Nevada PSI Real Estate Salesperson Exam with complete solutions

Fungible - Answer- Replaceable 1031 tax deferred exchange - Answer- Under section 1031 of the Irs code, some or all of the realized gain from the exchange of one property for a like kind of property may be deferred. It is not a tax free event; however, in order to accumulate wealth the payment is deferred. Abandonment - Answer- The voluntary and permanent cessation of use or enjoyment with no intention to resume or reclaim one's possession or interest . May pertain to an easement of a property. Abstract of title - Answer- A condensed version of the history of the title to a particular parcel of real estate as recorded in the county clerks records; consists of a summary of the original grant and subsequent conveyances and encumbrances effecting the property. Abutting - Answer- The joining, reaching, or touching of adjoining land. Abutting parcels of land have common boundary. Accelerated depreciation - Answer- A method of calculating for tax purposes the depreciation of income property at a faster rate than would be achieved using the straight line method. Note that any depreciations taken in excess of what would be claimed using the straight line method is subject to recapture as ordinary income to the extent of the gain resulting from the sale. Acceleration clause - Answer- A provision in a written mortgage, note, bond or conditional sales contract that in the event of default, the whole amount of the principal and the interest may be declared due payable at once. Accession - Answer- Title to improvements or additions to real property is acquired as a result of the accretion of alluvial deposits alongside the banks of streams, or as a result of the annexation of fixtures. Accretion - Answer- An 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 valued. Acknowledgement - Answer- A declaration made by a person to notary public or other public official authorized to take acknowledgements that an instrument was executed by him 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 I'd physically ousted from the rented property pursuant to a court order. Actual notice - Answer- Express information or fact; that which is known; actual knowledge. Administrator - Answer- The party appointed by the county court to settle the estate of a deceased person who died without leaving a will. Ad valorem tax - Answer- A tax levied according to value; generally used to refer to real estate tax. Also called general tax. Adverse possession - Answer- The actual, visible, hostile, notorious, exclusive, and continuous possession of another's land under a claim to title. Possession for a statutory period may be a means of acquiring title. Affidavit - Answer- A written statement signed and sworn on or before a person authorized to administer an oath. Agent - Answer- One represents or has the power to act for another person (called the principal) . The authorization may be express, implied, or apparent. A fiduciary relationship is created under the law of agency when a property owner, as the principal, executes a listing agreement or management contract authorizing a licensed 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 conditions set forth in the agreement. Air lot - Answer- A designated airspace over a piece of land. Air lots, like surface property, may be transferred. Air rights - Answer- The right to use the open space above ones property. It can be sold to build a skywalk or for a utility company to erect power lines. Alienation - Answer- The act of transferring property to another. Alienation may be voluntary, such as by sale, or involuntary such as through eminent domain. Alienation clause ( due on sale clause) - Answer- Clause in a mortgage instrument that does not allow the borrower to sell (without lender approval) on assumption or contract for deed. If an attempt is made to do so without prior approval , all of the mortgaged balance becomes due on the sale of the property. Allusion - Answer- The actual soil increase resulting from accretion. Amendments - Answer- Changes to previously approved and adopted written agreements are amendments. For example , in a condominium association and original policy may allow the renting of units and later amend the rule requiring unit owners to live in their units for at least one year before leasing. Amentities - Answer- Neighborhood facilities and services that enhance a properties value They are always outside of the property swimming pools, three car garages, decks etc. that are on the property are called features. Americans with Disabilities Act - Answer- A federal law, effective in 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. Amortized loan - Answer- A loan in which the principal and interest or payable in monthly or other periodic installments over the term of the loan. Anticipation - Answer- An appraising principal created by the expectation of certain future events cause and values to either increase or decrease. Anti trust laws - Answer- The laws designed to preserve the free enterprise of the open market place by making a little certain private conspiracies and combinations formed to minimize competition. Violation of antitrust laws in the real estate business generally involves either price-fixing parentheses (brokers conspiracy conspiring to set fixed compensation rates )or allocation of customers or markets (brokers agreeing to limit their trades or dealings to certain areas or properties). Appraisal - Answer- An estimate of the quality , quantity, or value of something. The process through which conclusions about property value are obtained; also refers to the report that sets forth the process of estimation and conclusion of value. Appraised value - Answer- An estimate of the properties present worth. Appreciation - Answer- An increase in the worth or value of the property, due to economic or related causes, which may prove to be either temporary or permanent; opposite of depreciation. Appurtenant - Answer- Belonging to; incident to; annexed too. For example, a garage is appurtenant to a house, and the common interest in the common elements of a condominium is appurtenant to each apartment. Appurtenances pass with the land when the property is transferred. Arbitrage - Answer- The simultaneous purchase and sale of a security with the purpose of obtaining a higher yield from the differential between its acquisition and selling price. Arbitration - Answer- A means of settling a controversy between two parties through the medium of an impartial third party whose decision on the controversy (if agreed upon) will be final and binding. Assesment - Answer- The imposition of a tax, charge , or levy, usually according to established rates. Assignment - Answer- The transfer in writing of rights or interest in a bond, mortgage, lease , or other instrument. Attorney in fact - Answer- The holder of a power of attorney. Avulsion - Answer- A sudden tearing away of land by the action of natural forces. Balloon payment - Answer- The final payment of a mortgage loan that is considerably larger than the required periodic payments because the loan amount was not fully amortized. Bargain and sale deed - Answer- A deed that carries with it no warranties against liens or other encumbrances but it does imply the grantor has the right to convey title. Note that the grantor may add warrantees to the deed at his or her discretion. Base fee - Answer- A determinable fee estate that may be inherited. Base line - Answer- One of a set of imaginary lines running east and west and crossing a principal meridian at a definite point. Baselines are used by surveyors for reference in locating and describing land under the rectangular survey system or government survey method of property description. Benchmark - Answer- A permanent reference mark or point established for use by surveyors when measuring differences in elevation. Beneficiary - Answer- 1. The person to whom a trust operates or whose behalf the income from the trust estate is drawn. 2. A lender who lends money on real estate and take Specking note and deed of trust from the borrower. Bequest - Answer- A provision in a will providing for the distribution of personal property. Bilateral contract - Answer- A contract in which each party promises to perform an act in exchange for the other parties promise to perform. Bill of sale - Answer- A written instrument given to pass title to personal property. Binder - Answer- An agreement that may accompany an earnest money deposit for the purchase of real property as evidence of the purchasers good faith and intend to complete the transaction. Blanket mortgage - Answer- A mortgage that covers more than one parcel of real estate and provides for each parcels partial release from the mortgage lien on repayment of a definite portion of the debt. Blockbusting - Answer- The illegal practice of inducing homeowners to sell their properties by making representations regarding the entry or prospective entry of minority persons into the neighborhood. Sometimes referred to as panic peddling. Blue sky laws - Answer- The common name for state and federal laws that regulate the registration and sale of investment securities. Boycotting - Answer- Two or more businesses conspire against other businesses to reduce competition. Brownfields - Answer- Deserted defunct and derelict talk to can industrial sites in need of removal. Federal legislation has diminished the innocent landowners liability exposure and provided the landowner the opportunity to expense cleanup costs rather than capitalized him. Budget loan - Answer- A loan in which the monthly payments made by the borrower cover not only interest and a payment on the principle but also one 12th of such expenses as taxes, insurance, premiums, and similar charges. Bridge loan - Answer- A loan that bridges the sale of property. For example, a homeowner borrows from the bank the equity from her current home to use as a down payment on a new home . Then, when her current home sells, she uses her equity to repay a bridge loan. Buffer zone - Answer- A strip of land that separates one land use from another. Building line - Answer- A line fixed at a certain distance from the front and or sides of a lot beyond which no structure can project; a setback line used to ensure a degree of uniformity in the appearance of buildings and unobstructed light, air and view. Building restrictions - Answer- The limitations on the size or type of property improvements established by zoning acts or by deed or lease restrictions. Building restrictions are considered encumbrances, and violations render the title unmarketable. Bundle of legal rights - Answer- The theory that land ownership involves ownership of all legal rights to the land , such as possession, control within the law, and enjoyment, rather than ownership of the land itself. Buydown - Answer- A payment made, often by the seller, to help the buyer qualify for the loan. Canvassing - Answer- The practice of making telephone calls or visiting from door-to-door to see perspective buyers or sellers; in the real estate business, generally associated with acquired listings in a given area. Capacity of parties - Answer- The legal ability of persons to enter into a valid contract. Most persons have full capacity to contract and are said to be competent parties. Capitol gain - Answer- Profit earned from the sale of an asset. Capitol investment - Answer- The initial capital and the long term expenditures made to establish and maintain a business or investment property. Capitalization - Answer- The process of converting into present value or obtaining the present worth of a series of anticipated future periodic installments of net income,. In real estate appraisal, it usually takes the form of discounting. The formulas expressed as income/rate equals value. Cash flow - Answer- The net spendable income from an investment, determined by deducting all operating and fixed expenses from the gross income. If expenses exceed income, a negative cash flow is the result. Casualty insurance - Answer- A type of insurance policy that protects the property owner or other persons from loss or injury sustained as a result of theft, vandalism, or similar occurrences. Caveat emptor - Answer- A Latin phrase meaning , " let the buyer beware". Certificate of sale - Answer- The document generally given to a purchaser at a tax foreclosure sale. A certificate of sale does not convey title; generally, it is an instrument certifying that the holder may receive title to the property after the redemption period has passed and that the holder paid the property taxes for that interim period. Certificate of title - Answer- The statement of opinion on the status of the title to a parcel of real property, based on an examination of specify public records. Chain of title - Answer- The succession of conveniences from some excepted starting point by which the present holder of real property derives her or his title. Charrettes - Answer- Community planning tool that welcomes and improves public participation in discussions about a communities future growth and development. Chattels - Answer- Personal property. Check - Answer- Tracts of land located repetitively every 24 miles from the principal meridian and 24 miles from a defined baseline. Guide Meridian and correction lines define a checks boundaries consisting of 16 townships a correction line "correct" for the curvature of the earth and God meridians switch to compensate for north pole directional movement. City planning commission - Answer- A local government organization designed to direct and control the development of land within a municipality. Claim of right - Answer- Used as a factor in determining adverse possession claims. Adversely occupying another's real estate for statutory period of time may create a claim of right. Cloud on title - Answer- A claim or encumbrance that may affect the title to land. CLUE - Answer- And insurance company repository for reported claim activity and previous property damage. Clue is an acronym for comprehensive lost underwriting exchange. Ensures use the report to ascertain patterns a possible future claims and adjust their insurance premiums according to risk. Codicil - Answer- A testamentary disposition subsequent to a well that alters, explains, adds two, or confirms the will, but does not revoke it. Coinsurance clause - Answer- A clause in insurance policies cover in real property that requires a policyholder maintain fire Insurance coverage general equal to at least 80% of the properties actual replacement cost. Collateral - Answer- Something of value given a pledge to a lender as a security for debt or obligation. Color of title - Answer- Used as a factor in adverse possession claim when the occupying party actually received title but by a defective or incorrect date, (color of title). Commercial property - Answer- I classification of real estate that includes income producing property such as office buildings, restaurants, shopping centers, hotels, and stores. Comingled property - Answer- Property of a married couple that is so mixed or coming gold that it is difficult to determine whether it is separate or community property. Commingled property becomes community property. Commingling - Answer- The illegal act of a real estate broker who mixes the money of another people with that of his or her own; brokers are required by law to maintain a separate trust account for other parties funds held temporarily by the broker. Common elements - Answer- The parts of a property that are necessary or convenient to the existence, maintenance, and safety of the condominium or that are normally in common used by all of the condominium residence. All condominium owners have an undivided ownership interest in the common elements. Common law - Answer- A body of law based on customer, usage, and court decisions. Community property - Answer- A system of property ownership based on the theory that each spouse has an equal interest in the property acquired by the Everts of either spouse during marriage. Comparables - Answer- The sold properties, listed in an appraisal report, which are substantially equivalent to the subject property. Composite depreciation - Answer- A method of determining the depreciation of a multi building property using the average rate at which all the buildings are depreciating. Comprehensive environmental response, compensation, and liability act (CERCLA) - Answer- Federal legislation passed in 1980 require owners of contaminated properties to bear the cleanup costs. Also known as the Superfund legislation. Condemnation - Answer- A judicial or administrative proceeding or process to exercise the power of eminent domain. Condominium - Answer- The absolute ownership of an apartment or a unit, generally in a multiunit building, based on the legal description of the airspace the unit actually occupies, plus an undivided interest in the ownership of the common elements, would your own together with the other condominium unit owners. The entire track of real estate included in a condominium development is called a parcel or development parcel want to park in our space in a condominium or a part of a property intended for independent news and having lawful access to the public way is called a unit. Owner ship of one unit also includes a definite undivided interest in the common elements. Conforming mortgages - Answer- Securitized mortgages sold on the secondary market that meet certain requirements established by Fannie Mae and Freddie Mac. Consideration - Answer- Something of value that induces one to enter into a contract. Consideration may be valuable like money or commodity or a good like loving affection. Also. And active forbearance. Or the promise thereof. Given by one party in exchange for something from the other. Forbearance is a promise not to do something. Constructive eviction - Answer- 1. Acts by the landlord that so materially disturb or impair the tenants enjoyment of the least premises that the tenant is effectively forced to move out and terminate the lease without liability for any for the rent.2. A purchasers inability to obtain clear title. Constructive notice - Answer- Notice given to the world by recorded documents. All persons are charged with knowledge of such documents in their contents. Whether or not they have actually examine them. Possession of property is also considered constructive notice that the person in possession has an interest in the property. Contingencies - Answer- A provision or condition of the purchase of real estate requiring a certain hatch to be done or an event to happen before the contract becomes binding. Contract for deed - Answer- A contract for the sale of real estate under which the sale prices paid and periodic and song Stallmans by the purchaser, who is in possession and hold equitable title although actual title is retained by the seller until final payment. Also called an installment contract or land contract. Contract for exchange of real estate - Answer- A contract for sale of real estate in which the consideration is paid holy or partly in property. Contributory value - Answer- And appraising principal where the value of the properties component parts are measured by their effect on the selling price of the whole. Appraisers you sold properties as paired sales to isolate component parts and identify their monetary contribution to the hole. Conventional loan - Answer- A loan that is not insured or guaranteed by a government agency. Conveyance - Answer- A written instrument that evidences transfer of some interest in real property from one person to another. Cooperative - Answer- Residential multiunit building whose title is held by a trust or corporation that is owned by an operated for the benefit of persons living within the building. These persons are the beneficial owners of the trust or the shareholders of the Corporation, each having a proprietary lease. Corporation - Answer- And entity or organization created by operation of law whose rights of doing business or essentially the same as those of an individual. The entity has continued existence until dissolved according to legal procedures. Correction lines - Answer- The horizontal provisions in the rectangular survey system, government survey method, made to compensate for the curvature of the earth's surface. Every fourth township line, at 24 mile intervals, is used as a correction line on which the intervals between the north and south range lines are remeasured and corrected to a full 6 miles. Cost approach - Answer- The process of estimating the value of the property by adding the appraisers estimate of the reproduction a replacement cost of the building, less depreciation, to the estimated land value. Counseling - Answer- The business of providing people with expert advice on the subject, based on the counselors extensive, expert knowledge of the subject. Counter offer - Answer- A new offer made as a reply to an offer received, having the effect of rejecting the original offer. The original offer cannot be excepted there after unless revised by the offeror repeating it. Covenants, conditions, and restrictions (CC&R's) - Answer- Condominium documents to serve as the operational procedures describing the rights and prohibitions of the co-owners in a condominium association. Datum - Answer- A horizontal plane from which heights and depths are measured. Defeasable fee estate - Answer- Qualified a state in which the grantee could lose his or her interest upon the occurrence for non-occurrence of a specified event. There are two types of defeasible fee is states: 1/those known as condition subsequent where the possibility of reentry takes place, and 2/a qualified limitation, where The grantee's ownership automatically ends with the possibility of reverter, otherwise known as a fee simple determinable. The words as long as, while or during our key to creating a qualified limitation defeasable fee estate. Dba - Answer- Doing business as Debenture - Answer- A note or bond given as evidence of debt and issued without security. Declining balance method - Answer- An accounting method of calculating depreciation for tax purposes designed to provide large deductions in the early years of ownership. Deed - Answer- A written instrument that when executed and delivered conveys title to an interest in real estate. Deed in lieu of forclosure - Answer- A process by which the mortgagor can avoid foreclosure. Mortgagor gives a deed to mortgage when mortgagor is in default according to terms of mortgage. Deed of trust - Answer- An instrument used to create a lien by which the mortgagor conveys her title to a trustee., who holds it as security for the benefit of the note holder (the lender) also called a trust deed. Deed of reconveyance - Answer- The instrument used to reconvey title to a trustor under a deed of trust once the debt has been satisfied; also called a reconveyance deed. Deed - Answer- The clauses in a deed limiting the future use of the property. Did restrictions may impose a variety of limitations and conditions, such as limiting the density of buildings, dictating the types of structures that can be erected, and preventing buildings from being used for specific purposes or from being used at all. Defeasance clause - Answer- Because used in leases or mortgages that cancels a specific right on the occurrence of a certain condition, such as cancellation of a mortgage on repayment of the mortgage loan. Deficiency judgment - Answer- A personal judgment levied against the mortgagor when a foreclosure sale does not produce sufficient funds to pay the mortgage debt in full. Delivery - Answer- The legal after transferring ownership. Documents such as deeds and purchase agreement must be delivered and excepted to be valid. Delivery in escrow - Answer- Delivery of a deed to a third person until the performance of some medical condition by one of the parties. Density zoning - Answer- The zoning ordinances the restrict the average maximum number of houses per acre that may be built within a particular area, generally a subdivision. Depreciation - Answer- 1. In appraisal , a loss of value in property due to all causes, including physical deterioration. Functional and economic obsolescence. 2. In real estate investment, an expensive deduction for tax purposes taken over the period of ownership of the income property. Designated agency - Answer- An agency relationship where a client designates a broker to appoint an office agent to singularly represent his or her interest to the exclusion of all the other agents in the brokers office. Determinable fee estate - Answer- A fee simple estate in which the property automatically reverts to the grantor in the occurrence of a special event or condition. Devise - Answer- A transfer of real estate by will or last testament. The donor is The devisor and the recipient is the devisee. Diminishing returns - Answer- The principle that applies when A given parcel of land reaches its maximum percentage return on investment and further expenditures for improving the property yield a decreasing return. Discount points - Answer- And added loan fee charged by a lender to make the yield on a lower than market value alone competitive with higher interest loans. Discount rate - Answer- The rate of interest a commercial bank must pay when it burns from us federal reserve bank. Consequently, the discount rate is the rate of interest the banking system carries within its own framework. Member banks may take certain promissory notes that they have received from customers and sell them to their district federal reserve bank for less than face value. With the funds received, the banks can make further loans. Changes in the discount rate may cause banks and other lenders to re-examine credit policies and conditions. Disposses - Answer- To oust from land by legal process. Dower - Answer- The legal right or interest recognized in some states that a wife acquires in the property her husband held or acquired during the marriage. During the lifetime of the husband, the right is only a possibility of an interest; on his death it can become an interest in land. Due on sale clause - Answer- See alienation clause. Duress - Answer- The use of unlawful constraint that forces action or in action against a person's will. DVA loan - Answer- A mortgage loan on improved property made it to a qualified veteran by eight authorized lender and guaranteed by the department of Veterans Affairs to limit possible lost by the lender. Also called a G.I. guaranteed mortgage. Earnest money deposit - Answer- And amount of money deposited by buyer under the terms of the contract. In the event that the buyer for no valid legal reason, backs out of the transaction, earnest money is sometimes used as liquidated damages. Easement - Answer- A right to use the land of another for a specific purpose, such as for a right-of-way or utilities; and incorporeal interest in land. And easement appurtenant passes with the land when conveyed. Easement by necessity - Answer- An easement allowed by law as necessity for the full employment of a parcel of real estate; for example, a right of ingress and egress over a grantors land.