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Washington State Real Estate Fundamentals for Brokers License

Quiz yourself by thinking what should be in each of the black spaces below before clicking on it to display the answer.
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Question
Answer
show One for whom a trust is created and on whose behalf the trustee administers the trust..The lender in a deed of trust transaction...One entitled to receive real or personal property under a will; a trustee or devisee  
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show A future interest that becomes possessory when a life estate terminates, and that is held by the grantor of the life estate or the grantor's heirs  
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show The highest and most complete form of ownership, which is of potentially infinite duration. Also called a fee or a fee simple absolute.  
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show A leasehold estate set to last for a definite period (one week, three years, etc), after which it terminates automatically. Also called a tenancy for years or term tenancy.  
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show 1. An interest in real property that is or may become possessory; either a freeholder a leasehold. 2. The property left by someone who has died.  
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show A form of joint ownership of property by husband and wife recognized in most states that don't use a community property system; not recognized in Washington  
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Adverse Possession   show
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show A fee simple estate that is subject to termination if a certain condition is not met or if a specified event occurs. Also called a Conditional Fee or defeasible fee  
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Riparian Rights   show
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Personal Property   show
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show Rights that go along with ownership of a particular piece of property, such as air rights or mineral rights; they are ordinarily transferred with the property, but may in some cases, be sold separately.  
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show Articles of personal property annexed to real property by a tenant for use in his or her trade or business, which the tenant is allowed to remove at the end of the lease.  
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show The water rights of the owner of land that borders water that is not flowing, such as a lake or ocean  
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show A document used to transfer title to personal property from one person to another.  
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show A type of legal description that starts at an identifiable point of beginning, then describes the property's boundaries in terms of courses (compass directions) and distances, ultimately returning to point of beginning.  
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show A provision in a promissory note or security instrument allowing the lender to declare the entire debt due immediately if the borrower breaches one or more provisions of the loan agreement. Also referred to as a call provision.  
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Accession   show
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Addendum   show
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Ad Valorem   show
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Agency, Designated   show
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Alientation   show
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show A provision in a security instrument that gives the lender the right to declare the entire loan balance due immediately if the borrower sells or otherwise transfers the security property. Also called a due-on-sale clause.  
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show A written modification to a contract that occurs after both parties have signed the document.  
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Annual Percentage Rate (APR)   show
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Anticipation, Principle of   show
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show A transaction in which there is no pre-existing family or business relationship between the parties.  
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show 1. A transfer of contract rights from one person to another.2. When a buyer assumes personal liability for a seller's mortgage.3.In the case of a lease, when the original tenant transfers his or her entire leasehold estate to another  
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show The valuation of property for purposes of taxation  
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Assumption   show
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Attorney In Fact   show
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show A payment on a loan (usually the final payment)that is significantly larger than the regular installment payments.  
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show To transfer personal property to another by will.  
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show An advertisement placed by a real estate licensee that does not include the brokerage's name.  
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show Attempting to induce owners to list or sell their homes by predicting that members of another race or ethnic group, or people suffering from some disability, will be moving into the neighborhood; this violates anti-discrimination laws.  
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show State laws that regulate securities.  
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Boot   show
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show Profit realized from the sale of a capital asset.  
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show A method of appraising real property by converting the anticipated net income from the property into the present value. Also called the income approach to value.  
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show Meaning "let the buyer beware," a term that suggests that the duty to investigate a potential purchase ultimately falls on the buyer.  
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show A declaration of covenants, conditions, and restrictions; usually recorded by a developer to place restrictions on all lots within anew subdivision.  
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show A document issued by the Department of Veterans Affairs as evidence of a veteran's eligibility for a VA-guaranteed loan.  
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Certificate of Reasonable Value   show
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show An appraisal principle which holds that property values are in a state of flux, increasing and decreasing in response to social, economic, and governmental forces.  
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Chattel Real   show
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show A claim, encumbrance, or apparent defect that makes the title to a property unmarketable.  
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show Illegally mixing trust funds held on behalf of a client with personal funds.  
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show The land and improvements in a condominium, planned unit development, or other housing development that are owned and used collectively by all the residents, such as parking lots,hallways, rec areas available for common use.  
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Common Elements, Limited   show
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show Property owned jointly by a married couple in Washington, California and other community property states, as distinguished from each spouse's separate property; generally any property acquired through the labor or skill of either spouse during marriage.  
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show A recently sold and similarly situated property that is used as a point of comparison by an appraiser using the sales comparison approach.  
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Competitive Market Analysis   show
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Condemnation   show
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show Property developed for concurrent ownership, where each co-owner has a separate interest in an individual unit, combined with an undivided interest in the common areas of the property.  
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show An appraisal principle which holds that the maximum value of property is realized when there is a reasonable degree of social and economic homogeneity in the neighborhood.  
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show Anything of value given to induce another to enter into a contract, such as money, goods, services or a promise.  
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Contract, Bilateral   show
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Contract, Executed   show
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Contract, Executory   show
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Contract, Land   show
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Contract, Unenforceable   show
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show A contract that is accepted by performance; the offeror has promised to perform his or her side of the bargain if the other party performs, but the other party has not promised to do so.  
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Contract, Void   show
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show A contract that one of the parties can disaffirm without liability, because of lack of capacity or a negative factor such as fraud or duress.  
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Contribution, Principle of   show
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Conversion   show
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show A building owned by a corporation, where the residents are shareholders in the corporation; each shareholder receives a proprietary lease on an individual unit and the right to use the common areas.  
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show In appraisal, the current cost of constructing a building with the same utility as the subject property using modern materials and construction methods.  
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Cost, Reproduction   show
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Covenant, Restrictive   show
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show A promise that a buyer or tenant's possession will not be disturbed by the previous owner, the lessor, or anyone else making a lawful claim against the property  
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show A sum that the parties to a contract agree in advance (at the time the contract is made)will serve as full compensation in the event of a breach.  
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show A deed that conveys any interest in a property that the grantor has at the time the deed is executed, without warranties.  
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Deed in Lieu of Foreclosure   show
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show The instrument used to release the security property from the lien created by a deed of trust when the debt has been repaid.  
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show An instrument that creates a voluntary lien on real property to secure the repayment of a debt, and which includes a power of sale clause permitting nonjudicial foreclosure; the parties are the grantor or trustor, the beneficiary and the trustee.  
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Defeasance Clause   show
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show The legal transfer of a deed from the grantor to the grantee, which results in the trasfer of title.  
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show 1.A loss in value (caused by deferred maintenance, functional obsolescence, or external obsolescence)2.For the purposes of income tax deductions, apportioning the cost of an asset over a period of time.  
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show Deferred maintenance, functional obsolescence, or external obsolescence that is either impossible to correct, or not economically feasible to correct, because the cost could not be recovered in the sales price.  
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Devise   show
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show A percentage of the principal amount of a loan, collected by the lender at the time a loan is originated, to give the lender an additional yield.  
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Downzoning   show
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show Unlawful force or constraint used to compel someone to do something (such as sign a contract) against his or her will.  
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Easement   show
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Easement Appurtenant   show
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show An easement that benefits a person instead of a piece of land; there is a dominant tenant, but no dominant tenement.  
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Economic Life   show
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Elements of Value   show
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show The government's constitutional power to take (condemn) private property for public use, as long as the owner is paid just compensation.  
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show A nonpossessory interest in real property; a right or interest held by someone other than the property owner, which may be a lien, an easement, a profit, or a restrictive covenant.  
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Equity   show
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Escheat   show
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show An arrangement in which something of value (such as money or deed) is held on behalf of the parties to a transaction by a disinterested third party (an escrow agent) until specified conditions have been fulfilled.  
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show When a landlord's act (or failure to act) interferes with the tenant's quiet enjoyment of the property, or makes the property unfit for it's intended use, to such an extent that the tenant is forced to move out.  
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show A person named in a will to carry out it's provisions.  
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Fiduciary Relationship   show
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show An item that used to be personal property but has been attached to or closely associated with real property in such a way that it has legally become part of the real property.  
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show When a lienholder causes property to be sold against the owners wishes, so that the unpaid lien can be satisfied from the sale proceeds.  
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show Deceit or misrepresentation with the intention of cheating or defrauding another.  
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show A breach of duty that misleads the person the duty was owed to, without an intention to deceive.  
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show Words in a deed that indicate the grantor's intent to transfer an interest in property.  
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Gross Multiplier Method   show
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Habendum Clause   show
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show A warranty implied by law in every residential lease, that the property is fit for habitation.  
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show The use which, at the time of appraisal, is most likely to produce the greatest net return from the property over a given period of time.  
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show A person who obtains a negotiable instrument for value, in good faith, without notice that it is overdue or notice of any defenses against it.  
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Impound Account   show
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Income, Active   show
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show A measure of rental property's capacity to generate income; calculated by subtracting a bad debt/vacancy factor from the economic rent (potential gross income)  
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Income, Net   show
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show As classified by the IRS, income that includes earning from rental property or a limited partnership.  
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Injunction   show
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Insurance, Title, Extended Coverage   show
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show Title insurance that protects against latent title defects (such as forged deeds) and undiscovered recorded encumbrances, but does not protect against problems that would only be discovered by an inspection of the property.  
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show A court action filed by someone holding funds that two or more people are claiming. The holder turns the funds over to the court; the court resolves the dispute and delivers the money to the party who is entitled to it.  
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show Distribution of the property of a person who died without a will to his or her heirs.  
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Judgement, Deficiency   show
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show Defects that are not visible or apparent.  
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show A lease in which the rent is a set amount, and the landlord pays most or all of the operating expenses (such as utilities, taxes, insurance, and maintenance costs). Also called a flat lease, gross lease, or straight lease.  
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show A lease in which it is agreed that the rental payments will increase at intervals by a specified amount or according to a specified formula.  
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Lease, Percentage   show
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show A possessory interest in real property that has a limited duration, such as an estate for years or a periodic tenancy. Also called a less-than-freehold-estate.  
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show The effective use of borrowed money to finance an investment such as real estate.  
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show Official permission to do a particular thing that the law does not allow everyone to do. 2. Revocable, non-assignable permission to use another person's land for a particular purpose.  
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Lien   show
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Lien Priority   show
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show A freehold estate that lasts only as long as a specified person lives. That person is referred to as the measuring life.  
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Life Estate Pure Autre Vie   show
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Life Tenant   show
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Lis Pendensa   show
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Listing, Exclusive Agency   show
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Listing, Exclusive Right to Sell   show
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Listing, Open   show
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Loan, Amortized   show
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show A loan to finance the cost of constructing a building, usually providing that the loan funds will be advanced in installments as the work progresses. Also called an interim loan.  
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show A loan that requires the borrower to pay only the interest during the loan term, with the principal due at the end of the term. Also called a term loan.  
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Loan, Take-out   show
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show The relationship between the loan amount and either the sales price or the appraised value of the property (whichever is less), expressed as a percentage.  
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Maker   show
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show In an adjustable-rate mortgage, the difference between the index rate and the interest rate charged to the borrower.  
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Market Price   show
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Material Fact   show
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Merger   show
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Mortgage   show
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show A mortgage that covers more than one parcel of property.  
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Mortgage, Budget   show
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Mortgage, hard Money   show
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show A loan that permits the borrower to reborrow the money she has repaid on the principal, usually up to the original loan amount, without executing a new loan agreement.  
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Mortgage, Package   show
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show When a seller extends credit to a buyer to finance the purchase of the property, accepting a deed of trust or mortgage instead of cash. Sometimes called a carryback loan. 2.In a more general sense, any loan the borrower uses to buy the security property.  
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show An arrangement in which a homeowner mortgages the home to a lender in exchange for a monthly check from the lender.  
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show An interest-only loan, in which the borrower's regular payments during the loan term cover the interest on the loan, without paying any of the principal; the entire principal is due as a balloon payment at the end of the loan term.  
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Mortgage, Wraparound   show
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Mortgagee   show
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Mortgagor   show
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show A property use that does not conform to current zoning requirements, but is allowed because the property was being used that way before the present zoning ordinance was enacted.  
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show Someone who is officially authorized to witness and certify the acknowledgement made by someone signing a legal document.  
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show A promissory note that calls for regular payments of principal and interest until the debt is fully paid.  
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Note, Straight   show
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Notice, Constructive   show
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show 1.When one party to a contract withdraws and a new party is substituted, relieving the withdrawing party of liability. 2. The substitution of a new obligation for an old one.  
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show Loss in value resulting from factors outside the property itself, such as proximity to an airport. Also called economic obsolescence or external inadequacy.  
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show Loss in value due to inadequate or outmoded equipment, or as a result of a poor or outmoded design.  
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Option   show
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show A fee a lender charges a borrower upon making a new loan, intended to cover the administrative costs of making the loan. Also called a loan fee.  
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show The instrument given to the borrower when part of the security property is released from a blanket deed of trust under a partial release clause.  
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show A partnership in which each member has an equal right to manage the business and share in the profits, as well as equal responsibility for the partnership's debts.  
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show A partnership made up of one or more general partners and one or more limited partners.  
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Percolation Test   show
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show The increment of value that results when two or more lots are combined to produce greater value  
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show The constitutional power of state and local governments to enact and enforce laws for the protection of the public's health, safety, morals, and general welfare.  
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show In a qualified (or limited) fee estate, the chance that the estate will revert back to the grantor automatically if the condition attached to the estate is violated.  
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Power of Attorney   show
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show A penalty charged to a borrower who prepays.  
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Principal   show
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Procuring Cause   show
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show A court that oversees the distribution of property under a will or intestate succession.  
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show The right to enter another's land to remove something from the soil, such as oil, gas, or crops.  
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show The process of dividing or allocating something (especially a sum of money or an expense) proportionately, according to time, interest, or benefit.  
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Progression, Principle of   show
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Quiet Title Action   show
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Real Estate Investment Trust (REIT)   show
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show 1. When a defaulting borrower prevents foreclosure by paying the full amount of the debt, plus costs.2. When a mortgagor regains the property after foreclosure by paying what ever the foreclosure sale purchaser paid for it, plus interest and expenses.  
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show When a lender refuses to make loans secured by property in a certain neighborhood because of the racial or ethnic composition of the neighborhood.  
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show An appraisal principle which holds that a valuable property surrounded by properties of lesser value will tend to worth less than it would be in a different location.  
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Remainder   show
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show The person who has an estate in remainder  
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show When a contract is terminated and each party gives anything acquired under the contract back to the other party. (The verb form is rescind.)  
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show The Real Estate Settlement Procedures Act; a federal law that requires lenders to disclose certain information about closing costs to loan applicants.  
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show A limitation imposed on property by a previous owner, a neighbor, or the subdivision developer.  
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Sale-Leaseback   show
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show One of the three main methods of appraisal, in which the sales prices of comparable properties are used to estimate the value of the subject property. Also called the market data approach.  
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Setback Requirements   show
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show A document that presents a final, detailed accounting for a real estate transaction, listing each party's debits and credits and the amount each will receive or be required to pay at closing. Also called a closing statement.  
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Ownership in Severalty   show
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show A tax levied only against the properties that have benefited from a public improvement(such as a sewer or a street light), to cover the cost of the improvement.  
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show A legal remedy in which a court orders someone who has breached to actually perform the contract as agreed, rather than simply paying money damages.  
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show With this report, the surveyor will find an old survey on the property and then go look at the property and update the original survey by adding new structures to the report.  
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Statute of Frauds   show
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show A law requiring a particular type of lawsuit to be filed within a specified time after the event giving rise to the suit occurred.  
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Steering   show
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Stigmatized Property   show
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Sublease   show
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show A provision in a mortgage or deed of trust that permits a later mortgage or deed of trust to have higher lien priority than the one containing the clause.  
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show A principle of appraisal holding that the maximum value of a property is set by how much it would cost to obtain another property that is equally desirable, assuming that there would not be a long delay or significant incidental expenses involved in obtai  
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show The giving up an estate (such as a life estate or leasehold) before it has expired.  
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show A characteristic of joint tenancy; surviving joint tenants automatically acquire a deceased joint tenant's interest in the property.  
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Tax, Progressive   show
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Tax, Transfer   show
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show A credit that is subtracted directly from the amount of tax owed.  
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Tax-Deferred Exchange   show
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Tax Shelter   show
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show A form of concurrent ownership in which the co-owners have unity of time, title, interest, and possession and the right of survivorship.  
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Tenancy, Periodic   show
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Tenancy at Sufferance   show
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show A form of concurrent ownership in which two or more persons each have an undivided interest in the entire property but no right of survivorship.  
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show Property that receives the benefit of an easement appurtenant.  
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show Property burdened by an easement.  
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Time is of the Essence   show
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Title, Equitable   show
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show A lien on property in favor of someone who provided labor or materials to improve it. Also called a mechanic's lien or materialman's lien.  
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Lien, General   show
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show The vendor's interest in property under a land contract.  
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show Title free and clear of objectionable liens, encumbrances or defects, so that a reasonably prudent person with full knowledge of the facts would not hesitate to purchase the property.  
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Title Report, Preliminary   show
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Trust Account   show
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show 1. A person appointed to manage a trust on behalf of the beneficiaries.2. A neutral third party appointed in a deed of trust to handle the nonjudicial foreclosure process in case of default.  
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Trustor   show
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show A federal law that requires lenders and credit arrangers to make disclosures concerning loan costs (including the total finance charge and the annual percentage rate) to consumer loan applicants.  
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Undue Influence   show
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Uniform Settlement Statement   show
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show A summary legal action to regain possession of real property; especially, a suit filed by a landlord to evict a defaulting tenant.  
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Usury   show
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Value, Assessed   show
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Value, Market (aka, Value in exchange, or Objective value)   show
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show The value of a property to its owner or the a user. (A form of subjective value). Also called Value in use.  
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Variance   show
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show A buyer or purchaser; particularly, someone buying property under a land contract.  
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Vendor   show
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Waste   show
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Zoning   show
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Mortgage, Adjustable-Rate (ARM)   show
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Age, Effective   show
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Agency, Dual   show
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Appraisal   show
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Capitalization Rate   show
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show A voluntary or involuntary gift of private property for public use; may transfer ownership or simply create an easement.  
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show The sale of property pursuant to court order to satisfy a lien.2. A lawsuit filed by a mortgagee or deed of trust beneficiary to foreclose on the security property when the borrower has defaulted.  
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show A lien that attaches only to a particular piece of property.  
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Lienholder, Junior   show
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show A partially amortized mortgage loan that requires a large balloon payment at the end of the loan term.  
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Partition   show
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Affiliated Licensee   show
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Broker, Designated   show
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show In a warranty deed, a promise that the property is not burdened by any encumbrances other than those that are disclosed in the deed.  
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show In a warranty deed, a promise that the grantor actually owns the interest she is conveying to the grantee.  
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show A deed in which the grantor warrants the title against defects that might have arisen before or during his period of ownership.  
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show A deed in which the grantor warrants title only against defects that may have arisen during his period of ownership.  
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Earnest Money   show
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show When unpaid interest on a loan is added to the principal balance, increasing the amount owed.  
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show The after-tax cash flow divided by the amount of equity in the property multiplied by 100%  
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show A right that gives the holder the first opportunity to purchase or lease a particular parcel of real property, should the owner decide to sell or lease it.  
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show A federal law prohibiting any agreement that has the effect of an unreasonable restraint on trade, such as price fixing and tie-in arrangements.  
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Subagent   show
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Liability, Vicarious   show
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Plat   show
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Reconciliation   show
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show A system of land registration used in some states, which allows title to be verified without the necessity of a title search; registered land is free of all encumbrances or claims not registered with the title registrar.  
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show Cancer-causing chemicals that may leak from electrical equipment  
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