Question 1

Agency

Accepted Answer

The fiduciary relationship between a real estate agent and their client where the agent represents the client's interests.

Question 2

Appraisal

Accepted Answer

The process of estimating the market value of a property, typically conducted by a licensed appraiser.

Question 3

Abstract of Title

Accepted Answer

A condensed history of a property's title that includes any legal events and proceedings related to the property.

Question 4

Balloon Payment

Accepted Answer

A large, lump-sum payment scheduled at the end of a series of smaller, periodic payments.

Question 5

Capital Gain

Accepted Answer

The profit obtained from the sale of a capital asset like real estate.

Question 6

Deed of Trust

Accepted Answer

A legal document that pledges real property to secure a loan.

Question 7

Easement

Accepted Answer

The right to use another person's land for a specific purpose.

Question 8

Fair Housing Act

Accepted Answer

Federal law prohibiting discrimination in the sale, rental, or financing of housing based on race, color, religion, sex, or national origin.

Question 9

Gross Rent Multiplier

Accepted Answer

A ratio used to estimate the value of income-producing properties.

Question 10

Homestead Exemption

Accepted Answer

A legal provision that helps shield a portion of a home's value from property taxes.

Question 11

Impounds

Accepted Answer

Also known as escrows, are funds collected by the lender to pay for property taxes and insurance when due.

Question 12

Joint Tenancy

Accepted Answer

A type of ownership where two or more individuals own property together, each with equal rights and obligations.

Question 13

Kickback

Accepted Answer

Illegal payment made in return for a favor or service in real estate transactions.

Question 14

Lease Option

Accepted Answer

An agreement where a tenant is given the option to buy the property at a specified price during or at the end of the lease period.

Question 15

Marketable Title

Accepted Answer

A title free of liens or legal questions that would affect the sale of the property.

Question 16

Net Operating Income (NOI)

Accepted Answer

Income from a property after operating expenses have been deducted, but before income taxes and depreciation.

Question 17

Open Listing

Accepted Answer

A property listing that gives multiple agents the right to sell a property, but only the selling agent is entitled to the commission.

Question 18

Principal, Interest, Taxes, and Insurance (PITI)

Accepted Answer

The four components of a monthly mortgage payment.

Question 19

Qualified Intermediary

Accepted Answer

An independent party who facilitates tax-deferred exchanges under section 1031 of the Internal Revenue Code.

Question 20

Realtor®

Accepted Answer

A real estate agent who is a member of the National Association of Realtors and adheres to its strict code of ethics.

Question 21

Stigmatized Property

Accepted Answer

Property that buyers or tenants may shun for reasons unrelated to its physical condition or features.

Question 22

Title Insurance

Accepted Answer

An insurance policy that protects against loss arising from problems connected to the title to your property.

Question 23

Underwriting

Accepted Answer

The process a lender uses to determine loan approval. It involves evaluating the borrower's creditworthiness and the quality of the property itself.

Question 24

Variance

Accepted Answer

An exception from zoning ordinances granted because compliance would cause undue hardship.

Question 25

Warranty Deed

Accepted Answer

A type of deed where the grantor (seller) guarantees that they hold clear title to a piece of real estate and have the right to sell it.

Question 26

X-Efficiency

Accepted Answer

The degree of efficiency maintained by individuals and firms under conditions of imperfect competition.

Question 27

Yield

Accepted Answer

The return on an investor's capital investment.

Question 28

Zoning

Accepted Answer

Government regulation of the use of land and buildings within certain areas or zones.

Question 29

Acceleration Clause

Accepted Answer

A contract provision that allows a lender to require a borrower to repay all or part of a loan if certain requirements are not met.

Question 30

Blanket Mortgage

Accepted Answer

A mortgage that covers more than one parcel of real estate owned by the borrower.

Question 31

Covenant

Accepted Answer

A binding agreement made by two or more parties. In real estate, covenants can govern the use of property and are typically enforced through homeowners' associations.

Question 32

Dual Agency

Accepted Answer

A situation in which a real estate agent represents both the buyer and the seller in the same transaction.

Question 33

Equity

Accepted Answer

The difference between the market value of a property and the amount the owner still owes on the mortgage.

Question 34

Fixture

Accepted Answer

An item of personal property that has been converted to real property by being permanently affixed to the realty.

Question 35

Graduated Lease

Accepted Answer

A lease agreement in which the rental payments gradually increase over the term of the lease.

Question 36

Highest and Best Use

Accepted Answer

The potential use of a property that would produce the highest value.

Question 37

Injunction

Accepted Answer

A court order preventing a party from performing a specific act.

Question 38

Joint Venture

Accepted Answer

An agreement between two or more parties to combine resources for a specific task or project, typically for a specific period of time.

Question 39

Land Contract

Accepted Answer

Also known as an installment sale contract, this agreement allows the buyer to use the property while paying off the purchase price over time.

Question 40

Mortgage Insurance Premium (MIP)

Accepted Answer

An insurance policy compensates lenders or investors for losses due to the default of a mortgage loan.

Question 41

Nonconforming Use

Accepted Answer

The use of land that does not comply with the current zoning ordinance for its location, but is allowed because the use began before the ordinance was enacted.

Question 42

Option

Accepted Answer

A contract that gives the buyer the right to purchase property within a certain time period at a specific price.

Question 43

Percentage Lease

Accepted Answer

A lease in which the rent is based on a percentage of the sales volume made on the specific premises.

Question 44

Quiet Enjoyment

Accepted Answer

The right of a property owner or tenant to enjoy his or her property without interference.

Question 45

Restrictive Covenant

Accepted Answer

A clause in a deed or lease that restricts how the property can be used.

Advanced Concepts in Texas Real Estate