Glossary Terms Flashcards
Abandonment
giving up the right to possess a property, building, or real estate area through non-use and intention
Abutting
sitting next to another properly
acceleration clause
an addendum that forces the borrower to repay the entire loan upon the lenders insistence for specific reasons listed in the clause
accretion
increase of the amount of land by natural deposits of soil onto the property
accrued depreciation
the total loss of value on a property
accrued items
the additional costs still outstanding at the close of the real estate deal, such as interest, insurance, HOA fees
acre
equal to 4840 square yards ro 43560 square feet
actual notice
specific information given to a party, such as tenant, landlord, buyer or seller
addendum
a clue that provides more specific information to clarify a contract
adjacent
property or buildings next to each other but might not tough each other
adjoining
property or building next to each other that touch each other
adjustable rate mortgage
a loan rate that changes throughout the period of the load. sometimes called a variable rate or flexible rate
adjusted basis
the final cost of a property after improvements are added and deductions or reduced value are subtracted
adjustment date
the date agreed upon by the buyer and seller for financial changes
administrator
the court appointed person who executes a person’s estate if there is not a will
ad valorem tax
property tax on the current value of the land
adverse possession
the ways by which a person may acquire property, such as through purchase, inheritance, or other methods, including without payment as in squatting
agreement of sale
a contract between two parties to buy/sell property, usually over time
alienation
placement of ownership of property from one person/company to another person/company
alienation clause
an addendum to the mortgage contract that keeps the borrower from reselling the property without paying the lender
allodial system
a national system overseen by law that monitors property ownership
amenities
‘extras’ on a property that make it worth more or more attractive to buyers. location or kitchen upgrades are two examples.
amortization
paying off the principle and interest on a debt with equal payments until the debt is repaid
amortize
pay off the principle and interest on a loan
annual percentage rate
the percentage above the principle added to the loan over 12 months. it includes additional costs, such as closing costs and fees and not just interest rates
anti-deficiency law
a statute that stops the lender from pursuing the buyer for a loss on a property after a foreclosure sale
anti-trust laws
national laws that encourage free market trade and practices and prohibit the restriction of such
apportionments
the division of costs, such as fees and HOA responsibilities, between the seller and the purchaser
appraisal
assessing the worth of land or property by a professional, qualified person who is usually licensed
appreciation
growth in the worth of real estate
appurtenance
an attachement to land or edifices that now conveys with property
arbitration
dispute resolution through the use of a third party
assessed value
the tax-related value put on a property
assessment
the placement of tax-related value on a property
assessor
a professional who determines the tax-related value of a property
assumption
the process of the buyer taking over the seller’s mortgage
avulsion
transfer of land because water, such as a stream or brook, changes course
balloon mortgage
a mortgage with a small payments due for a specified period, such as three to give years, with a lump sum or a balloon due at the end of the mortgage
bequest
transfer of personal property through a will
betterment
upgrade to property
bilateral contract
a contract, such as a rental agreement, when both parties agree to comply with or not comply with certain terms
bill of sale
a legal paper that transfers ownership of property from one person (company) to another
binder
money paid to hold a property for set terms
blanket mortgage
a mortgage owned by the same person on at least two properties
bond
a type of insurance money that protects a professional against loss
cap
the maximum increase in interest for a mortgage with changing rates
capital expenditure
money spent to improve the value of real estate
capitalization
the total yearly potential earnings on a property, such as a rental
capitalization rate
a percentage that can be used to compare investment opportunities. this is determined by dividing the yearly capitalization by the cost of the property.
caveat emptor
buyer beware
certificate of title
an official decision on the ownership, status or availability of a piece of real estate through public documents
chattel
any property someone owns except real estate (i.e. personal property)
Codicil
an addendum to a will that explains additions or deletions to the document
commitment letter
a document from the mortgage company that informs the borrower regarding loan approval and the terms of said loan
community property
real estate and chattel shared by 2 parties, usually husband and wife
comparative market analysis
assessing the worth of real estate through the value of similar pirces of real estate in the area. Only properties that have been sold are used.
competitive market analysis
a list of benefits of the property and a comparison to other homes in the area. properties that have been recently sold and listed are used.
constructive eviction
when a tenant moved out of a residence because of the poor quality of the residence without being liable for the rent
contingency
certain requirements that must be met to fulfill the contract, such as the sale of the buyer’s home so they can afford the new residence
convertible ARM
an agreement that the buyer can change an adjustable rate mortgage to a fixed rate. there is a cost associated with this
conveyance
the legal transfer of property from one party to another
cost approach
a way to assess real estate value by starting with the worth of the property, subtracting cost and adding improvements
covenant
specifications in the deed requiring obligations or restrictions on real estate use
defeasance clause
the legal option that the lender has to repossess delinquent payments or the property from the borrower in case of default
deficiency judgement
a legal document ordering the collection of the difference between what a borrower owes to the bank and the sale price of a home
devise
a gift of real estate to an heir through a will
devisee
the person who receives a gift of property from a will
dispossess
legal process of eviction
earnest money
money to prove the buyer’s serious intent of purchasing the home
easement by necessity
the need to walk on someone else’s property by necessity
easement by prescription
accepted use of property by another person that is unnecessary. this becomes legal when it occurs over a certain number of years, such as a short cut through a neighbors yard
easement in gross
accepted use of property that remains with the individual and does not convey with the property.
effective age
the age of a building based on the condition of the building
encumbrance
assessments against a property, such as delinquent HOA fees, any mortgages or easements that impact the value
equitable title
the right someone has to a property when they commit to buy it although he deal is not yet finalized
executory contract
a legal agreement that is awaiting action by at least one party for completion
fee simple
full and complete ownership of real estate
freehold estate
continued ownership or stake in a property as compared to a temporary stake or a lease
functional obsolescence
the decrease in worth on the real estate except those caused by wear and tear
general warranty deed
a guarantee that the title is free and clear of other claims against it for the protection of the buyer
gross income multiplier
a way to assess the profitability of property arrived at by dividing the total price paid by the monthly rental rate
gross rent multiplier
a way to assess the profitability of property arrived at by dividing the total price paid by the monthly rental rate
highest and best use
the most productive use of real estate that will provide the greatest financial return over a specified period of time
income capitalization approach
a specific formula used to assess the income-producing worth of a property
indemnify
to insure against loss
interim financing
a transitional loan to bridge the time frame until the buyer can obtain permeant financing, example a construction loan
intestate
without legal will or without any will at all
joint tenancy
more than one individual who owns property in common, usually related
landlocked
property that is not accessible to public roads except through neighboring property
lease option
the renter can decide to buy the property under certain conditions
littoral rights
the shore land next to an ocean or very large body of water that the property owner has rights to
lock-in
the borrower pays a fee to guarantee a certain interest rate for a specific time period, especially if the borrower thinks the interest rate will rise
market date approach
a comparison of recent property sales to asses real estate worth
market value
in real estate, price range between the maximum purchase price and the minimum purchase price
mechanic’s lein
a hold on the construction and on the real estate that guarantees payment for the work done on the property
marketable title
free and clear title
mutual rescission
an agreement to void a contract by all involved parties
net income
when all the bills have been paid, the earnings that remain
net listing
any funds above the original price of the property that are paid to the real estate agent - illegal in Massachusetts
obsolescence
a decrease in worth because of out-dated design or construction such as a home without a dishwasher or cable hook-up
open listing
an agreement that allows a buyer to purchase a property t a specific price if done so within a specific time period
origination fee
fees assessed to the borrower that cove loan expenses related to the title, appraisal and credit checks
package mortgage
a combination loan that covers both the residence and the land
participation mortgage
a loan that permits the holder to receive a portion of the profits from the property
percentage lease
a rental payment determined by sales volume of the renter with a minimum rental amount
prescription
receiving the right to a property through common use, such as a squatter, or adverse possession
primary mortgage market
the original buyer of a loan, such as a bank or savings and loan, which may then be sold on the secondary mortgage market for a profit
prime rate
the lowest available rate a lending institution charges on a short term loans to businesses
procuring cause
a method of deciding if the real estate agent earned a commission, legal expression that means the goal was realized through the actions
quitclaim deed
a release of rights in a property without confirming the validity or the rights of the person who keeps the deed
real estate settlement procedures act (RESPA)
a law that informs buyers of their rights by requiring the lender to give updated information to the borrower throughout the home buying process
regulation Z
federal requirement that a lender must disclose all terms of a loan, including the APR
rescission
the negating of a contract so that it is no longer in effect
reversion
the landlords right to take possession of rental property when the rental agreement ends
reverse annuity mortgage
a property loan used for a person with high equity when the lender makes yearly payments to the home owner
right of redemption
the owner’s privilege to take possession of real estate when the financial obligations of the loan have been met, even during the process of a foreclosure
sale-leaseback
the sale of the real estate to to new owner and the new owner rents the real estate back to the original owner
seisin
the owner who holds the title to the property free and clear
servient tenement
property that gives shred use of land to a neighboring property for their good
special warranty deed
a deed that pertains only to the title under the person issuing it, not to any title issues from pervious title holders
specific lien
a mortgage or lien against only a specified part of the real estate
statutory lien
a legal obligation on the property, such as taxes
steering
illegal action when only certain racial or cultural groups are shown a property
tax deed
a legal document that places claim on real estate because of owed taxes
tax lien
a hold placed on a real estate because of owed taxes prior to filing the tax deed
tenancy at sufferance
a renter who can no longer legally remain on the property because the lease has ended
tenancy at will
an agreement the owner provided to the renter that ends upon if and when the landlord decided to end it. the renter can also terminate the lease
tenancy by entirety
equal rights to property shared between spouses, the real estate passes to the surviving spouse upon death of spouse
tenancy in common
equal rights to property shared between individuals without surviving rights but determined through a will upon one parties death
testate
someone who does with a legal will in place
useful life
the period of time during which improvements with yield income
valuation
estimation of the price of real estate
void contract
a written agreement that cannot be enforced even when signed
voidable contract
a written agreement that becomes unenforceable after it is signed
wraparound mortgage
merges a new loan with an existing loan. a property loan that combines a first mortgage with a second mortgage at a higher loan amount and higher payment
warranty deed
a legal right of protection against any type of claim
Package Mortgage
Personal property and real estate are used as collateral.
Junior Mortgage
Loan in addition to the primary mortgage.
equity loan
a second mortgage. it is used to access the equity in the home.
