Licensed Real Estate Agent Exam flashcards
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32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Fee simple absolute
- The most complete ownership estate in land, lasting indefinitely, freely inheritable, and subject only to government powers such as taxation, eminent domain, police power, and escheat.
- Fixture
- An item of personal property that becomes part of the realty through attachment, adaptation to the property, and the parties' intention; trade fixtures installed by a tenant may be removed.
- Easement appurtenant
- An easement that benefits a dominant parcel and burdens a servient parcel, passing automatically with the land when either parcel is transferred.
- Adverse possession
- Acquiring title by actual, open and notorious, exclusive, hostile, and continuous possession of another's land for the statutory period, sometimes with payment of taxes.
- Joint tenancy
- Concurrent ownership with right of survivorship, requiring unity of time, title, interest, and possession; a joint tenant's recorded conveyance severs the joint tenancy as to that share.
- General warranty deed
- A deed containing five covenants: seisin, right to convey, against encumbrances, quiet enjoyment, and warranty forever, giving the broadest title protection to the grantee.
- Dual agency
- Representing both buyer and seller, or two buyers, in one transaction; permitted only with informed written consent of all parties and with limits on advocacy and confidentiality.
- Fiduciary duty
- The legal obligation of an agent to act in the principal's best interest, including loyalty, disclosure, confidentiality, accounting, obedience, care, and reasonable skill.
- Exclusive right to sell
- A listing agreement in which the broker earns a commission regardless of who procures the buyer, including the seller acting alone during the listing term.
- Subagency
- A relationship in which a cooperating broker works for the listing broker and therefore owes fiduciary duties to the seller rather than to the buyer.
- Statute of Frauds
- A legal rule requiring certain contracts, including real estate sales agreements and leases beyond a stated term, to be in writing and signed to be enforceable.
- Earnest money
- A deposit held in trust by the broker or escrow agent showing the buyer's good faith; it may be forfeited if the buyer breaches without a valid contingency.
- Contingency
- A contract condition that must be satisfied or waived by a stated deadline, such as financing, inspection, appraisal, or sale of the buyer's existing home.
- Specific performance
- An equitable remedy ordering a breaching party to complete the contract, commonly available in real estate because each parcel of land is considered unique.
- Deed of trust
- A three-party security instrument in which a trustee holds title for the lender and may conduct a nonjudicial foreclosure if the borrower defaults.
- Loan-to-value ratio
- The loan amount divided by the property's value or purchase price, whichever is lower; it drives mortgage insurance and pricing decisions.
- Discount point
- A fee equal to one percent of the loan amount paid at closing to reduce the interest rate, increasing upfront costs but lowering monthly payments.
- Amortization
- The scheduled repayment of a loan through level payments that cover interest first and gradually reduce principal over the loan term.
- RESPA Section 8
- A federal prohibition on giving or receiving kickbacks and unearned fees for referrals of settlement service business in federally related mortgage transactions.
- Capitalization rate
- The ratio of a property's net operating income to its value or price, used to convert income into an estimate of market value.
- Net operating income
- Gross income minus vacancy and credit loss minus operating expenses; it excludes debt service, depreciation, and capital improvements.
- Highest and best use
- The use that is legally permissible, physically possible, financially feasible, and maximally productive, producing the highest value for the site.
- Gross rent multiplier
- Sale price divided by gross rent, used as a quick screening tool for comparing income properties before a full income-approach analysis.
- Reasonable accommodation
- A change in rules, policies, practices, or services that allows a person with a disability equal opportunity to use and enjoy a dwelling.
- Blockbusting
- The illegal practice of inducing owners to sell by suggesting that members of a protected class are moving into the neighborhood.
- Steering
- Directing prospective buyers or renters toward or away from neighborhoods based on race, color, religion, sex, national origin, familial status, or disability.
- Commingling
- Mixing client or trust funds with the broker's personal or business funds, which is a license law violation even if the funds are later restored.
- Nonconforming use
- A use that lawfully existed before a zoning ordinance took effect and may generally continue, but usually cannot be expanded or resumed after abandonment.
- Variance
- An administrative exception allowing a property owner to deviate from a zoning requirement because of unique hardship not shared by surrounding properties.
- Phase I environmental assessment
- A records-and-site review of a property's history and surroundings to identify recognized environmental conditions; it does not include soil or water sampling.
- Proration
- The division of expenses such as taxes, insurance, and rent between buyer and seller based on their respective days of ownership in the closing period.
- Acre conversion
- One acre equals 43,560 square feet; to convert a lot's square footage to acres, divide the square footage by 43,560.