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Learn Real Estate at Home!Over 40 Years of Continuous Service
Colorado Real EstatePre-Licensing Course
DEMO - REAL PROPERTY
“the innovators in home study education”
RP (06/09) © 1969 - 2009 Real Estate Training Center of Colorado, Inc.(303) 421-9078
National 1-866-311-7382
KEY WORDS - REAL PROPERTYTo look up each word listed below in the TERMINOLOGY section, click on the "+" next to "Terminology" onthe left side of your screen. Next, click on the "+" next to the first letter of the word you are looking for. Scrolldown to the word, click and the definition will appear. To return to list of keywords "Scroll" down and click on"Key Words" on the left margin.
DO NOT SKIP THIS STEP!! It will be your best friend and loyal helper now, after the exam and beyond.
ADVERSE POSSESSION
CHATTEL
COMMUNITY PROPERTY
CONDITION (DEED)
DEFEASIBLE FEE
EASEMENT
EMBLEMENT
ENCUMBRANCE
ESTATE
FEE SIMPLE
FREEHOLD
GRANT DEED
GRANTEE
GRANTOR
INTESTATE
JOINT TENANCY
LEGAL DESCRIPTION
LIEN
LIFE ESTATE
MECHANIC’S LIEN
MERIDIAN LINE
METES & BOUNDS
PERSONALTY
QUIT CLAIM DEED
REAL ESTATE
REMAINDERMAN
SECTION
SPECIAL WARRANTY DEED
TENANCY AT SUFFERANCE
TENANCY IN COMMON
TITLE EVIDENCE
TRADE FIXTURE
TRUE POINT OF BEGINNING (TPOB)
PLEASE READ!IMPORTANT INSTRUCTIONS!
NAVIGATION
On the left side of your screen is an interactive Table of Contents for this course. Click the [+] (to the left of thesection you wish to view) and subsections under that section will be listed on a drop-down. The [+] changes to a[-]. If you click on any section or subsection you will automatically move there. After you are finished click the[-] and the subsections will close with only the section headers being displayed.
To go to a specific page, press "Shift", "Ctrl" and the letter "n" at the same time. A"Go to Page" box will open. Enter the specific page you wish to view and press "ok" and that page will be displayed. To move from page to page press the up arrow or down arrow on the menu bar above your coursematerial or you can use the "page up" and "page down" keys on your keyboard..
To adjust the type size on your screen use the "+" or "-" buttons on the tool bar.
COLORADO REAL ESTATE PRE-LICENSING COURSEREAL PROPERTY
RP (06/09) -4- © 1969 - 2009 Real Estate Training Center of Colorado, Inc.(303) 421-9078
National 1-866-311-7382
TABLE OF CONTENTS
I. THE NATURE OF REAL PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5A. Definitions of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5B. Specifics of the Nature of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
HOW TO TAKE THE PROGRESS TEST/FINAL EXAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
END OF DEMO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
COLORADO REAL ESTATE PRE-LICENSING COURSEREAL PROPERTY
RP (06/09) -5- © 1969 - 2009 Real Estate Training Center of Colorado, Inc.(303) 421-9078
National 1-866-311-7382
IMPORTANT NOTE: Through out the course material you will see words in RED. If you have notpreviously looked these words up in the Terminology, we suggest you do tofamiliarize yourself with particular real estate words and terms. To look up any wordat any time click on Terminology on the left side of your screen.
I. THE NATURE OF REAL PROPERTY - The foundation of our real property law is English CommonLaw and the product of legislative and administrative processes. The important thing to remember is whenwe speak of property, we are not speaking technically of the thing owned, but rather of the rights, powersand interest in the particular thing owned. These rights and interests are rights to control, use, possess,enjoy and dispose. In a broad sense, we refer to anything which may be possessed as an estate. Property isdivided into two kinds: real property and personal property. Respectively, these are also known as realtyand personalty. Realty is the property rights to real property; personalty is the property rights to personalproperty.
A. Definitions of Property
1. Rights or interests which a person has in lands and chattels to the exclusion of all others.
2. Blackstone defines land as comprehending all things of a permanent and substantial nature.
3. Estate - Quantity of ownership.
4. Title - Quality of ownership.
5. Land - Realty, real estate, or real property.
6. Chattel -Personalty or personal property which is not permanently attached to real property
7. Property of any kind that is capable of being owned falls into one of the two classifications: (SeeFigure 1)
a. Real Property
b. Personal Property
COLORADO REAL ESTATE PRE-LICENSING COURSEREAL PROPERTY
RP (06/09) -6- © 1969 - 2009 Real Estate Training Center of Colorado, Inc.(303) 421-9078
National 1-866-311-7382
Figure 1
Real property, real estate, realty, land is immovable, indestructible, non-homogenous. It can be dividedinto three categories - air rights, surface rights and mineral rights, as shown in Figure 2.
Figure 2
Land may be defined as the surface of the earth (soil, rock or other substance), material beneath (water,oil, minerals) and air space (limited by law). It could also be stated as “the center of the earth to theupper limits of the sky”.
“The Language of Real Estate “ - by John W. Reilly defines the term real estate as follows:
“REAL ESTATE -The physical land at, above, and below the earth's surface with allappurtenances, including any structures; any and every interest in land whether corporeal orincorporeal, freehold or non-freehold; for all practical purposes synonymous with real property."
COLORADO REAL ESTATE PRE-LICENSING COURSEREAL PROPERTY
RP (06/09) -7- © 1969 - 2009 Real Estate Training Center of Colorado, Inc.(303) 421-9078
National 1-866-311-7382
B. Specifics of the Nature of Property - Real Property includes the earth's surface, the air above and theground below, as well as all appurtenances to the land, including buildings, structures, fixtures, fencesand improvements erected upon or affixed to the same. This excludes, however, growing crops(emblements). The term real property refers to the interests, benefits and rights inherent in theownership of real estate, i.e., the bundle of rights.
1. The bundle of rights concept or theory describes the legal rights inherent in the ownership of realproperty and compares it to a bundle of sticks, each stick representing a legal right or privilege. These rights transfer from one owner to the next, unless some are limited or reserved by the presentowner or are not transferable. Private interests and rights are subject to the restrictions andlimitations of the public interests and rights.
Property is not only the item that is owned, but it is also a set of rights associated with the itemenjoyed by the owner (Remember “CUPED”). These include the rights to:
a. Control - One's right to use may not infringe on the rights of others to use and enjoy theirproperty.
b. Use - The right to use a property refers to the right to use it in certain ways, such as building,landscaping, razing, cultivating, and mining on the property. Rights are subject to thelimitations of local zoning and the legality of the use.
c. Possess - To control the occupancy of the property; to use the property without any legitimatechallenges to one’s use or title.
d. Enjoy - To use the property without any legitimate challenges to one’s use of title to theexclusion of others. The right to exclude gives the property owner the legal right to keepothers off the property and to prosecute trespassers.
e. Dispose - The right to transfer interests in the property includes the right to sell, bequeath,lease, donate or assign ownership interests. An owner may transfer certain individual rights tothe property without transferring total ownership. One may also transfer ownership whileretaining individual interests. For example, a person may sell mineral rights without sellingthe right of possession. On the other hand, the owner may convey all rights to the property andretain the mineral rights.
End of the demo course material
You are now ready to take the demo progress test!
COLORADO REAL ESTATE PRE-LICENSING COURSEREAL PROPERTY
RP (06/09) -8- © 1969 - 2009 Real Estate Training Center of Colorado, Inc.(303) 421-9078
National 1-866-311-7382
HOW TO TAKE THE PROGRESS TEST/FINAL EXAM
FOR CD USERS: We recommend you print the blank exam form from the next page as a worksheet forentering your answers. After you have answered all the questions see “SUBMITTING ANSWERS” below.
FOR TEXTBOOK USERS: Use the exam form at the back of the text, enter your answers on the form. Afteryou have answered all the questions, see “SUBMITTING ANSWERS” below.
SUBMITTING ANSWERS
Answers to the Progress Tests and/or Final Exams MUST be submitted via the Internet.
The Textbook and/or CD version contains the same text as found on the Internet, but does not provide theinteractivity found on the Internet. You should mark your answers on the Exam Form, log onto the Internetwww.realestatetrainingcenter.us and indicate your answers on each individual question. This will let you takeadvantage of the interactivity of the Internet program and instantly score your test, complete with explanations. You MUST score an 80% or better before you can go to the next course.
If you do not have access to a computer with Internet capabilities, please contact your Student Representative at1-866-311-7382.
YOU ARE NOW READY TO TAKE THE DEMO PROGRESS TESTUSING THE DIRECTIONS ABOVE.
Thank you,
RETCY & Staff
COLORADO REAL ESTATE PRE-LICENSING COURSEREAL PROPERTY
RP (04/09) -12- © 1969 - 2009 Real Estate Training Center of Colorado, Inc.(303) 421-9078
National 1-866-311-7382
END OF DEMOThank you for considering Real Estate Training Center.
If you have any questions please contact us at 1-866-311-7382. A Student representative will becontacting you in the near future to see how we may be of further service.
Thank you for your interest.
Sincerely,
Retcy & Staff
To enroll, click on our website www.realestatetrainingcenter.us then click on "ENROLLNOW" or call 1-866-311-7382.
We look forward to helping you make your dream a reality.
Learn Real Estate at Home!Over 40 Years of Continuous Service
WELCOME TO REAL ESTATE TRAINING CENTER
DO NOT CONTINUE UNTIL YOU HAVE READ THIS PAGE.
This is the key!! It has been said many times, and rightly so, that to understand the terminology of a subject is tounderstand the subject itself. This is so true that if you had only one book to study for a new profession, adictionary of the terms peculiar to that profession would be your best possible choice. That is why we include theterminology with every course available from Real Estate Training Center, and I would like you to join me nowas we explore the "Real Estate Terminology" to give yourself a head start.
The first page of each individual subject area throughout your entire course will be a list of "KEY WORDS".Before starting the text, look up all “KEY WORDS” in the terminology to obtain a basic understanding of whatthe subject area will be. DO NOT SKIP THIS STEP!! It will be your best friend and loyal helper from nowuntil after the exam and beyond.
Enjoy!
RETCY and Staff
USING TERMINOLOGY
To look up each word listed below in the TERMINOLOGY section, click on the [+] next to"Terminology" on the left side of your screen. Next, click on the [+] next to the first letter of theword you are looking for. Scroll down to the word, click and the definition will appear. Toreturn to list of keywords "Scroll" down and click on "Key Words" on the left margin.
You may look up as many words/phrases as you choose from within the program.
REAL ESTATE TERMINOLOGY
a.k.a.
"Also known as"; pertains to a persons name; an alias.
REAL ESTATE TERMINOLOGY
A.L.T.A. TITLE POLICY
American Land Title Association:. Covers the insured for thestandard exception in a title policy (i.e., mechanic lien, tax liens,encumbrances, easements, rights of parties in possession, etc.).
REAL ESTATE TERMINOLOGY
A.M.O.
Accredited Management Organization.
REAL ESTATE TERMINOLOGY
APR (ANNUAL PERCENTAGE RATE)
A term used in the “Truth in Lending Act”. It represents therelationship of the total finance charge (interest, discount points,origination fees, loan broker commission, etc.) to the amount of theloan.
REAL ESTATE TERMINOLOGY
ABANDONMENT
Voluntary surrender or relinquishing possession of real property,without vesting interest in another person.
REAL ESTATE TERMINOLOGY
ABLE
Able refers to being financially able to complete a contract.
REAL ESTATE TERMINOLOGY
ABSENTEE OWNER
A property owner who resides at a distance from the property;typically, relying on a property manager to manage his investment.
REAL ESTATE TERMINOLOGY
ABSTRACT OF JUDGMENT
Summary of a court order which creates a general lien upon real andpersonal property of a judgment debtor in the county where recorded.
REAL ESTATE TERMINOLOGY
ABSTRACT OF TITLE
Summary or condensation of the essential parts of all recordedinstruments which affect a particular piece of real estate, arranged inthe order in which they were recorded.
REAL ESTATE TERMINOLOGY
ACCELERATION CLAUSE
A clause in a mortgage, land purchase contract or lease stating that,upon default of any terms of original contract, the balance of theobligation should at once become due and payable. See Finance
REAL ESTATE TERMINOLOGY
ACCEPTANCE
Voluntarily agreeing to the price and terms of an offer. Offer andacceptance create a contract. See Contracts & Regs - PracticalApplications
REAL ESTATE TERMINOLOGY
ACCESS RIGHT
A property owner's right to have ingress and egress.
REAL ESTATE TERMINOLOGY
ACCORD & SATISFACTION
An agreement by a creditor to accept something less, or different,than the creditor believes they are entitled; acceptance by thecreditor constitutes satisfaction.
REAL ESTATE TERMINOLOGY
ACCOUNTS RECEIVABLE
Monies earned, but not yet received.
REAL ESTATE TERMINOLOGY
ACCRETION
Gradual increase of land on a shore or bank of a river by action ofthe water or wind.
REAL ESTATE TERMINOLOGY
ACCRUAL METHOD
An accounting method of reporting income and expenses for a givenperiod, although such income and expenses have not actually beenreceived or paid. It is the right to receive, not the actual receipt, thatdetermines the inclusion of the amount of gross income. Opposite ofCash Method.
REAL ESTATE TERMINOLOGY
ACCRUED
Accounting entries that have accumulated over a period of time suchas accrued depreciation, accrued expenses, or accrued interest,even though they may not have actually been paid.
REAL ESTATE TERMINOLOGY
ACCRUED DEPRECIATION
Depreciation which has accumulated over a period of time. SeeValuation Appraisal
REAL ESTATE TERMINOLOGY
ACKNOWLEDGMENT
A formal declaration made before a duly authorized officer, usually anotary public, by a person who has signed a document.
REAL ESTATE TERMINOLOGY
ACQUISITION COST
Costs of acquiring property, including purchase price, closing costs,appraisal fees, loan origination fees, finance charges, title insurance,etc.
REAL ESTATE TERMINOLOGY
ACQUISITIONS
The act or process by which a person attains or procures property.
REAL ESTATE TERMINOLOGY
ACRE
Any measure of land equaling 43,560 square feet of land area. (Asquare acre is approximately 209' x 209'.)
REAL ESTATE TERMINOLOGY
ACRE FOOT
A term used in measuring volume of water equal to the quantity ofwater required to cover 1 acre 1 foot in depth, or 43,560 cubic feet.
REAL ESTATE TERMINOLOGY
ACTION OF THE SUN
Consideration in the selection of a retail store; the shadiest sides ofthe street (south and west) are more desirable.
REAL ESTATE TERMINOLOGY
ACTION TO QUIET TITLE
A court action to remove any interest or claim in, or to, the title to realproperty.
REAL ESTATE TERMINOLOGY
ACTIVE CAPITAL INVESTMENT
Any investment that requires action on the part of the investor toachieve maximum gain, such as rental real estate.
REAL ESTATE TERMINOLOGY
ACTIVE INVESTOR
An investor invests capital, plus takes an active role managing theinvestment.
REAL ESTATE TERMINOLOGY
ACTUAL AGE
Chronological age.
REAL ESTATE TERMINOLOGY
ACTUAL NOTICE
To inform, or express information, of a fact.
REAL ESTATE TERMINOLOGY
ADD
The uniting of two or more numbers in one sum. See Math
REAL ESTATE TERMINOLOGY
ADDENDUM
A thing that is added or to be added; a list or section consisting ofadded material. In Real Estate, addendum generally refers to termsor provisions that are added to or changed 1) with respect to analready existing contract or 2) with respect to the initial preparation ofa standard contract form.
NOTE: The substance of an addendum must contain the threefundamental elements of a contract - offer, acceptance,and consideration.
REAL ESTATE TERMINOLOGY
ADDITIONAL PROVISIONS
Refers to the preprinted standard clause, by the same name, thatappears near the end of most of the Colorado Real EstateCommission-approved contract forms. This clause contains blankspace that allows the parties to insert only such additional terms,provisions, representations, or acknowledgments as have beennegotiated by the parties and that pertain specifically to thetransaction governed by the contract itself.
NOTE: See Commission Rule F, Commission Position #17 (CP-17), entitled “Statement of Policy Concerning Rule F,”sections 5, 8(f), 9, and the March 1997 Guidelines for theUse of Addenda and Additional Provisions.
REAL ESTATE TERMINOLOGY
ADJUSTABLE RATE MORTGAGE (ARM)
A loan with rates and terms that may change at specified times(usually one year), either up or down, a specified amount (usuallyone percent), and normally tied to a financial index of some kind,such as the one year T-Bill rate. See Finance
REAL ESTATE TERMINOLOGY
ADJUSTED COST BASIS
Referring to accounting practice, the original cost basis of a propertyreduced by certain expenses (depreciation, etc.) and increased bycertain capital improvement costs. The amount of gain or lossrecognized upon sale of property is computed by subtracting theadjusted basis on the date of sale from the net proceeds of sale.
REAL ESTATE TERMINOLOGY
ADJUSTED SALES PRICE
Referring to the sales comparison, the resulting dollar figure on acomparable sale after adjustments are made.
REAL ESTATE TERMINOLOGY
ADJUSTMENTS
Referring to real estate appraisal increases or decreases the marketvalue of a property in comparison to the subject property to adjust fora feature (or features) that the subject property has or does not have.
REAL ESTATE TERMINOLOGY
ADMINISTRATOR
Person appointed by the probate court to administer the estate of adeceased person who left no will. See INTESTATE.
REAL ESTATE TERMINOLOGY
ADMINISTRATRIX
A female administrator.
REAL ESTATE TERMINOLOGY
AD VALOREM
Latin for "according to valuation", usually referring to a tax orassessment. Real property tax is an ad valorem tax, based on theassessed valuation of the property. See Government Controls
REAL ESTATE TERMINOLOGY
ADVANCE
Transfer of funds from lender to a borrower in advance on a loan.
REAL ESTATE TERMINOLOGY
ADVANCE COMMITMENT
The institutional investor's prior agreement to provide long termfinancing upon completion of construction.
REAL ESTATE TERMINOLOGY
ADVANCE FEE
Money demanded or collected from the owner of a businessopportunity to pay for promotional services, in the form of advertisingin a publication devoted to describing properties available for sale orlease.
REAL ESTATE TERMINOLOGY
ADVERSE POSSESSION
The right of an occupant of land to acquire title against the realowner, where possession has been actual, continuous, hostile,visible and distinct for the statutory period. See Real Property
REAL ESTATE TERMINOLOGY
AFFIDAVIT
A written statement of facts sworn to, or affirmed by, oath before anauthorized official (usually a notary public).
REAL ESTATE TERMINOLOGY
AFFIDAVIT OF TITLE
A statement, in writing, made under oath by seller or grantor,acknowledged before a Notary Public in which the affiant identifieshimself and his marital status, certifying that since the examination oftitle on the contract date there are no judgments, bankruptcies ordivorces, no unrecorded deeds, contracts, unpaid repairs orimprovements or defects of title known to him; and that he is inpossession of the property.
REAL ESTATE TERMINOLOGY
AFFIRM
To confirm, to aver, to ratify, to verify.
REAL ESTATE TERMINOLOGY
AFFIRMATION
A solemn declaration by a person whose religious beliefs forbid thetaking of an oath.
REAL ESTATE TERMINOLOGY
AFTER TAX RETURN
The net return of an investment after all expenses, etc., have beendeducted from the sales price, including taxpayer's income taxexpense.
REAL ESTATE TERMINOLOGY
AGENCY
A legal relationship created by agreement or contract between twolegal persons whereby one (the “agent”) is authorized by the other(the “principal”) to do or perform certain acts for, on behalf of, and inthe place of the principal. In Real Estate, the most common agencyrelationship is that between the property owner (principal) and a realestate broker (agent).
NOTE: Agency creates a fiduciary relationship between theprincipal and the agent, with accompanying legal rights andduties of special trust and confidence. See Contracts &Regs - Contract Agency
REAL ESTATE TERMINOLOGY
AGENT
One (person, partnership, corporation, etc.) who, by agreement withanother (the “principal”) has the legal power and authority to act for,on behalf of, and in place of the principal with respect to theperformance of certain acts. See Contract Agency
REAL ESTATE TERMINOLOGY
AGREEMENT
A contract. Mutual assent between two or more parties
REAL ESTATE TERMINOLOGY
AGREEMENT FOR SALE AND PURCHASE
See CONDITIONAL SALES CONTRACT.
REAL ESTATE TERMINOLOGY
AGREEMENT OF SALE
See CONDITIONAL SALES CONTRACT.
REAL ESTATE TERMINOLOGY
AIR RIGHTS
The ownership of the right to use, control or occupy the air spaceover a designated property.
REAL ESTATE TERMINOLOGY
ALIENATE
Transferring estate or interest in property to another.
REAL ESTATE TERMINOLOGY
ALIENATION
See ALIENATE.
REAL ESTATE TERMINOLOGY
ALIENATION CLAUSE
A special type of acceleration clause, which demands payment of theentire loan balance upon sale or other transfer of the title. SeeFinance
REAL ESTATE TERMINOLOGY
ALL-INCLUSIVE TRUST DEED
See WRAP AROUND MORTGAGE.
REAL ESTATE TERMINOLOGY
ALLODIAL TENURE
A real property ownership system, wherein ownership may becomplete except for those rights held by government. Allodial is incontrast to feudal tenure.
REAL ESTATE TERMINOLOGY
ALLUVION
That actual increase of soil on a shore or bank of a river which isadded by the process of accretion.
REAL ESTATE TERMINOLOGY
AMBULATORY
Changeable or variable. Used to designate a type of will in which theterms are changeable at the option of the testator.
REAL ESTATE TERMINOLOGY
AMEND/EXTEND AGREEMENT
The term “Amend/Extend Agreement” is used to refer to either of thetwo Commission-approved forms discussed below.
Colorado Real Estate Commission Rule F-4 requires that a realestate broker use a Commission-approved form whenever it isappropriate for the broker to prepare an amendment to, or anextension of, 1) an existing Contract to Buy and Sell Real Estate, or2) a contract with a real estate broker.
1) Agreement to Amend/Extend Contract (Form No. AE41-9-00). Foruse in preparing an amendment to, or extension of a Contract toBuy and Sell Real Estate (Buyer and Seller are the parties to thiscontract).
2) Agreement to Amend/Extend Contract with Broker (Form No.AE42-7-96). For use in preparing an amendment to, or extensionof, a contract with a real estate broker (Broker is one party to thiscontract and either Buyer or Seller may be other party, i.e. ListingContract, Exclusive Right-to-Buy Contract).
NOTE: The original contract to which an Amend/Extend Agreementrefers continues to completely govern the contractualrelationship of the parties to the contract, except withrespect to the provisions of the Amend/Extend Agreement.
REAL ESTATE TERMINOLOGY
AMENITIES
The pleasures of the property, such as good neighborhood, schools,parks, playgrounds, etc.
REAL ESTATE TERMINOLOGY
AMERICAN INSTITUTE OF REAL ESTATE APPRAISERS
A trade association of real estate appraisers.
REAL ESTATE TERMINOLOGY
AMORTIZATION
Repayment of debt in equal periodic payments of principal andinterest, rather than interest only payments. See Math
REAL ESTATE TERMINOLOGY
AMORTIZATION SCHEDULE
A table showing the amounts of principal and interest due at regularintervals or various loan amounts, over varied loan terms, at variousinterest rates.
REAL ESTATE TERMINOLOGY
AMORTIZED LOAN
A loan that is completely paid off, interest and principal, by a seriesof regular payments that are equal or nearly equal. Also called aLevel Payment Loan.
REAL ESTATE TERMINOLOGY
ANCHOR TENANT
The key tenant in a commercial property. Since the quality of thetenant usually dictates the size of the mortgage that can be securedfor development purposes, a large national firm is most desirable.
REAL ESTATE TERMINOLOGY
ANIMAL UNIT (A.U.)
The grazing capacity of land to properly sustain one animal andoffspring, if any, for one year.
REAL ESTATE TERMINOLOGY
ANNEXATION
An addition to a property (real or personal) by the act of attachinganother thing to the property. Example: Attaching personal property to real property or real property to real property.
REAL ESTATE TERMINOLOGY
ANNUAL MORTGAGE CONSTANT
See CONSTANT.
REAL ESTATE TERMINOLOGY
ANNUAL PERCENTAGE RATE (APR)
The yearly interest percentage of a loan, as expressed by the actualrate of interest paid. For example: 6% add-on interest would bemuch more than 6%. The A.P.R. is disclosed as a requirement offederal truth in lending statutes.
REAL ESTATE TERMINOLOGY
ANNUL
See RESCIND.
REAL ESTATE TERMINOLOGY
ANTICIPATION, PRINCIPLE OF
Affirms that value is created by anticipated benefits to be derived inthe future.
REAL ESTATE TERMINOLOGY
APARTMENT BUILDING (HOUSE)
A building containing two or more separate dwelling units forpermanent tenants who rent or lease them.
REAL ESTATE TERMINOLOGY
APPARENT AUTHORITY
In the law of agency, refers to the authority that an agent has to actfor the principal not as a result of the agreement between the agentand the principal, but rather as a result of statements, actions, orother behavior by the principal that would cause a third-party toreasonably believe that the agent has that certain authority to act forthe principal. (The agent’s authority is “apparent” from the principal’sactions or words).
The legal significance of apparent authority is that the principal willnot be allowed to deny that the agent had the “apparent” authorityand will, as a result, be held liable for the agent’s actions on behalf ofthe principal so long as those actions are within the scope of(consistent with) that “apparent” authority.
NOTE: Remember, an agency relationship is created by agreement(contract) between the agent and the principal. Actual orreal authority (of the agent to act for the principal) is thatauthority flowing from the “actual” agreement of the parties.
REAL ESTATE TERMINOLOGY
APPORTION
To prorate charges to each party in a contract, charging each partyonly their proportionate share.
REAL ESTATE TERMINOLOGY
APPRAISAL METHOD
Generally, the three major methods of appraisal: Cost Approach,Income Approach, and Sales Comparison Approach.
REAL ESTATE TERMINOLOGY
APPRAISAL
An opinion of value based upon a factual analysis. Note: Anappraisal is an estimate, not a determination of value. See ValuationAppraisal
REAL ESTATE TERMINOLOGY
APPRAISAL PROCESS
An organized and systematic program for estimating real propertyvalue.
REAL ESTATE TERMINOLOGY
APPRAISAL REPORT
A report containing an estimate of property value and the data onwhich the estimate is based.
REAL ESTATE TERMINOLOGY
APPRAISER
One qualified by education, training and experience who is hired toestimate the value of real and personal property based onexperience, judgment, facts, and use of formal appraisal processes.
REAL ESTATE TERMINOLOGY
APPRAISAL INSTITUTE
A trade association of real estate appraisers.
REAL ESTATE TERMINOLOGY
APPRECIATION
An increased value of property due to either a positive improvementof the area or the elimination of negative factors. The opposite ofdepreciation. See Math
REAL ESTATE TERMINOLOGY
APPROPRIATION (OF WATER)
A legal term, designating the act or acts involved in the taking andreducing to personal possession of water occurring in a stream orother body of water, and of applying such water to beneficial uses orpurposes.
REAL ESTATE TERMINOLOGY
APPURTENANCE
The rights, privileges and improvements that belong to, and aretransferred with, the property, but that are not actually "property".
REAL ESTATE TERMINOLOGY
APPURTENANT
A part of, belonging to, annexed to (i.e., the barn is appurtenant tothe house).
REAL ESTATE TERMINOLOGY
ARCHITECT
A person whose profession is designing buildings, drawing up plans,and generally supervising construction of the building.
REAL ESTATE TERMINOLOGY
ARCHITECTURAL STYLE
Generally, the appearances and character of a building's design andconstruction.
REAL ESTATE TERMINOLOGY
ARRANGER
A person who structures extension of consumer credit, which is, infact, granted. See TRUTH-IN-LENDING.
REAL ESTATE TERMINOLOGY
ARREARS
Late or delinquent paying a debt. Not current. See Closings -Recordkeeping - Settlement Closings
REAL ESTATE TERMINOLOGY
ARELLO
The abbreviation for the National Association of Real Estate LicenseLaw Officials.
REAL ESTATE TERMINOLOGY
ARTIFICIAL PERSON
A corporation or other legally recognized entity.
REAL ESTATE TERMINOLOGY
"AS IS"
No guarantees are included. It is being purchased exactly as found.
REAL ESTATE TERMINOLOGY
ASKING PRICE
The price at which the seller is offering property for sale. Theeventual selling price may be less, or more, after negotiation with abuyer.
REAL ESTATE TERMINOLOGY
ASSEMBLAGE
The act of combining two or more parcels, which results in somevalue greater than the sum of the individual parcels. The increase invalue is termed plottage or plottage increment.
REAL ESTATE TERMINOLOGY
ASSENT
See CONSENT.
REAL ESTATE TERMINOLOGY
ASSESSED VALUE
Value placed on property for the purpose of computing real propertytaxes. Percentage of Market Value. See Math
REAL ESTATE TERMINOLOGY
ASSESSED VALUATION
The value of real property established by county and townshipassessors for the purpose of computing real property taxes.
REAL ESTATE TERMINOLOGY
ASSESSMENT
(1) The estimate of value of property for tax purposes. (2) A levyagainst property in addition to general taxes. Usually forimprovements such as streets, sewers, etc.
REAL ESTATE TERMINOLOGY
ASSESSMENT ROLLS
Public records of all properties in a given area.
REAL ESTATE TERMINOLOGY
ASSESSOR
A public official who determines assessed valuation of property fortax purposes. Note: Assessor does not determine tax rate.
REAL ESTATE TERMINOLOGY
ASSETS
Anything the borrower owns: cash, equities, securities, etc., includedon lender's financial report.
REAL ESTATE TERMINOLOGY
ASSIGN
To transfer over to another any claim, right or title to property.
REAL ESTATE TERMINOLOGY
ASSIGNEE
The person receiving the right or property being assigned(transferred).
REAL ESTATE TERMINOLOGY
ASSIGNMENT
The act of transferring property itself, or any rights or interests inproperty, to another. Pertains to all property whether real or personal. See Closings - Recordkeeping - Settlement Closings - CurrentLegal Issues - Contract Agency
REAL ESTATE TERMINOLOGY
ASSIGNMENT OF RENTS CLAUSE
A clause in a trust deed or mortgage, which gives the beneficiary theright to collect rents of the secured property in the event of a default.
REAL ESTATE TERMINOLOGY
ASSIGNOR
The giver of a right or property being assigned (transferred).
REAL ESTATE TERMINOLOGY
ASSOCIATION OF UNIT OWNERS
The unit owners of a condominium acting as a group for theadministration of the project, in accordance with the condominiumdeclaration and bylaws.
REAL ESTATE TERMINOLOGY
ASSUME & AGREE TO PAY
An agreement to become personally liable for the terms andconditions of a mortgage, including the payments.
REAL ESTATE TERMINOLOGY
ASSUMABLE MORTGAGE
One that does not contain an alienation clause.
REAL ESTATE TERMINOLOGY
ASSUMED NAME
A name taken or by which a person may be identified, other than hislegal name.
REAL ESTATE TERMINOLOGY
ASSUMPTION AGREEMENT
An undertaking or adoption of a debt or obligation primarily restingupon another person.
REAL ESTATE TERMINOLOGY
ASSUMPTION FEE
A lender's charge for changing over and processing new records fora new owner who is assuming an existing loan.
REAL ESTATE TERMINOLOGY
ASSUMPTION OF MORTGAGE
Agreement by a buyer to assume the liability under an existing notesecured by a mortgage or deed of trust. The lender must usuallyapprove the new debtor in order to release the existing debtor(usually the seller) from liability. See Closings - Recordkeeping -Settlement Closings
REAL ESTATE TERMINOLOGY
ATTACHMENT
Seizure of property by court order to have it available to satisfy ajudgment.
REAL ESTATE TERMINOLOGY
ATTEST
To affirm to be true or genuine; an official act establishingauthenticity.
REAL ESTATE TERMINOLOGY
ATTORNEY-IN-FACT
One who is authorized to perform certain acts for another under apower of attorney. Power of attorney may be limited to a specific actor acts, or be general. See Contract Agency - Contracts & Regs
REAL ESTATE TERMINOLOGY
ATTORNEY'S OPINION
In real estate, the written opinion of an attorney-at-law regarding themarketability of title to real property based upon an examination ofthe abstract of title or the records in the county clerk and recorder'soffice.
REAL ESTATE TERMINOLOGY
ATTORNMENT
When a renter formally agrees to become the tenant of a successorlandlord.
REAL ESTATE TERMINOLOGY
ATTRACTIVE NUISANCE
Anything on a property which may attract small children, and isdangerous to them. Reasonable care must be used to prevent injuryto the children.
REAL ESTATE TERMINOLOGY
AUTHORIZATION TO SELL
A listing contract whereby an agent (Broker) is employed by a sellerto locate a buyer for a property.
REAL ESTATE TERMINOLOGY
AVULSION
The loss of land when a sudden or violent action of nature results inits washing away.
REAL ESTATE TERMINOLOGY
AZIMUTH
An azimuth of a boundary line is the direction of the line in relation toa north-south line or median, or the angle between a north-south lineand the boundary line measured from the north point in the northernhemisphere and the south point in the southern hemisphere. Everyline has two azimuths, depending on the direction one looks downthe line. Thus, the azimuth of line A B is 240 degrees, but theazimuth of line B A is 60 degrees.
REAL ESTATE TERMINOLOGY
B.T.U.
British Thermal Unit. The quantity of heat required to raise the tem-perature of one pound of water one degree Fahrenheit, at sea level.
REAL ESTATE TERMINOLOGY
BACKFILL
The replacement of excavated earth into a hole or against astructure.
REAL ESTATE TERMINOLOGY
BALANCE, PRINCIPLE OF
Holds that value is created and maintained in proportion to theequilibrium attained in the amount and location of essential uses ofreal estate.
REAL ESTATE TERMINOLOGY
BALANCE SHEET
A financial statement that indicates what assets a person orcorporation owns, and how those assets are financed in the form ofliability or owner's equity.
REAL ESTATE TERMINOLOGY
BALLOON MORTGAGE
One in which the scheduled payment will not fully amortize the loanover the mortgage term. Therefore, it requires a final pay called aballoon payment, larger than the uniform payments, to fully satisfythe debt. See Finance
REAL ESTATE TERMINOLOGY
BALLOON PAYMENT
The final payment of a note or obligation, which is normally largerthan the previous installment payments, and which repays the debtin full.
REAL ESTATE TERMINOLOGY
BAND OF INVESTMENT
A method of developing an interest or capitalization rate by applyingmortgage and equity rates of comparable properties.
REAL ESTATE TERMINOLOGY
BANKRUPTCY
Financially insolvent, unable to pay debts. Liabilities exceed assets. May be voluntary or involuntary.
REAL ESTATE TERMINOLOGY
BARE (NAKED) LEGAL TITLE
Title in name only - No benefits of ownership.
REAL ESTATE TERMINOLOGY
BARGAIN AND SALE DEED
A form of deed with or without covenants of title.
REAL ESTATE TERMINOLOGY
BASE FEE
See DEFEASABLE FEE.
REAL ESTATE TERMINOLOGY
BASE LINE
Survey line running east and west, which is used in establishingtownship boundaries.
REAL ESTATE TERMINOLOGY
BASE AND MERIDIAN
Imaginary lines used by surveyors to find and describe the locationof private or public lands.
REAL ESTATE TERMINOLOGY
BASIS
The value of the property for purposes of depreciation.
REAL ESTATE TERMINOLOGY
BEARING
An angle of from 0o to 90o in relation to true North or South, fixingdirection. Used in surveying. The Bearing System
REAL ESTATE TERMINOLOGY
BEARING WALL OR PARTITION
A wall or partition supporting any vertical load in addition to its ownweight.
REAL ESTATE TERMINOLOGY
BEFORE TAX RETURN
The net return of an investment after all expenses, etc., have beendeducted from the sales price, except taxpayer's income taxesexpenses.
REAL ESTATE TERMINOLOGY
BENCH MARKS
A location indicated on a durable marker by surveyors.
REAL ESTATE TERMINOLOGY
BENEFICIAL TITLE
The equitable title to real property retained by a mortgagor or trustorconveying the legal title to secure a mortgage debt.
REAL ESTATE TERMINOLOGY
BENEFICIARY
One who receives the income from a trustor/grantor. The lender ona note and trust deed transaction.
REAL ESTATE TERMINOLOGY
BENEFICIARY'S STATEMENT
Statement of a lender, giving the remaining principal balance andother information concerning the loan. Usually obtained when anowner wishes to sell or refinance. Referred to as a "BeneStatement", "Offset Statement" or "Payoff Statement".
REAL ESTATE TERMINOLOGY
BEQUEATH
A transfer of personal property by will.
REAL ESTATE TERMINOLOGY
BEQUEST
Personal property which is transferred by will.
REAL ESTATE TERMINOLOGY
BETTERMENT
An improvement upon real property, which increases the propertyvalue, and is considered as a capital asset, as distinguished fromrepairs or replacements, where the original character or cost isunchanged.
REAL ESTATE TERMINOLOGY
BILATERAL CONTRACT
A contract wherein one party gives a promise or promises inexchange for a promise or promises from the other party (as in “ Ipromise to transfer title to my house to you and you promise to payme $250,000.00 in exchange). Once the contract is created, bothparties are legally bound to perform their promise/s. Failure of eitherparty to perform any promise constitutes a breach of the contract forwhich the law provides a remedy. See Contract Agency
REAL ESTATE TERMINOLOGY
BILL OF SALE
Document used to transfer title (ownership) of personal property. See Practical Applications
REAL ESTATE TERMINOLOGY
BINDER
An agreement to consider a down payment for the purchase of realestate as evidence of good faith on the part of the purchaser. Also, anotation of coverage on an insurance policy, issued by an agent, andgiven to the insured prior to issuing of the policy.
REAL ESTATE TERMINOLOGY
BLACKTOP
Asphalt paving used in streets and driveways.
REAL ESTATE TERMINOLOGY
BLANKET MORTGAGE (OR TRUST DEED)
A mortgage or trust deed which covers more than one lot or parcel ofreal estate.
REAL ESTATE TERMINOLOGY
BLIGHTED AREA
A term once popular in urban renewal, referring to a run-down area. A declining area, in which real property values are seriously affectedby destructive economic forces, infiltration of lower social andeconomic classes of inhabitants, and/or rapidly depreciatingbuildings.
REAL ESTATE TERMINOLOGY
BLIND ADVERTISING
Failure to disclose identity of advertiser. Normally prohibited for realestate licensees.
REAL ESTATE TERMINOLOGY
BLOCKBUSTING
Illegal, discriminatory practice, whereby a person is induced byanother to enter into a real estate transaction for the financial benefitof the first person, who represents that a racial change in theneighborhood may result in the lowering of the property values.
REAL ESTATE TERMINOLOGY
BLUE SKY
See GOOD WILL.
REAL ESTATE TERMINOLOGY
BOARD FOOT
A unit of measurement of lumber; one foot wide, one foot long, oneinch thick; 144 cubic inches.
REAL ESTATE TERMINOLOGY
BOARD OF EQUALIZATION
State agency which (1 supervises county assessors and taxcollectors in order to create uniformity in tax assessment; and (2)collects sales taxes.
REAL ESTATE TERMINOLOGY
BONA FIDE
In good faith, without fraud.
REAL ESTATE TERMINOLOGY
BOOK VALUE
In accounting terms, the value of a property as a capital asset (costplus additions to value, less depreciation).
REAL ESTATE TERMINOLOGY
BOOT
Generally, something given “in addition to” something else. In RealEstate, pertains to the situation wherein two parties are exchangingparcels of real property of unequal values. Boot is money or otherproperty given from one party to another to equalize the total value ofthe exchange.
For example, Joe wants to exchange an apartment building he ownsin Dallas (worth $900,000) for an apartment building that Sharonowns in San Antonio (worth $1,000,000). Sharon says to Joe, I’mokay with this exchange, but you’re going to have to come up withanother $100,000 to even this out and make it fair to me.” Joeagrees to also give Sharon his $50,000 Mercedes and $50,000 cashto equalize the values in the exchange. Sharon agrees. In this case,the Mercedes and the cash constitute “boot.” See Contract Agency
REAL ESTATE TERMINOLOGY
BOUNDARIES
The limit, or perimeter of, a parcel of land according to its legaldescription.
REAL ESTATE TERMINOLOGY
BOUNDARY
A separation, natural or artificial, which marks the division of twocontiguous properties.
REAL ESTATE TERMINOLOGY
BOUNDS
Refers to direction, based on terminal points and angles.
REAL ESTATE TERMINOLOGY
BRACKETING
The selecting of a value that falls within the highs and lows of recentselling prices of comparable homes. Used in the Sales ComparisonApproach.
REAL ESTATE TERMINOLOGY
BRANCH OFFICE
Any secondary place of business apart from the principal or mainoffice from which real estate business is conducted.
REAL ESTATE TERMINOLOGY
BREACH\ (OF CONTRACT)
When a party to a contract fails to perform (or otherwise violates) anyof the terms, conditions, obligations, or promises in the contract,without a legally recognized excuse for the failure or violation.
NOTE: The law provides various remedies for the “wronged” party,usually dependent upon the nature, severity, andcircumstances of the breach.
See Contract Agency
REAL ESTATE TERMINOLOGY
BRIDGE LOAN
Usually a short-term loan covering the period of time between theend of a construction loan and the permanent or "take-out" loan.
REAL ESTATE TERMINOLOGY
BROKER
One who acts as an intermediary between parties to a transaction. Areal estate broker is a properly licensed party (individual, corporation,or partnership) who, for a valuable consideration or promise ofconsideration, serves as a special agent to others to facilitate thesale or lease of real property. Also referred to as “Qualifying Broker”and “Employing Broker”.
REAL ESTATE TERMINOLOGY
BROKER, REAL ESTATE
A natural or legal person, who for compensation or in expectation ofcompensation, acts for another in a real estate transaction.
REAL ESTATE TERMINOLOGY
BROKERAGE
The act of bringing together principals (buyer-seller, landlord-tenant,etc.) for a fee or commission, rather than acting as a principal.
REAL ESTATE TERMINOLOGY
BROKERAGE RELATIONSHIPS
The establishment of the working relationship a licensee has with acustomer or client (i.e., agent or Transaction-Broker, Facilitator). Anagent "represents," a Transaction-Broker "helps" or "assists". SeeAGENCY, TRANSACTION-BROKER.
REAL ESTATE TERMINOLOGY
BROWNSTONE
A row house constructed with reddish-brown sandstone; usually astructure constructed during the nineteenth century.
REAL ESTATE TERMINOLOGY
BUDGET MORTGAGE
Payment includes reserves for tax, insurance, etc.
REAL ESTATE TERMINOLOGY
BUILDING CODES
A comprehensive set of laws, which control the construction ofbuildings, including design, materials used, construction, use, repair,remodeling, and other similar factors.
REAL ESTATE TERMINOLOGY
BUILDING LINE
A line set by law a certain distance from a street line, in front ofwhich, an owner cannot build on his lot.
REAL ESTATE TERMINOLOGY
BUILDING, MARKET VALUE OF
The sum of money which the presence of that structure adds to, orsubtracts from, the value of the land it occupies. Land: valued onthe basis of highest and best use.
REAL ESTATE TERMINOLOGY
BUILDING PAPER
A heavy waterproofed paper used as sheathing in wall or roofconstruction as a protection against air passage and moisture.
REAL ESTATE TERMINOLOGY
BUILDING RESIDUAL TECHNIQUE
An income capitalization technique used to isolate the value of abuilding.
REAL ESTATE TERMINOLOGY
BUILDING RESTRICTIONS
Prohibition by a government body (zoning restriction) or a privateparty (a former owner) against construction of certain structures on aproperty.
REAL ESTATE TERMINOLOGY
BUILT-IN
Cabinets, or other features, built as part of the house.
REAL ESTATE TERMINOLOGY
BULK SALES ACT
Uniform Commercial code that regulates the sale of inventory of abusiness for protection of the seller's creditors.
REAL ESTATE TERMINOLOGY
BUNDLE OF RIGHTS
The rights or interests that a person has in a thing; the exclusive rightof a person to control, use, possess, enjoy, and dispose of real orpersonal property (CUPED).
REAL ESTATE TERMINOLOGY
BUNGALOW
A small, one or one-and-one-half story house.
REAL ESTATE TERMINOLOGY
BUSINESS OPPORTUNITY
The term used to describe a business or a going concern andincludes the stock-in-trade, fixtures and good-will.
REAL ESTATE TERMINOLOGY
BUYDOWN
A method used to lower the monthly payments on a loan, by buyingdown the interest rate charged for a period of time, such as one tothree years.
REAL ESTATE TERMINOLOGY
BUYER AGENCY
The Brokerage Relationship established when a buyer contracts witha real estate broker to have that broker represent only the buyer andthe buyer’s interests in a real estate transaction. The buyer is theprincipal and the broker is the agent in this agency relationship. Itcreates a fiduciary relationship grounded in special trust andconfidence. Accordingly, the broker owes additional and greaterduties to the buyer than when acting as a transaction broker.
NOTE: This relationship is established, in Colorado, by theexecution (signing by both the buyer and the broker) of theCommission-approved Form No. BC17-6-01, ExclusiveRight-to-Buy Contract (Buyer Agency).
See Contracts & Regs
REAL ESTATE TERMINOLOGY
BUYER MARKET
This occurs when the supply exceeds the demand. There are morehouses for sale than there are buyers available to purchase them.
REAL ESTATE TERMINOLOGY
BUYER’S AGENT
A real estate broker who has agreed with a buyer to represent onlythat buyer and that buyer’s best interests in a real estate transaction. Also referred to as a BUYER’S BROKER. See BUYER AGENCY.
This term is specifically defined in the Colorado Revised Statutes,Section 12-61-802 (4) (a).
REAL ESTATE TERMINOLOGY
BUY/SELL CONTRACT
The written agreement used to purchase or lease real estate inColorado, where the parties agree to do certain things.
REAL ESTATE TERMINOLOGY
C.C.& R.
Covenants, Conditions, and Restrictions. Normally found in a deed.
REAL ESTATE TERMINOLOGY
C.P.M.
See CERTIFIED PROPERTY MANAGER.
REAL ESTATE TERMINOLOGY
C.R.B.
Certified Residential Broker.
REAL ESTATE TERMINOLOGY
C.R.V.
See CERTIFICATE OF REASONABLE VALUE.
REAL ESTATE TERMINOLOGY
CALLED LOAN
A loan that is due and payable at the demand of the lender, usuallyas a result of an acceleration or alienation clause.
REAL ESTATE TERMINOLOGY
CAPACITY
See COMPETENT PARTY.
REAL ESTATE TERMINOLOGY
CAPITAL
Money used to create income through investment.
REAL ESTATE TERMINOLOGY
CAPITAL BASE
Investor initiated money in an investment.
REAL ESTATE TERMINOLOGY
CAPITAL EXPENDITURE
Investments of cash or the creation of liability incurred for additionsor betterments; usually land, buildings, machinery and equipment.
REAL ESTATE TERMINOLOGY
CAPITAL GAINS
Gains realized from the sale of capital assets. Generally, thedifference between cost and selling price, less certain deductibleexpenses. Used mainly for income tax purposes. See GovernmentControls
REAL ESTATE TERMINOLOGY
CAPITAL GAINS TAX RATE
The effective rate of taxation on a capital gain.
REAL ESTATE TERMINOLOGY
CAPITAL IMPROVEMENT
Any structure erected as a permanent improvement to real property,an improvement made to add to the value of the property or toextend the useful life of a property.
REAL ESTATE TERMINOLOGY
CAPITAL LOSS
A loss derived from the sale of a capital asset.
REAL ESTATE TERMINOLOGY
CAPITAL RECAPTURE
The systematic, periodic recovery of the amount of principalinvested in a depreciable asset, such as a building.
REAL ESTATE TERMINOLOGY
CAPITAL RECAPTURE PERIOD
The number of years over which a typical investor will permit hiscapital to be extended. Quite frequently, this is said to be the sameas the property's "Remaining Economic Life".
REAL ESTATE TERMINOLOGY
CAPITALIZATION
Determining a present value of income property by converting allfuture benefits, such as tax benefits, cash flow, and reversion into avalue estimate. See Valuation Appraisal
REAL ESTATE TERMINOLOGY
CAPITALIZATION RATE
The percentage (acceptable to an average buyer) used to determinethe value of income property through capitalization. See ValuationAppraisal
REAL ESTATE TERMINOLOGY
CAPITALIZATION RATE, OVER-ALL
An interest rate, plus a recapture rate. The overall capitalization rateis a weighted rate, which combines the interest rate for the land andthe capitalization rate for the building. The "interest rate for the land"is the rate of interest which the value of the land should earn ifinvested. It contains proper provision for interest to the land and tothe building. Recapture of the capital invested in the building over itsestimated remaining economic life is recapture rate. It is the ratedeveloped when a property's net income is divided by its sales price.
Cap Rate = Risk Interest (Return ON investment) (+) RecaptureRate (Return OF investment)
REAL ESTATE TERMINOLOGY
CARRY-BACK (LOAN)
Refers to a note for a part of the purchase price usually secured by ajunior mortgage. The difference in the equity the buyer doesn't haveavailable to pay to the seller.
REAL ESTATE TERMINOLOGY
CASH AT CLOSING
Buyer's agreed upon down payment, plus buyer's closing costs andprepaid items, less original earnest money deposit.
REAL ESTATE TERMINOLOGY
CASH BASIS ACCOUNTING
A method of recognizing revenue and expense when cash isreceived or disbursed rather than when earned or incurred. SeeClosings
REAL ESTATE TERMINOLOGY
CASH DISBURSEMENTS JOURNAL
A record of the disposition of trust funds, held by the broker, in theform of cash or checks.
REAL ESTATE TERMINOLOGY
CASH FLOW
In investment property, the actual cash the investor will receive afterdeduction of operating expenses and debt service (loan payment)from his gross income.
REAL ESTATE TERMINOLOGY
CASH FLOW OR CASH SPENDABLE
The actual annual cash income produced by an investment afterpaying all expenses, including principal and interest payments (debtservice).
REAL ESTATE TERMINOLOGY
CASH METHOD
An accounting method of reporting income in the taxable year, inwhich the income is actually or constructively received and reportingexpenses when actually paid out. Opposite of Accrual Method.
REAL ESTATE TERMINOLOGY
CASH RECEIPTS JOURNAL
A record of all trust funds received.
REAL ESTATE TERMINOLOGY
CASH RESERVE
A money reserve used to smooth out the irregularity of income andexpenses.
REAL ESTATE TERMINOLOGY
CAVEAT EMPTOR
Latin term meaning "Let the buyer beware". The buyer mustexamine his purchase and buy at his own risk.
REAL ESTATE TERMINOLOGY
CENTER OF INFLUENCE
One who, by nature of his relationships, is in a position to swayothers.
REAL ESTATE TERMINOLOGY
CERTIFICATE OF ELIGIBILITY
A statement provided to veterans of military service setting forth theamount of loan guarantee to which they are entitled at that time.
REAL ESTATE TERMINOLOGY
CERTIFICATE OF NO DEFENSE
(1) Estoppel Certificate. (2) A tax certificate, e.g., the CountyTreasurer - when he signs a tax certificate, saying that taxes havebeen paid there is no defense; he cannot come back later and saythat they haven't been paid. Any loss would have to be stood by thecounty.
REAL ESTATE TERMINOLOGY
CERTIFICATE OF OCCUPANCY
A certificate issued by a governmental building department showingthat a building is fit for occupancy.
REAL ESTATE TERMINOLOGY
CERTIFICATE OF PURCHASE
The instrument which the purchaser receives at the time of a tax saleor a foreclosure sale on a deed of trust.
REAL ESTATE TERMINOLOGY
CERTIFICATE OF REASONABLE VALUE (CRV)
Any estimate of value issued by a Veterans Administration appraiser.
REAL ESTATE TERMINOLOGY
CERTIFICATE OF SALE
A certificate issued to the purchaser at a judicial sale, as in the caseof a mortgage foreclosure by the court.
REAL ESTATE TERMINOLOGY
CERTIFICATE OF TAXES DUE
(Estoppel Certificate) A written statement of guaranty of thecondition of the taxes on a certain property made by the CountyTreasurer of the county wherein the property is located.
REAL ESTATE TERMINOLOGY
CERTIFICATE OF TITLE
In areas where an attorney examines abstracts or chains of title, awritten opinion, executed by the examining attorney, stating that titleis vested as stated in the abstract.
REAL ESTATE TERMINOLOGY
CERTIFIED PROPERTY MANAGER (CPM)
A designation granted to Property Managers upon successfulcompletion of specified courses, and written reports. Granted by theINSTITUTE OF REAL ESTATE MANAGEMENT, a part of theNational Association of Realtors.
REAL ESTATE TERMINOLOGY
CERTIFY
To guarantee in writing, written testimony.
REAL ESTATE TERMINOLOGY
CESSION DEED
Used to transfer or dedicate streets or street rights.
REAL ESTATE TERMINOLOGY
CHAIN
A unit of measurement used by surveyors. A chain consists of 100links equal to 66 feet.
REAL ESTATE TERMINOLOGY
CHAIN OF TITLE
A history of all of the documents transferring title to a parcel of realestate, beginning with the document originally transferring title fromthe government to private ownership, and ending with the latestdocument transferring title.
REAL ESTATE TERMINOLOGY
CHANGE, PRINCIPLE OF
Holds that it is the future, not the past, which is of prime importancein estimating value; fundamentally, the law of cause and effect. Subsidiary principles; (1) integration, equilibrium, and disintegration;(2) regression, and (3) progression.
REAL ESTATE TERMINOLOGY
CHARACTER OF SOIL
A distinctive quality or nature of land. The soil may be sandy, adobe,rocky, fertile, etc.
REAL ESTATE TERMINOLOGY
CHATTEL
Items of tangible personal property, transferred by means of a bill-of-sale. See Real Property
REAL ESTATE TERMINOLOGY
CHATTEL MORTGAGE
A personal property mortgage; replaced by Security Agreement.
REAL ESTATE TERMINOLOGY
CHATTEL REAL
Personal property which is closely related to real estate, such as alease.
REAL ESTATE TERMINOLOGY
CHOSE
An article of personal property. "CHOSE IN ACTION" - is intangiblepersonal property (i.e., rights in an instrument). "CHOSE INPOSSESSION" - is tangible personal property (i.e., a desk).
REAL ESTATE TERMINOLOGY
CHRONOLOGICAL AGE
The age of a property measured by the actual number of yearselapsed since the original structure was built.
REAL ESTATE TERMINOLOGY
CIVIL RIGHTS ACT OF 1866
A federal law that prohibits all discrimination of the basis of race.
REAL ESTATE TERMINOLOGY
CLAPBOARD
Boards, usually thicker at one edge, used for siding.
REAL ESTATE TERMINOLOGY
CLIENT
Traditionally, one who employs an attorney. Has loosely been usedto refer to the principal of a real estate agent, insurance agent,stockbroker, etc.
REAL ESTATE TERMINOLOGY
CLOSE OF ESCROW
See CLOSING STATEMENT.
REAL ESTATE TERMINOLOGY
CLOSING
In a real estate transaction, the final procedure, in which documentsare executed and/or recorded, and the sale (or loan) is completed. See Closings - Recordkeeping - Settlement Closings - PracticalApplications
REAL ESTATE TERMINOLOGY
CLOSING COSTS
Expenses incidental to a sale of real estate, such as loan fees, titlefees, appraisal fees, etc.
REAL ESTATE TERMINOLOGY
CLOSING INSTRUCTIONS
The form captioned “Closing Instructions” to be used when it isappropriate for a broker to prepare closing instructions in connectionwith the closing of a real estate transaction.
REAL ESTATE TERMINOLOGY
CLOSING STATEMENT
The statement which lists the financial settlement between buyer andseller, and also the costs each must pay. A separate statement forbuyer and seller is sometimes prepared. See Closings -Recordkeeping - Settlement Closings - Contracts & Regs
REAL ESTATE TERMINOLOGY
CLOUD ON THE TITLE
Condition which affects the clear title to real property.
REAL ESTATE TERMINOLOGY
CODE OF ETHICS
With regard to professions, a code of professional standards,containing aspects of fairness and duty to the profession and thegeneral public.
REAL ESTATE TERMINOLOGY
CODICIL
An addition or change to a will.
REAL ESTATE TERMINOLOGY
CO-OP
See COMMUNITY APARTMENT PROJECT and STOCKCOOPERATIVE PROJECT.
REAL ESTATE TERMINOLOGY
CO-ORDINATE SYSTEM
A method of land description using measurements from anintersection of a defined north-south axis and a defined east-westaxis.
REAL ESTATE TERMINOLOGY
COGNOVIT NOTE
Note authorizing confession of judgment.
REAL ESTATE TERMINOLOGY
COLLAR BEAM
Beam that connects opposing roof rafters above the attic floor.
REAL ESTATE TERMINOLOGY
COLLATERAL
Property given in addition to the personal obligation of the borrower,which is held by the lender as security; that is, to insure theperformance of the obligation.
REAL ESTATE TERMINOLOGY
COLLATERAL SECURITY
A separate obligation attached to a contract to guarantee itsperformance; the transfer of property, or of other contracts orvaluables, to insure the performance of a principal agreement.
REAL ESTATE TERMINOLOGY
COLLUSION
A secret agreement between two or more persons to defraudanother of his rights. See Practical Applications
REAL ESTATE TERMINOLOGY
COLOR OF TITLE
A title that appears to be good, but because of a certain defect, is notvalid (paper title).
REAL ESTATE TERMINOLOGY
COMMENCEMENT OF WORK
The visible beginning of work on real estate. Something happeningthat can be seen.
REAL ESTATE TERMINOLOGY
COMMERCIAL ACRE
That portion of land available to a developer to build on, after streets,sidewalks, parks, etc., have been deducted.
REAL ESTATE TERMINOLOGY
COMMERCIAL PROPERTY
Property which is zoned "commercial" (for business uses). Propertysuch as stores, restaurants, etc., falling between residential andindustrial.
REAL ESTATE TERMINOLOGY
COMMINGLING
To mingle or mix funds held in trust with other funds. See Closings -Recordkeeping - Settlement Closings - Current Legal Issues
REAL ESTATE TERMINOLOGY
A(oSA
COMMISSION
n amount, usually a percentage paid to a real estate brokernormally by seller), for services rendered in connection with the saler exchange of real property. See Closings - Recordkeeping -ettlement Closings - Math - Contracts & Regs - Practicalpplications
REAL ESTATE TERMINOLOGY
COMMISSION REGULATIONS
Regulations adopted by the Real Estate Commission to implementthe administration and enforcement of the Real Estate Law. Theyhave the force and effect of the law itself. See Closings -Recordkeeping - Settlement Closings
REAL ESTATE TERMINOLOGY
COMMITMENT
(1) Title insurance term for the preliminary report issued before theactual policy. Said report shows the condition of title and the stepsnecessary to complete the transfer of title as contemplated by buyerand seller. (2) A written promise to make or insure a loan for aspecified amount and on specified terms.
REAL ESTATE TERMINOLOGY
COMMON AREA
Land or improvements owned in common for the use and benefit ofall property owners and residents.
REAL ESTATE TERMINOLOGY
COMMON EXPENSES
All operating expenses of a condominium development, excludingthose associated with the individual dwelling units, includingoperating and maintenance.
REAL ESTATE TERMINOLOGY
COMMON INTEREST
The undivided ownership percentage in the common elementsbelonging to each condominium apartment used to promote commonexpenses.
REAL ESTATE TERMINOLOGY
COMMON LAW
Body of law that grew from custom, and legally decided cases(English Law).
REAL ESTATE TERMINOLOGY
COMMON WALL
The wall separating two living units (as in condominiums orapartment buildings).
REAL ESTATE TERMINOLOGY
COMMUNITY
A part of a metropolitan area that has a number of neighborhoodsthat have a tendency toward common interests and problems.
REAL ESTATE TERMINOLOGY
COMMUNITY APARTMENT PROJECT
Multiple ownership of an apartment, in which each owner is atenant-in-common, with the right to occupy one of the apartments.
REAL ESTATE TERMINOLOGY
COMMUNITY PROPERTY
Property acquired by husband and wife during marriage, when notacquired as separate property. See Real Property
REAL ESTATE TERMINOLOGY
COMPACTING
Whenever extra soil is added to a lot to fill in low places or to raisethe level of the lot, the added soil is often too loose and soft tosustain the weight of the buildings. Therefore, it is necessary to tampdown the added soil so that it will carry the weight of buildingswithout the danger of their tilting, settling or cracking.
REAL ESTATE TERMINOLOGY
COMPARABLE SALES
Sales which have similar characteristics as the subject property andare used for analysis in the appraisal process.
REAL ESTATE TERMINOLOGY
COMPARABLES
Recently sold properties used in the Sales Comparison Approach toappraisal. Used as comparisons to determine the value of a specificproperty.
REAL ESTATE TERMINOLOGY
COMPARATIVE MARKET ANALYSIS
Appraising the value of a property by comparing the price of similarproperties (comparables) recently sold. The degree of similarity ofthe properties and circumstances of the sale are the importantcharacteristics to consider. See Valuation Appraisal
REAL ESTATE TERMINOLOGY
COMPENSATION
Money, or the equivalent of money, received for services.
REAL ESTATE TERMINOLOGY
COMPETENT PARTY
The ability of a person to be legally qualified to perform certain civilacts. One of the essential elements of a contract.
REAL ESTATE TERMINOLOGY
COMPETITION, PRINCIPLE OF
Holds that profits tend to breed competition, and excess profits tendto breed ruinous competition. See Valuation Appraisal
REAL ESTATE TERMINOLOGY
COMPOUND INTEREST
Interest on the original principal, plus accrued interest.
REAL ESTATE TERMINOLOGY
CONCENTRIC CIRCLE THEORY
That a city will grow outward in concentric circles.
REAL ESTATE TERMINOLOGY
CONCLUSION
The final estimate of value, realized from facts, data, experience, andjudgment.
REAL ESTATE TERMINOLOGY
CONDEMNATION
The act of taking private property, through the exercise of the powerof eminent domain, for public use, upon the payment of a faircompensation. See Valuation Appraisal
REAL ESTATE TERMINOLOGY
CONDITION
A stipulation or qualification in a deed, which, if violated or notperformed, defeats the deed and places the title back in the hands ofthe original grantor. See Real Property
REAL ESTATE TERMINOLOGY
CONDITIONAL SALES CONTRACT
A contract for the sale of real or personal property in whichpossession is delivered to the buyer, title to remain vested in theseller until all the conditions of the contract have been fulfilled. SeeFinance
REAL ESTATE TERMINOLOGY
CONDOMINIUM
A structure of two or more units, the interior space of which areindividually owned; balance of the property (both land and building) isowned in common by the owners of the individual units. The size ofeach unit is measured from the interior surfaces (exclusive of paint orother finishes) of the exterior walls, floors and ceiling. The balanceof the property is called the common area.
REAL ESTATE TERMINOLOGY
CONDOMINIUM DECLARATION
The document which, when recorded, creates a condominium. Alsocalled a “master deed”.
REAL ESTATE TERMINOLOGY
CONDOMINIUM OWNERSHIP
The individual outright ownership of a single unit in a multi-unitproperty, together with an interest in the common elements of thatproperty.
REAL ESTATE TERMINOLOGY
CONDUIT
Usually a metal pipe, into which electrical wiring is installed.
REAL ESTATE TERMINOLOGY
CONFESSION OF JUDGMENT
An entry of judgment upon the debtor's voluntary admission orconfession. Illegal in many states.
REAL ESTATE TERMINOLOGY
CONFISCATION
To seize as forfeiture.
REAL ESTATE TERMINOLOGY
CONFORMITY, PRINCIPLE OF
Holds that the maximum of value is realized when a reasonabledegree of homogeneity of improvements is present. See ValuationAppraisal
REAL ESTATE TERMINOLOGY
CONSENT
To agree to the terms, to approve.
REAL ESTATE TERMINOLOGY
CONSEQUENTIAL DAMAGES
Damages occurring through breach of contract or by adjacentlandowners through adverse neighborhood influence.
REAL ESTATE TERMINOLOGY
CONSIDERATION
Anything of value to induce another to enter into a contract; may bemoney, services, a promise, or love and affection.
REAL ESTATE TERMINOLOGY
CONSPICUOUSNESS
A factor of publicity value. Is of great importance to a businessdependent upon advertising.
REAL ESTATE TERMINOLOGY
CONSTANT
The total annual combined principal and interest payments per$1,000 of mortgage, expressed as a percent. Example - an annualpayment of $9,000 ($750.00 per month) on a $100,000 loan is anannual mortgage constant of 9%. The annual mortgage constant isalways greater than the interest rate, as it also includes amortizationof principal. The annual mortgage constant varies according to theterm of the loan and the interest rate involved. The purpose of theAnnual Mortgage Constant is to remove the distortion caused byhigher interest payments in the beginning years of a mortgage, andto give a true picture of the investment over a period of time, such asa 10 year average.
REAL ESTATE TERMINOLOGY
CONSTRUCTION LOAN
A short-term mortgage used to finance the building of a structure. Provides for progressive payments of the loan proceeds duringerection of the building (also, Interim Loan).
REAL ESTATE TERMINOLOGY
CONSTRUCTIVE EVICTION
Breach of a covenant of warranty of quiet enjoyment, e.g., theinability of a lessee to obtain possession because of a paramountdefect in title, or a condition making occupancy hazardous.
REAL ESTATE TERMINOLOGY
CONSTRUCTIVE NOTICE
Notice given by the public records, or possession.
REAL ESTATE TERMINOLOGY
CONTIGUOUS
Adjoining or touching upon, such as parcels of land next to eachother.
REAL ESTATE TERMINOLOGY
CONTINGENCY
A condition upon which a valid contract is dependent. See PracticalApplications
REAL ESTATE TERMINOLOGY
CONTINUATION STATEMENT
Statement filed with the Secretary of State to extend the time limit ona previously filed financing statement.
REAL ESTATE TERMINOLOGY
CONTOUR
The surface configuration of land.
REAL ESTATE TERMINOLOGY
CONTRACT
A legally enforceable agreement between two or more competentparties or entities who agree to perform, or refrain from performing,certain acts for a consideration. A contract is an enforceablepromise. See Contracts & Regs
REAL ESTATE TERMINOLOGY
CONTRACT FOR DEED
A contract of sale and a financing instrument wherein the selleragrees to convey title when the buyer completes the purchase priceinstallment payments. Also called installment land contract, landcontract and conditional sales contract.
REAL ESTATE TERMINOLOGY
CONTRACT OF SALE
See CONDITIONAL SALES CONTRACT.
REAL ESTATE TERMINOLOGY
CONTRACT RENT
The rent payable as set forth in a lease.
REAL ESTATE TERMINOLOGY
CONTRIBUTION, PRINCIPLE OF
See INCREASING AND DIMINISHING RETURNS. See ValuationAppraisal
REAL ESTATE TERMINOLOGY
CONTROLLER OF THE CURRENCY
A governmental entity, acting in concert with the Department of theTreasury and the Federal Reserve System, to regulate theavailability, flow, and cost of money.
REAL ESTATE TERMINOLOGY
CONSUMER PRICE INDEX (CPI)
An index of the change in prices of various commodities andservices that provides a measure of the rate of inflation.
REAL ESTATE TERMINOLOGY
CONVENTIONAL LOAN
A loan made with real estate as security, and not involvinggovernment participation in the form of insuring (FHA) orguaranteeing (VA) the loan. The lender (institution or private party)looks solely to the credit of the borrower and the security of theproperty to assure payment of the debt. See Finance
REAL ESTATE TERMINOLOGY
CONVERSION
Change from one character or use to another.
REAL ESTATE TERMINOLOGY
CONVEY
To transfer title to property from one person to another.
REAL ESTATE TERMINOLOGY
CONVEYANCE
A document, such as a deed, used to transfer title to property fromone person to another.
REAL ESTATE TERMINOLOGY
COOPERATIVE APARTMENT
A form of apartment ownership. Ownership of shares in acooperative venture which entitles the owner to use, rent, or sell aspecific apartment unit.
REAL ESTATE TERMINOLOGY
COOPERATING BROKER
Usually the selling broker, who assists the listing broker in a realestate transaction.
REAL ESTATE TERMINOLOGY
CO-OWNERSHIP
Title to real property held by two or more persons at the same time. Also called “concurrent ownership”.
REAL ESTATE TERMINOLOGY
CORNER INFLUENCE
The increase in value of a corner lot due to its location.
REAL ESTATE TERMINOLOGY
CORNER INFLUENCE TABLE
A statistical table that may be used to estimate the added value of acorner lot.
REAL ESTATE TERMINOLOGY
CORNER STAKES
Stakes used by a surveyor in a metes and bounds survey toestablish the survey on the ground, and are used each time thedirection changes.
REAL ESTATE TERMINOLOGY
CORPORATION
An artificial "person", created by law which has many of the powersand duties of an individual.
REAL ESTATE TERMINOLOGY
CORPOREAL
Possessory rights in real property.
REAL ESTATE TERMINOLOGY
CORRECTION DEED
See QUIT CLAIM DEED.
REAL ESTATE TERMINOLOGY
CORRECTION LINES
A system for compensating inaccuracies in the GovernmentRectangular Survey System due to the curvature of the earth. Everyfourth township line, 24 mile intervals, is used as a correction line onwhich the intervals between the north and south range lines areremeasured and corrected to a full 6 miles.
REAL ESTATE TERMINOLOGY
CORRELATE THE FINDINGS
Interpret the data and value estimates to bring them together to afinal conclusion of value.
REAL ESTATE TERMINOLOGY
CORRELATIVE WATER RIGHT
Allows the holder of riparian water rights to take only a "reasonable"amount of water from a common water source.
REAL ESTATE TERMINOLOGY
COST
A historical record of past expenditures, or an amount which wouldbe given in exchange for other things.
REAL ESTATE TERMINOLOGY
COST APPROACH
An appraisal approach to the evaluation of property based on theproperty's current reproduction or replacement cost, lessdepreciation, plus land value. See Valuation Appraisal
REAL ESTATE TERMINOLOGY
COST BASIS
An accounting concept which refers to the original purchase cost ofan investment, such as real estate which includes purchase price,closing costs, etc.
REAL ESTATE TERMINOLOGY
COST REPLACEMENT OR REPRODUCTION
The current cost of constructing a new improvement similar to theimprovement being appraised. Technically, reproduction cost is saidto be the current cost of reproducing an exact replica structure,whereas replacement cost is the current cost of reproducing withmodern materials a new improvement having substantially the sameutility as the building being appraised.
REAL ESTATE TERMINOLOGY
COUNTER OFFER
An offer (instead of acceptance) in response to an offer. Forexample: A offers to buy B's house for X dollars. B, in responseoffers to sell to A at a higher price. B's offer to A is a counter offer. See Contracts & Regs - Practical Applications
REAL ESTATE TERMINOLOGY
COURSES AND DISTANCES
A method of describing or locating real property; this descriptiongives a starting point and the direction and length of lines to be run;practically indistinguishable from a metes and bounds description.
REAL ESTATE TERMINOLOGY
COVENANT
A clause in a contract, a promise, an agreement contained in a deedfor the performance or non-performance of certain acts, or the use ornon-use of the property.
REAL ESTATE TERMINOLOGY
COVENANT OF
There are: covenant of seizincovenant against encumbrancescovenant of further assurancecovenant of quite possessioncovenant of warranty forever
REAL ESTATE TERMINOLOGY
COVENANT AGAINST ENCUMBRANCES
A promise in a deed that there are no encumbrances against the titleexcept those set forth in the deed.
REAL ESTATE TERMINOLOGY
COVENANT OF FURTHER ASSURANCE
A promise in a deed that the grantor will execute such furtherassurances as may be reasonable or necessary to perfect the title inthe grantee.
REAL ESTATE TERMINOLOGY
COVENANT OF QUIET ENJOYMENT
A promise in a deed that the grantor has the legal capacity to conveythe title.
REAL ESTATE TERMINOLOGY
COVENANT OF SEISIN
A promise in a deed assuring to the grantee that the grantor has thetitle being conveyed.
REAL ESTATE TERMINOLOGY
COVENANT OF WARRANTY
Forever a promise in a deed that the grantor will guarantee anddefend the title against lawful claimants.
REAL ESTATE TERMINOLOGY
CRAWL HOLE
Exterior or interior opening permitting access underneath a building,as required by building codes.
REAL ESTATE TERMINOLOGY
CRAWL SPACE
The area left underneath the first floor of a building for access. FHAminimum requirement - 18 inches.
REAL ESTATE TERMINOLOGY
CREATIVE FINANCING
A generic term that describes a variety of non-traditional methods forfinancing property.
REAL ESTATE TERMINOLOGY
CREDIT
The ability to acquire a liability that will become due at a future time. See Closings - Recordkeeping - Settlement Closings
REAL ESTATE TERMINOLOGY
CREDIT RATING
Payment habits of a natural or legal person. Lender considersbuyer's credit rating, but property is lender's main security.
REAL ESTATE TERMINOLOGY
CREDIT REPORT
A report on the past ability of a loan applicant to pay installmentpayments. Several national and local companies make such reports. See Closings - Recordkeeping - Settlement Closings
REAL ESTATE TERMINOLOGY
CREDITOR
Anyone who extends consumer credit. See TRUTH-IN-LENDING.
REAL ESTATE TERMINOLOGY
CREED
A system or doctrine in which a person believes.
REAL ESTATE TERMINOLOGY
CUBAGE
Front or width of a building, multiplied by depth of the building and bythe height; figured from basement floor to the outer surfaces of wallsand roof.
REAL ESTATE TERMINOLOGY
CUBIC FOOT
A block whose length, width and height are each 12", or anyequivalent of 1,728 cubic inches. See Math
REAL ESTATE TERMINOLOGY
CUBIC FOOT PER SECOND
A unit of discharge for measurement of flowing liquid equal to a flowof 1 cu. ft. per second past a given section. Also called SecondFoot.
REAL ESTATE TERMINOLOGY
CUBIC YARD
A block whose length, width and height are each 1 yard. 1 yard (3')X 1 yard (3') X 1 yard (3') = 1 cubic yard, or any equivalent of 27cubic feet. See Math
REAL ESTATE TERMINOLOGY
CUL-DE-SAC
A passageway with one outlet. Streets in newer subdivisions aresometimes built in cul-de-sac fashion.
REAL ESTATE TERMINOLOGY
CURABLE DEPRECIATION
Physical or functional items where the value added by repairing orreplacing a component will be recaptured at the time of sale.
REAL ESTATE TERMINOLOGY
CURTESY
The right which a husband has in his wife's estate at her death.
REAL ESTATE TERMINOLOGY
CUSTOMER
Prospective buyer.
REAL ESTATE TERMINOLOGY
DAMAGES
Money payment ordered by a court to be paid to one whoseproperty, or personal, rights have been violated.
REAL ESTATE TERMINOLOGY
DATA PLANT
An appraiser's file of information on real estate.
REAL ESTATE TERMINOLOGY
DEALER
An Internal Revenue Service designation for a person who regularlybuys and sells real property as a business, not as an investor. Adealer is not allowed the capital gains benefits of an investor.
REAL ESTATE TERMINOLOGY
DEBENTURE
Bonds issued without specific security, and secured only by theoverall equity of the issuer.
REAL ESTATE TERMINOLOGY
DEBIT
A charge to a party or entity on a closing statement or balance sheet. See Closings - Recordkeeping - Settlement Closings
REAL ESTATE TERMINOLOGY
DEBT SERVICE
The amount of money needed to meet the periodic amortizationpayments of a loan.
REAL ESTATE TERMINOLOGY
DEBTOR
One who owes a debt. Anyone liable for a claim.
REAL ESTATE TERMINOLOGY
DEBTS
Claims against the borrower; Accounts Payable on a financial report.Important item in determining qualification of buyer.
REAL ESTATE TERMINOLOGY
DECIDUOUS
Deciduous trees lose their leaves in the autumn and winter.
REAL ESTATE TERMINOLOGY
DECLARATION
It refers to condominium ownership, and it commits the property tocondominium development; defines the complex and the air spaces,the general common elements and limited common elements; andestablishes the basic rights and obligations of the owners. Inaddition, it provides for the creation of a management associationwith the authority to collect common expenses.
REAL ESTATE TERMINOLOGY
DEDICATION
An appropriation of land by its owner for some public use, andaccepted for such use by authorized public officials on behalf of thepublic.
REAL ESTATE TERMINOLOGY
As
DEED
conveyancing instrument given to pass fee title to property uponale. See Practical Applications
REAL ESTATE TERMINOLOGY
DEED IN LIEU OF FORECLOSURE
A deed given to the mortgagee by the mortgagor giving up all rightsin the property to prevent the mortgagee from foreclosing on amortgage that is in default.
REAL ESTATE TERMINOLOGY
DEED OF RECONVEYANCE
The transfer of legal title from the trustee to the trustor (borrower)after a trust deed debt has been paid. See RELEASE OF DEED OFTRUST.
REAL ESTATE TERMINOLOGY
DEED OF TRUST
An instrument used in many states in place of a mortgage. Propertyis transferred to a trustee by the borrower (trustor), in favor of thelender (beneficiary), and reconveyed upon payment in full. SeeClosings - Recordkeeping - Settlement Closings - Finance
REAL ESTATE TERMINOLOGY
DEED RESTRICTION
A provision in a deed controlling or limiting the use of the land.
REAL ESTATE TERMINOLOGY
DEFAULT
Failure to perform a duty or to discharge an obligation. See PracticalApplications
REAL ESTATE TERMINOLOGY
DEFAULT JUDGMENT
A court order resulting from the failure of a defendant to answer acomplaint in a lawsuit.
REAL ESTATE TERMINOLOGY
DEFEASABLE FEE
Ownership with conditional restrictions which, if broken, can causeforfeiture of title to the grantor or his heirs (Defeatable).
REAL ESTATE TERMINOLOGY
DEFEASANCE CLAUSE
A clause to terminate a party's rights in an instrument under specifiedconditions, such as reconveyance of title upon payment of debt. SeeFinance
REAL ESTATE TERMINOLOGY
DEFERRED MAINTENANCE
Repairs necessary to put a property in good condition. A concern ofa purchaser. An owner may have a capital account for suchmaintenance.
REAL ESTATE TERMINOLOGY
DEFERRED PAYMENT OPTIONS
The privilege of deferring income payments to take advantage of taxstatutes.
REAL ESTATE TERMINOLOGY
DEFICIENCY JUDGMENT
A court order to pay the balance (deficiency) owed on a loan, afterthe proceeds from the sale of the security are not sufficient to pay offthe loan.
REAL ESTATE TERMINOLOGY
DEGREE
1/360th of a circle, used in surveying.
REAL ESTATE TERMINOLOGY
DELIVERY
In the legal act of transferring ownership of property, the deed mustbe delivered (given to) and accepted by the buyer to be valid.
REAL ESTATE TERMINOLOGY
DEMAND
One of the four essential elements of value. A desire to possess.
REAL ESTATE TERMINOLOGY
DEMISE
In real estate, the leasing or renting of property for a certain period oftime.
REAL ESTATE TERMINOLOGY
DEMURRER
An objection made by one party to his opponent's pleading, allegingthat he ought not to answer it, for some defect in law or the pleading.
REAL ESTATE TERMINOLOGY
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT(HUD)
A federal agency involved with housing.
REAL ESTATE TERMINOLOGY
DEPARTMENT OF REAL ESTATE
That department of the state government responsible for thelicensing and regulation of persons engaged in the real estatebusiness. The person heading the department is usually called TheReal Estate Commissioner. Other names for the department are TheDivision of Real Estate and The Real Estate Commission.
REAL ESTATE TERMINOLOGY
DEPOSIT
Money given by the buyer with an offer to purchase. Shows goodfaith. See also EARNEST MONEY.
REAL ESTATE TERMINOLOGY
DEPOSIT RECEIPT
A form used to accept "earnest money" to bind an offer for thepurchase of real property.
REAL ESTATE TERMINOLOGY
DEPRECIABLE LIFE
A tax term meaning the number of years used to determinedepreciation of an asset (generally a building).
REAL ESTATE TERMINOLOGY
DEPRECIABLE REAL PROPERTY
Property of a type that is subject to wear and tear, including held forinvestment or used in trade or business.
REAL ESTATE TERMINOLOGY
DEPRECIATED VALUE
The original basis of a property less the amount of depreciationtaken at any point of time.
REAL ESTATE TERMINOLOGY
DEPRECIATION, ACCOUNTING
A theoretical paper loss, which may or may not have actuallyoccurred within the item being exhausted.
REAL ESTATE TERMINOLOGY
DEPRECIATION (APPRAISAL)
A loss in value due to any cause. For appraisal purposes,depreciation is divided into three classes according to its cause: physical deterioration, functional obsolescence, and economicobsolescence.
REAL ESTATE TERMINOLOGY
DEPRECIATION BASIS
The adjusted basis of a property, which geographically defines realproperty and is acceptable in a court of law.
REAL ESTATE TERMINOLOGY
DEPRECIATION RATE
An estimate or theoretic annual amount or percentage, at which theusefulness of a property is being exhausted.
REAL ESTATE TERMINOLOGY
DEPRECIATION (TAX)
For income tax purposes, depreciation is an expense deductiontaken for an investment in depreciable property. See GovernmentControls
REAL ESTATE TERMINOLOGY
DEPTH FACTOR
The increase or decrease of the value of a lot as the depth increasesor decreases; the frontage remains the same.
REAL ESTATE TERMINOLOGY
DEPTH TABLE
Tables used by appraisers to provide a uniform system of measuringthe additional value which accrues to a commercial lot because ofadded depth.
REAL ESTATE TERMINOLOGY
DERELICTION
See RELICTION.
REAL ESTATE TERMINOLOGY
DESCENT
Inheriting property by operation of law, where the heir obtainsownership through hereditary succession (passes from father toson).
REAL ESTATE TERMINOLOGY
DESCRIPTION
The portion of a conveyance document which geographically definesreal property and is acceptable in a court of law.
REAL ESTATE TERMINOLOGY
DETERIORATION
A cause of loss of value due to wear and tear.
REAL ESTATE TERMINOLOGY
DETERMINABLE FEE
Sometimes called "fee simple determinable" and exists "as long as","during the time or period of", or "while", a certain prescribed use ofthe property continues.
REAL ESTATE TERMINOLOGY
DEVISE
A gift of real property by will.
REAL ESTATE TERMINOLOGY
DEVISEE
One who receives (inherits) real property by will.
REAL ESTATE TERMINOLOGY
DEVISOR
One who bequeaths (gives) by will.
REAL ESTATE TERMINOLOGY
DIRECTIONAL GROWTH
The path of growth of an urban area. Used to determine wherefuture development will be most profitable.
REAL ESTATE TERMINOLOGY
DISBURSEMENT
Money paid out of an account, such as at a closing.
REAL ESTATE TERMINOLOGY
DISCHARGE OF CONTRACT
The termination or cancellation of a contract by performance, non-performance, breach, rescission, etc.
REAL ESTATE TERMINOLOGY
DISCLOSURE
The act of making information known to others. In RealEstate, usually pertains to the disclosure of important, orotherwise material or confidential, information. The “others”(to whom disclosure is required or prohibited) pertains to theinterested parties to a transaction. Most often, the rules orregulations dealing with disclosure address 1) the kind ofinformation the disclosure of which is required or prohibited;2) the identity of persons both from whom and to whom. SeeContract Agency
REAL ESTATE TERMINOLOGY
DISCLOSURE STATEMENT
An accounting of all financial aspects of a mortgage loan required oflenders to borrowers in residential mortgage loans by Regulation Z ofthe Federal Reserve Board.
REAL ESTATE TERMINOLOGY
DISCOUNT
To reduce the cost of something. The difference between the cashvalue and the face value of something.
REAL ESTATE TERMINOLOGY
DISCOUNT POINTS
A loan fee charged by a lender when accepting an FHA or VA loan,to increase the yield on the investment (also known in the trade asPoints), to offset the lower interest received in comparison withconventional loan interest rates. See Contracts & Regs - Math
REAL ESTATE TERMINOLOGY
DISCOUNTING
A process based on the concept that present value is always worthmore than future money; and conversely, money receivable in thefuture is worth less than money today.
REAL ESTATE TERMINOLOGY
DISCRIMINATION
In real estate, prejudice or refusal to rent or sell to a person becauseof race, color, religion, sex, marital status, or ethnic origin.
REAL ESTATE TERMINOLOGY
DISINTEGRATION, PRINCIPLE OF
The last stage of the life cycle of property value. Disintegration is thedecline or decay state.
REAL ESTATE TERMINOLOGY
DISINTERMEDIATION
The process of the direct investing of funds by the owners of thefunds, instead of placing the funds in banks or Saving and Loan's forthem to invest.
REAL ESTATE TERMINOLOGY
DISPOSSESS
To deprive one of the use of real estate.
REAL ESTATE TERMINOLOGY
DISTRESS SALE
A sale of property when the seller is under extreme pressure to sell. Generally, the property is sold for less than market value.
REAL ESTATE TERMINOLOGY
DISTRESSED PROPERTY
Property the brings an insufficient return to the owner or is indifficulty for other reasons.
REAL ESTATE TERMINOLOGY
DIVIDE
To cut or otherwise separate into two or more parts. See Math
REAL ESTATE TERMINOLOGY
DOCUMENTARY (FEE) TRANSFER TAX
A Colorado state law requiring a fee of one cent for each onehundred dollars of consideration paid by the person recording aninstrument of conveyance to the county clerk and recorder. SeePractical Applications
REAL ESTATE TERMINOLOGY
DOMINANT TENEMENT
The tenement benefitting by an easement appurtenant.
REAL ESTATE TERMINOLOGY
DONEE
A person to whom a gift is made.
REAL ESTATE TERMINOLOGY
DONOR
A person who makes a gift.
REAL ESTATE TERMINOLOGY
DOWER
The right which a wife has in her husband's estate at his death.
REAL ESTATE TERMINOLOGY
DOWN PAYMENT
Cash portion paid by a buyer from his or her own funds, as opposedto that portion of the purchase price which is financed.
REAL ESTATE TERMINOLOGY
DUAL AGENCY
An agent, who by agreement, represents both parties in a real estatetransaction. Each party gives up some loyalty and confidentialitythey are owed by the agent. See Contracts & Regs - Current LegalIssues
REAL ESTATE TERMINOLOGY
DUE DILIGENCE
A proper and fair amount of activity and care, used in performingduties and obligations in a contract.
REAL ESTATE TERMINOLOGY
DUE ON SALE CLAUSE
See ALIENATION CLAUSE. See Finance
REAL ESTATE TERMINOLOGY
DUPLEX
A building comprised of two dwelling units.
REAL ESTATE TERMINOLOGY
DURESS
Unlawful force used to compel a person to do something against hiswill. See Contract Agency
REAL ESTATE TERMINOLOGY
DWELLING
Any building, structure, or part thereof, used and occupied for humanhabitation or intended to be so used, including any appurtenances.
REAL ESTATE TERMINOLOGY
DWELLING UNIT
As defined in many zoning codes, an apartment, building or group ofbuildings comprised of a room, or rooms constituting an independenthousekeeping unit for a family and containing a single kitchen.
REAL ESTATE TERMINOLOGY
E & O
See ERRORS AND OMISSIONS INSURANCE.
REAL ESTATE TERMINOLOGY
EARNEST MONEY
The cash deposit paid by a prospective buyer of real estate asevidence of intention to complete the transaction. See Closings -Recordkeeping - Settlement Closings - Practical Applications -Contracts & Regs
REAL ESTATE TERMINOLOGY
EASEMENT
A right to use the land of another. See Real Property
REAL ESTATE TERMINOLOGY
EASEMENT APPURTENANT
An easement usually adjoining land which remains part of theowner's land (appurtenant to).
REAL ESTATE TERMINOLOGY
EASEMENT BY PRESCRIPTION
See PRESCRIPTION.
REAL ESTATE TERMINOLOGY
EASEMENT IN GROSS
(Commercial) An easement held which is not attached orappurtenant to any specific land (i.e., a public utility companypersonal to the holder), similar to a license.
REAL ESTATE TERMINOLOGY
EASEMENT OF NECESSITY
Easement necessary to obtain ingress and egress to a landlockedproperty.
REAL ESTATE TERMINOLOGY
EAVES
The lower part of a roof projecting over the wall.
REAL ESTATE TERMINOLOGY
ECONOMIC LIFE
The "profitable" life of an improvement. Generally, shorter than thephysical life (before it is worn out). See Valuation Appraisal
REAL ESTATE TERMINOLOGY
ECONOMIC OBSOLESCENCE
Loss of desirability and useful life of a property through economicforces, such as zoning changes, traffic pattern changes, etc., ratherthan deterioration or functional obsolescence. See ValuationAppraisal
REAL ESTATE TERMINOLOGY
ECONOMIC RENT
The market rental value of a property at any given time, even thoughthe actual rent may be different.
REAL ESTATE TERMINOLOGY
EFFECTIVE AGE
Age of a structure as estimated by its condition, rather than actualage. Takes into account rehabilitation and maintenance.
REAL ESTATE TERMINOLOGY
EFFECTIVE DATE OF VALUE
The specific day the conclusion of value applies.
REAL ESTATE TERMINOLOGY
EFFECTIVE GROSS INCOME
Gross income less vacancy and bad debt allowance.
REAL ESTATE TERMINOLOGY
EFFECTIVE INTEREST RATE
The percentage of interest that is actually being paid by the borrowerfor the use of the money.
REAL ESTATE TERMINOLOGY
EFFICIENCY UNIT
An apartment consisting of one room, sectioned into areas for akitchen, bedroom, etc.
REAL ESTATE TERMINOLOGY
EGRESS
A way to exit from a property. Opposite of ingress.
REAL ESTATE TERMINOLOGY
ELEVATIONS
Profile of building, showing roof lines, windows, doors -- usuallyshowing all four sides.
REAL ESTATE TERMINOLOGY
ELLWOOD MORTGAGE - EQUITY - ANALYSIS
This is a method which enables the analysis of a property by takinginto account differing effects of various mortgage financing, loanamortization and future property appreciation or depreciation at thetime of sale.
REAL ESTATE TERMINOLOGY
EMBLEMENTS
Crops produced annually by the labor of the cultivator. The right of atenant farmer to remove the annual crops he has produced after histenancy has ended.
REAL ESTATE TERMINOLOGY
EMINENT DOMAIN
The power of the government to take (condemn) private property fora public use upon payment of a fair compensation. See GovernmentControls
REAL ESTATE TERMINOLOGY
EMPLOYING BROKER
A broker who can employ, and must supervise other licensees. SeeCurrent Legal Issues
REAL ESTATE TERMINOLOGY
ENCROACHMENT
Generally, construction onto the property of another, as of a wall,fence, building, etc.
REAL ESTATE TERMINOLOGY
ENCUMBER
To place a lien or charge on land.
REAL ESTATE TERMINOLOGY
ENCUMBRANCE
Anything which burdens (limits) the fee title to property, such as alien, easement or restriction of any kind. See Real Property
REAL ESTATE TERMINOLOGY
ENDORSEMENT
Signature on the back of a promissory note or check for the purposeof transferring ownership. "In Blank": Guarantees payment tosubsequent holders. "Without Recourse": Does not guaranteepayment to subsequent holders.
REAL ESTATE TERMINOLOGY
ENFORCEABLE
A contract in which the parties may legally be required to perform.
REAL ESTATE TERMINOLOGY
ENGINEER PROPERTY INSPECTION
A real property inspection conducted by an engineer, for a fee, todetermine the physical condition of the subject property.
REAL ESTATE TERMINOLOGY
ENJOIN
To stop performance of, or require performance of an act.
REAL ESTATE TERMINOLOGY
ENVIRONMENTAL IMPACT STATEMENT
A requirement of National Environmental Policy Act prior to initiatingor changing a land use that may have an adverse affect on theenvironment.
REAL ESTATE TERMINOLOGY
EQUAL CREDIT OPPORTUNITY ACT
Federal law passed in 1974, to prohibit lenders from discrimination inthe granting of credit on the basis of race, creed, color, religion,national origin, sex, marital status, age, or because income comesfrom public assistance programs. See Finance
REAL ESTATE TERMINOLOGY
EQUAL HOUSING OPPORTUNITY
Denotes all citizens shall have the same rights and privileges as allothers, without discrimination of any kind. See Contracts & Regs
REAL ESTATE TERMINOLOGY
EQUILIBRIUM
The middle state of the life cycle of property value. The equilibriumpoint is the static point at the peak of its value.
REAL ESTATE TERMINOLOGY
EQUITABLE LIEN
Lien based on a written agreement to pledge the particular propertyas security.
REAL ESTATE TERMINOLOGY
EQUITABLE TITLE/OWNERSHIP
The interest in the property held by the buyer under an executorycontract. (Prior to transfer of legal title.) See Practical Applications
REAL ESTATE TERMINOLOGY
EQUITY
The market value of real property, less the amount of existing liens.
REAL ESTATE TERMINOLOGY
EQUITY BUILD-UP
By reducing the amount of principal owed on a debt, the equityincreases. See also EQUITY.
REAL ESTATE TERMINOLOGY
EQUITY OF REDEMPTION
Right of a mortgagor, before a foreclosure sale, to reclaim propertywhich had been forfeited due to mortgage default. The mortgagorcan redeem the property by paying the full debt plus interest andcosts.
REAL ESTATE TERMINOLOGY
EQUITY PARTICIPATION
An agreement between a buyer and an investor that allows theinvestor to participate in the equity when the property is sold, inexchange for assisting in, or with, the original financing of thepurchase.
REAL ESTATE TERMINOLOGY
EROSION
The gradual loss of soil due to the operation of currents, tides, orwinds; the opposite of accretion.
REAL ESTATE TERMINOLOGY
ERRORS AND OMISSIONS INSURANCE (E & O)
A form of malpractice insurance that protects brokers and agents forerrors, mistakes and negligence in real estate contracts they areinvolved in.
REAL ESTATE TERMINOLOGY
ESCALATION CLAUSE
The right reserved by the lender/lessor to increase the amount of thepayment and/or interest upon the happening of a certain event. Some escalator clauses are based upon the "cost of living" index.
REAL ESTATE TERMINOLOGY
ESCHEAT
Reverting of property to the State upon death of an owner withoutheirs, and without will (intestate).
REAL ESTATE TERMINOLOGY
ESCROW
Delivery of a deed by a grantor to a third party for delivery to thegrantee upon the happening of a contingent event.
REAL ESTATE TERMINOLOGY
ESCROW ACCOUNT
See TRUST ACCOUNT, IMPOUNDS, TAX & INSURANCERESERVES. See Closings - Recordkeeping - Settlement Closings -Practical Application - Current Legal Issues
REAL ESTATE TERMINOLOGY
ESCROW HOLDER
A third party who acts as the stakes holder for two or more parties. Escrow holder acts as an agent for all parties.
REAL ESTATE TERMINOLOGY
ESCROW INSTRUCTIONS
See ESCROW and ESCROW HOLDER.
REAL ESTATE TERMINOLOGY
ESTATE
The ownership interest of a person in real property. Also used torefer to the property left by a deceased person. See Real Property
REAL ESTATE TERMINOLOGY
ESTATE AT SUFFERANCE
An estate resulting where there is retention of possession without theconsent of the landlord, after expiration of a lease, creating aholdover tenancy. See Contract Agency - Real Property
REAL ESTATE TERMINOLOGY
ESTATE AT WILL
A type of lease which may be immediately terminated upon notice byeither party. See Contract Agency
REAL ESTATE TERMINOLOGY
ESTATE FOR LIFE
A freehold estate, not of inheritance, but which is held by the tenantfor his own life or the life or lives of one or more other persons, or foran indefinite period, which may endure for the life or lives of personsin being and beyond the period of life.
REAL ESTATE TERMINOLOGY
ESTATE FOR YEARS
Any lease for a definite period of time with a predeterminedtermination date.
REAL ESTATE TERMINOLOGY
ESTATE FROM PERIOD-TO-PERIOD
An interest in land, where there is no definite termination date but therental period is fixed at a certain sum per week, month, or year. Alsocalled a periodic tenancy.
REAL ESTATE TERMINOLOGY
ESTATE IN ENTIRETY
An estate held by husband and wife together so long as both live,and, after the death of either, by the survivor.
REAL ESTATE TERMINOLOGY
ESTATE IN FEE
Same as Fee Simple Absolute Estate (Fee Simple Estate).
REAL ESTATE TERMINOLOGY
ESTATE IN REMAINDER
The future interest in the title given by the grantor to a third person inthe remainder of a life estate.
REAL ESTATE TERMINOLOGY
ESTATE IN REVERSION
The future interest in the title remaining in the grantor to the residueof a life estate.
REAL ESTATE TERMINOLOGY
ESTATE OF INHERITANCE
Any estate capable of being inherited. All freehold estates areestates of inheritance, except life estates.
REAL ESTATE TERMINOLOGY
ESTIMATE OF VALUE
An opinion of value.
REAL ESTATE TERMINOLOGY
ESTOPPEL
The prevention of a person from making an affirmation or denial,because it is contrary to a previous affirmation or denial that he hasmade. See CERTIFICATE OF NO DEFENSE.
REAL ESTATE TERMINOLOGY
ET AL
An abbreviation for "et alii", meaning "and others". It may also mean"and another" in the singular. (Latin).
REAL ESTATE TERMINOLOGY
ET UX
Term meaning "and wife". (Latin)
REAL ESTATE TERMINOLOGY
ETHICS
Denotes a higher standard of conduct than that demanded by law. See CODE OF ETHICS.
REAL ESTATE TERMINOLOGY
ETHNIC GROUP
People having a common language, heritage, culture and customs,and usually belonging to the same race.
REAL ESTATE TERMINOLOGY
EVICTION
Refers to process instituted to oust a person from possession.
REAL ESTATE TERMINOLOGY
EVIDENCE OF TITLE
In Colorado, evidence of title may be shown by Title Insurance, anAbstract and Opinion or a Torrens Certificate. There is no documentknown as a "Title" to real estate as there is for an automobile.
REAL ESTATE TERMINOLOGY
EXCHANGE
A reciprocal transfer of real property, which has certain taxadvantages over a sale. Definite procedures must be followed inorder to qualify the transfer as an exchange.
REAL ESTATE TERMINOLOGY
EXCLUSIVE AGENCY LISTING
A written instrument giving one agent the right to sell property for aspecified time, but reserving the right of the owner to sell theproperty himself without the payment of a commission. See PracticalApplications - Contracts & Regs
REAL ESTATE TERMINOLOGY
EXCLUSIVE RIGHT-TO-SELL LISTING
A written agreement between owner and agent giving agent the rightto collect a commission if the property is sold by anyone during theterm of the listing. See Contract Agency - Current Legal Issues -Practical Applications - Contracts & Regs
REAL ESTATE TERMINOLOGY
EXCULPATORY CLAUSE
A clause sometimes inserted in a mortgage note, in which the lenderwaives the right to a deficiency judgment.
REAL ESTATE TERMINOLOGY
EXECUTE
To complete, to make, to perform, to do, to follow out; to execute adeed, to make a deed, including especially signing, sealing anddelivery; to execute a contract is to perform the contract, to follow outto the end, often referred to as the "Closing".
REAL ESTATE TERMINOLOGY
EXECUTED
A contract that has been fully performed; a signed instrument,completed.
REAL ESTATE TERMINOLOGY
EXECUTION
A writ issued by a court to the sheriff, directing him to sell property tosatisfy a debt.
REAL ESTATE TERMINOLOGY
EXECUTOR
A person named in a will to carry out its provisions as to thedisposition of the estate of a person deceased.
REAL ESTATE TERMINOLOGY
EXECUTORY CONTRACT
A contract in which one or both of the parties has not yet performed. See Closings.
REAL ESTATE TERMINOLOGY
EXECUTRIX
A woman executor.
REAL ESTATE TERMINOLOGY
EXEMPT
Relieved of liability.
REAL ESTATE TERMINOLOGY
EXPENSES
To an appraiser, this means all of the periodic annual expenseschargeable to the operation of a property. It does not includemortgage interest or amortization, the owner's income tax, or itemswhich are actually capital improvements.
REAL ESTATE TERMINOLOGY
EXPENSES OF SALE
Certain items which may appear on a closing statement inconnection with a real estate sale.
REAL ESTATE TERMINOLOGY
EXPRESS
To state; to put into words or writing.
REAL ESTATE TERMINOLOGY
EXTENDED COVERAGE
A broad form of title insurance that is available to home owners.
REAL ESTATE TERMINOLOGY
EXTENSION
Agreement between two or more parties to extend the maturity dateof a contract after it becomes due.
REAL ESTATE TERMINOLOGY
F.H.A.
See FEDERAL HOUSING ADMINISTRATION.
REAL ESTATE TERMINOLOGY
F.T.C.
See FEDERAL TRADE COMMISSION.
REAL ESTATE TERMINOLOGY
FACADE
Front of a building.
REAL ESTATE TERMINOLOGY
FACILITATOR
A real estate licensee that assists a customer to buy or sell realestate without "representing" them, or being their "advocate" (sameas Transaction-Broker).
REAL ESTATE TERMINOLOGY
FAIR CREDIT REPORTING ACT
A federal law requiring the accurate reporting of credit information bycredit agencies (designed to protect the public).
REAL ESTATE TERMINOLOGY
FAIR HOUSING ACT
See EQUAL HOUSING OPPORTUNITY. See Contracts & Regs
REAL ESTATE TERMINOLOGY
FAIR HOUSING VALUE
A price for property agreed upon between buyer and seller in acompetitive market with neither party being undue pressure.
REAL ESTATE TERMINOLOGY
FAIR HOUSING ACT OF 1968
A federal prohibition on discrimination in the sale, rental or financingof housing on the basis of race, color, religion, sex or national origin.
REAL ESTATE TERMINOLOGY
FALSE ADVERTISING
In most instances, when in connection with real estate, newspaperclassified advertising which misrepresents the property, price, orterms. A broker may have his or her license suspended or revoked ifthe offense is prolonged or deliberately fraudulent.
REAL ESTATE TERMINOLOGY
FALSE PROMISE
A promise to induce an act with no intent of fulfillment.
REAL ESTATE TERMINOLOGY
FANNIE MAE
The shortened name for the Federal National Mortgage Association.
REAL ESTATE TERMINOLOGY
FARMERS HOME ADMINISTRATION (FmHA)
An agency of the Department of Agriculture. Primary responsibility isto provide financial assistance for farmers and others living in ruralareas where financing is not available on reasonable terms fromprivate sources.
REAL ESTATE TERMINOLOGY
FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC)
The federal agency created to insure savings accounts of depositorsin state and federally chartered banks and savings and loans. SeeClosings - Recordkeeping - Settlement Closings
REAL ESTATE TERMINOLOGY
FEDERAL HOME LOAN BANK (FHLB)
A federal organization formed in 1932, to provide a Credit ReserveSystem for member State and Federal Savings and LoanAssociations, through which, they would be able to borrow for a shortor long term.
REAL ESTATE TERMINOLOGY
FEDERAL HOME LOAN BANK BOARD (FHLBB)
The administrative agency that charters Federal Savings and Loanassociations and exercises regulatory authority over the FHLBsystem.
REAL ESTATE TERMINOLOGY
FEDERAL HOME LOAN MORTGAGE CORPORATION
See FHLMC.
REAL ESTATE TERMINOLOGY
FEDERAL HOUSING ADMINISTRATION (FHA)
The Federal Government agency which administers FHA insuredloans. See Finance
REAL ESTATE TERMINOLOGY
FEDERAL HOUSING FINANCE BOARD (FHFB)
See FEDERAL HOME LOAN BANK BOARD.
REAL ESTATE TERMINOLOGY
FEDERAL LAND BANK
A privately owned cooperative organization administered by the FarmCredit Administration, it provides low-cost, long-term loans to farmersthat belong to the Federal Land Bank Association. There are 12districts with a Federal Land Bank in each district servicing memberbanks in that district.
REAL ESTATE TERMINOLOGY
FEDERAL RESERVE (The Fed)
A quasi-governmental agency. Actually, a private organizationentrusted with the control and management of the nation's economy. Composed of 12 districts, with a Federal Reserve Bank in eachdistrict servicing member banks in that district.
REAL ESTATE TERMINOLOGY
FEDERAL SAVINGS AND LOAN ASSOCIATION
An association chartered by the FHLBB in contrast to a state-chartered Savings and Loan.
REAL ESTATE TERMINOLOGY
FEDERAL TRADE COMMISSION (FTC)
A Federal Agency created to investigate and eliminate deceptive andunfair trade practices.
REAL ESTATE TERMINOLOGY
FEE
An estate of inheritance in real property.
REAL ESTATE TERMINOLOGY
FEE SIMPLE
Ownership of title to real property without limitation or end; inperpetuity. The greatest and most inclusive type of real estateownership. Includes rights to control, use, possess, enjoy anddispose (CUPED). See Real Property
REAL ESTATE TERMINOLOGY
FEE TAIL
An estate of inheritance given to a person and "the heirs of hisbody". If the grantee dies without leaving issue, the estateterminates and would revert to the grantor (abolished in all states).
REAL ESTATE TERMINOLOGY
FELONY
A major crime, the penalty of which is usually imprisonment in apenitentiary.
REAL ESTATE TERMINOLOGY
FEUDAL SYSTEM
Ownership of land was with the king or sovereign who allowed hissubjects the right to use the land for their benefit.
REAL ESTATE TERMINOLOGY
FEUDAL TENURE SYSTEM
A real property ownership system where ownership rests with asovereign who, in turn, may grant lesser interests in return forservice or loyalty. In contrast to allodial tenure.
REAL ESTATE TERMINOLOGY
FHA CONDITIONAL
See COMMITMENT.
REAL ESTATE TERMINOLOGY
FHA FIRM
See COMMITMENT.
REAL ESTATE TERMINOLOGY
FHA INSURED MORTGAGE
A mortgage under which the Federal Housing Administration insuresloans made according to its regulation by approved lenders.
REAL ESTATE TERMINOLOGY
FHLMC
(Freddie Mac) A secondary money market similar to FNMA andGNMA (Federal Home Loan Mortgage Corporation).
REAL ESTATE TERMINOLOGY
FICTITIOUS NAME
Commonly refers to a company name in a business not incorporated. The owner files a certificate of fictitious name. For example: JoeSmith (real name); Joe's Garage, (fictitious name). Also called aD.B.A. (doing business as).
REAL ESTATE TERMINOLOGY
FIDUCIARY
A person holding a position of trust for another. Agents, trustees,executors, administrators and attorneys-in-fact are fiduciaries. SeeContracts & Regs
REAL ESTATE TERMINOLOGY
FINANCE CHARGE
The total cost imposed directly, or indirectly, by the lender, andpayable either directly, or indirectly, by the borrower as defined bythe Federal Truth-in-Lending laws.
REAL ESTATE TERMINOLOGY
FINANCIAL INSTITUTIONS REFORM, RECOVERY, ANDENFORCEMENT ACT
A law to provide guidelines for the regulation of financial institutions. Referred to as the “savings and loan bailout bill, FIRREA created theSavings Association Insurance Fund (SAIF) and the Bank InsuranceFund (BIF), both of which are administered by the restructuredFederal Deposit Insurance Corporation (FDIC). FIRREA alsocreated the Resolution Trust Corporation (RTC) to manage theassets of insolvent savings and loan associations. One part of thelaw created the Appraisal Foundation and requires the use of state-certified or state-licensed appraisers to appraise properties involvinga federally insured or federally regulated industry.
REAL ESTATE TERMINOLOGY
FINANCIAL STATEMENT
A formal statement of the financial status and net worth of a personor company, disclosing assets and liabilities as of a specified date.
REAL ESTATE TERMINOLOGY
FINDER'S FEE
A fee paid to someone for referring a prospect to the payor. InColorado, it is illegal to pay or receive a finder's fee to or by anunlicensed person.
REAL ESTATE TERMINOLOGY
FIRE STOP
Boards placed horizontally between studs.
REAL ESTATE TERMINOLOGY
FIRE WALL
A wall constructed of fire-retardant materials, used to prevent thespread of fire in a structure or building.
REAL ESTATE TERMINOLOGY
FIRM COMMITMENT
A definite undertaking by a lender to loan a set amount of money at aspecified interest rate for a certain term; also, a commitment by theFHA to insure a mortgage on certain property to a specifiedmortgagor (as opposed to a commitment conditioned on approval ofa yet-to-be determined mortgagor).
REAL ESTATE TERMINOLOGY
FIRREA
See Financial Institutions Reform, Recovery, and Enforcement Act.
REAL ESTATE TERMINOLOGY
FIRST MORTGAGE
The mortgage on a property that is superior in right to any othermortgage.
REAL ESTATE TERMINOLOGY
FIRST RIGHT OF REFUSAL
A right that gives someone the first chance to purchase or leaseproperty.
REAL ESTATE TERMINOLOGY
FIRST USER
Relates to depreciable property purchased prior to 1981. It allowscertain tax breaks to the first owner who puts the property to the usefor which it was intended.
REAL ESTATE TERMINOLOGY
FIXED EXPENSES
The regular recurring costs of charges required in the holding of aproperty, such as taxes and fire insurance.
REAL ESTATE TERMINOLOGY
FIXED LEASE
See FLAT LEASE.
REAL ESTATE TERMINOLOGY
FIXED RATE LOAN
A loan in which the interest rate remains the same for the life of theloan.
REAL ESTATE TERMINOLOGY
FIXITY OF LOCATION
The physical characteristic of real estate that subjects it to theinfluence of its surroundings.
REAL ESTATE TERMINOLOGY
FIXTURES
Personal property that has been attached to real property by nails,screws, glue, etc., so it has become real property. It depends onintent and manner of attachment. Fixtures used in a trade orbusiness usually remain personal property.
REAL ESTATE TERMINOLOGY
FLASHING
Sheet metal or other material used to protect a building fromseepage of water.
REAL ESTATE TERMINOLOGY
FLAT
An apartment unit or an entire floor of a building used for residentialpurposes.
REAL ESTATE TERMINOLOGY
FLAT LEASE
A lease, in which the rental is a fixed sum paid periodicallythroughout the entire lease term.
REAL ESTATE TERMINOLOGY
FLEXIBLE-PAYMENT MORTGAGE
A loan in which the payment schedule is based on the borrower'sparticular financial condition. Often, interest rates are initially lowerthan ordinary mortgages and the initial payments are below those ofan amortized mortgage.
REAL ESTATE TERMINOLOGY
FLOAT
A mortgage banking term that refers to the spread of the variableinterest rate on a loan; the "pegged rate" - for example, the intereston a development loan might be set at 3 percent above the localprime rate. A float can have a floor or a ceiling, such as, "in noevent below 9 percent or above 15 percent"; or it can have nolimitation, as a full float.
REAL ESTATE TERMINOLOGY
FLOOD WATERS
Waters overflowing a regularly defined channel.
REAL ESTATE TERMINOLOGY
FLOOR JOIST
The boards that support the floor; they are laid horizontally, on edge,and the sub-floor is nailed directly into the joists.
REAL ESTATE TERMINOLOGY
FLOOR PLAN
An architectural drawing showing the physical layout of a building,including the exact room sizes and their interrelationships.
REAL ESTATE TERMINOLOGY
FNMA
(Fannie Mae) - Abbreviation for Federal National MortgageAssociation. A secondary money market. See Finance
REAL ESTATE TERMINOLOGY
FOOTING
The base or bottom of a foundation wall, pier, or column.
REAL ESTATE TERMINOLOGY
FORBEARANCE
The failure to pursue legal recourse to which the lender is entitled ona delinquent loan, usually based on an agreement.
REAL ESTATE TERMINOLOGY
FORCIBLE ENTRY & DETAINER (FED)
Lawful eviction proceedings.
REAL ESTATE TERMINOLOGY
FORECASTING (APPRAISAL)
Taking the past as a guide to the future, together with presentconditions, and tempering this with the appraiser's judgment for theprojection of the future.
REAL ESTATE TERMINOLOGY
FORECLOSURE
Procedure whereby property pledged as security for a debt is sold topay the debt in the event of default.
REAL ESTATE TERMINOLOGY
FORFEITURE
Loss of anything of value due to failure to perform. See Contracts &Regs
REAL ESTATE TERMINOLOGY
FOUNDATION PLAN
A scale drawing providing the essential details concerning the size offootings, size and dimensions of piers, and constructionmeasurements and details of the subfloor area.
REAL ESTATE TERMINOLOGY
FOURPLEX
A building comprised of four dwelling units.
REAL ESTATE TERMINOLOGY
FRANCHISE
A specified privilege awarded by a government or business firmwhich awards an exclusive dealership.
REAL ESTATE TERMINOLOGY
FRACTIONS
One or more or a number of equal parts into which a unit is divided. See Math
REAL ESTATE TERMINOLOGY
FRAUD
An intentional false representation or concealment of material fact,which is used to induce another person to act, which act causes aloss of property or legal rights. See Contracts & Regs - ContractAgency - Current Legal Issues
REAL ESTATE TERMINOLOGY
FREDDIE MAC
See FHLMC.
REAL ESTATE TERMINOLOGY
FREE AND CLEAR
"Free" means a freehold estate (i.e., one of indefinite duration), and"clear" indicates no money encumbrances against the title. Noproperty is ever truly "free and clear" (i.e., taxes, etc.).
REAL ESTATE TERMINOLOGY
FREEHOLD
The holding of real property as an estate of inheritance (fee simple),or as a lesser estate for life (life estate), it includes actual ownershipof unpredictable duration. See Real Property
REAL ESTATE TERMINOLOGY
FREEHOLD ESTATE
An estate in fee simple or for life.
REAL ESTATE TERMINOLOGY
FRONT FOOT
A foot of property along the street frontage; each front foot extendingthe depth of the lot. A valuation for property measurement or salepurposes.
REAL ESTATE TERMINOLOGY
FRONT MONEY
The minimum amount of money necessary to initiate a real estateventure.
REAL ESTATE TERMINOLOGY
FRONTAGE
Land bordering a street.
REAL ESTATE TERMINOLOGY
FRUCTUS INDUSTRIALES
Crops grown and cultivated.
REAL ESTATE TERMINOLOGY
FRUCTUS NATURALES
Vegetation growing naturally on the property, not a "planted" crop.
REAL ESTATE TERMINOLOGY
FSLIC
Federal Savings & Loan Insurance Corporation. Provides depositorswith savings insurance. Currently insures deposits in amounts up to$100,000 per account.
REAL ESTATE TERMINOLOGY
FULL DISCLOSURE
The requirement to fully disclose all material facts known pertainingto a real estate transaction by the licensee involved.
REAL ESTATE TERMINOLOGY
FUNCTIONAL OBSOLESCENCE
A loss in value of an improvement to real property due to functionalinadequacies, deficiency, and pool design, or a loss in value due to asuper adequate feature. See Valuation Appraisal
REAL ESTATE TERMINOLOGY
FURRING
Strips of wood or metal applied to a wall or other surface to even it,to form an air space, or to give the wall an appearance of greaterthickness.
REAL ESTATE TERMINOLOGY
FUTURE BENEFITS
The anticipated benefits the present owner will receive from hisproperty in the future.
REAL ESTATE TERMINOLOGY
GABLE ROOF
A pitched roof with 2 sloping sides.
REAL ESTATE TERMINOLOGY
GARDEN APARTMENT
A dwelling unit of an apartment building that is partially in the ground(i.e., at garden level).
REAL ESTATE TERMINOLOGY
GARNISHMENT
A legal process used by creditors to collect a debt through a courthearing, having already obtained a judgement. Usually paid ininstallments by the debtor.
REAL ESTATE TERMINOLOGY
GENERAL AGENT
An agent who has authority to perform any and all acts for theprincipal relating to the objective for which the agent was engaged.
REAL ESTATE TERMINOLOGY
GENERAL LIEN
A lien on all the property of a debtor.
REAL ESTATE TERMINOLOGY
GENERAL PARTNER
A co-owner in a partnership who has full authority to act for thepartnership, and who has full liability for its debts.
REAL ESTATE TERMINOLOGY
GENERAL WARRANTY DEED
See WARRANTY DEED. See Real Property - Practical Applications
REAL ESTATE TERMINOLOGY
GI LOAN
A Government-guaranteed loan available to eligible veterans.
REAL ESTATE TERMINOLOGY
GIFT DEED
A deed used to make a gift of real estate. No monetaryconsideration required.
REAL ESTATE TERMINOLOGY
GNMA (Ginnie Mae)
(Government National Mortgage Association) A secondary moneymarket that deals primarily in subsidized loans.
REAL ESTATE TERMINOLOGY
GOOD CONSIDERATION
Love and affection (non-monetary). Does not establish basis forbreach of contract. See Contract Agency
REAL ESTATE TERMINOLOGY
GOOD FAITH
Any act done with honest intent. Bona Fide.
REAL ESTATE TERMINOLOGY
GOOD FAITH ESTIMATE
The lender’s estimate of a borrower’s settlement costs that isrequired by RESPA to be furnished to borrowers at time of loanapplication. See Closings - Recordkeeping - Settlement Closings
REAL ESTATE TERMINOLOGY
GOOD FUNDS
Examples of good funds are: cash, wire transfers, cashier’s checks,certified checks. See Closings - Recordkeeping - SettlementClosings
REAL ESTATE TERMINOLOGY
GOOD WILL
The expectation of continued public patronage.
REAL ESTATE TERMINOLOGY
GOVERNMENT PATENT
See PATENT.
REAL ESTATE TERMINOLOGY
GOVERNMENT SURVEY
The survey from which our present system of townships, sections,etc., was developed.
REAL ESTATE TERMINOLOGY
GRADE
Ground level at the foundation.
REAL ESTATE TERMINOLOGY
GRADUATED LEASE
A lease, which provides for a varying rental rate, often based uponsome future determination, such as Cost of Living Index, etc.
REAL ESTATE TERMINOLOGY
GRADUATED PAYMENT MORTGAGE (GPM)
A mortgage that has payments beginning at less than interest only,and gradually increase at specified times (usually once each year forseven years), then level off and stay the same for the balance of theloan term. See Finance
REAL ESTATE TERMINOLOGY
GRANDFATHER CLAUSE
An expression conveying the idea that something that formerly waspermissible may continue, despite changes which now make it non-permissible.
REAL ESTATE TERMINOLOGY
GRANT
A technical term used in deeds of conveyance of lands to import atransfer.
REAL ESTATE TERMINOLOGY
GRANT DEED
Customary document used in some states to transfer title to realproperty. Contains two implied warranties. See also WARRANTYDEED. See Real Property
REAL ESTATE TERMINOLOGY
GRANTEE
The receiver of the title being granted by deed. See Real Property
REAL ESTATE TERMINOLOGY
GRANTING CLAUSE
A clause wherein the grantor(giver) transfers an interest in theproperty to the grantee(receiver) by deed. See Contracts & Regs
REAL ESTATE TERMINOLOGY
GRANTOR
The owner of the title being granted by deed. The person whomakes a grant. See Real Property
REAL ESTATE TERMINOLOGY
GRI
Graduate, REALTORS Institute.
REAL ESTATE TERMINOLOGY
GROSS INCOME
The scheduled total income derived from an income-businessproperty before deductions and or expenses, depreciation, taxes,etc.
REAL ESTATE TERMINOLOGY
GROSS INCOME MULTIPLIER
A factor determined from comparable rental property sales that,when multiplied by the annual gross income of a property, willsuggest a market value.
REAL ESTATE TERMINOLOGY
GROSS LEASE
Tenant only pays rent, the lessor pays taxes, insurance, etc. Sometimes called a "fixed" or "flat" lease.
REAL ESTATE TERMINOLOGY
GROSS RENT MULTIPLIER
A factor determined from comparable rental property sales that,when multiplied by the monthly rent, will suggest a market value. See Valuation Appraisal
REAL ESTATE TERMINOLOGY
GROUND LEASE
Lease of land only, sometimes secured by the improvements placedon the land by the user.
REAL ESTATE TERMINOLOGY
GROUND RENT
Earnings of improved property credited to earnings of the grounditself, after allowance is made for earnings of improvements.
REAL ESTATE TERMINOLOGY
GROUND WATER
A pervious formation with sides and bottom of relatively imperviousmaterial, in which ground water is held or retained. Also calledSUBSURFACE WATER BASIN.
REAL ESTATE TERMINOLOGY
GUARANTEED INVENTORY
A guarantee given by the seller that the actual amount of inventoryon hand at the close of escrow, will equal that value placed upon theinventory at the time the sales agreement was entered into.
REAL ESTATE TERMINOLOGY
GUARANTEED SALE PROGRAM
Broker or agent agrees to pay a pre-determined price for a property,if it doesn't sell during the time specified in the listing contract.
REAL ESTATE TERMINOLOGY
GUARANTY
A pledge or security given by one person to assure performance byanother.
REAL ESTATE TERMINOLOGY
GUARDIAN DEED
See SPECIAL WARRANTY DEED.
REAL ESTATE TERMINOLOGY
H.O.W. (HOME OWNERS' WARRANTY)
See HOME WARRANTY PROGRAM.
REAL ESTATE TERMINOLOGY
HABENDUM CLAUSE
The "To Have and To Hold" clause, which defines or limits thequantity of the estate granted in the premises of the deed.
REAL ESTATE TERMINOLOGY
HABITABLE
Being in a condition that is fit to live in.
REAL ESTATE TERMINOLOGY
HANDICAPPED
A physical or mental impairment, which substantially limits one ormore major life activities of a person. It includes, alcoholism,A.I.D.S., H.I.V. virus, certain physiological disorders, specifiedanatomical losses, mental illness, retardation, and psychologicaldisorders.
REAL ESTATE TERMINOLOGY
HAZARD INSURANCE
Insurance on property (mainly the buildings), that insures lossescaused by fire, hail and windstorms.
REAL ESTATE TERMINOLOGY
HEADER
A beam placed perpendicular to joists, and to which joists are nailedin framing for chimney, stairway, or other openings.
REAL ESTATE TERMINOLOGY
HEIRS AND ASSIGNS
Words usually found in a deed, showing the interest the grantee isreceiving. A deed to "A, his heirs and assigns", would grant theproperty to A, with the right to assign said property or have itdescend to A's heirs upon A's death.
REAL ESTATE TERMINOLOGY
HEREDITAMENTS
Anything capable of being inherited, includes both real and personalproperty.
REAL ESTATE TERMINOLOGY
HIGHEST AND BEST USE
That use which is most likely to produce the greatest net return to theland and/or building, over a given period of time. See ValuationAppraisal
REAL ESTATE TERMINOLOGY
HIP ROOF
A pitched roof with 4 sloping sides and ends.
REAL ESTATE TERMINOLOGY
HISTORICAL AGE
Same as CHRONOLOGICAL AGE.
REAL ESTATE TERMINOLOGY
HOLD HARMLESS CLAUSE
A clause in a contract where one party agrees to indemnify the otherparty against injuries or suits resulting from the contractualagreement.
REAL ESTATE TERMINOLOGY
HOLDER IN DUE COURSE
Person who, in good faith and for value, obtains a promissory note orcheck before it was overdue, and who does not have notice that ithad been previously dishonored, and does not have knowledge ofany defects. See Finance
REAL ESTATE TERMINOLOGY
HOLDING PERIOD
The length of time a property is owned.
REAL ESTATE TERMINOLOGY
HOLDOVER CLAUSE
The number of days following expiration of listing that the broker’scommission is protected. See Practical Applications
REAL ESTATE TERMINOLOGY
HOLDOVER TENANT
A tenant who remains in possession of leased property after theexpiration of the lease term. See ESTATE AT SUFFERANCE.
REAL ESTATE TERMINOLOGY
HOLOGRAPHIC WILL
A will that is written entirely in the handwriting of the testator.
REAL ESTATE TERMINOLOGY
HOME LOAN
A loan secured by a residence for one, two, three, or four familiesunder either a mortgage or a deed of trust.
REAL ESTATE TERMINOLOGY
HOME OWNERSHIP
Ownership as opposed to rental status.
REAL ESTATE TERMINOLOGY
HOME WARRANTY INSURANCE
Private insurance, insuring a buyer against defects (usuallyplumbing, heating, and electrical) in the home he has purchased. The period of insurance varies and both new and used homes maybe insured.
REAL ESTATE TERMINOLOGY
HOMEOWNERS' ASSOCIATION
(1) An association of people who own homes in a given area, formedfor the purpose of improving or maintaining the quality of the area. (2) An association formed by the builder of condominiums orplanned developments, and required by statute in some states. Thebuilder's participation, as well as the duties of the association, arecontrolled by statute.
REAL ESTATE TERMINOLOGY
HOMEOWNERS’ POLICY
An insurance policy protecting against a variety of hazards.
REAL ESTATE TERMINOLOGY
HOMEOWNERS' WARRANTY PROGRAM (HOW)
Insurance offered by a subsidiary of the National Association ofHome Builders that provides a buyer of a new home a ten-yearwarranty against certain physical defects.
REAL ESTATE TERMINOLOGY
HOMESTEAD
A limited exemption against certain money judgments allowed ahomeowner. A home upon which the owner has recorded aDeclaration of Homestead.
REAL ESTATE TERMINOLOGY
HOSTILE POSSESSION
Possession and occupation of property adverse to the titled owner ofthe property.
REAL ESTATE TERMINOLOGY
HOUSING OPPORTUNITY
See EQUAL HOUSING OPPORTUNITY.
REAL ESTATE TERMINOLOGY
HUD
Department of Housing and Urban Development.
REAL ESTATE TERMINOLOGY
HUD FORM NO. 1
A standard settlement form required by RESPA.
REAL ESTATE TERMINOLOGY
HUNDRED PERCENT LOCATION
The best retail business location in a community for attractingbusiness.
REAL ESTATE TERMINOLOGY
HYPOTHECATE
To make property security for a debt without giving up possession.
REAL ESTATE TERMINOLOGY
I.R.E.M.
See INSTITUTE OF REAL ESTATE MANAGEMENT.
REAL ESTATE TERMINOLOGY
IRS FORM 1099-S
A form that summarizes and reports transaction data from a closingfor IRS. See Closings
REAL ESTATE TERMINOLOGY
ILLEGAL
Contrary to law; not authorized by law.
REAL ESTATE TERMINOLOGY
IMPLIED
Presumed, or inferred, rather than expressed.
REAL ESTATE TERMINOLOGY
IMPLIED AGENCY
An agency created by the words, conduct or acts of the parties.
REAL ESTATE TERMINOLOGY
IMPLIED CONTRACT
A contract created by the words, conduct or acts of the parties, it isboth unwritten and unintended.
REAL ESTATE TERMINOLOGY
IMPLIED WARRANTIES
The warranties inferred, and not expressed, in a deed which usesthe word "grant" to convey a fee estate.
REAL ESTATE TERMINOLOGY
IMPOUND ACCOUNT
A trust-type account, established by lenders for the accumulation offunds to meet taxes, mortgage insurance premiums, and/or futureinsurance policy premiums, required to protect their security.Impounds are usually collected with the note payment. SeeESCROW ACCOUNT, TAX AND INSURANCE RESERVE. SeeClosings - Recordkeeping - Settlement Closings - PracticalApplications - Current Legal Issues
REAL ESTATE TERMINOLOGY
IMPROVED LAND
Land having either on-site improvements, off-site improvements, orboth.
REAL ESTATE TERMINOLOGY
IMPROVEMENT DISTRICT
See SPECIAL IMPROVEMENT DISTRICT. See GovernmentControls
REAL ESTATE TERMINOLOGY
IMPROVEMENTS
Generally, buildings, but may include any permanent structure orother development, such as a street, utilities, etc.
REAL ESTATE TERMINOLOGY
IMPUTED INTEREST
Rate of interest on a note that is implied by law, when the statedamount is less than 9%, or there is no stated amount.
REAL ESTATE TERMINOLOGY
IMPUTED KNOWLEDGE
Knowledge an agent has that is binding on a principal as a result ofthe agency relationship (whether or not the principal has this sameknowledge).
REAL ESTATE TERMINOLOGY
INCOME APPROACH
An appraisal method to determine the value of rental property by useof the estimated net income and other benefits to the owner,discounted or capitalized to determine its present value. SeeValuation Appraisal
REAL ESTATE TERMINOLOGY
INCOME, EFFECTIVE OR ADJUSTED GROSS
The actual amount of dollar income the property is likely to produce. It is the potential income, less a reasonable estimate of an allowancefor vacancy and collection loss.
REAL ESTATE TERMINOLOGY
INCOME, NET
The income that remains after all expenses have been deductedfrom effective gross income. Net income is derived without anydeduction for depreciation or debt service.
REAL ESTATE TERMINOLOGY
INCOME, POTENTIAL OR SCHEDULED GROSS
The annual market or economic rent of the property at 100%occupancy and no credit losses.
REAL ESTATE TERMINOLOGY
INCOME PROPERTY
Any real property that produces income, usually from rent.
REAL ESTATE TERMINOLOGY
INCOMPETENT
One who is mentally incapable; any person who, though not insane,is - by reason of old age, disease, weakness of mind, or any othercause - unable to properly manage and take care of himself or hisproperty unassisted, and by reason thereof, would likely be deceivedor imposed upon by designing persons. See Contract Agency
REAL ESTATE TERMINOLOGY
INCORPOREAL
Intangible, not able to be seen or felt (a right to use is incorporeal).
REAL ESTATE TERMINOLOGY
INCORPOREAL RIGHTS
Non-possessory rights in real estate.
REAL ESTATE TERMINOLOGY
INCREASING AND DIMINISHING RETURNS, PRINCIPLE OF
Holds that in successively applying equal increments of land, laborand/or capital to the already existing factor(s), a greater or lesseryield is reached. See Valuation Appraisal
REAL ESTATE TERMINOLOGY
INCREMENT
An increase in value. See PLOTTAGE.
REAL ESTATE TERMINOLOGY
INCURABLE DEPRECIATION
A loss in value due to physical deterioration, functionalobsolescence, or economic obsolescence that is economicallyinfeasible to fix; the contemplated dollar cost to fix the problem wouldnot be recaptured at sale, as of the date of appraisal.
REAL ESTATE TERMINOLOGY
INDEMNITY AGREEMENT
Agreement to insure; to secure against loss.
REAL ESTATE TERMINOLOGY
INDEPENDENT CONTRACTOR
One whose time and efforts are not regulated by others.
REAL ESTATE TERMINOLOGY
INFLATION
The expense or increase in an economy over its natural growth. Usually caused by over printing money and over-extending credit. Marked by a rapid increase in the price of goods.
REAL ESTATE TERMINOLOGY
INGRESS
A way to enter a property.
REAL ESTATE TERMINOLOGY
INHERITANCE
Property received by the laws of inheritance.
REAL ESTATE TERMINOLOGY
INJUNCTION
An instrument of a court to discontinue a specified activity.
REAL ESTATE TERMINOLOGY
IN-SERVICE LOAN
An allowance paid for active-duty military personnel, covering theirHUD required mortgage insurance premium.
REAL ESTATE TERMINOLOGY
INSPECTION
A visit to and review of the premises. See Closings - Recordkeeping- Settlement Closings
REAL ESTATE TERMINOLOGY
INSTALLMENT LAND CONTRACT
Purchase of real estate wherein the purchase price is paid ininstallments over a long period of time and title is retained by seller. Upon default, the payments are forfeited. See also LANDCONTRACT, CONTRACT FOR DEED, REAL PROPERTY SALESCONTRACT, etc. See Contract Agency - Finance
REAL ESTATE TERMINOLOGY
INSTALLMENT LOAN
A loan providing for payment of the principal in two or more amountsat different stated times.
REAL ESTATE TERMINOLOGY
INSTALLMENT NOTE
A note, which provides for payments of a certain sum or amount tobe paid on the dates specified in the instrument.
REAL ESTATE TERMINOLOGY
INSTALLMENT REPORTING
A method of reporting capital gains by installments for successive taxyears to minimize the impact of the totality of the capital gains tax inthe year of the sale.
REAL ESTATE TERMINOLOGY
INSTALLMENT SALE
A sale, for income tax purposes, in which the seller spreads thereceipts of the proceeds over two or more tax years, and does notreceive the entire principal amount in the first year of sale. SeeGovernment Controls
REAL ESTATE TERMINOLOGY
INSTITUTE OF REAL ESTATE MANAGEMENT
The organization conferring the designation of C.P.M. (CertifiedProperty Manager), which is considered the most prestigiousdesignation in the field of property management.
REAL ESTATE TERMINOLOGY
INSTITUTIONAL LENDER
A bank, insurance company, mutual savings bank, or savings andloan company, that deals heavily in real estate loans.
REAL ESTATE TERMINOLOGY
INSTRUMENT
A written legal document.
REAL ESTATE TERMINOLOGY
INSURABLE INTEREST
The degree of interest qualifying for insurance.
REAL ESTATE TERMINOLOGY
INSURANCE
Indemnification against loss from a specific hazard or peril.
REAL ESTATE TERMINOLOGY
INSURED MORTGAGE
A mortgage insured against loss to the mortgagee, in the event ofdefault and a failure of the mortgaged property to satisfy the balanceowing, plus costs of foreclosure. May be insured by F.H.A., V.A., orby independent mortgage insurance companies.
REAL ESTATE TERMINOLOGY
INTANGIBLE PROPERTY
That which cannot be touched, such as good will.
REAL ESTATE TERMINOLOGY
INTEGRATION, PRINCIPLE OF
The development stage of the life cycle of property value.
REAL ESTATE TERMINOLOGY
INTEREST
The sum paid or accrued in return for the use of money. SeeClosings - Recordkeeping - Settlement Closings
REAL ESTATE TERMINOLOGY
INTEREST RATE
The percentage of a sum of money charged for its use. Rent rateon money. See Math
REAL ESTATE TERMINOLOGY
INTERIM FINANCING
A short-term loan used until long-term financing is available. Usuallypaid off with the proceeds of a "take out" loan.
REAL ESTATE TERMINOLOGY
INTERNAL RATE OF RETURN (IRR)
A rate of discount, at which the present worth of future cash flows isexactly equal to the initial capital investment.
REAL ESTATE TERMINOLOGY
INTERPLEADER
A legal proceeding that allows an escrow holder of funds to ask thecourt to decide who gets what, when ownership of said funds is indispute. See Contracts & Regs - Practical Applications
REAL ESTATE TERMINOLOGY
INTERSTATE LAND SALES (ILSFD)
The Interstate Land Sales Full Disclosure Act is a federal law,enacted in 1968, which regulates interstate land sales by requiringregistration of real property with HUD. The main purpose of the actis to require disclosure of full and accurate information regarding theproperty to buyers before they decide to buy.
REAL ESTATE TERMINOLOGY
INTESTATE
A person who dies without leaving a valid will. See Real Property
REAL ESTATE TERMINOLOGY
INURE
To come into use or take effect.
REAL ESTATE TERMINOLOGY
INVENTORY
A detailed list of the stock-in-trade of a business.
REAL ESTATE TERMINOLOGY
INVALID
Not legally enforceable.
REAL ESTATE TERMINOLOGY
INVERSE CONDEMNATION
A request for condemnation brought about by the owner, rather thana governmental agency, as a result of loss sustained.
REAL ESTATE TERMINOLOGY
INVESTMENT YIELD
The gain from an investment in real property, including both incomeand resale. Expressed as a percentage of the amount invested.
REAL ESTATE TERMINOLOGY
INVESTOR
A person who commits money in order to earn financial return.
REAL ESTATE TERMINOLOGY
INVOLUNTARY LIEN
A lien imposed against property by operation of law without consentof the owner, such as a tax lien, judgment lien or mechanic's lien.
REAL ESTATE TERMINOLOGY
INWOOD ANNUITY CAPITALIZATION
This capitalization method is most frequently used to estimate thevalue of property under a long-term lease.
REAL ESTATE TERMINOLOGY
IRS (INTERNAL REVENUE SERVICE)
That branch of the Federal Government that regulates and controlsthe Federal Income Tax Service.
REAL ESTATE TERMINOLOGY
IRREVOCABLE
That which cannot be revoked or changed.
REAL ESTATE TERMINOLOGY
IRRIGATION DISTRICT
Quasi-political districts, created under special laws, to provide forwater services to property owners in the district; an operationgoverned to a great extent by law.
REAL ESTATE TERMINOLOGY
JAMB
The side post or lining of a doorway, window or other opening.
REAL ESTATE TERMINOLOGY
JOINT TENANCY
A type of ownership of property by two or more people with the rightof survivorship. Requires the four unities of time, title, interest andpossession. See Real Property - Practical Applications
REAL ESTATE TERMINOLOGY
JOINT VENTURE
Two or more individuals, or firms, joining together on a single projectas partners.
REAL ESTATE TERMINOLOGY
JOINTLY AND SEVERALLY LIABLE
Each party may be sued individually for the entire liability or allparties may be sued jointly.
REAL ESTATE TERMINOLOGY
JOIST
One of a series of parallel beams to which the boards of a floor andceiling laths are nailed, and supported in turn by larger beams,girders, or bearing walls.
REAL ESTATE TERMINOLOGY
JOURNAL
A chronological record of receipts and disbursements made to a trustescrow account. Required in Colorado. The ending journal balanceshows the total amount of money on deposit as of any given date. See Closings - Recordkeeping - Settlement Closings
REAL ESTATE TERMINOLOGY
JUDGMENT
The final determination of a court of a matter presented to it.
REAL ESTATE TERMINOLOGY
JUDGMENT LIEN
A legal claim on all of the property of a judgment debtor, whichenables the judgment creditor to have the property sold for paymentof the amount of the judgment.
REAL ESTATE TERMINOLOGY
JUDICIAL FORECLOSURE
A sale of property by a court proceeding to satisfy a lien.
REAL ESTATE TERMINOLOGY
JUNIOR MORTGAGES
Mortgages second in lien to previous mortgages.
REAL ESTATE TERMINOLOGY
JURISDICTION
The authority by which judicial officers take cognizance of anddecide causes; the power to hear and determine a cause; the rightand power which a judicial officer has to enter upon the inquiry.
REAL ESTATE TERMINOLOGY
JUST COMPENSATION
The amount of money received by a party whose property was takenby condemnation as determined by a court proceeding.
REAL ESTATE TERMINOLOGY
KEY LOT
A lot that is more valuable because of its location, especially whenneeded for the highest and best use of contiguous property.
REAL ESTATE TERMINOLOGY
KICKER
Different kinds of equity incentives a lender may ask for as acondition for making the loan.
REAL ESTATE TERMINOLOGY
LACHES
Failure to assert one's legal rights in the statutory period allowed. See STATUTE OF LIMITATIONS.
REAL ESTATE TERMINOLOGY
LAND
A general term, which includes the ground and those things of apermanent nature such as trees, crops, oil and minerals in theground, unless specifically excepted.
REAL ESTATE TERMINOLOGY
LAND ALLOCATION
The part of the cost basis of an income property that is the value ofthe land. The land portion of an income property is not depreciated,thus it must be allocated out for tax depreciation purposes.
REAL ESTATE TERMINOLOGY
LAND BANK
Land held for open space and/or future development.
REAL ESTATE TERMINOLOGY
LAND CONTRACT
See CONDITIONAL SALES CONTRACT. See Finance
REAL ESTATE TERMINOLOGY
LAND DESCRIPTION
A description of a particular piece of real property.
REAL ESTATE TERMINOLOGY
LAND GRANT
The giving of public lands, by the government, for the benefit of itscitizens, usually for roads, railroads, colleges, etc.
REAL ESTATE TERMINOLOGY
LAND LOCKED
Property that has no ingress or egress, except across land belongingto another.
REAL ESTATE TERMINOLOGY
LAND PROJECT
Subdivision of 50 or more unimproved parcels subject to FederalLand Subdivision Law.
REAL ESTATE TERMINOLOGY
LAND RESIDUAL PROCESS
Method of appraising vacant land by subtracting building value fromtotal value.
REAL ESTATE TERMINOLOGY
LANDLORD
Owner or lessor of real property.
REAL ESTATE TERMINOLOGY
LANDLORD-TENANT CODE
Laws intended to provide some uniformity in regulating therelationship of landlord and tenant.
REAL ESTATE TERMINOLOGY
LANDSCAPING
The act of modifying a landscape, or features used in suchmodification, such as trees, lawns, grade changes, etc.
REAL ESTATE TERMINOLOGY
LATERAL SUPPORT
The right to have land supported by the adjoining land.
REAL ESTATE TERMINOLOGY
LAWFUL OBJECT
The object of a contract, which is permitted by law. One of theessential elements of a contract.
REAL ESTATE TERMINOLOGY
LEASE
An agreement, written or unwritten, by which an owner of realproperty (lessor) gives the right of possession to another (lessee) fora specified period of time (term), and for a specified consideration(rent).
REAL ESTATE TERMINOLOGY
LEASE OPTION
A rental agreement containing a clause giving the tenant the right topurchase, according to specified conditions.
REAL ESTATE TERMINOLOGY
LEASEHOLD ESTATE
A tenant's right to occupy real estate during the term of the lease.
REAL ESTATE TERMINOLOGY
LEDGER
The principal book of accounts containing the final entries of debitsand credits. See Closings
REAL ESTATE TERMINOLOGY
LEDGER CARD
An accounting document that contains only those debits and creditsthat affect an individual, or one particular property.
REAL ESTATE TERMINOLOGY
LEGACY
A gift of personal property by will, usually money.
REAL ESTATE TERMINOLOGY
LEGAL
Required or permitted by law; conforming to the law.
REAL ESTATE TERMINOLOGY
LEGAL AGE
The age, according to statutes, a person attains majority and is nolonger a minor, currently 18 years.
REAL ESTATE TERMINOLOGY
LEGAL CAPACITY
The ability to contract.
REAL ESTATE TERMINOLOGY
LEGAL DESCRIPTION
A proper and formal method of describing a parcel of real estate thatis recognized by law. See Real Property - Math
REAL ESTATE TERMINOLOGY
LEGAL PERSON
A creature of law having certain powers and duties of a naturalperson, usually a corporation.
REAL ESTATE TERMINOLOGY
LEGAL TITLE
Usually, title without ownership rights, such as the title placed in atrustee under a deed of trust, or the title of a vendor under a landcontract. See Contracts & Regs
REAL ESTATE TERMINOLOGY
LEGATEE
The party receiving a legacy.
REAL ESTATE TERMINOLOGY
LESS THAN FREEHOLD
The manner of holding real property by renting or leasing.
REAL ESTATE TERMINOLOGY
LESSEE
The party to whom a lease (the right to possession) is given, inreturn for a consideration (rent).
REAL ESTATE TERMINOLOGY
LESSOR
The party (usually the owner) who gives the lease (right topossession), in return for a consideration (rent).
REAL ESTATE TERMINOLOGY
LET
To rent or lease.
REAL ESTATE TERMINOLOGY
LEVEL PAYMENT LOAN
See AMORTIZED LOAN.
REAL ESTATE TERMINOLOGY
LEVERAGE
The use of financing to allow a small amount of cash to purchase alarge investment.
REAL ESTATE TERMINOLOGY
LEVERAGE MULTIPLIER
In a leveraged investment, the ratio of purchase price to the cashinvestment.
REAL ESTATE TERMINOLOGY
LEVY
Imposition of a tax, executing a lien. See Government Controls
REAL ESTATE TERMINOLOGY
LIABILITY
A general term, encompassing all types of debts and obligations.
REAL ESTATE TERMINOLOGY
LICENSE
An authorization, by law, to do some specific thing. See Contracts &Regs
REAL ESTATE TERMINOLOGY
LICENSEE
A person legally licensed by the Real Estate Commission to transactbusiness in real estate. See Current Legal Issues
REAL ESTATE TERMINOLOGY
LICENSE LAW
Laws enacted by all states, the District of Columbia, and certainCanadian provinces which provide the states with the authority tolicense and regulate the activities of real estate brokers andsalespeople.
REAL ESTATE TERMINOLOGY
LIEN
A charge upon property for the payment of a debt or obligation. SeeReal Property
REAL ESTATE TERMINOLOGY
LIENEE
One whose property is subject to a lien.
REAL ESTATE TERMINOLOGY
LIENOR
the one holding a lien against another.
REAL ESTATE TERMINOLOGY
LIEN THEORY
Treats mortgages only as a security interest in real property, with"title" vested in the mortgagor (owner). Colorado is a lien theorystate.
REAL ESTATE TERMINOLOGY
LIFE ESTATE
An estate in real property, measured by the life of a person. SeeReal Property
REAL ESTATE TERMINOLOGY
LIFE TENANT
One holding a life estate.
REAL ESTATE TERMINOLOGY
LIKE-KIND PROPERTY
A tax term used in exchanges. Property may be exchanged for like-kind property, and the tax postponed. The term does not refer to thephysical similarity of the properties, but the purpose and intent(investment) of the taxpayer.
REAL ESTATE TERMINOLOGY
LIMITED AGENT
An agent whose duties and obligations to a principal are only thoseset forth in C.R.S. 12-61-804 or 12-61-805, with any additional dutiesand obligations agreed to pursuant to section 12-61-803(5).
REAL ESTATE TERMINOLOGY
LIMITED PARTNERSHIP
A partnership composed of limited partners, whose contribution andliability are limited, and has one or more general partners.
REAL ESTATE TERMINOLOGY
LINTEL
A horizontal board that supports the load over an opening, such as adoor or window.
REAL ESTATE TERMINOLOGY
LIQUID ASSETS
Cash, or assets immediately convertible to cash.
REAL ESTATE TERMINOLOGY
LIQUIDATED DAMAGES
The amount of money paid, or to be paid, under a contract in theevent of a breach of contract. See Contracts & Regs - PracticalApplications
REAL ESTATE TERMINOLOGY
LIQUIDITY OF INVESTMENT
The ease with which investments can be immediately converted intocash.
REAL ESTATE TERMINOLOGY
LIS PENDENS
A recorded notice that litigation (a lawsuit) is pending, which mayaffect title of the real estate involved.
REAL ESTATE TERMINOLOGY
LISTING
A written employment agreement between an owner of a realproperty and a real estate agent, whereby the agent agrees tosecure a buyer or tenant for a specific property, at a certain priceand terms, in return for a fee or commission. See Contract Agency -Practical Applications
REAL ESTATE TERMINOLOGY
LISTOR
The licensee who obtains a listing on a particular property.
REAL ESTATE TERMINOLOGY
LITIGATION
A lawsuit.
REAL ESTATE TERMINOLOGY
LOAN ADMINISTRATION
Mortgage bankers not only originate loans, but also "service" themfrom origination to maturity of the loan. (Loan servicing.)
REAL ESTATE TERMINOLOGY
LOAN APPLICATION
A source of information, on which the lender bases his decision tomake the loan; defines the terms of the loan contract, gives the nameof the borrower, place of employment, salary, bank accounts, andcredit references; and describes the real estate that is to bemortgaged. It also stipulates the amount of loan being applied for,and the loan's repayment terms.
REAL ESTATE TERMINOLOGY
LOAN CLOSING
When all conditions have been met, the loan officer authorizes therecording of the trust deed or mortgage. The disbursal procedure offunds is similar to the closing of a real estate sales escrow. Theborrower can expect to receive less than the amount of the loan, astitle, recording, service, and other fees may be withheld, or he canexpect to deposit the cost of these items into the loan escrow. Thisprocess is sometimes called "funding" of the loan.
REAL ESTATE TERMINOLOGY
LOAN COMMITMENT
See COMMITMENT.
REAL ESTATE TERMINOLOGY
LOAN CORRESPONDENT
A representative who negotiates and services loans, usually for anout-of-state lender.
REAL ESTATE TERMINOLOGY
LOAN PAYOFF
The balance, at any point in time, of a partially amortized loan.
REAL ESTATE TERMINOLOGY
LOAN TERM
Period of time allowed for amortization of loan, usually expressed inyears. Certain types of loans have maximum terms, and some arefixed with penalties imposed for prepayment.
REAL ESTATE TERMINOLOGY
LOAN-TO-VALUE RATIO
The ratio, expressed as a percentage, of the amount of a loan to thevalue, or selling price, of real property. Usually, the higher thepercentage, the greater the interest charged. See Math
REAL ESTATE TERMINOLOGY
LOAN VALUE
Value set to aid in determining the amount of a new mortgage ortrust deed loan. See Math
REAL ESTATE TERMINOLOGY
LOCATION (SITUS)
An economic characteristic of land having the greatest effect onvalue of any other characteristic.
REAL ESTATE TERMINOLOGY
LOCK-IN CLAUSE
A clause in a note, mortgage, or trust deed that preventsprepayment. See Finance
REAL ESTATE TERMINOLOGY
LOFT
Unfinished building area or open space, usually second floor orhigher, typically used for low-cost manufacturing operations.
REAL ESTATE TERMINOLOGY
LOSS PAYEE
Person or entity designated in an insurance policy to be paid in casethe insured property is damaged or destroyed.
REAL ESTATE TERMINOLOGY
MAI
Designated member of the Appraisal Institute.
REAL ESTATE TERMINOLOGY
MAGGIE MAE (MGIC)
Mortgage Guarantee Insurance Corporation. See also MUTUALMORTGAGE INSURANCE.
REAL ESTATE TERMINOLOGY
MAINTENANCE
The general repair and upkeep of a building in order to keep it ingood condition.
REAL ESTATE TERMINOLOGY
MAINTENANCE FEE
As applied to condominiums and planned developments, the amountcharged each unit owner to maintain the common area. Usually, amonthly fee paid as part of the budget.
REAL ESTATE TERMINOLOGY
MAJORITY
The age at which a person is no longer considered a minor, currently18 years old in most states, and is valid for most things, such asentering into contracts, etc.
REAL ESTATE TERMINOLOGY
MANAGEMENT AGREEMENT
A contract wherein an owner employs a property manager.
REAL ESTATE TERMINOLOGY
MARKET DATA APPROACH
The primary method of estimating the value of vacant land andsingle-family owner-occupied dwellings. Also called “comparableapproach”. See Valuation Appraisal
REAL ESTATE TERMINOLOGY
MARKET PRICE
The price actually paid for property.
REAL ESTATE TERMINOLOGY
MARKET VALUE
The price for which property can be sold on the open market, if thereis a willing seller, a wiling buyer, and a reasonable time to make thesale. See Valuation Appraisal - Math
REAL ESTATE TERMINOLOGY
MARKETABLE TITLE
Title which can be readily marketed (sold) to a reasonably prudentpurchaser who is aware of the facts, and their legal meaning,concerning liens and encumbrances.
REAL ESTATE TERMINOLOGY
MASTER DEED
The instrument that legally establishes a condominium. Also called“condominium declaration”.
REAL ESTATE TERMINOLOGY
MATERIAL FACT
An important fact that may affect a person’s judgment.
REAL ESTATE TERMINOLOGY
MATERIALMEN
The person or entity that supplies materials used in the constructionof improvements on real property.
REAL ESTATE TERMINOLOGY
MATURITY
The time when a debt, such as a note, becomes due and isextinguished, if paid as agreed.
REAL ESTATE TERMINOLOGY
MECHANIC'S LIEN
A statutory lien on a specific property for labor or materialscontributed to a work or improvement. See Real Property
REAL ESTATE TERMINOLOGY
MEGALOPOLIS
An extensive, heavily-populated, continuous urban area, includingany number of cities.
REAL ESTATE TERMINOLOGY
MERGER
The union of two or more separate interests, by the transfer of all theinterests into one. The acquisition of title by one owner, to title of anadjacent parcel.
REAL ESTATE TERMINOLOGY
MERIDIAN LINE
Survey line running North and South, used in establishing townshipboundaries. See Math
REAL ESTATE TERMINOLOGY
METES
Refers to distance and direction
REAL ESTATE TERMINOLOGY
METES AND BOUNDS
A method of describing the boundaries of land, setting forth all theboundary lines, together with their terminal points and angles. SeeReal Property
REAL ESTATE TERMINOLOGY
MGIC (Maggie Mae)
See MUTUAL MORTGAGE INSURANCE.
REAL ESTATE TERMINOLOGY
MILE
5,280 feet, 1,760 yards.
REAL ESTATE TERMINOLOGY
MILL
One tenth of a cent (.001). A unit used in computing real propertytaxes. See Government Controls & Math
REAL ESTATE TERMINOLOGY
MINERAL RIGHTS
Subsurface rights in the land, and the profits therefrom.
REAL ESTATE TERMINOLOGY
MINIMUM PROPERTY REQUIREMENTS (MPR)
Minimum standards of planning, construction and generalacceptability required on FHA and VA loans for the purchase orconstruction of residential property.
REAL ESTATE TERMINOLOGY
MINOR
In most states, a person under 18 years of age.
REAL ESTATE TERMINOLOGY
MISDEMEANOR
A minor crime, usually punishable by a year or less in prison, and/ora fine of $1,000.00 or less.
REAL ESTATE TERMINOLOGY
MISPLACED IMPROVEMENT
An appraisal term indicating an improvement on land which is not the"highest and best use".
REAL ESTATE TERMINOLOGY
MISREPRESENTATION
A false, incorrect, or misleading statement, account or explanation. See Contract Agency
REAL ESTATE TERMINOLOGY
MISTAKE
A misunderstanding or error. May make a contract voidable if themistake was mutual, unintentional, material, and not a result ofnegligence.
REAL ESTATE TERMINOLOGY
MMI
See MUTUAL MORTGAGE INSURANCE.
REAL ESTATE TERMINOLOGY
MONETARY CONTROLS
Federal Reserve tools for regulating the availability of money andcredit to influence the level of economic activity.
REAL ESTATE TERMINOLOGY
MONEY MARKET (MONEY MARKET FUND)
A general term, referring to the availability of money for short or longterm loans. A kind of mutual fund, usually trading in short-termnotes, (i.e., T-Bills, certificates of deposits (CD's), etc.).
REAL ESTATE TERMINOLOGY
MONTH-TO-MONTH TENANCY
A lease of real property for the term of one month, renewable foreach succeeding month, at the option of either party.
REAL ESTATE TERMINOLOGY
MONTHLY RENT
The rental income received, or due, during the period of a month.
REAL ESTATE TERMINOLOGY
MONUMENT
A fixed object and point established by surveyors to establish landlocations.
REAL ESTATE TERMINOLOGY
MORATORIUM
A temporary suspension in the payment of any activity.
REAL ESTATE TERMINOLOGY
MORE OR LESS
Sometimes used in describing property, this statement indicates themeasurements or dimensions are approximate.
REAL ESTATE TERMINOLOGY
MORTGAGE
(1) To hypothecate as security, real property for the payment of adebt. The borrower (mortgagor) retains possession and use of theproperty. (2) The instrument by which real estate is hypothecated assecurity for the repayment of a loan.
REAL ESTATE TERMINOLOGY
MORTGAGE BANKER/BROKER
See LOAN CORRESPONDENT & MORTGAGE COMPANY.
REAL ESTATE TERMINOLOGY
MORTGAGE COMPANY
A company that deals in real estate loans that are readily saleable inthe secondary mortgage market. State regulated.
REAL ESTATE TERMINOLOGY
MORTGAGE GUARANTY INSURANCE CORPORATION (MGIC)
A private company, organized in 1956, to insure against financialloss. Available to mortgage lenders.
REAL ESTATE TERMINOLOGY
MORTGAGEE
The party lending the money and receiving the mortgage. Somestates treat the mortgagee as the "legal" owner, entitled to rents fromthe property. Other states treat the mortgagee as a secured creditor,the mortgagor being the owner.
REAL ESTATE TERMINOLOGY
MORTGAGOR
The party who borrows the money and gives the mortgage. SeeFinance
REAL ESTATE TERMINOLOGY
MULTIPLE
The operation by which any given number or quantity may be addedto itself any number of times. See Math
REAL ESTATE TERMINOLOGY
MULTIPLE DWELLING
A building designed as a dwelling for more than four families at thesame time.
REAL ESTATE TERMINOLOGY
MULTIPLE EXCHANGE
One in which more than two like-kind properties are exchanged.
REAL ESTATE TERMINOLOGY
MULTIPLE LISTING
A listing agreement used by a broker who is a member of a multiplelisting organization. The multiple listing agreement is, in effect, anexclusive "right-to-sell", with an additional authority and obligation onthe part of the listing broker to distribute the listing to other brokers ofa multiple listing organization. A listing taken by a member of agroup of brokers, organized so that each member of the groupshares his listings with the fellow members.
REAL ESTATE TERMINOLOGY
MUTUAL CONSENT (ASSENT)
Both parties approve or assent to the terms of a contract freely. Oneof the essential elements of a contract.
REAL ESTATE TERMINOLOGY
MUTUAL MORTGAGE INSURANCE
Insurance premium paid by the borrower, collected by the lender,and paid to the FHA. This fund insures the lender against loss, andprovides enough funds for the full operation of the FHA. If not FHA,use PMI and MGIC.
REAL ESTATE TERMINOLOGY
MUTUAL SAVINGS BANK
A savings bank originated in the New England States, in which thedepositors invested their savings with the right to borrow money forhome loans from the organization.
REAL ESTATE TERMINOLOGY
MUTUAL WATER COMPANY
A water company organized by or for water users in a given district,with the object of securing an ample water supply at a reasonablerate; stock is issued to users and is considered "Real Property" as it"runs with the land".
REAL ESTATE TERMINOLOGY
NAKED LEGAL TITLE
See BARE LEGAL TITLE.
REAL ESTATE TERMINOLOGY
NAR
National Association of Realtors (New Association), formerlyNational Association of Real Estate Boards (Old Association).
REAL ESTATE TERMINOLOGY
NAREB
Founded in 1947, is the oldest and largest minority trade associationin America. Members of the NAREB organization are referred to as“Realtist”. Although the majority of the members are AfricanAmerican, NAREB is open to qualified real estate agents of all raceswho are interested in achieving the ideals of “Democracy inHousing”.
REAL ESTATE TERMINOLOGY
NARRATIVE APPRAISAL
A summary of all factual materials, techniques and appraisalmethods used by the appraiser in setting forth his value conclusion.
REAL ESTATE TERMINOLOGY
NATIONAL ASSOCIATION OF REALTORS® (NAR)
The largest and most prominent trade organization of real estatelicensees.
REAL ESTATE TERMINOLOGY
NATIONAL FOREST
A forest or watershed reservation which is administered by theForest Service, United States Department of Agriculture.
REAL ESTATE TERMINOLOGY
NATURAL PERSON
A living person, contrasted to a legal person (corporation).
REAL ESTATE TERMINOLOGY
NEGATIVE AMORTIZATION LOAN
A financing payment plan, in which the monthly payments are lessthan the actual amortized amount, and the loan balance increasesrather than of decreases (see GPM).
REAL ESTATE TERMINOLOGY
NEGATIVE CASH FLOW
An investment situation where the income from an investmentproperty does not equal the usual expenses. The owner must comeup with cash each month to meet these expenses.
REAL ESTATE TERMINOLOGY
NEGATIVE FRAUD
The withholding of a material fact, thereby inducing a person to enterinto a contract which causes him damage or loss.
REAL ESTATE TERMINOLOGY
NET AFTER TAXES
The net income after all charges, including federal and state incometaxes, have been deducted (i.e., Profit).
REAL ESTATE TERMINOLOGY
NET INCOME
The difference between adjusted gross income and operatingexpenses.
REAL ESTATE TERMINOLOGY
NET LEASE
A lease under which lessor receives a fixed rental and lessee paystaxes, utilities and all other operating expenses.
REAL ESTATE TERMINOLOGY
NET LISTING
A listing which provides that the broker may retain, as hiscommission, that part of the sales price above a specified amount. Frowned upon in most states. See Contract Agency
REAL ESTATE TERMINOLOGY
NET LOSS
The excess of expense over income for a given period.
REAL ESTATE TERMINOLOGY
NET USABLE ACRE
Only that portion of a property that is suitable to build upon.
REAL ESTATE TERMINOLOGY
NET WORTH
The difference between total assets and liabilities of an individual,corporation, etc.
REAL ESTATE TERMINOLOGY
NOMINAL INTEREST RATE
Rate named in the contract.
REAL ESTATE TERMINOLOGY
NON-CONFORMING USE
A use of land that does not conform to the use permitted by a zoningordinance for the area. It may be lawful or unlawful.
REAL ESTATE TERMINOLOGY
NON DISCLOSURE
Failing to reveal a fact, with, or without, intent to conceal.
REAL ESTATE TERMINOLOGY
NON-FREEHOLD ESTATE
See LEASEHOLD ESTATE.
REAL ESTATE TERMINOLOGY
NON-INSTITUTIONAL LENDERS
Sources of real estate loan funds, other than institutional.
REAL ESTATE TERMINOLOGY
NON-RECOURSE NOTE
A note in which the borrower has no personal liability for payment.
REAL ESTATE TERMINOLOGY
NON-RESIDENT
Not residing in this state.
REAL ESTATE TERMINOLOGY
NORMAL WEAR AND TEAR
The deterioration or loss in value caused by the normal andreasonable use of the property. In leases, the tenant is not usuallyresponsible for "normal wear and tear".
REAL ESTATE TERMINOLOGY
NOTARY PUBLIC
An appointed officer with authority to take the acknowledgment ofpersons executing documents, to sign the certificate and affix hisseal.
REAL ESTATE TERMINOLOGY
NOTE
Document signed by the borrower, obligating them to re-pay theamount borrowed, plus anything else agreed upon. See Closings -Recordkeeping - Settlement Closings
REAL ESTATE TERMINOLOGY
NOTICE
Actual knowledge acquired by being present at the occurrence.
REAL ESTATE TERMINOLOGY
NOTICE OF CESSATION
A notice filed by an owner after work has ceased on a constructionproject, thereby limiting the time in which to file a mechanic's lien.
REAL ESTATE TERMINOLOGY
NOTICE OF COMPLETION
A notice that is recorded by the party who ordered work orimprovements, which places time limits for mechanic's liens.
REAL ESTATE TERMINOLOGY
NOTICE OF NON-RESPONSIBILITY
A notice which, when properly recorded and posted on the property,relieves the owner from the effect of a mechanic's lien for work thatwas not ordered by the owner.
REAL ESTATE TERMINOLOGY
NOTICE TO PAY RENT OR QUIT
A notice required by law before a tenant, delinquent in rentalpayments, may be evicted by an unlawful detainer court action.
REAL ESTATE TERMINOLOGY
NOTICE TO QUIT
An eviction notice, given by the landlord to the tenant terminatingtheir tenancy.
REAL ESTATE TERMINOLOGY
NOVATION
The substitution of a new obligation for an old one. See ContractAgency
REAL ESTATE TERMINOLOGY
NULL AND VOID
Something that is not binding or enforceable, it is of no legal force oreffect, it has no worth.
REAL ESTATE TERMINOLOGY
NUNCUPATIVE WILL
An oral will, made in contemplation of death, such as servicemen inwartime. Must be reduced to writing, and conveys only personalproperty up to a $1,000 limit.
REAL ESTATE TERMINOLOGY
OATH
A solemn pledge made before a judge, notary public, or other publicofficial, usually given to affirm the "truth of" or "to something".
REAL ESTATE TERMINOLOGY
"OR MORE" CLAUSE
Clause in a trust deed, or note, which permits an early payoff of theloan, without payoff penalty.
REAL ESTATE TERMINOLOGY
OBLIGATORY ADVANCES
Disbursements of money, in which the lender, under the terms of theloan, has bound himself to make over the period of the construction.
REAL ESTATE TERMINOLOGY
OBLIGEE
One to whom a legal debt is owed.
REAL ESTATE TERMINOLOGY
OBLIGOR
One who owes a legal debt to another.
REAL ESTATE TERMINOLOGY
OBSOLESCENCE
A type of depreciation of property. Functional obsolescence is a lossof value, due to some defect in a structure.
REAL ESTATE TERMINOLOGY
OCCUPANCY
With reference to land, the word has become synonymous withpossession.
REAL ESTATE TERMINOLOGY
OFF-SITE IMPROVEMENTS
Improvements which add to the usefulness (utility) of the site, but arenot located directly on it (i.e., streets, curbs, drainage, sidewalks,lighting, etc.).
REAL ESTATE TERMINOLOGY
OFFER
A presentation or proposal for acceptance to form a contract. Anoffer must be definite as to price and terms. See Contracts & Regs
REAL ESTATE TERMINOLOGY
OFFER AND ACCEPTANCE
Necessary to make a contract valid. An offer is made by one party(the offeror) and, if accepted by the other party (offeree), a meetingof the minds has been effected and a valid contract exists; providedit is definite and certain as to its required terms (price, location,method of payment, etc.). See Practical Applications
REAL ESTATE TERMINOLOGY
OFFEREE
One to whom an offer is made.
REAL ESTATE TERMINOLOGY
OFFEROR
One who makes an offer.
REAL ESTATE TERMINOLOGY
OFFICE BUILDING
A building constructed of individual offices, used primarily bycompanies to conduct business.
REAL ESTATE TERMINOLOGY
OFFICE OF INTERSTATE LAND SALES REGISTRATION (OILSR)
The federal agency that regulates interstate land sales.
REAL ESTATE TERMINOLOGY
OFFICE OF THRIFT SUPERVISION
A Federal Agency under the Department of Treasury that supervisessavings and loans.
REAL ESTATE TERMINOLOGY
OFFICE POLICY
Written procedures for all office personnel to adhere to. SeeContracts & Regs - Current Legal Issues
REAL ESTATE TERMINOLOGY
OPEN AND NOTORIOUS OCCUPATION OR POSSESSION
Possession of real property, obvious to anyone, that the party inpossession is claiming title to, or an interest in, the property.
REAL ESTATE TERMINOLOGY
OPEN END MORTGAGE (OR TRUST DEED)
Allows for future advances, using the same instrument for security.
REAL ESTATE TERMINOLOGY
OPEN HOUSING LAW
Federal law banning discrimination in the sale, use or rental ofhousing based upon race, color, religion, or national origin of thebuyer or tenant. The two formal names are the Civil Rights Act, TitleVIII and Public Law No. 90-284.
REAL ESTATE TERMINOLOGY
OPEN LISTING
A listing providing that the broker is to receive a commission if he isthe first person to obtain a buyer who is "ready, willing and able" topurchase the property on the terms of the listing, or on other termsacceptable to the owner. Procuring cause is the primeconsideration. See Contracts & Regs - Contract Agency
REAL ESTATE TERMINOLOGY
OPERATING CASH
The money an income property owner has to operate the property,including rental income and cash reserves.
REAL ESTATE TERMINOLOGY
OPERATING EXPENSE RATIO
The ratio of expenses to gross income expressed as a percentage. In general, the older the building, the higher the expense ratio.
REAL ESTATE TERMINOLOGY
OPERATING EXPENSES
The cost of operating an income producing property, such asmanagement, utilities, and similar day to day expenses; as well astaxes, insurance, and a reserve for replacement of items whichperiodically wear out.
REAL ESTATE TERMINOLOGY
OPERATING RESULTS
The profit or loss from the operation of the income property, beforedepreciation adjustment.
REAL ESTATE TERMINOLOGY
OPERATING STATEMENT
A statement setting forth estimated operating incomes and expensesfor a typical year for a property. The appraiser reconstructs theowner's operating statement, including or excluding figuresnecessary to make it illustrative of a typical year of ownership.
REAL ESTATE TERMINOLOGY
OPERATION OF LAW
Rights, and sometimes, duties and/or obligations, that belong to aperson through established rules of law, or by "common law", withoutany action by the person, or by an action taken, or changed by,legislation.
REAL ESTATE TERMINOLOGY
OPINION OF TITLE
An evaluation of the condition of the title to a particular parcel of landafter examination of the abstract of title to the land. Usually, an"Attorney's Opinion".
REAL ESTATE TERMINOLOGY
OPTION
A right given to a person to buy, sell, or lease property within a statedperiod, and under certain specified terms. See Contract Agency
REAL ESTATE TERMINOLOGY
OPTION DEALER
A person buying, selling, or offering to buy or sell options on realproperty.
REAL ESTATE TERMINOLOGY
OPTIONEE
The person who receives an option on property.
REAL ESTATE TERMINOLOGY
OPTIONOR
The owner of the title who gives an option.
REAL ESTATE TERMINOLOGY
ORAL CONTRACT
A verbal or spoken contract. See also PAROL EVIDENCE RULE.
REAL ESTATE TERMINOLOGY
ORDINANCES
Codes, regulations and rules enacted into law by local governingbodies.
REAL ESTATE TERMINOLOGY
ORDINARY INCOME
A term having meaning only in relation to income tax. The regulargraduated scale of tax is paid on income which is called "ordinary",as opposed to capital gains or any other income that is taxeddifferently.
REAL ESTATE TERMINOLOGY
ORIENTATION
Placing an improvement on a lot with regard to its exposure to therays of the sun, prevailing winds, privacy from the street andprotection from outside noises.
REAL ESTATE TERMINOLOGY
ORIGINAL CONTRACTOR
A contractor who contracts directly with the owner of real estate.
REAL ESTATE TERMINOLOGY
ORIGINATION FEE
A fee charged by a lender for making a loan. Usually, covers cost ofdocument preparation. Generally, is between 1% and 2% of loanamount. See Contracts & Regs
REAL ESTATE TERMINOLOGY
"OR MORE"
A term used in a mortgage or Deed of Trust that allows themortgagor to pre-pay the loan without a penalty.
REAL ESTATE TERMINOLOGY
OSTENSIBLE AGENCY
That which appears to be, or seems to be, agency, without a formalcontract.
REAL ESTATE TERMINOLOGY
OUTLAWED
A claim which can no longer be prosecuted, due to the expiration ofthe period permitted by the Statute of Limitations. Outside theprotection of the law.
REAL ESTATE TERMINOLOGY
OVER-IMPROVEMENT
An improvement which is not the "highest and best use" for the siteon which it is placed, by reason of excess size or cost.
REAL ESTATE TERMINOLOGY
OVERAGE
That yield on the loan which exceeds the interest rate, and has itsbasis in the achievement of rental income by the borrower-owner, inexcess of a set minimum.
REAL ESTATE TERMINOLOGY
OVERAGE INCOME
The amount of rent, over the base amount, received by the lessor ina retail lease (a percentage lease).
REAL ESTATE TERMINOLOGY
OVERHANG
That part of the roof extending beyond the walls, to shade buildingsand cover walks.
REAL ESTATE TERMINOLOGY
OWNER/OCCUPANT
Property owner who physically occupies the property.
REAL ESTATE TERMINOLOGY
OWNERSHIP
The right to the use and enjoyment of property to the exclusion ofothers.
REAL ESTATE TERMINOLOGY
P.I.T.I.
The term used to identify "Principal, Interest, Taxes and Insurance",payments on a mortgage or deed of trust. May only be P & I, orP.I.T. payments, as identified in sequence above.
REAL ESTATE TERMINOLOGY
PACKAGE TRUST DEED OR MORTGAGE
A trust deed or mortgage, secured by both real property andpersonal property (appliances, carpeting, etc.).
REAL ESTATE TERMINOLOGY
PANIC PEDDLING
Generally referred to as "block-busting." A real estate licensee usesthe influx of minorities into a neighborhood to induce other owners tosell their property at a discount before the values go down, then re-sells those properties to the minorities at a higher price. Thispractice is a violation of Fair Housing Laws.
REAL ESTATE TERMINOLOGY
PAPER
A generic term, used to describe notes, mortgages, deeds of trust,etc.
REAL ESTATE TERMINOLOGY
PAR
The "average", equal of, or face value of the norm. The "zero" point.
REAL ESTATE TERMINOLOGY
PARCEL
Any area of land contained within one legal description. See Math
REAL ESTATE TERMINOLOGY
PAROL CONTRACT
A verbal or spoken contract (Oral).
REAL ESTATE TERMINOLOGY
PAROL EVIDENCE RULE
Provides that oral agreements may be used as proof of intent, only ifthe written contract is contradictory, illegal or ambiguous, and oraltestimony would be required for proper interpretation.
REAL ESTATE TERMINOLOGY
PARTIAL RECONVEYANCE DEED
A deed used to reconvey a portion of land encumbered by a blanketmortgage or trust deed. See also PARTIAL RELEASE.
REAL ESTATE TERMINOLOGY
PARTIAL RELEASE CLAUSE
A clause in a mortgage or trust deed, which provides for release ofpart of the property from the mortgage or trust deed upon partpayment of all, or part of, the debt. See also PARTIALRECONVEYANCE.
REAL ESTATE TERMINOLOGY
PARTIALLY AMORTIZED
A payment schedule that allows for equal payments of principal andinterest for a certain period or term, followed by payment in full of thebalance, or a balloon payment.
REAL ESTATE TERMINOLOGY
PARTICIPATION
As a concession for making the loan on a commercial property, thelender is given some portion of the ownership, allowing him toparticipate in the profits.
REAL ESTATE TERMINOLOGY
PARTICIPATION LOAN
See PARTICIPATION.
REAL ESTATE TERMINOLOGY
PARTITION
A division of real or personal property between co-owners, usually bycourt action. When the property cannot be physically divided, thecourt will sell the property and divide the proceeds.
REAL ESTATE TERMINOLOGY
PARTNERSHIP
Two or more persons, joined together for the operation of abusiness, sharing the profits in certain proportions.
REAL ESTATE TERMINOLOGY
PARTY WALL
A wall erected on a line between adjoining properties for the use ofboth properties.
REAL ESTATE TERMINOLOGY
PASSIVE INVESTMENT
Any investment that does not require any action on the part of theinvestor, beyond the investment of capital to receive a gain.
REAL ESTATE TERMINOLOGY
PASSIVE INVESTOR
An investor who invests only capital, and does not take an active rolein the investment.
REAL ESTATE TERMINOLOGY
PATENT
An original conveyance of real estate from the Federal governmentto the private owner.
REAL ESTATE TERMINOLOGY
PAYBACK
A time that indicates the time period required to recoup an initialinvestment. Note: Does not include the "time value" of moneyconcept.
REAL ESTATE TERMINOLOGY
PAYEE
The one to whom payment is made, the receiver of the monies.
REAL ESTATE TERMINOLOGY
PAYOR
The one who pays.
REAL ESTATE TERMINOLOGY
PEDESTRIAN COUNT
A count of persons walking past a business location. This count isused in appraising the property for business purposes.
REAL ESTATE TERMINOLOGY
PENALTY
A punishment imposed for violating a law or agreement.
REAL ESTATE TERMINOLOGY
PENNY
The term, as applied to nails, serves as a measure of nail length, andis abbreviated by the letter "d".
REAL ESTATE TERMINOLOGY
PER AUTRE VIE
Latin meaning “for the life of another”. A life estate measured by thelife of someone other than the life tenant. See also “pur autre vie”.
REAL ESTATE TERMINOLOGY
PERCENT
1/100th, Decimal .01. See Math
REAL ESTATE TERMINOLOGY
PERCENTAGE LEASE
A lease, in which the rent is computed as a percentage of the grossbusiness of the tenant.
REAL ESTATE TERMINOLOGY
PERCOLATION (PERK) TEST
A soil test to determine if soil will take sufficient water seepage foruse of a septic tank.
REAL ESTATE TERMINOLOGY
PERIODIC TENANCY
Tenancy for successive periods of the same length, unlessterminated sooner by proper notice of either party.
REAL ESTATE TERMINOLOGY
PERSONAL PROPERTY
Any property which is not designated by law as real property. SeeReal Property
REAL ESTATE TERMINOLOGY
PERSONALTY
See PERSONAL PROPERTY. See Real Property
REAL ESTATE TERMINOLOGY
PHYSICAL DETERIORATION
Cause of loss in value, resulting from wear and tear.
REAL ESTATE TERMINOLOGY
PHYSICAL LIFE
Estimated period during which a building may be capable of use, ifnormally maintained. Actual period during which a building stands. See Valuation Appraisal
REAL ESTATE TERMINOLOGY
PIGGYBACK LOAN
A loan jointly made with two lenders, who share in a singlemortgage, thereby spreading the liability of the lenders. Usuallyunequal participation, 80% - 20%.
REAL ESTATE TERMINOLOGY
PITCH
The incline or rise of a roof.
REAL ESTATE TERMINOLOGY
PITI
Letters following the amount of a mortgage payment designating thatthe payment includes principal, interest, taxes and insurance.
REAL ESTATE TERMINOLOGY
PLACEMENT FEE
A fee charged to the buyer by a mortgage broker for finding and/ornegotiating a loan between the buyer and lender.
REAL ESTATE TERMINOLOGY
PLANNED UNIT DEVELOPMENT (PUD)
A land use design which provides intensive utilization of the landthrough a combination of private and common areas, withprearranged sharing of responsibilities for the common areas.
REAL ESTATE TERMINOLOGY
PLANNING COMMISSION
A local government agency which plans proper physical growth of acommunity, and recommends zoning ordinances and other laws forthat purpose.
REAL ESTATE TERMINOLOGY
PLAT BOOK
A public record of various recorded plans in the municipality orcounty.
REAL ESTATE TERMINOLOGY
PLAT MAP
A map of a subdivision, section, or land parcel, showing boundariesof individual properties located therein.
REAL ESTATE TERMINOLOGY
PLATE
A horizontal board placed on a wall, or supported on posts or studs,to carry the trusses of a roof or rafters directly; a shoe, or basemember, as of a partition or other frame; a small flat board placed onor in a wall to support girders, rafters, etc.
REAL ESTATE TERMINOLOGY
PLEDGE
Making personal property security for payment of a debt, includingtransfer of possession to the lender.
REAL ESTATE TERMINOLOGY
PLEDGED ACCOUNT MORTGAGE (PAM)
A mortgage device or clause that allows existing saved funds and/orthose saved in the future, to be used for future payments to thelender, or as collateral to be held by the lender for making a higherloan-to-value loan than usual.
REAL ESTATE TERMINOLOGY
PLEDGEE
One who is given a pledge or a security. See also SECUREDPARTY.
REAL ESTATE TERMINOLOGY
PLEDGOR
One who offers a pledge or gives security. See also DEBTOR.
REAL ESTATE TERMINOLOGY
PLOT PLAN
A plan of the location of improvements on a parcel of land. Alsocalled a Plot Map.
REAL ESTATE TERMINOLOGY
PLOTTAGE INCREMENT
Increase in value of several parcels of land, when brought under oneownership, making possible a higher utility as a whole. SeeValuation Appraisal
REAL ESTATE TERMINOLOGY
PLYWOOD
Laminated wood made up in panels; several thicknesses of woodglued together with grain at different angles for strength.
REAL ESTATE TERMINOLOGY
PMI (PRIVATE MORTGAGE INSURANCE)
See MMI.
REAL ESTATE TERMINOLOGY
POINT
One percent. When referring to mortgages or deeds of trust, theterm is used to describe the percentage of discount, rather thaninterest (for which the word "percent" is used). The points are paidby the seller in V.A. insured loans, and by either buyer or seller (orboth) in conventional and F.H.A. loans.
REAL ESTATE TERMINOLOGY
POINTS
A generic term for a percentage of the loan amount. One point isequal to 1% of the loan amount, it is also equal to approximately a1/8% change in an interest rate.
REAL ESTATE TERMINOLOGY
POINT OF BEGINNING (POB)
The starting point of a land description, usually tied to the TPOB(True Point of Beginning), which is usually a Government Surveymarker or monument.
REAL ESTATE TERMINOLOGY
POLICE POWER
The right of the state to regulate the use of private property for theprotection of the health, safety, morals, or general welfare of thepublic.
REAL ESTATE TERMINOLOGY
POSSESSION
The actual possession of the property, either physically orconstructively. See Contracts & Regs
REAL ESTATE TERMINOLOGY
POTABLE
Water that is drinkable and not contaminated.
REAL ESTATE TERMINOLOGY
POWER OF ATTORNEY
A written instrument authorizing a person, the attorney-in-fact, to actas the agent on behalf of another to the extent indicated in theinstrument.
REAL ESTATE TERMINOLOGY
POWER OF SALE CLAUSE
A clause in a trust deed, which gives the trustee the right to sellborrower's property publicly, without court procedure, if the borrowerdefaults. This clause may be put into a mortgage instrument byagreement, whereby the lender may foreclose without courtprocedure.
REAL ESTATE TERMINOLOGY
PREFABRICATED HOUSE
A house manufactured and, sometimes, partially assembled beforedelivery to building site.
REAL ESTATE TERMINOLOGY
PREMISES
The subject property that is being deeded or leased.
REAL ESTATE TERMINOLOGY
PREPAID ITEMS OF EXPENSE
Prorations of prepaid items of expense, which are credited to theseller in the closing statement. See Closings - Recordkeeping -Settlement Closings
REAL ESTATE TERMINOLOGY
PREPAYMENT
Provision made for loan payments to be larger than those specifiedin the note.
REAL ESTATE TERMINOLOGY
PREPAYMENT PENALTY
A clause in a note, which provides for a penalty in the event of anearly pay-off of the note.
REAL ESTATE TERMINOLOGY
PREPAYMENT PRIVILEGE
The right a debtor has to pay off all, or a part of, the debt, without apenalty or fee being charged, before the debt becomes due. SeeFinance
REAL ESTATE TERMINOLOGY
PRESCRIPTION
A method of obtaining an easement by use, hostile to owner'swishes. See ADVERSE POSSESSION.
REAL ESTATE TERMINOLOGY
PRESUMPTION
A fact that will stand and be assumed true until overcome by someevidence to the contrary.
REAL ESTATE TERMINOLOGY
PRIMA FACIE
At first sight; "on the face of it"; so far as can be judged from the firstdisclosure.
REAL ESTATE TERMINOLOGY
PRIMARY FINANCING
Trust deed and note that has first priority.
REAL ESTATE TERMINOLOGY
PRIMARY MONEY MARKET
Refers to the source of loan funds available to borrowers, for first,second, or other junior loans.
REAL ESTATE TERMINOLOGY
PRIME LENDING RATE
The most favorable interest rates charged by a commercial bank onshort term loans (not mortgages).
REAL ESTATE TERMINOLOGY
PRIME RATE
The interest rate charged by lenders to their biggest and strongestcustomers.
REAL ESTATE TERMINOLOGY
PRINCIPAL
The employer of an agent. Also means money or capital, asopposed to interest or income. See Math
REAL ESTATE TERMINOLOGY
PRINCIPAL MERIDIAN
A north-south line projected through a prominent landmark,established under the Government Survey System. (Same as PrimeMeridian)
REAL ESTATE TERMINOLOGY
PRINCIPAL NOTE
The promissory note, which is secured by the mortgage or trustdeed.
REAL ESTATE TERMINOLOGY
PRIOR APPROPRIATION
A water law theory that gives water use based on "first to use is firstin rights", even to the extent that the first user may use all the water,to the exclusion of others.
REAL ESTATE TERMINOLOGY
PRIORITY
Preferred rank or position.
REAL ESTATE TERMINOLOGY
PRIVATE INVESTOR
An individual citizen who loans money to the owner(s) orpurchaser(s) of real estate at a higher than market interest rate for ashort term (1-15 years), and usually, less than $20,000.
REAL ESTATE TERMINOLOGY
PRIVATE MORTGAGE INSURANCE (PMI)
Virtually the same as Mutual Mortgage Insurance for F.H.A. and V.A.loans, except P.M.I. was implemented for conventional loans, andallows the lender to make higher loan-to-value loans than before. See Finance
REAL ESTATE TERMINOLOGY
PRIVATE RESTRICTION
A restriction placed on real property by the grantor.
REAL ESTATE TERMINOLOGY
PROBATE
The process for proving a will.
REAL ESTATE TERMINOLOGY
PROCEDURE MANUAL
(See Office Policy)
REAL ESTATE TERMINOLOGY
PRO FORMA STATEMENT
A projected annual operating financial statement that showsexpected income, operating expenses and net operating income. Used for planning and financing purposes.
REAL ESTATE TERMINOLOGY
PROCURING CAUSE - (PROXIMATE CAUSE)
The cause of an event, which, in a natural and continuous sequence,unbroken by any new cause, produced that event; and withoutwhich, the event would not have happened. Primary requisite for anopen listing commission.
REAL ESTATE TERMINOLOGY
PROFIT
The excess of income over expenditure from an investment or abusiness. See Math
REAL ESTATE TERMINOLOGY
PROGRESSION, PRINCIPLE OF
The opposite of the Principle of Regression. It holds that the worthof a lesser valued home is enhanced, when placed in an area withhomes of higher value.
REAL ESTATE TERMINOLOGY
PROMISE
An agreement to do or not to do a certain thing.
REAL ESTATE TERMINOLOGY
PROMISSORY NOTE
A written contract containing a promise to pay a definite amount ofmoney at a definite future time. See Closings - Recordkeeping -Settlement Closings - Finance
REAL ESTATE TERMINOLOGY
PROPERTY
Anything that is owned by someone, including real estate (i.e., realproperty).
REAL ESTATE TERMINOLOGY
TocbC
PROPERTY MANAGEMENT
he branch of the real estate business dealing with the managementf property. The duties may range from merely collecting rents, toomplete management of all maintenance, and may also includeeing leasing agent. See Closings - Recordkeeping - Settlementlosings - Contracts & Regs
REAL ESTATE TERMINOLOGY
PROPERTY RESIDUAL TECHNIQUE
An appraisal technique that attributes the net income to the wholeproperty, land and building as a complete unit.
REAL ESTATE TERMINOLOGY
PROPERTY TAX
Generally, money levied by the government against real or personalproperty, the amount of taxing dependent upon the value of theproperty. See Math
REAL ESTATE TERMINOLOGY
PRORATE
To divide equally or proportionately, according to time or use. SeeClosings - Recordkeeping - Settlement Closings - Contracts & Regs -Math
REAL ESTATE TERMINOLOGY
PUBLIC PROPERTY
That which is owned by government. See Government Controls
REAL ESTATE TERMINOLOGY
PUBLIC RECORD
Record providing constructive notice of real property conveyancesand other matters.
REAL ESTATE TERMINOLOGY
PUBLIC TRUSTEE
The public official in each county, whose office has been created bystatute, to whom title to real property is conveyed by Trust Deed forthe use and benefit of the beneficiary, who is usually the lender. Notused in all states.
REAL ESTATE TERMINOLOGY
"PUFF" OR "PUFFERY"
Exaggerated comments used in selling, not made as representationsof fact; usually based on the maker's personal opinions.
REAL ESTATE TERMINOLOGY
PURCHASE AGREEMENT
The formal name of the contract used when accepting "earnestmoney" to bind an offer for property by a prospective purchaser. Also known as "deposit receipt", "Receipt & Option", etc.
REAL ESTATE TERMINOLOGY
PURCHASE AND INSTALLMENT SALEBACK
Involves purchase of the property upon completion of constructionand immediate saleback on a long-term installment contract.
REAL ESTATE TERMINOLOGY
PURCHASE MONEY MORTGAGE
Deed of trust, mortgage or land contract given to the seller to securepayment of the balance of the purchase price or a deed of trust,mortgage or land contract on an owner-occupied dwelling of fourunits or less, given to a lender to secure repayment of a loan thatwas used to purchase the property. See Closings - Recordkeeping -Settlement Closings - Finance
REAL ESTATE TERMINOLOGY
PURCHASE OF LAND, LEASEBACK AND LEASEHOLDMORTGAGES
An arrangement, whereby land is purchased by the lender andleased back to the developer, with a mortgage negotiated on theresulting leasehold of the income property constructed. The lenderreceives an annual ground rent, plus a percentage of income fromthe property.
REAL ESTATE TERMINOLOGY
PYRAMIDING
Buying additional properties by leveraging existing properties,usually done by refinancing or selling existing property, then buyingtwo or three with the proceeds from the one.
REAL ESTATE TERMINOLOGY
QUADRANGLE
The largest tract of land surveyed in the Government Survey, itcontains sixteen (16) Townships and measures twenty-four (24)miles on each side.
REAL ESTATE TERMINOLOGY
QUALIFICATION
A process of checking the buyer's credit and payment ability, used bythe lender, prior to approving them for a loan.
REAL ESTATE TERMINOLOGY
QUALIFIED FEE
See DEFEASIBLE FEE.
REAL ESTATE TERMINOLOGY
QUANTITY SURVEY
A time consuming method of construction cost or reproduction costestimating.
REAL ESTATE TERMINOLOGY
QUANTRUM MERUIT
A Latin term meaning "on the quality of it's merits", usuallydetermined by the court.
REAL ESTATE TERMINOLOGY
QUIET ENJOYMENT
Right of an owner to the use of the property, without interference ofpossession.
REAL ESTATE TERMINOLOGY
QUIET TITLE
A suit brought for the purpose of establishing clear title to realproperty, or to remove a cloud on the title.
REAL ESTATE TERMINOLOGY
QUITCLAIM DEED
A deed used to transfer any interest in real property which thegrantor may have. It contains no warranties of any kind. Used forcorrections, quiet title, etc. See Contracts & Regs - PracticalApplications - Real Property
REAL ESTATE TERMINOLOGY
RAFTER
Load-bearing timber of a roof. Flat roof rafters are usually calledjoists.
REAL ESTATE TERMINOLOGY
RANGE
A strip of land six (6) miles wide, determined by a governmentsurvey, running in a north-south direction.
REAL ESTATE TERMINOLOGY
RANGE LINE
A north and south line used in the location and description oftownships. See Math
REAL ESTATE TERMINOLOGY
RATE OF RETURN
The percentage of the net income produced by a property or otherinvestment.
REAL ESTATE TERMINOLOGY
RATIFICATION
The confirmation of a previous act, done either by the party himself,or by another. The confirmation of a voidable act.
REAL ESTATE TERMINOLOGY
"READY WILLING & ABLE"
A phrase that pertains to a buyer, meaning someone who is legallycapable of entering into a binding, unconditional contract, and who isfinancially able to perform it. See Contract Agency
REAL ESTATE TERMINOLOGY
REAL ESTATE
(1) Land, and anything permanently affixed to the land, such asbuildings, fences; and those things attached to the building, such aslight fixtures, plumbing and heating fixtures, or other such items;which would be personal property if not attached. The term isgenerally synonymous with real property, although in some states afine distinction may be made. (2) May refer to rights in real property,as well as the property itself. See Real Property
REAL ESTATE TERMINOLOGY
REAL ESTATE BOARD
An organization whose members consist, primarily, of real estatebrokers and salespersons.
REAL ESTATE TERMINOLOGY
REAL ESTATE COMMISSION
A state agency charged with the obligation of enforcing real estatelicense laws. See Contracts & Regs
REAL ESTATE TERMINOLOGY
REAL ESTATE INVESTMENT TRUST (REIT)
An unincorporated association of investors, owned by at least 100investors, which, were it not for a special tax exemption, would betaxed as a corporation.
REAL ESTATE TERMINOLOGY
REAL ESTATE MORTGAGE TRUST (REMT)
A type of investment trust (REIT) that buys and sells short term,junior mortgages.
REAL ESTATE TERMINOLOGY
REAL PROPERTY
See REAL ESTATE.
REAL ESTATE TERMINOLOGY
REALTIST
A real estate broker holding active membership in the NationalAssociation of Real Estate Brokers, whose members arepredominantly African American.
REAL ESTATE TERMINOLOGY
REALIZED/RECOGNIZED GAIN
The before-tax capital gain upon the sale of an investment. See alsoBEFORE TAX RETURN.
REAL ESTATE TERMINOLOGY
REALTOR
A designation given to a real estate broker, who is a member of aboard associated with the National Association of Realtors.
REAL ESTATE TERMINOLOGY
REALTY
See REAL PROPERTY.
REAL ESTATE TERMINOLOGY
REBATE
The discounting of the commission received by the broker by givingback a portion to the buyer, sometimes called a kickback.
REAL ESTATE TERMINOLOGY
RECAD
The “Real Estate Consumers Agency and Disclosure” (RECAD)requires the Alabama Real Estate Commission to write a Real EstateBrokerage Services Disclosure form which describes the alternativetypes of brokerage services available to consumers in Alabamatransactions. The use of this form is mandatory as required byRECAD and this rule. Additionally, the Commission has written aConsumer Information booklet which is optional and may be used byany licensees who choose to use it.
REAL ESTATE TERMINOLOGY
RECAPTURE
Recovery by an owner of money invested in real estate, usuallyreferring to a depreciation allowance.
REAL ESTATE TERMINOLOGY
RECAPTURE PERIOD
Period envisioned by buyers for the return of investment in adepreciable asset, such as a building (remaining economic life).
REAL ESTATE TERMINOLOGY
RECAPTURE RATE
An appraisal term describing the rate, expressed as a percentage, atwhich invested capital will be returned over a period of time.
REAL ESTATE TERMINOLOGY
RECIPROCITY
The mutual agreement by states to extend licensing privileges tolicensees in each state.
REAL ESTATE TERMINOLOGY
RECISION
Usual misspelling of rescission. See RESCISSION.
REAL ESTATE TERMINOLOGY
RECONCILIATION
The final step in the appraisal process, where the appraiserconsiders the three estimates of value derived from the Cost, Incomeand Sales Comparison approaches; and weighs the influence ofeach in relation to his final estimate of value. See ValuationAppraisal
REAL ESTATE TERMINOLOGY
RECONVEYANCE
See DEED OF RECONVEYANCE.
REAL ESTATE TERMINOLOGY
RECORDATION
To file for record in the office of the county recorder. Givesconstructive notice to the world of the contents of the documents. See Real Property
REAL ESTATE TERMINOLOGY
RECORDING FEES
Money charges by the county recorder’s office to record documents. See Closings
REAL ESTATE TERMINOLOGY
RECOVERY FUND
A special state fund to provide financial relief to persons who havesuffered damages that are uncollectible, caused by the fraudulentpractices of a licensee. See Contracts & Regs
REAL ESTATE TERMINOLOGY
RECTANGULAR SURVEY SYSTEM
See U.S. GOVERNMENT SURVEY SYSTEM.
REAL ESTATE TERMINOLOGY
REDEMPTION PERIOD
A period of time established by state law, during which a propertyowner has a right to redeem his or her real estate after a foreclosureor tax sale by paying the sale price, interest, and costs.
REAL ESTATE TERMINOLOGY
REDLINING
Illegal practice of restricting loans or loan amounts in certaingeographic areas.
REAL ESTATE TERMINOLOGY
REDUCTION CERTIFICATE
A lender's statement as to the amount owing at a given time. Alsoreferred to as ASSUMPTION, BENEFICIARY, or PAYOFFSTATEMENT.
REAL ESTATE TERMINOLOGY
REENTRY
The right of the owner to regain possession of real property.
REAL ESTATE TERMINOLOGY
REFERENCE TO PLAT
A method of describing or locating real property by means ofreferring to a map of a subdivision, usually recorded in the office ofthe county clerk and recorder.
REAL ESTATE TERMINOLOGY
REFERRAL FEE
A percentage of a broker’s commission paid to another for referring abuyer or seller.
REAL ESTATE TERMINOLOGY
REFINANCING
The paying-off of an existing obligation, and assuming a newobligation in its place.
REAL ESTATE TERMINOLOGY
REGRESSION
An appraising principle that holds that a high valued property, placedin a neighborhood of lower valued properties, seeks the level of thelower valued properties.
REAL ESTATE TERMINOLOGY
REGULATION Z
See TRUTH-IN-LENDING.
REAL ESTATE TERMINOLOGY
REJECT
To refuse to accept an offer.
REAL ESTATE TERMINOLOGY
REJECTION
The result of being refused. See Contracts & Regs.
REAL ESTATE TERMINOLOGY
RELEASE
The relieving of someone from a legal or contractual obligation.
REAL ESTATE TERMINOLOGY
RELEASE CLAUSE
A stipulation in a trust deed or mortgage, which provides that aspecific described lot, or area, will be removed from the blanket lienupon payment of a specific sum of money.
REAL ESTATE TERMINOLOGY
RELEASE OF DEED OF TRUST
Discharge of a Deed of Trust Security Interest in Real Property. Seealso DEED OF RECONVEYANCE.
REAL ESTATE TERMINOLOGY
RELEASE OF LIEN
The discharge or release of specific property from the charge or lienof a judgment, mortgage or other claim.
REAL ESTATE TERMINOLOGY
RELEASE STATEMENT
The form that is prescribed by the Uniform Commercial Code to beused for the purpose of indicating the release of all, or part of, thesecurity interest.
REAL ESTATE TERMINOLOGY
RELICTION
The gradual recession of water from the usual watermark, and;therefore, an increase of land.
REAL ESTATE TERMINOLOGY
REMAINDER
An estate, which vests after the termination of a life estate.
REAL ESTATE TERMINOLOGY
REMAINDERMAN
The one entitled to the remainder. See Real Property
REAL ESTATE TERMINOLOGY
REMAINING ECONOMIC LIFE
The period of time(years) it takes for the improvement to LIFEbecomes valueless.
REAL ESTATE TERMINOLOGY
REMODELING
Changing the plan, form, or style of a structure to correct functionalor economic deficiencies.
REAL ESTATE TERMINOLOGY
REMUNERATION
To recompense, reward, pay for services or work performed.
REAL ESTATE TERMINOLOGY
RENT
Consideration, usually fixed periodic payment, made by the lessee ofa property to the lessor for the possession and use thereof, usuallyby prior agreement (written or unwritten) of the parties. See Closings- Recordkeeping - Settlement Closings
REAL ESTATE TERMINOLOGY
RENT, CONTRACT
The actual agreed payment for the use of a piece of real estate, asdesignated in a lease.
REAL ESTATE TERMINOLOGY
RENT INCREASE
An increase in the amount of the periodic rent payment, due tochanging market conditions or capital improvements made to theproperty.
REAL ESTATE TERMINOLOGY
RENT, MARKET
The going market rental as of the appraisal date. It could begreater, or less, than contract rent.
REAL ESTATE TERMINOLOGY
RENTAL RIDGE
An investor's formula used to forecast rental rates for a property inevaluating its investment potential. Generally, income property witheconomic rents below the rental ridge will show a negative after-taxcash flow.
REAL ESTATE TERMINOLOGY
REPAIRS
The general upkeep of property, without major replacement orchange of the plan or characteristics of the building.
REAL ESTATE TERMINOLOGY
REPLACEMENT COST
The cost of reproducing at current prices, a property having a utilityequivalent to the one being appraised. See Valuation Appraisal
REAL ESTATE TERMINOLOGY
REPOSSESSION
Regaining possession of property as a result of a breach of contractby another.
REAL ESTATE TERMINOLOGY
REPRODUCTION COST
An appraisal term meaning the cost to reproduce, exactly, a structurepreviously built, with the same materials and workmanship as theoriginal. Usually, not economically feasible.
REAL ESTATE TERMINOLOGY
REQUEST FOR NOTICE OF DEFAULT
A recorded notice made by the beneficiary of a Trust Deed,requesting that he be notified in the event that foreclosureproceedings are commenced by another party in interest.
REAL ESTATE TERMINOLOGY
RESALE CERTIFICATE
Certificate that the property is purchased for resale. Wholesaler is,thereby, relieved of the necessity to collect sales tax.
REAL ESTATE TERMINOLOGY
RESCIND
To cancel a contract from the beginning, restoring the parties to theiroriginal positions. To annul.
REAL ESTATE TERMINOLOGY
RESCISSION
The legal method of terminating or canceling a contract, andreturning the parties to their original positions, state or status quo(not R-E-C-I-S-I-O-N).
REAL ESTATE TERMINOLOGY
RESERVATION
A right retained by a grantor in conveying property.
REAL ESTATE TERMINOLOGY
RESERVE FUND
Funds usually required by a lender to be held for payment of itemsin the future, such as taxes and insurance. Sometimes called"reserves", or "impounds".
REAL ESTATE TERMINOLOGY
RESIDENCE
A place where someone lives.
REAL ESTATE TERMINOLOGY
RESIDENT MANAGER
An agent of the owner of a building, who is employed on a salary,and devotes his time to the management of a single building.
REAL ESTATE TERMINOLOGY
RESIDUAL
Whatever is left over, such as the amount of money a buyer has leftafter paying all of the bills.
REAL ESTATE TERMINOLOGY
RESPA (REAL ESTATE SETTLEMENT PROCEDURES ACT)
Federal law enacted to standardize closing procedures in residentialloan transactions. See Closings - Recordkeeping - SettlementClosings - Practical Applications
REAL ESTATE TERMINOLOGY
RESTORATION
Restoring a building to its original form, or a representation of itsoriginal form.
REAL ESTATE TERMINOLOGY
RESTRICTION
An encumbrance, which limits the use of real estate in some way.
REAL ESTATE TERMINOLOGY
RESTRICTIVE COVENANT
A clause in a deed limiting the use to which the property may be put.
REAL ESTATE TERMINOLOGY
RETURN OF CAPITAL INVESTMENT
See RECAPTURE RATE.
REAL ESTATE TERMINOLOGY
RETURN ON CAPITAL INVESTMENT
A rate, expressed as a percentage, that shows how much of theoriginal capital investment is returned during a period, typically 1year.
REAL ESTATE TERMINOLOGY
REVERSE ANNUITY MORTGAGE
Allows elderly home owners to borrow funds against the equity intheir property, so they may receive a monthly income for livingexpenses.
REAL ESTATE TERMINOLOGY
REVERSION
A right to future possession, retained by an owner at the time oftransfer of his interest in real property.
REAL ESTATE TERMINOLOGY
REVERSIONARY INTEREST
The interest which a person has in lands, or other property, upon thetermination of the preceding estate.
REAL ESTATE TERMINOLOGY
REVOCATION
Nullification of an offer to contract (annulment).
REAL ESTATE TERMINOLOGY
REVOKE
See REVOCATION.
REAL ESTATE TERMINOLOGY
RIDER
An addition, amendment, or endorsement to a document.
REAL ESTATE TERMINOLOGY
RIDGE BOARD
The board placed on edge at the ridge of the roof to support theupper ends of the rafters; highest point of construction.
REAL ESTATE TERMINOLOGY
RIGHT OF FIRST REFUSAL
A clause added to an offer to purchase or lease, giving the offerorthe first right to purchase or lease the property.
REAL ESTATE TERMINOLOGY
RIGHT OF SURVIVORSHIP
The right of a joint tenant to automatically acquire the interest of adeceased joint tenant.
REAL ESTATE TERMINOLOGY
RIGHT OF WAY
An easement, giving a person the right to pass over the land ofanother.
REAL ESTATE TERMINOLOGY
RIPARIAN OWNER
One who owns lands bounding upon a river or water course.
REAL ESTATE TERMINOLOGY
RIPARIAN RIGHTS
The right of a landowner to water on, under, or adjacent to his land.
REAL ESTATE TERMINOLOGY
RISK CAPITAL
Any money invested in a speculative type of investment.
REAL ESTATE TERMINOLOGY
ROD
A measurement of 5 ½ yards or 16 ½ feet.
REAL ESTATE TERMINOLOGY
ROLLOVER MORTGAGE
A type of mortgage that allows it to be rewritten at its maturity, andmay be at same or different rate or terms as the original.
REAL ESTATE TERMINOLOGY
ROW HOUSE
One of a series of individual homes having architectural similarityand a common wall between each dwelling unit.
REAL ESTATE TERMINOLOGY
RULE OF 72'S
A general rule of thumb used by investors that says, "If you dividethe number 72, by the rate of return, the investment will doubleaccording to the answer" (i.e., 72/12% = 6 years).
REAL ESTATE TERMINOLOGY
RULE OF 78'S
A way of computing the refund of unearned pre-computed financecharges, in proportion to monthly unpaid balances at the time ofrefund. The creditor gets 12/78's of total finance charge (on a 12month contract) for the first month, 11/78's for second month, etc. Ifpaid off after 4 months, the creditor would be entitled to 42/78's(12+11+10+9=42) the debtor would receive the difference (i.e., 78-42= 36/78's).
REAL ESTATE TERMINOLOGY
RUNNING WITH THE LAND
Anything which inures to the benefit and advantage of subsequentowners of the land, such as an easement appurtenant.
REAL ESTATE TERMINOLOGY
SALE AND LEASEBACK
A situation where the owner of a piece of property wishes to sell theproperty and retain occupancy by leasing it from the buyer.
REAL ESTATE TERMINOLOGY
SALES AND USE TAX
Tax on the sale of certain tangible personal property.
REAL ESTATE TERMINOLOGY
SALES COMPARISON APPROACH
A valuation method, in which the market value is estimated bycomparing the subject property, with similar properties which haverecently sold. The reliability of this technique is dependent upon thedegree of comparability of each sale property to the subject property,the quantity and quality of data available, and the skill and objectivityof the appraiser. See Valuation Appraisal
REAL ESTATE TERMINOLOGY
SALES CONTRACT
See CONDITIONAL SALES CONTRACT.
REAL ESTATE TERMINOLOGY
SALESPERSON, REAL ESTATE
A natural person, who for a compensation, or in expectation of(Salesperson) a compensation, is employed by a licensed real estatebroker to do one or more acts specified in the Real Estate Law.
REAL ESTATE TERMINOLOGY
SALVAGE VALUE
May only be used for pre-1981 properties, and constitutes theestimated amount an asset can be sold for at the end of its usefullife, made at the time of its acquisition.
REAL ESTATE TERMINOLOGY
SANDWICH LEASE
A leasehold interest, which lies between the primary lease and theoperating lease.
REAL ESTATE TERMINOLOGY
SATISFACTION
Discharge of mortgage or trust deed lien from the records uponpayment of the evidence of debt.
REAL ESTATE TERMINOLOGY
SATISFACTION OF MORTGAGE
A release or receipt for having satisfied a mortgage note. In the caseof a trust deed, Release of Deed of Trust is issued.
REAL ESTATE TERMINOLOGY
SATISFACTION PIECE
An instrument for recording and acknowledging payment of anindebtedness secured by a mortgage.
REAL ESTATE TERMINOLOGY
SAVINGS AND LOAN ASSOCIATIONS (S & L's)
Established to promote "thrift" and home ownership by loaning outthe depositors' deposits, in the form of residential home mortgages. See Finance
REAL ESTATE TERMINOLOGY
SCARCITY
An appraisal term that says the more scarce an item is, the greaterits value, if there is any demand for it.
REAL ESTATE TERMINOLOGY
SEAL
An impression made to attest the execution of an instrument.
REAL ESTATE TERMINOLOGY
SEASONED LOAN
A loan with good payment record.
REAL ESTATE TERMINOLOGY
SEC
Securities & Exchange Commission.
REAL ESTATE TERMINOLOGY
SECOND FOOT
A measure of water quantity flow - l cubic foot per second.
REAL ESTATE TERMINOLOGY
SECOND MORTGAGE
A mortgage or deed of trust (trust deed) recorded in second position. Also refers to all junior mortgages, regardless of their recordedposition. See Closings - Recordkeeping - Settlement Closings
REAL ESTATE TERMINOLOGY
SECONDARY FINANCING
Junior trust deeds or mortgages.
REAL ESTATE TERMINOLOGY
SECONDARY MONEY MARKET
The marketplace for the sale and purchase of existing trust deedsand mortgages. Same as Secondary Mortgage Market.
REAL ESTATE TERMINOLOGY
SECONDARY MORTGAGE MARKET
Market place for the sale and purchase of existing trust deeds andmortgages. See also FNMA, GNMA, FHLMC, etc. See Finance
REAL ESTATE TERMINOLOGY
SECTION
Established by government survey, it is one square mile and contains 640 acres. See Real Property
REAL ESTATE TERMINOLOGY
SECURED
A specific property is available to satisfy a lien (if unpaid).
REAL ESTATE TERMINOLOGY
SECURED PARTY
The lender in whose favor there is a security interest.
REAL ESTATE TERMINOLOGY
SECURITY AGREEMENT
The agreement which creates or provides for a security interest. Theform used to give a lender an interest in the personal property that isbeing used to secure the loan.
REAL ESTATE TERMINOLOGY
SECURITY DEPOSIT
Money deposited with a landlord, by or for the tenant, to insureperformance of the lease and/or to compensate for damages.
REAL ESTATE TERMINOLOGY
SECURITY INTEREST
A term designating the interest of the creditor in the property of thedebtor in all types of credit transactions. It thus replaces such termsas the following: chattel mortgage; pledge; trust receipt, chattel trust;equipment trust; conditional sale; inventory lien; etc. See Contracts& Regs
REAL ESTATE TERMINOLOGY
SEIZIN
Possession of real estate by one entitled thereto.
REAL ESTATE TERMINOLOGY
SELLER’S DAY
In a real estate closing, the last day for which the seller will becharged expenses of ownership. See Closings
REAL ESTATE TERMINOLOGY
SEPARATE PROPERTY
Property acquired by either spouse, prior to marriage, or by gift ordevise after marriage. Opposite of COMMUNITY PROPERTY.
REAL ESTATE TERMINOLOGY
SEPTIC TANK
An underground tank, in which sewage from the house is reduced toliquid by bacterial action and drained off.
REAL ESTATE TERMINOLOGY
SERVICING
Generally, refers to the collection of, and accounting for, themortgage payments on a mortgage loan.
REAL ESTATE TERMINOLOGY
SERVIENT TENEMENT
Land burdened by an easement.
REAL ESTATE TERMINOLOGY
SET-OFF
A right which exists between two parties, each of whom, under anindependent contract, owes the other a certain amount of money,and in which they cancel their respective debt by way of a mutualdeduction.
REAL ESTATE TERMINOLOGY
SETBACK ORDINANCE
A law prohibiting the erection of a building within a certain distancefrom the curb.
REAL ESTATE TERMINOLOGY
SETTLEMENT STATEMENT
See CLOSING STATEMENT. See Closings - Recordkeeping -Settlement Closings
REAL ESTATE TERMINOLOGY
SEVERALTY OWNERSHIP
Ownership by one person only. Sole ownership. See Real Property
REAL ESTATE TERMINOLOGY
SEVERANCE DAMAGES
Loss in value suffered by remaining property after partial takingthrough right of eminent domain. See also CONDEMNATION.
REAL ESTATE TERMINOLOGY
"SHALL"
Legal term meaning that which is required, a "must".
REAL ESTATE TERMINOLOGY
SHARED APPRECIATION
Participation by the lender in the profits generated by the appreciatedvalue of a mortgaged property when it is sold.
REAL ESTATE TERMINOLOGY
SHEATHING
Structural covering; usually boards, plywood, or wallboard, placedover exterior studding or rafters of a house.
REAL ESTATE TERMINOLOGY
SHERIFF'S DEED
Deed given when property is sold by court order for payment of adebt after expiration of Redemption Period. Form of SPECIALWARRANTY DEED.
REAL ESTATE TERMINOLOGY
"SHOULD"
Legal term meaning that which is recommended, but not required.
REAL ESTATE TERMINOLOGY
SILL
The lowest part of the frame of a house, resting on the foundationand supporting the uprights of the frame. The board or metalforming the lower side of an opening such as a door sill, window sill,etc.
REAL ESTATE TERMINOLOGY
SINGLE FAMILY RESIDENCE
Any structure used as a single dwelling unit, as a private home. Typically, a free standing house.
REAL ESTATE TERMINOLOGY
SINKING FUND
A depreciation method that involves periodic investing in acompound interest bearing account for a specified time, at the end ofwhich, the principal and interest will be sufficient to replace theimprovements at the end of their economic life.
REAL ESTATE TERMINOLOGY
SITE OR SITUS
The area or the place of which anything is, has been, or is to belocated.
REAL ESTATE TERMINOLOGY
SIXTH PRINCIPAL (PRIME) MERIDIAN (6th PM)
Located near Lincoln, Nebraska and is 402 miles due east ofColorado Boulevard in Denver, Colorado.
REAL ESTATE TERMINOLOGY
SKY LEASE
Lease for a long period of time of space above a piece of real estate;upper-stories of a building to be erected by the tenant. Upontermination of the lease, the improvement belongs to the lessor.
REAL ESTATE TERMINOLOGY
SLANDER OF TITLE
A civil wrong (a tort), caused by false or untrue statements made bya person relating to the title of another's property, to their injury.
REAL ESTATE TERMINOLOGY
SOIL BANK
An Agriculture Department program where farmers are paid not togrow crops.
REAL ESTATE TERMINOLOGY
SOIL OR SOLE PLATE
A member, usually a 2" by 4", on which wall and partition studs rest.
REAL ESTATE TERMINOLOGY
SOIL PIPE
Pipe carrying waste out from the house to the main sewer line.
REAL ESTATE TERMINOLOGY
SOLDIERS' AND SAILORS' CIVIL RELIEF ACT
A Federal act, which provides protection against foreclosure to anindividual, while in the service, who contracted for an obligationbefore entry into the service.
REAL ESTATE TERMINOLOGY
SOLE PLATE
The support on the floor, on which the bottom of the studs rest.
REAL ESTATE TERMINOLOGY
SOLE PROPRIETORSHIP
Only one person owns and operates the entire business.
REAL ESTATE TERMINOLOGY
SPECIAL AGENT
The usual real estate agency relationship, where an agent is hired toperform a single task, such as selling the principal's home, or helpinga buyer to buy a home. See Contract Agency
REAL ESTATE TERMINOLOGY
SPECIAL ASSESSMENT
Lien assessed against real property by a public authority to pay costsof public improvements, which directly benefit the assessed property. See Government Controls - Closings - Recordkeeping - SettlementClosings - Practical Applications
REAL ESTATE TERMINOLOGY
SPECIAL IMPROVEMENT DISTRICT
Levied against a limited group of property owners for specialimprovements to their properties. See Government Controls
REAL ESTATE TERMINOLOGY
SPECIAL WARRANTY DEED
Grantor warrants only his own acts. See Real Property
REAL ESTATE TERMINOLOGY
SPECIFIC LIENS
Liens which attach to only a certain specific parcel of land or piece ofproperty.
REAL ESTATE TERMINOLOGY
SPECIFIC PERFORMANCE
A doctrine of contract law, by which a party is compelled by the courtto perform his agreement. See Practical Applications
REAL ESTATE TERMINOLOGY
SPECULATOR
One who buys property, not for his use, but with only the intent to sellas a profit.
REAL ESTATE TERMINOLOGY
SPENDABLE INCOME
The money remaining from the gross income after deductingoperating expenses, principal and interest payments, and the incometax attributable to income.
REAL ESTATE TERMINOLOGY
SPLIT-FEE FINANCING
A joint venture, usually between a lender and a developer, whereinthe lender buys the land and leases it to the developer, and then alsoprovides the funds for the construction of the improvements.
REAL ESTATE TERMINOLOGY
SPOT LOAN
A loan on a particular property, usually a condominium unit, by alender who has not previously financed that particular condominiumproject.
REAL ESTATE TERMINOLOGY
SPOT ZONING
Allowing a particular use of property that is different from the zoningof the surrounding properties.
REAL ESTATE TERMINOLOGY
SQUARE FOOTAGE
Multiplying the length times the width expressed in feet. See Math
REAL ESTATE TERMINOLOGY
SRA
Member of the Appraisal Institute holding a residential designation.
REAL ESTATE TERMINOLOGY
STANDARD DEPTH
Generally, the most typical lot depth in the neighborhood.
REAL ESTATE TERMINOLOGY
STANDARD FORM
Basic policy form of title insurance, which is usually issued to thepurchaser of real property.
REAL ESTATE TERMINOLOGY
STANDARD TOWNSHIP
See TOWNSHIP.
REAL ESTATE TERMINOLOGY
STANDBY COMMITMENT
The mortgage banker frequently protects a builder by a "StandbyAgreement", under which he agrees to make mortgage loans, at anagreed price, for many months in the future. The builder deposits a"Standby Fee" with the mortgage banker for this service. Frequently,the mortgage banker protects himself by securing a Standby from along-term investor for the same period of time, paying a fee for thisprivilege.
REAL ESTATE TERMINOLOGY
STATUTE
A law enacted by legislation, as opposed to common law or judicialdecision.
REAL ESTATE TERMINOLOGY
STATUTE OF FRAUDS
Law which requires certain contracts to be in writing to beenforceable. See Contracts & Regs - Contract Agency
REAL ESTATE TERMINOLOGY
STATUTE OF LIMITATIONS
The law that specifies the time limits in which legal action must beinstigated to be enforceable in court.
REAL ESTATE TERMINOLOGY
STATUTORY DEDICATION
See DEDICATION.
REAL ESTATE TERMINOLOGY
STATUTORY RIGHT OF REDEMPTION
See REDEMPTION PERIOD.
REAL ESTATE TERMINOLOGY
STATUTORY WARRANTY DEED
A short form warranty deed, which warrants by inference that theseller is the undisputed owner, and has the right to convey theproperty, and that he will defend the title if necessary. This type ofdeed protects the purchaser, in that the conveyor covenants todefend all claims against the property. If he fails to do so, the newowner can defend said claims and sue the former owner.
REAL ESTATE TERMINOLOGY
STEERING
Illegal channeling of home-seekers to particular areas, to create aspeculative situation. See also DISCRIMINATION.
REAL ESTATE TERMINOLOGY
STOCK COOPERATIVE PROJECT
Improved multiple-unit property owned by a corporation.
REAL ESTATE TERMINOLOGY
STRAIGHT LEASE
See FLAT LEASE.
REAL ESTATE TERMINOLOGY
STRAIGHT-LINE DEPRECIATION
A method of replacing the capital investment of income property, byreducing the value of the property by a set amount annually, over theeconomic life of the property. See Valuation Appraisal
REAL ESTATE TERMINOLOGY
STRAIGHT NOTE
A note in which the principal is paid in one sum. See Finance
REAL ESTATE TERMINOLOGY
STRAWMAN
Someone who buys property for another, in order to keep theiridentity secret.
REAL ESTATE TERMINOLOGY
STRINGER
The enclosed sides of stairs that support the risers and treads, alsomay be horizontal beam connecting uprights in a frame.
REAL ESTATE TERMINOLOGY
STRICT FORECLOSURE
A proceeding in which a court gives a mortgagor in default a specifictime period to satisfy the debt to prevent transfer of the title to themortgaged property to the lender.
REAL ESTATE TERMINOLOGY
STRUCTURE
Any man-made building or edifice.
REAL ESTATE TERMINOLOGY
STUDS OR STUDDING
Vertical supporting timbers in the walls and partitions.
REAL ESTATE TERMINOLOGY
SUBAGENT
Under the uniform or common law, employed licensees are agents oftheir employing broker, and subagents for sellers listed with theircompany, and if they act upon or expressly agree to and accept anoffer of subagency from another broker. In Colorado, as of 1/1/94, alicensee is deemed to be a subagent of their employing broker, and ifin agreement with their office policy, they accept and act upon anoffer of subagency offered by another brokerage office. However,they are agents of all buyers and sellers listed with their office. SeeContracts & Regs
REAL ESTATE TERMINOLOGY
SUBCHAPTER 'S' CORPORATION
A corporation which, for tax purposes, has elected to be treated asan individual or a partnership.
REAL ESTATE TERMINOLOGY
SUBDIVISION
Any property or improvement that is divided into two or more parcelsor units, including "time shares".
REAL ESTATE TERMINOLOGY
SUBJACENT SUPPORT
The right of land to be supported by the land which lies under it.
REAL ESTATE TERMINOLOGY
"SUBJECT TO" CLAUSE
A clause in a deed, stating that the grantee takes title "subject to" anexisting mortgage. The original mortgagor, alone, is responsible forany deficiency, should there be foreclosure of the mortgage. Differsfrom an "assumption" clause, whereby the grantee "assumes andagrees to pay" the existing mortgage.
REAL ESTATE TERMINOLOGY
SUBJECT TO MORTGAGE
Method of taking over a loan, without taking on the responsibility of adeficiency judgment.
REAL ESTATE TERMINOLOGY
SUBLEASE
A lease given by a lessee for part of the premises or less than theremaining term.
REAL ESTATE TERMINOLOGY
SUBORDINATE
Lower in priority.
REAL ESTATE TERMINOLOGY
SUBORDINATION AGREEMENT
An agreement, by which the lender relinquishes his priority to asubsequent mortgage or trust deed. It benefits the borrower.
REAL ESTATE TERMINOLOGY
SUBPOENA
A process to cause a witness to appear and give testimony.
REAL ESTATE TERMINOLOGY
SUBROGATION
The substitution of one person in the place of another, with referenceto a lawful claim, so that he who is substituted succeeds to the rightsof the other. See also HOLDER IN DUE COURSE.
REAL ESTATE TERMINOLOGY
SUBTRACT
To take one number from another. See Math
REAL ESTATE TERMINOLOGY
SUBSTITUTION OF ELIGIBILITY
The assumption of a VA loan, where the new veteran buyersubstitutes their VA eligibility for the original vet's eligibility, therebyfreeing up the original vet's eligibility, which is then available to beused again.
REAL ESTATE TERMINOLOGY
SUBSTITUTION OF MORTGAGOR
An agreement signed by the lender on a loan that is being assumedby the buyer, whereby the lender relieves the original borrower ofliability.
REAL ESTATE TERMINOLOGY
SUBSTITUTION, PRINCIPLE OF
An appraising principle holding that when two or more properties,with substantially the same utility, are available, the one with thelower price receives the greatest demand. See Valuation Appraisal
REAL ESTATE TERMINOLOGY
SUCCESSION
The taking of property by inheritance.
REAL ESTATE TERMINOLOGY
SUCCESSOR
One who follows or comes after (i.e., the buyer of a business is theone who comes after the seller and is, therefore, referred to as thesuccessor).
REAL ESTATE TERMINOLOGY
SUCCESSOR'S LIABILITY
The liability of a purchaser of a business that may arise for non-payment by the prior owners.
REAL ESTATE TERMINOLOGY
SUFFERANCE
See ESTATE AT SUFFERANCE.
REAL ESTATE TERMINOLOGY
SUPER REGIONAL SHOPPING CENTER
A large shopping center with 250,000 to l,000,000 square feet ofstore area, serving 200,000 or more people.
REAL ESTATE TERMINOLOGY
SUPPLY AND DEMAND, PRINCIPLE OF
Affirms that price or value varies directly, but not necessarilyproportionately with, demand; and inversely, but not necessarilyproportionately, with supply. See Valuation Appraisal
REAL ESTATE TERMINOLOGY
SURETY
One who guarantees the performance of another: Guarantor.
REAL ESTATE TERMINOLOGY
SURFACE RIGHTS
Surface of the earth.
REAL ESTATE TERMINOLOGY
SURFACE WATER
Water resulting from rains and melting snows that is diffused overthe surface of the ground, until it reaches some well defined channelor reaches some permanent lake or pond.
REAL ESTATE TERMINOLOGY
SURPLUS PRODUCTIVITY, PRINCIPLE OF
Affirms that the net income is that which remains after the propercosts of labor, organization and capital have been paid; whichsurplus is imputable to the land, and tends to fix the value thereof.
REAL ESTATE TERMINOLOGY
SURRENDER
The giving up of a lease or right prior to its expiration.
REAL ESTATE TERMINOLOGY
SURVEY
The process by which a parcel of land is measured, and its area isascertained.
REAL ESTATE TERMINOLOGY
SUSPENSION
A temporary cancellation of a license.
REAL ESTATE TERMINOLOGY
SWEAT EQUITY
Equity created in a property by the performance of work or labor bythe purchaser. Directly increases the value of the property.
REAL ESTATE TERMINOLOGY
SYNDICATE
A combination of individuals formed to carry out some projectsrequiring large sources of capital, which, individually, none couldundertake.
REAL ESTATE TERMINOLOGY
TACKING-ON
Combining of successive periods of real property usage to establisha plan of adverse possession.
REAL ESTATE TERMINOLOGY
TAKE-OUT-LOAN
A long-term loan that replaces the interim construction loan.
REAL ESTATE TERMINOLOGY
TANDEM PLAN
A mortgage assistance program, whereby the FNMA and GNMA canjoin forces in times of tight money and high discount rates.
REAL ESTATE TERMINOLOGY
TANGIBLE PROPERTY
Can be handled manually (stock-in-trade).
REAL ESTATE TERMINOLOGY
TAX(ES)
A compulsory payment of a percentage of income, property value,sales price, etc., for the support of a government. See Closings -Government Controls
REAL ESTATE TERMINOLOGY
TAX BRACKET
The percentage of income tax which one pays, based on tax tables.
REAL ESTATE TERMINOLOGY
TAX CREDIT
An amount of money that may be deducted from a tax bill to arrive atthe net amount of tax due
REAL ESTATE TERMINOLOGY
TAX CERTIFICATE
See CERTIFICATE OF TAXES DUE.
REAL ESTATE TERMINOLOGY
TAX DEED
Deed given when property is sold, due to tax delinquency, and afterexpiration of Redemption Period.
REAL ESTATE TERMINOLOGY
TAX DEDUCTIBLE
An amount of money that may be deducted from gross income inarriving at net taxable income before depreciation, if any. SeeGovernment Controls
REAL ESTATE TERMINOLOGY
TAX DISTRICT
An area over which a governmental body has authority to levyproperty taxes; may contain one or more assessment districts.
REAL ESTATE TERMINOLOGY
TAX-FREE EXCHANGE
A method of deferring capital gains by exchanging real property forother like property. A misnomer, actually, tax-sheltered or tax-deferred. See Government Controls
REAL ESTATE TERMINOLOGY
TAX & INSURANCE RESERVE
See IMPOUNDS.
REAL ESTATE TERMINOLOGY
TAX PAYABLE
In investment, the tax payer's net amount of money owed on therecognized gain of an investment activity.
REAL ESTATE TERMINOLOGY
TAX RATE
Traditionally, the ratio of dollars of tax per hundred or per thousanddollars of valuation. Modernly, has come to be expressed as apercentage of valuation.
REAL ESTATE TERMINOLOGY
TAX SALE
Sale of property after a period of non-payment of taxes.
REAL ESTATE TERMINOLOGY
TAX SHELTER
A general term, used to include any property which gives the ownercertain income tax advantages, such as deductions for propertytaxes, maintenance, mortgage interest, insurance, and especiallydepreciation.
REAL ESTATE TERMINOLOGY
TAXABLE GAIN
The amount of profit subject to tax (recognized gain). SeeGovernment Controls
REAL ESTATE TERMINOLOGY
TENANCY
The estate of a tenant, as in a joint tenancy, a tenant for years, etc.
REAL ESTATE TERMINOLOGY
TENANCY FOR YEARS
See ESTATE FOR YEARS.
REAL ESTATE TERMINOLOGY
TENANCY IN COMMON
Ownership by two or more persons who hold an undivided interest,without right of survivorship. See Real Property - PracticalApplications
REAL ESTATE TERMINOLOGY
TENANCY IN PARTNERSHIP
See UNIFORM PARTNERSHIP ACT.
REAL ESTATE TERMINOLOGY
TENANCY BY THE ENTIRETY
Under certain state laws, ownership of property acquired by ahusband and wife during marriage, which is jointly owned. Upondeath of one spouse, it becomes the property of the survivor.
REAL ESTATE TERMINOLOGY
TENANT
A holder of property under a lease or other rental agreement.
REAL ESTATE TERMINOLOGY
TENANT AT SUFFERANCE
See ESTATE AT SUFFERANCE. See Contract Agency - RealProperty
REAL ESTATE TERMINOLOGY
TENANT AT WILL
See ESTATE AT WILL.
REAL ESTATE TERMINOLOGY
TENDER
The offer of performance, not performance itself, and which, whenjustifiably refused, places another party in default and permits partymaking tender to exercise remedies for breach of contract. An offerof money. See Contract Agency
REAL ESTATE TERMINOLOGY
TENEMENTS
All rights in land, which pass with a conveyance of the land.
REAL ESTATE TERMINOLOGY
TENURE IN LANDS
The mode, or manner, by which an estate in lands is held.
REAL ESTATE TERMINOLOGY
TERMINATION STATEMENT
The form that is prescribed by the Uniform Commercial Code to beused to remove a previously filed Financing Statement or SecurityAgreement from the files.
REAL ESTATE TERMINOLOGY
TERMITES
Insects, similar to ants, which feed on wood, causing destruction towooden structures.
REAL ESTATE TERMINOLOGY
TERM MORTGAGE
One that requires the mortgagor to pay interest only during themortgage term with the principal due at the end of the term.
REAL ESTATE TERMINOLOGY
TESTAMENT
The written declaration of one's last will.
REAL ESTATE TERMINOLOGY
TESTATE
Leaving a will upon death.
REAL ESTATE TERMINOLOGY
TESTATOR
One who makes a will.
REAL ESTATE TERMINOLOGY
TESTATRIX
A female testator.
REAL ESTATE TERMINOLOGY
TESTIMONY CLAUSE
The introduction in a legal document "In Witness Whereof...".
REAL ESTATE TERMINOLOGY
THRESHOLD
A strip of wood or metal, beveled on each edge, and used above thefinished floor under outside doors.
REAL ESTATE TERMINOLOGY
TIER
A row of townships, running east and west, lying between any two(2) consecutive township lines, comprising an area six (6) mileswide.
REAL ESTATE TERMINOLOGY
TIGHT MONEY MARKET
A period of time, in which available loan funds are scarce andinterest rates and discount points are high.
REAL ESTATE TERMINOLOGY
"TIME IS OF THE ESSENCE"
One of the essential requirements to the formation of a bindingcontract; contemplates punctual performance. Contract is VOID iftime of performance is not met. See Contracts & Regs - PracticalApplications
REAL ESTATE TERMINOLOGY
TIMESHARING
A number of tenants-in-common hold legal title to a particular condoor other real estate, entitling each to use of the property for aspecified time each year.
REAL ESTATE TERMINOLOGY
TITLE EVIDENCE
The evidence one has showing right to possession of land.
REAL ESTATE TERMINOLOGY
TITLE BY ADVERSE POSSESSION
Acquired by occupation, and recognized as against the paper titleowner.
REAL ESTATE TERMINOLOGY
TITLE COMMITMENT
A preliminary report of the current record title to a property. A titlecommitment (or title report) shows only the current state of the titlealong with the recorded objections to clear title such as unpaidmortgages and easements. The title insurance policy is issuedbased on the title report.
REAL ESTATE TERMINOLOGY
TITLE INSURANCE
Insurance against loss, resulting from defects of title, to a specificallydescribed parcel of real property. See Closings - Recordkeeping -Settlement Closings - Practical Applications - Real Property
REAL ESTATE TERMINOLOGY
TITLE INSURANCE REISSUE RATE
A reduced premium on title insurance, issued within a short period oftime from a previous policy date.
REAL ESTATE TERMINOLOGY
TITLE PLANT
A duplication of pertinent records filed with the county recorder'soffice, and maintained at a title company.
REAL ESTATE TERMINOLOGY
TITLE REPORT
A report, which discloses condition of the title, made by a titlecompany, preliminary to issuance of title insurance.
REAL ESTATE TERMINOLOGY
TITLE THEORY
Mortgage arrangement, whereby title to mortgaged real propertyvests in the lender.
REAL ESTATE TERMINOLOGY
TOPOGRAPHY
Nature of the surface of land. Its contour and elevation as shown bylines on a map.
REAL ESTATE TERMINOLOGY
TORRENS CERTIFICATE
In states that convey title according to the Torrens System aRegistrar is used to register via a Torrens Certificate (not record) titleand liens for real property.
REAL ESTATE TERMINOLOGY
TORRENS TITLE INSURANCE
State system of land registration.
REAL ESTATE TERMINOLOGY
TORT
A negligent or intentional wrong, acted on by another, where the lawwill grant money damages in a civil action. A private wrong.
REAL ESTATE TERMINOLOGY
TOWN HOUSE
Originally, a house in a city, as opposed to a country estate. Morerecently, the term is applied to certain types of row houses, whetherplanned unit developments or condominiums.
REAL ESTATE TERMINOLOGY
TOWNSHIP
A unit of land containing thirty-six (36) square miles, and is six (6)miles long on each side, constituting a Standard Township. SeeMath
REAL ESTATE TERMINOLOGY
TRADE
See EXCHANGE and TRADE-IN.
REAL ESTATE TERMINOLOGY
TRACT
An area of land.
REAL ESTATE TERMINOLOGY
TRADE-IN
A method of guaranteeing an owner a minimum amount of cash on thesale of his present property, permitting him to purchase another. Ifproperty is not sold within a specified time, the broker agrees topurchase the property at an agreed upon discount.
REAL ESTATE TERMINOLOGY
TRADE FIXTURES
Articles of personal property annexed to real property, but which arenecessary to carry on a business; and are removable by the owner ofthe fixture. See Real Property
REAL ESTATE TERMINOLOGY
TRADE NAME
The name under which a company carries on business.
REAL ESTATE TERMINOLOGY
TRANSACTION-BROKER
A licensee who assists the buyer or seller or both in a real estatetransaction, without being an agent or advocate for either one of them,thereby relieving them of any liability they would have had for the actsof an agent (same as Facilitator). See Contracts & Regs - CurrentLegal Issues - Practical Applications
REAL ESTATE TERMINOLOGY
TRANSACTION PRICE
The price actually paid for property.
REAL ESTATE TERMINOLOGY
TRANSFERABILITY
One of the four essential elements of value.
REAL ESTATE TERMINOLOGY
TREASURER'S DEED
A deed given after Redemption Period expires for property sold atpublic sale by the county, for non-payment of taxes owed by the owner.
REAL ESTATE TERMINOLOGY
TREND (APPRAISAL)
A series of related changes, brought about by a chain of causes andeffects.
REAL ESTATE TERMINOLOGY
TRESPASS
Unlawful entry on the land of another.
REAL ESTATE TERMINOLOGY
TRIPLEX
A building comprised of three dwelling units.
REAL ESTATE TERMINOLOGY
TRUE POINT OF BEGINNING (TPOB)
The description always identifies an enclosed area by starting at anorigination point called a true point of beginning or TPOB, and returningto the TPOB at the end of the description. See Real Property
REAL ESTATE TERMINOLOGY
TRUST ACCOUNT
A special account, where money is deposited by an agent for theaccount of a principal, and is to be kept. Also referred to as escrow ortrustee account. See Closings - Recordkeeping - Settlement Closings -Practical Applications - Current Legal Issues - Contracts & Regs
REAL ESTATE TERMINOLOGY
TRUST DEED
A deed, by which a trustor conveys bare legal title to the trustee assecurity for the payment of a debt.
REAL ESTATE TERMINOLOGY
TRUST LEDGER
A record of all trust funds received (cash, checks, or others), whetherplaced in the broker's trust account, given to the seller, or placed inescrow.
REAL ESTATE TERMINOLOGY
TRUST MORTGAGE
A single loan made by several lenders under a trust agreement.
REAL ESTATE TERMINOLOGY
TRUSTEE
One who holds bare legal title to property for a special purpose, withoutbeing the actual (beneficial) owner. A trustee is one of the parties toevery trust deed. See also PUBLIC TRUSTEE.
REAL ESTATE TERMINOLOGY
TRUSTEE'S DEED
Deed given by the trustee when property is sold under the power ofsale in trust deed and after expiration of Redemption Period. Form ofSPECIAL WARRANTY DEED.
REAL ESTATE TERMINOLOGY
TRUSTOR
Owner who is the borrower in a trust deed. He deeds his property to atrustee as security for a loan in a trust deed transaction. See alsoGRANTOR.
REAL ESTATE TERMINOLOGY
TRUTH-IN-LENDING
The Federal Reserve Board's "Regulation Z", which requiresdisclosure of certain loan terms to the borrower, before the obligation iseffective. See Finance
REAL ESTATE TERMINOLOGY
TURNOVER
The number of times a given amount of inventory sells over a givenperiod of time.
REAL ESTATE TERMINOLOGY
UNAMORTIZED LOAN
A loan with only periodic interest payments. Note: No principalreduction occurs. See also AMORTIZATION.
REAL ESTATE TERMINOLOGY
UNDER IMPROVEMENT
An improvement, which, because of its deficiency in size or cost, is notthe "highest and best use" of the site.
REAL ESTATE TERMINOLOGY
UNDISCLOSED AGENCY
The failure to disclose who you are representing or working for in a realestate transaction to a party, or the parties, to the transaction.
REAL ESTATE TERMINOLOGY
UNDIVIDED INTEREST
The interest of co-owners in the entire property, which interest isindistinguishable.
REAL ESTATE TERMINOLOGY
UNDUE INFLUENCE
Taking any fraudulent or unfair advantage of another's weakness ofmind, distress or necessity.
REAL ESTATE TERMINOLOGY
UNEARNED INCREMENT
An increase in the value of property, not anticipated by the owner, dueprimarily to the operation of social forces (i.e., increase in population).
REAL ESTATE TERMINOLOGY
UNIFORM COMMERCIAL CODE - (UCC)
The law, which established a unified and comprehensive scheme forthe regulation of security transactions in personal property and BulkSales Laws.
REAL ESTATE TERMINOLOGY
UNIFORM CONSUMER CREDIT CODE (U.C.C.C.)
Relates to disclosure and right of rescission under Truth-in-Lending;however, the U.C.C.C. also establishes finance charge rate limitationsas they apply to consumer credit related loans. Also, anyone whoextended credit five (5) times in the previous, or the current, year isclassed as a creditor.
REAL ESTATE TERMINOLOGY
UNIFORM PARTNERSHIP ACT
Legally establishes the ownership of property by a partnership, byproviding that real estate may be held in the name of the partnership.
REAL ESTATE TERMINOLOGY
UNIFORM RESIDENTIAL LANDLORD AND TENANT ACT
Law intended to provide some uniformity regulating the relationship oflandlord and tenant.
REAL ESTATE TERMINOLOGY
UNILATERAL CONTRACT
A promise for an act. Only one party is bound to perform (i.e., Option).
REAL ESTATE TERMINOLOGY
UNIMPROVED PROPERTY
Raw land.
REAL ESTATE TERMINOLOGY
UNINTENTIONAL AGENCY
An agency relationship created by the wrongful acts of an agent to thethird party, when the agent was originally the agent of the principal.
REAL ESTATE TERMINOLOGY
UNIT
(1) One of any group. (2) An apartment, condominium, house in asubdivision, etc.
REAL ESTATE TERMINOLOGY
UNIT-IN-PLACE-METHOD
The cost of erecting a building by estimating the cost of eachcomponent part (i.e., foundations, floors, walls, windows, ceilings,roofs, etc.), including labor and overhead.
REAL ESTATE TERMINOLOGY
UNITIES OF TITLE
Time, title, interest and possession.
REAL ESTATE TERMINOLOGY
UNLAWFUL DETAINER ACT
Lawsuit to evict a tenant who unlawfully remains in possession of realproperty.
REAL ESTATE TERMINOLOGY
UNSECURED
No specific property is available to satisfy a lien.
REAL ESTATE TERMINOLOGY
URBAN PROPERTY
City property.
REAL ESTATE TERMINOLOGY
USEFUL LIFE
(1) In appraisal for sale purposes, the true economic value of abuilding in terms of years of use to the owner. (2) For tax purposes,the life set for depreciation. At any time during that period, a new lifecould begin for a new owner.
REAL ESTATE TERMINOLOGY
USUFRUCTUARY RIGHT
A limited right to use and profit from property owned by another,provided the user doesn't change the substance of the property.
REAL ESTATE TERMINOLOGY
USURY
Charging more than the legal rate of interest for the use of money.
REAL ESTATE TERMINOLOGY
UTILITIES
Public utility companies under the control of the Public UtilitiesCommission, such as the telephone, gas, and electric companies. SeeClosings - Recordkeeping - Settlement Closings
REAL ESTATE TERMINOLOGY
UTILITY
The ability to give satisfaction and/or excite desire for possession.
REAL ESTATE TERMINOLOGY
V.A.
See VETERANS ADMINISTRATION.
REAL ESTATE TERMINOLOGY
VACANCY FACTOR
The estimated percentage of vacancies in a rental project. May bebased on past records of the property, or a professional guess if a newproject. Surrounding area buildings, if similar, may be used forcomparison. See Valuation Appraisal
REAL ESTATE TERMINOLOGY
VALID
Legally sufficient and authorized by law.
REAL ESTATE TERMINOLOGY
VALID CONTRACT
An agreement that is legally binding and enforceable.
REAL ESTATE TERMINOLOGY
VALLEY
The internal angle, formed by the junction of two sloping sides of a roof.
REAL ESTATE TERMINOLOGY
VALUABLE CONSIDERATION
A legal term, meaning any amount of consideration supporting acontract that has monetary value.
REAL ESTATE TERMINOLOGY
VALUATION
SEE APPRAISAL
REAL ESTATE TERMINOLOGY
VALUE
Worth of a thing in money or goods. What it can be exchanged for.
REAL ESTATE TERMINOLOGY
VARIABLE RATE MORTGAGE
A loan where interest may change, depending upon the fluctuations ofthe indicator or index to which its rate is tied.
REAL ESTATE TERMINOLOGY
VARIANCE
Usually refers to zoning, and is government permission to a use notallowed under current zoning laws.
REAL ESTATE TERMINOLOGY
VENDEE
Receiver of a thing being vended (sold) BUYER.
REAL ESTATE TERMINOLOGY
VENDOR
Owner of thing being vended (sold) SELLER.
REAL ESTATE TERMINOLOGY
VERIFICATION
Sworn statement before a duly-qualified officer as to correctness ofcontents of an instrument.
REAL ESTATE TERMINOLOGY
VETERANS ADMINISTRATIONS (VA)
Federal government agency, which administers GI (VA) loans.
REAL ESTATE TERMINOLOGY
VICARIOUS
Taking the place of another. Endured or performed by one person inplace of another. Shared in by imagined participation in another'sexperience.
REAL ESTATE TERMINOLOGY
VICARIOUS LIABILITY
To be responsible for the acts of another, such as a principal for theacts his agent. See Contracts & Regs - Current Legal Issues -Practical Applications
REAL ESTATE TERMINOLOGY
VIOLATION
Breach of any law or agreement.
REAL ESTATE TERMINOLOGY
VOID
To have no force or effect. Never existed legally. See ContractAgency
REAL ESTATE TERMINOLOGY
VOIDABLE
That which is capable of being void, but is not void, unless action istaken to make it so.
REAL ESTATE TERMINOLOGY
VOLUNTARY
With consent of the owner, such as “voluntary lien” etc.
REAL ESTATE TERMINOLOGY
VOLUNTARY ALIENATION
The transfer of title freely by the owner.
REAL ESTATE TERMINOLOGY
VOLUNTARY LIEN
Any lien placed on property with consent of, or as a result of, thevoluntary act of the owner.
REAL ESTATE TERMINOLOGY
WAIVE
To relinquish or abandon; to forego a right to enforce or requireanything.
REAL ESTATE TERMINOLOGY
WAIVER
The intentional or voluntary relinquishment of a known right, essentiallya unilateral act.
REAL ESTATE TERMINOLOGY
WAREHOUSING
Interim loans by a commercial bank to nonbank lenders made onsecurities being underwritten by the nonbank lender, while the issuesare being prepared for sale and distribution to individuals and financialinstitutions; who buy them for their investment portfolios.
REAL ESTATE TERMINOLOGY
WARRANTY DEED
Deed which contains five specific covenants (covenant of seizin,covenant of quite enjoyment, covenant against encumbrances,covenant of warranty forever, and covenant of further assurance)written warranties (guarantees) of title. See also SPECIALWARRANTY DEED and GENERAL WARRANTY DEED. See RealProperty - Practical Applications
REAL ESTATE TERMINOLOGY
WASTE
The destruction, or material alteration or injury to premises by a tenant.
REAL ESTATE TERMINOLOGY
WATER
Is considered to be real property when in its natural state and, inColorado, must be transferred by deed. It does not run with the land.
REAL ESTATE TERMINOLOGY
WATER TABLE
Distance from surface of ground to a depth at which natural groundwater is found.
REAL ESTATE TERMINOLOGY
WILL
The disposition of property effective upon the maker's death.
REAL ESTATE TERMINOLOGY
WITHHOLDING
The process of holding back money earmarked for the payment oftaxes. See Closings - Recordkeeping - Settlement Closings
REAL ESTATE TERMINOLOGY
WITHOUT RECOURSE ENDORSEMENT
See ENDORSEMENT.
REAL ESTATE TERMINOLOGY
WITNESSED WILL
A formal written will, signed by the maker in the presence of witnesseswho also sign.
REAL ESTATE TERMINOLOGY
WORDS OF CONVEYANCE
Wording in a deed demonstrating the definite intention to convey aparticular title to real property to a named grantee.
REAL ESTATE TERMINOLOGY
WRAP-AROUND MORTGAGE
Involves the borrower entering into a second mortgage. Thisarrangement represents the means by which he can add to hisdevelopment, without refinancing the first mortgage at substantiallyhigher current rates. See Finance
REAL ESTATE TERMINOLOGY
WRIT OF EXECUTION
A process of the court to carry out a judicial decision (judgment).
REAL ESTATE TERMINOLOGY
YARD
3 feet; 36 inches.
REAL ESTATE TERMINOLOGY
YIELD
Ratio of income from an investment to the total cost of the investmentover a given period of time.
REAL ESTATE TERMINOLOGY
(YOUR STATE) ASSOCIATION OF REALTORS
The State Association of real estate personnel, whose goal is theprofessional advancement of the real estate industry, and whosemembership is comprised of the local real estate boards.
REAL ESTATE TERMINOLOGY
ZONE
The area set off by the proper authorities for specific use; subject tocertain restrictions or restraints.
REAL ESTATE TERMINOLOGY
ZONING
The division of a city or county by legislative regulations, into areas(zones) specifying the uses allowable for the real property in theseareas.
REAL ESTATE TERMINOLOGY
ZONING ORDINANCE
Exercise of police power of a municipality in regulating and controllingthe character and use of property. See Government Controls
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REAL ESTATE TERMINOLOGY
4-3-2-1
A rule for computing depth factors.