Principles of Real Estate 1 Vocabulary Flashcards

Principles of Real Estate 1 Vocabulary Flashcards FraudA misstatement made intentionally to deceive Air RightsMay be sold/leased separately of tract Net Operating Income (NOI)The income projected for an income-producing property after deducting losses for vacancy and collection and operating expenses.AmortizationProcess of paying of a debt/mortgage in regular installments; Interest amount goes down and principal amount goes up as time progresses Personal PropertyItems that can be easily removed AdaptationUse and modification of particular item for a specific use in a property Appointed License HolderA sales agent license holder who was designated to work with client during an intermediary transaction SitusThe desirability of a particular location Real Estate BrokerPerson/corporation who markets to find buyers and sellers to connect together in exchange for commission ImprovementAny permanent human-made addition to land Taxpayer Relief Act of 1997Largest tax reduction acts in U.S. history; Married/Single homeowners can exclude up to $500K/$250K of capital gains; exclusion reusable every 2 years after sale Long-term Holding PeriodGreater than or equal to 1 year Homestead RightsAutomatic and protects homeowners from claims by creditors being made against their homes IntentionallyActual awareness at time of the act PLUS the consumer acted on the information Commercial Real EstateMade up of property used for business with more than 4 units PuffingExaggerations of opinions about real estate Universal AgencyGives agents power to act on behalf of AND make decisions for client, essentially power of attorney Non-Fungible CommodityEach parcel of land is an object without a precise or equal substitute Treble DamagesTriple damages; often awarded in fraud cases.CooperativeResidential building where title is held by corporation which residents are stockholders of and they have a lease Promulgated FormsForms prepared and authorized by TREC that must be used by real estate license holders CondominiumSingle unit in residential complex, owns unit but not common elements or land Market ValuePrice for which a property will sell if offered openly under normal conditions

SeveranceThe act of separating some element of the real estate from the land Material FactAny significant/essential fact to the transaction Uniqueness or Non-HomogeneityLand is unique unto itself AppraiserIndependent person deciding on value Intermediary BrokerBroker who negotiates a contract between two parties that are both being represented by that broker Implied AgencyCreated when an agent is given permission to act on behalf of a client through conduct or communication, but not established orally or in writing CMACompetitive Market Analysis; does NOT equal appraisal Real PropertyLand and any natural/human-made improvements attached to it PLUS the bundle of legal rights or ownership Water RightsRight to enjoy water that borders the property Real EstateLand AND any natural/human-made improvements attached to it Ad Valorem TaxTax calculated according to the assessed value of real estate CAP RateRough estimate of rate of return on money Special AgencyRelationship between broker and principal where broker has restricted authority to achieve one specific objective for principal AgentA person who acts on behalf of someone else AccessionWhen trade fixtures are left behind by tenants and become property of the landlord PITIPrincipal, Interest, Taxes and Insurance whic hare components of most mortgage payments Sunset ActEvaluate all state agencies every 12 years Cloud on the TitleEncumbrance that keeps the title to property from transferring easily IntentionInferred from nature of the item and blends annexation and adaptation ImmobilityLand itself, tract or lot, is immovable; deeds/title used to convey ownership AssessmentsRegular fees used to pay for upkeep of common areas, roads and structural maintenance Fructus NaturalesTrees, bushes, grass and uncultivated plants usually real property because of permanence Sherman Antitrust ActPassed in 1890, makes monopolies illegal ProrationAllocation/distribution of an annual expense across smaller chunks of time Bundle of RightsSet of legal rights that come with ownership of real property Homestead Tax ExemptionReduces amount of ad valorem taxes assessed General AgencyGives agents more power and hold principal (broker) responsible for action performed by their agent

NARNational Association of Realtors ArrearsPayment for an item or service after it is received Texas Deceptive Trade Practices Act (DTPA) 1973, protect consumers against false, misleading and deceptive business practices, unconscionable actions and breaches of warranty Seller's MarketNumber of properties for sale does not meet the demand; 0-4 months of inventory Information About Brokerage Services (IABS) Explains how agency is performed and the duties of a broker representing a party or acting as an intermediary; given at first substantive dialogue Fiduciary DutiesResponsibility to act in the best interest of your client - the highest standard AlterationHow heavily land is developed, altered, and modified by building and other developments Planned Unit Development (PUD)Subdivision/development with single family dwelling and common elements Express AgencyAgency created by a clear, specific agreement SubagentLicense holder from one office who represents seller through cooperation with listing broker from another company Trade FixturePersonal property attached to real property that is owned by and needed for a tenants business The Third PartyThe person the agent is NOT representing Education Standards Advisory Committee (ESAC) Review and revise curriculum standards, course content and instructor certification requirements for both qualifying and continuing education course (CE) Surface RightsOwnership of land in a parcel or real estate but limited to the plane LandNatural resources seen on surface, minerals below the surface and the air above Buyer's MarketFewer buyers than supply of homes in an area; 6+ months of inventory Physical DurabilityRefers to permanence of land TownhousesInclude unit AND land Written AssurancesContains a statement saying the entire gain can be excluded and the property is owner's primary residence to avoid paying taxes Seller's Disclosure NoticeDocument filled out by seller concerning any defects in the improvements on the property ConversionUsing client/customer money for your own use ProrateDividing of expenses (taxes, interest, rent) at closing between buyer and seller Economic ScarcityCreated solely by demand for land in specific areas Agency by RatificationWhen license holder acts on behalf of principal without prior authorization but the principal accepts after the fact

Approved FormsForms prepared and authorized by TREC that can be used by real estate license holders FixityThe permanence of land Littoral RightsRights that govern lake/oceanfront property and usually allow owner to use water bordering the property 1031 ExchangeLets an investor sell a property, reinvest the proceeds in brand new property and defer all capital gains taxes CLUE ReportsComprehensive Loss Underwriting Exchange, database used by insurance agencies that contains information on claims in past five years by property owners on specific properties FixtureObject that was once personal property but which has now been firmly attached to the land in a way that it becomes part of the real estate Private Mortgage Insurance (PMI)/Mortgage Insurance Premium (MIP) Required for conventional loans/FHA loans for down payments less than 20% Riparian RightsRights that govern use of flowering water that pass through or border a property Subsurface RightsOwnership of the minerals, gas and oil beneath the surface of a piece of real estate Sales Agent Apprentice Education (SAE)Educational requirement for courses in the first 2 years of being licensed as a real estate agent ConsumerPerson or company that buys or leases any product or service Common ElementsShare spaces in a residential community Gratuitous AgencyReal estate agent works for free!Brokers Price Opinion (BPO)Process used by hired sales agent to determine the potential selling price/estimated value of a property KnowinglyActual awareness at time of the act Fructus IndustrialesAnnually cultivated crops generally considered to be personal property; AKA Emblements TimeshareResidence with multiple owners who share right of possession for specific period of time with other owners AnnexationAttached to the land Nolo ContendrePlea where defendant accepts punishment without admitting guilt Short-term Holding PeriodLess than one year