basic terms Flashcards
abstract of title
An abbreviated history of a property, including information on any transfers,
grants, wills, conveyances, liens, and encumbrances
acceleration clause
a clause in a security instrument which makes the entire loan amount due
immediately upon default
accession
is the right to all that one’s own property produces, including that which is
added, either naturally or by human action, to the property already owned.
accretion
The process that results in the gradual increase in land area through deposits
of soil by natural forces
acre
a measurement of land equal to 43,560 square feet
actual eviction
the legal process by which someone is expelled from a property and
prevented from re-entry
actual notice
When an individual actually knows of a fact
ad valorem taxes
A tax calculated according to the assessed value of a piece of real estate
Adjustable-rate mortgage (ARM)
A mortgage with an interest rate that can be adjusted based on fluctuations in
the cost of money
adverse possession
Involuntary transfer of title from an owner who does not use or inspect their
land for a number of years to another person who has some claim to the
land and takes possession
agency agreement
a mutual binding understanding between two parties that authorizes another
party to act on their behalf
agent
an individual with authority to act on behalf of another; a state license is
required to operate as an agent in real estate
air rights
the right to use the airspace above the surface of land
air space
The area above ground that is owned along with a property. Could include
space above a piece of land, or the space owned inside a condominium unit
alienation
The transfer of ownership (title) to real property. Alienation may be voluntary
or involuntary.
Americans with Disabilities Act
a federal civil rights law passed in 1990 which prohibits discrimination against
and create standards for people with disabilities
amortization
The process of paying off a debt/mortgage in regular installments based on a
fixed payment schedule
antitrust laws
Laws designed at preventing unfair or anti-competitive practices such as price
fixing, collusion, monopolies, etc.
appraised value
an estimation of property’s value as of a specific date, performed by a
certified appraiser
appreciation
The increase in value of a property
appurtenances
Rights that run with real property ownership; most often transferred with the
property, but possible to sell separately
arrears
A payment that occurs at the end of a period to compensate for charges
accrued during that time
asbestos
a naturally occurring mineral fiber that is commonly used in insulation but if
airborne or inhaled, can cause severe respiratory health issues
assemblage
The combining of multiple contiguous pieces of real property into a single
tract of land, often resulting in an increase in value
assessed value
The value placed on a property by a governmental unit for use in calculating
property taxes
assessment
the determination of the value of a property for tax purposes
asset
item of value
assignment
The transference of rights and obligations in a contract from one party to another
associate broker
an individual who meets the licensure requirements to be a real estate broker
but provides real estate brokerage services as an independent contractor to a
real estate broker
avulsion
the sudden loss of land by flood or when a stream or river changes course.
balloon payment
A payment at the end of a loan period which includes the total outstanding
balance of the loan.
bargain and sale deed
a deed without any covenants or warranties against encumbrances that only
implies the grantor has possession of the property and holds the right to
convey title
base line
an imaginary line of latitude used in the rectangular survey system of land
description to identify townships in relation to proximity to a principal
meridian
benchmark
permanent markers of known location and elevation above sea level as
established by a government survey team (such as the USGS)
beneficiary
The recipient of advantage or gain from an act or instrument such as a trust,
will, or insurance policy
bilateral contract
a contract wherein both parties are obligated to perform in an exchange of
promises
binder
A preliminary agreement for the sale of a property secured by a valuable
deposit from the potential buyer, which binds the seller to a good faith
agreement to sell the subject property, provided that a sale contract meeting
the conditions determined is executed within the prescribed period; also
known as a letter of intent (LOI)
blanket mortgage
a loan for which more than one collateral property acts as security
block and lot system
a system of legal land description that identifies a piece of platted property by
referring to the section, lot, and block numbers in a subdivision; a.k.a. the
recorded plat method
blockbusting
the illegal act of causing owners to sell their homes by creating fear that members of a protected class are moving into the area
bridge loan
short-term loan used to transition from one loan to another; can connect
borrower from construction loan to eventual mortgage loan (or current
home to their new home)
broker
A person who is licensed to represent one of the parties in a real estate
transaction in exchange for a commission or other valuable consideration
brownfield
real property, the expansion, redevelopment, or reuse of which may be
complicated by the presence or potential presence of a hazardous
substance, pollutant, or contaminant
building code
a set of regulations pertaining to building design, materials, safety, sanitation,
and structure
Bundle of Rights
Ownership of land with all of the legal rights of possession, control, quiet
enjoyment, exclusion, transfer, and encumber
buydown
the paying of money upfront to reduce a loan’s interest rate and monthly
payments
buyers market
Any market that is experiencing an excess of sellers or supply, creating more
favorable conditions for buyers
capital expense
an expense paid in order to improve a property
capital improvement
any upgrade or improvement to a property that falls outside the scope of
normal repair and maintenance, usually with the intention of increasing value
capitalization rate
a rate of return that calculates the percentage of expected annual income
earned over a property’s value; the present value for expected future income
earned
carbon monoxide
an odorless, colorless gas that occurs as a by-product due to incomplete
combustion when burning such fuels as wood, oil, and natural gas
cash reserve
a portion of funds allocated to pay for variable expenses
CERCLA
the Comprehensive Environmental Response, Compensation, and Liability
Act, aka the Superfund
certificate of title
A document prepared by a title attorney detailing the chain of title and
offering an opinion on the marketability of the seller’s title
chain of title
chronological chain of ownership
chlordane
a chemical compound formerly used in pesticides that is dangerous to
human health
chloroflourocarbons (CFCs)
chemical compounds containing chlorine, fluorine, and carbon atoms that
were once used in refrigerator coolant, air conditioners, and dehumidifiers
Civil Rights Act of 1866
federal law that prohibits discrimination in housing based on race
cloud
Any claim to or encumbrance on the title to a property which affects
transferability
certificate of occupancy (CO)
legal document from a local authority that authorizes a building to be
occupied; issued after the building has passed all required inspections
collateral
Property liened by a lender in order to assure payment of the loan and
protect the lender’s investment
collusion
an unlawful agreement between competitors to monopolize a market,
disadvantage other competitors, or otherwise undertake activities in violation
of fair trade laws
color of title
a title transfer that is defective in a way that is unknown to the new owner
commingling
illegal act of mixing funds with client funds
commission
the regulatory body responsible for regulating the brokerage industry and
licensing real estate practitioners; formally known as the Georgia Real Estate
Commission (GREC)
common elements
Portions of a shared ownership property not controlled by any one owner or tenant. Examples include parking lots, lobbies, fitness centers, elevators, etc.
common law
the side of law which arises from judgments and decisions made in courts
rather than explicit legislation
community association manager
individual who provides administrative and operational services to a community association in exchange for consideration; requires specific
licensure
community property
a system of property co-ownership, most commonly applied to married
couples, which describes what is joint property and what is individual
property
comparable
any property which has sold and is similar enough in features, location, and
proximity in time to inform the value of a subject property
comparative market analysis
A report that compares the prices of recently sold or listed homes
(“comparables”) in order to estimate the market value of a similar property
(the “subject property”) located in the same area
condominium
Property where each owner has a separate interest in their own unit and
undivided interest in the common areas
consideration
Something of value exchanged by the parties as evidence of agreement to
the terms of a contract
construction mortgage
temporary mortgage to finance construction
constructive eviction
the termination of a lease in circumstances in which the landlord defaults and
acts, or fails to act, in such a way that the premises become unusable
constructive notice
When a property’s ownership is recorded publicly, so everyone can know the
contents of recorded documents
contingency
A provision within a contract that makes performance conditional upon the
occurrence of a stated event
contract
a legally enforceable and binding agreement between parties wherein a
promise to do or not do something is given in exchange for valuable
consideration
contract for deed
a sales contract in which the buyer pays the seller for the property in multiple
installments for a predetermined length of time, and the seller holds the title
until the property has been fully paid for; also known as an installment sales
contract or land contract
contribution
the amount of market value added to a property by an addition or improvement to the property; not necessarily the same as the cost of the improvement
conventional life estate
is a life estate in which the measuring life is that of the life tenant; it is an
estate created by a deed that lasts for the duration of the tenant’s life
conventional loan
Any loan that is neither insured by the government nor guaranteed by the government
conversion
Changing real property to personal property, and vice versa; also the illegal act of mixing fiduciary’s funds with agent personal funds
conveyance
instrument that transfers a grantor interest in real property
cooperating brokerage
An agency arrangement in which two brokerages collaborate to achieve a
real estate transaction for a specific piece of property.
corrective maintenance
the repair or restoration of equipment after it has broken
cost approach
Method of estimating the value of a property by determining how much it
would cost to replace the building or other improvements, minus the cost of
depreciation, plus the value of the land itself
counteroffer
A contract proposal submitted in response to a previous offer, modifying the terms of the original offer; considered a rejection of the original offer
covenant of seisin
a protection in which the grantor states they hold the title conveyed in the deed
credit report
contains information regarding an individual’s credit history (loan payments,
etc.) as well as the present credit status of all open credit accounts
covenants, conditions, and
restrictions (CCRs)
Private restrictions similar to deed restrictions that dictate what homeowner may do with their property
credits
sum of money that is received
curtesy/dower
The right of a spouse to inherit property held in their spouse’s name after that spouse dies; dower is the word used for women, curtesy for men.
customer
an individual with whom a license holder has no agency relationship nor fiduciary duties but to whom fairness and honesty are still required
datum
a designated base reference point to elevation used by surveyors to determine the elevations of land or property in an area
debits
sum of money that is owed
debt service
current obligations - expenditures to maintain payment
