Question 1

Agency Relationship

Accepted Answer

A legal relationship in which a real estate broker or a licensee represents a client in a real estate transaction.

Question 2

Real Estate Settlement Procedures Act (RESPA)

Accepted Answer

A law ensuring that consumers receive disclosures about the transfer of servicing rights and the nature and costs of real estate settlement services.

Question 3

Eminent Domain

Accepted Answer

The power of a government or its agent to take private property for public use, with payment of compensation.

Question 4

Fair Housing Act

Accepted Answer

A law that prohibits discrimination in all facets of the home buying process on the basis of race, color, national origin, religion, sex, familial status, or disability.

Question 5

Leasehold Estate

Accepted Answer

An estate that gives the holder (Tenant) a temporary right to possession, without ownership.

Question 6

Title Insurance

Accepted Answer

Insurance that protects real estate owners and lenders against any property loss or damage they might experience because of liens, encumbrances, or defects in the title to the property.

Question 7

Multiple Listing Service (MLS)

Accepted Answer

A service used by a group of real estate brokers. They band together to create an MLS that allows each of them to see one another's listings of properties for sale.

Question 8

Broker Price Opinion (BPO)

Accepted Answer

A report that is conducted by a licensed real estate agent, similar to an appraisal, to estimate the selling price of a property.

Question 9

Exclusive Agency Listing

Accepted Answer

A contract under which the owner appoints a real estate broker as his or her exclusive agent for a designated period of time to sell the property, on the owner's stated terms, for a commission.

Question 10

Appraisal

Accepted Answer

An unbiased professional opinion of a home's value.

Question 11

Earnest Money

Accepted Answer

A deposit made to a seller indicating the buyer's good faith in an arrangement.

Question 12

Contingency

Accepted Answer

A condition that must be met before a contract is legally binding.

Question 13

Escrow

Accepted Answer

A deed, a bond, money, or a piece of property held in trust by a third party to be turned over to the grantee only upon fulfillment of a condition.

Question 14

Quiet Enjoyment

Accepted Answer

The right to enjoy and use premises in peace and without interference.

Question 15

Comparative Market Analysis (CMA)

Accepted Answer

An estimate of a home's value based on recently sold, similar properties in the immediate area.

Question 16

Dual Agency

Accepted Answer

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

Question 17

Net Listing

Accepted Answer

A type of listing where the agent's commission is the difference between the sales price and a minimum price set by the seller.

Question 18

Bundle of Rights

Accepted Answer

The legal rights of the real estate title holder, including possession, control, exclusion, enjoyment, and disposition.

Question 19

Zoning

Accepted Answer

Municipal or local government laws that dictate how real property can and cannot be used in certain areas.

Question 20

Equitable Title

Accepted Answer

The interest held by one party to purchase property before closing.

Question 21

Purchase Agreement

Accepted Answer

A contract in which a seller promises to convey a property title to a buyer in exchange for the purchase price.

Question 22

Real Estate Investment Trust (REIT)

Accepted Answer

A company that owns or finances income-generating real estate.

Question 23

Capital Gain

Accepted Answer

The profit one earns on the sale of a real estate asset.

Question 24

Amortization

Accepted Answer

The process of gradually reducing a debt through installment payments of principal and interest.

Question 25

Buyer's Agent

Accepted Answer

A real estate agent who represents the buyer in a real estate transaction.

Question 26

Seller's Agent

Accepted Answer

A real estate agent who represents the seller in a real estate transaction.

Question 27

Home Inspection

Accepted Answer

A thorough assessment by a professional to determine the condition of a home prior to purchase.

Question 28

Loan-to-Value Ratio (LTV)

Accepted Answer

The amount of money borrowed compared to the value or price of the property

Question 29

Pre-Approval Letter

Accepted Answer

A document from a lender stating that a potential buyer has the financial means to purchase a home up to a certain price.

Question 30

Deed

Accepted Answer

A legal document that transfers ownership of a property.

Question 31

Property Tax

Accepted Answer

A government levy based on the market value of a property.

Question 32

Underwriting

Accepted Answer

The process a lender uses to determine if the risk of offering a mortgage loan to a particular borrower under certain parameters is acceptable.

Question 33

Closing Costs

Accepted Answer

Fees and expenses, over and above the price of the property, incurred by the buyer and/or the seller in the property transfer process.

Question 34

Foreclosure

Accepted Answer

The legal process by which a lender takes control of a property, evicts the homeowner and sells the home after a homeowner is unable to make full principal and interest payments on his or her mortgage.

Question 35

Adjustable Rate Mortgage (ARM)

Accepted Answer

A type of mortgage loan where the interest rate on the note periodically adjusts based on an index.

Question 36

Exclusive Right to Sell

Accepted Answer

A contractual agreement under which the listing broker acts as the agent or as the legally recognized non-agency representative of the seller, and the seller agrees to pay a commission to the listing broker regardless of who sells the property.

Question 37

Real Estate Owned (REO)

Accepted Answer

Property that is owned by a lender—typically a bank—after an unsuccessful sale at a foreclosure auction.

Question 38

Negative Amortization

Accepted Answer

Occurs when the monthly payments do not cover all the interest cost. The interest cost that isn’t covered is added to the unpaid principal balance.

Question 39

Land Contract

Accepted Answer

A contract between buyer and seller of property in which the buyer makes payments toward full ownership (as opposed to a mortgage where the loan is secured by the new property).

Question 40

Specific Performance

Accepted Answer

A legal action to compel a party to carry out the terms of a contract.

Question 41

Tenancy in Common

Accepted Answer

A type of ownership where two or more people own property at the same time.

Question 42

Blanket Mortgage

Accepted Answer

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

Advanced Illinois Real Estate Agent Flashcard Set