PA Real Estate flashcards

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 freehold estate; the owner holds title indefinitely, may use and transfer the property subject to government powers, and has no future interest holder to answer to.

Joint tenancy

Co-ownership with right of survivorship; requires unity of time, title, interest, and possession, so a deceased joint tenant's share passes automatically to the surviving joint tenants.

Tenancy in common

Co-ownership in which owners hold separate, undivided interests that may be unequal, may be transferred independently, and do not include a right of survivorship.

Easement appurtenant

An easement that benefits a dominant parcel and burdens a servient parcel; it passes with the land when either parcel is transferred, even if not mentioned in the deed.

General warranty deed

A deed containing six covenants, including seisin, right to convey, against encumbrances, quiet enjoyment, warranty, and further assurances; the grantor defends title against all lawful claims.

Statute of Frauds

A legal rule requiring real estate contracts to be in writing and signed by the party to be charged, stating essential terms such as parties, price, and property description.

Police power

The government's authority to regulate land use for public health, safety, and welfare, exercised through zoning, building codes, and environmental rules without compensation.

Escheat

The government power by which property reverts to the state when an owner dies intestate with no lawful heirs, avoiding permanent absence of ownership.

Life estate

A freehold estate measured by the life of a named person; the life tenant may possess and use the property but must not commit waste, and the remainder passes to a future holder.

Option contract

An agreement in which the optionor grants the optionee the right to buy or lease property at set terms within a stated period; consideration keeps the offer open.

Mortgage versus promissory note

The promissory note is the borrower's promise to repay; the mortgage is the recorded security instrument that lets the lender foreclose if the note is not paid.

Consumer Notice

A Pennsylvania disclosure explaining agency relationships, transaction licensee status, and dual agency; it must be given at the first meeting or before confidential information is shared.

Transaction licensee

A Pennsylvania licensee who assists a buyer and seller without representing either as an agent; the licensee owes honesty, accounting, and disclosure of known material defects.

Dual agency

An agency relationship in which one broker represents both buyer and seller in the same transaction; Pennsylvania requires written informed consent from both parties before it begins.

Seller's Property Disclosure

A Pennsylvania form in which a residential resale seller discloses known material defects; it must be delivered before the buyer signs, with exemptions for new construction, estates, and some foreclosures.

Real Estate Recovery Fund

A Pennsylvania fund that can reimburse consumers for out-of-pocket losses caused by a licensee's fraudulent or dishonest conduct, after a court judgment and Commission procedures.

State Real Estate Commission

The Pennsylvania regulatory body within the Department of State that licenses brokers and salespersons, sets education rules, and imposes discipline for violations of the licensing act.

Salesperson education requirement

Pennsylvania salesperson applicants must complete 75 hours of approved real estate education, be at least 18, have a high school diploma or equivalent, and pass the licensing exam.

Broker experience requirement

Pennsylvania broker applicants must be at least 21, complete 240 hours of approved education, and have three years of full-time experience as a licensed salesperson or equivalent.

Continuing education requirement

Pennsylvania licensees must complete 14 hours of approved continuing education every two years, including mandatory topics set by the Commission, to renew an active license.

Escrow account

A separate bank account a Pennsylvania broker uses to hold trust funds belonging to others; commingling with operating funds is prohibited, and records must be maintained.

Referral fee rule

In Pennsylvania, a licensee may not pay a fee to an unlicensed person for referring real estate business; commissions and referral compensation may be shared only with licensed brokers.

Pennsylvania Human Relations Act

The state fair housing law prohibiting discrimination in housing based on race, color, religious creed, ancestry, age, sex, national origin, disability, familial status, and use of guide animals.

Loan-to-value ratio

The loan amount divided by the lesser of the purchase price or appraised value; lenders use it to measure risk and set down payment and mortgage insurance requirements.

Discount points

Prepaid interest paid at closing; one point equals 1% of the loan amount, and paying points typically lowers the note rate and raises the lender's yield.

Capitalization rate

Net operating income divided by property value; it converts income into an indicated value and reflects investor return expectations and risk for comparable properties.

Gross rent multiplier

Sale price divided by gross monthly rent; appraisers multiply a market GRM by a subject property's gross rent to estimate value in income-producing residential property.

Acre

A land area equal to 43,560 square feet; a section contains 640 acres, and a township contains 36 sections, or 23,040 acres.

Proration

The allocation of income or expenses between buyer and seller at closing based on the number of days each owns the property; annual taxes often use a 365-day year.

Millage rate

A property tax rate expressed in mills, where one mill equals $1 of tax per $1,000 of assessed value; tax equals assessed value times millage divided by 1,000.

Amortization payment

The level monthly payment that repays a loan with interest over a set term; it is calculated using the monthly interest rate and total number of monthly payments.

Highest and best use

The legally permissible, physically possible, financially feasible, and maximally productive use of a property, which supports the value estimate in appraisal.