Glossary A - I Flashcards
Abstract of Title
A summary or digest of all transfers, conveyances, legal proceedings, and any other facts relied on as evidence of title, showing continuity of ownership, together with any other elements of
record which may impair title
Acceleration Clause
– A condition in a real estate finance instrument giving the lender the power to declare all sums owing the lender immediately due and payable upon the happening of an event, such as
sale of the property, or a delinquency in the repayment of the note
Acceptance
The act of agreeing or consenting to the terms of an offer thereby establishing the “meeting of the minds” that is an essential element of a contract.
Accession
An addition to property through the efforts of man or by natural forces.
Accretion
Accession by natural forces, e.g., alluvium.
Acknowledgment
A formal declaration made before an authorized person, e.g., a notary public, by a person who has executed an instrument stating that the execution was his or her free act.
Actual Eviction
– The removal of a tenant by the landlord because the tenant breached a condition of a lease or another rental contract.
Actual Notice
Express or implied knowledge of a fact.
Addendum
Additional pages of material that are added to and become part of a contract.
Adverse Possession
A method of acquiring title to real property through possession of the property for a statutory period under certain conditions by a person other than the owner of record.
Agency
The relationship between principal and the principal’s agent, which arises out of a contract, either expressed or implied, written or oral, wherein the agent is employed by the principal to do certain
acts dealing with a third party.
Agent
One who acts for and with authority from another called the principal.
Agreement of Sale
A written agreement or contract between seller and purchaser in which they reach a “meeting of minds” on the terms and conditions of the sale. The parties concur; are in harmonious
opinion.
Air Rights
The rights in real property to the reasonable use of the air space above the surface of the land.
Alienation Clause
A clause in a contract giving the lender certain rights in the event of a sale or other transfer of a mortgaged property.
Alluvium
The gradual increase of the earth on a shore of an ocean or bank of a stream resulting from
the action of the water.
Amortization
The liquidation of a financial obligation on an installment basis.
Amortized Loan
A loan to be repaid, interest and principal, by a series of regular payments that are equal or nearly equal, without any special balloon payment prior to maturity
Appraisal
An estimate of the value of property resulting from an analysis of facts about the property. An opinion of value.
Appraiser
One qualified by education, training and experience who is hired to estimate the value of real and personal property based on experience, judgment, facts, and use of formal appraisal process.
Appreciation
Monetary gain resulting from the increase in the market value of an investment, excluding
additions of capital. For example, a house which is sold five years after it was purchased for 20% more
than the purchase price.
Asbestos
A naturally occurring mineral fiber sometimes found in older homes. It is hazardous to health
when a possibility exists of exposure to inhalable fibers. Homeowners should be alert for friable asbestos and always seek professional advice in dealing with it.
Asbestos
A chronic lung disease caused by inhaling asbestos fibers.
Assessed Value
A valuation placed upon a piece of property by a public authority as a basis for levying taxes on the property.
Assessing Unit
A city, county, town or village with the authority to value real property for purposes of taxation.
Assessments
charge against real estate made by a unit of government to cover a proportionate cost
of an improvement such as a street or sewer.
Assignment
The transfer to another of any property in possession or in action, or of any estate or right
therein. A transfer by a person of that person’s rights under a contract.
Assignment of Rents
A provision in a mortgage or deed of trust under which the lender may, upon default by the trustor, take possession of the property, collect income from the property and apply it to the
loan balance and the costs incurred by the lender.
Assumption of Mortgage
The taking of a title to property by a grantee wherein the grantee assumes liability for payment of an existing note secured by a mortgage or deed of trust against a property, becoming a co-guarantor for the payment of a mortgage or deed of trust note.
Avulsion
A sudden and perceptible loss of land by the action of water as by a sudden change in the course of a river.
Bargain and Sale Deed
Any deed that recites a consideration and purports to convey the real estate; a bargain and sale deed with a covenant against the grantor’s act is one in which the grantor warrants that grantor has done nothing to harm or cloud the title.
Base and Meridian
Imaginary lines used by surveyors to find and describe the location of private or public lands. In government surveys, a base line runs due east and west, meridians run due north and south, and are used to establish township boundaries.
Beneficiary
The lender on the security of a note and deed of trust.
Bilateral Contract
A contract in which each party promises to do something.
Blanket Mortgage –
A type of loan used to fund the purchase of more than one piece of real property. A blanket mortgage is often used for subdivision financing.
Blockbusting
The practice on the part of unscrupulous speculators or real estate agents of including panic selling of homes at prices below market value, especially by exploiting the prejudices of property owners in neighborhoods in which the racial make-up is changing or appears to be on the verge of
changing.
Building Code –
A systematic regulation of construction of buildings within a municipality established by
ordinance or law.
Building Envelope
A building envelope is the maximum three-dimensional space on a zoning lot within
which a structure can be built, as permitted by applicable height, setback and yard controls.
One of the main goals of a zoning analysis is to determine the building envelope. A building envelope is also referred to as the “bulk” of a building.
Bundle of Rights
All of the legal rights incident to ownership of property including rights of use, possession, encumbering and disposition.
Buydown
Obtaining a lower interest rate by paying additional points to the lender.
Buyer Agent
An agent who represents the buyer in a real estate transaction.
Capital Expense
Expenditures creating future value. Incurred when a property owner spends money to upgrade a building in an effort to add value and/or extend the useful life of the building.
Capital Gains
At resale of a capital item, the amount by which the net sale proceeds exceed the adjusted cost basis (book value). Used for income tax computations. Gains are called short or long based upon the length of the holding period after acquisition. Usually taxed at lower rates than ordinary
income.
Capital Reserve Budget
Money set aside by a property owner for long-term capital expenditures to a
property.
Capitalization Rate
The rate of interest which is considered a reasonable return on the investment, and used in the process of determining value based upon net income.
Capitalization Rate = Net Operating Income (NOI) / Purchase Price
Certificate of Occupancy
A document issued by a local government agency after satisfactory inspection of a structure authorizing that the structure can be occupied.
Certificate of Title
A written opinion by an attorney that ownership of a particular parcel of land is as stated in the certificate.
Chain of Title
A history of conveyances and encumbrances affecting the title from the time the original patent was granted, or as far back as records are available, used to determine how title came to be
vested in current owner.
Chattel
Goods or every species of property movable or immovable which are not real property. Personal property.
Chloro-flouro Carbons (CFCs) -
A fluid, containing hydrocarbons, that absorbs heat from a reservoir at low temperatures and rejects heat at higher temperatures. When emitted into the atmosphere, CFCs cause depletion of the stratospheric ozone layer.
Closing
Process by which all the parties to a real estate transaction conclude the details of a sale or
mortgage. The process includes the signing and transfer of documents and distribution of funds.
Cloud on Title
A claim, encumbrance or condition which impairs the title to real property until disproved or eliminated as for example through a quitclaim deed or quiet title legal action.
Commingling
The illegal mixing of personal funds with money held in trust on behalf of a client.
Commission
An agent’s compensation for performing the duties of agency; in real estate practice, a percentage of the selling price of property, percentage of rentals, etc.
Common Elements
Refers to the spaces in a building shared by residents of the building. These include lobbies, corridors, stairs, elevators, etc.
Community Property
Property acquired by husband and/or wife during a marriage when not acquired as the separate property of either spouse. Each spouse has equal rights of management, alienation and testamentary disposition of community property
Comparative Market Analysis
An analysis of the competition in the marketplace that a property will face upon sale attempts.
Condemnation
The act of taking private property for public use by a political subdivision upon payment to owner of just compensation.
Condominium
An estate in real property wherein there is an undivided interest in common in a portion of real property coupled with a separate interest in space called a unit, the boundaries of which are
described on a recorded final map, parcel map or condominium plan.
Confidentiality
An agent is obligated to safeguard his/her principal’s lawful confidences and secrets. Therefore, a real estate broker must keep confidential any information that may weaken a principal’s bargaining position. The duty of confidentiality precludes a broker who represents a seller from disclosing to a buyer that the seller can, or must, sell a property below the listed price. Conversely, a broker who represents a buyer is prohibited from disclosing to a seller that the buyer can, or will, pay more than what has been offered for a property.
The duty of confidentiality does not include an obligation by a broker who represents a seller to withhold known material facts about the condition of the seller’s property from the buyer, or to misrepresent the property’s condition. To do so constitutes misrepresentation and may impose liability on both the broker and/or the seller.
Consideration
Anything given or promised by a party to induce another to enter into a contract, e.g., money or personal services.
