Real Estate Test Prep

Front 1

Cooperating agent

Back 1

A member of a multiple listing service who finds a buyer for property listed for sale by another broker.

Front 2

Sandwich lease

Back 2

Leasehold which has been sublet by a lessee to another party, so the former becomes a lessor.

Front 3

Statute of Frauds

Back 3

State law holding that certain contracts be in writing and signed to be enforceable, unless the terms of a contract can be performed within one year.

Front 4

Setback

Back 4

Area from the curb or other set line of demarcation within which no structures can exist.

Front 5

Hypothecate

Back 5

Using real property as collateral for a debt without having to give up possession of it.

Front 6

Affirm

Back 6

(a) To confirm or approve. (b) To make a sincere declaration that is not under oath.

Front 7

Grant

Back 7

To transfer or convey an interest in real property through a written instrument.

Front 8

Holder in due course

Back 8

One who has taken a note, check, or similar asset prior to it being overdue - in good faith and for value - and with no knowledge that it had previously been dishonored.

Front 9

Income approach to value

Back 9

One of the three main methods of appraisal in which an estimate of the property value is based on the net income it produces; also called the capitalization method or the investor's method of appraisal.

Front 10

Leverage

Back 10

Using borrowed funds to raise purchasing power and enhance profitability of an investment.

Front 11

Land contract

Back 11

Installment agreement for the purchase of real estate in which the buyer may use and occupy the land, without the passage of deed or title until all or a portion of the selling price is conveyed.

Front 12

Depreciation

Back 12

(a) A loss in value as a result of physical deterioration, functional obsolescence, or external obsolescence. (b) Allocating the cost of an asset over a period of time for the purpose of income-tax deductions.

Front 13

Civil Rights Act of 1964

Back 13

Federal law that disallows discrimination on the basis of race, color, national origin, or religion in programs for which the government provides financial assistance.

Front 14

Easement

Back 14

The right to enter or use someone's property for a specific purpose.

1. Appurtenant easement: anything which is used for the betterment of the land.

2. Easement in gross: the benefit is that of a person (or corporation) and not of the parcel of land.

Front 15

Fixture

Back 15

Personal property that becomes real property when attached to the land.

Front 16

Eave

Back 16

Horizontal lower edge of a sloped roof.

Front 17

1 acre equals...

Back 17

43,560 feet

Front 18

Tacking

Back 18

The process whereby an individual who is in Adverse Possession of real property adds his period of possession to that of a prior adverse possessor.

Front 19

Encroachment

Back 19

When a part of an improvement extends over the boundary line between properties.

3 years to sue from the discovery of the encroachment.

Front 20

Blockbusting

Back 20

When someone tries to persuade homeowners to list or sell their homes by forecasting that people of another race, or people with a certain disability, or people with a particular ethnic background, or other such group will be moving into the neighborhood.

Front 21

Economic rent

Back 21

The rent a property would earn on the open market.

Front 22

Contract rent

Back 22

The rent which is actually being earned by a property. Aka historical rent

Front 23

Duress

Back 23

When someone enters into an agreement as a result of threats of physical violence or mental harassment.

Front 24

Open mortgage

Back 24

Mortgage that has matured or whose payments are late, so that it is open to being foreclosed upon.

Front 25

Mortgage

Back 25

A contract between the property owner and the creditor. The borrower, or mortgagor, attaches a lien as a security for replacement against the loan which he is to receive from the lender, or mortgagee. A mortgage is a specific and voluntary lien.

Front 26

Estoppel

Back 26

A type of agency that is created when the principal leads the third party to believe that some other person is the principal's agent.

Front 27

Partition action

Back 27

A legal proceeding that sorts out disputes when there is a difference of opinion between the co-owners regarding the distribution of the property.

In this way the co-ownership ends and the property is either physically divided or the money derived from its sale is divided.

Front 28

Trust deed

Back 28

Used when a property serves as security for a debt.

Front 29

Commingling

Back 29

Mixing of trust funds with personal funds, a violation of state law.

Front 30

Specific performance

Back 30

The legal action through which the breachingparty is forced to fulfill the terms of the contract.

Front 31

Non-disclosure

Back 31

The failure to volunteer required information.

Front 32

Term of years

Back 32

A term of years is a property interest that isset to last for a predetermined period of time specified at the time theinterest is created. It is a type of non-freehold estate.

Front 33

Security agreement

Back 33

Secures a loan on personal property and is often referred to as collateral.

Examples of typical collateral are shares of stock and vehicles.

Front 34

Necessaries

Back 34

Essentials required for subsistence or survival, including all that is needed for maintaining a certain lifestyle depending on factors like age and social norms.

Front 35

Devise

Back 35

Conveyance of real property in someone's will.

Front 36

Subdivision

Back 36

One piece of land divided into two or more pieces of land, which are called lots or parcels.

Front 37

Tender

Back 37

An unconditional offer of performance of one party's contractual obligations.

A tender of performance constitutes an offer by a party to perform their duties under a contract.

A tender is often made when it appears the other party is not going to complete their contracted for performance.

Front 38

Hard loan

Back 38

Cash loan earmarked for a property purchase.

Front 39

Lock-in clause

Back 39

Period of time written into a loan contract prior to which the borrower may not repay any of the principal.

Front 40

Subrogation

Back 40

The substitution of one creditor for another.

Front 41

Discounting

Back 41

If a deed of trust sells on the secondary market for less than face value.

Front 42

Rumford Act

Back 42

This act prohibits discrimination based on the applicant's race, color, religion, gender, sexual orientation, and other protected groups.

Front 43

Holden Act

Back 43

Under this act the lender must make lending decisions based on the worthiness of the borrower and the security property, not on the property being in a certain neighborhood. It is against public policy to refuse mortgage loans or to impose stricter loan terms due to neighborhood characteristics.

Front 44

Basis

Back 44

An owner's investment in a property for the purpose of income tax.

Front 45

Sherman Antitrust Act

Back 45

Prohibits tying (tie-in) agreements.

Front 46

Value in use and value in exchange

Back 46

Value in exchange would be how an average person would objectively value a property (aka market value).

Value in use is the subjective value on a property by its owner, which includes the emotional aspects of being familiar with a property.

Front 47

Principle of Substitution

Back 47

Basis of all 3 methods of the appraisal process. If 2 properties for sale are equally desirable the less expensive one will be in greater demand.

Front 48

Escheat

Back 48

Reverting of a property to the state in case there are no capable heirs found.

Front 49

Reconciliation

Back 49

1. The collection and analysis of all the facts that affect the value of a property by an appraiser.

2. Comparing the trust fund balance to the sum of individual transactions.

Front 50

Emblements, Doctrine of

Back 50

Law allowing an agricultural tenant to enter the land for harvesting the crops even after the lease period ends.

Front 51

Probate

Back 51

To prove the validity of a will of a deceased person.

Front 52

Avulsion

Back 52

A sudden tearing away of land by the action of water or a sudden shift in a water course.

Front 53

Interpleader

Back 53

Proceeding started by a 3rd party to find the rights of other claimants to a property or in a transaction.

Front 54

Open-end mortgage

Back 54

A mortgage that sets a borrowing limit, but allows the borrower to re-borrow when required.

Front 55

Deferred maintenance

Back 55

Physical deterioration that is curable.

Front 56

Deed restriction

Back 56

Provisions in a deed that set restrictions on the use of property. May be either covenants or conditions.

Front 57

Unruh act

Back 57

State law requiring borrowers be provided with explicit notices of default on mortgages, to safeguard homeowners from losing their residence due to default on an installment purchase.

Front 58

Straight note

Back 58

A note payable for "interest only"