Real Estate Vocabulary (Guide to Passing the PSI Real Estate Exam) Already Passed

Real Estate Vocabulary (Guide to Passing the PSI Real Estate Exam) Already Passed acceleration clause A provision in a written mortgage, note, bond, or conditional sales contract that in the even of default, the whole amount of the principal and the interest may be declared due and payable at once. accession Title to improvements or additions to real property is acquired as a result of the accretion of alluvial deposits along the banks of streams or as a result of the annexation of fixtures. accretion Increase or addition to land by the deposit of sand or soil washed up naturally from a river, lake, or sea. accrued depreciation The actual depreciation that has occurred to a property at any given date, the difference between the cost of replacement new (as of the date of the appraisal) and the present appraised value. acknowledgement A declaration made by a person to a notary public or other pubic official authorized to take acknowledgments that an instrument was executed by his or her as a free and voluntary act. actual eviction The result of legal action originated by a lessor, by which a defaulted tenant is physically ousted from the rented property pursuant to a court order. actual notice Express information or fact; that which is known; actual knowledge. ad valorem tax A tax levied according to value; generally used to refer to real estate tax. adjustable-rate mortgage (ARM) A mortgage in which the interest changes periodically, according to corresponding fluctuations in an index. All are tied to indexes. adjustment date The date the interest rate changes on an adjustable-rate mortgage. administrator The party appointed by the county court to settle the estate of a deceased person who died without leaving a will. adverse possession The actual, visible, hostile, notorious, exclusive, and continuous possession of another's land under a claim to title. affidavit A written statement signed and sworn to before a person authorized to administer an oath agent One who represents or has the power to act for another (principal). The authorization may be express, implied, or apparent. A fiduciary relationship is created when a principal executes a listing agreement or management contract authorizing a real estate broker to be his or her agent. agreement of sale A written agreement by which the purchaser agrees to buy certain real estate and the seller agrees to sell, on the terms and conditions set forth in the agreement. air lot A designated airspace over a piece of land, like suface property, may be transferred. air rights The right to use the open space above one's property. It can be sold to build a sky-walk or for the utility company to erect power lines, alienation The act of transferring property to another. May be voluntary, such as by sale, or involuntary, such as through eminent domain. alienation clause Clause in a mortgage instrument that does not allow the borrower to sell (without lender approval) on assumption or contract-for-deed. alluvion The actual soil increase resulting from accretion. amendments Changes to previously approved and adopted written agreements. amenities Neighborhood facilities and services that enhance a property's value, outside of the property (swimming pools, three-car garages). Americans with Disabilities Act (ADA) A federal law (1992) designed to eliminate discrimination against individuals with disabilities. amortization The liquidation of a financial burden by installment payments, which include principal and interest. The loan payment consists of a portion which will be applied to pay the accruing interest on a loan, with the remainder being applied to the principal. Over time, the interest portion decreases as the loan balance decreases, and the amount applied to principal increases so that the loan is paid off in the specified time. amortized loan A loan in which the principal and interest are payable in monthly or other periodic installments over the term of the loan amortization schedule A table which shows how much of each payment will be applied toward principal and how much toward interest over the life of the loan. It also shows the gradual decrease of the loan balance until it reaches zero. annual percentage rate (APR) This is not the note rate on your loan. It is a value created according to a government formula intended to reflect the true annual cost of borrowing, expressed as a percentage. It works sort of like this, but not exactly, so only use this as a guideline: deduct the closing costs from your loan amount, then using your actual loan payment, calculate what the interest rate would be on this amount instead of your actual loan amount. Because you are using the same payment on a smaller amount, it is always higher than the actual not rate on your loan. antitrust laws The laws designed to preserve the free enterprise of the open marketplace by making illegal certain private conspiracies and combinations formed to minimize competition. Violations: price fixing (set fixed compensation rates) or allocation of customers or markets (brokers agreeing to limit their trades to certain areas or properties. application The form used to apply for a mortgage loan, containing information about a borrower's income, savings, assets, debts, and more. appraisal A written justification of the price paid for a property, primarily based on an analysis of comparable sales of similar homes nearby. appraised value An opinion of a property's fair market value, based on an appraiser's knowledge, experience, and analysis of the property. Since an appraisal is based primarily on comparable sales, and the most recent sale is the one on the property in question, the appraisal usually comes out at the purchase price. appraiser An individual qualified by education, training, and experience to estimate the value of real property and personal property. Although some work directly for mortgage lenders, most are independent. appreciation The increase in the value of a property due to changes in market conditions, inflation, or other causes. appurtenant Belonging to, incident to, annexed to. Examples: garage to a house. Passes with the land when the property is transferred. assessed value The valuation placed on property by a public tax assessor for purposes of taxation. assessment The placing of a value on property for the purpose of taxation. assessor A public official who establishes the value of a property for taxation purposes. asset Items of value owned by an individual. These include bank accounts, stocks, bonds, mutual funds, and so on. Others include real estate, personal property, and debts owed to an individual by others. assignment Transfer in writing of rights or interest i