Real Estate Concepts Quiz

Abstract of Title

• An abbreviated summary of a property's history, detailing transfers, grants, wills, conveyances, liens, and encumbrances.

Acceleration Clause

• A mortgage clause that requires immediate payment of the entire loan upon default.

Accession

• The right to property's additions, whether natural or man-made.

Accretion

• A gradual increase in land area due to natural soil deposits.

Acre

• A unit of land measurement (43,560 square feet).

Actual Eviction

• The legal process of removing someone from a property, preventing re-entry.

Ad Valorem Taxes

• Property taxes based on the assessed value of the property.

Adjustable-Rate Mortgage (ARM)

• A mortgage with an interest rate that adjusts based on market changes.

Adverse Possession

• The involuntary transfer of title to a property after a period of non-use by its original owner.

Agency Agreement

• A legally binding agreement authorizing one party to act on behalf of another.

Agent

• A licensed individual acting on behalf of another in a real estate transaction.

Air Rights

• The right to use the air space above a piece of land.

Air Space

• The area above ground owned along with a property.

Alienation

• The transfer of property ownership, voluntary or involuntary.

Americans with Disabilities Act (ADA)

• A federal law prohibiting discrimination against people with disabilities.

Amortization

• The process of paying off a debt in installments.

Annual Percentage Rate (APR)

• The annual interest cost of a loan.

Appraisal

• An official valuation of a property by a licensed appraiser.

Appraiser

• A licensed professional who estimates property value.

Appreciation

• An increase in the value of a property.

Appurtenances

• Rights inherent to property ownership, often transferred with the land.

Arrears

• Payments made late, compensating for charges accrued during a period.

Asbestos

• A naturally occurring mineral fiber, if airborne, harmful to respiratory health.

Assemblage

• Combining multiple adjacent properties into one larger parcel.

Assessed Value

• The value a government places on a property for tax purposes.

Assignment

• The transfer of contract rights and obligations from one party to another.

Associate Broker

• A licensed individual working under the supervision of a real estate broker.

Avulsion

• The sudden loss of land due to a change in a body of water.

Balloon Payment

• A final large payment at the end of a loan term, covering the remaining principal.

Bargain and Sale Deed

• A deed conveying ownership without any specific guarantees.

Baseline

• A horizontal reference line used in land surveying.

Benchmark

• A permanent marker establishing a known elevation.

Beneficiary

• A recipient of benefits under a trust, will, or insurance policy.

Bilateral Contract

• A contract where both parties make promises of performance.

Binder

• A preliminary agreement for a property sale, secured by a deposit.

Blanket Mortgage

• A loan secured by multiple properties.

Blind Ad

• An advertisement that fails to disclose an agent's licensing.

Blockbusting

• The illegal practice of inducing homeowners to sell by fear-mongering.

Branch Office

• A real estate office location separate from the main office.

Bridge Loan

• A short-term loan bridging the gap between loans.

Broker

• A licensed individual representing one party in a real estate transaction.

Brownfield

• Land potentially contaminated by hazardous materials.

Building Code

• Regulations for building design, safety, and structure.

Bundle of Rights

• The complete ownership rights of a property.

Buydown

• Paying extra money to reduce a loan's interest rate.

Buyer's Market

• A market with more sellers than buyers, favoring buyers.

Capital Expenditure

• Expenses to improve or maintain a property.

Capital Improvement

• Enhancements that increase a property's value.

Capitalization Rate (Cap Rate)

• A return rate representing a property's annual income compared to its value.

Carbon Monoxide

• A colorless, odorless gas produced by incomplete combustion.

Cash Flow

• Money coming in and out of a business in a given period.

CERCLA

• A federal law regarding environmental cleanup of contaminated property.

Certificate of Occupancy (CO)

• A document allowing a building to be occupied after inspections.

Certificate of Title

• A document detailing ownership history and title opinion.

Chain of Title

• The chronological history of property ownership.

Chattel

• Personal property.

Chlordane

• A dangerous pesticide chemical.

Chlorofluorocarbons (CFCs)

• A group of refrigerants now known to be harmful to the environment.

Civil Rights Act of 1866

• A federal law prohibiting housing discrimination based on race.

Cloud

• A claim or encumbrance affecting property ownership.

Collateral

• Security for a loan, usually a property.

Collusion

• An illegal agreement between parties to harm others.

Color of Title

• A defective title transfer that's not apparent to the new owner.

Commingling

• Mixing personal funds with client funds.

Common Elements

• Shared portions of property ownership, such as lobbies or parking lots.

Community Property

• Property co-ownership system often applied to married couples to determine what property is joint and what is individual.

Comparable (Comp)

• A recently sold property similar to the subject property for valuation purposes.

Comparative Market Analysis (CMA)

• An analysis of recently sold properties to estimate the value of a similar property.

Condominium

• Property ownership with individual units & shared common areas.

Consideration

• Something of value exchanged to form a contract.

Construction Mortgage

• A temporary loan to fund a construction project.

Constructive Eviction

• Unlawfully making a property unsuitable for use, removing a tenant.

Contingency

• A condition in a contract that must be met for performance.

Contract

• A legally binding agreement with exchanged promises.

Contract for Deed

• A sales contract where payment occurs in installments.

Contribution

• Value added to a property by improvements.

Conventional Loan

• A mortgage not insured or guaranteed by the government.

Conversion

• Changing real property to personal property, or vice versa; also the illegal act of mixing a fiduciary's funds with an agent's personal funds.

Conveyance

• An instrument transferring property ownership.

Cooperating Brokerage

• A collaboration between brokerages to complete a transaction.

Corrective Maintenance

• Repairing equipment after failure.

Cost Approach

• Estimating property value by replacement cost, minus depreciation, plus land value.

Counteroffer

• A modified offer in response to an original offer.

Covenant of Seisin

• A grantor's warranty that they hold ownership of a property.

Covenants, Conditions, and Restrictions (CC&Rs)

• Private restrictions on property use.

Credit Report

• Information on an individual's credit history and standing.

Credits

• Amounts received.

Curtesy/Dower

• Spousal rights to inherit property upon death of a spouse.

Customer

• An individual with whom an agent has no agency relationship.

Datum

• A reference point for elevation measurements.

Debits

• Amounts owed.

Debt Service

• Current debt obligations.

Debt Service Coverage Ratio

• A ratio of net operating income to total debt service.

Debt-to-Income Ratio

• A ratio of monthly debt to monthly income, used in credit assessments.

Deed in Lieu of Foreclosure

• Voluntary transfer of property to a lender to avoid foreclosure.

Deed In Trust

• A deed transferring ownership to a trustee.

Deed Restriction

• A limitation on how a property can be used in a deed.

Defeasance

• A clause stating a loan is satisfied and the lien is removed.

Deficiency Judgment

• A court order attaching a lien for outstanding debts not covered by a sale.

Demand

• The general desire for an asset at a given time.

Test your knowledge on essential real estate terms and concepts, including property history, mortgages, and land rights. This quiz covers important definitions like acceleration clauses and adverse possession, helping you understand the legal aspects of real estate transactions.