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Real Estate Vocabulary (Guide to Passing the PSI Real Estate Exam)
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Real Estate Vocabulary (Guide to Passing the PSI Real Estate Exam) 2023-2024 acceleration clause - ANSWER A provision in a written mortgage, n ote, bond, or conditional sales contract that in the even of default, the whole amount of t he principal and the interest may be declared due and payable at once. accession - ANSWER Title to improvements or additions to real prop erty is acquired as a result of the accretion of alluvial deposits along the banks of str eams or as a result of the annexation of fixtures. accretion - ANSWER Increase or addition to land by the deposit of sand or soil washed up naturally from a river, lake, or sea. accrued depreciation - ANSWER The actual depreciation that has occurred to a property at any given date, the difference between the cost of replacement new (as of the date of the appraisal) and the present appraised value. acknowledgement - ANSWER A declaration made by a person to a notary public or other pubic official authorized to take acknowledgments that an instrum ent was executed by his or her as a free and voluntary act. actual eviction - ANSWER The result of legal action originated by a lessor, by which a defaulted tenant is physically ousted from the rented property pursuan t to a court order. actual notice - ANSWER Express information or fact; that which is k nown; actual knowledge. ad valorem tax - ANSWER A tax levied according to value; generally u sed to refer to real estate tax. adjustable-rate mortgage (ARM) - ANSWER A mortgage in which the intere st changes periodically, according to corresponding fluctuations in an in dex. All are tied to indexes. adjustment date - ANSWER The date the interest rate changes on an adjustable-rate mortgage. administrator - ANSWER The party appointed by the county court to settle the estate of a deceased person who died without leaving a will. adverse possession - ANSWER The actual, visible, hostile, notorious, excl usive, and continuous possession of another's land under a claim to title. affidavit - ANSWER A written statement signed and sworn to befor e a person authorized to administer an oath agent - ANSWER One who represents or has the power to act for anot her (principal). The authorization may be express, implied, or apparent. A fiducia ry relationship is created when a principal executes a listing agreement or management contract au thorizing a real estate broker to be his or her agent. agreement of sale - ANSWER A written agreement by which the purchaser agrees to buy certain real estate and the seller agrees to sell, on the terms and con ditions set forth in the agreement. air lot - ANSWER A designated airspace over a piece of land, like suface property, may be transferred. air rights - ANSWER The right to use the open space above one's p roperty. It can be sold to build a sky-walk or for the utility company to erect power lin es, alienation - ANSWER The act of transferring property to another . May be voluntary, such as by sale, or involuntary, such as through eminent domain. alienation clause - ANSWER Clause in a mortgage instrument that does not allow the borrower to sell (without lender approval) on assumption or contract- for-deed. alluvion - ANSWER The actual soil increase resulting from accret ion. amendments - ANSWER Changes to previously approved and adopted written agreements. amenities - ANSWER Neighborhood facilities and services that enhance a pr operty's value, outside of the property (swimming pools, three-car garages). Americans with Disabilities Act (ADA) - ANSWER A federal law (1992 ) designed to eliminate discrimination against individuals with disabilities. amortization - ANSWER The liquidation of a financial burden by installment payments, which include principal and interest. The loan payment consist s of a portion which will be applied to pay the accruing interest on a loan, with the remain der being applied to the principal. Over time, the interest portion decreases as the loan b alance decreases, and the amount applied to principal increases so that the loan is paid off in the specified time. amortized loan - ANSWER A loan in which the principal and interest are payable in monthly or other periodic installments over the term of the loan amortization schedule - ANSWER A table which shows how much of each p ayment will be applied toward principal and how much toward interest over th e life of the loan. It also shows the gradual decrease of the loan balance until it reaches zero. annual percentage rate (APR) - ANSWER This is not the note rate on your loan. It is a value created according to a government formula intended to reflect th e true annual cost of borrowing, expressed as a percentage. It works sort of like this, but n ot exactly, so only use this as a guideline: deduct the closing costs from your loan amou nt, then using your actual loan payment, calculate what the interest rate would be on this amou nt instead of your actual loan amount. Because you are using the same payment on a smaller amount, it is always higher than the actual not rate on your loan. antitrust laws - ANSWER The laws designed to preserve the fre e enterprise of the open marketplace by making illegal certain private conspiracies and comb inations formed to minimize competition. Violations: price fixing (set fixed compensation r ates) or allocation of customers or markets (brokers agreeing to limit their trades to certain ar eas or properties. application - ANSWER The form used to apply for a mortgage loan, con taining information about a borrower's income, savings, assets, debts, and more. appraisal - ANSWER A written justification of the price paid for a property, primarily based on an analysis of comparable sales of similar homes nearb y. appraised value - ANSWER An opinion of a property's fair marke t value, based on an appraiser's knowledge, experience, and analysis of the property. Since a n appraisal is based primarily on comparable sales, and the most recent sale is t he one on the property in question, the appraisal usually comes out at the purchase price. appraiser - ANSWER An individual qualified by education, trai ning, and experience to estimate the value of real property and personal property. Althou gh some work directly for mortgage lenders, most are independent. appreciation - ANSWER The increase in the value of a property du e to changes in market conditions, inflation, or other causes. appurtenant - ANSWER Belonging to, incident to, annexed to. Examples: garage to a house. Passes with the land when the property is transferred. assessed value - ANSWER The valuation placed on property by a public tax a ssessor for purposes of taxation. assessment - ANSWER The placing of a value on property for the purpose of taxation. assessor - ANSWER A public official who establishes the value of a pr operty for taxation purposes. asset - ANSWER Items of value owned by an individual. These include bank accounts, stocks, bonds, mutual funds, and so on. Others include real estate, p ersonal property, and debts owed to an individual by others. assignment - ANSWER Transfer in writing of rights or interest in a bond, mortgage, lease or other instrument. When ownership of your mortgage is tran sferred from one company or individual to another. assumable mortgage - ANSWER A mortgage that can be assumed by the buy er when a home is sold. Usually, the borrower must "qualify" in order to assume t he loan. assumption - ANSWER The term applied when a buyer assumes the sel ler's mortgage. avulsion - ANSWER A sudden tearing away of land by the action of natural forces. balloon mortgage - ANSWER A mortgage loan that requires the remain ing principal balance be paid at a specific point in time. For example, a loan may be amortized as if it would be paid over a thirty year period, but requires that at the end of th e tenth year the entire remaining balance must be paid. base line - ANSWER Set of imaginary lines running east and we st used by surveyors under the rectangular survey system (or government survey method) of prop erty description. balloon payment - ANSWER The final lump sum payment that is due at the termination of a balloon mortgage. bankruptcy - ANSWER By filing in federal bankruptcy court, a n individual or individuals can restructure or relieve themselves of debts and liabilities. benchmark - ANSWER A permanent reference mark or point establis hed for use by surveyors when measuring differences in elevation. bill of sale - ANSWER A written document that transfers title t o personal property. For example, when selling an automobile to acquire funds which w ill be used as a source of down payment or for closing costs, the lender will usually require it (in addition to other items) to help document this source of funds. biweekly mortgage - ANSWER A mortgage in which you make payme nts every two weeks instead of once a month. The basic result is that instead of ma king twelve monthly payments during the year, you make thirteen. The extra payment reduces the principal, substantially reducing the time it takes to pay off a thirty year mortgage. bond market - ANSWER Usually refers to the daily buying and selli ng of thirty year treasury bonds. Lenders follow this market intensely because as the yields of bonds go up and down,The benefits of buying summaries with Stuvia:
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