contract between an owner (as principal) and a real estate broker (as agent) by which the broker is employed as agent to find a buyer for the owner's real estate on the owner's terms, for which service the owner agrees to pay a commission. 44
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Accession
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Acquring title to additions or improvements to real property as a result of the annexation of fixtures or the accretion of alluvial deposts along the banks of streams. 22
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Agent
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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. 45
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Air rights
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The right to use the open space above a property, usually allowing the surface to be used for another purpose. 18
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Annexation
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Process of converting personal property into real property. 20-21
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Appraisal
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An estimate of the quality, quantity, 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. 5
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Appurtenance
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A right, privilege, or improvement belonging to, and passing with,the land. 18
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Attachment
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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. 26
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Balance
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The appraisal principle that states that the greatest value in a property will occur when the type and size of the improvements are proportional to each other as well as the land.
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Allodial system
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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 US.
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Broker
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One who acts as an intermediary on behalf of others for a fee or commission. 5
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Brokerage
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The bringing together of parties interested in making a real estate transaction. 5
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Bundle of legal rights
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The concept of land ownership that includes ownership of all legal rights to the land- for example, possession, control within the law, and enjoyment. 17
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Buyer-agency agreement
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A principal-agent relationship in which the broker is the agent for the buyer, with fiduciary responsibilities to the buyer. The broker represents the buyer under the law of agency. 89
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Buyer's broker
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A residential real estate broker who represents prospective buyers exclusively. As the buyers agent, the broker owes the buyer-principal the commonlaw or statutory agency duties. 63
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Caveat emptor
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A Latin phrase meaning "Let the buyer beware". 67
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Coinsurance clause
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a clause in insurance policies covering real property that requires the policyholder to maintain fire insurance coverage generally equal to at least 80% of the property's actual replacement cost. 37
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Commission
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Payment to a broker for services rendered, such as in the sale or purchase of real property; usually a percentage of the selling price of the property. 75
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Common elements
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Parts of a property that are necessary or convenient to the existence, maintenance, and safety of a condominium or are normally in common use by all of the condominium residents. Each condominium owner has an undivided interest in the common elements. 31
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Common law
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The body of law based on custom, usage, and court decisions. 43
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Comprehensive Loss underwriting Exchange (CLUE)
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A database of consumer claim history that allows insurance companies to access prior claim information in the underwriting and rating process. 37
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Condominium
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The absolute ownership of a unit in a multiunit building based on a legal description of the airspace the unit actually occupies, plus an undivided interest in the ownership of the common elements, which are owned jointly with the other condominium unit pwners. 31
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Cooperative
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A residential multiunit building whose title is held by a trust or corporation that is owned by and operated for the benefit of persons living within the building, who are the beneficial owners of the trust or stockholders of the corporation, each possessing a proprietary leae. 30
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Dedication
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The voluntary transfer of private property by its owner to the public for some public use, such as for streets or schools. 10
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Deed
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A written instrument that, when executed and delivered, conveys title to or an interest in real estate. 18
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Do not call registry
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A registry, managed by the Federal Trade Commission, that lists the phone numbers of consumers who have indicated their preference to limit the telemarketing calls they receive. 81
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Duress
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Unlawful constraint or action exercised upon a person whereby the person is forced to perform an act against his or her will. A contract entered into under duress is voidable.
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Electronic contracting
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A process of integrating information in a real estate contract between clients, lender, and title and closing agents electronically. 74
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Electronic Signaturs in Global and National Commerce Act (E-sign)
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An act that makes contracts (including signatures) and records legally enforceable regardless of the medium in which they are created. 74
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Emblements
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Growing crops, such as grapes and corn,that are produced annually through labor and industry, also called fructus industriales. 20
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Equity
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The interest or value that an owner has in property over and above any indebtedness. 35
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Estoppel
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Method of creating an agency relationship in which someone states incorrectly that another person is his or her agent and a third party relies on that representation.
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Estoppel Certificate
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A document in which a borrower certifies the amount owed on a mortgage loan and the rate of interest.
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Exclusive-agency listing
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A listing contract under which the owner appoints a real estate broker as his or her exclusive agent for a designated period of time to sell the property, on the owner's stated terms, for a commisiion. The owner reserves the right to sell without paying anyone a commission if her or she sells to a prospect who has not be introduced or claimed by the broker. 90
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Exclusive-right-to-sell listing
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A listing contract under which the owner appoints a real estate broker as his or her exclusive agent for a designated period of time, to sell the property for the owners stated terms, and agrees to pay the broker a commission when the property is sold, whether by the broker, the owner, or another broker. 90
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Execution
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The signing and delivery of an instrument. Also, a legal order directing an official to enforce a judgement against the property of a debtor. 18
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Fee for service
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Arrangement where a consumer asks a license to perform specific real estate services for a set fee. 79
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Fiduciary
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One in whom trust and confidence is placed; a reference to a broker employed under the terms of a listing contract or buyer agency agreement. 45
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Government check
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The 24 mile square parcels composed of 16 townships in the rectangular (government) survey system of legal description. 161
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Government lot
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Fractional sections in the rectangular (government) survey system that are less than one-quarter section in area. 161
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Graduated payment system (GPM)
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A loan in which the monthly principal and interest payments increase by a certain percentage each year for a certain number of years and then level off for the remaining loan term.
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Grantee
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A person who receives a conveyance of real property from a grantor. 209
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Granting clause
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words in a deed of convayance that state the grantor's intention to convey the property at the present time. This clause is generally worded as "convay and warrant"; "grant"; "grant, bargain and sell"; or the like. 210
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Gross income multiplier
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A figure used as a multiplier of the gross annual income of a property to produce an estimate of the properties value. 347
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Gross lease
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A lease of property according to which a landlord pays all property charges regularly incurred through ownership, such as repairs, taxes, insurance and operating expenses. Most residential leases are gross leases. 296
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Gross rent multiplier (GRM)
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The figure used as a multiplier of the gross monthly income of a property to produce an estimate of the property's value. 347
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Ground lease
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A lease of land only, on which the tenant owns a building or is required to build as specified in the lease.. Such leases are usually long term net leases; the tenants rights and obligations continue until the lease expires or is terminated through default. 297
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Growing-equity Mortgage (GEM)
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A loan in which the monthly payments increase annually, with the increased amount being used to reduce directly the principal balance outstanding and thus shorten the overall term of the loan. 264
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Heir
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one who might inherit or succeed to an interest in land under the state law of descent when the owner dies without leaving a vald will. 219
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Highest and best use
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The possible use of a property that would produce the greatest net income and thereby develop the highest value. 340
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Holdover tenancy
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A tenancy whereby the lessee retains possession of leased property after the lease has expired and the landlord, by continuing to accept rent, agrees to the tenant's continued occupancy as defined by state law. 289
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Holographic will
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A will that is written, dated and signed in the testator's handwriting. 219
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Home equity loan
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A loan (sometimes called a line of credit) under which a property owner uses his or her residence as collateral and can then draw funds up to a prearranged amount against the property. 274
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Homeowner's insurance policy
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A standardized package insurance policy that covers a residential real estate owner against financial loss from fire, theft, public liability and other common risks. 36
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Homestead
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Land that is owned and occupied as the family home. In many states aportion of the area or value of this land is protected or exempt from judgemants for debts. 120
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Hypothecate
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To pledge property as security for an obligation or loan without giving up possession of it. 240
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Implied warranty of habitability
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A theory in landlord/tenant law in which the landlord renting residential property implies that the property is habitable and fit for its intended use.
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Improvement
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1) any structure, usually privately owned, erected on a site to enhance the value of the property- for example, building a fence or a driveway. 2) A publicly owned structure added to or benefiting land, such as a curb, sidewalk, street or sewer. 16
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Income approach
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The process of estimating the value of an income producing property through capitalization of the annual net income expected to be produced by the property during its remaining useful life. 346
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Income property
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Property held for current income as well as a potential profit upon its sale. 439
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Incorporeal right
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A nonpossessory right in real estate; for example, an easement or right of way.
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Independent contractor
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Someone who is retained to perform a certain act but who is subject to the control and direction of another only as th the end result and not as to the way in which the act is performed. Unlike an employee, an independent contractor pays for all expenses and SS and income taxes and receives no employee benefits. Most real estate sales people are independent contractors. 70
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Index method
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The appraisal method of estimating building costs by multiplying the original cost of the property by a percentage factor to adjust for current construction costs. 344
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abtract of title
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The condensed history of a title to a particular parcel of real estste, cosisting of a summary of the original grant and all sunsequent conveyances and encumberances affecting the property and a and a certification by the abstractor that the history is complete and accurate. 230
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Acceleration clause
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The clause in a mortgage or deed of trust that can be enforced to make the entire debt due immediately if the borrower defaults on an installation payment or other covenant. 245
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Accretion
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The increase or addition of land by the deposit of sand or soil washed up naturally from a river, lake or sea. 127
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Accrued items
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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. 425
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Acknowledgment
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A formal declatation made befor a duly authorized officer, usually a notary public, by a person who has signed a document. 212
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Acre
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A measure of land equal to 43,560 square feet, 4,840 square yards, 4047 square meters, 160 square rods, or 0.4047 hectares. 169
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Actual eviction
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The legal process that results in the tenant's being physically removed from the leased premises. 298
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Actual notice
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Express information or fact; that which is known; direct knowledge. 228
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Adjustable-rate-mortgage (ARM)
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A loan characterized by a fluctuating interest rate, usually one tied to a bank or savings and loan association cost-of-funds index. 262
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Ad valorem tax
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A tax levied according to value, generally used to refer to real estate tax. Also called the general tax. 177
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Adverse possession
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The actual, oen, notorious, hostile and continuous possession of another's land under a claim of title. Possession for a stutory period may be a means of acquiring title. 217
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Affidavit of title
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A written statement, made under oath by a seller or grantor of real property and acknowledged by a notary public, bin which the grantor 1)identifies himself and indicates marital status, 2) certifies that since the examination of title, on the date of the contract, no defects have occurred in the title, and 3) certifies that he is in possession of the property (if applicable) 416
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Air lot
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A designated airspace over a piece of land. An air lot, like surface property may be transferred. 166
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Alienation
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The act of transferring property to another. Alienation may be voluntary, as through eminent domain or adverse possession. 217
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Alienation clause
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The clause in a mortgage or deed of trust that states that the balance of the secured debt becomes immediately due and payable at the lenders option if the property is sold by the borrower. In effect, this clause prevents the borrower from assigning the bedt without the lenders approval. 248
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American Land Title Association (ALTA) policy
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A title insurance policy that protects the interest in a colateral property of a mortgage lender who originates a new real estate loan. 232
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Americans with Disabilities Act
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Act addresses rights of individuals with disabilities in employment and public accommodations. 377
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Amortized loan
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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. 261
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Annual percentage rate (APR)
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The relationship of the total finance charges associated with a loan. This must be disclosed to the borrowers by lenders under the Truth-in-Lending-Act. 275
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Anticipation
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The appraisal principle that holds that value can increase or decrease based on the expectation of some future benefit or detriment produced by the property. 340
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Appraisal report
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An opinion of market value on a property given to a lender or client with detailed and accurate information. 330
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Antitrust laws
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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 involve either price fixing or allocation of customers or markets. 78
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Appreciation
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An increase of 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. 440
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Appraiser
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An independent person trained to provide an unbiased estimate of value. 330
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Appurtenant easement
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An easement that is annexed to the ownership of one parcel and allows the owner the use of the neighbor's land. 122
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Base line
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The main imaginary line running east and west and crossing a principal meridian at a definate point, used by surveyors for reference in locating and describing land under the rectangular (government) survey system of legal description. 157
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Basis
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The financial interest that the Internal Revenue Service attributes to an owner of an investment property for the purpose of determining annual depreciation and gain or loss on the sale of the asset. If a property was acquired by purchase, the owner's basis is the cost of the property plus the value of any capital expenditures for improvements to the property, minus any depreciation allowable or actually taken. This new basis is called the adjusted basis. 443
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Asbestos
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A mineral once used in insulation and other materials that can cause respiratory diseases. 392
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Assemblage
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The combining of two or more adjoining lots into one larger tract to increase their total value. 341
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Assessment
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The imposition of a tax, charge or levy, usually according to established rate. 145
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Assignment
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The transfer in writing of interest in a bond, mortgage, lease or other instrument. 195
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Benchmark
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A permanent reference mark or point established for use by surveyors in measuring differences in elevation. 167
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Assumption of Mortgage
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Acquiring title to property on which there is an existing mortgage and agreeing to be personnally liable for the terms and conditions of the mortgage, including payments. 247
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Beneficiary
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10 the person for whom a trust operates or in whose behalf the income from a trust estate is drawn. 2) A lender in a deed of trust loan transaction. 140
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Attachment
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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. 26
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Attorney's opinion of title
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An abstract of title that an attorney has examined and has certified to be, in his or her opinion, an accurate statement of the facts concerning the property ownership. 231
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Automatic underwriting
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Computer systems that permit lenders to expedite the loan approval process and reduce lending costs. 278
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automatic extension
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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. 92
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Avulsion
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The sudden tearing away of land as by earthquake, flood, volcanic action, or the sudden change in the course of a stream. 127
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Balloon payment
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A final payment of a mortgage loan that is considerably larger then the required periodic payments because the loan was not fully amortized. 261
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