TN Real Estate flashcards
TN Real Estate · Build recall with a focused review session.
32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Fiduciary duty
- A legal obligation requiring an agent to act in the principal's best interest, including loyalty, obedience, disclosure, confidentiality, reasonable care, and accounting.
- Dual agency
- A brokerage relationship in which one licensee represents both buyer and seller in the same transaction; Tennessee requires informed written consent from both parties.
- Transaction broker
- A Tennessee non-agency relationship in which the licensee assists a party without representing either side and does not owe fiduciary duties of loyalty.
- Apparent authority
- Authority that arises when a principal's words or conduct lead a third party to reasonably believe the agent has power to act for the principal.
- Subagency
- A relationship in which a cooperating broker acts as an agent of the listing broker or seller, so fiduciary duties run to that principal rather than the buyer.
- Statute of Frauds
- A legal rule requiring certain contracts, including real property sales and leases longer than one year, to be in writing and signed to be enforceable.
- Counteroffer
- A response to an offer that changes its terms; it terminates the original offer and becomes a new offer that may be accepted or rejected.
- Liquidated damages
- A contract clause setting a predetermined amount for breach; it is enforceable when it reasonably estimates actual damages rather than punishing the breacher.
- Specific performance
- An equitable remedy in which a court orders a party to carry out the contract; it is common for real property because each parcel is unique.
- Parol evidence rule
- A rule that generally prevents prior or contemporaneous oral statements from changing a fully integrated written contract, though exceptions exist for fraud or ambiguity.
- Fee simple absolute
- The broadest real property estate, lasting indefinitely and passing to heirs or successors without restrictions on inheritance.
- Tenancy by the entirety
- A form of co-ownership available to married couples in Tennessee that includes a right of survivorship and cannot be severed by one spouse alone.
- Easement appurtenant
- An easement that benefits a dominant parcel and burdens a servient parcel; it passes with the benefited land when transferred.
- Fixture
- Personal property that has become part of real estate based on attachment, adaptation to the property, and the parties' intention.
- Nonconforming use
- A preexisting property use allowed to continue after new zoning rules make that use no longer permitted, subject to local restrictions.
- Loan-to-value ratio
- The loan amount divided by the lesser of the purchase price or appraised value; lenders use it to measure financing risk.
- Discount point
- Prepaid interest equal to one percent of the loan amount that generally lowers the mortgage interest rate for the borrower.
- Balloon mortgage
- A loan with scheduled payments that do not fully amortize the debt, leaving a large unpaid principal balance due at a specified date.
- PITI
- Principal, interest, taxes, and insurance; the standard monthly housing payment used in mortgage underwriting and borrower budgeting.
- Deed of trust
- A Tennessee security instrument that conveys title to a trustee to secure a loan and allows nonjudicial foreclosure by trustee's sale after notice.
- Market value
- The most probable price a property should bring in a competitive and open market under fair sale conditions, with knowledgeable buyers and sellers.
- Highest and best use
- The reasonably probable, legally permissible, physically possible, financially feasible use that produces the greatest value for a property.
- Capitalization rate
- A rate used in the income approach; value equals net operating income divided by the capitalization rate.
- Gross rent multiplier
- A valuation tool calculated as sale price divided by gross rent; estimated value equals the multiplier times the subject property's gross rent.
- Exclusive right to sell
- A listing agreement that entitles the broker to a commission regardless of who procures the buyer during the listing term.
- Open listing
- A listing agreement allowing the owner to employ multiple brokers and requiring payment only to the broker who procures a ready, willing, and able buyer.
- Lead-based paint disclosure
- A federal requirement for sales and leases of housing built before 1978 to disclose known lead hazards and provide the EPA pamphlet.
- Proration
- The allocation of recurring expenses such as taxes or rent between buyer and seller at closing based on the closing date.
- Affiliate broker
- A Tennessee licensee who performs brokerage services under the supervision of a licensed broker and must be affiliated with a brokerage firm.
- TREC
- The Tennessee Real Estate Commission, the state agency that licenses real estate professionals, investigates complaints, and imposes disciplinary sanctions.
- TREC Core
- A required continuing education component of six hours within Tennessee's sixteen-hour biennial renewal requirement for real estate licensees.
- Trust account
- A separate bank account in which a broker holds client funds such as earnest money, without commingling them with the broker's operating funds.