WRA GLOSSARY COMPREHENSIVE TEST
PAPER QUESTIONS AND SOLUTIONS
VERIFIED PREPARATION MATERIAL
●● Ad valorem
Answer: Latin for 'according to value.' Refers to property taxes
calculated as a percentage of the property's assessed value.
●● Amortization
Answer: Paying off a debt gradually through scheduled installment
payments over time.
●● Appraisal
Answer: A professional's written estimate of a property's value on a
specific date.
●● Appraised value
Answer: An appraiser's opinion of what a property is worth, based on
available facts and judgment, as of a specific date.
●● Assessed value
Answer: The value assigned to a property by a government office for tax
purposes.
,●● Assessments
Answer: Special charges imposed on nearby properties to fund local
improvements like flood control, street lighting, or air quality districts.
●● Assignment
Answer: A written transfer of someone's rights or interest in an asset to
another person or entity.
●● Assumption
Answer: When a new buyer agrees to take over the seller's existing loan.
●● Balloon payment
Answer: A large lump-sum payment due at a set point before the loan
would naturally be paid off.
●● Beneficiary
Answer: In a deed of trust, the lender — the party who benefits from the
security provided by the property.
●● Beneficiary's statement
Answer: A written report from the lender detailing the current status of a
loan, including the balance, interest rate, monthly payments, and any
other terms.
, ●● Bill of sale
Answer: A document that officially transfers ownership of personal
property from one party to another.
●● Buy-sell agreement
Answer: An agreement between the short-term lender, long-term lender,
and borrower outlining how the short-term loan will be paid off by the
long-term lender.
●● Capitalization rate
Answer: A percentage used to estimate the current value of an income-
producing property based on the income it generates.
●● Commitment fee
Answer: A fee, typically 1-2% of the loan amount, paid to the lender in
exchange for a loan commitment.
●● Competition
Answer: Properties that potential tenants might consider as alternatives
to the subject property.
●● Common area
Answer: Shared spaces within a property that all tenants can use.
PAPER QUESTIONS AND SOLUTIONS
VERIFIED PREPARATION MATERIAL
●● Ad valorem
Answer: Latin for 'according to value.' Refers to property taxes
calculated as a percentage of the property's assessed value.
●● Amortization
Answer: Paying off a debt gradually through scheduled installment
payments over time.
●● Appraisal
Answer: A professional's written estimate of a property's value on a
specific date.
●● Appraised value
Answer: An appraiser's opinion of what a property is worth, based on
available facts and judgment, as of a specific date.
●● Assessed value
Answer: The value assigned to a property by a government office for tax
purposes.
,●● Assessments
Answer: Special charges imposed on nearby properties to fund local
improvements like flood control, street lighting, or air quality districts.
●● Assignment
Answer: A written transfer of someone's rights or interest in an asset to
another person or entity.
●● Assumption
Answer: When a new buyer agrees to take over the seller's existing loan.
●● Balloon payment
Answer: A large lump-sum payment due at a set point before the loan
would naturally be paid off.
●● Beneficiary
Answer: In a deed of trust, the lender — the party who benefits from the
security provided by the property.
●● Beneficiary's statement
Answer: A written report from the lender detailing the current status of a
loan, including the balance, interest rate, monthly payments, and any
other terms.
, ●● Bill of sale
Answer: A document that officially transfers ownership of personal
property from one party to another.
●● Buy-sell agreement
Answer: An agreement between the short-term lender, long-term lender,
and borrower outlining how the short-term loan will be paid off by the
long-term lender.
●● Capitalization rate
Answer: A percentage used to estimate the current value of an income-
producing property based on the income it generates.
●● Commitment fee
Answer: A fee, typically 1-2% of the loan amount, paid to the lender in
exchange for a loan commitment.
●● Competition
Answer: Properties that potential tenants might consider as alternatives
to the subject property.
●● Common area
Answer: Shared spaces within a property that all tenants can use.
