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79 True/False questions

  1. Associate BrokerThe act of process of combining two or more lots under single ownership.

          

  2. SuretyOne who guarantees performance of another.

          

  3. AssemblageTo publish or make known such as license law.

          

  4. Cost of ReproductionA legal person created by state law owned by one or more people; corp. must be licensed and vonded; at least one (underlined) officer of corp. must be licensed as a broker but all members of the corp. involved or engaged (underlined) in realty must be licensed also.

          

  5. ContributionAdded investment in a site is measured by added value.

          

  6. Market ValuePrice for which realty can be sold on open market if there is a willing seller and buyer and a reas. time to make sale negotiated at arms length.

          

  7. Gross Living AreaTo publish or make known such as license law.

          

  8. Physical DepreciationLoss in value from any source other than wear or tear.

          

  9. UtilityPrincipal who hires an agent; CUSTOMER is the other party.

          

  10. CompetitionExcess profits attract competition on supply side.

          

  11. ObsolescenceToo much supply given the demand.

          

  12. CommissionMoney or other valuable consideration given to broker by principal for services rendered; amount is by agreement (underlined).

          

  13. Cash on CashProfit after principal and interest are deducted from net operating income (NOI).

          

  14. Liquidation ValueThe value of a property to a particular investor.

          

  15. Effective DemandThe ability to act on the desire to buy.

          

  16. Insurable ValueIncrease in the value of land by ASSEMBLAGE of smaller lots into one ownership. Known as plottage increment.

          

  17. AgentA person (natural), corporation, society, association or partnership (legal persons) acting by authority of a principal in a realty transaction for compensation.

          

  18. Capitalization RateProfit expressed as a percentage that an investor expects from an investment on a yearly basis. A rate of return.

          

  19. National Association of Realtors (NAR)A national, private trade association with state and local chapters whose members are called REALTORS. Trademarked.

          

  20. CMACompetitive (comparable, comparative) market analysis, market value determined by a real estate agent that resembles sale comparison approach.

          

  21. Carrying ChargesExpenses necessary for holding property such as vacant land pending development or zoning charges.

          

  22. Net WorthThe ability to satisfy desires and expectations.

          

  23. CorporationA legal person created by state law owned by one or more people; corp. must be licensed and vonded; at least one (underlined) officer of corp. must be licensed as a broker but all members of the corp. involved or engaged (underlined) in realty must be licensed also.

          

  24. CapitalizationProcess of computing current value from expected future income by dividing annual net (underline) income by selected rate of return desired for that type of property. The cap rate.

          

  25. Cash FlowThe holding of something of value by a person (escrowee or escrow agent) for the benefit of other parties.

          

  26. Marketable TitleA title which buyer would accept as being good performance on part of seller. A good deed by grantor.

          

  27. Approaches to ValuePrice for which realty can be sold on open market if there is a willing seller and buyer and a reas. time to make sale negotiated at arms length.

          

  28. Arm's Length TransactionSale without duress on either party resulting in fair market value. An open and willing sale.

          

  29. Net Income (NOI)Also known as the net operating income (NOI). Effective gross income minus operating expenses and property taxes.

          

  30. Attorney-In-FactAnyone (underlined) who is authorized in writing to perform certain acts for another; valid only during lifetime of party giving this power.

          

  31. SubstitutionAdded investment in a site is measured by added value.

          

  32. Market DataPrice for which realty can be sold on open market if there is a willing seller and buyer and a reas. time to make sale negotiated at arms length.

          

  33. Raw LandUnimproved land.

          

  34. ComminglingThe mixing of funds held for the benefit of others with the broker's personal or business funds.

          

  35. FriableCrumbling/brittle - such as asbestos

          

  36. USPAPUniform Residential Appraisal Report. Most widely used method of communicating a residential appraisal. Required by Fannie Mae.

          

  37. Assessed ValuationWhen two or more LIKE properties are for sale, the one with the lowest price attracts the greatest demand.

          

  38. Finder's FeeDeposit or earnest money given as evidence of good faith by buyer to secure property until sale is consummated; in insurance, it is memorandum of temporary coverage at passing of papers until formal policy is issued later.

          

  39. URARUniform Standards of Professional Appraisal Practice. A code of conduct in performing appraisals.

          

  40. EscrowUniform Residential Appraisal Report. Most widely used method of communicating a residential appraisal. Required by Fannie Mae.

          

  41. Elements of ValuePrice for which realty can be sold on open market if there is a willing seller and buyer and a reas. time to make sale negotiated at arms length.

          

  42. BondGuarantee by third party that it will make good any loss, up to certain amount, incurred by a party dealing with a broker not acting in good faith; bonding company is Surety and obligor and State is obligee. Broker bond is made payable to State.

          

  43. TopographyValue left after liabilities are deducted from assets.

          

  44. Unearned IncrementAnyone (underlined) who is authorized in writing to perform certain acts for another; valid only during lifetime of party giving this power.

          

  45. ReciprocityInsufficient supply to meet demand.

          

  46. Unimproved PropertyMutual exchange of privileges.

          

  47. AgencyA contract by which one party undertakes to represent another in certain business situations, such as realty brokerage.

          

  48. BinderDeposit or earnest money given as evidence of good faith by buyer to secure property until sale is consummated; in insurance, it is memorandum of temporary coverage at passing of papers until formal policy is issued later.

          

  49. Economic LifeMoney or other valuable consideration given to broker by principal for services rendered; amount is by agreement (underlined).

          

  50. Net ListingA fixed, specified price below which owner will not sell and at which broker receives no commission; broker receives everything over fixed price; illegal. Seller gets fixed amount.

          

  51. AppreciationA legal person created by state law owned by one or more people; corp. must be licensed and vonded; at least one (underlined) officer of corp. must be licensed as a broker but all members of the corp. involved or engaged (underlined) in realty must be licensed also.

          

  52. OverabundanceToo much supply given the demand.

          

  53. ConformityA legal person created by state law owned by one or more people; corp. must be licensed and vonded; at least one (underlined) officer of corp. must be licensed as a broker but all members of the corp. involved or engaged (underlined) in realty must be licensed also.

          

  54. Investment ValueThe value of a property to a particular investor.

          

  55. TransferabilityA seller has to be able to transfer title.

          

  56. BettermentsOne who guarantees performance of another.

          

  57. Accrued DepreciationCost of exact duplication of property using similar materials

          

  58. Power of AttorneyA legal person created by state law owned by one or more people; corp. must be licensed and vonded; at least one (underlined) officer of corp. must be licensed as a broker but all members of the corp. involved or engaged (underlined) in realty must be licensed also.

          

  59. Homestead LawsLaws designed to protect homeowner from forced sale of home to satisfy certain unsecured debts.

          

  60. Functional ObsolescenceLoss of value from any source other than wear and tear.

          

  61. StatuteAct of legislature

          

  62. Clear TitleFree of encumbrances.

          

  63. Earnest MoneyDeposit or binder given with Agreement to Buy

          

  64. ClientA person (natural), corporation, society, association or partnership (legal persons) acting by authority of a principal in a realty transaction for compensation.

          

  65. AnticipationProcess of computing current value from expected future income by dividing annual net (underline) income by selected rate of return desired for that type of property. The cap rate.

          

  66. Attorney-At-LawAnyone (underlined) who is authorized in writing to perform certain acts for another; valid only during lifetime of party giving this power.

          

  67. Plottage ValueThe value of property for insurance purposes (cost)

          

  68. ScarcityOne who guarantees performance of another.

          

  69. AmenitiesA person (natural), corporation, society, association or partnership (legal persons) acting by authority of a principal in a realty transaction for compensation.

          

  70. ChangeCompetitive (comparable, comparative) market analysis, market value determined by a real estate agent that resembles sale comparison approach.

          

  71. Market PriceThe price the property actually sells for.

          

  72. PromulgateAct of legislature

          

  73. External ObsolescenceLoss in value due to out-of-date, poorly designed or old-fashioned fixtures or equipment. May be curable.

          

  74. ReconciliationA legal person created by state law owned by one or more people; corp. must be licensed and vonded; at least one (underlined) officer of corp. must be licensed as a broker but all members of the corp. involved or engaged (underlined) in realty must be licensed also.

          

  75. InfrastructureNetwork of public facilities of an area.

          

  76. AppraisalUniform Residential Appraisal Report. Most widely used method of communicating a residential appraisal. Required by Fannie Mae.

          

  77. Weighted AveragingIncrease in value, not anticipated by owner due primarily to outside forces. Example: population growth and inflation.

          

  78. Highest and Best UseUse of a property that produces greatest net income.

          

  79. DustCompetitive (comparable, comparative) market analysis, market value determined by a real estate agent that resembles sale comparison approach.