Flashcards (Vocab)
Estate for Years
A leasehold estate with a definite end date; must be renegotiated; commonly used for commercial leases
Cost approach
An appraisal method that estimates replacement cost of the improvements, deducts estimated accrued depreciation, and then adds market value of the land
Grant Deed
A type of deed in which the grantor warrants that he or she has not previously conveyed the property being granted, that he or she has not encumbered the property except disclosed, and that he or she will convert to the grantee any title to the property acquired
Execute
To perform or complete; to sign
Mortgagor
The borrower under a mortgage
Comps
A term used by real estate agents and appraisers to mean comparable properties
Price
What is paid for something
Estate at Sufferance
A tenancy created when one is in wrongful possession of real estate even though the original possession may have been legal
Executed Contract
A contract in which the obligations have been performed on both sides of the contract and nothing is left to be completed
Revoke
Recall and make void
Marketable Title
Good or clear salable title reasonably free from risk of litigation over possible defects
Ratification
The approval of previously authorized act, performed on behalf of a person, which makes the act valid and legally binding
Condition Precedent
A condition which requires something to occur before a transaction becomes absolute and enforceable: for example, a sale that is contingent on the buyer obtaining financing
Valuable Consideration
Each party to a contract must give up something to make the agreement binding
Index
A publically published number used as the basis for adjusting interest rates of adjustable-rate mortgages (ARMS)
Principal
The original amount borrowed
Reliction
Occurs when land that has been covered by water is exposed by the receding of the water
Subordination Clause
A clause in which holder of a trust deed permits a subsequent loan to take priority
Estate from Period to Period
A leasehold estate that is automatically renewed for the same term; a conveyance for an indefinite period of time; does not need to be renegotiated upon each renewal; commonly a month to month rental
Graduated Payment Adjustable Mortgage
A loan with low initial monthly payments which gradually increase over a specified timeframe
Depreciation
Loss in value from any cause
Earnest Money
Down payment made by a purchaser of real estate as evidence of good faith; or a deposit or partial payment
Subject to Clause
A buyer takes over the existing loan payments but assumes no personal liability for the loan
Transferability
The ability to transfer ownership of an item from one person or entity to another
Bundle of Rights
An ownership concept describing all the legal rights that attach to the ownership of real property
Minor
Someone under 18 years of age
Unenforceable
A contract that was valid when made, but either cannot be proved or will not be enforced by a court
Section
An area of land, used in the U.S. Public Land Survey method of land description; a land area of one square mile, or 640 acres; 1/36 of a township
Estate at Will
Possession of real estate belonging to another, with their permission, for an indefinite period of time; can be terminated by either the lessor or lessee; either party must give 30 days notice before ending the tenancy
Less-Than-Freehold Estate
A leasehold estate that is considered to exist for a definite period of time or successive periods of time until termination
Writ of Possession
A court order directing the sheriff to remove the tenant and his or her possessions within five days
Economic age
Age of a building determined by its condition and usefulness
Consideration
Something of value, such as money, a promise, property, or personal services
Instrument
A written legal document setting forth the rights and liabilities of the parties involved
Functional Utility
The combined factors of usefulness with desirability
Accession
The acquisition of title to additional land or to improvements as a result of the annexation of fixtures or as a result of alluvial deposits along the banks of streams by accretion
Income approach
A method of appraising property based on the property’s anticipated future income
Foreclosure Sale
A sale during which property is sold to satisfy a debt
Retaliatory Eviction
An act whereby a landlord evicts a tenant in response to some complaint made by the tenant
Sucession
The legal transfer of a person’s interest in real property under the law of descent and distribution
Mortgage
A legal document used as security for a debt
Partially Amortizing Note
A promissory with repayment that is not sufficient to amortize the loan over its term; usually contains a balloon payment at the end
Lis Pendens
A recorded notice that indicates pending litigation on a property that prevents a conveyance or any other transfer of ownership
Agency
A relationship in which one party (principal) authorizes party (agent) to act as the principal’s representative in dealing with third parties
Alluvial Deposit
Sand or mud carried by water and deposited on land
Cap Rate
A term sometimes used to refer to capitalization rate
Contract Rent
The amount of rental income due from the tenant as agreed in the lease agreement
Demise
A conveyance of an estate in real property to someone for a certain length of time, as in a lease
Or More Clause
A clause in a promissory note that allows a borrower to pay a loan off early without penalty
Trustor
The borrower under a deed of trust
Trade Association
A voluntary, nonprofit organization of independent and competing business units engaged in the same industry or trade and formed to aid in the industry problems, promote its progress, and enhance its service
Conversion
The appropriation of property belonging to another
Personal Property
Anything movable that is not real property
Administrator/Administratrix
A person appointed by the court to handle the affairs of a deceased person when there is no one mentioned in the will
Principle of Substitution
The market value of a property is affected by the cost of obtaining an equally desirable and valuable property as a substitute
Utility Value
The usefulness of the property
Menace
Using a threat of violence to get agreement on accepting a contract
Margin
A fixed percentage rate that is added to an index to determine the fully indexed interest rate of an adjustable rate mortgage (ARM)
Misrepresentation
An innocent or negligent misstatement of material fact which causes someone loss or harm
Bilateral Contract
A contract in which each party to the contract promises to perform some act or duty in exchange for the promise of the other party
Standard Policy
A policy of title insurance covering only matters of record
Attorney-in-Fact
A competent and disinterested person who is authorized by another person to act in his or her place in legal matters
Littoral
Land bordering a lake, ocean, or sea as opposed to a land bordering a stream or river (running water)
Effective Age
The years or age shown by the condition and utility of a structure, rather than its actual or chronological age
Lessee
Tenant; renter
Acceleration Clause
A clause in the loan document describing certain events that would cause the entire loan to be due
Title Commitment
A contract to issue a title insurance policy
Alienation Clause
A clause in the loan document that allows the lender to call the entire loan due upon the sale of property; a type of acceleration clause
Duress
The use of force to get agreement in accepting a contract
ALTA Policy
American Land Title Association policy of extended title insurance policy; can be purchased by lender or buyer
Release Cause
A provision found in many blanket loans enabling the borrower to obtain a partial release of specific parcels from the loan
Property
The rights or interests an owner has in something owned
Future Interest
An interest in real property that cannot exercised today; but that might be exercised in the future
Chattel
Personal property
Constructive Notice
Public notice given by recording a document with the county recorder
Deferred Maintenance
Negligent care of a building
Servicemembers Civil Relief Act
A federal law designed to protect persons in military service from loss of property when their ability to make the payment has been affected by their entering military service
Assignment of Rents
An agreement between a property owner and the holder of a trust deed or mortgage by which the holder receives, as security, the right to collect rents from tenants of the property in the event of default by the borrower
Offeree
The party receiving an offer
Principle of Anticipation
The market anticipates the future benefits that are to be derived from the property
Blanket Loan
A loan that is secured by several properties
Mobile Home
A factory-built home fabricated prior to June 15, 1976, constructed on a chassis and wheels
Surrender
The voluntary giving up of a lease
Freehold Estate
An estate in real property which continues for an indefinite period of time
Holder in Due Course
A person who has obtained a negotiable instrument (promissory note, check) in the ordinary course of business before it is due, in good faith and for value, without knowledge that it has been previously dishonored and without notice of any defect or setoff at the time it is negotiated
Capitalization
The process of calculating the present worth of a property on the basis of its capacity to continue to produce an income stream
Police Power
The power of the state to pass laws, within lawful limits, that promote order, safety, health, morals, and general welfare of its citizens
Reconciliation
Sometimes called correlation, this is the adjustment process of weighing the results of all three appraisal methods to arrive at a final estimate of market value for the subject property
Patents
Deeds used by the U.S. government when confirming or transferring ownership to private parties
Interest
The charge for the use of money
Balloon Payment
Under an installment loan, a final payment that is substantially larger than the other payments and repays the debt in full
Beneficiary
The lender under a deed of trust
Working Capital
Liquid assets available for the conduct of daily business
Swing Loan
A short-term loan used to enable the purchaser of a new property to buy that property on the strength of the equity from the property the purchaser is now selling
Fee Simple Defeasible
An estate in which the holder has a fee simple title that is subjected to return to the grantor if a specified condition occurs; also known as fee simple qualified
Steering
The illegal practice of only showing clients property in certain areas
License
Permission to use a property which may be revoked at any time
Pledge
The transfer of property to a lender as security for re-payment of a debt. The lender takes possession of the property
Appreciation
An increase in value
Trustee’s Deed
A deed given to a buyer of real property at a trustee’s sale
Reverse Annuity Loan
A loan that enables elderly homeowners to borrow against the equity in their homes by receiving monthly payments, from a lender, that are needed to help meet living costs; due upon a specific date or upon the occurrence of a specific event, such as the sale of the property or the death of the borrower
Multiple Listing Service
A cooperative listing service conducted by a group of brokers for the purpose of marketing listings
Township
A land description used in the U.S. Public Land Survey System consisting of a six-by-six mile area containing 36 sections, each one mile square
Promissory Note
A written promise or order to pay money; evidence of a debt
Intermediation
The process of transferring capital from who invest funds to those who wish to borrow
Percentage Lease
A lease in which the landlord receives a percentage of the gross sales as part or all of the rental payment
Unlawful Detainer Action
A lawsuit filed with the court against a tenant who remains in unlawful possession of rental property after breaching the terms of a lawful lease
Rollover Mortgage
A loan that allows the rewriting of a new loan at the termination of the prior loan
Lessor
Landlord; property owner
Mutual Consent
Agreement to the provisions of a contract by the parties involved; a mutual willingness to enter into a contract
Agreement of Sale
A contract for the sale of real property in which the seller gives up possession but retains the title until the purchase price is paid in full; also known as a contract of sale or land contract
Real Property
Land; anything affixed to the land; anything appurtenant to the land; anything immovable by law
Actual Depreciation
That depreciation occurring as a result of physical, functional, or economic forces that causes loss in value to a building
Escrow
The deposit of funds or documents with a neutral third party who is instructed to carry out the provisions of an agreement
Vacancy Factor
Lost income because of a vacant unit
Vendor
The seller under a contract of sale (land contract)
Brokerage
The occupation of a broker. A real estate brokerage is the business of selling real estate through a broker who negotiates the sale for a commission
Conveyance
The transfer of title to land from one person to another by use of a written instrument
Love and Affection
The consideration used in a gift deed
Retrofit
Modification of an existing building or facility to include new systems or components
Bill of Sale
A written agreement used to transfer ownership in personal property
Front Footage
The width of a property along the street
Undue Influence
Using unfair advantage to get agreement in accepting a contract
Curb Appeal
The impression gained, whether good or bad, of a property when it is first seen, usually from street while driving by
Security Interest
The interest of a creditor (lender) in the property of a debtor (borrower)
Prepayment Clause
A clause in a trust deed that allows a lender to collect a certain percentage of a loan as a penalty for an early payoff
Natural Person
An individual; a private person, as distinguished from an artificial entity such as corporation or partnership
Guarantee of Title
An assurance of clear title
Divided Interest
An interest in various parts of a whole property, such as the interest of the fee owner, lessee, or mortgage
Sublease
Transfer less that the entire leasehold, with the original lessee being primarily liable
Recording
The act of filing written documents affecting the title to real property with the county recorder
Range
A land description used in the U.S. Public Land Survey System (PLSS) consisting of a strip of land located every six miles east of each principle meridian
Vested
Owned by
Sublease
Transfer less than the entire leasehold, with the original lessee being primarily liable
Hypothecation
To give real property as security for a debt without giving up possession
Replacement Cost
The cost of replacing improvements with modern materials and techniques
Liquid Damages
Sets in advance a specified amount of money as a penalty in the event of a breach of contract
Alienate
Transfer ownership or sell
Grantee
The person receiving the property or to whom it is being conveyed
Land Contract
A contract for the sale of real property in which the seller gives up possession but retains the title until the purchase price is paid in full; also known as contract of sale or agreement of sale
Deregulation
A process by which financial institutions, that had formerly been restrained in their lending activities by the law, are allowed to compete freely for the profits in the marketplace
Assumption Clause
A buyer takes over the existing loan and agrees to be liable for the repayment of the loan
Corner lot
A lot found at the intersection of two streets
Beneficiary Statement
A statement of the unpaid balance of a loan and the condition of the debt
Probate Sale
A court-approved sale of the property of a deceased person
Net Lease
A lease where the tenant pays such costs as taxes, insurance and repairs, as well as a set amount for rent. A triple net lease in one in which the tenant pays all expenses of operating the property as well as a set amount for rent
Default
Failure to pay a debt or honor a contract
Avulsion
The sudden washing or tearing away of the land by action of water
Request for Notice
A notice that is sent, upon request, to any parties interested in a mortgage or deed of trust informing them of a default
Security Instrument
Evidence of obligations to pay money, such as deed of trust or mortgage
Sales Contract
Primary document used to present an offer on real property; also known as a purchase offer
Equity
Value remaining in a property after payments of all liens; the difference between the amount that is owed and the fair market value
Suspend
Temporarily make ineffective
Fiscal Year
A year as reckoned for taxing or accounting purposes
Life Estate
An estate that is limited in duration to life of its owner or the life of some other chosen person
Trustee’s Sale
The forced sale of real property, by a lender, to satisfy a debt
Blockbusting
Causing panic selling people that values in the neighborhood will decline because of a specific event, such as the purchase of homes by minorities
Testator/Textatrix
A person who has made a will
CC&Rs
Restrictions are placed on certain types of real property and limit the activities of owners
Axial Growth
City growth that occurs outward along main transportation routes; usually star shaped
Novation
The substitution by agreement of new obligation for an existing one
Foreclosure
A legal procedure by which mortgaged property in which there has been default on the part of the borrower is sold to satisfy the debt
Offeror
Landlord
Encroachment
The placement of permanent improvements on adjacent property owned by another
Actual Age
The real age of a building
Warranty Deed
A deed used to transfer title to property, guaranteeing that the title is clear and the grantor has the right to transfer it; no longer used in California
Good and Indefeasible
Title that cannot be defeated, set aside, or made void by a superior claim
Accretion
A build-up of soil by natural causes on property bordering a river, lake, or ocean
Improvements
Additions to real property; can be natural (e.g., trees or a lot feature), but usually are manmade; substantial fixtures, such as buildings
Severalty
Ownership of real property by one person or entity
Escrow Instructions
Written directions, signed by a buyer and seller, detailing the procedures necessary to close a transaction and directs the escrow agent in how to proceed
Arm’s Length Transaction
A transaction, such as a sale of property, in which all parties involved are acting in their own self-interest and are under no undue influence or pressure from the other parties
Residential Rental Property
Property from which 80% or more of the gross rental income is income from dwelling units
Demand
The desire to buy or obtain a commodity
Reconveyance Deed
Conveys title to property from a trustee back to the borrower (trustor) upon payment in full of the debt secured by the trust deed
Leasehold or Lease
An agreement, written or unwritten, transferring the right to exclusive possession and use of real estate for a definite period of time
Usury
The act of changing a rate of interest in excess of that permitted by law
Statute of Frauds
A state law which requires that certain contracts must be in writing and contain certain essential elements in order to be enforceable
Open End Loan
A loan in which the borrower is given a pre-approved limit up to which may be borrowed, such as a credit card, with each advance secured by the same contract
Estate in Fee
A freehold estate is the most complete form of ownership of real property; also known as a fee, fee simple, or fee simple absolute. It is an estate of inheritance
Chain of Title
A chronological history of a property’s ownership
Holographic Will
Written in the maker’s own handwriting, dated, and signed by the maker
Private Grant
The granting of private property to other private persons
Title Plant
The storage facility of a title company which holds and stores the complete title records of properties in its area
Actual Notice
Notice given by possession of property
Holder
The party to whom a promissory note is made payable; the person holding the note
Customer
A prospective buyer of real estate
Public Grant
The transfer of title by the government to a private individual
Power of Sale
A clause in a trust deed or mortgage that gives the holder the right to sell the property in the event of default by the borrower
Principal
Someone who directs or authorizes another to act in his or her place in regard to relations with third persons; buyer or seller
Gross income multiplier (GIM)
A conversion factor derived from the sales price of a comparable rental property divided by its gross rent and any other miscellaneous income. This factor is multiplied by the estimated gross rent of the subject
Gross rent multiplier (GRM)
A figure which, when multiplied by the monthly rental income, equals the property’s market value
Deed of Trust
A security instrument in which title to a property is transferred to a third party trustee as security for a debt owed by the trustor (borrower) to the beneficiary (lender)
Definite and Certain
Precise acts to be performed are to be clearly stated
Abstract of Title
A full summary of all consecutive grants, conveyances, wills, records and judicial proceedings affecting title to a specific parcel of real estate
Doctrine of Correlative User
Owners may use only a reasonable amount of the total water supply for beneficial use
Third Party Originator (TPO)
Person who takes mortgage applications from borrowers, but does not underwrite or fund loans
Emblements
Annual crops produced for sale by a tenant using or occupying the property
Grace Period
An agreement upon time after the payment of a debt is past due during which a party can perform without being considered in default; usually 10 to 15 days
Bequest
A gift of personal property by will (see legacy)
Cost
Represents expenses in money, labor, material, or sacrifices in acquiring or producing something
Erosion
The gradual wearing away of land by natural process
Notice of Default
A notice to a defaulting party that there has been a nonpayment of debt
Gift Deed
Used to make a gift of property to a grantee who is usually a close friend or relative
Graduated Lease
A lease calling for periodic increases in the rental payments; sometimes called a stair-step lease
Voidable
An agreement which is valid and enforceable on its face, but may be rejected by one or more of the parties
Recission
Legal action taken to repeal a contract either by mutual consent of the parties or by one party when the other party has breached a contract
Abrogation
The revocation, rescission, or annulling of a contract by mutual consent of the parties to the contract, or for cause by either party to the contract
Breach of Contract
A failure to perform on part or all of the terms and conditions of a contract
Intestate
Dying without leaving a will
Legal Title
Title that is complete and perfect in regard to the right of ownership; can be held by a trustee
Patent Deed
A deed given by the government to a private individual as evidence of transfer of title from government to the public person
Real Estate Salesperson
Someone holding a real estate license and employed by a licensed real estate broker. In some states, the salesperson is called a sales agent or sales associate
Assessed Value
Value placed on property by a public tax assessor as a basis for taxation
“DUST”
The elements that create value: Demand, Utility, Scarcity, Transferability
Express Contract
The parties declare the terms and put their intentions in words, either oral or written
Agent
A person who acts for and in the place of another, called a principal, for the purpose of affecting the principal’s legal relationship with third persons
Unilateral Contract
An agreement in which one party promises to pay consideration for the performance of an act by another party. The party promising to pay consideration is not legally obligated to act unless the party promising to perform does so
Title Insurance
An insurance policy that protects the insured against loss or damage due to defects in the property’s title
Equity of Redemption
The right of the debtor, before a foreclosure sale, to reclaim property that had been given up due to mortgage default; also known as right of redemption
Appurtenance
Those rights, privileges, and improvements that belong to and pass with the transfer of real property, but are not necessarily a part of the actual property
Reversionary Rights
The lessor (landlord) grants the right of possession to the lessee (tenant) but retains the right to retake possession after the lease’s term has expired
Counteroffer
The rejection of an original offer that becomes a new offer
Unilateral Rescission
Legal action taken to repeal a contract by one party when the other party has breached a contract
Baseline
A survey line running east to west, and used as a reference when mapping land
License holder
Someone who holds a real estate license issued by a state licensing agency
Timely Manner
An act must be performed within certain time limits as described in a contract
Land Grant
A grant of public lands by the government usually for roads, railroads, or agricultural
Ethics
A set of principles or values by which an individual guides his or her own behavior and judges that of others
Environmental Impact Report
A study of how a development will affect the ecology of its surroundings
Assemblage
Putting several smaller, less valuable parcels together under one ownership to increase value of total property
Execution
Completion of an act or process
Contract
An agreement to do or not do a certain thing
Condition Subsequent
A condition which, if it occurs at some point in the future, can cause a property to revert to grantor: for example, a requirement in a grant deed that a buyer must never use the property for anything other than a private residence
Puffing
Exaggerated comments or opinions not made as representations of facts and thus not grounds for misrepresentations
Closing Disclosure
Settlement statement created by the Consumer Financial Protection Bureau that must be used for any conventional residential mortgage loans that will be sold to Fannie Mae or Freddie Mac, or that are subject to RESPA
Financing Statement
A written notice filed with the county recorder by a creditor who has extended credit for the purchase of personal property; establishes the creditor’s interest in the personal property, which is security for the debt
Effective Demand
The desire coupled with purchasing power.
Possessory Interest
Present right to physically occupy land and to exclude others from that same land
Ingress
A way to enter property; access
Stigmatized Property
Psychologically-impacted property that buyers or tenants may avoid, for reasons that are unrelated to its physical conditions or features
Net Income
Sometimes known as net operating income. THe remaining income after operating expensed have been subtracted from the gross income of a property
Listing
A contract by which a principal employs an agent to do certain things for the principal
Annual Percentage Rate (APR)
The relationship of the total finance charge to the total amount to be financed as required under the Truth in Lending Act
Parol Evidence
Oral or written negotiations made prior to dispute about an executed contract
Ad Valorem
A Latin prefix meaning according to value. Local governments levy real property tax based on the assessed value
Ratified
Approved
Mortgage Loan Originator (MLO)
A natural person who takes a residential mortgage loan application or negotiates terms of a residential mortgage loan for compensation
Equal Credit Opportunity Act
A federal law that requires lenders to assure that credit is available with fairness, impartiality, and without discrimination
Indirect Costs
Development costs not related to the land or structure, such as legal and architectural fees, financing, and insurance costs during construction
Commingling
To deposit client funds in the broker’s personal account
Executory Contract
A contract in which an obligation to perform exists on one or both sides of the contract
Real Estate Broker
A person licensed by the state to negotiate and arrange real estate transactions
Assignee
Party to whom a lease is assigned or transferred
Easement
The right to use another’s land for a specified purpose; sometimes known as right-of-way
Executor/Executrix
A person named in the will to handle the affairs of a deceased person
Partition Action
A court action to divide a property held by co-owners
Purchase Money Loan
A trust deed was created as evidence of debt at the time of the sale of real property
Void
An agreement which is totally absent of legal effect
Junior or 2nd Lien Loan
Any deed of trust or mortgage that is recorded after a first deed of trust or mortgage, and whose priority is less than the first lien
Deficiency Judgement
A judgment against a borrower for the balance of a debt owed when the security for the loan is not sufficient enough to pay a debt
Riparian Rights
The rights of a landowner whose land is next to a natural watercourse to reasonable use of whatever water flows past the property
Value
The power of goods or services to command other goods in exchange for the present worth of future benefits arising from ownership
Real Estate Investment Trust (REIT)
A way investors with a small amount of capital can pool their resources to buy real estate
Client
The person who employs an agent to perform a service for a fee
Specific Performance
An action brought in a court to compel a party to carry out the terms of a contract
Valid
Legally binding
Real Estate Law
The law that affects the licensing and conduct of real estate agents
Forbearance
Refraining from action by a creditor against the debt owed by a borrower after the debt has become due
Convey
To transfer ownership of title
Will
A written instrument by which a person makes a disposition of his or her property to take effect after his or her death
Chattel Real
An item of personal property which is connected to real estate, for example, a lease
Assignee
The person to whom a claim, benefit, or right in property is made
Quitclaim Deed
Transfer any interest the grantor may have at the time the deed is signed with no warranties of clear title
Fully Amortizing Note
A promissory note that is fully repaid at maturity by periodic reduction of the principal; usually paid in equal monthly installments
Operating expenses
Expenditures necessary to the operation of an income-producing building
Assignment
The transfer of a claim, benefit, or right in property from one person to another person
Codicil
A change in a will before the maker’s death
Judgement
The final legal decision of a judge in a court of law regarding the legal rights of parties to a dispute
Option
A right which is given for consideration to a party (optionee) by a property owner (optionor) to purchase or lease property within a specified time, at a specified price and terms. An option is irrevocable by the optionor and will not be extinguished by death or insanity of either party
Judicial Foreclosure
Foreclosure by court action
Impound Account
A trust account set up for funds set aside for future, recurring cost relating to a property
Notice of Trustee’s Sale
Notice given, and published, that a trustee’s sale will be held to sell a property to satisfy a debt
Acceptance
An unqualified agreement to the terms of an offer
Life Tenant
A person to whom a life estate conveys
Manufactured Home
A home built in a factory after June 15, 1976 and must conform to the federal Manufactured Home Construction and Safety Standards
Homeowner Equity Loan
A cash loan made against the equity in the borrower’s home
Tenant
A renter
Subagent
An agent of a person who is already acting as an agent for a principal
Variance
An exception granted to zoning regulations for special reasons
Scarcity
Less availability of a commodity in the marketplace resulting in increased value when demands exceeds supply
Public Dedication
When private property is intended for public use, it may be acquired in this manner
Homeowner’s Association
A group of property owners in a common interest development that manages common areas, collects dues, and establishes property standards
Witnessed Will
One prepared by an attorney, that is typed and signed by the maker and two witnesses
Acknowledgement
A signed statement, made before a notary public by a named person; confirming the signature on a document and that it was made of free will
Rent
Consideration paid for the use of a property
Egress
A way to exit property
Gross Rent
Income (figured annually) received from rental units before any expenses are deducted
Implied Contract
Agreement shown by acts and conduct rather than words
Grantor
The person conveying or transferring the property
Loan Estimate
Disclosure statement created by the Consumer Financial Protection Bureau to provide borrowers with good-faith estimates of credit costs and transaction terms
Business Opportunity
Any type of business for lease or sale
Financial Intermediaries
An organization that obtains funds through deposits and then lends those funds to earn a return; savings and loan associations, commercial banks, credit unions, and mutual savings banks
Sales Comparison Approach
An appraisal method using the principles of substitution to compare similar properties
Negotiable Instrument
Any written instrument that may be transferred by endorsement or delivery
Fixture
Personal property that has become affixed to real estate
Goodwill
An intangible, salable asset arising from the reputation of a business; the expectation of continued public patronage
Cul-de-Sac Lot
A lot on a dead-end street
Undivided Interest
The interest a co-owner has in a property, carries with it the right to possession and use of the whole property, along with the co-owners
Sandwich Lease
A lease agreement created when a tenant sublets the property to another person, thus creating a sublessor-sublessee relationship. The person in the “sandwich” is a lessee to one party and a lessor to another
Adjustable-Rate Mortgage
A note whose interest rate is tied to a flexible index
Reinstate
Being current and restore
Statute of Limitations
A statute limiting the period of time during which legal action may be taken on a certain issue
Calendar Year
This starts on January 1 and continues through December 31 of the same year
Collateral
Something of value given as security for a debt
Straight Note
A promissory note in which payments of interest only are made periodically during the term of the note, with the principal payment due in one lump sum upon maturity; May also be a note with no payments on either principal or interest until the entire sum is due
Truth in Lending Act (Regulation Z)
A federal law that requires borrowers to be informed about the cost of borrowing money
Accrued Depreciation
The difference between the cost to replace the property and the property’s current appraised value
PITI
Abbreviation for principal, interest, tax, and insurance
Assignor
The person transferring a claim, benefit, or right in property to another
Accrued
Accumulated over a period of time
Contract for Deed
A contract for the sale of real property in which the seller gives up possession of the property but retains title until the total of the purchase price is paid off
Home Inspection
A home inspector examines the readily accessible physical structure, systems, and condition of a home and describes them in a written report
Escrow Holder
An independent third party that acts as a neutral agent of both and seller
Revocation
The canceling of an offer to contract by the person making the original offer
Settlement Statement
A complete breakdown of all cash received, all charges and credits made, and all costs involved in the transaction
Effective Gross Income
The anticipated income resulting from estimated potential gross income from a rental property less an allowance for vacancy and bad debts
Capital Improvements
Any permanent improvement made to real estate for the purpose of increasing the useful life of the property or increasing the property’s value
Devise
A gift of real property by will
Extended Title Policy
An extended title insurance policy
Contractual Intent
Intention to be bound by an agreement, thus preventing jokes and jests from becoming valid contracts
Bulk Transfer Law
The law concerning the transfer in bulk (not a sale in the ordinary course of the seller’s business)
Blind Advertising
Advertising that fails to disclose that the party is a license acting as an agent
Estoppel
A legal doctrine which prevents a person from denying something to be true or a fact, if the denial is contrary to previous statements or actions made by that same person
Easement in Gross
An easement that is not appurtenant to any one parcel, for example, public utilities
Adverse Possession
Acquiring title to property by continued possession and payment of taxes
Proration
The division and distribution of expenses and/or income between the buyer and seller of property as of the date of closing or settlement
Emancipated Minor
Someone who is legally set free from parental control/supervision
Metes and Bounds
A method of land description in which the dimensions of the property are measured by distance and direction
Market Value
The price the property would bring if freely offered on the open market with both a willing buyer and a willing seller
Security Agreement
The device commonly used to secure a loan on personal property
Power of Attorney
A written instrument giving a person legal authority to act on behalf of another person
Offer
A presentation or proposal for acceptance to form a contract
Condemnation
A common name for eminent domain, or the right of the government to take private property from an owner for public use, paying fair market value
Alluvium
Soil that builds up as a result of accretion
Sheriff’s Deed
A deed given to a buyer when property is sold through court action in order to satisfy a judgement for money or foreclosure of a mortgage
Action
A lawsuit brought to court
Hard Money Loan
The evidence of a debt given in exchange for cash
Mortgagee
The lender under a mortgage
Homestead
Status provided to a homeowner’s principal residence that protects the home against judgments
Reproduction Cost
The current cost of building a replica of the subject structure using similar quality materials; refers to exact duplication of the buildings; usually costs more than replacement costs
Title
Evidence of ownership of land
Monument
A fixed landmark used in a metes and bounds land description
Vendee
The buyer under a contract of sale (land contract)
Vesting
The way title will be taken
Real Estate Associate Licensee
A person with a real estate license who is employed or sponsored by a real estate broker
Tender
An offer by one of the parties to a contract to carry out his or her part of the contract
Redlining
The use of a property’s location to deny financing
Trustee
Holds bare legal title to property as a neutral third party where there is a deed of trust used as a security for a loan
Trade Fixture
An article of personal property affixed to leased property by the tenant as a necessary part of business; may be removed by tenant as personal property upon termination of the lease
Eminent Domain
The right of the government to take private property from the owner, for public use, and paying for the fair market value
Fee Simple Qualified
An estate in which the holder has a fee simple title that is subject to return to the grantor if a specified condition occurs
Eviction
The legal process of removing a tenant from the premise for some breach of the lease
Leverage
The used of borrowed money to purchase property
Linear Foot
A measurement meaning one foot or twelve inches in length as contrasted to a square foot or a cubic foot
Appraisal
An act or process of developing an option of value
Legacy
A gift of personal property by will (see bequest)
Closed-End Loan
Loan in which the borrower receives all loan proceeds in one lump sum at the time of closing. These loans are secured with collateral, i.e., auto and home loans
Dual Agent
An agent who represents both parties in a transaction
Appraisal Report
A written report setting forth an appraiser’s estimates of value of a subject property
Market Rent
The rent a property should bring in the open market
Meridian
A survey line running north and south, used as a reference when mapping land
Estate
A legal interest in land that defines the nature, degree, extent, and duration of a person’s ownership in land
Economic Life
The estimated period over which an improved property may be profitably used to yield a return
Fraud
An act meant to deceive in order to get someone to part with something of value
Closing
The act of finalizing the transaction in which the deed is delivered to the buyer, the title is transferred, and all costs are paid
Subdivision
A plot of land divided into smaller portions for the purpose of building
Fiduciary
A relationship that implies a position of trust or confidence
Preliminary Title Report
An offer to issue a policy of title insurance in the future for a specific fee
Present Interest
An interest in real property that can be exercised today
Supply
The total amount of an item that is for sale or lease, at various prices, at any given point in time.
Book Value
The initial cost of the property plus capital improvements and minus the total accrued depreciation
Equitable Title
The interest held by the trustor or vendee
