Core real estate vocabulary tested on state licensing exams.
43 cards · basic cards · AI-written, checked twice. Edit anything.
- What is escrow in a real estate transaction?
- A neutral third party holds funds or documents until all contract conditions are met before closing.
- Define earnest money.
- Funds deposited by the buyer to demonstrate intent to purchase, typically held in escrow and credited toward the purchase price at closing.
- What does fee simple mean?
- Complete ownership of real property with no restrictions or limitations on transfer or use, except those imposed by law.
- What is leasehold interest?
- The right to possess and use property for a fixed period, as granted by a lease, with ownership reverting to the landlord at lease end.
- Define encumbrance.
- A claim, lien, or restriction on a property that affects its title, value, or use.
- What is an easement?
- The right to use another's property for a specific purpose, such as a utility company accessing land to maintain power lines.
- Define lien.
- A legal claim against a property as security for payment of a debt, giving the lienholder the right to foreclose if the debt is unpaid.
- What is a mortgage?
- A legal instrument that pledges property as security for repayment of a loan, allowing the lender to foreclose if the borrower defaults.
- What is a deed of trust?
- A three-party security instrument where a borrower transfers title to a trustee who holds it as security for the lender, used in some states instead of a mortgage.
- Define promissory note.
- A written promise by a borrower to repay a specific debt on stated terms, often accompanying a mortgage or deed of trust.
- What is amortization?
- The process of paying off a loan over time through regular installments of principal and interest.
- In a loan, what is principal?
- The original amount borrowed, distinct from the interest charged on that amount.
- What is interest in a loan context?
- The charge imposed by the lender for the use of borrowed money, usually expressed as an annual percentage rate.
- What is property tax?
- An annual tax levied by local governments on the assessed value of real property, used to fund schools and services.
- What does HOA stand for?
- Homeowners Association, an organization in a community that sets rules and collects fees from residents to maintain common areas.