Real Estate Basics
What is the term for the initial payment made by a buyer to secure a property, often a percentage of the total purchase price?
Down Payment
What is the term for the increase in the value of a property over time?
Appreciation
What do you call the person or business entity that rents and occupies a property under a lease?
Tenant/lessee
What type of commercial lease charges the tenant one rental amount that generally includes rent and property operating expenses?
Gross lease
What type of agency relationship exists when a real estate agent represents both the buyer and seller in the same transaction?
Dual Agency
What is the portion of a property’s value that the owner actually owns after subtracting the outstanding mortgage or other debt secured by the property?
Equity
What investment strategy involves purchasing properties to generate rental income and potentially benefit from appreciation over time?
Buy-and-Hold Investing
What do you call the property owner or party who grants a lease to a tenant?
Lessor/landlord
What type of commercial lease generally requires the tenant to pay base rent plus property taxes, insurance, and maintenance expenses?
Triple net lease nnn lease
When an agent is authorized to perform only specific tasks on behalf of the principal, what type of agency is established?
Special Agency / Limited Agency
In real estate, what does the acronym MLS stand for?
Multiple Listing Service
What type of investment property is purchased with the intention of improving it and selling it relatively quickly for a profit?
Fix and flip property
What type of lease allows a tenant to rent all or part of their leased space to another person while the original lease remains in effect?
Sublease
What clause in a lease explains how and when rent can increase over the lease term?
Escalation clause
What legal concept requires a real estate agent to act in the best interests of their client and put the client’s interests above their own?
Fiduciary Duty
What is the process of determining the value of a property through a professional evaluation?
Appraisal
What investment concept refers to using borrowed money, such as a mortgage, to increase the potential return on an investment?
Leverage
What is the percentage of a property’s available rental space that is currently occupied by tenants?
Occupancy Rate
What is the process of thoroughly investigating a property, its documents, finances, and other relevant information before completing a real estate transaction?
Due Diligence
What is the illegal practice of directing buyers or renters to or away from certain neighborhoods based on characteristics such as race, religion, or national origin?
Steering
What term describes the collection of legal rights that comes with owning real property, such as the rights to possess, use, transfer, and exclude others?
Bundle of Rights
What is the income generated by a property minus its operating expenses?
Net Operating income NOI
What factor can greatly influence the success of a brick-and-mortar business and should be carefully considered when selecting commercial real estate
Location
What is a legal right that allows someone to use another person’s property for a specific purpose without owning it?
Easement
What is the legal obligation of a real estate professional to reveal important facts about a property that could affect a buyer’s decision?
Duty of disclosure