Question 1

Abstract of Title

Accepted Answer

A summary of the recorded history of a property's title, including ownership changes and claims against the property.

Question 2

Acceleration Clause

Accepted Answer

A provision in a mortgage allowing the lender to demand full repayment if the borrower defaults on the loan.

Question 3

Ad Valorem Tax

Accepted Answer

A property tax based on the assessed value of the property.

Question 4

Adjustable-Rate Mortgage (ARM)

Accepted Answer

A mortgage with an interest rate that changes periodically, typically tied to a specific index.

Question 5

Amortization

Accepted Answer

The process of paying off a mortgage through regular installments over a set period of time.

Question 6

Appraisal

Accepted Answer

An estimate of a property's value based on factors such as location, amenities, and condition.

Question 7

Assemblage

Accepted Answer

The process of combining two or more adjacent properties to create a larger parcel.

Question 8

Balloon Payment

Accepted Answer

A large, lump-sum payment due at the end of a mortgage term.

Question 9

Blanket Mortgage

Accepted Answer

A mortgage covering multiple properties, typically used by developers.

Question 10

Broker

Accepted Answer

A licensed professional who represents buyers or sellers in real estate transactions.

Question 11

Capitalization Rate

Accepted Answer

The rate of return on a real estate investment based on the income the property is expected to generate.

Question 12

Chain of Title

Accepted Answer

The sequence of historical transfers of title to a property.

Question 13

Closing Costs

Accepted Answer

Fees and expenses paid by buyers and sellers during the closing of a real estate transaction.

Question 14

Cloud on Title

Accepted Answer

An unresolved claim or encumbrance on a property's title.

Question 15

Comparative Market Analysis (CMA)

Accepted Answer

A report that compares similar properties to determine a property's market value.

Question 16

Contingency

Accepted Answer

A condition in a contract that must be met for the contract to become binding.

Question 17

Conveyance

Accepted Answer

The legal transfer of property from one owner to another.

Question 18

Deed

Accepted Answer

A legal document that transfers ownership of a property.

Question 19

Deed of Trust

Accepted Answer

A legal document used in some states in place of a mortgage to secure the repayment of a loan.

Question 20

Depreciation

Accepted Answer

A decrease in the value of a property over time.

Question 21

Due Diligence

Accepted Answer

The process of investigating a property before making a purchase or investment decision.

Question 22

Easement

Accepted Answer

The right to use a portion of another person's property for a specific purpose.

Question 23

Encroachment

Accepted Answer

An unauthorized intrusion onto another person's property.

Question 24

Encumbrance

Accepted Answer

A claim or lien on a property that affects its title or use.

Question 25

Equity

Accepted Answer

The difference between the market value of a property and the outstanding debt secured by the property.

Question 26

Escrow

Accepted Answer

A neutral third party that holds funds and documents during a real estate transaction.

Question 27

Exclusive Listing

Accepted Answer

A contract that gives a real estate agent the exclusive right to represent a seller in the sale of a property.

Question 28

Fiduciary Duty

Accepted Answer

The legal obligation of a real estate agent to act in the best interests of their client.

Question 29

Fixture

Accepted Answer

An item of personal property that is permanently attached to real property and becomes part of the real estate.

Question 30

Gross Rent Multiplier

Accepted Answer

A ratio used to estimate the value of an income-producing property based on its gross rental income.

Question 31

Highest and Best Use

Accepted Answer

The most profitable and legally permissible use of a property.

Question 32

Home Inspection

Accepted Answer

A professional examination of a property's structural and mechanical systems.

Question 33

Installment Sale

Accepted Answer

A method of selling property in which the buyer makes regular payments to the seller over time.

Question 34

Joint Tenancy

Accepted Answer

A form of property ownership in which two or more people hold equal interests and have equal rights to the property.

Question 35

Land Contract

Accepted Answer

A financing arrangement in which the seller holds the title to the property until the buyer has made all required payments.

Question 36

Leasehold Estate

Accepted Answer

A tenant's right to occupy real estate for the term of the lease, typically long term.

Question 37

Legal Description

Accepted Answer

A detailed method of identifying a property using lot and block, metes and bounds, or government survey.

Question 38

Lien

Accepted Answer

A claim against a property as security for a debt.

Question 39

Listing Agreement

Accepted Answer

A contract between a property owner and a real estate broker authorizing the broker to represent the owner and sell the property.

Question 40

Market Value

Accepted Answer

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

Question 41

Mechanic's Lien

Accepted Answer

A lien filed by a contractor or other worker who has not been fully paid for their work on a property.

Question 42

Metes and Bounds

Accepted Answer

A system of land description that defines property boundaries by specifying distances and directions from a known point.

Question 43

Mortgage

Accepted Answer

A loan to finance the purchase of real estate, secured by the property itself.

Question 44

Multiple Listing Service (MLS)

Accepted Answer

A database of property listings used by real estate brokers and agents to share information about properties for sale.

Question 45

Net Operating Income (NOI)

Accepted Answer

The total income generated by a property after operating expenses are subtracted.

Question 46

Nonconforming Use

Accepted Answer

A use of property that was legally established and maintained, but no longer conforms to the current zoning regulations.

Question 47

Open Listing

Accepted Answer

A property listing that can be offered for sale by more than one real estate broker.

Question 48

Plat

Accepted Answer

A map of a town, section, or subdivision indicating the location and boundaries of individual properties.

Question 49

Principal

Accepted Answer

The amount of money borrowed for a loan.

Question 50

Private Mortgage Insurance (PMI)

Accepted Answer

Insurance that protects a lender against loss if a borrower defaults on a loan.

Question 51

Quitclaim Deed

Accepted Answer

A deed that transfers any interest the grantor has in the property without warranties or obligations.

Question 52

Real Estate Owned (REO)

Accepted Answer

Property owned by a lender—usually a bank—after an unsuccessful foreclosure auction.

Question 53

Redemption Period

Accepted Answer

A period of time after foreclosure during which the borrower can reclaim the property by paying the outstanding loan balance.

Question 54

Replacement Cost

Accepted Answer

The cost to replace a building with a similar one using current construction costs.

Question 55

Right of First Refusal

Accepted Answer

A contractual right that gives its holder the option to enter a business transaction with the owner of something, according to specified terms, before the owner is entitled to enter into that transaction with a third party.

Question 56

Seller's Agent

Accepted Answer

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

Question 57

Sublease

Accepted Answer

A lease by a tenant to a sub-tenant of a portion of the leased property.

Question 58

Survey

Accepted Answer

A professional measurement of a property's boundaries and area.

Question 59

Tenancy in Common

Accepted Answer

A form of co-ownership in which each owner holds an individual interest in the property and has the right to sell, mortgage, or bequeath their interest.

Question 60

Title Insurance

Accepted Answer

Insurance that protects the holder from loss resulting from defects in the title.

Question 61

Underwriting

Accepted Answer

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

Question 62

Warranty Deed

Accepted Answer

A deed in which the grantor guarantees that he or she holds clear title to a piece of real estate and has a right to sell it.

Question 63

Zoning

Accepted Answer

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

New Mexico Real Estate Agent Flashcards