How can we help?

You can also find more resources in our Help Center.

65 terms

Real Estate Exam Glossary Terms

Terms taken from the glossary of the PSI Test Manual
STUDY
PLAY
Abandonment
Voluntary and permanent cessation of use or enjoyment with no intention to resume or reclaim one's possession or interest. May pertain to easement of a property.
Abstract of Title
Condensed version of history of a title to a particular parcel of real estate as recorded in the county clerk's records; consists of a summary of the original and grant and all subsequent conveyances and encumbrances affecting the property.
Abutting
Joining, reaching, or touching of adjoining land. Have a common boundary.
Accelerated Depreciation
A Method of calculating for tax purposes the depreciation of income property at a faster rate than would be achieved using the straight line method.
Acceleration Clause
A provision in a written mortgage, note, bond, or conditional sales contract that in the event of a default, the whole amount of the principal and the interest may be declared due and payable at once.
Accession
Title to improvements or additions to real property is acquired as a result of the accretion of alluvial deposits along the banks of streams or as a result of the annexation of fixtures
Accretion
An increase or addition to land by the deposit of sand or soil washed up naturally from a river, lake, or sea.
accrued depreciation
The actual depreciation that has occurred to a property at any given date; the difference between the cost of replacement new (as of the the date of appraisal) and the present appraised value.
acknowledgement
A declaration made by a person to a notary public or other public official authorized to take acknowledgments that an instrument was excuted by him or her as a free and voluntary act.
actual eviction
The result of legal action originated by a lessor, by which a defaulted tenant is physically outsted from the rented property pursuant to a court order.
Administrator
Party appointed by the county court to settel the estate of a deceased person who died intestate (w/o will)
Ad valorem tax
A tax levied according to value; generally used to refer to real estate tax. AKA: General tax
Adverse possession
The actual, visible, hostile, notorious, exclusive and continuous possession of another's land under a claim to title. Posssession for a statutory period may be a menas of acquiring title.
affidavit
A written statement signed and sworn to before a person authorized to administer an oath.
Agent
One who represents or has the power to act for another person (prinicipal). Authorization may be implied, expressed, or apparent.
Law of agency
Creates a fiduciary relationship, when a property owner (principal), excutes a listing agreement or management contract authorizing a licensed real estate broker to be his or her agent.
Agreement of Sale
A written agreement by which the purchaser agrees to buy certain real estate and the seller agrees to sell, on the terms and conditions set forth in the agreement.
Air Lot
A desingated airspace over a piece of land. Like surface property, may be transferred.
Air Rights
The right to use the open space above a property, generally allowing the surface to be used for another purpose.
Alienation
The act of transferring title of real property to another. Alienation may be voluntary, such as gift or sale, or involuntary, such as eminant domain or adverse possession.
Alienation Clause
The clause in the mortgage or deed of trust that states that the balance of the secured debt becomes immediately due and payable at the mortgagee's option if the title is transferred or sold.
This prevents the mortgagor form assigning the debt without the mortgagee's approval or buyer from assuming the seller's mortgage. AKA: Due-on-sale Clause
Alluvion
Soil increase resulting from accretion
Amenities
Tangible and Intangible features that increase the value of desirability of real estate.
Americans with Disabilities Act (ADA)
Federal Law, effecitve 1992, designed to eliminate discrimination against individuals with disabilities.
Amortization
The liquidation of a financial burden by installment payments, which include prinical and interest.
Amortized Loan
A loan in which the principal and interest are payable in monthly or other periodic installments over the term of the loan.
Antitrust Laws
Laws designed to preserve the free enterprise of the open marketplace by making illegal certain private conspiracies and combinations formed to minimize competition. Violation examples: Price Fixing, Claiming territories, or tying agreements
Appraisal
An estimate of the quantity, quality, or value of something. The process thorugh which conclusions about property value are obtained; also refers to the report that sets forth the process of estimation and conclusion of value.
Appraised Value
Estimation of the property's present worth.
Appreciation
An increase in worth or value of the property, due to econonmic or related causes, which may prove to be either temporary or permanent; opposite of depreciation.
Appurtenant
Belonging to; Incident to; annexed to. Ex: garaged is this term to the to the house; common elements are this term to each apartment. They pass with the land with the property is transferred.
Assessment
The imposition of a tax, charge, or levy, usually according to established rates.
Assignment
The transfer in writing of rights or interest in a bond, mortgage, lease, or other instrument.
Attorney-in-fact
The holder of a power of attorney.
Attorney's opinion of title
An instrument written and signed by the attorney who examines the title, stating her or his own opnion as to whether a seller may convey good title.
Avulsion
A sudden tearing away of land by the action of natural forces.
Balloon Payment
The final payment of a mortgage loan that is considerably larger than the required periodic payments because the loan amount was not fully amortized.
Bargand and Sale Deed
A deed that carries with it no warranties against liens or other encumbrances but that does imply the grantor has the right to convey titile.
Base fee
A determinable fee estate that may be inherited.
Base Line
One of a set of imaginary lines running east and west and crossing a principal meridian at a definite point. Used by surveyors under the rectangular survey method
Benchmark
A permanent reference mark or point established for use by surveyors when measuring differences in elevation.
Beneficiary
The person form whom a trust operates or in whose behalf the income from a truse estate is drawn.
Bequest
A provision in a will providing for the distribution of personal property.
Bilateral contract
A contract in which each party promises to perform an act in exchange for the other party's promise to perform
Bill of Sale
A written instrument given to pass title to personal property
Binder
Agreement that may accompany an earnest money deposit for the purchase of real property as evidence of the purchaser's good faith and intent to complete the transaction
Blanket mortgage
Mortgage that covers more than one parcel of land and provides for each parcel's release from the mortgage lien on repayment of a definite portion of the debt.
Blockbusting
Illigal practice of inducing homeowners to sell their properties by making claims that minorities are moving into the neighborhood.
Blue-sky-laws
The common name for state and federal laws that regulate the registration and sale of investment securities.
Boycotting
Two or more businessess conspire against other businesses to reduce competition.
Branch office
Secondary place of business. Generally run by licensed real estate broker, broker salesperson, or associate broker working on behalf of the broker operating the main office.
Breach of Contract
Failure, without legal excuse, of one of the parties to a contract to perform according to the contract.
Broker
One who buys and sells for another for commission
Budget Loan
Loan in which the monthly payments made by the borrower cover not only the interest and payment on the principal but also 1/12 of taxes, pmi, assessments, homeowner's insurance, etc.
Capital Gain
Profit earned from the sale of an asset.
Capital Investment
The initial capital and long-term expenditures made to establish and maintain a business or investment property.
Capitalization
Process of converting into present value ( or obtaining the present worth of) a series of anticipated future periodic installments of net income. In real estate appraisal, it usually takes the form of discounting. Formula is expressed as: Income/Rate=Vlaue
Capitalization Rate
Rate of return a property will produce on the owner's investment.
Real Property
The land and anyting permanently affixed to it; includes interests, benefits, and rights inherent in the ownership of real estate
Personal Property
Movable objects (chattels) that do not fit into the definition of real property; conveyed by bill of sale.
3 Physical Characteristics of Land
Immobile
Indestructible
Unique/Nonhomogenius/Heterogenious
4 Economic Characteristics of Land
Scarcity
Improvements
Permanence of Investment
Area Preference/Situs
Encumbrance
A charge, claim, or liability that attaches to and is binding on real estate
Encumbrances that affect the physical conditon of the property
Encroachments
Easements
Restrictions
Easement Appurtenant
Requires 2 tracts of land either contiguous (connected) or noncontiguous (not connected) owned by different parties.
Tract over which easement runs is the servient tenement. Tract that benefits from the easement is the dominant tenement.