Real Estate Broker License Exam Vocabulary IL Flashcards

Real Estate Broker License Exam Vocabulary (IL) Flashcards Appraised valueAn opinion of the current market value of a property.Blanket loanA mortgage covering more than one parcel of real estate, providing for each parcel's partial release from the mortgage lien on repayment of a definite portion of the debt.Adjustable-rate mortgage (ARM)A mortgage loan with the interest rate on the note periodically adjusted based on an index which reflects the cost to the lender of borrowing on the credit markets.Adverse possessionThe acquisition of title to property through possession without the owner's consent for a certain period of time.Breach of contractThe failure to perform provisions of a contract without a legal excuse.Abstract and attorney's opinion of title An opinion of title status based on a review of the abstract by an attorney. Similar to a certificate of title, the opinion of title does not protect against defects that cannot be discovered from the public records.Alternative mortgageAny home loan that does not conform to a standard fixed-rate mortgage.AssignmentA transfer of rights or duties under a contract.Assumable mortgageA mortgage that can be transferred to another borrower.AssetsItems of value, which include cash, real estate, securities and investments.AttachmentThe act of taking a person's property into legal custody by writ or other judicial order to hold it available for application to that person's debt to a creditor.BequestPersonal property given to a person through a will.Allocation of Customers or MarketsAn agreement among real estate companies to divide their markets and refrain from competing for each other's business. This is Illegal under antitrust laws.Automated underwritingComputer systems that permit lenders to expedite the loan approval process and reduce lending costs.AddendumAn addition or change to a contract.Abstract of judgment, lawThe summary of a court judgment that creates a lien against a property when filed with the county recorder.Acceleration clauseA provision that gives a lender the right to collect the balance of a loan if a borrower misses a payment.AmortizationThe process of paying the principal and interest on a loan through regularly scheduled installments.Appraisal feeThe fee that an ______ charges to estimate the market value of the property.

ArbitrationA method of resolving a dispute in which a third party renders a decision.Aeolian soilSoil that is composed of materials deposited by the wind.Air rightsThe right to use the open space above a property, usually allowing the surface to be used for another purpose.Accelerated depreciationA bookkeeping method that depreciates property faster in the early years of ownership.AccessionAcquiring title to additions or improvements to real property as a result of the annexation of fixtures or the accretion of alluvial deposits along the banks of streams.BenchmarkA permanent reference mark or point established for use by surveyors in measuring differences in elevation.Application feeThe fee that a lender charges to process a loan application.BalanceThe appraisal principle that states that the greatest value in a property will occur when the type and size of the improvements are proportional to each other as well as to the land.Assessed valueA tax assessor's determination of the value of a home in order to calculate a tax base.BasisThe financial interest that the Internal Revenue Service attributes to an owner of an investment property for the purpose of determining annual depreciation and gain or loss on the sale of the asset.Attorney's opinion of titleAn abstract of title that an attorney has examined and certified to be, in his opinion, an accurate statement of the facts concerning the property ownership.AppurtenanceA right, privilege, or improvement belonging to, and passing with, the land.Appraisal reportA detailed written report on the value of a property based on recent sales of comparable sites in the area.Assumption feeA fee the lender charges to process new records for a buyer who assumes an existing loan.Adverse useThe access and use of property without the owner's consent.AssessmentThe estimated value of a piece of real estate or a levy placed on property in addition to taxes.Appurtenant easementAn easement that is annexed to the ownership of one parcel and allows the owner the use of the neighbor's land.Bargain and sale deedA deed that carries with it no warranties against liens or other encumbrances but that does imply that the grantor has the right to convey title. The grantor may add warranties to the deed at his discretion. Granting clause

example: "I, ______, grant, bargain, and sell..."

Adjustable-rate mortgage (ARM)A loan with an interest rate that is periodically adjusted to reflect changes in a specified financial index.

Agency coupled with an interestThe agency relationship in which the agent is given an estate or interest in the subject of the agency.Blue sky lawsRegulations on the sale of securities to prevent consumers from investing in fraudulent or high-risk companies without being informed of the risks.AppreciationAn increase in the value of a home or other property.Article 15 of the Real Estate License Act of 2000 Provides legal definitions of real estate terms in Illinois.Assumption clauseA provision that allows a buyer to take responsibility for the mortgage from a seller.Americans with Disabilities Act (ADA)A law passed in 1990 that outlaws discrimination against a person with a disability in housing, public accommodations, employment, government services, transportation and telecommunications.Actual noticeExpress information or fact; that which is known; direct knowledge.Base lineThe main imaginary line running east and west and crossing the principal meridian at a definite point, used by surveyors for reference in locating and describing land under the rectangular (government) survey system of legal description.Accrued itemsOn a closing statement, items of expense that are incurred but not yet payable, such as interest on a mortgage loan or taxes on real property.Adjusted cost basisThe cost of any improvements the seller makes to the property. Deducting the cost from the original sales price provides the profit or loss of a home when it is sold.AcreA measurement of land equal to 43,560 square feet.Blanket insurance policyA policy that covers more than one person or piece of property.AppraisalThe process of estimating a property's market value based on established methods and professional judgment.BootMoney or property given to make up any difference in value or equity between two properties in an exchange.AgentA person licensed by the state to conduct real estate transactions.Allodial systemA system of land ownership in which land is held free and clear of any rent or service due to the government; commonly contrasted to the feudal system. Land is held under this system in the United States.Bill of saleA document that transfers ownership of personal property.AccretionThe gradual addition to the shore or bank of a waterway by deposits of sand or silt.Affiliated business disclosureA disclosure that a company or individual referring settlement services has either an affiliate relationship with or a direct or beneficial ownership interest of more than 1%

in a provider of settlement services.American Land Title Assoc. (ALTA) policy A title insurance policy that protects the interest in a collateral property of a mortgage lender who originates a