17891407
| Question | Answer |
| Federal law dealing with real estate closings that provides guidelines for the disclosure of settlement costs. 7 | Real Estate Settlement Procedures Act (RESPA) |
| The annulment of a contract by mutual consent of the parties. (to rescind) 7 | Rescission |
| The ongoing purpose of collecting payments, keeping records, and handling defaults for loans. 7 | Servicing |
| Issued by the CFPB to create standardized, consumer-friendly disclosure documents. 7 | TRID Rule |
| Describes a loan, including the down payment, terms, monthly payments. Required for TILA. 7 | Trigger Terms |
| Federal law that requires disclosure of the terms of credit by a creditor to a prospective borrower. 7 | Truth In Lending Act (TILA) |
| A guaranteed loan made to eligible veterans for the purchase or construction of a home. 7 | VA Guaranteed Loans |
| A wide-ranging federal civil rights law, signed in 1990, that prohibits, under certain circumstances, discrimination based on disability. 8 | Americans with Disabilities Act |
| An illegal act whereby owners are encouraged to sell their properties because minorities are moving into their neighborhood. 8 | Blockbusting |
| Fundamental rights guaranteed to all persons by the law. 8 | Civil Rights |
| A physical or mental impairment that substantially limits or curtails one or more major life activities. 8 | Disability |
| Treating people unequally because of their race, religion, sex, national origin, age, or some other characteristic of a protected class, in violation of civil rights laws. 8 | Discrimination |
| When a law that isn't discriminatory on the face of it has a greater impact on a minority group than it has on other groups. 8 | Disparate Impact |
| An intentional decision to treat some people differently than others in a similar situation. 8 | Disparate Intent |
| A law that prohibits discrimination in all facets of the home-buying process on the basis of race, color, national origin, religion, sex, familial status, or disability. 8 | Fair Housing Act |
| A protected group under the Federal Fair Housing Act, making it illegal to discriminate against a person because he is the parent or guardian of a child less than 18 years of age. 8 | Familial Status |
| A court order requiring the defendant to do, or refrain from doing, a particular act. 8 | Injunction |
| A group of people with a common characteristic who are legally protected from discrimination on the basis of that characteristic. 8 | Protected Classes |
| An establishment that is intended to be avilable to everyone, either as a place of business or commerce. 8 | Public Accommodation |
| Changes to rules, policies, practices, or services as necessary for disabled persons to use the housing on an equal basis with non-disabled persons. 8 | Reasonable Accomodation |
| Physical changes to a dwelling or common use area, at the tenant's expense, that would permit full use of housing; usually requiring the tenant to restore the * property to its original condition upon moving. 8 | Reasonable Modifications |
| The illegal process of a lender denying loans in certain areas of a community because of race, color, creed, etc. 8 | Redlining |
| Channeling prospective buyers or tenants to particular neighborhoods based on race, religion, national origin, ancestry, or other legally protected class. 8 | Steering |
| The physical removal of a tenant from a leased property with the tenant relieved of any further responsibility to pay rent. 9 | Actual Eviction |
| A document for owners of mobile homes certifying that the home is immobilized, i.e., anchored to real property. 9 | Affidavit of Affixture |
| The ownership of the interior of a condo; a property that is above the base elevation of the land; multi level building. 9 | Air Lot |
| Property where co-owner has a separate interest in the space inside an individual unit, plus an undivided interest in common areas. 9 | Condominium |
| A landlord's act makes the property unfit for its intended use, to such an extent the tenant is forced to move out. 9 | Constructive Eviction |
| When a tenant is actually paying in rent, as stated in the terms of the lease. 9 | Contract Rent |
| Property ownership where residents purchase stock shares in a corporation and have a proprietary lease. 9 | Cooperative |
| The resulting difference when the economic rent exceeds the contract rent, to the disadvantage of the Lessor and advantage to the lessee. 9 | Deficit Rent |
| The right of the landlord to sieze a tenant's belongings for payments in arrears. Not permitted for residential property. 9 | Distraint for Rent |
| A structure that is used as a residence or sleeping place by someone who maintains a household. 9 | Dwelling Unit |
| When the property could rent for in the open market if currently vacant and available. 9 | Economic Rent aka Market Rent |
| A protected group under FFHA making it illegal to discrminate because he is the parent or guardian of a child less than 18 years of age. 9 | Familial Status |
| The difference when the contract rent exceeds the economic rent, to the advantage of the lessor and disadvantage to the lessee. 9 | Excess Rent |
| The owner of a property who leases it; the lessor. 9 | Landlord |
| A written contract between a lessor and lessee granting possession, usually for a specific time period. 9 | Lease |
| A tenant. 9 | Lessee |
| A landlord. 9 | Lessor |
| A parcel of land with four or more rental spaces for manufactured or mobile homes. 9 | Mobile Home Park |
| Leasing real property of others for consideration pursuant to a written contract. 9 | Property Management |
| A written agreement that governs the relationship between the property owner and the property manager. 9 | Property Management Agreement |
| A person hired by a real property owner to administer, market, and maintain property, especially rental property. 9 | Property Manager |
| An exclusive long term lease that conveys a leasehold interest to an owner of shares in a cooperative. 9 | Proprietary Lease |
| A right held by a property owner to re-enter and regain possession of leased property at the term of the lease. 9 | Reversionary Right |
| Money a tenant gives a landlord at the beginning of tenancy to ensure that the tenant will comply with the terms of the lease. 9 | Security Deposit |
| The person who has the right of possession under a lease. 9 | Tenant |
| The ownership of a single unit by multiple persons for fixed or floating increments of time over the course of a year. 9 | Timeshare |
| Property where co-owner has a fee simple interest in an individual unit and the ground beneath it, plus an undivided interest in common areas. 9 | Townhouse |
| A court order that may be filed if a tenant remains in a property for more than five days after a judgement for eviction is signed. 9 | Writ of Restitution |
| 43560 square feet 10 | Acre |
| Parcels of land that are 160 acres or larger. 10 | Bulk Land |
| Rules that are principles founded on customs, decisions, and opinions fo the court. 10 | Common Law |
| Person/firm that improves raw land for the purpose of building structures or subdividing parcels for sale or construction. 10 | Developer |
| The way to exit a property. 10 | Egress |
| An intentional perversion of the truth for the purpose of inducing another, to part with something of value. 10 | Fraud |
| The dimension across the access side of a parcel of land. 10 | Front Footage |
| A parcel on which a structure exists or will exist within two years from the date of the contract of sale. 10 | Improved Lot |
| The way to enter a property. 10 | Ingress |
| Land that is divided into five or fewer parcels. 10 | Lot Split |
| A misstatement of a material fact. 10 | Misrepresentation |
| A disclosure document that a developer must give to buyers before they sign a contract. 10 | Public Report |
| Exaggerated or superlative comments or opinions. 10 | Puffing |
| The permanent cancellation of a real estate license. 10 | Revocation |
| Laws that are passed by a legislative body. 10 | Statutory Law |
| Land that is divided into six or more lots of less than 36 acres. 10 | Subdivided Land |
| A person or entity that subdivides land. 10 | Subdivider |
| The temporary withdrawal of a real estate agent's license. 10 | Suspension |
| A parcel or lot upon which there is no structure nor any contract to construct one within two years. 10 | Unimproved Lot |
| Land that is divided into six or more lots of at least 36 acres, yet less than 160 acres. 10 | Unsubdivided Land |
| One who represents a principal (Client). 11 | Agent (In AZ the designated agent is the agent of the principal) |
| The individual who has a power of attorney. 11 | Attorney-in-Fact |
| The person who hires the agent and for whom the agent works. 11 | Client/Principal |
| Mixing personal money with trust funds. 11 | Commingling |
| Misappropriating trust monies. The illegal use of funds being held in a trust. 11 | Conversion |
| Often considered a third party in the transaction. 11 | Customer |
| An agent who represents both the buyer and seller in the same transaction. 11 | Dual Agent |
| Care a reasonable person should take to investigate a property before entering into a transaction. 11 | Due Diligence |
| A relationship of trust and confidence. 11 | Fiduciary |
| An agent authorized to handle any and all of the principal's affairs in a specified job or business area. 11 | General Agent |
| A defect that is not visible or apparent. 11 | Latent Defect |
| Any property conditions that might affect the consideration paid by the buyer/customer. 11 | Material Defect |
| Information that would be relevant in a buying or selling decision. 11 | Material Fact |
| Document that must be obtained to give unlimited power. 11 | Power of Attorney |
| The person who gives authority to the agent or attorney thereby creating a fiduciary relationship. 11 | Principal |
| One who is authorized to perform one specific transaction for a client. 11 | Special Agent |
| Assuming the legal rights of a person for whom a debt has been paid. 11 | Subrogation |
| One who acts on behalf of the client in all matters and situations. 11 | Universal Agent |
| Items of additional material that are attached to an existing contract to explain, modify, or revoke elements of the contract. 12 | Addendum |
| A formal revision to a contract to add, remove, or update elements found in the contract. 12 | Amendment |
| The transfer of one person's interests under contract to another. 12 | Assignment |
| Standardized language used in contracts for the sake of efficiency and completeness. 12 | Boilerplate |
| An unexcused failure to perform according to the terms of a contract. 12 | Breach |
| Something of value given to another as compensation for entering into a contract. 12 | Consideration |
| Provision in a contract that makes a party's rights depend on the occurrence {or nonoccurrence) of a particular event. 12 | Contingency |
| An agreement that the law will enforce. 12 | Contract |
| Using unlawful force or intimidation against a person to enter into a contract. 12 | Duress |
| Money given by a buyer upon signing a contract, showing the buyer's intention to carry out the terms of the contract. 12 | Earnest Money Deposit |
| A legally binding promise to refrain from doing a particular act. 12 | Forbearance |
| A right or a share in something; a charge a borrower pays to lender for the use of lender's money. 12 | Interest |
| A concept preventing the assertion of a right or claim because of an undue delay. 12 | Laches |
| A sum of money the parties to a contract agree in advance will serve as compensation in the event of a contract breach. 12 | Liquidated Damages |
| The release of liability of the original party to an agreement and the substitution of a subsequent party with approval. 12 | Novation |
| A person who receives an offer or to whom an offer is made. 12 | Offeree |
| A person who makes an offer. 12 | Offeror |
| The buyer who has a right to purchase or lease property under the terms of an option agreement, but is not obligated to do so. 12 | Optionee |
| Someone obligated to sell or lease property under the terms of an option agreement if the optionee exercises the option. 12 | Optionor |
| The annulment of a contract by mutual consent of the parties. 12 | Rescission |
| A contract in which both parties expressly enter into mutual agreements or engagements. 13 | Bilateral Contract |
| An advertisement that does not include the broker's business name. 13 | Blind Ad |
| Standardized language used in contracts for the sake of efficiency and completeness. 13 | Boilerplate |
| Contract clause that entitles a listing broker to a commission if the property sells in a specified timeframe and the broker or an affiliated licensee introduced the buyer to the property during the listing period. 13 | Broker Protection Clause |
| Compensation paid to a broker for services in a real estate transaction; usually a percentage of the sales price. 13 | Commission |
| A way to determine an appropriate list price by comparing the property to similar ones that sold, are for sale, or did not sell. 13 | Competitive Market Analysis (CMA) |
| Gives one broker the right to sell the property, allowing the owner to sell it on his own without owing commission. 13 | Exclusive Agency Listing |
| Entitles the broker to collect a sales commission regardless of who sells the property, including a FSBO. 13 | Exclusive Right to Sell Listing |
| An agreement between a broker and a seller. 13 | Listing Contract |
| An arrangement whereby brokers agree to share listings, show properties and share commissions. 13 | Multiple Listing Service (MLS) |
| A listing agreement in which the seller sets the amount he will accept for the property, allowing the broker to keep the excess. 13 | Net Listing |
| A traditional marketing strategy to showcase a listed property. 13 | Open House |
| A non-exclusive listing; the broker who is the procuring cause of the sale is entitled to a commission. 13 | Open Listing |
| The effort that brings about the desired result; an unbroken chain of events that results in the sale of property. 13 | Procuring Cause |
| A contract that is legally binding only on the one party who made a promise. 13 | Unilateral Contract |
| Value is created by the expectation of future benefits, such as profit on resale; foundation of income approach to appraisal. 14 | Anticipation |
| An opinion or estimate of value of real property as of a certain date, as supported by objective evidence and data. 14 | Appraisal |
| An increase in the value of property due to a positive improvement. 14 | Appreciation |
| A transaction that occurred under typical conditions in the marketplace; each party acting in their own best interests. 14 | Arm's Length Transaction |
| The combining of two or more parcels of land into one larger parcel, usually to increase the usefulness of the land. 14 | Assemblage |
| A method of determining the present value of income property by discounting the annual net income by a community used rate of return; IRV formula. 14 | Capitalization |
| A rate of return stated as a percent, used to derive a value opinion from the anticipated net operating income a property could generate. 14 | Capitalization Rate |
| Economic principle that says a home usually achieves maximum value when surrounded by homes similar in style and function. 14 | Conformity |
| Theory that a specific item or feature of a property is worth only what it actually contributes in value to a parcel of real estate. 14 | Contribution |
| The dollars needed to develop, produce, or build something. 14 | Cost |
| A method of appraisal based on reproduction cost of an improvement, minus any depreciation, plus site value. 14 | Cost Approach |
| The decrease in value to real property improvements caused by deterioration or obsolescence. 14 | Depreciation |
| The time during which a building can be used for its intended purpose, or generate more income than is paid out.14 | Economic Life |
| A loss of value due to change in external events or factors affecting a piece of real property; cannot be cured by the owner. 14 | Economic Obsolescence |
| The age the structure appears to be based on physical wear and tear, functional design, and external factors. 14 | Effective Age |
| Potential gross income less vacancy and collection losses. 14 | Effective Gross Income (EGI) |
| A federal law that imposes qualification criteria for appraisers performing appriasals. In connection with Fed regulated loans 14 | Financial Institutions Reform, Recovery, and Enforcement Act (FiRREA) |
| A conversion factor derived from the sales price of a comparable rental property divided by its gross monthly rent. 14 | Gross Rent Multiplier (GRM) |
| The most profitable, legally permitted, feasible, and physically possible use of a piece of property. 14 | Highest and Best Use |
| Appraisal method that estimates value of real estate by analyzing revenue the property generates or could generate. 14 | Income Approach |
| Finding the net operating income, the rate, or value of an investment property. 14 | IRV Formula |
| The contract price for which a property actually sold. 14 | Market Price |
| The most probable price a property should bring on an open and competitive market through an arm's length transaction. 14 | Market Value |
| The assemblage of two or more parcels of land into one larger parcel, resulting in an increased value over the combined value of individual parcels. 14 | Plottage Increment |
| The amount a ready, willing, and able buyer agrees to pay for a property and a seller agrees to accept. 14 | Price |
| A principle that the value of a less expensive home is positively affected when surrounded by more expensive homes. 14 | Progression |
| The final step in the appraisal process that involves analyzing the values from different approaches to arrive at a final value. 14 | Reconciliation |
| A principle that the value of a more expensive home is negatively affected when surrounded by less expensive homes. 14 | Regression |
| The method of determining the value of an improvement under the cost approach in an appraisal by building the structure using current building materials. 14 | Replacement Cost |
| The method of determining the value of an improvement under the cost approach in an appraisal by building an exact replica of a structure. 14 | Reproduction Cost |
| Appraisal approach that estimates the value of real property by analyzing comparable properties recently sold. 14 | Sales Comparison Approach |
| The measurement in feet of an area directly under some type of covering. 14 | Square Footage Under Roof |
| The measurement in feet of the above grade interior area of a structure that is liveable with proper access. 14 | Square Foot Living Space |
| Economic theory that says an informed buyer will not pay more for a property than a comparable property. 14 | Substitution |
| Principle that says when supply exceeds demand, prices will fall and when demand exceeds supply, prices will rise. 14 | Supply and Demand |
| Professional appraisal standards developed by the Appraisal Foundation. 14 | Uniform Standards of Professional Appraisal Practice (USPAP) |
| Refers to parcels that share a boundary. 15 | Abutting |
| 43,560 square feet. 15 | Acre |
| A primary line running east to west that establishes a north and south boundary in the rectangular survey system. 15 | Baseline |
| Column lots that form the structural support of air lot. 15 | Caisson |
| Refers to parcels that touch at any point 15 | Contiguous |
| A point, line, or surface from which elevations are measured. 15 | Datum |
| A parcel of land described by the number of miles wide and high. 15 | Miles Square |
| The distance around the outside of a parcel. 15 | Perimeter |
| The starting and ending point for a metes and bounds legal description. 15 | Point of Beginning |
| In the rectangular survey system, a six-mile strip of land running north/south. 15 | Range |
| North-south lines that run parallel to principal meridians at six-mile intervals, establishing east-west boundaries. 15 | Range Lines |
| An area of land in the rectangular survey system that is a one mile by one mile square with 640 acres. 15 | Section |
| The area of a parcel of land (length x width) in miles. 15 | Square Miles |
| In the rectangular survey system, a six-mile strip of land running east/west. 15 | Tier |
| Square divisions of land, 6 miles by 6 miles in the rectangular survey system. 15 | Township |
| A sworn statement under oath that indicates the purchase price paid by the buyer in a transaction. 16 | Affidavit of Value |
| Owing payment on things for which one has the use of but has not yet paid for, such as property taxes. 16 | Arrears |
| An extension of a title search to verify that no liens have been filed against a property between the time of original search and the recording of the deed/mortgage. 16 | Bring Down Endorsement |
| 365 days per year. 16 | Calendar Year |
| A settlement statement prepared by the lender or closing agent itemizing all expenses and costs paid by the buyer and seller. 16 | Closing Disclosure |
| Notice given by the publication in a newspaper, recording, or other method. 16 | Constructive Notice |
| A sum of money to be received. 16 | Credit |
| Any sum of money owed; a charge on a closing statement. 16 | Debit |
| A written instrument transferring the grantor's ownership of, or interest, in real property. 16 | Deed |
| A system where things of value are held on behalf of parties to a transaction by a disinterested third party until specified conditions have all been met. 16 | Escrow |
| A neutral clearinghouse through which title to real property is closed and/or escrow funds are held in trust. 16 | Escrow Company |
| The person charged with coordinating the activities and documentation necessary for completing a real estate transaction. 16 | Escrow Officer |
| Federal law that imposes income tax on foreign persons selling or otherwise disposing of their interest in real property. 16 | FIRPTA (Foreign Investment in Real Property Tax Act of 1980) |
| A tax form indicating the seller's proceeds from the sale or transfer of real estate that settlement officer submits to IRS. 16 | IRS Form 1099-S |
| Fees or other compensation given for services not performed. Prohibited by RESPA 16 | Kickbacks |
| The legal seizure of an individuals property to satisfy an IRS tax debt. 16 | Levy |
| Title to real property that is reasonably free of defects and encumbrances. 16 | Marketable Title |
| The allocation of expenses, real estate taxes, or rents between buyer and seller in proportion to their actual use of an item. 16 | Proration |
| Federal law dealing with real estate closings that provides guidelines for the disclosure of settlement costs. 16 | Real Estate Settlement Procedures Act (RESPA) |
| Any service provided in connection with a prospective or actual settlement of a real estate transaction. 16 | Settlement Services |
| 360 days per year; 30 days per month 16 | Statutory Year |
| The right to or ownership of land. 16 | Title |
| A company that examines and insures title claims for real estate purposes through a thorough examination of property records. 16 | Title Company |
| Insurance that indemnifies the policyholder against losses resulting from undiscovered title defects and encumbrances. 16 | Title Insurance |
| A report issued by a title company disclosing the condition of the title to a specific piece of property. 16 | Title Report |
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