Question 1

Appraisal

Accepted Answer

The process of determining the value of a property, typically done by a professional appraiser.

Question 2

Abstract of Title

Accepted Answer

A summary of all recorded documents affecting the title of a property.

Question 3

Acceleration Clause

Accepted Answer

A contract provision that allows a lender to require a borrower to repay all or part of an outstanding loan upon failure to meet certain conditions.

Question 4

Adjustable-Rate Mortgage (ARM)

Accepted Answer

A mortgage with an interest rate that can change over time based on a market index.

Question 5

Ad Valorem

Accepted Answer

A term that refers to the taxation applied based on the assessed value of an item, most commonly real estate.

Question 6

Amortization

Accepted Answer

The process of paying off debt in regular installments over a period of time.

Question 7

Assessed Value

Accepted Answer

The dollar value assigned to a property by a public tax assessor for purposes of property taxes.

Question 8

Balloon Mortgage

Accepted Answer

A mortgage that typically offers low rates for an initial period of time, after which the balance must be paid in full or refinanced.

Question 9

Blanket Mortgage

Accepted Answer

A mortgage that covers more than one piece of real estate.

Question 10

Bridge Loan

Accepted Answer

A short term loan that is used until a person secures permanent financing or removes an existing obligation.

Question 11

Building Code

Accepted Answer

Standards for construction and safety of buildings.

Question 12

Buydown

Accepted Answer

The process of paying extra points upfront in exchange for a lower interest rate on a mortgage.

Question 13

Capital Gains Tax

Accepted Answer

Tax payable on profit made from selling real estate.

Question 14

Chain of Title

Accepted Answer

The history of all of the documents that transfer title to a parcel of real property, starting with the earliest existing document.

Question 15

Closing Costs

Accepted Answer

Fees paid at the closing of a real estate transaction, often including attorney fees, title service costs, recording fees, etc.

Question 16

Cloud on Title

Accepted Answer

Any condition that affects the clear title to real property.

Question 17

Comparative Market Analysis (CMA)

Accepted Answer

An examination of the prices at which similar properties in the same area have recently sold.

Question 18

Contingency

Accepted Answer

A condition that must be met in order for a contract to be legally binding.

Question 19

Conventional Mortgage

Accepted Answer

A mortgage loan that is not insured or guaranteed by the government.

Question 20

Deed in Lieu

Accepted Answer

A document that transfers the title of property from a borrower to a lender to satisfy a loan that is in default and avoid foreclosure.

Question 21

Dual Agency

Accepted Answer

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

Question 22

Due Diligence

Accepted Answer

The process of thoroughly checking a property before buying it.

Question 23

Easement

Accepted Answer

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

Question 24

Encumbrance

Accepted Answer

Any claim that may impede the transfer of property from one party to another.

Question 25

Equity

Accepted Answer

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

Question 26

Escrow

Accepted Answer

A neutral third party holds onto funds or documents until a specified condition has been met.

Question 27

Fair Market Value

Accepted Answer

The estimated price that a willing buyer would pay and a willing seller would accept for a property.

Question 28

Fixed-Rate Mortgage

Accepted Answer

A mortgage with an interest rate that does not change during the entire term of the loan.

Question 29

Forbearance

Accepted Answer

An agreement to delay foreclosure on a mortgage.

Question 30

Home Inspection

Accepted Answer

A thorough examination of a property's condition, often performed by a professional home inspector.

Question 31

Interest-Only Mortgage

Accepted Answer

A type of mortgage where the borrower only pays the interest on the loan for a specified amount of time.

Question 32

Joint Tenancy

Accepted Answer

A type of ownership where two or more people own property together, with equal rights and responsibilities.

Question 33

Leasehold Estate

Accepted Answer

A type of property tenure where one party buys the right to occupy land or a building for a given length of time.

Question 34

Lien

Accepted Answer

A legal claim or hold on a property, as security for a debt or charge.

Question 35

Loan-to-Value Ratio (LTV)

Accepted Answer

The ratio of a loan to the value of an asset purchased.

Question 36

Market Value

Accepted Answer

The highest estimated price that a buyer would pay, and a seller would accept, for an item in an open and competitive market.

Question 37

Negative Amortization

Accepted Answer

Occurs when the payments on a loan are less than the interest that accrues, causing the balance owed on the loan to increase.

Question 38

Nonconforming Loan

Accepted Answer

A loan that does not meet the standards set by government-sponsored entities and cannot be sold to Fannie Mae or Freddie Mac.

Question 39

Owner Financing

Accepted Answer

A transaction in which the seller of a property agrees to finance all or part of the purchase.

Question 40

PITI

Accepted Answer

An acronym for the four components of a mortgage payment: principal, interest, taxes, and insurance.

Question 41

Prepayment Penalty

Accepted Answer

A clause in a mortgage contract that states if a mortgage is paid off within a certain period, a penalty will be assessed.

Question 42

Quitclaim Deed

Accepted Answer

A deed that transfers a property owner's interest to a recipient, without stating that the property is clear of liens or encumbrances.

Question 43

Real Estate Settlement Procedures Act (RESPA)

Accepted Answer

A U.S. federal law aiming to protect consumers from abusive practices in the real estate settlement process.

Question 44

Right of First Refusal

Accepted Answer

A provision in a lease or other agreement that gives a potentially interested party the right to buy a property before the seller negotiates any other offers.

Question 45

Survey

Accepted Answer

A measurement of land, prepared by a registered land surveyor, showing the location of the land with reference to known points, its dimensions, and the location and dimensions of any buildings.

Question 46

Tax Lien

Accepted Answer

A lien imposed by law upon a property to secure the payment of taxes.

Question 47

Title Insurance

Accepted Answer

Insurance that protects the holder from loss sustained by defects in the title.

Question 48

Underwriting

Accepted Answer

The process of evaluating a loan application to determine the risk involved for the lender.

Question 49

VA Loan

Accepted Answer

A mortgage loan in the United States guaranteed by the United States Department of Veterans Affairs.

Question 50

Warranty Deed

Accepted Answer

A deed in which the grantor fully warrants good clear title to the premises.

Question 51

Zoning

Accepted Answer

Local rules that divide a municipality into different areas in which various uses are permitted.

Question 52

Escalation Clause

Accepted Answer

A real estate contract, sometimes called an escalator, that lets a home buyer say: "I will pay x price for this home, but if the seller receives another offer that's higher than mine, I'm willing to increase my offer to y price."

Question 53

Capitalization Rate

Accepted Answer

The ratio of Net Operating Income (NOI) to property asset value.

Question 54

Option Agreement

Accepted Answer

A contract that gives the buyer the option, but not the obligation, to purchase or sell a property within a certain time period, at a given price.

Question 55

1031 Exchange

Accepted Answer

A swap of one investment property for another that allows capital gains taxes to be deferred.

Advanced Washington Real Estate Agent Flashcards