75 Hour Broker Pre License Term Review
Accrued item on a closing statement, items of expense that are incurred but not yet payable,
such as interest on a mortgage loan or taxes on real property.
Acknowledgment a formal declaration made before a duly authorized officer, usually a notary
public, by a person who has signed a document.
Actual eviction the legal process that results in the tenants being physically removed from the
leased premises.
Actual notice express information or fact; that which is known; direct knowledge.
Addendum any provision added to an existing contract without altering the content of the
original; it must be signed by both parties.
Adjustable-rate mortgage (ARM) a loan characterized by a fluctuating interest rate, usually one tied to a bank or
savings or loan association cost-of-fund index.
Adverse possession the actual, open, notorious, hostile, and continuous possession of another's
land under a claim of right. Possession for a statutory period may be a means
of acquiring title.
Affidavit of title a written statement, made under oath by a seller or grantor of real property
and acknowledged by a notary public, in which the grantor (1) identifies himself
and indicates marital status, (2) certifies that since the examination of the title
on the date of the contract no defects have occurred in the title, and (3)
certifies that he is in possession of the property (if applicable).
Affiliated business arrangement (ABA) a system under which, to streamline the settlement process, a real estimate
firm, title insurance company, mortgage broker, home inspection company, or
even a moving company may agree to offer a package of services to
consumers.
Affiliated business disclosure a disclosure that the company or individual referring settlement services has
either an affiliate relationship with or a direct or beneficial ownership interest of
more than 1% in a provider of settlement services and who then refers business
to that provider or in some way influences the selection of that provider.
Agency the relationship between a principal and an agent is authorized to represent
the principal in certain transactions.
Agency coupled with interest an agency relationship in which the agent is given an estate or interest in the
subject of the agency (the property).
, 75 Hour Broker Pre License Term Review
Agent one who acts or has the power to act for another. A fiduciary relationship is
created under the law of agency where a property owner, as the principal,
executes a listing agreement or management contract authorizing a licensed
sponsoring broker to be his agent.
Air lot a designated airspace over a piece of land. An air lot, like surface property,
may be transferred.
Air rights the right to use the open space above a property, usually allowing the surface
to be used for another purpose.
Alienation the act of transferring property to another. See also voluntary alienation and
involuntary alienation.
Alienation clause the clause in a mortgage or deed of trust that states that the balance of the
secured debt becomes immediately due and payable at the lender's option if
the property is sold by the borrower. In effect, this clause prevents the
borrower from assigning the debt without the lender's approval.
Allodial system a system of land ownership in which land is held free and clear of any rent or
service due to the government; commonly contrasted to the feudal system.
Land is held under the allodial system in the United States.
Amendment a change to an existing contact.
American Land Title Association (ALTA) policy A title insurance policy that protects the interest in a collateral property of a
mortgage lender who originates a new real estate loan.
Americans with Disabilities Act (ADA) Legislation that prohibits discrimination against the physically or mentally
impaired as it relates to employment opportunities and public
accommodations.
Amortized loan A loan in which the principal as well as the interest is payable in monthly or
other periodic installments over the term of the loan.
Annexation Method of converting personal property into real property (e.g., using cement,
stones, and sand to build a sidewalk).
Annual percentage rate (APR) The relationship of the total finance charges associated with a loan. This must
be disclosed to borrowers by lenders under the Truth in Lending Act.
Anticipation The appraisal principle holding that value can increase or decrease based on
the expectation of some future benefit or detriment produced by the property.
, 75 Hour Broker Pre License Term Review
Antitrust laws Laws designed to preserve the free enterprise of the open marketplace by
making illegal certain private conspiracies and combinations formed to
minimize competition. Most violations of antitrust laws in the real estate
business involve either price-fixing or allocation of customers or markets (real
estate companies agreeing to limit their areas of trade or dealing to certain
areas or properties).
Appraisal An estimate of the quantity, quality, or value of something. The process through
which conclusions of property value are obtained; also refers to the report that
sets forth the process of estimation and conclusion of value.
Appraiser An independent person trained to provide an unbiased opinion of value in an
impartial and objective manner according to the appraisal process.
Appreciation An increase in the worth or value of a property due to economic or related
causes, which may prove to be either temporary or permanent; opposite of
depreciation.
Appropriation The way a taxing body authorizes the expenditure of funds and provides for
the sources of the funding.
Appurtenance A right, privilege, or improvement belonging to, and passing with, the land.
Appurtenant easement An easement that is annexed to the ownership of one parcel and allows the
owner the use of the neighbor's land.
Asbestos A mineral once in insulation and other materials that can cause respiratory
diseases.
Assemblage The combining of two or more adjoining lots into one larger tract to increase
their total value.
Assessment The imposition of a tax, charge, or levy, usually according to established rates.
Assignment The transfer in writing of interest in a bond, mortgage, lease, or other
instrument.
, 75 Hour Broker Pre License Term Review
Assumption of mortgage Acquiring title to property on which there is an existing mortgage and agreeing
to be personally liable for the terms and conditions of the mortgage, including
payments.
Attachment The act of taking a person's property into legal custody by writ or other judicial
order to hold it available for application to that person's debt to a creditor.
Attorney's Opinion of title An abstract of title that an attorney has examined and has certified to be, in his
opinion, an accurate statement of the facts concerning the property ownership.
Automated underwriting Software that permits lenders to expedite the loan approval process and
reduce lending costs.
Automatic extension A clause in a listing agreement stating that the agreement will continue
automatically for a certain period of time after its expiration date. In many
states, use of this clause is discouraged or prohibited.
Avulsion The sudden tearing away of land, as by an earthquake, flood, volcanic action,
or the sudden change in the course of a stream.
Balance The appraisal principle stating that the greatest value in a property will occur
when the type and size of the improvements are proportional to each other as
well as to the land.
Balloon payment A 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 A deed that carries with it no warranties against liens or other encumbrances
but does imply that the grantor has the right to convey title. The grantor may
add warranties to the deed at his discretion.
Balloon payment A final payment of a mortgage loan that is considerably larger than the
required periodic payments because the loan amount was not fully amortized.
Base line The main imaginary line running east and west and crossing a principal
meridian at a definite point, used by surveyors for reference in locating and
describing land under the rectangular (government) survey system of legal
description.
Basis The financial interest that the Internal Revenue Service attributes to an owner
of an investment property for the purpose of determining annual depreciation
and gain or loss on the sale of the asset If a property was acquired by
purchase, the owner's basis is the cost of the property plus the value of any
capital expenditures for improvements to the progeny, minus any deprecation
allowable or actually taken This new basis' is called the adjusted basis.
Benchmark A permanent reference mark or point established for use by Surveyors in
measuring differences in elevation.
Beneficiary (1) The person for whom a trust operates or on whose behalf the income from a
trust estate is drawn. (2) A lender in a deed of trust loan transaction. Also called
a legatee.
Bequest A gift of personal property under a will. Also called a legacy.
Accrued item on a closing statement, items of expense that are incurred but not yet payable,
such as interest on a mortgage loan or taxes on real property.
Acknowledgment a formal declaration made before a duly authorized officer, usually a notary
public, by a person who has signed a document.
Actual eviction the legal process that results in the tenants being physically removed from the
leased premises.
Actual notice express information or fact; that which is known; direct knowledge.
Addendum any provision added to an existing contract without altering the content of the
original; it must be signed by both parties.
Adjustable-rate mortgage (ARM) a loan characterized by a fluctuating interest rate, usually one tied to a bank or
savings or loan association cost-of-fund index.
Adverse possession the actual, open, notorious, hostile, and continuous possession of another's
land under a claim of right. Possession for a statutory period may be a means
of acquiring title.
Affidavit of title a written statement, made under oath by a seller or grantor of real property
and acknowledged by a notary public, in which the grantor (1) identifies himself
and indicates marital status, (2) certifies that since the examination of the title
on the date of the contract no defects have occurred in the title, and (3)
certifies that he is in possession of the property (if applicable).
Affiliated business arrangement (ABA) a system under which, to streamline the settlement process, a real estimate
firm, title insurance company, mortgage broker, home inspection company, or
even a moving company may agree to offer a package of services to
consumers.
Affiliated business disclosure a disclosure that the company or individual referring settlement services has
either an affiliate relationship with or a direct or beneficial ownership interest of
more than 1% in a provider of settlement services and who then refers business
to that provider or in some way influences the selection of that provider.
Agency the relationship between a principal and an agent is authorized to represent
the principal in certain transactions.
Agency coupled with interest an agency relationship in which the agent is given an estate or interest in the
subject of the agency (the property).
, 75 Hour Broker Pre License Term Review
Agent one who acts or has the power to act for another. A fiduciary relationship is
created under the law of agency where a property owner, as the principal,
executes a listing agreement or management contract authorizing a licensed
sponsoring broker to be his agent.
Air lot a designated airspace over a piece of land. An air lot, like surface property,
may be transferred.
Air rights the right to use the open space above a property, usually allowing the surface
to be used for another purpose.
Alienation the act of transferring property to another. See also voluntary alienation and
involuntary alienation.
Alienation clause the clause in a mortgage or deed of trust that states that the balance of the
secured debt becomes immediately due and payable at the lender's option if
the property is sold by the borrower. In effect, this clause prevents the
borrower from assigning the debt without the lender's approval.
Allodial system a system of land ownership in which land is held free and clear of any rent or
service due to the government; commonly contrasted to the feudal system.
Land is held under the allodial system in the United States.
Amendment a change to an existing contact.
American Land Title Association (ALTA) policy A title insurance policy that protects the interest in a collateral property of a
mortgage lender who originates a new real estate loan.
Americans with Disabilities Act (ADA) Legislation that prohibits discrimination against the physically or mentally
impaired as it relates to employment opportunities and public
accommodations.
Amortized loan A loan in which the principal as well as the interest is payable in monthly or
other periodic installments over the term of the loan.
Annexation Method of converting personal property into real property (e.g., using cement,
stones, and sand to build a sidewalk).
Annual percentage rate (APR) The relationship of the total finance charges associated with a loan. This must
be disclosed to borrowers by lenders under the Truth in Lending Act.
Anticipation The appraisal principle holding that value can increase or decrease based on
the expectation of some future benefit or detriment produced by the property.
, 75 Hour Broker Pre License Term Review
Antitrust laws Laws designed to preserve the free enterprise of the open marketplace by
making illegal certain private conspiracies and combinations formed to
minimize competition. Most violations of antitrust laws in the real estate
business involve either price-fixing or allocation of customers or markets (real
estate companies agreeing to limit their areas of trade or dealing to certain
areas or properties).
Appraisal An estimate of the quantity, quality, or value of something. The process through
which conclusions of property value are obtained; also refers to the report that
sets forth the process of estimation and conclusion of value.
Appraiser An independent person trained to provide an unbiased opinion of value in an
impartial and objective manner according to the appraisal process.
Appreciation An increase in the worth or value of a property due to economic or related
causes, which may prove to be either temporary or permanent; opposite of
depreciation.
Appropriation The way a taxing body authorizes the expenditure of funds and provides for
the sources of the funding.
Appurtenance A right, privilege, or improvement belonging to, and passing with, the land.
Appurtenant easement An easement that is annexed to the ownership of one parcel and allows the
owner the use of the neighbor's land.
Asbestos A mineral once in insulation and other materials that can cause respiratory
diseases.
Assemblage The combining of two or more adjoining lots into one larger tract to increase
their total value.
Assessment The imposition of a tax, charge, or levy, usually according to established rates.
Assignment The transfer in writing of interest in a bond, mortgage, lease, or other
instrument.
, 75 Hour Broker Pre License Term Review
Assumption of mortgage Acquiring title to property on which there is an existing mortgage and agreeing
to be personally liable for the terms and conditions of the mortgage, including
payments.
Attachment The act of taking a person's property into legal custody by writ or other judicial
order to hold it available for application to that person's debt to a creditor.
Attorney's Opinion of title An abstract of title that an attorney has examined and has certified to be, in his
opinion, an accurate statement of the facts concerning the property ownership.
Automated underwriting Software that permits lenders to expedite the loan approval process and
reduce lending costs.
Automatic extension A clause in a listing agreement stating that the agreement will continue
automatically for a certain period of time after its expiration date. In many
states, use of this clause is discouraged or prohibited.
Avulsion The sudden tearing away of land, as by an earthquake, flood, volcanic action,
or the sudden change in the course of a stream.
Balance The appraisal principle stating that the greatest value in a property will occur
when the type and size of the improvements are proportional to each other as
well as to the land.
Balloon payment A 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 A deed that carries with it no warranties against liens or other encumbrances
but does imply that the grantor has the right to convey title. The grantor may
add warranties to the deed at his discretion.
Balloon payment A final payment of a mortgage loan that is considerably larger than the
required periodic payments because the loan amount was not fully amortized.
Base line The main imaginary line running east and west and crossing a principal
meridian at a definite point, used by surveyors for reference in locating and
describing land under the rectangular (government) survey system of legal
description.
Basis The financial interest that the Internal Revenue Service attributes to an owner
of an investment property for the purpose of determining annual depreciation
and gain or loss on the sale of the asset If a property was acquired by
purchase, the owner's basis is the cost of the property plus the value of any
capital expenditures for improvements to the progeny, minus any deprecation
allowable or actually taken This new basis' is called the adjusted basis.
Benchmark A permanent reference mark or point established for use by Surveyors in
measuring differences in elevation.
Beneficiary (1) The person for whom a trust operates or on whose behalf the income from a
trust estate is drawn. (2) A lender in a deed of trust loan transaction. Also called
a legatee.
Bequest A gift of personal property under a will. Also called a legacy.
