Glossary A - I Flashcards
1
Q
Abstract of Title
A
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
2
Q
Acceleration Clause
A
– 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
3
Q
Acceptance
A
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.
4
Q
Accession
A
An addition to property through the efforts of man or by natural forces.
5
Q
Accretion
A
Accession by natural forces, e.g., alluvium.
6
Q
Acknowledgment
A
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.
7
Q
Actual Eviction
A
– The removal of a tenant by the landlord because the tenant breached a condition of a lease or another rental contract.
8
Q
Actual Notice
A
Express or implied knowledge of a fact.
9
Q
Addendum
A
Additional pages of material that are added to and become part of a contract.
10
Q
Adverse Possession
A
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.
11
Q
Agency
A
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.
12
Q
Agent
A
One who acts for and with authority from another called the principal.
13
Q
Agreement of Sale
A
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.
14
Q
Air Rights
A
The rights in real property to the reasonable use of the air space above the surface of the land.
15
Q
Alienation Clause
A
A clause in a contract giving the lender certain rights in the event of a sale or other transfer of a mortgaged property.
16
Q
Alluvium
A
The gradual increase of the earth on a shore of an ocean or bank of a stream resulting from
the action of the water.
17
Q
Amortization
A
The liquidation of a financial obligation on an installment basis.
18
Q
Amortized Loan
A
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
19
Q
Appraisal
A
An estimate of the value of property resulting from an analysis of facts about the property. An opinion of value.
20
Q
Appraiser
A
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.
21
Q
Appreciation
A
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.
22
Q
Asbestos
A
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.
23
Q
Asbestos
A
A chronic lung disease caused by inhaling asbestos fibers.
24
Q
Assessed Value
A
A valuation placed upon a piece of property by a public authority as a basis for levying taxes on the property.
25
Assessing Unit
A city, county, town or village with the authority to value real property for purposes of taxation.
26
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.
27
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.
28
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.
29
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.
30
Avulsion
A sudden and perceptible loss of land by the action of water as by a sudden change in the course of a river.
31
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.
32
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.
33
Beneficiary
The lender on the security of a note and deed of trust.
34
Bilateral Contract
A contract in which each party promises to do something.
35
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.
36
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.
37
Building Code –
A systematic regulation of construction of buildings within a municipality established by
ordinance or law.
38
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.
39
Bundle of Rights
All of the legal rights incident to ownership of property including rights of use, possession, encumbering and disposition.
40
Buydown
Obtaining a lower interest rate by paying additional points to the lender.
41
Buyer Agent
An agent who represents the buyer in a real estate transaction.
42
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.
43
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.
44
Capital Reserve Budget
Money set aside by a property owner for long-term capital expenditures to a
property.
45
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
46
Certificate of Occupancy
A document issued by a local government agency after satisfactory inspection of a structure authorizing that the structure can be occupied.
47
Certificate of Title
A written opinion by an attorney that ownership of a particular parcel of land is as stated in the certificate.
48
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.
49
Chattel
Goods or every species of property movable or immovable which are not real property. Personal property.
50
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.
51
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.
52
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.
53
Commingling
The illegal mixing of personal funds with money held in trust on behalf of a client.
54
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.
55
Common Elements
Refers to the spaces in a building shared by residents of the building. These include lobbies, corridors, stairs, elevators, etc.
56
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
57
Comparative Market Analysis
An analysis of the competition in the marketplace that a property will face upon sale attempts.
58
Condemnation
The act of taking private property for public use by a political subdivision upon payment to owner of just compensation.
59
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.
60
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.
61
Consideration
Anything given or promised by a party to induce another to enter into a contract, e.g., money or personal services.
62
Construction Loan
A loan secured by real estate which is for the purpose of funding the construction of improvements or building(s) upon the property.
63
Constructive Eviction
Any disturbance of the tenant’s possession of the lease premises by the landlord whereby the premises are rendered unfit or unsuitable for the purpose for which they were leased.
64
Constructive Notice
Notice of the condition of title to real property given by the official records of a
government entity which does not require actual knowledge of the information.
65
Contract
An agreement to do or not to do a certain thing.
66
Conventional Loan
A mortgage securing a loan made by investors without governmental underwriting, i.e., which is not FHA insured or VA guaranteed. This type of loan is customarily made by a bank or savings and loan association.
67
Conversion
The unlawful appropriation of another’s property, as in the conversion of trust funds.
68
Cooperative
An apartment building, owned by a corporation and in which tenancy in an apartment unit is obtained by purchase of shares of stock of the corporation and where the owner of such shares is entitled to occupy a specific apartment in the building.
69
Corporation
An entity established and treated by law as an individual or unit with rights and liabilities, or both, distinct and apart from those of the persons composing it. A corporation is a creature of having
certain powers and duties of a natural person. Being created by law, it may continue for any length of
time the law prescribes.
70
Corrective Maintenance
A maintenance task performed to identify, isolate, and rectify a problem with a property so that the property can be restored to an acceptable condition.
71
Cost Approach
An analysis in which a value estimate of a property is derived by estimating the replacement cost of the improvements, deducting therefrom the estimated accrued depreciation, then adding the market value of the land.
72
Counter Offer
– A response to an offer to enter into a contract, changing some of the terms of the
original offer. A counter offer is a rejection of the offer (not a form of acceptance), and does not create a
binding contract unless accepted by the original offeror.
73
Covenants, Conditions, and Restrictions (CC&Rs)
The basic rules establishing the rights and
obligations of owners of real property within a subdivision or other tract of land in relation to other owners within the same subdivision or tract and in relation to an association of owners organized for the purpose of operating and maintaining property commonly owned by the individual owners.
74
Credit
A bookkeeping entry on the right side of an account, recording the reduction or elimination of an
asset or an expense, or the creation of or addition to a liability or item of equity or revenue.
75
Debit
That which is due from one person to another.
76
Deed
A written instrument which when properly executed and delivered conveys title to real property
from one person (grantor) to another (grantee).
77
Deed in Lieu of Foreclosure
A deed to real property accepted by a lender from a defaulting borrower to avoid the necessity of foreclosure proceedings by the lender.
78
Deed Restrictions
Limitations in the deed to a property that dictate certain uses that may or may not be made of the property.
79
Default
Failure to fulfill a duty or promise or to discharge an obligation.
80
Defeasance Clause
The clause in a mortgage that gives the mortgagor the right to redeem the mortgagor’s property upon the payment of the mortgagor’s obligations to the mortgagee.
81
Deficiency Judgment
A judgment given by a court when the value of security pledged for a loan is insufficient to pay off the debt of the defaulting borrower.
82
Demand
The supply of willing and able buyers in the marketplace or lack thereof.
83
Devise
A gift or disposal of real property by last will and testament.
84
Devisee
One who receives a gift of real property by will.
85
Devisor
One who receives a gift of real property by will.
86
Discount Points
The amount of money the borrower or seller must pay the lender to get a mortgage at a stated interest rate.
87
Dominant Tenement
A parcel of real property that has an easement over another piece of property (the servient estate).
88
Dual Agency
An agency relationship in which the agent acts concurrently for both of the principals in a
transaction.
89
Easement
A right, privilege or interest limited to a specific purpose which one party has in the land of
another.
90
Easement Appurtenant
An easement that benefits the dominant estate and “runs with the land”. In
other words, an easement appurtenant generally transfers automatically when the dominant estate is
transferred.
91
Easement by Condemnation
An easement created by the government or government agency that has
exercised its right under eminent domain.
92
Easement by Condemnation
An easement created by the government or government agency that has exercised its right under eminent domain.
93
Easement by Implication
An easement that is not created by express statements between the parties; but as a result of surrounding circumstances that dictate that an easement must have been intended by the parties.
94
Easement by Necessity
Easement by Necessity – Parcels without access to a public way may have an easement of access over
adjacent land if crossing that land is absolutely necessary to reach the landlocked parcel and there has been some original intent to provide the lot with access.
95
Easement by Prescription
Easement by Prescription – Implied easements granted after the dominant estate has used the property in a hostile, continuous, and open manner for a statutorily prescribed number of years.
96
Easement in Gross
An easement that benefits an individual or legal entity, rather than a dominant estate.
97
Emblements
The crops and other annual plantings considered to be personal property of the cultivator.
98
Eminent Domain
The right of the government to acquire property for necessary public or quasi-public use by condition; the owner must be fairly compensated.
99
Encroachment
An unlawful intrusion onto another’s adjacent property by improvements to real property, e.g., a swimming pool built across a property line.
100
Encumbrance
Anything which affects or limits the fee simple title to or value of property, e.g., mortgages or easements.
101
Equitable Lien
A lien on property imposed by a court in order to achieve fairness, particularly when
someone has possession of property which he/she holds for another.
102
Erosion
The wearing away of land by the act of water, wind, or glacial ice.
103
Escalation
The right reserved by the lender to increase the amount of the payments and/or interest
upon the happening of a certain event.
104
Escheat
The reverting of property to the State when heirs capable of inheriting are lacking.
105
Estate at Sufferance
An estate arising when the tenant wrongfully holds over after the expiration of the term. The landlord has the choice of evicting the tenant as a trespasser or accepting such tenant for a similar term and under the condition of the tenant’s previous holding. Also called a tenancy at sufferance.
106
Estate at Will
The occupation of lands and tenements by a tenant for an indefinite period, terminable by one or both parties
107
Estate For Years
An interest in lands by virtue of a contract of a contract for the possession of them for a definite and limited period of time. May be for a year or less. A lease may be said to be an estate for
years.
108
Ethics
Moral principles that govern a person’s or group’s behavior.
109
Exclusive Agency Listing
A listing agreement employing a broker as the sole agent for the seller of real property under the terms of which the broker is entitled to a commission if the property is sold through any other broker, but not if a sale is negotiated by the owner without the services of an agent
110
Exclusive Right to Sell Agreement
A listing agreement employing a broker to act as agent for the seller of real property under the terms of which the broker is entitled to a commission if the property is sold during the duration of the listing through another broker or by the owner without the services of an
agent
111
Executed Contract
A contract in which both parties have completely performed their contractual obligations
112
Executory Contract
A contract in which one or both parties have not yet completed performance of
their obligations.
113
Express Agency
An agency relationship created by oral or written agreement between principal and
the agent.
114
Express Contract
A contract that has been put into words, either spoken or written.
115
Federal Home Loan Mortgage Corporation (FHLMC) (Freddie Mac)
An independent stock company which creates a secondary market in conventional residential loans and in FHA and VA loans by purchasing mortgages.
116
Federal National Mortgage Association (FNMA) (Fannie Mae)
A New York stock exchange company. It is a public company that operates under a federal charter and is the nation’s largest source of financing for home mortgages. Fannie Mae does not lend money directly to consumers, but instead works to ensure that mortgage funds are available and affordable, by purchasing mortgage loans from institutions that lend directly to consumers.
117
Federal Reserve System
The federal banking system of the United States under the control of central board of governors (Federal Reserve Board) involving a central bank in each of twelve geographical districts with broad powers in controlling credit and the amount of money in circulation.
118
Fee Simple Absolute
An inheritable estate in land providing the greatest interest of any form of title.
119
Fee Simple Determinable
An estate that will end automatically when the stated event or condition occurs. The interest will revert to the grantor or the heirs of the grantor.
120
Fee Simple Estate
The greatest interest that one can have in real property. An estate that is unqualified, of indefinite duration, freely transferable and inheritable.
121
FHA-Insured Loan
A mortgage loan in which payments are insured by the Federal Housing
Administration.
122
Fiduciary
A person in a position of trust and confidence, as between principal and broker; broker as fiduciary owes certain loyalty which cannot be breached under the rules of agency.
123
Fiduciary Duty
That duty owed by an agent to act in the highest good faith toward the principal and not to obtain any advantage over the latter by the slightest misrepresentation, concealment, duress or
pressure
124
Fixtures – Appurtenances attached to the land or improvements, which usually cannot be removed
without agreement as they become real property; examples – plumbing fixtures, store fixtures built into
the property, etc.
Appurtenances attached to the land or improvements, which usually cannot be removed without agreement as they become real property; examples – plumbing fixtures, store fixtures built into
the property, etc.
125
Floor Area Ratio (FAR)
The floor area ratio, also referred to as FAR, is the principal bulk regulation controlling the size of buildings. FAR is the ratio of total building floor area to the area of the zoning lot. Each zoning district has a FAR control which, when multiplied by the lot area of the zoning lot, produces the maximum amount of floor area allowable in a building on the zoning lot. For example, on a 10,000 square foot zoning lot in a district with a maximum FAR of 1.0, the floor area of a building cannot exceed 10,000 square feet.
126
Foreclosure
Procedure whereby property pledged as security for a debt is sold to pay the debt in event
of default in payments or terms.
127
Freon
Moderately toxic gases or liquids which have typically been used as refrigerants (in air
conditioning units) and as aerosol propellants.
128
Friable
Easily crumbled or reduced to power. Asbestos is an example of a friable substance.
129
General Agent
An agent with full authority over one property of the principal, such as a property manager.
130
General Lien – A lien on all the property of a debtor.
A lien on all the property of a debtor.
131
Government National Mortgage Association (GNMA) (Ginnie Mae)
Government National Mortgage Association (GNMA) (Ginnie Mae) - A government-owned corporation
within the U.S. Department of Housing and Urban Development (HUD) that guarantees securities backed by mortgages that are insured or guaranteed by other government agencies. Popularly known as “Ginnie Mae
132
Government Survey
A method of specifying the location of parcel of land using prime meridians, base lines, standard parallels, guide meridians, townships and sections.
133
Government Survey
A method of specifying the location of parcel of land using prime meridians, base lines, standard parallels, guide meridians, townships and sections.
134
Grant
A technical legal term in a deed of conveyance bestowing an interest in real property to another. The words “convey” and “transfer” have the same effect.
135
Grant Deed
A limited warranty deed using the word “grant” or like words that assures a grantee that the grantor has not already conveyed the land to another and that the estate is free from encumbrances placed by the grantor
136
Grantee
A person to whom a grant is made.
137
Grantor
A person who transfers his or her interest in property to another by grant.
138
Gross Lease
A lease in which the lessor pays all costs of operating and maintaining the property and real estate taxes.
139
Ground Lease
An agreement for the use of land only, sometimes secured by improvements placed on the land by the user.
140
Group Boycott
An agreement between members of a trade to exclude other members from fair
participation in the trade
141
Habendum Clause
The “to have and to hold” clause which may be found in a deed.
142
Highest and Best Use
An appraisal phrase meaning that use which at the time of an appraisal is most likely to produce the greatest net return to the land and/or buildings over a given period of time; that usewhich will produce the greatest amount of profit. This is the starting point for an appraisal.
143
Hypothecate
To pledge a thing as security without the necessity of giving up possession of it.
144
Implied Agency
Agency that exists as a result of actions of the parties.
145
Implied Contract
An agreement that has not been put into words, but is implied by the actions of the parties.
146
Income (Capitalization) Approach
An appraisal method applied to income producing properties, which involves a three-step process. First, the appraiser must find the net annual income. Second, an appropriate capitalization rate or “present worth” factor must be set. Finally, the appraiser must capitalize the income by dividing the net income by the capitalization rate
147
Independent Contractor
A person that provides services to another under terms specified in a contract or within a verbal agreement.
148
Insured Value
The value of an asset or asset group that is covered by an insurance policy; can be estimated by deducting cost of non-insurable items (e.g. land value) from market value
149
Interest
The charge in dollars for the use of money for a period of time. In a sense, the “rent” paid for
the use of money
150
Interest Only Loan
A straight, non-amortizing loan in which the lender receives only interest during the term of the loan and principal is repaid in a lump sum at maturity.
151
Intestate
A person who dies having made no will, or one which is defective in form, is said to have died intestate, in which case the estate descends to the heirs at law or next of kin.
152
Investment Value
The specific value of an investment to a particular investor or class of investors based on individual investment requirements; distinguished from market value, which is impersonal and detached.
153
Involuntary Alienation
The transfer of title to real property as a result of a lien foreclosure sale, adverse possession, the filing of a petition in bankruptcy, or condemnation under power of eminent domain or upon the death of the titleholder, to the State when there are no heirs.
154
Involuntary Lien
A lien imposed against property without consent of an owner.
