WASHINGTON STATE REAL ESTATE
AGENCY LAW AND DISCLOSURE
REQUIREMENTS PRACTICE TEST 2026
◉ Hypothecation
Answer: To pledge property as security for an obligation or loan
without giving up possession of it.
◉ legal title
Answer: When title is transferred only as collateral, unaccompanied
by possessory . Bare title or naked title.
◉ Equitable title
Answer: The property rights the borrower retains (without legal
title).
◉ PMI
Answer: Private Mortgage insurance; insurance designed to protect
lenders from the greater risks of high-LTV conventional loans.
◉ Home warranty Plan
, Answer: An insurance policy that reimburses a home owner for
expenses related to the failure of covered systems, components, or
appliances on the property. Also called a home protection plan.
Usually active for a couple years. Seller or agent sometimes offers to
help push the sell.
◉ Property Management
Answer: When someone other than the property owner supervises
the operation of an income-producing property.
◉ Rental Schedule
Answer: A list of the rental rates for units in a particular building.
◉ MIP
Answer: The Mortgage insurance premiums required for FHA-
insured loans.
◉ Principal
Answer: The person who authorizes an agent to act on his behalf.
◉ Third Party
Answer: A person seeking to deal with the principal through the
agent.
AGENCY LAW AND DISCLOSURE
REQUIREMENTS PRACTICE TEST 2026
◉ Hypothecation
Answer: To pledge property as security for an obligation or loan
without giving up possession of it.
◉ legal title
Answer: When title is transferred only as collateral, unaccompanied
by possessory . Bare title or naked title.
◉ Equitable title
Answer: The property rights the borrower retains (without legal
title).
◉ PMI
Answer: Private Mortgage insurance; insurance designed to protect
lenders from the greater risks of high-LTV conventional loans.
◉ Home warranty Plan
, Answer: An insurance policy that reimburses a home owner for
expenses related to the failure of covered systems, components, or
appliances on the property. Also called a home protection plan.
Usually active for a couple years. Seller or agent sometimes offers to
help push the sell.
◉ Property Management
Answer: When someone other than the property owner supervises
the operation of an income-producing property.
◉ Rental Schedule
Answer: A list of the rental rates for units in a particular building.
◉ MIP
Answer: The Mortgage insurance premiums required for FHA-
insured loans.
◉ Principal
Answer: The person who authorizes an agent to act on his behalf.
◉ Third Party
Answer: A person seeking to deal with the principal through the
agent.
