Texas Principles of Real Estate 2 Key
Terms Questions & Answers(RATED
A+)
Amortization - ANSWER repayment of a loan principal over time based on a predetermined schedule
of payments
Arrears - ANSWER payment for an item or service after it is received
Proration - ANSWER the allocation or distribution of an annual expense across smaller chunks of
time
square footage - ANSWER Length x Width
acreage - ANSWER 1 acre= 43,560
appraial - ANSWER the value of a property, based on factors determined by the opinion of a certified
appraiser
general data - ANSWER information about a property the area surrounding it
specific data - ANSWER information regarding the property itself
limited appraisal - ANSWER a simpler, abbreviated version of an appraisal
market value - ANSWER the price for which a property will sell if offered openly under normal
conditions. This refers to the economic principle; its the price that a buyer and seller would probably
accept
, appraised value - ANSWER refers to the value given by a licensed appraiser during the mortgage
origination. Appraisers are chosen by lenders but paid for by the homebuyer.
assessed value - ANSWER refers tot eh value placed on a property by a governmental unit for use in
levying annual real estate taxes
loan-to-value-ratio - ANSWER the limit on the value of a loan, usually a certain percentage of the
home's appraised value or sales price, whichever is lower
principle of anticipation - ANSWER the present value of a propery is affected by the anticipated
income or utility that property will give its property owner
principle of contribution - ANSWER a properties overall value is made up of the combined value of
each of its parts
principles of substitution - ANSWER the value of something is affected by the cost of getting a similar
(substitute) item elsewhere
principle of change - ANSWER the condition of a property, the desireability of its location, and the
market in which it exists can always change
principle of conformity - ANSWER values are highest when the houses in a neighborhood look
roughly the same
principle of regression - ANSWER Lower valued properties in the neighborhood lead to a decline in
value of a subject property
principle of progression - ANSWER higher-value properties surrounding a subject property can bump
the value of the property
sales comparison approach - ANSWER determining value by comparing the subject property to
similar properties that have sold recently. Most commonly used for single family dwellings
cost approach - ANSWER determining value by considering how much the same property would cost
to build brand new at current prices, then adjusting the depreciation
Terms Questions & Answers(RATED
A+)
Amortization - ANSWER repayment of a loan principal over time based on a predetermined schedule
of payments
Arrears - ANSWER payment for an item or service after it is received
Proration - ANSWER the allocation or distribution of an annual expense across smaller chunks of
time
square footage - ANSWER Length x Width
acreage - ANSWER 1 acre= 43,560
appraial - ANSWER the value of a property, based on factors determined by the opinion of a certified
appraiser
general data - ANSWER information about a property the area surrounding it
specific data - ANSWER information regarding the property itself
limited appraisal - ANSWER a simpler, abbreviated version of an appraisal
market value - ANSWER the price for which a property will sell if offered openly under normal
conditions. This refers to the economic principle; its the price that a buyer and seller would probably
accept
, appraised value - ANSWER refers to the value given by a licensed appraiser during the mortgage
origination. Appraisers are chosen by lenders but paid for by the homebuyer.
assessed value - ANSWER refers tot eh value placed on a property by a governmental unit for use in
levying annual real estate taxes
loan-to-value-ratio - ANSWER the limit on the value of a loan, usually a certain percentage of the
home's appraised value or sales price, whichever is lower
principle of anticipation - ANSWER the present value of a propery is affected by the anticipated
income or utility that property will give its property owner
principle of contribution - ANSWER a properties overall value is made up of the combined value of
each of its parts
principles of substitution - ANSWER the value of something is affected by the cost of getting a similar
(substitute) item elsewhere
principle of change - ANSWER the condition of a property, the desireability of its location, and the
market in which it exists can always change
principle of conformity - ANSWER values are highest when the houses in a neighborhood look
roughly the same
principle of regression - ANSWER Lower valued properties in the neighborhood lead to a decline in
value of a subject property
principle of progression - ANSWER higher-value properties surrounding a subject property can bump
the value of the property
sales comparison approach - ANSWER determining value by comparing the subject property to
similar properties that have sold recently. Most commonly used for single family dwellings
cost approach - ANSWER determining value by considering how much the same property would cost
to build brand new at current prices, then adjusting the depreciation
