Massachusetts Real Estate Test
Definitions Exam Questions with
Verified Answers
Accretion - ANSWER-Increase of property by gradual natural additions (usually wind
or water)
Accretion line - ANSWER-The water's edge; often the mean high tide line
Accrued depreciation - ANSWER-Difference between cost of replacing property new
as of date of appraisal and present value; already occurs when property is
purchased
Acknowledgement - ANSWER-An act of executing a legal instrument such as a
deed, mortgage or discharge before a lawyer or other officer of state such as a
notary public; this act declares signing to be free and voluntary; this is necessary
before recording at registry
Acre - ANSWER-43,560 square feet
Act of Waste - ANSWER-Unreasonable or improper use of land by an individual in
rightful possession of the land
Action of law - ANSWER-A way in which a lease can be terminated; includes
eminent domain taking, tax sale, etc.
Active income - ANSWER-Income generated from active activities, such as a salary;
cannot deduct depreciation from this income unless you are a real estate
professional
Actual Eviction - ANSWER-Legal action originated by lessor whereby lessee in
default is physically ousted pursuant to a court order (unlawful detainer).
Actual Notice - ANSWER-Specific notice of something (e.g. being served a lawsuit)
Adjacent - ANSWER-Nearby or abutting
Adjoining - ANSWER-Touching and contiguous
Adjustments - ANSWER-The proration of costs and income (taxes, rents, HOA fees,
etc.) between buyer and seller at closing of title (passing of papers)
,Administrator/Administratrix - ANSWER-Person appointed by court to probate or
prove and settle estate of person leaving no will
Ad Valorem - ANSWER-Tax assessment based on actual value
Adaptability - ANSWER-One of the tests to determine if something is real or personal
property; was it custom built to fit the space or can it fit anywhere
Adverse possession - ANSWER-The right to acquire legal title to privately owned
property if held openly, notoriously, adversely and without permission for 20 years;
also known as squatter's rights
Aeolian soil - ANSWER-Soil deposited by wind, such as sand dunes or silt
Affidavit - ANSWER-A sworn written statement
Affirmation - ANSWER-A solemn declaration
Agency - ANSWER-A contract by which someone represents another in a
transaction or area of business
Agency for Toxic Substances and Disease Registry - ANSWER-Created by CERCLA
as part of their environmental protection programs
Agent - ANSWER-An individual, corporation, or other person, acting on behalf of
another person with permission and legally binding authority
Agreement - ANSWER-One of the tests to determine whether something is real or
personal property; buyer and seller agree to make that decision; this overrides all
other tests, but should be in writing per Statute of Frauds
Agreement of sale - ANSWER-A bilateral contract whereby buyer promises to buy
and seller promises to sell by execution and delivery of deed; also known as
Purchase and Sale Agreement (P&S); Agreement means the same as Contract
Air rights - ANSWER-Ownership or lease of air space over a specific parcel of realty,
such as a building over a turnpike; also known as air lots or vertical interests;
typically extend no more than 80-500ft above real estate, depending on where
navigable air space begins
Alienation - ANSWER-Loss of ownership; can be voluntary, such as in a real estate
sale or involuntary, such as in a foreclosure
Alienation clause - ANSWER-Also known as due on sale clause or assumption
clause; permits lender to speed up the due date of the loan in the event of a title
transfer; prevents transfer of mortgage to a third party
Alluvion - ANSWER-Increasing of land area along a shore by deposited alluvium or
by the recession of water
,Alluvium - ANSWER-Clay, silt, sand, gravel, or similar detrital material deposited by
running water
Amenities - ANSWER-The features of a property that make it desirable like fitness
centers, access to transport, views, etc.
Amortization - ANSWER-The payment of a debt in equal installments; each payment
is the same, and pays down the debt over time, with a portion of each payment going
to the principal and interest on the loan
Anchor tenants - ANSWER-Major tenants which draw consumers to a shopping
center, such as department stores
Annexation - ANSWER-When property that was personal becomes real
Annual Property Operating Data (APOD Sheet) - ANSWER-Sheet that shows the
annual income of a rental property; profit and loss statements for investment
properties; looks at vacancies, operating expenses (, debt service (mortgage), and
capital expenditures (improvements).
Anticipation - ANSWER-The benefit a property owner expects to receive over the
lifetime of their ownership
Appraisal - ANSWER-An estimate of value
Appraiser - ANSWER-Professionals with an appraisal license who estimate what
buyers will pay for real estate
Appreciation - ANSWER-Increase in value resulting from market forces such as
demand stronger than supply
Approaches to value - ANSWER-Three methods used by appraiser to form an
estimate of value such as cost, market and income approaches
Appurtenance - ANSWER-A right belonging to and passing with a property such as
having a right of way through adjoining property
ARM - ANSWER-Adjustable Rate Mortgage; loan with an interest rate that adjusts
Arm's length transaction - ANSWER-An open and willing sale without cooperation or
coordination between the buyer and seller
Asbestos - ANSWER-Hazardous material that was used as an insulation material
and fire retardant; carcinogenic; most often seen in homes with popcorn ceilings;
most dangerous in a friable state
Assemblage - ANSWER-The act or process of combining two or more lots under
single ownership
, Assessed value - ANSWER-Also known as tax value; value given to realty by
assessor's office for property taxation purposes
Assets - ANSWER-All of the property someone owns
Assignment - ANSWER-Transfer of one's remaining interest in a lease or option to a
third party
Assignee - ANSWER-Person receiving a portion of rights or obligations under
someone else's contract
Assignor - ANSWER-Person assigning a contract
Associate broker - ANSWER-A broker who chooses to work for another broker
Assumption of mortgage - ANSWER-Method of taking over a mortgage; borrower
and original mortgagor are both responsible for the loan and liability for any
deficiency after foreclosure; joint responsibility
Attachment (court action) - ANSWER-A writ issued, beginning or during a legal
action commanding sheriff to attach ("seize") property, rights and effects of
defendant to satisfy possible credit demands of plaintiff if judgment comes out in
plaintiff's favor; involuntary lien
Attachment (test) - ANSWER-One of the ways to test whether something is real or
personal property; whether or not the property is attached with roots or nails to the
land
Attest - ANSWER-Affirmation that something is true or authentic
Attestation - ANSWER-Testimony or evidence given under oath
Attorney-at-law - ANSWER-A licensed lawyer
Attorney-in-fact - ANSWER-Someone holding a written power of attorney
Auction - ANSWER-Public sale of property to highest bidder
Avulsion - ANSWER-Sudden separation of land from one property and it's
attachment to another typically by flooding or changing course of a river
Bait and switch - ANSWER-Form of fraud where an agent advertises a certain
property that may or may not be available, with the intention of switching it out for
something more expensive or lower quality when the client comes into the office to
view; prohibited under licensing law
Balance - ANSWER-The notion that value is created and maintained when there is
equilibrium in the market
Definitions Exam Questions with
Verified Answers
Accretion - ANSWER-Increase of property by gradual natural additions (usually wind
or water)
Accretion line - ANSWER-The water's edge; often the mean high tide line
Accrued depreciation - ANSWER-Difference between cost of replacing property new
as of date of appraisal and present value; already occurs when property is
purchased
Acknowledgement - ANSWER-An act of executing a legal instrument such as a
deed, mortgage or discharge before a lawyer or other officer of state such as a
notary public; this act declares signing to be free and voluntary; this is necessary
before recording at registry
Acre - ANSWER-43,560 square feet
Act of Waste - ANSWER-Unreasonable or improper use of land by an individual in
rightful possession of the land
Action of law - ANSWER-A way in which a lease can be terminated; includes
eminent domain taking, tax sale, etc.
Active income - ANSWER-Income generated from active activities, such as a salary;
cannot deduct depreciation from this income unless you are a real estate
professional
Actual Eviction - ANSWER-Legal action originated by lessor whereby lessee in
default is physically ousted pursuant to a court order (unlawful detainer).
Actual Notice - ANSWER-Specific notice of something (e.g. being served a lawsuit)
Adjacent - ANSWER-Nearby or abutting
Adjoining - ANSWER-Touching and contiguous
Adjustments - ANSWER-The proration of costs and income (taxes, rents, HOA fees,
etc.) between buyer and seller at closing of title (passing of papers)
,Administrator/Administratrix - ANSWER-Person appointed by court to probate or
prove and settle estate of person leaving no will
Ad Valorem - ANSWER-Tax assessment based on actual value
Adaptability - ANSWER-One of the tests to determine if something is real or personal
property; was it custom built to fit the space or can it fit anywhere
Adverse possession - ANSWER-The right to acquire legal title to privately owned
property if held openly, notoriously, adversely and without permission for 20 years;
also known as squatter's rights
Aeolian soil - ANSWER-Soil deposited by wind, such as sand dunes or silt
Affidavit - ANSWER-A sworn written statement
Affirmation - ANSWER-A solemn declaration
Agency - ANSWER-A contract by which someone represents another in a
transaction or area of business
Agency for Toxic Substances and Disease Registry - ANSWER-Created by CERCLA
as part of their environmental protection programs
Agent - ANSWER-An individual, corporation, or other person, acting on behalf of
another person with permission and legally binding authority
Agreement - ANSWER-One of the tests to determine whether something is real or
personal property; buyer and seller agree to make that decision; this overrides all
other tests, but should be in writing per Statute of Frauds
Agreement of sale - ANSWER-A bilateral contract whereby buyer promises to buy
and seller promises to sell by execution and delivery of deed; also known as
Purchase and Sale Agreement (P&S); Agreement means the same as Contract
Air rights - ANSWER-Ownership or lease of air space over a specific parcel of realty,
such as a building over a turnpike; also known as air lots or vertical interests;
typically extend no more than 80-500ft above real estate, depending on where
navigable air space begins
Alienation - ANSWER-Loss of ownership; can be voluntary, such as in a real estate
sale or involuntary, such as in a foreclosure
Alienation clause - ANSWER-Also known as due on sale clause or assumption
clause; permits lender to speed up the due date of the loan in the event of a title
transfer; prevents transfer of mortgage to a third party
Alluvion - ANSWER-Increasing of land area along a shore by deposited alluvium or
by the recession of water
,Alluvium - ANSWER-Clay, silt, sand, gravel, or similar detrital material deposited by
running water
Amenities - ANSWER-The features of a property that make it desirable like fitness
centers, access to transport, views, etc.
Amortization - ANSWER-The payment of a debt in equal installments; each payment
is the same, and pays down the debt over time, with a portion of each payment going
to the principal and interest on the loan
Anchor tenants - ANSWER-Major tenants which draw consumers to a shopping
center, such as department stores
Annexation - ANSWER-When property that was personal becomes real
Annual Property Operating Data (APOD Sheet) - ANSWER-Sheet that shows the
annual income of a rental property; profit and loss statements for investment
properties; looks at vacancies, operating expenses (, debt service (mortgage), and
capital expenditures (improvements).
Anticipation - ANSWER-The benefit a property owner expects to receive over the
lifetime of their ownership
Appraisal - ANSWER-An estimate of value
Appraiser - ANSWER-Professionals with an appraisal license who estimate what
buyers will pay for real estate
Appreciation - ANSWER-Increase in value resulting from market forces such as
demand stronger than supply
Approaches to value - ANSWER-Three methods used by appraiser to form an
estimate of value such as cost, market and income approaches
Appurtenance - ANSWER-A right belonging to and passing with a property such as
having a right of way through adjoining property
ARM - ANSWER-Adjustable Rate Mortgage; loan with an interest rate that adjusts
Arm's length transaction - ANSWER-An open and willing sale without cooperation or
coordination between the buyer and seller
Asbestos - ANSWER-Hazardous material that was used as an insulation material
and fire retardant; carcinogenic; most often seen in homes with popcorn ceilings;
most dangerous in a friable state
Assemblage - ANSWER-The act or process of combining two or more lots under
single ownership
, Assessed value - ANSWER-Also known as tax value; value given to realty by
assessor's office for property taxation purposes
Assets - ANSWER-All of the property someone owns
Assignment - ANSWER-Transfer of one's remaining interest in a lease or option to a
third party
Assignee - ANSWER-Person receiving a portion of rights or obligations under
someone else's contract
Assignor - ANSWER-Person assigning a contract
Associate broker - ANSWER-A broker who chooses to work for another broker
Assumption of mortgage - ANSWER-Method of taking over a mortgage; borrower
and original mortgagor are both responsible for the loan and liability for any
deficiency after foreclosure; joint responsibility
Attachment (court action) - ANSWER-A writ issued, beginning or during a legal
action commanding sheriff to attach ("seize") property, rights and effects of
defendant to satisfy possible credit demands of plaintiff if judgment comes out in
plaintiff's favor; involuntary lien
Attachment (test) - ANSWER-One of the ways to test whether something is real or
personal property; whether or not the property is attached with roots or nails to the
land
Attest - ANSWER-Affirmation that something is true or authentic
Attestation - ANSWER-Testimony or evidence given under oath
Attorney-at-law - ANSWER-A licensed lawyer
Attorney-in-fact - ANSWER-Someone holding a written power of attorney
Auction - ANSWER-Public sale of property to highest bidder
Avulsion - ANSWER-Sudden separation of land from one property and it's
attachment to another typically by flooding or changing course of a river
Bait and switch - ANSWER-Form of fraud where an agent advertises a certain
property that may or may not be available, with the intention of switching it out for
something more expensive or lower quality when the client comes into the office to
view; prohibited under licensing law
Balance - ANSWER-The notion that value is created and maintained when there is
equilibrium in the market
