FBLA REAL ESTATE STATE fLASHCARDS

Term

Definition

Real Property

Land and anything permanently attached to it including buildings

Personal Property

Movable property not permanently attached to land (e.g.

Appurtenance

A right or privilege that is attached to and passes with real property (e.g.

Hereditament

Any property — real or personal — that can be inherited; historically used to describe property passing with land.

Fixture

Personal property that has been permanently attached to real property and is legally treated as part of it.

Real Estate Agent

A licensed professional who represents buyers or sellers in real estate transactions under the supervision of a broker.

Real Estate Broker

A licensed professional who has completed additional education and can operate independently

Realtor

A real estate agent or broker who is a member of the National Association of Realtors (NAR) and adheres to its Code of Ethics.

NAR (National Association of Realtors)

The largest real estate trade organization in the U.S. that sets ethical standards and advocates for the industry.

Property Manager

A real estate professional who manages rental properties on behalf of owners — collecting rent

Leasing Agent

A real estate professional who specializes in finding tenants for rental properties.

Mortgage Banker

A lender or financial professional who originates

Appraisal

A professional estimate of a property's market value conducted by a licensed appraiser.

Appraiser

A licensed professional who provides an objective valuation of real property based on market data and property characteristics.

Comparative Market Analysis (CMA)

An evaluation of similar recently sold properties (comparables/comps) used to estimate a property's market value.

Fair Market Value

The price a knowledgeable and willing buyer would pay a willing seller in an arm's-length transaction.

Residential Real Estate

Property used for living purposes including single-family homes

Commercial Real Estate

Property used for business purposes including office buildings

Land

Unimproved real property; the earth's surface including subsurface rights and air rights above it.

Lien

A legal claim against a property as security for a debt or obligation (e.g.

Encumbrance

Any claim

Deed

A written legal document that transfers ownership of real property from grantor (seller) to grantee (buyer).

Title

Legal ownership of real property; evidence of the right to possess and use the property.

Clear Title

A title free from liens

Abstract of Title

A condensed history of a property's ownership

Title Search

An examination of public records to verify legal ownership and identify any claims against a property.

Title Insurance

Insurance protecting buyers and lenders against financial loss from title defects or ownership disputes.

Escrow

A neutral third party that holds funds

Closing (Settlement)

The final step in a real estate transaction where ownership is officially transferred and all documents are signed.

Closing Costs

Fees and expenses paid at the closing of a real estate transaction (e.g.

MLS (Multiple Listing Service)

A database used by real estate agents to share property listings with other agents and brokers.

Listing Agreement

A contract between a property owner and a real estate broker authorizing the broker to market and sell the property.

Buyer's Agent

A real estate agent who represents the buyer's interests in a transaction.

Seller's Agent (Listing Agent)

A real estate agent who represents the seller's interests in a transaction.

Dual Agent

A real estate agent who represents both the buyer and seller in the same transaction; requires disclosure and consent.

Sub-agent

An agent who works under a listing broker to assist in selling a property

Fiduciary Duty

The legal obligation of a real estate agent to act in the best interest of their client including loyalty

Fair Housing Act

Federal law prohibiting discrimination in the sale

Protected Classes (Fair Housing)

Groups protected from housing discrimination: race

Steering

An illegal practice where a real estate agent directs buyers toward or away from neighborhoods based on protected class characteristics.

Blockbusting

An illegal practice of inducing homeowners to sell by suggesting that people of a certain protected class are moving into the neighborhood.

Redlining

An illegal practice of denying loans or insurance to people in certain neighborhoods based on race or ethnicity.

Property Disclosure

A seller's legal obligation to inform buyers of known material defects or hazardous conditions in a property (e.g.

Lead-Based Paint Disclosure

Federal law requiring sellers of pre-1978 homes to disclose known lead paint hazards to buyers.

Zoning

Government regulations dividing land into zones to control how property can be used (residential

Variance

An exception to existing zoning regulations granted to a property owner for a specific use.

Easement

The legal right to use another person's land for a specific purpose (e.g.

Right of Way

An easement allowing a person or entity to travel across another's property.

Eminent Domain

The government's constitutional right to take private property for public use with just compensation to the owner.

Condemnation

The legal process by which the government exercises eminent domain to acquire private property.

Setback

A zoning requirement specifying the minimum distance a structure must be from a property line

Lease

A legal contract granting a tenant the right to occupy and use a property for a specified period in exchange for rent.

Landlord (Lessor)

The property owner who grants a tenant the right to occupy property under a lease.

Tenant (Lessee)

The person who rents and occupies property under a lease agreement.

Gross Lease

A lease where the landlord pays most property expenses (taxes

Net Lease

A lease where the tenant pays rent plus some or all property expenses (taxes

Security Deposit

Money paid by a tenant to a landlord held to cover damages or unpaid rent at the end of a lease.

Eviction

The legal process by which a landlord removes a tenant from a property for violation of the lease or nonpayment of rent.

Mortgage

A loan used to purchase real property where the property serves as collateral for the debt.

Mortgagor

The borrower who pledges property as collateral in a mortgage loan.

Mortgagee

The lender who receives the mortgage as security for the loan.

Conventional Loan

A mortgage loan not insured or guaranteed by the federal government.

FHA Loan

A mortgage loan insured by the Federal Housing Administration; allows lower down payments and credit scores.

VA Loan

A mortgage loan guaranteed by the Department of Veterans Affairs for eligible veterans and service members.

USDA Loan

A mortgage loan backed by the U.S. Department of Agriculture for rural and suburban homebuyers.

Fixed-Rate Mortgage

A mortgage where the interest rate remains the same for the entire loan term.

Adjustable-Rate Mortgage (ARM)

A mortgage with an interest rate that changes periodically based on a market index.

Amortization

The process of gradually paying off a loan through regular payments of principal and interest over time.

Down Payment

The portion of a property's purchase price paid upfront by the buyer; typically expressed as a percentage.

Equity

The difference between a property's market value and the amount owed on the mortgage.

LTV (Loan-to-Value Ratio)

The ratio of the mortgage loan amount to the appraised value of the property; used to assess lending risk.

Private Mortgage Insurance (PMI)

Insurance required by lenders when a borrower's down payment is less than 20%; protects the lender if the borrower defaults.

Pre-Approval

A lender's conditional commitment to loan a buyer a specific amount based on credit

Secondary Mortgage Market

A market where existing mortgage loans are bought and sold between lenders and investors (e.g.

Fannie Mae (FNMA)

A government-sponsored enterprise that buys mortgages from lenders to increase the availability of mortgage credit.

Freddie Mac (FHLMC)

A government-sponsored enterprise similar to Fannie Mae that purchases mortgages to support the secondary mortgage market.

Foreclosure

The legal process by which a lender repossesses and sells a property when the borrower fails to make mortgage payments.

Short Sale

A sale in which the property sells for less than the amount owed on the mortgage with the lender's approval.

Real Estate Investment Trust (REIT)

A company that owns income-producing real estate and allows investors to buy shares

Capital Gain

Profit made from selling a property for more than its purchase price.

Depreciation

A tax deduction allowing real estate investors to recover the cost of income-producing property over time.

1031 Exchange

A tax-deferred exchange allowing an investor to sell an investment property and reinvest proceeds in a like-kind property without immediate capital gains taxes.

RESPA (Real Estate Settlement Procedures Act)

Federal law requiring lenders to disclose settlement costs and prohibiting kickbacks in real estate transactions.

Truth in Lending Act (TILA)

Federal law requiring lenders to clearly disclose loan terms

ECOA (Equal Credit Opportunity Act)

Federal law prohibiting lenders from discriminating against credit applicants based on race

CRA (Community Reinvestment Act)

Federal law encouraging banks to meet the credit needs of all communities including low- and moderate-income areas.

Puffing

Exaggerated or subjective sales claims that are not factual misrepresentations (e.g.

Misrepresentation

A false or misleading statement of fact made by a real estate agent or seller that may void a contract or create liability.

Procuring Cause

The agent whose efforts directly led to the completion of a real estate sale; determines who earns the commission.

Commission

A percentage of the sale price paid to real estate agents as compensation for facilitating a transaction.

Earnest Money

A deposit made by a buyer to show good faith intent to purchase a property; applied toward closing costs or down payment.

Contingency

A condition in a real estate contract that must be met before the sale can proceed (e.g.

Counter-offer

A seller's response to a buyer's offer that changes one or more terms; legally rejects the original offer.

Purchase Agreement (Sales Contract)

A legally binding contract between buyer and seller outlining the terms of a real estate sale.

Home Inspection

An examination of a property's condition by a licensed inspector; findings may affect contract negotiations.

Seller's Disclosure

A document where the seller reports known defects and material facts about the property to the buyer.

NAR Code of Ethics

The ethical standards that Realtors must follow governing honesty

Dual Agency Disclosure

The legal requirement to inform both buyer and seller when one agent represents both parties in a transaction.

Truth in Advertising (Real Estate)

The ethical and legal obligation to provide accurate and non-deceptive information in all property marketing materials.