CT REAL ESTATE TERMS EXAM
QUESTIONS WITH CORRECT
ANSWERS
automatic extension clause - ANSWER-A listing agreement clause 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 - ANSWER-The sudden tearing away of land, as by earthquake, flood,
volcanic action, or the sudden change in the course of a stream.
Balance - ANSWER-The appraisal principal 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 the land.
Balloon Payment - ANSWER-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 - ANSWER-A deed that carries with it no warranties against
liens or other encumbrances but that does imply that the grantor has the right to
convey title. The grantor may add warranties to the deed at his or her discretion.
Base Line - ANSWER-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 - ANSWER-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 property, minus any depreciation allowable or
actually taken. This new basis is called the adjusted basis.
benchmarks - ANSWER-Permanent reference marks or points established for use by
surveyors in measuring differences in elevation.
beneficiary - ANSWER-(1) The person for whom a trust operates or in whose behalf
the income from a trust estate is drawn. (2) A lender in a deed of trust loan
transaction.
binder - ANSWER-An agreement that may accompany an earnest money deposit for
the purchase of real property as evidence of the purchaser's good faith and intent to
complete the transaction.
,Blanket Loan - ANSWER-A mortgage covering more than one parcel of real estate,
providing for each parcel's partial release from the mortgage lien upon repayment of
a definite portion of the debt.
Blockbusting - ANSWER-Illegal practice of inducing homeowners to sell their
properties by telling them that a certain people of a certain race, national origin or
religion are moving into the area
Blue Sky Laws - ANSWER-Common name for those state and federal laws that
regulate the registration and sale of investment securities.
boot - ANSWER-Money or property given to make up any difference in value or
equity between two properties in an exchange.
Boycott - ANSWER-When individuals or businesses withhold their patronage to a
business as a protest or to reduce competition.
branch office - ANSWER-A secondary place of business apart from the principal or
main office from which real estate business is conducted. A branch office usually
must be run by a licensed real estate broker working on behalf of the broker.
breach of contract - ANSWER-Violation of any terms or conditions in a contract
without legal excuse; for example, failure to make a payment when it is due.
bring down - ANSWER-A second title search that is made after the closing and
before any new documents are filed.
Broker - ANSWER-One who acts as an intermediary on behalf of others for a fee or
commission.
Broker Protection Clause - ANSWER-Clause in a contract that protects a broker from
losing a commission in the event a transaction is not completed or is intentionally
delayed until after the listing expires.
Amortized Loan - ANSWER-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 - ANSWER-Process of converting personal property into real property.
Annual Percentage Rate (APR) - ANSWER-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 (TILA).
anticipation - ANSWER-The appraisal principle that holds that value can increase or
decrease based on the expectation of some future benefit or detriment produced by
the property.
antitrust laws - ANSWER-Laws designed to preserve the free enterprise of the open
marketplace by making illegal certain private conspiracies and combinations formed
to minimize competition.
, appraisal - ANSWER-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.
Appraisal Report - ANSWER-An opinion of a property's market value given to a
lender or client with detailed market information.
Appraiser - ANSWER-An independent person trained to provide an unbiased
estimate of value
Appraiser Independence Requirements (AIR) - ANSWER-Regulations issued by
Fannie Mae that must be followed by appraisers to ensure accurate and objective
appraisals.
appreciation - ANSWER-An increase in the worth of value of a property due to
economic or related causes, which may prove to be either temporary or permanent;
opposite of depreciation.
appurtenance - ANSWER-Any right or privilege which belongs to and passes with
land.
area - ANSWER-A level surface or piece of ground; the size of a surface; the amount
of a two dimensional object.
area preference - ANSWER-People's desire for one area over another, based on a
number of factors such as history, reputation, convenience, scenic beauty, and
location.
Asbestos - ANSWER-A mineral once used in insulation and other materials that can
cause respiratory diseases.
Assemblage - ANSWER-The combining of two or more adjoining lots into one larger
tract to increase their total value.
assessd value - ANSWER-The value of property for tax purpose.
Tax rate X assessed value = yearly taxes
Assesment - ANSWER-The imposition of a tax, charge, or levy, usually according to
the established rates.
assessment equalization factor - ANSWER-A factor (number) by which the assessed
value of a property is multiplied to arrive at a value for the property that is in line with
statewide tax assessments. The ad valorem tax would be based on this adjusted
value. An equalization factor may be applied to raise or lower assessments in a
particular district or county.
Assigned Agency - ANSWER-happens when two agents working for the same
broker, represent different parties in the same transaction.
QUESTIONS WITH CORRECT
ANSWERS
automatic extension clause - ANSWER-A listing agreement clause 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 - ANSWER-The sudden tearing away of land, as by earthquake, flood,
volcanic action, or the sudden change in the course of a stream.
Balance - ANSWER-The appraisal principal 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 the land.
Balloon Payment - ANSWER-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 - ANSWER-A deed that carries with it no warranties against
liens or other encumbrances but that does imply that the grantor has the right to
convey title. The grantor may add warranties to the deed at his or her discretion.
Base Line - ANSWER-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 - ANSWER-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 property, minus any depreciation allowable or
actually taken. This new basis is called the adjusted basis.
benchmarks - ANSWER-Permanent reference marks or points established for use by
surveyors in measuring differences in elevation.
beneficiary - ANSWER-(1) The person for whom a trust operates or in whose behalf
the income from a trust estate is drawn. (2) A lender in a deed of trust loan
transaction.
binder - ANSWER-An agreement that may accompany an earnest money deposit for
the purchase of real property as evidence of the purchaser's good faith and intent to
complete the transaction.
,Blanket Loan - ANSWER-A mortgage covering more than one parcel of real estate,
providing for each parcel's partial release from the mortgage lien upon repayment of
a definite portion of the debt.
Blockbusting - ANSWER-Illegal practice of inducing homeowners to sell their
properties by telling them that a certain people of a certain race, national origin or
religion are moving into the area
Blue Sky Laws - ANSWER-Common name for those state and federal laws that
regulate the registration and sale of investment securities.
boot - ANSWER-Money or property given to make up any difference in value or
equity between two properties in an exchange.
Boycott - ANSWER-When individuals or businesses withhold their patronage to a
business as a protest or to reduce competition.
branch office - ANSWER-A secondary place of business apart from the principal or
main office from which real estate business is conducted. A branch office usually
must be run by a licensed real estate broker working on behalf of the broker.
breach of contract - ANSWER-Violation of any terms or conditions in a contract
without legal excuse; for example, failure to make a payment when it is due.
bring down - ANSWER-A second title search that is made after the closing and
before any new documents are filed.
Broker - ANSWER-One who acts as an intermediary on behalf of others for a fee or
commission.
Broker Protection Clause - ANSWER-Clause in a contract that protects a broker from
losing a commission in the event a transaction is not completed or is intentionally
delayed until after the listing expires.
Amortized Loan - ANSWER-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 - ANSWER-Process of converting personal property into real property.
Annual Percentage Rate (APR) - ANSWER-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 (TILA).
anticipation - ANSWER-The appraisal principle that holds that value can increase or
decrease based on the expectation of some future benefit or detriment produced by
the property.
antitrust laws - ANSWER-Laws designed to preserve the free enterprise of the open
marketplace by making illegal certain private conspiracies and combinations formed
to minimize competition.
, appraisal - ANSWER-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.
Appraisal Report - ANSWER-An opinion of a property's market value given to a
lender or client with detailed market information.
Appraiser - ANSWER-An independent person trained to provide an unbiased
estimate of value
Appraiser Independence Requirements (AIR) - ANSWER-Regulations issued by
Fannie Mae that must be followed by appraisers to ensure accurate and objective
appraisals.
appreciation - ANSWER-An increase in the worth of value of a property due to
economic or related causes, which may prove to be either temporary or permanent;
opposite of depreciation.
appurtenance - ANSWER-Any right or privilege which belongs to and passes with
land.
area - ANSWER-A level surface or piece of ground; the size of a surface; the amount
of a two dimensional object.
area preference - ANSWER-People's desire for one area over another, based on a
number of factors such as history, reputation, convenience, scenic beauty, and
location.
Asbestos - ANSWER-A mineral once used in insulation and other materials that can
cause respiratory diseases.
Assemblage - ANSWER-The combining of two or more adjoining lots into one larger
tract to increase their total value.
assessd value - ANSWER-The value of property for tax purpose.
Tax rate X assessed value = yearly taxes
Assesment - ANSWER-The imposition of a tax, charge, or levy, usually according to
the established rates.
assessment equalization factor - ANSWER-A factor (number) by which the assessed
value of a property is multiplied to arrive at a value for the property that is in line with
statewide tax assessments. The ad valorem tax would be based on this adjusted
value. An equalization factor may be applied to raise or lower assessments in a
particular district or county.
Assigned Agency - ANSWER-happens when two agents working for the same
broker, represent different parties in the same transaction.
