Washington State Real Estate Exam Flashcards

Washington State Real Estate Exam Flashcards BlockbustingThe illegal practice of inducing homeowners to sell their properties by making representations regarding the entry, or prospective entry, of minority persons into the neighborhood.Base LineOne of a set of imaginary lines running east and west and crossing a principal meridian at a definite point, used by surveyors for reference in locating and describing land under the rectangular survey system (or government survey method) of property description.Certificate of ReductionA document issued by the lender to verify the loan balance.Air LotA designated airspace over a piece of land. Air lots, like surgace property, may be transferred.ComparablesThe properties listed in an appraisal report that are substantially equivalent to the subject property.Accrued DepreciationThe actual depreciation that has occurred to a property at any given date; the difference between the cost of replacement new (as of the date of appraisal) and the present appraised value.CondemnationA judicial or administrative proceeding to exercise the power of eminent domain, by which a government agency takes private property for public use and compensates the owner.Cash FlowThe net spendable income from an investment, determined by deducting all operating and fixed expenses from the gross income. If expenses exceed income, a negative cash flow is the result.Bill of SaleA written insturment given to pass title to personal property.AlluvionNew deposits of soil as the result of accretion.Common LawThe body of law based on custom, usage, and court decisions.Certificate of EligibilityA certificate given by the federal government to qualified veterans to show their remaining eligibility for a VA guaranteed loan.Coinsurance ClauseA clause in insurance policies covering real property that requires the policy holder to maintain fire insurance; coverage is generally equal to at least 80 percent of the property's actual replacement cost.Breach of ContractThe failure, without legal excuse, of one of the parties to a contract to perform according to the contract.Antitrust LawsThe laws designed to preserve the free enterprise of the open marketplace by making illegal certain private

conspiracies and combinations formed to minimize competition. Violations of antitrust laws in the real estate business generally involve either price fixing (brokers conspiring to set fixed compensation rates) or allocation of customers or markets (brokers agreeing to limit their areas of trade or dealing to certain areas or properties).

Buydown MortgageA mortgage in which the interest rate is reduced by paying interest in advance. A temporary buydown is for the initial years of the loan. A permanent buydown is for the life of the loan.AmortizationThe liquidation of a financial burden by installment payments.AcknowledgmentA declaration made by a person to a notary public, or other public official authorized to take acknowledgments that an instrument was executed by that person as a free and voluntary act.Building RestrictionsThe limitations on the size or type of property improvements established by zoning acts or by deed or lease restrictions.ComminglingThe illegal act of a real estate broker who mixes the money of other people with that of his or her own; by law brokers are required to maintain a separate trust account for the funds of other parties held temporarily by the broker.Capitalization RateThe rate of return a property will produce on the owner's investment.Ad Valorem TaxA tax levied according to value; generally used to refer to real estate tax. Also called the general tax.CodicilAn addition to a will that alters, explains, adds to, or confirms the will, but does not revoke it.Bench MarkA permanent reference mark or point established for use by surveyors in measuring differences in elevation.Alienation ClauseThe clause in a mortgage or deed of trst that states that the balance of the secured debt becomes immediately due and payable at the mortgagee's option if the property is sold by the mortgagor. In effect, this clause prevents the mortgagor from assigning the debt without the mortgagee's approval.Capital GainsA tax on the profits realized from the sale of a capital asset.Building LineA line fixed at a certain distance from the front and/or sides of a lot beyond which no structure can project; a setback line used to ensure a degree of uniformity in the appearance of buildings and unobstructed light, air, and view.AbuttingThe joining, reaching, or touching of adjoining land.Abutting parcels of land have a common boundary.BrokerOne who buys and sells for another for a commission.Amortized LoanA loan in which the principal, as well as the interest, is payable in monthly or other periodic installments over the term of the loan.Caveat emptorA Latin phrase meaning "let the buyer beware" Balloon paymentthe final payment of a mortgage loan that is considerably larger than the required periodic payments because the

loan amount was not fully amortized.