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Real Estate > Glossary 2 > Flashcards

Glossary 2 Flashcards

Vocabulary

1
Q

A public notice in a foreclosure proceeding that the mortgaged property may soon have a judgment issued against it. Enables other investors to join in the proceeding if they wish to collect their debts.

A

lis pendens

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2
Q

A legal contract that establishes and controls the dynamics of the agency relationship between principal and agent. The principal to the listing may be buyer, seller, landlord, or tenant.

A

listing

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3
Q

A set of water rights defined by state law relating to properties abutting navigable bodies of water such as lakes and bays. Generally, a property owner enjoys usage rights but owns land only to the high water mark. See riparian rights and prior appropriation.

A

littoral rights

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4
Q

A trust established during one’s lifetime in which the trustor conveys legal title to property to a trustee and names another party as beneficiary. The trustee discharges management duties and the beneficiary receives all profit and gain net of the trustee’s fees.

A

living trust

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5
Q

A lender’s written pledge to lend funds under specific terms. May contain deadlines and conditions.

A

loan commitment

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6
Q

An underwriting ratio that relates the size of a loan to the market value of the collateral. The closer the loan value is to market value, the riskier the loan is for the lender , since the lender is less likely to recover the debt fully from the proceeds of a foreclosure sale.

A

loan-to-value ratio (LTV)

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7
Q

A method for legally describing property in a subdivision where lots are identified by block and number. A recorded metes and bounds or rectangular survey description of the subdivision underlies the lot and block system.

A

lot and block system

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8
Q
  1. Buyers and sellers exchanging goods and services through the price mechanism. 2. The totality of interactions between supply and demand for a specific set of products or services in a particular geographic area.
A

market

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9
Q

An opinion of the price at which a willing seller and buyer would trade a property at a given time, assuming a cash sale, reasonable exposure to the market, informed parties, marketable title, and no abnormal pressure to transact.

A

market value

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10
Q

A condition of title to a property where there are no claims, liens, or encumbrances clouding title or impeding the property’s transferability.

A

marketable title

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11
Q

An agent’s design for procuring a customer for a client, including selling and promotional activities.

A

marketing plan

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12
Q

A deed used to convey land to a condominium developer.

A

master deed

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13
Q

An amalgamated land use plan for a municipality, county, or region which incorporates community opinion, the results of intensive research, and the various land use guidelines and regulations of the state. Acts as a blueprint for subsequent zoning ordinances and rulings.

A

master plan

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14
Q

mechanic’s lien A junior lien enabling property builders, suppliers, and contractors to secure debt arising from labor and materials expended on a property. Distinguished by its order or priority, which is based on when the work was performed rather than when the lien was recorded.

A

mechanic’s lien

materialman’s lien

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15
Q

A north-south line used in the rectangular survey system of legal descriptions.

A

meridian

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16
Q

A method of legally describing property which utilizes physical boundary markers and compass directions for describing the perimeter boundaries of a parcel.

A

metes and bounds

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17
Q

The ad valorem tax rate of a taxing district, derived by dividing revenues required from taxpayers by the district’s tax base. If the millage rate is 30, the tax rate is 3%, or $3.00 per $100 of assessed valuation (net of exemptions).

A

millage rate

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18
Q

One one-thousandth of a dollar ($.001). Used to quantify the ad valorem tax rate in dollars.

A

mill

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19
Q

Separable subsurface rights to mineral deposits; transferrable by sale or lease to other parties.

A

mineral rights

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20
Q

A statement or act, or failure to make a statement or act, that misleads a party in a transaction. May be intentional or unintentional. May warrant legal recourse or license revocation.

A

misrepresentation

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21
Q

A fixed, artificial or natural landmark used as a reference point in a metes and bounds legal description.

A

monument

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22
Q

A legal document wherein a mortgagor pledges ownership interests in a property to a lender, or mortgagee, as collateral against performance of the mortgage debt obligation.

A

mortgage

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23
Q

Financing that uses mortgaged real property as security for borrowed funds.

A

mortgage financing

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24
Q

An organization of brokers who agree to cooperate in marketing the pooled listings of all members.

A

multiple listing service

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25
Q

Consent by all principals to a contract to all provisions of the contract. A requirement for validity.

A

mutual consent

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26
Q

A situation in which the loan balance of an amortizing loan increases because periodic payments are insufficient to pay all interest owed for the period. Unpaid interest is added to the principal balance.

A

negative amortization

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27
Q

A legal instrument that can be sold, traded, assigned, or otherwise transferred to another party, such as a promissory note.

A

negotiable instrument

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28
Q

A lease which requires a tenant to pay rent as well as a share of the property’s operating expenses to the extent provided for in the lease contract.

A

net lease

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29
Q

A listing which states a minimum sale or lease price the owner will accept, with any excess going to the broker as a commission. Professionally discouraged, if not illegal.

A

net listing

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30
Q

The amount of pre-tax revenue generated from an income property after accounting for operating expenses and before accounting for any debt service.

A

net operating income

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31
Q

use A land use that is not consistent with the current zoning ordinance. May be legal or illegal.

A

non-conforming

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32
Q

A forced sale of mortgaged property without a formal foreclosure suit or court proceeding. Authorized through a “power of sale” clause in a mortgage or trust deed document.

A

non-judicial foreclosure

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33
Q

An expense incurred by buyer or seller in closing a real estate transaction that is not shared with the other party. Examples include attorney fees, documentary tax stamps, and lender fees.

A

non-prorated expense

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34
Q

An agreement to repay a loan of an indicated amount under certain terms.

A

note

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35
Q

Actual or recorded public evidence of real property ownership. See actual notice and constructive notice.

A

notice of title

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36
Q

Without legal force or effect. See void.

A

null and void

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37
Q

A loss of property value because of functional or economic (external) factors. See functional obsolescence and economic obsolescence.

A

obsolescence

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38
Q

A proposal to enter into a binding contract under certain terms, submitted by an offeror to an offeree. If accepted without amendment, an offer becomes a contract.

A

offer

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39
Q

A process that creates a contract. Acceptance is the offeree’s unequivocal, manifest agreement to the terms of an offer. The offer becomes a contract when the acceptance has been communicated to the offeror.

A

offer and acceptance

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40
Q

A non-exclusive listing which pays an agent a commission only if the agent is procuring cause of a ready, willing, and able customer.

A

open listing

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41
Q

A recurring or periodic expense necessary for the operation of an income property. Examples include utilities, management, and ad valorem tax expenses. Excluded are debt service and the property’s income tax liability.

A

operating expense

42
Q

An attorney’s or title officer’s opinion of the condition and marketability of title to a parcel of property based on a recent search of title records by a competent party.

A

opinion of title

43
Q

A unilateral contract in which an owner, or optionor, grants a buyer or tenant, the optionee, a future right to be exercised before a deadline, in exchange for valuable consideration. The terms of the right, such as a right to purchase or lease, must be clearly stated and cannot be changed during the option period.

A

option

44
Q

A lender’s charge for funding a loan.

A

origination fee

45
Q

An oral agreement. Potentially enforceable if validly created.

A

parol contract

46
Q

A lawsuit requesting the court to alter or cancel the interests of a co-owner in a parcel of real property. Initiated when co-owners do not agree to make the change voluntarily.

A

partition suit

47
Q

An easement appurtenant where owners of two adjacent properties share an improvement along the property boundary. The parties agree not to perform acts that would adversely affect the other party’s interest in the shared improvement.

A

party wall easement

48
Q

A retail property lease which requires a tenant to pay a minimum amount of rent plus an additional increment that reflects the sales achieved by the tenant.

A

percentage lease

49
Q

Fulfillment of the terms of a contract.

A

performance

50
Q

A leasehold interest for a lease term where, in the absence of default, the term automatically renews itself until proper notice of termination is provided by either party.

A

periodic tenancy

51
Q

All property that is not considered real property; all property that is not land or permanently attached to land, excepting trade fixtures and emblements.

A

personal property

52
Q

A loss of value to property because of decay or natural wear and tear. Exacerbated by deferred maintenance, or the failure to repair or maintain property on a regular basis.

A

physical deterioration

53
Q

A multi-use development project requiring special zoning and involving deed restrictions.

A

planned unit development (PUD)

54
Q

A map of one or more properties indicating each parcel’s lot and block number, boundaries, and dimensions.

A

plat

55
Q

An increment of value added by the assemblage of contiguous properties.

A

plottage

56
Q

One-percent of a loan amount, a lender’s finance charge.

A

point

57
Q

The origination and termination point in a metes and bounds legal description.

A

point of beginning (POB)

58
Q

A state’s or local government’s legal authority to create, regulate, tax, and condemn real property in the interest of the public’s health, safety, and welfare.

A

police power

59
Q

The maximum amount of revenue a property could generate before accounting for vacancy, collection loss, and expenses. Consists of total rent with full occupancy at established rent rates, plus other income from any source.

A

potential gross income

60
Q

An authorization granting a fiduciary the power to perform specified acts on the principal’s behalf. Used to establish a universal agency relationship.

A

power of attorney

61
Q

The discounted value of an amount of money to be received in the future that accounts for the interest that would have been earned if the money had been received in the present.

A

present value

62
Q

An act of collusion where competitors agree to establish prices at certain levels to the detriment of customers or other competitors.

A

price fixing

63
Q

An interaction of supply and demand that determines a price a buyer and seller agree is the value of a good or service to be exchanged. A quantification of value in a transaction.

A

price mechanism

64
Q

Lenders and mortgage brokers who originate mortgage loans directly to borrowers.

A

primary mortgage market

65
Q
  1. The employer in an agency relationship, to whom the agent owes fiduciary duties. 2. The loan balance to which interest charges are applied.
A

principal

66
Q

A designated meridian in the rectangular survey system that is used in conjunction with a base line to identify ranges, tiers, and townships.

A

principal meridian

67
Q

A legal doctrine granting a state the power to control and regulate the use of water resources within state boundaries

A

prior appropriation

68
Q

A voluntary conveyance of property by a private party.

A

private grant

69
Q

An insurance policy, purchased by a borrower, that protects a lender against loss of that portion of a mortgage loan which exceeds the acceptable loan-to-value ratio.

A

private mortgage insurance (PMI)

70
Q

A court proceeding to validate and distribute a decedent’s estate to creditors, tax authorities, and heirs.

A

probate

71
Q

A party who was first to obtain a ready, willing, and able customer, or a party who expended the effort to induce the customer to complete the transaction.

A

procuring cause

72
Q

An item that has a legal owner, along with the attendant rights to legal ownership.

A

property

73
Q

The business of managing the physical and financial condition of an investment property for an owner.

A

property management

74
Q

A cooperative owner’s lease on a unit in the cooperative building. The lease runs concurrently with the owner’s ownership interest in the cooperative.

A

proprietary lease

75
Q

Apportionment of expense and income items at closing. Examples of items prorated between buyer and seller include interest, insurance, taxes, and rent.

A

proration

76
Q

A voluntary conveyance of property by a government entity to a private party.

A

public grant

77
Q

A life estate where the grantee’s interest endures over the lifetime of another party named by the grantor.

A

pur autre vie

78
Q

A mortgage loan where a seller lends a buyer some or all of the purchase price of a property.

A

purchase money mortgage

79
Q
  1. A mortgage underwriting procedure to determine the financial capabilities and credit history of a prospective borrower. 2. A listing and marketing procedure to determine the needs and urgency of a client or customer.
A

qualification

80
Q

A right of an owner or tenant to use a property without interference from others.

A

quiet enjoyment

81
Q

A court proceeding to clear a property’s title of defects, claims, and encumbrances.

A

quiet title suit

82
Q

A deed which conveys one’s possible ownership interests to another party. The grantor does not claim to own any interest and makes no warrants.

A

quit claim deed

83
Q

A north-south area bounded by consecutive meridians.

A

range

84
Q

Land and all manmade structures permanently attached to it.

A

real estate

85
Q

An investment in which owners purchase shares in a trust which owns or acquires real property. Investors receive income and gain on a per-share basis.

A

real estate investment trust (REIT)

86
Q

Real estate and the bundle of rights associated with ownership of real estate.

A

real property

87
Q

An appraiser’s weighted blending of the results of different approaches to value into a final value estimate.

A

reconciliation

88
Q

An act of entering into public title records any document or transaction affecting title to real estate. Recording gives constructive notice of one’s rights and interests in a property and establishes the priority of inferior liens.

A

recording

89
Q

A method of legally describing real property which uses longitude and latitude lines to identify ranges, tiers, and township. Also called government survey systems.

A

rectangular survey system

90
Q

A statutory period after a foreclosure sale during which the foreclosed owner may buy back the property by paying all sums due the lender. See also equity of redemption.

A

redemption period

91
Q

The illegal lending practice of restricting loans by geographical area.

A

redlining

92
Q

Obtaining a new loan to replace an existing loan, usually to take advantage of lower interest rates, to obtain a longer-term loan, or to liquidate equity.

A

refinancing

93
Q

A fair financing law applying to residential loans; lenders must disclose financing costs and relevant terms of the loan to the borrower.

A

Regulation Z

94
Q

A future freehold interest in a life estate held by a third party remainderman named by the grantor. When the life tenant dies, the estate passes to the remainderman. See also reversion.

A

remainder

95
Q

The cost of constructing a functional equivalent of a property at current labor and materials costs using current construction methods.

A

replacement cost

96
Q

The cost of constructing a precise duplicate of a property, at current labor and materials prices.

A

reproduction cost

97
Q

An amount of money allocated from a property’s income to cover future repair and maintenance costs.

A

reserve allowance

98
Q

A limitation on the use of a property imposed by deed, zoning, state statute, or public regulation.

A

restriction

99
Q
  1. A transfer of title from a life estate tenant back to the grantor. 2. Proceeds from the sale of a property at the end of a holding period in a cash flow analysis.
A

reversion

100
Q
  1. Cancellation of a contract. 2. Cancellation of a real estate license.
A

revocation

Real Estate (16 decks)

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