Real Estate Vocabulary (Guide to Passing the
PSI Real Estate Exam) 346 Q&A.
acceleration clause - Answer: A provision in a written mortgage, note, bond, or
conditional sales contract that in the event of default, the whole amount of the
principal and the interest may be declared due and payable at once.
accession - Answer: Title to improvements or additions to real property is
acquired as a result of the accretion of alluvial deposits along the banks of
streams or as a result of the annexation of fixtures.
accretion - Answer: Increase or addition to land by the deposit of sand or soil
washed up naturally from a river, lake, or sea.
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,accrued depreciation - Answer: The actual depreciation that has occurred to a
property at any given date, the difference between the cost of replacement new
(as of the date of the appraisal) and the present appraised value.
acknowledgement - Answer: A declaration made by a person to a notary public or
other pubic official authorized to take acknowledgments that an instrument was
executed by his or her as a free and voluntary act.
actual eviction - Answer: The result of legal action originated by a lessor, by which
a defaulted tenant is physically ousted from the rented property pursuant to a
court order.
actual notice - Answer: Express information or fact; that which is known; actual
knowledge.
ad valorem tax - Answer: A tax levied according to value; generally used to refer to
real estate tax.
adjustable-rate mortgage (ARM) - Answer: A mortgage in which the interest
changes periodically, according to corresponding fluctuations in an index. All are
tied to indexes.
adjustment date - Answer: The date the interest rate changes on an adjustable-
rate mortgage.
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,administrator - Answer: The party appointed by the county court to settle the
estate of a deceased person who died without leaving a will.
adverse possession - Answer: The actual, visible, hostile, notorious, exclusive, and
continuous possession of another's land under a claim to title.
affidavit - Answer: A written statement signed and sworn to before a person
authorized to administer an oath
agent - Answer: One who represents or has the power to act for another
(principal). The authorization may be express, implied, or apparent. A fiduciary
relationship is created when a principal executes a listing agreement or
management contract authorizing a real estate broker to be his or her agent.
agreement of sale - Answer: A written agreement by which the purchaser agrees
to buy certain real estate and the seller agrees to sell, on the terms and conditions
set forth in the agreement.
air lot - Answer: A designated airspace over a piece of land, like suface property,
may be transferred.
air rights - Answer: The right to use the open space above one's property. It can
be sold to build a sky-walk or for the utility company to erect power lines,
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, alienation - Answer: The act of transferring property to another. May be voluntary,
such as by sale, or involuntary, such as through eminent domain.
alienation clause - Answer: Clause in a mortgage instrument that does not allow
the borrower to sell (without lender approval) on assumption or contract-for-
deed.
alluvion - Answer: The actual soil increase resulting from accretion.
amendments - Answer: Changes to previously approved and adopted written
agreements.
amenities - Answer: Neighborhood facilities and services that enhance a
property's value, outside of the property (swimming pools, three-car garages).
Americans with Disabilities Act (ADA) - Answer: A federal law (1992) designed to
eliminate discrimination against individuals with disabilities.
amortization - Answer: The liquidation of a financial burden by installment
payments, which include principal and interest. The loan payment consists of a
portion which will be applied to pay the accruing interest on a loan, with the
remainder being applied to the principal. Over time, the interest portion
decreases as the loan balance decreases, and the amount applied to principal
increases so that the loan is paid off in the specified time.
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PSI Real Estate Exam) 346 Q&A.
acceleration clause - Answer: A provision in a written mortgage, note, bond, or
conditional sales contract that in the event of default, the whole amount of the
principal and the interest may be declared due and payable at once.
accession - Answer: Title to improvements or additions to real property is
acquired as a result of the accretion of alluvial deposits along the banks of
streams or as a result of the annexation of fixtures.
accretion - Answer: Increase or addition to land by the deposit of sand or soil
washed up naturally from a river, lake, or sea.
Page 1 of 51
,accrued depreciation - Answer: The actual depreciation that has occurred to a
property at any given date, the difference between the cost of replacement new
(as of the date of the appraisal) and the present appraised value.
acknowledgement - Answer: A declaration made by a person to a notary public or
other pubic official authorized to take acknowledgments that an instrument was
executed by his or her as a free and voluntary act.
actual eviction - Answer: The result of legal action originated by a lessor, by which
a defaulted tenant is physically ousted from the rented property pursuant to a
court order.
actual notice - Answer: Express information or fact; that which is known; actual
knowledge.
ad valorem tax - Answer: A tax levied according to value; generally used to refer to
real estate tax.
adjustable-rate mortgage (ARM) - Answer: A mortgage in which the interest
changes periodically, according to corresponding fluctuations in an index. All are
tied to indexes.
adjustment date - Answer: The date the interest rate changes on an adjustable-
rate mortgage.
Page 2 of 51
,administrator - Answer: The party appointed by the county court to settle the
estate of a deceased person who died without leaving a will.
adverse possession - Answer: The actual, visible, hostile, notorious, exclusive, and
continuous possession of another's land under a claim to title.
affidavit - Answer: A written statement signed and sworn to before a person
authorized to administer an oath
agent - Answer: One who represents or has the power to act for another
(principal). The authorization may be express, implied, or apparent. A fiduciary
relationship is created when a principal executes a listing agreement or
management contract authorizing a real estate broker to be his or her agent.
agreement of sale - Answer: A written agreement by which the purchaser agrees
to buy certain real estate and the seller agrees to sell, on the terms and conditions
set forth in the agreement.
air lot - Answer: A designated airspace over a piece of land, like suface property,
may be transferred.
air rights - Answer: The right to use the open space above one's property. It can
be sold to build a sky-walk or for the utility company to erect power lines,
Page 3 of 51
, alienation - Answer: The act of transferring property to another. May be voluntary,
such as by sale, or involuntary, such as through eminent domain.
alienation clause - Answer: Clause in a mortgage instrument that does not allow
the borrower to sell (without lender approval) on assumption or contract-for-
deed.
alluvion - Answer: The actual soil increase resulting from accretion.
amendments - Answer: Changes to previously approved and adopted written
agreements.
amenities - Answer: Neighborhood facilities and services that enhance a
property's value, outside of the property (swimming pools, three-car garages).
Americans with Disabilities Act (ADA) - Answer: A federal law (1992) designed to
eliminate discrimination against individuals with disabilities.
amortization - Answer: The liquidation of a financial burden by installment
payments, which include principal and interest. The loan payment consists of a
portion which will be applied to pay the accruing interest on a loan, with the
remainder being applied to the principal. Over time, the interest portion
decreases as the loan balance decreases, and the amount applied to principal
increases so that the loan is paid off in the specified time.
Page 4 of 51
