Principles 2: Cumulative -All Of The Key Terms Of
Principles 2 – Questions & Verified Solutions
absolute auction Correct Ans - an auction in which there is no
reserve or restriction on price; also known as a no-reserve auction
abstract of title Correct Ans - an abbreviated history of a property,
including info on any transfers, grants, wills, conveyances, liens, and
encumbrances
acceleration clause Correct Ans - a clause in a security instrument
(mortgage/deed of trust) which makes the entire loan amount due
immediately upon default
acquisition Correct Ans - the process of gaining ownership or
control of real property or an interest in real property
acreage Correct Ans - a unit of area measurement used to
determine the size of land; 1 acre = 43,560 square feet
actual eviction Correct Ans - the process by which a tenant is
expelled from a property
adjustable-rate mortgage (ARM) Correct Ans - a mortgage with an
interest rate that can be adjusted based on fluctuations in the cost of
money
adverse possession Correct Ans - involuntary transfer of title from
an owner who does not use or inspect their land for a number of years to
another person who has some claim to the land and takes possession
affidavit as to debts and liens Correct Ans - a sworn statement in
which the seller assures the title company (and the buyer) that there are no
liens, unpaid bills for repairs or improvements, or undisclosed defects in
the title
after-tax cash flow Correct Ans - a financial performance measure
that reflects a property's ability to generate positive cash flow
,alienation Correct Ans - the transfer of title to real estate
amortization Correct Ans - the process of paying off a
debt/mortgage in regular installments based on a fixed payment schedule
L3, C4 the process of paying off a debt/mortgage in regular installments
based on a fixed payment schedule
appraisal Correct Ans - the value of a property, based on factors
determined by the opinion of a certified appraiser
appraisal report Correct Ans - a report from a licensed appraiser
that sums up a property's market value based on collected data
appraisal review Correct Ans - a review of an appraisal report to
make sure the appraisal meets the lender's standards
appraised value Correct Ans - an estimation of property's value as
of a specific date, performed by a certified appraiser
appreciation Correct Ans - the increase in value of a property
assessed value Correct Ans - the value placed on a property by a
governmental unit for use in levying annual real estate taxes
balloon payment Correct Ans - a payment at the end of a loan
period which includes the total outstanding balance of the loan
balloon payment loan Correct Ans - employs periodic payments
that will not fully amortize the loan, thereby requiring a final payment that
is larger than previous payments
bargain and sale deed Correct Ans - a deed without any warranty
against encumbrances; only implies that the grantor holds title and
possession of the property
blockbusting Correct Ans - the illegal act of causing owners to sell
their homes by creating fear that members of a protected class are moving
into the area; a.k.a. panic peddling
, bridge loan Correct Ans - short-term loan used to transition from
one loan to another; can connect borrower from construction loan to
eventual mortgage loan (or current home to their new home)
building code Correct Ans - sets of regulations pertaining to
building design, materials, safety, sanitation, and structure
capital expenditure Correct Ans - funds used by a company to
acquire or upgrade physical assets like property, industrial buildings, or
equipment
capital gain Correct Ans - the increase in the value of an asset
capital improvement Correct Ans - the addition, restoration, or
remodel of a property in a way that increases property value and/or
extends its useful life
cash flow Correct Ans - the cash that an investment generates after
accounting for the operating expenses, debt service, and taxes associated
with the enterprise
CERCLA Correct Ans - the 1980 act that established the Superfund
and created a process for identifying potentially responsible parties of
environmental damage and ordering them to take responsibility for the
cleanup action
chain of title Correct Ans - the entire record of a property's
ownership
chronological age Correct Ans - the literal age of a property
closing Correct Ans - the final step of executing a real estate
transaction in which consideration is paid and ownership of the property is
transferred
closing agent Correct Ans - the representative of the title insurance
company; usually conducts closing
Principles 2 – Questions & Verified Solutions
absolute auction Correct Ans - an auction in which there is no
reserve or restriction on price; also known as a no-reserve auction
abstract of title Correct Ans - an abbreviated history of a property,
including info on any transfers, grants, wills, conveyances, liens, and
encumbrances
acceleration clause Correct Ans - a clause in a security instrument
(mortgage/deed of trust) which makes the entire loan amount due
immediately upon default
acquisition Correct Ans - the process of gaining ownership or
control of real property or an interest in real property
acreage Correct Ans - a unit of area measurement used to
determine the size of land; 1 acre = 43,560 square feet
actual eviction Correct Ans - the process by which a tenant is
expelled from a property
adjustable-rate mortgage (ARM) Correct Ans - a mortgage with an
interest rate that can be adjusted based on fluctuations in the cost of
money
adverse possession Correct Ans - involuntary transfer of title from
an owner who does not use or inspect their land for a number of years to
another person who has some claim to the land and takes possession
affidavit as to debts and liens Correct Ans - a sworn statement in
which the seller assures the title company (and the buyer) that there are no
liens, unpaid bills for repairs or improvements, or undisclosed defects in
the title
after-tax cash flow Correct Ans - a financial performance measure
that reflects a property's ability to generate positive cash flow
,alienation Correct Ans - the transfer of title to real estate
amortization Correct Ans - the process of paying off a
debt/mortgage in regular installments based on a fixed payment schedule
L3, C4 the process of paying off a debt/mortgage in regular installments
based on a fixed payment schedule
appraisal Correct Ans - the value of a property, based on factors
determined by the opinion of a certified appraiser
appraisal report Correct Ans - a report from a licensed appraiser
that sums up a property's market value based on collected data
appraisal review Correct Ans - a review of an appraisal report to
make sure the appraisal meets the lender's standards
appraised value Correct Ans - an estimation of property's value as
of a specific date, performed by a certified appraiser
appreciation Correct Ans - the increase in value of a property
assessed value Correct Ans - the value placed on a property by a
governmental unit for use in levying annual real estate taxes
balloon payment Correct Ans - a payment at the end of a loan
period which includes the total outstanding balance of the loan
balloon payment loan Correct Ans - employs periodic payments
that will not fully amortize the loan, thereby requiring a final payment that
is larger than previous payments
bargain and sale deed Correct Ans - a deed without any warranty
against encumbrances; only implies that the grantor holds title and
possession of the property
blockbusting Correct Ans - the illegal act of causing owners to sell
their homes by creating fear that members of a protected class are moving
into the area; a.k.a. panic peddling
, bridge loan Correct Ans - short-term loan used to transition from
one loan to another; can connect borrower from construction loan to
eventual mortgage loan (or current home to their new home)
building code Correct Ans - sets of regulations pertaining to
building design, materials, safety, sanitation, and structure
capital expenditure Correct Ans - funds used by a company to
acquire or upgrade physical assets like property, industrial buildings, or
equipment
capital gain Correct Ans - the increase in the value of an asset
capital improvement Correct Ans - the addition, restoration, or
remodel of a property in a way that increases property value and/or
extends its useful life
cash flow Correct Ans - the cash that an investment generates after
accounting for the operating expenses, debt service, and taxes associated
with the enterprise
CERCLA Correct Ans - the 1980 act that established the Superfund
and created a process for identifying potentially responsible parties of
environmental damage and ordering them to take responsibility for the
cleanup action
chain of title Correct Ans - the entire record of a property's
ownership
chronological age Correct Ans - the literal age of a property
closing Correct Ans - the final step of executing a real estate
transaction in which consideration is paid and ownership of the property is
transferred
closing agent Correct Ans - the representative of the title insurance
company; usually conducts closing
