Question 1

Appraisal

Accepted Answer

The process of determining the value of a property based on objective measures, such as comparable properties in the area and the property's condition.

Question 2

Abstract of Title

Accepted Answer

A summary of the public records relating to the title to a particular piece of land.

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 certain events.

Question 4

Adjustable Rate Mortgage (ARM)

Accepted Answer

A type of mortgage in which the interest rate paid on the outstanding balance varies according to a specific benchmark.

Question 5

Ad Valorem Tax

Accepted Answer

A tax based on the assessed value of an item, such as real estate or personal property.

Question 6

Amortization

Accepted Answer

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

Question 7

Balloon Mortgage

Accepted Answer

A type of mortgage that is generally paid over a short period of time but provides for a lump sum payment to be due at the end of the initial period.

Question 8

Benchmark Rate

Accepted Answer

The lowest interest rate that lenders are willing to offer for a mortgage.

Question 9

Blanket Mortgage

Accepted Answer

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

Question 10

Broker

Accepted Answer

An individual or firm that charges a fee or commission for executing buy and sell orders submitted by a client.

Question 11

Buyer's Agent

Accepted Answer

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

Question 12

Capital Gain

Accepted Answer

The increase in value of a capital asset (investment or real estate) that gives it a higher worth than the purchase price.

Question 13

Chain of Title

Accepted Answer

The sequence of historical transfers of title to a property.

Question 14

Cloud on Title

Accepted Answer

Any document or claim that casts doubt on the clear ownership of real property.

Question 15

Comparative Market Analysis (CMA)

Accepted Answer

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

Question 16

Conforming Loan

Accepted Answer

A mortgage that is equal to or less than the loan limit set annually by Fannie Mae and Freddie Mac.

Question 17

Contingency

Accepted Answer

A condition that must be met in order for a real estate contract to become binding.

Question 18

Conveyance

Accepted Answer

The act of transferring property from one party to another.

Question 19

Deed

Accepted Answer

A legal document that grants the bearer a right or privilege, provided that he or she meets a number of conditions.

Question 20

Deed-in-Lieu

Accepted Answer

A potential option taken by a mortgagor (a borrower) to avoid foreclosure under which the mortgagor agrees to deed the collateral property (the home) back to the bank.

Question 21

Dual Agency

Accepted Answer

When a real estate agent represents both the seller and the buyer in a transaction.

Question 22

Earnest Money

Accepted Answer

A sum of money paid by a buyer at the time of entering a contract to indicate the intention and ability of the buyer to carry out the contract.

Question 23

Easement

Accepted Answer

A right to cross or otherwise use someone else's land for a specified purpose.

Question 24

Encumbrance

Accepted Answer

A claim against, limitation on or liability against real estate.

Question 25

Equity

Accepted Answer

The difference between the fair market value of the property and the amount still owed on its mortgage and other liens.

Question 26

Escrow

Accepted Answer

A financial arrangement where a third party holds and regulates payment of the funds required for two parties involved in a given transaction.

Question 27

Fair Housing Act (continued)

Accepted Answer

race, color, national origin, religion, sex, familial status, or disability.

Question 28

Fixed-Rate Mortgage

Accepted Answer

A mortgage that has a fixed interest rate for the entire term of the loan.

Question 29

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 30

Grantee

Accepted Answer

The party that receives the title to a piece of real estate.

Question 31

Grantor

Accepted Answer

The person who transfers a title in real property to another.

Question 32

Home Equity Line of Credit (HELOC)

Accepted Answer

A line of credit extended to a homeowner that uses the borrower's home as collateral.

Question 33

Home Inspection

Accepted Answer

A thorough inspection by a professional that evaluates the structural and mechanical condition of a property.

Question 34

HUD-1 Settlement Statement

Accepted Answer

A document that provides an itemized listing of the funds that are payable at closing.

Question 35

Implied Agency

Accepted Answer

An agency relationship that's created when the actions of two parties show that they have mutually consented to an agency relationship.

Question 36

Joint Tenancy

Accepted Answer

Ownership of real estate between two or more parties who have been named in one conveyance as joint tenants.

Question 37

Lease

Accepted Answer

A legal document outlining the terms under which one party agrees to rent property from another party.

Question 38

Lien

Accepted Answer

A claim or charge on property for payment of some debt, obligation or duty.

Question 39

Listing Agreement

Accepted Answer

A document in which a property owner contracts with a real estate broker (as agent) to find a buyer for the owner's property.

Question 40

Loan-to-Value Ratio (LTV)

Accepted Answer

The total dollar amount of the loan divided by the property's appraised value or selling price, whichever is less.

Question 41

Market Value

Accepted Answer

The most probable price that a property should bring in a competitive and open market.

Question 42

Mechanic's Lien

Accepted Answer

A statutory lien on a specific property for labor or materials contributed to a work of improvement.

Question 43

Mortgage

Accepted Answer

A legal agreement by which a bank or other creditor lends money at interest in exchange for taking title of the debtor's property.

Question 44

Net Listing

Accepted Answer

A real estate listing in which the broker's commission is the difference between the sale proceeds and an agreed-upon (net) price paid to the seller.

Question 45

Nonconforming Use

Accepted Answer

A use of property that is permitted to continue after a zoning ordinance prohibiting it has been established.

Question 46

Open Listing

Accepted Answer

A property listing that uses multiple real estate agents in a nonexclusive arrangement to find potential buyers.

Question 47

Origination Fee

Accepted Answer

A fee charged by a lender on entering into a loan agreement to cover the cost of processing the loan.

Question 48

Pre-Approval

Accepted Answer

A lender's commitment to a borrower to extend a certain amount of credit under specified terms for the purchase of a home.

Question 49

Principal, Interest, Taxes, and Insurance (PITI)

Accepted Answer

The four components of a monthly mortgage payment.

Question 50

Private Mortgage Insurance (PMI)

Accepted Answer

Insurance payable to a lender or trustee for a pool of securities that may be required when taking out a mortgage loan.

Question 51

Pro-Forma

Accepted Answer

A method by which financial results are calculated based on predictions or estimates.

Question 52

Real Estate Owned (REO)

Accepted Answer

Property owned by a lender, typically a bank, after an unsuccessful sale at a foreclosure auction.

Question 53

Real Property

Accepted Answer

Land and anything permanently affixed to it, including buildings, structures, and any rights, interests, and benefits related to the property.

Question 54

Refinancing

Accepted Answer

The process of obtaining a new mortgage in an effort to reduce monthly payments, lower interest rates, take cash out of the home for large purchases, or change mortgage companies.

Question 55

Rent-to-Own

Accepted Answer

A lease agreement in which a portion of the rent is credited to the tenant's future purchase of the property.

Question 56

Seller's Agent

Accepted Answer

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

Question 57

Short Sale

Accepted Answer

A real estate transaction in which the net proceeds from the sale of the property are less than the outstanding mortgage debt.

Question 58

Subdivision

Accepted Answer

The process of dividing a parcel of land into smaller lots.

Question 59

Survey

Accepted Answer

A drawing or map showing the precise legal boundaries of a property, the location of improvements, easements, rights of way, encroachments, and other physical features.

Question 60

Tenancy in Common

Accepted Answer

A form of joint ownership in which each co-owner holds an undivided interest in the property, and there is no right of survivorship.

Question 61

Title

Accepted Answer

A document that provides evidence of an individual's ownership of property.

Question 62

Title Insurance

Accepted Answer

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

Question 63

Title Search

Accepted Answer

The process of reviewing public records to determine the ownership history and any potential liens or claims on a property.

Question 64

Underwriting

Accepted Answer

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

Colorado Real Estate Agent Terminology Flashcards