Real Estate Terminology Quiz

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Questions and Answers

What is the main purpose of an assistance animal?

To offer emotional or physical support to individuals with disabilities (correct)

To provide financial support to individuals

To serve as a service animal for physical disabilities

To enhance property value in housing developments

What is the primary function of association fees in homeowners associations?

To facilitate real estate auction transactions

To fund individual homeowners' renovation projects

To allow property owners to transfer ownership

To cover common area expenses like utilities and maintenance (correct)

What is required for an assumable loan to be transferred to a new buyer?

The approval of the new buyer's creditworthiness

A release from the original borrower must be obtained

A new appraisal of the property must be conducted

The lender's approval is required (correct)

What does an attorney's opinion of title signify?

A statement regarding the quality of a property title Signup and view all the answers

What is an attachment lien used for?

To block the sale of a property pending litigation Signup and view all the answers

What defines an attorney-in-fact?

A person designated to act on behalf of another but not necessarily authorized to practice law Signup and view all the answers

What is avulsion in the context of property law?

A natural event where land is removed from one property and deposited onto another Signup and view all the answers

What is the role of an auctioneer in real estate?

To conduct public auctions of property and items Signup and view all the answers

What is the purpose of a condominium declaration?

To specify common and private spaces and list easements Signup and view all the answers

Which of the following best describes a conforming loan?

A loan that meets the qualifying standards of Fannie Mae or Freddie Mac Signup and view all the answers

What does constructive eviction refer to?

Interference with a tenant’s enjoyment of the premises without formal eviction Signup and view all the answers

What is meant by 'consideration' in a legal contract?

Anything of value exchanged to induce contract formation Signup and view all the answers

Which principle states that a property achieves maximum value when surrounded by similar properties?

Conformity Signup and view all the answers

What is the role of the Consumer Financial Protection Bureau (CFPB)?

To oversee and enforce consumer financial laws Signup and view all the answers

Which of the following best describes confidentiality in an agency relationship?

It requires agents to maintain client privacy indefinitely Signup and view all the answers

What characterizes a construction loan?

A temporary loan used to finance building improvements Signup and view all the answers

What does the Implied Warranty of Habitability guarantee?

The premises are safe for occupancy and comply with regulations. Signup and view all the answers

Which appraisal method estimates property value based on its income generation?

Income Approach Signup and view all the answers

What is Imputed Knowledge in a principal-agent relationship?

Knowledge communicated to the agent is considered communicated to the principal. Signup and view all the answers

What does Incentive Zoning aim to achieve?

To incentivize developers to offer community benefits. Signup and view all the answers

Which term describes the authority to take necessary actions to follow a principal's express orders?

Incidental Authority Signup and view all the answers

What is Incidental Authority?

The authorization to carry out necessary tasks related to express orders. Signup and view all the answers

What does an Income Statement typically report?

The income and expenses associated with an investment. Signup and view all the answers

What constitutes Incurable Depreciation?

Elements of a structure that cannot be corrected either physically or financially. Signup and view all the answers

What is the primary purpose of the Interstate Land Sales Full Disclosure Act?

To protect consumers from fraud and abusive marketing in land sales Signup and view all the answers

What does the term 'intestate' refer to in legal terms?

Dying without a will, leading to state laws applying Signup and view all the answers

Which of the following best describes an 'involuntary lien'?

A lien that arises by operation of law without the owner's consent Signup and view all the answers

What does 'investment value' refer to?

The specific value of a property to a particular investor based on their criteria Signup and view all the answers

Which statement correctly defines 'joint tenancy'?

A form of co-ownership with equal undivided interests and right of survivorship Signup and view all the answers

What is a fixture in real estate?

An item of personal property that has become part of real property Signup and view all the answers

What does the term 'flipping' refer to in real estate?

Purchasing a property and quickly reselling it for a profit Signup and view all the answers

What does the floor area ratio (FAR) indicate?

The maximum size of a building permitted on a development site Signup and view all the answers

What is a 'For Sale by Owner' (FSBO)?

A property offered for sale directly by the seller without an agent Signup and view all the answers

What is a forbearance agreement?

An arrangement to temporarily dismiss loan payments Signup and view all the answers

Which statement accurately describes the foundation of a building?

It is the primary structure that supports the entire building Signup and view all the answers

What does the term 'floor load capacity' refer to?

The weight (pounds per square foot) that a floor can support Signup and view all the answers

What is known as a forcible entry and detainer action?

A lawsuit filed for eviction of a tenant Signup and view all the answers

What does the Civil Rights Act of 1866 specifically prohibit?

Discrimination based on race and color in property transactions Signup and view all the answers

What is defined as a claim that could place the title to real property in question?

Cloud on the Title Signup and view all the answers

Which term describes the expenses incurred during the final stages of a real estate transaction?

Closing Costs Signup and view all the answers

What does combined loan-to-value (CLTV) measure?

The relationship between unpaid principal balances of all loans and property value Signup and view all the answers

Which document provides a detailed accounting of expenses for a real estate transaction?

Closing Disclosure Signup and view all the answers

What is the primary function of a Building Department?

To issue building permits and ensure compliance with building codes. Signup and view all the answers

Which aspect is addressed during a Building Inspection?

Compliance with state and local building codes. Signup and view all the answers

What does a Building Permit signify for a construction project?

It grants permission for construction or remodeling to commence. Signup and view all the answers

Which of the following accurately describes a Bump Clause in real estate?

It allows a seller to continue showing the property while negotiating with a buyer. Signup and view all the answers

What is meant by the term Bundle of Rights in real estate?

The exclusive rights tied to property ownership, including possession and control. Signup and view all the answers

What is the main purpose of an Environmental Site Assessment (ESA)?

To identify potential environmental contamination liabilities Signup and view all the answers

Which of the following best describes an Equitable Lien?

A lien created when fairness requires a court to declare its existence Signup and view all the answers

What does the term 'Equitable Right of Redemption' refer to?

The right of a debtor to redeem property before final sale confirmation Signup and view all the answers

What does the term 'Chain of Title' refer to in real estate?

The chronological succession of changes in ownership of a property. Signup and view all the answers

What is the Certificate of Purchase associated with in real estate transactions?

It confirms the winning bid for real estate tax or foreclosure sale. Signup and view all the answers

What is the primary function of an Escrow Account?

To hold deposits from clients until conditions are met Signup and view all the answers

Which document serves as proof of ownership after a title search is performed?

Certificate of Title Signup and view all the answers

Which federal law mandates fairness in lending practices without discrimination?

Equal Credit Opportunity Act Signup and view all the answers

What is the primary purpose of the Certificate of Permanent Location?

To confirm the status of manufactured homes permanently affixed to real property. Signup and view all the answers

Which principle states that property value is subject to constant change?

Change Signup and view all the answers

Study Notes

Assistance Animal

An animal that provides emotional or physical support to an individual with a disability, lessening the effects of the disability.
Also called Emotional Support Animal.

Association Fees

Monthly dues homeowners pay to cover common area expenses such as utilities, management, building maintenance, insurance, and amenities.

Assumable Loan

A financing arrangement where a borrower transfers their outstanding loan and its terms to the buyer.
Requires lender approval.

Assumption

One party takes over the payments and liability for another party's loan.
Usually requires lender approval.
A release of liability is needed for the original party, otherwise, they remain secondarily liable for the loan.

Attachment Lien

A lien acquired by a creditor on property to prevent transfer pending litigation.

Attestation

The act of a notary public witnessing a person signing a document.

Attorney-In-Fact

A person designated in a document (e.g., power of attorney) to act on behalf of another, but not necessarily authorized to practice law.

Attorney's Opinion of Title

A statement issued by an attorney after analyzing an abstract of title, assessing its quality.

Attornment

An act where tenants acknowledge their obligations to a new landlord.

Auctioneer

A licensed or authorized person who conducts public auctions of items belonging to others.
In some states, auctioneers of real property must be licensed as real estate brokers, while in others, they must be licensed auctioneers.

Automated Clearinghouse (ACH)

A settlement system for financial transactions by U.S. commercial lenders.
A nationwide network for paperless payments between financial institutions and government agencies.

Automated Underwriting

A computerized evaluation of a borrower's creditworthiness using statistical models.

Avulsion

A natural process where land is suddenly removed from one property and deposited onto another, like in a flash flood.

Backup Offer

An offer made and accepted after another offer, contingent on the failure of the first contract.

Bad Title

Title with defects that make it unmarketable.

Condominium

A property developed for co-ownership, with each owner having a separate interest in an individual unit, plus an undivided interest in the common areas and airspace.

Condominium Declaration

Document filed in public record by developers when creating or converting property into a condominium.
It specifies common and private spaces, lists easements, and describes the land, bylaws, and house rules.

Confidentiality

A duty of an agent to protect the client's confidential information, which lasts even after the agency relationship ends.

Conforming Loan

A loan that meets the qualifying standards of Fannie Mae or Freddie Mac, making it eligible for sale on the secondary market.

Conformity

The principle of value indicating that a property reaches its maximum value when surrounded by properties similar in style, function, and utility.
Also called Homogeneity.

A binding agreement reached before judgment in a court case where the accused party agrees to change behavior without admitting wrongdoing.

Consideration

Anything of value, like money, goods, services, or promises, given to induce another person to enter a contract.
Also called Valuable Consideration.

Construction Loan

A temporary loan used to finance the construction of improvements and buildings on land.

Constructive Eviction

When a landlord doesn't physically or legally evict a tenant but takes actions that interfere with their use and enjoyment of the premises.
This may provide legal grounds for a tenant's release from the lease.

Constructive Fraud

Concealment of a material fact.
It occurs when someone carelessly fails to disclose material information or makes statements they should realize are false or misleading.

Constructive Notice

Knowledge of a fact imputed to a person by law because they could have or should have known it, even if they didn't actually know it.
This includes notice given by recording a document in the public record or taking physical possession of property.

Consumer

A person or entity seeking or receiving licensed activities.

Consumer Financial Protection Bureau (CFPB)

An independent government agency within the Federal Reserve System established under the Dodd-Frank Act.
It has rulemaking and enforcement authority regarding many consumer financial laws.

Fixture

An item of personal property attached to or closely associated with real property, becoming legally part of it.

Flat Fee

A specific fee paid once or in specific increments.

Flipping

Purchasing a property and quickly reselling it for a profit.

Floodplain

Land areas adjacent to rivers and streams that are subject to recurring flooding.

Floor Area Ratio (FAR)

The maximum building size permitted on a development site based on zoning regulations.
FAR is typically expressed as a percentage.

Floor Duty

An assignment to take calls from consumers who contact the brokerage for assistance or walk in for help.

Floor Load Capacity

The weight (pounds per square foot) a structure's floor can handle.

Footer

The support for the foundation of a building.
Footers are installed below the frost line and are wider than the foundations they support.

For Sale By Owner (FSBO)

A property offered directly by the seller, who is not represented by a listing agent.

Forbearance Agreement

When a lender agrees to temporarily reduce, postpone, or suspend a borrower's mortgage payment and not proceed with foreclosure if the borrower brings the loan current within a specified time.

Forced-Air System

A heating system consisting of furnaces, blowers, ducts, and registers.

Forcible Entry and Detainer Action

A summary legal action to regain possession of real property, particularly a lawsuit filed by a landlord to evict a defaulting tenant and regain possession.
Also called Unlawful Detainer Action.

Foreclosure

The process a lienholder uses to force a property sale to satisfy a debt.
Proceeds from the sale are applied toward debt satisfaction.

Foreclosure Action

A lawsuit filed by a creditor to initiate foreclosure proceedings.

Foreign Investment in Real Property Tax Act of 1980 (FIRPTA)

A federal law that imposes income tax on foreign persons selling or disposing of their interest in real property.

Foundation

The basic structure upon which the rest of a building sits.
A foundation can be a concrete slab, pier and beams, crawl space, or basement.

Framing

The basic load-bearing skeleton of a house to which interior walls, exterior walls, and the roof are attached.

Implied Warranty of Habitability

The lessor's implied promise that the premises comply with building codes, health and safety regulations, and are safe for occupancy.

Improvement

A substantial, manufactured addition to real property, like a building.

Imputed Knowledge

The legal principle that information communicated to the agent has been communicated to the principal.
Notice to the agent is considered notice to the client.

Incentive Zoning

A system where developers receive zoning incentives in exchange for providing specific physical, social, or cultural benefits to the community.

Incidental Authority

The authority to do everything reasonably necessary to carry out the principal's express orders.

Income Approach

An appraisal method that estimates the value of real estate by analyzing the revenue it currently generates or could generate.
Also called Capitalization Approach.

Income Statement

A report detailing the income (e.g., rent and other income) and expenses associated with an investment over a specific period.
Also called Profit and Loss Statement.

Increasing and Decreasing Returns

Economic principle stating that adding more factors of production will increase income up to a certain point, where the asset's maximum value is reached.
Adding more factors beyond this point won't increase the value.

Incurable Depreciation

Elements of a structure that are neither physically possible nor economically feasible to correct.

Independent Contractor

A term often mistakenly used for real estate licensees who are actually self-employed individuals supervised by their brokers (statutory non-employees under IRS terms).

Indestructibility

A characteristic of real estate; land can't be destroyed.

Index

A statistical report that reliably indicates the approximate change in the cost of money.
Often used to adjust the interest rate of adjustable rate mortgages.

Interstate Land Sales Full Disclosure Act

A federal law that protects consumers from fraud and abusive marketing practices in the sale and lease of land through interstate commerce.

Intestate

The state of dying without making a will, causing the decedent's estate to pass on according to state laws of descent and distribution.

Invalid

Without legal force.

Inventory

The number of available homes on the market listed as active or pending.

Investment Value

The value of a property to a particular investor based on their specific investment expectations and criteria.

Involuntary Alienation

When title to property is transferred during the owner's lifetime without their consent.

Involuntary Lien

A lien that arises by operation of law, without the property owner's consent.

Irrevocable

Not capable of being changed or terminated.

IRS Form 1099-S

A report indicating the seller's proceeds from the sale or transfer of real estate, submitted by a settlement officer to the Internal Revenue Service.

IRV Formula

A simple calculation for finding the net operating income (I), the capitalization rate (R), or the value (V) of an investment property.
When two factors are known, the third can be determined.
Also called Capitalization Rate Formula.

Joint Tenancy

A form of co-ownership where co-owners have equal undivided interests and the right of survivorship.

Building Code

A set of written regulations governing the design and construction standards of buildings.
Created by city or county officials with input from construction professionals.
Enforces specific construction methods and materials.

Building Department

Issues building permits.
Ensures compliance with building codes during construction and renovations.
Requires licensed professionals to carry out construction and renovations work.

Building Efficiency

Represents the ratio of usable square footage to rentable square footage in a building.

Building Inspection

A process by which local government officials ensure compliance with state and local building codes.

Building Permit

An official document allowing construction or remodeling projects to proceed.
Issued by a local government or other relevant authority.

Bump Clause

A provision in a purchase agreement allowing the seller to keep the property on the market while the buyer's purchase is contingent on selling their own property.

Bundle of Rights

All rights conferred with real property ownership including:
- Right of possession
- Right of quiet enjoyment
- Right of disposition
- Right of exclusion
- Right of control

Buyer Agency Agreement

Employment contract between a buyer and a broker.
Grants the broker the right to represent the buyer in purchasing property.
Stipulates the terms under which the broker will be compensated.

Buyer's Agent

A real estate licensee representing the interests of a buyer of a property.

Buyer's Choice

An auction for multiple parcels where the winning bidder selects which parcel they want.

Buyer's Market

A housing market with an abundance of homes for sale and few buyers.

Buyer's Premium

A compensation structure where the winning buyer at an auction pays the auctioneer/company.
Typically a percentage of the final bid amount in addition to the bid itself.

Bylaws

Rules and regulations governing property owners' activities within a homeowners association.
Include rules for elections and voting and frequency of board meetings.

Cancellation

Termination of a contract without undoing completed actions.
Can be done without going to court.

Civil Rights Act of 1866

A federal law prohibiting discrimination based on race and color in all property transactions.
Applies to all native-born Americans, without exception.

Clearspan

The open distance between the inside faces of support members in a construction.

Client

An individual represented by a licensee.
Also referred to as a "Principal."

Closing

The final stage of a real estate transaction.
The transfer of real property ownership from seller to buyer according to the purchase agreement or escrow instructions.
Also called "Settlement."

Closing Costs

Expenses incurred and paid at the time of settlement in the transfer of property.

Closing Disclosure

A standardized document providing a final, detailed accounting for a real estate transaction.
Includes each party's debits and credits and the amount each will receive or pay at closing.
Required for all RESPA-related transactions.
Also called "Settlement Statement."

Cloud on the Title

A claim, encumbrance, or defect that could jeopardize the title to real property.
Reduces the marketability of the property.

Cluster Zoning

A zoning method allowing diverse lot sizes and housing options within a designated area.

Code of Ethics

A set of principles and standards based on core values.
Guides the conduct of a group of professionals.

Co-insurance

A common clause in building insurance policies.
The insured agrees to maintain insurance on their property at least 80% of the replacement cost.
If the property isn't insured to this amount and a loss occurs, the insurance company makes the insured share in the loss proportionally.

Cold Calling

The practice of making unsolicited phone calls to potential customers without a prior relationship or inquiry.

Collateral

Property pledged as security for a debt.

Collusion

Secret agreement or cooperation among individuals, often for deceitful or fraudulent purposes.

Combined Loan-to-Value (CLTV)

The relationship between the unpaid principal balances of all mortgage loans and the appraised value or sale price of the property (whichever is lower).

Commercial Banks

The largest financial intermediaries directly involved in real estate financing.

Deed

A written instrument transferring the grantor's ownership or interest in real property.

Deed in Lieu of Foreclosure

A document transferring the title of a property from the owner to the lender in exchange for relief from mortgage debt.

Deed of Release

A deed given by lien holders, remaindermen, or mortgagees to relinquish their claims on the property.

Deed of Trust

A security instrument in financed real estate transactions.
Transfers legal title of a property to a third party (bank, escrow company, title company) until the borrower repays the debt to the lender.
Also called "Trust Deed."

Deed Restriction

Limitations placed in a deed by a grantor, restricting how the land may be used, improved, or maintained.

Default

Failure to fulfill an obligation, duty, or promise.
Examples: failure to make payments, non-payment of rent, or failure to perform contractual obligations.

Defeasance Clause

A clause used to defeat or cancel a certain right when a specific event occurs.

Defeasible Fee Estate

A type of freehold estate conveying ownership interest with a condition attached.
Also called "Fee Simple Defeasible Estate" or "Qualified Fee Estate."

Defect in Title

Any lien, claim, or encumbrance on a particular piece of real estate that is properly recorded in the public records.
Recorded defects impair clear title and could make the title unmarketable.

Deficiency Judgment

A personal judgment against a borrower if the lender/creditor does not receive the full amount of the lien plus foreclosure costs at a foreclosure sale.

Deficiency Statement

A statement in a home inspection report describing a deficiency, explaining its implications, and advising the client on how to address it.

Delivery and Acceptance

A legal requirement for the transfer of property through a deed.
Delivery refers to the grantor's intention to transfer the title and signing the deed.
Acceptance refers to the grantee receiving the deed while the grantor is alive.

Demand

The need or desire for a specific good or service.

Demographics

Socioeconomic data about employment, education, marriage rates, birth and death rates, and family dynamics.

Department of Housing and Urban Development (HUD)

An agency of the federal government overseeing many federal housing programs.

Deposit

A sum of money placed or kept in a bank account.

Depreciation

Loss in property value due to various factors:
- Physical deterioration
- Functional obsolescence
- External obsolescence
Also, a loss in value used as a tax deduction for income tax purposes.
Also called "Cost Recovery."

Deregulation

A process gradually relaxing restrictions imposed by a governing authority.

Derogatory Credit

Credit history demonstrating previous problems in meeting financial obligations.

Descending Bid

An auction method where the auctioneer begins with a high asking price and gradually lowers it until someone speaks.
The first person to speak wins the auction.
Also called "Dutch Auction."

Descent

A legal process where real property is transferred to an heir upon the death of the owner who left no will (intestate).

Designated Agency

A contractual relationship between a broker and a client, available in some states.
One or more licensees associated with the broker are appointed to represent the client in an in-house transaction.
Also called "Split Agency."

Designated Agent

A licensee appointed by a broker as the legal agent of a client.
Also called "Split Agent."

Desk Copy

A payment agreement where a real estate licensee pays their employing broker.
An alternative to a commission split.

Devise

To transfer real property by will.
Real property transferred in a will.

Direct Capitalization Rate

A rate of return, expressed as a percentage, used to derive a value opinion based on the anticipated net operating income a property could generate.
Used for direct capitalization in the income approach.
Also called "Cap Rate" or "Rate."

Disability

A physical or mental impairment substantially limiting or curtailing one or more major life activities.

Discharge of Mortgage

The lender's release of all further obligations on the part of a borrower.
Required once a borrower's loan is paid off.
The lender issues the discharge of contract, and the borrower should record this document.
Also called "Release of Lien" or "Satisfaction of Mortgage."

Disclosure

Revelation of material facts or defects.

Discount Point

A form of prepaid interest charged by a lender to increase the yield on a loan with a lower-than-market interest rate.
One point equals 1% of the loan amount.

Implied Warranty of Habitability

The lessor's implicit promise that the premises comply with building codes, health and safety regulations, and are safe for occupancy.

Improvement

A substantial, manufactured addition to real property, such as a building.

Imputed Knowledge

The legal principle that information communicated to an agent is considered communicated to the principal.
Notice to the agent is considered notice to the client.

Incentive Zoning

A zoning system where developers receive zoning incentives in exchange for providing specific physical, social, or cultural benefits to the community.

Incidental Authority

The authority to do everything necessary to carry out the principal's express orders.

Income Approach

An appraisal method for estimating the value of real property by analyzing the amount of revenue it currently generates or could potentially generate.

Increasing and Decreasing Returns

An economic principle stating that adding more factors of production (labor, capital) will lead to increased income until a certain point where the asset reaches maximum value.
Any further addition of factors of production will not increase the value.

Incurable Depreciation

Elements of a structure that are neither physically possible nor economically feasible to correct.

Independent Contractor

A term sometimes mistakenly used for real estate licensees.
Real estate licensees are actually self-employed individuals supervised by their brokers.
Considered "statutory-non-employees" in IRS terminology.

Indestructibility

A characteristic of real estate where land itself cannot be destroyed.

Index

A statistical report that is generally a reliable indicator of the approximate change in the cost of money.
Often used to adjust the interest rate of adjustable-rate mortgages (ARMs).

Certificate of Occupancy

Issued to builders after inspections ensuring the property meets health and safety standards.

Certificate of Permanent Location

Recorded in the county where a manufactured home is permanently attached to the land.

Certificate of Purchase

Document given to the winning bidder in a real estate tax or foreclosure sale.
A deed is issued to convey title after the sale is confirmed.

Certificate of Title

Prepared by attorneys, title companies, or abstractor, providing an opinion on the status of property title.
Also called Opinion of Title.
A document proving vehicle ownership.

Chain of Title

Chronological record of property ownership changes from the public record.

Change

A principle of value that states all real estate-influencing factors (physical, economic, governmental, social) are constantly changing.

Chant

An auctioneer's verbal communication method to engage bidders, indicating the current and desired bid.

Charrette

A collaborative effort where design professionals from different disciplines and community stakeholders work together in a compressed timeframe to develop a plan.

Chattel

Personal property.

Chattel Mortgage

A loan secured solely by personal property.

Chlorofluorocarbons (CFCs)

Nonflammable chemicals previously used in refrigeration systems linked to ozone layer depletion.

City Planning

Effort by a city to coordinate and direct the type of development to maximize benefits for its population.

Civil Rights

Fundamental rights ensured to all persons by law.

Environmental Protection Agency (EPA)

Federal agency for creating and enforcing environmental protection standards, assisting with pollution issues and researching environmental concerns.

Environmental Site Assessment (ESA)

A report prepared for real estate transactions identifying potential or existing environmental contamination liabilities.

Equal Credit Opportunity Act (ECOA)

Federal law requiring lenders to provide credit fairly without discrimination based on race, color, religion, national origin, age, sex, marital status, or income from public assistance programs.

Equitable Lien

A lien imposed by a court when justice and fairness necessitate its existence.

Equitable Right of Redemption

A debtor's ability to redeem property from foreclosure proceedings before the sale is confirmed.

Equitable Title

A present right to acquire legal property title.

Equity

An owner's unencumbered property interest, the difference between property value and outstanding liens like a mortgage.

Erosion

Gradual soil loss due to wind, water, or other forces.

Errors and Omissions (E&O) Insurance

Liability insurance protecting real estate licensees against client lawsuits alleging negligence.

Escalation Clause

A lease clause allowing rent increases to reflect expenses paid by the landlord, like real estate taxes, operating costs, and cost of living.

Escape Clause

A contract provision allowing a party to avoid their contractual commitments.

Escheat

Reversion of property ownership to the state (or county) after a person dies without a valid will or heirs.

Escrow

A neutral third party holding valuable assets for transaction parties until specified conditions are fulfilled.

Escrow Account

A separate account maintained by a broker for client funds (e.g., good faith deposits).

Executory Contract

A contract where one or both parties haven't yet fulfilled their obligations.

Expired Listing

A property listing that did not sell within the designated period.

Express Agency

An agency relationship where the principal clearly communicates authority to the agent, verbally or in writing.

Express Authority

Explicit consent to represent given by agreement, verbally or in writing, from a principal to an agent.

Express Contract

An agreement explicitly stated in words, spoken or written.

Extended Coverage

A title insurance policy including standard coverage and additional protection, often required by lenders.

External Obsolescence

Loss of property desirability due to factors outside the property's control.

Facilitator

A licensee assisting with a real estate transaction without an agency relationship or fiduciary obligation to either party.

Fair Credit Reporting Act

Federal law promoting consumer information accuracy, fairness, and privacy in consumer credit agency files.

Fair Housing Act

Title VIII of the Civil Rights Act of 1968 and its amendments prohibiting discrimination in residential real estate sale or lease by government and private entities.

Fair Market Value

The negotiated price for real estate in a competitive market where both buyer and seller are free from undue pressure.

Familial Status

A protected group under the Fair Housing Act, making it illegal to discriminate against someone as a parent or guardian of a child under 18.

Farm Area

A targeted area like a neighborhood that a licensee continuously prospects, increasing the likelihood of success through multiple contacts over time.

Federal Deposit Insurance Corporation (FDIC)

A federal agency insuring deposits in member commercial banks, determining the maximum insurance amount per account.