real estate glossary

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real estate glossary
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2014-11-19 11:41:48
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  1. The condensed history of a title to a particular parcel of real estate,
    consisting of a summary of the original grant and all subsequent
    conveyances and encumbrances affecting the property and a certification
    by the abstractor that the history is complete and accurate.
    Abstract of Title
  2. The clause in a mortgage or deed of trust that can be enforced to make
    the entire debt due immediately if the borrower defaults on an
    installment payment or other covenant.
    Acceleration Clause:
  3. The increase or addition of land by the deposit of sand or soil washed up naturally from a river, lake or sea.
    Accretion
  4. On a closing statement, items of expense that are incurred but not yet
    payable, such as interest on a mortgage loan or taxes on real property.
    Accrued Items
  5. A formal declaration made before a duly authorized officer, usually a notary public, by a person who has signed a document.
    acknowledgement
  6. A measure of land equal to 43,560 square feet, 4,840 square yards, 4,047 square meters, 160 square rods or 0.4047 hectares.
    acre
  7. The legal process that results in the tenant's being physically removed from the leased premises.
    Actual Eviction
  8. Express information or fact; that which is known; direct knowledge
    actual notice
  9. A loan characterized by a fluctuating interest rate, usually one tied to
    a bank or savings and loan association cost-of-funds index.
    Adjustable Rate Mortgage (ARM)
  10. A tax levied according to value, generally used to refer to real estate tax. Also called the general tax.
    Ad Valorem Tax
  11. The actual, open, notorious, hostile and continuous possession of
    another's land under a claim of title. Possession for a statutory period
    may be a means of acquiring title.
    Adverse Possession
  12. The relationship between a principal and an agent wherein the agent is
    authorized to represent the principal in certain transactions.
    agency
  13. One who acts or has the power to act for another. A fiduciary
    relationship is created under the law of agency when a property owner,
    as the principal, executes a listing agreement or management contract
    authorizing a licensed real estate broker to be his or her agent.
    agent
  14. The right to use the open space above a property, usually allowing the surface to be used for another purpose.
    air rights
  15. The act of transferring property to another. Alienation may be
    voluntary, such as by gift or sale, or involuntary, as through eminent
    domain or adverse possession.
    Alienation
  16. The clause in a mortgage or deed of trust that states that the balance
    of the secured debt becomes immediately due and payable at the lender's
    option if the property is sold by the borrower. In effect this clause
    prevents the borrower from assigning the debt without the lender's
    approval.
    Alienation Clause
  17. A system of land ownership in which land is held free and clear of any
    rent or service due to the government; commonly contrasted to the feudal
    system.
    Allodial System
  18. A loan in which the principal as well as the interest is payable in
    monthly or other periodic installments over the term of the loan.
    amortized loan
  19. The relationship of the total finance charges associated with a loan.
    This must be disclosed to borrowers by lenders under the
    Truth-in-Lending Act
    Annual Percentage Rate (APR)
  20. The appraisal principle that holds that value can increase or decrease
    based on the expectation of some future benefit or detriment produced by
    the property.
    Anticipation
  21. Laws designed to preserve the free enterprise of the open marketplace by
    making illegal certain private conspiracies and combinations formed to
    minimize competition. Most violations of antitrust laws in the real
    estate business involve either price-fixing (brokers conspiring to set
    fixed compensation rates) or allocation of customers or markets (brokers
    agreeing to limit their areas of trade or dealing to certain areas or
    properties)
    Anti Trust laws
  22. An estimate of the quantity, quality or value of something. The process
    through which conclusions of property value are obtained; also refers
    to the report that sets forth the process of estimation and conclusion
    of value.
    appraisal
  23. An increase in the worth or value of a property due to economic or
    related causes, which may prove to be either temporary or permanent;
    opposite of depreciation.
    Appreciation
  24. A right, privilege or improvement belonging to, and passing with, the land.
    Appurtenance
  25. An easement that is annexed to the ownership of one parcel and allows the owner the use of the neighbor's land.
    Appurtenant Easement
  26. The combining of two or more adjoining lots into one larger tract to increase their total value.
    assemblage
  27. The imposition of a tax, charge or levy, usually according to established rates.
    assessment
  28. The transfer in writing of interest in a bond, mortgage, lease or other instrument.
    assignment
  29. Acquiring title to property on which there is an existing mortgage and
    agreeing to be personally liable for the terms and conditions of the
    mortgage, including payments.
    assumption of mortgage
  30. The act of taking a person's property into legal custody by writ or
    other judicial order to hold it available for application to that
    person's debt to a creditor.
    attachment
  31. An abstract of title that an attorney has examined and has certified to
    be, in his or her opinion, an accurate statement of the facts concerning
    the property ownership
    Attorney's Opinion of Title
  32. A clause in a listing agreement that states that the agreement will
    continue automatically for a certain period of time after its expiration
    date. In many states, use of this clause is discouraged or prohibited.
    automatic extension
  33. The sudden tearing away of land, as by earthquake, flood, volcanic action or the sudden change in the course of a stream.
    Avulsion
  34. The appraisal principle that states that the greatest value in a
    property will occur when the type and size of the improvements are
    proportional to each other as well as the land.
    balance
  35. A final payment of a mortgage loan that is considerably larger than the
    required periodic payments because the loan amount was not fully
    amortized.
    balloon payment
  36. A deed that carries with it no warranties against liens or other
    encumbrances but that does imply that the grantor has the right to
    convey title. The grantor may add warranties to the deed at his or her
    discretion
    Bargain and sale deed
  37. The main imaginary line running east and west and crossing a principal
    meridian at a definite point, used by surveyors for reference in
    locating and describing land under the rectangular (government) survey
    system of legal description.
    baseline
  38. The financial interest that the Internal Revenue Service attributes to
    an owner of an investment property for the purpose of determining annual
    depreciation and gain or loss on the sale of the asset. If a property
    was acquired by purchase, the owner's basis is the cost of the property
    plus the value of any capital expenditures for improvements to the
    property, minus any depreciation allowable or actually taken. This new
    basis is called the adjusted basis.
    basis
  39. A permanent reference mark or point established for use by surveyors in measuring differences in elevation.
    bench mark
  40. (1) The person for whom a trust operates or in whose behalf the income
    from a trust estate is drawn. (2) A lender in a deed of trust loan
    transaction.
    Beneficiary
  41. A mortgage covering more than one parcel of real estate, providing for
    each parcel's partial release from the mortgage lien upon repayment of a
    definite portion of the debt.
    blanket loan
  42. The illegal practice of inducing homeowners to sell their properties by
    making representations regarding the entry or prospective entry of
    persons of a particular race or national origin into the neighborhood.
    blockbusting
  43. Violation of any terms or conditions in a contract without legal excuse; for example, failure to make a payment when it is due
    breach of contract
  44. One who acts as an intermediary on behalf of others for a fee or commission.
    broker
  45. The bringing together of parties interested in making a real estate transaction.
    brokerage
  46. A strip of land, usually used as a park or designated for a similar use,
    separating land dedicated to one use from land dedicated to another use
    (e.g., residential from commercial).
    buffer zone
  47. An ordinance that specifies minimum standards of construction for buildings to protect public safety and health.
    building code
  48. Written governmental permission for the construction, alteration or
    demolition of an improvement, showing compliance with building codes and
    zoning ordinances.
    building permit
  49. The concept of land ownership that includes ownership of all legal
    rights to the land--for example, possession, control within the law and
    enjoyment.
    bundle of rights
  50. A financing technique used to reduce
    the monthly payments for the first few years of a loan. Funds in the
    form of discount points are given to the lender by the builder or seller
    to buy down or lower the effective interest rate paid by the buyer,
    thus reducing the monthly payments for a set time.
    buy down
  51. A principal-agent relationship in which the broker is the agent for the
    buyer, with fiduciary responsibilities to the buyer. The broker
    represents the buyer under the law of agency.
    Buyer-Agency Agreement
  52. Profit earned from the sale of an asset.
    capital gain
  53. A mathematical process for estimating the value of a property using a
    proper rate of return on the investment and the annual net operating
    income expected to be produced by the property. The formula is expressed
    as: Income -------- = Value Rate
    capitalization
  54. The rate of return a property will produce on the owner's investment.
    capitalization rate
  55. The net spendable income from an investment, determined by deducting all
    operating and fixed expenses from the gross income. When expenses
    exceed income, a negative cash flow results.
    cash flow
  56. A Latin phrase meaning "Let the buyer beware."
    Caveat Emptor
  57. A form indicating the appraised value of a property being financed with a VA loan.
    Certificate of Reasonable Value (CRV)
  58. The document generally given to the purchaser at a tax foreclosure sale.
    It does not convey title; normally it is an
    instrument certifying that the holder received title to the property
    after the redemption period passed and that the holder paid the property
    taxes for that interim period.
    Certificate of Sale
  59. A statement of opinion on the status of the title to a parcel of real
    property based on an examination of specified public records.
    certificate of title
  60. The succession of conveyances, from some accepted starting point, whereby the present holder of real property derives title.
    chain of title
  61. An act that prohibits racial discrimination in the sale and rental of housing.
    civil rights act of 1866
  62. A detailed cash accounting of a real estate transaction showing all cash
    received, all charges and credits made and all cash paid out in the
    transaction.
    Closing Statement
  63. Any document, claim, unreleased lien or encumbrance that may impair the
    title to real property or make the title doubtful; usually revealed by a
    title search and removed by either a quitclaim deed or suit to quiet
    title.
    cloud on title
  64. A written system of standards for ethical conduct.
    code of ethics
  65. The illegal act by a real estate broker of placing client or customer
    funds with personal funds. By law brokers are required to maintain a
    separate trust or escrow account for other parties' funds held
    temporarily by the broker.
    Commingling
  66. Parts of a property that are necessary or convenient to the existence,
    maintenance and safety of a condominium or are normally in common use by
    all of the condominium residents. Each condominium owner has an
    undivided ownership interest in the common elements.
    common elements
  67. The body of law based on custom, usage and court decisions.
    common law
  68. A system of property ownership based on the theory that each spouse has
    an equal interest in the property acquired by the efforts of either
    spouse during marriage. A holdover of Spanish law found predominantly in
    western states; the system was unknown under English common law.
    community property
  69. Properties used in an appraisal report that are substantially equivalent to the subject property.
    comparables
  70. The appraisal principle that states that excess profits generate competition.
    competition
  71. A comparison of the prices of recently sold homes that are similar to a
    listing seller's home in terms of location, style and amenities.
    Competitive Market Analysis (CMA)
  72. A judicial or administrative proceeding to exercise the power of eminent
    domain, through which a government agency takes private property for
    public use and compensates the owner.
    condemnation
  73. Written governmental permission allowing a use inconsistent with zoning
    but necessary for the common good, such as locating an emergency medical
    facility in a predominantly residential area.
    Conditional-Use Permit
  74. The absolute ownership of a unit in a multi-unit building based on a
    legal description of the airspace the unit actually occupies, plus an
    undivided interest in the ownership of the common elements, which are
    owned jointly with the other unit owners
    Condominium
  75. The appraisal principle that holds that the greater the similarity among
    properties in an area, the better they will hold their value
    Conformity
  76. (1) That received by the grantor in exchange for his or her deed.
    (2) Something of value that induces a person to enter into a contract.
    Consideration
  77. Actions of a landlord that so materially disturb or impair a tenant's
    enjoyment of the leased premises that the tenant is effectively forced
    to move out and terminate the lease without liability for any further
    rent.
    Constructive eviction
  78. Notice given to the world by recorded documents. All people are charged
    with knowledge of such documents and their contents, whether or not they
    have actually examined them. Possession of property is also considered
     _________that the person in possession has an interest in the
    property.
    constructive notice
  79. A provision in a contract that requires a certain act to be done or a
    certain event to occur before the contract becomes binding.
    Contingency
  80. A legally enforceable promise or set of promises that must be performed
    and for which, if a breach of the promise occurs, the law provides a
    remedy. A contract may be either unilateral, by which only one party is
    bound to act, or bilateral, by which all parties to the instrument are
    legally bound to act as prescribed.
    Contract
  81. The appraisal principle that states that the value of any component of a
    property is what it gives to the value of the whole or what its absence
    detracts from that value.
    Contribution
  82. A loan that requires no insurance or guarantee.
    Conventional Loan
  83. A term used to refer to any document that transfers title to real
    property. The term is also used in describing the act of transferring.
    Conveyance
  84. A residential multi-unit building whose title is held by a trust or
    corporation that is owned by and operated for the benefit of persons
    living within the building, who are the beneficial owners of the trust
    or stockholders of the corporation, each possessing a proprietary lease.
    Cooperative
  85. Title ownership held by two or more persons.
    Co-Ownership
  86. An entity or organization, created by operation of law, whose rights of
    doing business are essentially the same as those of an individual. The
    entity has continuous existence until it is dissolved according to legal
    procedures.An entity or organization, created by operation of law, whose rights of
    doing business are essentially the same as those of an individual. The
    entity has continuous existence until it is dissolved according to legal
    procedures.
    Corporation
  87. The process of estimating the value of a property by adding to the
    estimated land value the appraiser's estimate of the reproduction or
    replacement cost of the building, less depreciation.
    Cost Approach
  88. A new offer made in response to an offer received. It has the effect of
    rejecting the original offer, which cannot be accepted thereafter unless
    revived by the offeror.
    Counteroffer
  89. A written agreement between two or more parties in which a party or
    parties pledge to perform or not perform specified acts with regard to
    property; usually found in such real estate documents as deeds,
    mortgages, leases and contracts for deed
    Covenant
  90. The covenant implied by law by which a landlord guarantees that a tenant
    may take possession of leased premises and that the landlord will not
    interfere in the tenant's possession or use of the property.
    Covenant of Quiet Enjoyment
  91. On a closing statement, an amount entered in a person's favor--either an
    amount the party has paid or an amount for which the party must be
    reimbursed.
    credit
  92. On a closing statement, an amount charged; that is, an amount that the debited party must pay.
    debit
  93. The voluntary transfer of private property by its owner to the public for some public use, such as for streets or schools.
    dedication
  94. A written instrument that, when executed and delivered, conveys title to or an interest in real estate.
    deed
  95. A deed given by the mortgagor to the mortgagee when the mortgagor is in
    default under the terms of the mortgage. This is a way for the mortgagor
    to avoid foreclosure.
    Deed in Lieu of Foreclosure
  96. An instrument that grants a trustee under a land trust full power to
    sell, mortgage and subdivide a parcel of real estate. The beneficiary
    controls the trustee's use of these powers under the provisions of the
    trust agreement.
    deed in trust
  97. Clauses in a deed limiting the future uses of the property. Deed
    restrictions may impose a vast variety of limitations and conditions,
    for example, they may limit the density of buildings, dictate the types
    of structures that can be erected or prevent buildings from being used
    for specific purposes or even from being used at all.
    deed restriction
  98. The nonperformance of a duty, whether arising under a contract or otherwise; failure to meet an obligation when due.
    default
  99. A clause used in leases and mortgages that cancels a specified right
    upon the occurrence of a certain condition, such as cancellation of a
    mortgage upon repayment of the mortgage loan.
    Defeasance Clause
  100. An
    estate in which the holder has a fee simple title that may be divested
    upon the occurrence or nonocurrence of a specified event. There are two
    categories of defeasible fee estates: fee simple on condition precedent
    (fee simple determinable) and fee simple on condition subsequent.
    Defeasible Fee Estate or Fee Simple Defeasible
  101. Point levied against the borrower when a foreclosure sale does not produce sufficient funds to pay the mortgage debt in full.
    Deficiency Judgment
  102. The amount of goods people are willing and able to buy at a given price; often coupled with supply.
    demand
  103. Zoning ordinances that restrict the maximum average number of houses per
    acre that may be built within a particular area, generally a
    subdivision.
    density zoning
  104. (1) In appraisal, a loss of value in property due to any cause,
    including physical deterioration, functional obsolescence and external
    obsolescence.
    (2) In real estate investment, an expense deduction for tax purposes taken over the period of ownership of income property.
    Depreciation
  105. Acquisition of an estate by inheritance in which an heir succeeds to the property by operation of law.
    Descent
  106. One who attempts to put land to its most profitable use through the construction of improvements.
    developer
  107. A gift of real property by will. The donor is the devisor, and the recipient is the devisee.
    devise
  108. A property that includes in its ownership the appurtenant right to use
    an easement over another person's property for a specific purpose.
    Dominant Tenement
  109. The legal right or interest, recognized in some states, that a wife
    acquires in the property her husband held or acquired during their
    marriage. During the husband's lifetime the right is only a possibility
    of an interest; upon his death it can become an interest in land.
    dower
  110. Representing both parties to a transaction. This is unethical unless both parties agree to it, and it is illegal in many states.
    dual agency
  111. A provision in the mortgage that states that the entire balance of the
    note is immediately due and payable if the mortgagor transfers (sells)
    the property.
    Due-On-Sale Clause
  112. Unlawful constraint or action exercised upon a person whereby the person
    is forced to perform an act against his or her will. A contract entered
    into under it is voidable.
    duress
  113. Money deposited by a buyer under the terms of a contract, to be
    forfeited if the buyer defaults but applied to the purchase price if the
    sale is closed.
    earnest money
  114. A right to use the land of another for a specific purpose, such as for a
    right-of-way or utilities; an incorporeal interest in land.
    easement
  115. An easement created by the government or government agency that has exercised its right under eminent domain.
    Easement by Condemnation
  116. An easement allowed by law as necessary for the full enjoyment of a
    parcel of real estate; for example, a right of ingress and egress over a
    grantor's land.
    Easement by Necessity
  117. An easement acquired by continuous, open and hostile use of the property for the period of time by state law.
    Easement by Prescription
  118. An easement that is not created for the benefit of any land owned by the
    owner of the easement but that attaches personally to the easement
    owner. For example, a right granted by Eleanor Franks to Joe Fish to use
    a portion of her property for the rest of his life
    Easement in Gross
  119. The number of years during which an improvement will add value to the land.
    economic life
  120. Growing crops, such as corn, that are produced annually through labor and industry; also called fructus industriales.
    Emblements
  121. The right of a government or municipal quasi-public body to acquire
    property for public use through a court action called condemnation, in
    which the court decides that the use is a public use and determines the
    compensation to be paid to the owner.
    Eminent Domain
  122. A building--or some portion of it--a wall or fence for instance, that
    extends beyond the land of the owner and illegally intrudes on some land
    of an adjoining owner or a street or alley.
    Encroachment
  123. Anything, such as a mortgage, tax, or judgment lien, an easement, a
    restriction on the use of the land or an outstanding dower right that
    may diminish the value or use and enjoyment of a property.
    Encumbrance
  124. The federal law that prohibits discrimination in the extension of credit
    because of race, color, religion, national origin, sex, age or marital
    status.
    Equal Credit Opportunity Act (ECOA)
  125. A factor (number) by which the assessed value of a property is
    multiplied to arrive at a value for the property that is in line with
    statewide tax assessments. The ad valorem tax would be based on this
    adjusted value.
    Equalization Factor
  126. The right of a defaulted property owner to recover the property prior to its sale by paying the appropriate fees and charges.
    Equitable Right of Redemption
  127. The interest held by a vendee under a contract for deed or an
    installment contract; the equitable right to obtain absolute ownership
    to property when legal title is held in another's name.
    Equitable Title

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