Easy to read Real Estate Vocabulary
(Guide to Passing the PSI Real Estate
Exam)
What is the meaning of “appraisal” in real estate?
☑️☑️ A professional estimate of a property’s value
What does “amortization” refer to?
☑️☑️ The process of gradually paying off a loan through scheduled payments
What is an “easement”?
☑️☑️ A legal right to use another person’s land for a specific purpose
What is “equity” in property ownership?
☑️☑️ The difference between the property’s value and the amount owed on it
What does “escrow” mean?
☑️☑️ A neutral third party holding funds or documents until conditions are met
What is a “fixture” in real estate terms?
☑️☑️ An item permanently attached to property that becomes part of it
What is “fee simple” ownership?
☑️☑️ The highest form of property ownership with complete rights
What does “foreclosure” mean?
☑️☑️ The legal process where a lender takes property due to unpaid debt
What is a “lease”?
☑️☑️ A contract allowing use of property for a specified time in exchange for rent
What is “listing agreement”?
☑️☑️ A contract between a property owner and a broker to sell or lease property
What is a “mortgage”?
☑️☑️ A loan used to purchase property, secured by the property itself
What does “principal” refer to in a loan?
☑️☑️ The original amount borrowed
1
,What is “interest” in real estate financing?
☑️☑️ The cost paid for borrowing money
What is a “deed”?
☑️☑️ A legal document transferring property ownership
What does “title” mean?
☑️☑️ Legal ownership of a property
What is “zoning”?
☑️☑️ Government regulation of land use in specific areas
What is “closing”?
☑️☑️ The final step in a real estate transaction where ownership transfers
What is “contingency”?
☑️☑️ A condition that must be met for a contract to become binding
What does “down payment” mean?
☑️☑️ Initial payment made when purchasing property
What is “capital gain”?
☑️☑️ Profit from the sale of a property
What is “broker”?
☑️☑️ A licensed professional who facilitates real estate transactions
What is an “agent”?
☑️☑️ A person authorized to act on behalf of another in real estate deals
What does “dual agency” mean?
☑️☑️ When one agent represents both buyer and seller
What is “market value”?
☑️☑️ The price a property would sell for under normal conditions
What is “comparative market analysis”?
☑️☑️ Evaluation of similar properties to determine value
What is “liability”?
☑️☑️ Legal responsibility for debts or obligations
What is “encumbrance”?
☑️☑️ A claim or restriction on a property
2
,What is a “lien”?
☑️☑️ A legal claim against property for unpaid debt
What is “tenancy in common”?
☑️☑️ Ownership shared by two or more people with separate interests
What is “joint tenancy”?
☑️☑️ Ownership where all parties share equal interest with right of survivorship
What is “leasehold estate”?
☑️☑️ Tenant’s right to occupy property for a set period
What is “freehold estate”?
☑️☑️ Ownership of real property for an indefinite duration
What is “appreciation”?
☑️☑️ Increase in property value over time
What is “depreciation”?
☑️☑️ Decrease in property value
What is “balloon payment”?
☑️☑️ A large final loan payment after smaller installments
What is “default”?
☑️☑️ Failure to meet loan or contract obligations
What is “gross rent multiplier”?
☑️☑️ A ratio used to estimate property value based on rental income
What is “net operating income”?
☑️☑️ Income after operating expenses are deducted
What is “vacancy rate”?
☑️☑️ Percentage of rental units that are unoccupied
What is “building code”?
☑️☑️ Regulations for construction standards
What is “eminent domain”?
☑️☑️ Government’s right to take private property for public use
What is “title insurance”?
☑️☑️ Protection against losses from title defects
3
, What is “survey”?
☑️☑️ Measurement of land boundaries
What is “offer”?
☑️☑️ Proposal to buy or lease property
What is “acceptance”?
☑️☑️ Agreement to the terms of an offer
What is “counteroffer”?
☑️☑️ Response to an offer with modified terms
What is “earnest money”?
☑️☑️ Deposit showing buyer’s serious intent
What is “closing costs”?
☑️☑️ Expenses incurred during finalization of a transaction
What is “adjustable-rate mortgage”?
☑️☑️ Loan with interest rates that change over time
What is “fixed-rate mortgage”?
☑️☑️ Loan with constant interest rate
What is “prepayment penalty”?
☑️☑️ Fee for paying off a loan early
What is “home inspection”?
☑️☑️ Evaluation of a property’s condition
What is “short sale”?
☑️☑️ Sale where lender accepts less than owed amount
What is “REO property”?
☑️☑️ Property owned by a lender after foreclosure
What is “subdivision”?
☑️☑️ Division of land into smaller lots
What is “plat map”?
☑️☑️ Diagram showing land divisions
What is “setback”?
☑️☑️ Required distance between structure and property line
4
(Guide to Passing the PSI Real Estate
Exam)
What is the meaning of “appraisal” in real estate?
☑️☑️ A professional estimate of a property’s value
What does “amortization” refer to?
☑️☑️ The process of gradually paying off a loan through scheduled payments
What is an “easement”?
☑️☑️ A legal right to use another person’s land for a specific purpose
What is “equity” in property ownership?
☑️☑️ The difference between the property’s value and the amount owed on it
What does “escrow” mean?
☑️☑️ A neutral third party holding funds or documents until conditions are met
What is a “fixture” in real estate terms?
☑️☑️ An item permanently attached to property that becomes part of it
What is “fee simple” ownership?
☑️☑️ The highest form of property ownership with complete rights
What does “foreclosure” mean?
☑️☑️ The legal process where a lender takes property due to unpaid debt
What is a “lease”?
☑️☑️ A contract allowing use of property for a specified time in exchange for rent
What is “listing agreement”?
☑️☑️ A contract between a property owner and a broker to sell or lease property
What is a “mortgage”?
☑️☑️ A loan used to purchase property, secured by the property itself
What does “principal” refer to in a loan?
☑️☑️ The original amount borrowed
1
,What is “interest” in real estate financing?
☑️☑️ The cost paid for borrowing money
What is a “deed”?
☑️☑️ A legal document transferring property ownership
What does “title” mean?
☑️☑️ Legal ownership of a property
What is “zoning”?
☑️☑️ Government regulation of land use in specific areas
What is “closing”?
☑️☑️ The final step in a real estate transaction where ownership transfers
What is “contingency”?
☑️☑️ A condition that must be met for a contract to become binding
What does “down payment” mean?
☑️☑️ Initial payment made when purchasing property
What is “capital gain”?
☑️☑️ Profit from the sale of a property
What is “broker”?
☑️☑️ A licensed professional who facilitates real estate transactions
What is an “agent”?
☑️☑️ A person authorized to act on behalf of another in real estate deals
What does “dual agency” mean?
☑️☑️ When one agent represents both buyer and seller
What is “market value”?
☑️☑️ The price a property would sell for under normal conditions
What is “comparative market analysis”?
☑️☑️ Evaluation of similar properties to determine value
What is “liability”?
☑️☑️ Legal responsibility for debts or obligations
What is “encumbrance”?
☑️☑️ A claim or restriction on a property
2
,What is a “lien”?
☑️☑️ A legal claim against property for unpaid debt
What is “tenancy in common”?
☑️☑️ Ownership shared by two or more people with separate interests
What is “joint tenancy”?
☑️☑️ Ownership where all parties share equal interest with right of survivorship
What is “leasehold estate”?
☑️☑️ Tenant’s right to occupy property for a set period
What is “freehold estate”?
☑️☑️ Ownership of real property for an indefinite duration
What is “appreciation”?
☑️☑️ Increase in property value over time
What is “depreciation”?
☑️☑️ Decrease in property value
What is “balloon payment”?
☑️☑️ A large final loan payment after smaller installments
What is “default”?
☑️☑️ Failure to meet loan or contract obligations
What is “gross rent multiplier”?
☑️☑️ A ratio used to estimate property value based on rental income
What is “net operating income”?
☑️☑️ Income after operating expenses are deducted
What is “vacancy rate”?
☑️☑️ Percentage of rental units that are unoccupied
What is “building code”?
☑️☑️ Regulations for construction standards
What is “eminent domain”?
☑️☑️ Government’s right to take private property for public use
What is “title insurance”?
☑️☑️ Protection against losses from title defects
3
, What is “survey”?
☑️☑️ Measurement of land boundaries
What is “offer”?
☑️☑️ Proposal to buy or lease property
What is “acceptance”?
☑️☑️ Agreement to the terms of an offer
What is “counteroffer”?
☑️☑️ Response to an offer with modified terms
What is “earnest money”?
☑️☑️ Deposit showing buyer’s serious intent
What is “closing costs”?
☑️☑️ Expenses incurred during finalization of a transaction
What is “adjustable-rate mortgage”?
☑️☑️ Loan with interest rates that change over time
What is “fixed-rate mortgage”?
☑️☑️ Loan with constant interest rate
What is “prepayment penalty”?
☑️☑️ Fee for paying off a loan early
What is “home inspection”?
☑️☑️ Evaluation of a property’s condition
What is “short sale”?
☑️☑️ Sale where lender accepts less than owed amount
What is “REO property”?
☑️☑️ Property owned by a lender after foreclosure
What is “subdivision”?
☑️☑️ Division of land into smaller lots
What is “plat map”?
☑️☑️ Diagram showing land divisions
What is “setback”?
☑️☑️ Required distance between structure and property line
4
