Test Your Knowledge of General Real Estate Terms
1. What is the term for the amount of money a buyer borrows to purchase a property?
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Equity
Principal
Down Payment
Mortgage
2. Which of the following best describes a “fixed-rate mortgage”?
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A loan where the interest rate stays the same throughout the loan term
A loan where the interest rate changes every month
A loan where the interest rate changes based on the market
A loan with a fixed payment but varying interest rates
3. What does “closing” refer to in a real estate transaction?
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The buyer and seller agreeing on a price
The final step where ownership of the property is transferred
The buyer submitting their offer
The seller listing the property on the market
4. What is “escrow” used for in real estate?
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A deposit made to show the buyer’s serious interest
A neutral third-party account that holds funds until the transaction is completed
A type of insurance for homeowners
The interest rate on a mortgage
5. What does “appraisal” mean in real estate?
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Estimating the market value of a property
The process of inspecting a home for repairs
The closing cost paid by the buyer
The amount of money offered by the buyer
6. What is “equity” in real estate?
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The amount of money the buyer owes on the mortgage
The difference between the market value of a property and the amount owed on it
The total amount paid in interest over the loan term
The initial amount of money invested by the seller
7. What is a “buyer’s market”?
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When there are more buyers than available properties
When home prices are generally rising quickly
When there are more properties for sale than buyers
When mortgage rates are high
8. Which of the following is considered a type of "contingency" in real estate contracts?i
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The seller providing a home warranty
The buyer's offer being dependent on securing financing
The listing price of the home
The amount of down payment required
9. What is “title insurance” designed to protect?
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The buyer in case the property decreases in value
The lender in case the buyer defaults on the loan
Both buyer and lender from any claims against the property’s ownership
The seller in case the buyer backs out of the deal
10. What does “amortization” mean in relation to a mortgage?
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The process of gradually reducing the loan balance through regular payments
The process of raising a property’s value
The percentage of down payment required for a loan
The increase in property taxes over time