real estate exam prep book vocabulary Flashcards

A written summary of the chain of title

Any Clause in a loan requiring the loan to be paid off upon the occurrence of a certain event. An alienation clause is an example of an acceleration clause

The acquisition of property by its being added to other property.

The process of gradual or imperceptible additions to land bordering a river or stream.

The declaration before a notary by a person who executed a document stating that he did in fact sign the document. A deed must be acknowledged to be recorded. Once acknowledged, it is accepted as prima facie evidence in court.

43,560 square feet, or 4840 square yards, or about 209 feet by 209 feet (if squared)

The authority that a principal actually confers on the agent

For income tax purposes, it is determined by subtracting the adjusted cost basis from the exchange value of a property

When a person actually knows something, such as when an agent knows someone has taken possession of a property

A property tax is an Ad Valorem Tax

For income tax purposes, it is the cost basis plus capital improvements, plus existing assessment liens assumed by the buyer, minus depreciation, minus gains deferred from prior extractions.

For income tax purposes, it is the selling price minus the expenses of the sale

Acquiring title by five years of exclusive, notorious, and open possession of a property (contrary to the best interests of the true owner) under a claim of right or color of title. When property is acquired by adverse possession, a quiet title action would be used to perfect title.

An agent is a person authorized to represent a principal in business dealings with other parties. Paying consideration is not required to create an agency relationship.

California's Agency Disclosure law requires agents to disclose the common agency relationships in transactions concerning the sale or a lease for more than one year, or four or less residential units (including mobile homes), commercial properties and vacant land.

To sell, transfer, or convey. Both real and personal property may be alienated.

An alienation clause in a loan requires the borrower to pay off the loan when title is transferred. The opposite of alienation is acquisition.

This is a junior lien which is subordinate to, yet includes, the liens to which it is subordinated. AITD'S are commonly used in with land contracts.

The soil deposited by accretion

requires the disclosure of earthquake fault lines on a map

A home, Amenity property are appraised by the Market Data Approach.

The federal law which requires equal access to public buildings for handicapped persons

The liquidation of a financial obligation, such as a loan

Used to determine monthly payments

A promissory note which calls for periodic payments of both principal and interest.

A change in geographic direction is often referred to by using an angle expressed in degrees, minutes, and seconds; it is often described as "So many degrees from the South or North points of the compass".

Used in the Capitalization Approach to appraisal and determined by this formula: Gross Income- Vacancies- Expenses= Annual Net Income

The relative cost of credit expressed in percentage terms and disclosed under the Truth-In-Lending Law (also called Reg. Z)

An agreement providing for a sum of money to be received by a series of payments at fixed intervals over a period of time. The monthly payments made to a lender and the rent payments made to the landlord under a lease may be described as annuities.

An opinion of the value of a specific property on a given date; it is valid for that date only.

Occurs when the government gives permission to a non-riparian owner to take water from public waterway.

Benefit the land of a dominant tenement. The buyer of the dominant automatically receives the appurtenant easement.

A clause in a contract in which the parties agree to arbitrate a dispute rather than go to court.

A clause in a contract in which the parties agree to arbitrate a dispute rather than go to court.

Establishes the tax base. Property is assessed every year at 100% of its taxable value (100% of fair market value or 100% of full cash value). If sold, property is reassessed during the year.

A contract is usually assignable. Leases can be assigned; when a lease holder assigns a lease, the person who acquires the lease (the assignee) becomes the tenant. Listings cannot be assigned because a listing is a personal service contract calling for the personal performance of the broker.

A preexisting lien which is assumed (taken over) by a buyer of real property.

When a buyer assumes a loan, he or she becomes primarily liable. The seller is still liable but is in a secondary position.

Property is held by court order as security for a possible judgement in a pending lawsuit. An attachment lien is valid for three years.

Acting for another with a duly executed and recorded power of attorney.

Sudden violent tearing away of land by water

Dirt used to fill in excavations or brace of foundation

Partially Amortized

Any payment which is significantly larger than the other payments

Based on a 3-day month and 360-day year, used for proration and loan calculations

A wall supporting any vertical load in addition to its own weight. It is normally left in place during remodeling and can be constructed at any angle to doorways. Bearing walls are real property.

The lender in a trust deed. A beneficiary holds the promissory note and trust deed during the life of the loan.

Statement by a lender disclosing the current loan balance.

A contract in which the promise of one party is given in exchange for the promise of the other party (a promise for a promise). Both parties are bound to perform. These promises are often the basis for a contract ( for example, exclusive listings, deposit receipts).

A real estate loan which covers (blankets or secures) more than one parcel of land; it is commonly used when building new homes

Does not disclose that an agent is representing the seller. When advertising, a licensee must disclose that he is an agent. Additionally, the ad must name the broker.

A unit of measurement of lumber which is one foot wide, one foot long, and one inch thick (any combination of 144 cubic inches).

Loan instruments

In good faith, without fraud or deceit, genuine, a bona fide land contract or listing has all the elements required by law.

Cash, other "unlike" property, or "mortgage relief" used to balance the equities of the properties in a 1031 tax deferred exchange.

Provides the lender with information used to determine the risk inherent in the loan.

A person employed for a fee by another to perform a real estate act requiring a license. A broker is the employer of salespersons.

A real estate parcel with the presence of potential presence of a hazardous or toxic substance, pollutant or containment. It typically results in abandoned structures and vacant lots. Although a brownfield site is usually found on industrial or manufacturing sites, a brownfield can be found on any land on which hazardous substances, pollutants or containments have been dumped.

A measurement of heat used in rating the capacity of heating systems.

An appraiser uses the building residual technique when the value of a building is an unknown factor. The technique determines how the building contributes to the value of the entire property.

The state agency which regulates the real estate industry. Also called California Bureau of Real Estate (CalBRE)

The stage agency which licenses and regulates real estate appraisers.

A set of California Laws Regulating business, which as the real estate industry.

Are personal property. The document used to transfer title to personal property is a bill of sale, not a deed.

The state purchases homes and sells them to California veterans using land contracts.

Everyone is capable of contracting, except minors and those who are mentally incompetent. It is one of the four essential elements of a contract.

Investment of money in physical improvements of a property (for example, adding a wall, remodeling, or upgrading a heating system). It is not deductible as an expense but is added to the cost basis and depreciated over the life of the improvements.

Establishes the current value of future benefits which may be obtained from an income producing property (Apartments, commercial buildings, restaurants, etc.). The value of an asset is determined by dividing the annual net income by a desired rate of return called the capitalization rate (V=I/R)

The rate of interest which is considered a reasonable return on an investment. The greater the risk, the higher the capitalization rate demanded by an investor. Capitalization rates consider the quantity, quality, and durability of the rent. The three methods of calculating capitalization rate are (C.B.S) Market Comparison, Band of Investment, and Summation.