MA Real Estate Exam Study Guide terms with Correct
Solutions.
Appraisal - Correct Answer An estimation of a property's value, usually prepared by a
professional who is licensed in this field.
Brokerage - Correct Answer The business of bringing people together in a real estate
transaction.
Commerical - Correct Answer The types of properties that include office spaces, shopping
centers, stores, theaters, hotels, parking facilities, etc.
Development - Correct Answer The term for the construction of improvements upon the
land.
Elevation Certificate - Correct Answer Insurance agents are required to obtain one of
these on any property before issuing quotes for flood insurance.
Financing - Correct Answer The pledging of real property and collateral for the repayment
of a loan through a mortgage or deed of trust.
Federal Deposit Insurance Corporation - Correct Answer This agency can fine and
withdraw its insurance from lenders that do not carry flood insurance on required
mortgages.
Flood Insurance - Correct Answer This type of homeowner's insurance policy covers
"rising water" problems such as a burst water main, overloaded drains, and melting snow.
It is usually an optional add-on policy that becomes effective 30 days after purchase,
unless the property is in a specific area and is collateral for a federal loan, in which case it
is a mandatory policy and effective immediately.
HO1 - Correct Answer This is the basic form of a homeowner's hazard insurance policy,
and the default policy when a property has been empty for any length of time. It covers
fire, lightning, hail, and other perils.
,HO2 - Correct Answer This form of a homeowner's hazard insurance policy covers more
than the basic form, but not as much as the special form. It is often available for second
homes.
HO3 - Correct Answer This special form homeowner's hazard insurance policy offers the
most coverage for the most reasonable price, and is the preferred policy on primary
residences. It covers both real and personal property.
HO6 - Correct Answer This form of a hazard insurance policy is designed for
condominiums and can be customized to comply with the condo association's bylaws.
HO4 - Correct Answer This renter's insurance policy is similar to the homeowner's
insurance policy carried on primary residences, but doesn't include coverage on real
property owned by someone else.
Improvements - Correct Answer Additions to property that increase its value or enhance
its appearance. It can include buildings, fixtures, and landscaping.
Landlord's policy - Correct Answer This insurance policy is the reverse of a renter's policy
and covers only the real property.
Property Management - Correct Answer A broad term for a person or company hired to
maintain and manage a property on behalf of its owners, and who are to maximize the
owner's returns.
Real Estate Counsellors - Correct Answer These people provide clients with competent,
independent real estate advice without representing them as an agent.
Special Flood Hazard Area - Correct Answer Properties in this area are required by
federal law to have special insurance as part of any federally-backed mortgages.
Subdivision - Correct Answer The process of splitting a single property into smaller
parcels.
Residential - Correct Answer The type of properties that include single and multi-family
homes.
,Industrial - Correct Answer The types of properties that include warehouses, factories,
power plants, and other manufacturing areas, even if the property has a storefront
attached.
Agricultural - Correct Answer The types of properties that include farmlands, timberlands,
orchards, and ranches.
Special Purpose - Correct Answer The types of properties that include churches, schools,
cemeteries, and government-held lands.
Real Estate Market - Correct Answer The setting where real property is bought and sold
and prices are established.
Submarket - Correct Answer A real estate market defined by property type and/or
geographic location.
National Association of Realtors - Correct Answer A professional real estate organization
that requires members to uphold a specific set of ethics and pay dues. In turn, the
members can call themselves Realtors.
Seller's Market - Correct Answer The situation where demand for real property is greater
than the supply, which causes sale prices to rise and builders to become more motivated
to build.
Location - Correct Answer This characteristic of real property is important because a
parcel's value is impacted by surrounding land uses.
Demographics - Correct Answer This factor determines the quantity and type of housing
in demand in a particular area. It evaluates family sizes, ratio of adults to children, number
of senior citizens, family incomes, lifestyles, etc.
Property - Correct Answer This term refers to both a physical article and the rights and
interests involved in its use of ownership.
Rights of Ownership - Correct Answer A "bundle" of legal rights associated with owned
property. These rights include possession, control of the property (within legal bounds),
enjoyment of the property, exclusion, and disposition.
, Appurtenance - Correct Answer Anything that is used with land for its benefits. Examples
include subsurface, air, and water rights, as well as gardens and certain easements.
Exclusion - Correct Answer The right to legally ban other people from entering your
property without your consent.
Air Rights - Correct Answer These rights are for the use of space above a piece of real
property. They can be transferred and subdivided.
Subsurface Rights - Correct Answer These rights are for the use of anything found
beneath a piece of real property, such as oil, coal, or gas. These rights can be transferred
separately from the property itself, and include an implied easement that allows the owner
access to the property so that they can exercise their rights.
Land - Correct Answer The earth's surface down to the center of the earth and upwards to
infinity ("heaven to hell"), including all things attached by nature. Also known by the term
real estate.
Littoral Rights - Correct Answer The rights granted to owners of land that are adjacent to
large, navigable, non-flowing lakes and oceans. These rights state the owner may make
use of the water for legal purposes, but they only own the land down to the average high
water mark.
Percolating Water - Correct Answer Another name for subsurface water.
Prior Appropriation - Correct Answer A law used in states where water is scarce. This law
limits homeowners' use of any domestic water found on or abutting their property.
Riparian Rights - Correct Answer The rights granted to owners of land that are adjacent to
flowing waters and/or land that has subsurface water. These rights state the owner can
use the water in any legal way as long as it doesn't interfere with the same rights of owners
downstream.
Water Table - Correct Answer The name for the level at which subsurface water is located
below ground.
Real Property - Correct Answer A term that encompasses the earth's surface, all things
attached to that property by nature, all permanently attached improvements made by
