Social Science Economics
Real Estate Vocabulary (Guide to Passing the
PSI Real Estate Exam) Questions Verified and
Provided with Complete A+ Graded Answers
Latest Updated 2026
acceleration clause A provision in a written mortgage, note, bond, or conditional sales
contract that in the even of default, the whole amount of the principal
and the interest may be declared due and payable at once.
accession Title to improvements or additions to real property is acquired as a
result of the accretion of alluvial deposits along the banks of streams or
as a result of the annexation of fixtures.
accretion Increase or addition to land by the deposit of sand or soil washed up
naturally from a river, lake, or sea.
accrued depreciation 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 A declaration made by a person to a notary public or other pubic
official authorized to take acknowledgments that an instrument was
executed by his or her as a free and voluntary act.
actual eviction The result of legal action originated by a lessor, by which a defaulted
tenant is physically ousted from the rented property pursuant to a court
order.
actual notice Express information or fact; that which is known; actual knowledge.
ad valorem tax A tax levied according to value; generally used to refer to real estate
tax.
adjustable-rate mortgage (ARM) A mortgage in which the interest changes periodically, according to
corresponding fluctuations in an index. All are tied to indexes.
adjustment date The date the interest rate changes on an adjustable-rate mortgage.
administrator The party appointed by the county court to settle the estate of a
deceased person who died without leaving a will.
adverse possession The actual, visible, hostile, notorious, exclusive, and continuous
possession of another's land under a claim to title.
affidavit A written statement signed and sworn to before a person authorized to
administer an oath
, agent One who represents or has the power to act for another (principal). The
authorization may be express, implied, or apparent. A fiduciary
relationship is created when a principal executes a listing agreement or
management contract authorizing a real estate broker to be his or her
agent.
agreement of sale A written agreement by which the purchaser agrees to buy certain
real estate and the seller agrees to sell, on the terms and
conditions set forth in the agreement.
air lot A designated airspace over a piece of land, like suface property, may
be transferred.
air rights The right to use the open space above one's property. It can be sold to
build a sky-walk or for the utility company to erect power lines,
alienation The act of transferring property to another. May be voluntary, such as
by sale, or involuntary, such as through eminent domain.
alienation clause Clause in a mortgage instrument that does not allow the borrower to
sell (without lender approval) on assumption or contract-for-deed.
alluvion The actual soil increase resulting from accretion.
amendments Changes to previously approved and adopted written agreements.
amenities Neighborhood facilities and services that enhance a property's value,
outside of the property (swimming pools, three-car garages).
Americans with Disabilities Act (ADA) A federal law (1992) designed to eliminate discrimination against
individuals with disabilities.
amortization The liquidation of a financial burden by installment payments, which
include principal and interest. The loan payment consists of a portion
which will be applied to pay the accruing interest on a loan, with the
remainder being applied to the principal. Over time, the interest portion
decreases as the loan balance decreases, and the amount applied to
principal increases so that the loan is paid off in the specified time.
amortized loan A loan in which the principal and interest are payable in monthly or
other periodic installments over the term of the loan
amortization schedule A table which shows how much of each payment will be applied toward
principal and how much toward interest over the life of the loan. It also
shows the gradual decrease of the loan balance until it reaches
zero.
annual percentage rate (APR) This is not the note rate on your loan. It is a value created according to
a government formula intended to reflect the true annual cost of
borrowing, expressed as a percentage. It works sort of like this, but not
exactly, so only use this as a guideline: deduct the closing costs
from your loan amount, then using your actual loan payment, calculate
what the interest rate would be on this amount 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.
Real Estate Vocabulary (Guide to Passing the
PSI Real Estate Exam) Questions Verified and
Provided with Complete A+ Graded Answers
Latest Updated 2026
acceleration clause A provision in a written mortgage, note, bond, or conditional sales
contract that in the even of default, the whole amount of the principal
and the interest may be declared due and payable at once.
accession Title to improvements or additions to real property is acquired as a
result of the accretion of alluvial deposits along the banks of streams or
as a result of the annexation of fixtures.
accretion Increase or addition to land by the deposit of sand or soil washed up
naturally from a river, lake, or sea.
accrued depreciation 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 A declaration made by a person to a notary public or other pubic
official authorized to take acknowledgments that an instrument was
executed by his or her as a free and voluntary act.
actual eviction The result of legal action originated by a lessor, by which a defaulted
tenant is physically ousted from the rented property pursuant to a court
order.
actual notice Express information or fact; that which is known; actual knowledge.
ad valorem tax A tax levied according to value; generally used to refer to real estate
tax.
adjustable-rate mortgage (ARM) A mortgage in which the interest changes periodically, according to
corresponding fluctuations in an index. All are tied to indexes.
adjustment date The date the interest rate changes on an adjustable-rate mortgage.
administrator The party appointed by the county court to settle the estate of a
deceased person who died without leaving a will.
adverse possession The actual, visible, hostile, notorious, exclusive, and continuous
possession of another's land under a claim to title.
affidavit A written statement signed and sworn to before a person authorized to
administer an oath
, agent One who represents or has the power to act for another (principal). The
authorization may be express, implied, or apparent. A fiduciary
relationship is created when a principal executes a listing agreement or
management contract authorizing a real estate broker to be his or her
agent.
agreement of sale A written agreement by which the purchaser agrees to buy certain
real estate and the seller agrees to sell, on the terms and
conditions set forth in the agreement.
air lot A designated airspace over a piece of land, like suface property, may
be transferred.
air rights The right to use the open space above one's property. It can be sold to
build a sky-walk or for the utility company to erect power lines,
alienation The act of transferring property to another. May be voluntary, such as
by sale, or involuntary, such as through eminent domain.
alienation clause Clause in a mortgage instrument that does not allow the borrower to
sell (without lender approval) on assumption or contract-for-deed.
alluvion The actual soil increase resulting from accretion.
amendments Changes to previously approved and adopted written agreements.
amenities Neighborhood facilities and services that enhance a property's value,
outside of the property (swimming pools, three-car garages).
Americans with Disabilities Act (ADA) A federal law (1992) designed to eliminate discrimination against
individuals with disabilities.
amortization The liquidation of a financial burden by installment payments, which
include principal and interest. The loan payment consists of a portion
which will be applied to pay the accruing interest on a loan, with the
remainder being applied to the principal. Over time, the interest portion
decreases as the loan balance decreases, and the amount applied to
principal increases so that the loan is paid off in the specified time.
amortized loan A loan in which the principal and interest are payable in monthly or
other periodic installments over the term of the loan
amortization schedule A table which shows how much of each payment will be applied toward
principal and how much toward interest over the life of the loan. It also
shows the gradual decrease of the loan balance until it reaches
zero.
annual percentage rate (APR) This is not the note rate on your loan. It is a value created according to
a government formula intended to reflect the true annual cost of
borrowing, expressed as a percentage. It works sort of like this, but not
exactly, so only use this as a guideline: deduct the closing costs
from your loan amount, then using your actual loan payment, calculate
what the interest rate would be on this amount 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.
