California real estate exam`vocabulary

beneficiary

1- one entitled to the benefit of a trust 2- one who receives profit from an estate, the title of which is vested in a trustee 3- the lender on the security of a note and deed trust

ALTA title policy

American land and title association. a type of title insurance policy issued by title insurance companies which expands the risks normally insured against under the standard type policy to include unrecorded mechanic's liens; unrecorded physical easements; facts a physical survey would show; water and mineral rights; and rights of parties in possession, such as tenants and buyers under unrecorded instruments.

C.A.R.

California association of realtors

cal-vet loan

California veterans' farm and home purchase program for qualified native born veterans, or veterans who entered service from this state

alienation clause

a clause in a contract giving the lender certain rights in the event of a sale or other transfer of mortgaged property.

conditional sale contract

a contract for sale of a property stating that delivery is to be made to the buyer, title to remain vested in the seller until the conditions of the contract have been fulfilled

affirmation

a declaration by a person who refuses to take an oath

blighted area

a declining area in which real property values are seriously affected by destructive economic forces, such as encroaching inharmonious property usages, infiltration of lower social and economic classes of inhabitants, and or rapidly depreciating buildings

advance fees

a fee paid in advance of any services rendered. sometimes unlawfully charged in connection with the illegal practice of obtaining a fee in advance for the advertising of property or businesses for sale, with no obligation to obtain a buyer, by persons representing themselves as real estate licensees, or representatives of licensed real estate firms

acknowledgment

a formal declaration before a duly authorized officer by a person who has executed and instrument that such execution is his act and deed

chain of title

a history of conveyances and encumbrances affecting the title from the time the original patent was granted or as far back as records are available

ad valorem

a latin phrase meaning "according to value" usually used in connection with real estate taxation

amortized loan

a loan that is completely paid off, interest and principal, by a series of regular payments that are equal or nearly equal. also called a legal payments loan

acre

a measure of land equaling 160 square rods, 4,840 square yards, 43,560 square feet or a tract about 208.71 feet square

conventional mortgage

a mortgage securing a loan made by investors without governmental underwriting ie. which is not fha or va guaranteed. the type customarily made by a bank or savings and loan association

community

a part of a metropolitan area that has a number of neighborhoods that have a tendency toward common interests and problems

broker

a person employed for a fee by another to carry on any of the activities listed in the license law definition of a broker

chattel mortgage

a personal property mortgage

condition

a qualification of an estate granted which can be imposed only in conveyances. they are classified as conditions precedent and conditions subsequent

comparison approach

a real estate comparison method which compares a given property with similar or comparable properties also called market comparison

blanket mortgage

a single mortgage which covers more than one piece of real estate

balance sheet

a statement of the financial condition of a business at a certain time, showing assets, liabilities and capital

corner influence table

a statistical table that may be used to estimate the added value of a corner lot

Abstract of title

a summary or digest of the conveyances, transfers, and any other facts relied on as evidence of title, together with any other elements of record which may impair the title.

condominium

a system of individual fee ownership of units in a multi-family structure, combined with joint ownership of common areas of structure and the land

building code

a systematic regulation of construction of buildings within a municipality established by ordinance or law

commercial acre

a term applied to the remainder of an acre of newly subdivided land after the area devoted to streets sidewalks and curbs etc has been deducted from the acre

assignment

a transfer or making over to another of the whole of any property, real or personal, in possession or in action, or of any estate or right therein

A.L.T.A. title policy

a type of title insurance policy issued by title insurance companies which expands the risks normally insured against under the standard type policy

board foot

a unit of measure of lumber; one foot wide one foot long and on inch thick equals 144 cubic inches

assessed valuation

a valuation placed upon property by a public officer or board, as a basis for taxation

bearing wall or partition

a wall or partition supporting any vertical load in addition to its own weight

agreement of sale

a written agreement or contract between seller and purchaser in which they reach a meeting of minds on the terms and conditions of the sale

broker-salesperson relationship agreement

a written agreement required by regulations of the real estate commissioner setting forth the material aspects of the relationship between a real estate broker and each salesperson and broker performing licensed activities in the name of the supervising broker

bill of sale

a written instrument given to pass title of personal property from vendor to vendee

basis (b)

adjusted cost basis- the cost basis after the application of certain additions for improvements, etc... and deductions for depreciation

blind ad

advertisement placed by a broker which fails to disclose the broker's name or that it is and agent's ad

closing statement

an accounting of funds made to the buyer and seller separately. required by law to be made at the completion of every real estate transaction

actual fraud

an act intended to deceive another, e.g. making a false statement, making a promise without intending to perform it, suppressing the truth

accretion

an addition to land from natural causes as, for example, from gradual action of the ocean or river waters

accession

an addition to property through the efforts of man or by natural forces

commission

an agent's compensation for performing the duties of his agency; in real estate practice a percentage of the selling price of property, percentages of rentals etc...

collusion

an agreement between two or more persons to defraud another of his rights by the forms of law, or to obtain an object forbidden my law

contract

an agreement, either written or oral, to do or not to do certain things

chattel real

an estate related to real property such as a leas on real property

appraisal

an estimate of the value of property resulting from the analysis of facts about the property, an opinion of value

assumption agreement

an undertaking or adoption of a debt or obligation primarily resting upon another person.

cloud on the title

any conditions revealed by a title search which affect the title to property; usually relatively unimportant items but which cannot be removed without a quitclaim deed or court action

bargain and sale deed

any deed that recites a consideration and purports to convey the real estate; a bargain and sale deed with a covenant against the grantor's act is one in which the grantor warrants that grantor had done nothing to harm or cloud the title

consideration

anything of value given to induce entering into a contract; it may be money, personal services ore even love and affection

capital gains

at resale of capital time, the amount by which the net sale proceeds exceed the adjusted cost basis (book value). used for income tax computations. gains are called short or long term based upon length of holding period after acquisition. usually taxed at lower rates than ordinary income

bundle of rights

beneficial interests or rights

constructive eviction

breach of a covenant of warranty or quiet enjoyment, e.g. the inability of a lessee to obtain possession because of paramount defect in title or a condition making occupancy hazardous

BTU

british thermal unit the quantity of heat required to raise the temperature of one pound of water one degree fahrenheit

acceleration clause

clause in trust deed or mortgage giving lender right to call all sums owing him to be immediately due and payable upon the happening of a certain event.

basis (a)

cost basis- the dollar amount assigned to property at the time of acquisition under provisions of the internal revenue code for the purpose of determining gain, loss and depreciation in calculating the income tax to be paid upon the sale or exchange of the property

chattels

goods or every species of property movable or immovable which are not real property

principle of contribution

holds that maximum real property values are achieved when the improvements on the site procure the highest return, commensurate with the investment

principle of competition

holds that profits tend to breed competition an excess profits tend to breed ruinous competition

principle of conformity

holds that the maximum of value is realized when the reasonable degree of homogeneity of improvements is present

base and meridian

imaginary lines used by surveyors to find and describe the location of private or public lands

capitalization

in appraising, determining value of property by considering net income and percentage of reasonable return on the investment

compound interest

interest paid on original principal and also on the accrued and unpaid interest that has accumulated

construction loans

loans made for the construction of homes or commercial buildings. usually funds are disbursed to the contractor-builder during construction and after periodic inspections. disbursements are based on an agreement between borrower and lender

constructive notice

notice given by the public records

cost approach

one of three methods in the appraisal process. an analysis in which a value estimate of a property is derived by estimating the replacement cost of the improvements, deducting there from the estimated accrued depreciation, then adding the market value of the land

appraiser

one qualified by education, training and experience who is hired to estimate the value of real and personal property based on experience, judgment, facts and use of formal appraisal processes

attorney in fact

one who is authorized to perform certain acts for another under a power of attorney; power of attorney may be limited to a specific act or acts, or be general

community property

property accumulated through joint efforts of husband and wife living together

comparable sales

sales which have similar characteristics as the subject property and are used for analysis in the appraisal process

attachement

seizure of property by court order, usually done to have it available in the event a judgment is obtained in a pending suit.

alluvion

soil deposited by accretion. increase of earth on a shore or bank of a river

appurtenance

something annexed to another thing which may be transferred incident to it. that which belongs to another thing, as a barn, dwelling, garage, or orchard is incident to the land to which it is attached

color of title

that which appears to be good title but which is not title in fact

condemnation

the act of taking private property for public use by political subdivision; declaration that a structure is unfit for use

acquisition

the act or process by which a person procures property

company dollar

the amount of commission remaining to the broker after paying the salesperson and other possible commission splits

actual authority

the authority an agent has or believes that he or she has because of an intentional, unintentional or careless act of a principal

buyer's market

the condition which exists when a buyer is in a more commanding position as to price and terms because real property offered for sale is in plentiful supply in relation to demand

book value

the current value for accounting purposes of an asset expressed as original cost plus capital additions minus accumulated depreciation

certificate of reasonable value

the federal veterans administration appraisal commitment of property value

amortization

the liquidation of a financial obligation on an installment basis; also , recovery, over a period, of cost or value

cash flow

the net income generated by a property before depreciation and other non cash expenses

closing costs

the numerous expenses buyers and sellers normally incur in the transfer of ownership of real property

adverse possession

the open and notorious possession and occupancy under an evident claim or right, in denial or opposition to the title of another claimant

blockbusting

the practice on the part of unscrupulous spectators or real estate agents of inducing panic selling of homes at below market value, especially by exploiting the prejudices of property owners in neighborhoods in which the racial make up is changing or appears to be on the verge of changing

capitalization rate

the rate of interest which is considered a reasonable return on investment, and used in the process of determining value based upon net income

agency

the relationship between principal and agent which arises out of a contract, either expressed or implied, written or oral, wherein the agent is employed by the principal to do certain acts dealing with a third party

annual percentage rate

the relative cost of credit as determined in accordance with regulation z of the board of governors of the federal reserve system for implementing the federal truth in lending act

backfill

the replacement of excavated earth into a hole or against a structure

avulsion

the sudden tearing away or removal of land by action of water flowing over or through it

assumption of mortgage

the taking of title of property by grantee, wherein he assumes liability for payment of an existing note secured by a mortgage or deed of trust against the property; becoming a co-guarantor for the payment of a mortgage or deed of trust note

appropriation of water

the taking, impounding or diversion of water flowing on the public domain from its natural course and the application of the water to some beneficial use personal and exclusive to the appropriator

conveyance

the transfer of title of land from one to another. it denotes an instrument which carries from one person to another an interest in land

alienation

the transferring of property to another; the transfer of property and passion of lands, or other things, from one person to another.

assessment

the valuation of property for the purpose of levying a tax or the amount of the tax levied

collateral

this is the property subject to the security interest

assessed value

value placed on property as a basis for taxation

balloon payment

where the final installment payment on a note is greater than the preceeding installment payments and it pays the note in full; such final installment is termed a balloon payment

alquist-priolo special studies zones act

zoning act designed to control development in the vicinity of hazardous earthquake faults