Glossary terms Flashcards
Representing both parties to a transaction. This is unethical unless both parties agree to it, and it is illegal in some states.
Dual Agency
A place where goods can be bought and sold and a price established.
Market
An intermediary between a buyer and a seller, or a landlord and a tenant, who assists one or both parties with a transaction without representing either. Also known as a facilitator, transaction broker, transaction coordinator, and contract broker.
Nonagent
A clause allowing the tenant the opportunity to buy the property before the owner accepts an offer from another party.
Right Of First Refusal
A combination of people or firms formed to accomplish a business venture of mutual interest by pooling resources. In a real estate investment syndicate, the parties own and/or develop property, with the main profit generally arising from the sale of the property.
Syndicate
Having made and left a valid will.
Testate
A government agency that plays an important role in the secondary mortgage market. It guarantees mortgage-backed securities using FHA-insured and VA-guaranteed loans as collateral.
Ginnie Mae
An oral or written contract in which the parties state the contract’s terms and express their intentions in words.
Express Agreement
Charging interest at a higher rate than the maximum rate established by state law.
Usury
An evaluation of property to show that due care was exercised in the determination of environmental impairments.
Environmental Site Assessment (ESA)
Compares actual results with the original budget, often giving either percentages or a numerical variance of actual versus projected income and expenses.
Budget Comparison Statement
A life estate, usually a fractional interest, given by some states to the surviving husband in real estate owned by his deceased wife. Most states have recognized other marital property rights and abolished this
Curtesy
A legal process by which a court determines who will inherit a decedent’s property and what the estate’s assets are.
Probate
The Federal Agricultural Mortgage Corporation—a privately owned and publicly traded company established by Congress to create a secondary market for agricultural mortgage and rural utilities loans and the portions of agricultural and rural development loans guaranteed by the U.S. Department of Agriculture (USDA).
Farmer Mac
A method used to describe a parcel of land that begins at a well-marked point and follows the property’s boundaries, using directions and distances around the tract, back to the place of beginning.
Metes-and-bounds Method
One who acts or has the power to act for another. A fiduciary relationship is created under the law of agency when a property owner executes a listing agreement or management contract authorizing a licensed real estate broker to be his or her agent. A prospective property buyer may authorize a real estate broker to act as the buyer’s agent to find a suitable property.
Agent
The original tenant remains responsible for rent being paid by the new tenant and for any damage done to the rental during the lease term. The new tenant is responsible only to the original tenant to pay the rent due.
sublease
A one-sided contract wherein one party makes a promise so as to induce a second party to do something. The second party is not legally bound to perform; however, if the second party does comply, the first party is obligated to keep the promise.
Unilateral Contract
A statement of opinion on the status of the title to a parcel of real property based on an examination of specified public records.
Certificate Of Title
(1) The right to ownership or the ownership of land. (2) The evidence of ownership of land.
Title
Sets forth rules for entering into an enforceable contract using electronic means.
Uniform Electronic Transactions Act (UETA)
Depreciation taken periodically in equal amounts over an asset’s useful life.
Straight-line Depreciations
The most probable price that a property would bring in an arm’s-length transaction under normal conditions on the open market.
Market Value
The right given by a lease to the tenant to purchase the property at a predetermined price within a certain period, possibly the lease term.
Purchase Option
A personal judgment levied against the borrower when a foreclosure sale does not produce sufficient funds to pay the mortgage debt in full. In some states, it cannot be sought when the mortgage debt was used to purchase, and is secured by, the borrower’s principal residence.
Deficiency Judgment
The clause in a mortgage or deed of trust stating that the balance of the secured debt becomes immediately due and payable at the lender’s option if the property is sold by the borrower. In effect, this clause prevents the borrower from assigning the debt without the lender’s approval.
Alienation Clause
An entity or organization, created by operation of law, whose rights of doing business are essentially the same as those of an individual. The entity has continuous existence until it is dissolved according to legal procedures.
Corporation
A principal-agent relationship in which the real estate professional acts on behalf of the buyer, usually as an agent, with fiduciary responsibilities to the buyer.
Buyer Representation Agreement
Law that provides funds to assess and clean up brownfields, clarifies liability protections, and provides tax incentives toward enhancing state and tribal response programs (also known as Brownfields Law).
Small Business Liability Relief And Brownfields Revitalization Act
A right to use the land of another for a specific purpose, such as for a right-of-way or utilities; an incorporeal interest in land because it does not include a right of possession.
Easement
A contract that seems to be valid on the surface but may be rejected or disaffirmed by one or both of the parties.
Voidable Contract
One who attempts to put land to its most profitable use through the construction of improvements.
Developer
Real estate professionals conspiring to set fixed compensation rates.
Price-fixing
State legislation that confers zoning and other powers on municipal governments.
Enabling Acts
Chattel
personal property.
Information about an applicant’s gross income and total debt that lenders generally look at as a percentage to determine qualification for a loan.
Debt To Income (DTI)
Federal tax on a decedent’s real and personal property.
Estate Tax
(1) In appraisal, a loss of value in property due to any cause, including physical deterioration, functional obsolescence, and external obsolescence. (2) In real estate investment, a deduction for tax purposes taken over the period of ownership of income property, based on the property’s acquisition cost.
Depreciation
The interest or value that an owner has in property over and above any indebtedness.
Equity
A highly detailed plan that lays out the owner’s objectives for a property, as well as what the property manager wants to accomplish and how, including all budgetary information.
Management Plan
Incurable depreciation caused by factors not on the subject property, such as environmental or economic factors.
External Obsolescence
The process of estimating the value of a property by adding to the estimated land value the appraiser’s estimate of the reproduction or replacement cost of the building, less depreciation.
Cost Approach
A tax entity that issues multiple classes of investor interests (securities) backed by a pool of mortgages.
Real Estate Mortgage Investment Conduit (REMIC)
A new offer made in response to an offer received. It has the effect of rejecting the original offer, which cannot be accepted thereafter unless revived by the offeror.
Counteroffer
When individuals or businesses withhold their patronage to a business as a protest or to reduce competition.
Boycott
A mortgage loan that is expandable by increments up to a maximum dollar amount, with the full loan being secured by the same original mortgage.
Open-end Loan
The return of the rights of possession and quiet enjoyment to the lessor at the expiration of a lease.
Reversionary Right
Expansion of the Fair Housing Act to include families with children and those with physical or mental disabilities
Fair Housing Amendments Act Of 1988
The amount of money paid to a seller for the product sold.
Sales Price
An independent federal agency established by Congress to examine and supervise financial institutions, manage receiverships, and insure deposits (currently up to $250,000 per depositor per financial institution).
Federal Deposit Insurance Corporation (FDIC)
Sale of property in which the sales price is less than the remaining indebtedness.
Short Sale
A residential multiunit building whose title is held by a trust or corporation that is owned by and operated for the benefit of people living within the building who are the beneficial owners of the trust or shareholders of the corporation, each possessing a proprietary lease to a property unit.
Cooperative
A loan by which a homeowner receives a lump sum, monthly payments, or a line of credit based on the homeowner’s equity in the property secured by the mortgage. The loan must be repaid at a prearranged date, upon the death of the owner, or upon the sale of the property.
Reverse Mortgage
A mortgage clause stating that the mortgagee agrees not to terminate the tenancies of the lessees in the event the mortgagee forecloses on the mortgagor-lessor’s building.
Nondisturbance Clause
A charge made by a lender for the use of money.
Interest
A loan characterized by a fluctuating interest rate, usually one tied to a bank or savings and loan association cost-of-funds index.
Adjustable-rate Mortgage (ARM)
(1) Any structure, usually privately owned, erected on a site to enhance the value of the property (e.g., a building, fence, or driveway). (2) A publicly owned structure added to or benefiting land (e.g., a curb, sidewalk, street, or sewer).
Improvement
A hidden structural defect that could not be discovered by ordinary inspection and that threatens a property’s soundness or the safety of its inhabitants. Some states impose on property sellers and real estate professionals a duty to inspect for and disclose latent defects.
Latent Defect
The examination of public records relating to real estate to determine the current state of the ownership.
Title Search
State-imposed taxes on a decedent’s real and personal property.
Inheritance Taxes
The process of estimating the value of a property by examining and comparing sales and listings of comparable properties.
Sales Comparison Approach
A federal law administered by the Environmental Protection Agency that establishes a process for identifying parties responsible for creating hazardous waste sites, forcing liable parties to clean up toxic sites, bringing legal action against responsible parties, and funding the abatement of toxic sites. See also Superfund.
Comprehensive Environmental Response, Compensation, And Liability Act (CERCLA)
A contract under which the agreement of the parties is demonstrated by their acts and conduct.
Implied Agreement
A lien affecting or attaching only to a certain, identified parcel of land or piece of property.
Specific Lien
Practice of one company offering a package of services to consumers.
Affiliated Business Arrangement (ABA)
The main imaginary line running east and west and crossing a principal meridian at a definite point; used by surveyors for reference in locating and describing land under the rectangular (government) survey system of legal description.
Base Line
An estate carrying the limitation that, if it is no longer used for the purpose conveyed, it reverts to the original grantor by the right of reentry.
Fee Simple Subject To A Condition Subsequent
A factor (number) by which the assessed value of a property is multiplied to arrive at a value for the property that is in line with statewide tax assessments. The ad valorem tax would be based on this adjusted value. An equalization factor may be applied to raise or lower assessments in a particular district or county.
Assessment Equalization Factor
Express information or fact; that which is known; direct knowledge.
Actual Notice
An opinion of real estate value commissioned by a bank or an attorney and provided by a broker.
Broker’s Price Opinion (BPO)
Agency in which an affiliated licensee is appointed by the designated broker of the affiliated licensee’s real estate brokerage agency to act solely for a client of that brokerage agency to the exclusion of other affiliated licensees of that brokerage agency.
Appointed Agency
(or designated agency)
A listing based on the net price the seller will receive if the property is sold. Under a net listing, the real estate professional can offer the property for sale at the highest price obtainable to increase the commission. This type of listing is illegal in many states.
Net Listing
That portion of the loan payment directed toward the principal rather than the interest, plus any gain in property value due to appreciation.
Equity Buildup
The mutual exchange of privileges. Some states have reciprocal agreements for recognizing and granting licenses to licensees from other states.
Reciprocity
a qualified fee estate that is subject to the occurrence or nonoccurrence of some specified event.
Fee Simple Defeasible
Actions of a landlord that so materially disturb or impair a tenant’s enjoyment of the leased premises that the tenant is effectively forced to move out and terminate the lease without liability for any further rent.
Constructive Eviction
An easement acquired by open, notorious, continuous, hostile and adverse use of the property for the period of time prescribed by state law.
Easement By Prescription
A listing contract under which the owner appoints a real estate professional as her exclusive agent for a designated period of time to sell the specified property, on the owner’s stated terms, for a commission. The owner reserves the right to sell the property without paying anyone a commission if the sale is to a prospect who has not been introduced or claimed by the real estate professional.
Exclusive-agency Listing
Federal government regulates the lending practices of mortgage lenders through this act
Truth In Lending Act (TILA)
Substituting a new obligation for an old one or substituting new parties to an existing obligation.
Novation
The purchase of real property, the consummation of which is preceded by a lease, usually long term, that is typically done for tax or financing purposes.
Lease Purchase
Words in a deed of conveyance that state the grantor’s intention to convey the property at the present time. This clause is generally worded as “convey and warrant”; “grant”; “grant, bargain, and sell”; or the like.
Granting Clause
The government’s right to impose laws, statutes, and ordinances, including zoning ordinances and building codes, to protect the public health, safety, and welfare.
Police Power
Expenses, either prepaid or paid in arrears, that are divided or distributed between the buyer and the seller at the closing.
Prorations
An estate in land in which ownership is for an indeterminate length of time, in contrast to a leasehold estate.
Freehold Estate
A test of the soil to determine whether it will absorb and drain water adequately to use a septic system for sewage disposal.
Percolation Test
A loan insured by the Federal Housing Administration and made by an approved lender in accordance with FHA regulations.
FHA-insured Loan
A contract between an owner (as principal) and a real estate professional (as representative of the owner) by which the real estate professional is employed to find a buyer for the owner’s real estate on the owner’s terms, for which service the owner agrees to pay a commission or other form of compensation.
Listing Agreement
Common law rights held by owners of land adjacent to rivers, lakes, or oceans; includes restrictions on those rights and land ownership.
Water Rights
The highest interest in real estate recognized by the law; the holder is entitled to all rights to the property.
Fee Simple
To pledge property as security for an obligation or loan without giving up possession of it.
Hypothecation
An estimate of the quantity, quality, or value of something. The process through which conclusions of property value are obtained; also refers to the report that sets forth the process of estimation and conclusion of value.
Appraisal
A clause in a deed that limits the way the real estate ownership may be used.
Restrictive Covenant
A legally enforceable promise or set of promises that must be performed and for which, if a breach of the promise occurs, the law provides a remedy. A contract may be either unilateral, by which only one party is bound to act, or bilateral, by which all parties to the instrument are legally bound to act as prescribed.
Contract
A lien that belongs to a vendor for the unpaid purchase price of land, where the vendor has not taken any other lien or security beyond the personal obligation of the purchaser.
Vendor’s Lien
The appraisal principle stating that the value of any component of a property is what it gives to the value of the whole or what its absence detracts from that value.
Contribution
The income projected for an income-producing property after deducting anticipated vacancy and collection losses and operating expenses.
Net Operating Income (NOI)
An estate that gives the lessee the right to possession until the estate is terminated by either party; the term of this estate is indefinite.
Estate (tenancy) At Will
Ownership of real property by one person only; also called sole ownership.
Severalty
In real estate practice, a person who has the skills and knowledge to be licensed as a real estate broker or salesperson.
Real Estate Licensee
A national registry, managed by the Federal Trade Commission, which lists the phone numbers of consumers who have indicated their preference to limit the telemarketing calls they receive.
National Do Not Call Registry
The appraisal principle holding that value can increase or decrease based on the expectation of some future benefit or detriment produced by the property.
Anticipation
A loan in which only interest is paid during the term of the loan, with the entire principal amount due with the final interest payment.
Straight Loan
(or interest only loan, or term loan)
A system of property ownership based on the theory that each spouse has an equal interest in the property acquired by the efforts of either spouse during marriage. A holdover of Spanish law found predominantly in the western U.S. states; the system was unknown under English common law.
Community Property
A lien placed on property with the knowledge and consent of the property owner.
Voluntary Lien
A financing instrument that states the terms of the underlying obligation, is signed by its maker, and is negotiable (transferable to a third party). Also called a promissory note.
Note
One-tenth of one cent. Some states use a – rate to compute real estate taxes; for example, a rate of 52 – would indicate a tax of $0.052 for each dollar of assessed valuation of a property.
Mill
The concept of land ownership that includes ownership of all legal rights to the land—possession, control within the law, enjoyment, exclusion, and disposition.
Bundle Of Legal Rights
A set of standards developed by the Appraisal Foundation that details information required for a property appraisal.
Uniform Standards Of Professional Appraisal Practice (USPAP)
The interests, benefits, and rights inherent in real estate ownership; often used as a synonym for real estate.
Real Property
Growing crops, such as corn, that are produced annually through labor and industry; also called fructus industriales.
Emblements
Agreements to sell one product only if the buyer purchases another product as well. The sale of the first product is “tied” to the purchase of a second product.
Tying Agreement
A judicial or administrative proceeding to exercise the power of eminent domain, through which a government agency takes private property for public use and compensates the owner.
Condemnation
A written agreement between holders of liens on a property that changes the priority of mortgage, judgment, and other liens under certain circumstances.
Subordination Agreement
A method of controlling environmental contamination by sealing off a dangerous substance, such as asbestos.
Encapsulation
A policy insuring a property owner or mortgagee against loss by reason of defects in the title to a parcel of real estate, other than encumbrances, defects, and matters specifically excluded by the policy.
Title Insurance
Permission obtained from zoning authorities to build a structure or conduct a use that is expressly prohibited by the current zoning laws; an exception from the zoning ordinances.
Variance
An adverse fact that a party indicates is of such significance, or that is generally recognized by a competent licensee as being of such significance, to a reasonable party, that it affects or would affect the party’s decision to enter into a contract or agreement concerning a transaction, or affects or would affect the party’s decision about the terms of the contract or agreement.
Material Adverse Fact
A person who receives a transfer of real property from a grantor.
Grantee
A mortgage loan on approved property made to a qualified veteran by an authorized lender and guaranteed by the U.S. Department of Veterans Affairs in order to limit the lender’s possible loss.
VA-guaranteed Loan
Specific credit terms, such as down payment, monthly payment, and amount of finance charge or term of loan.
Triggering Terms
The remnant of an estate that the grantor holds after granting a life estate to another person.
Reversionary Interest
The succession of conveyances, from some accepted starting point, whereby the present holder of real property derives title.
Chain Of Title
Agency relationship in which the agent represents only one party to a transaction.
Single Agency
A marketing organization composed of member real estate professionals who agree to share their listing agreements with one another in the hope of procuring ready, willing, and able buyers for their properties more quickly than they could on their own. Most multiple listing services accept exclusive right-to-sell or exclusive agency listings from their member real estate professionals.
Multiple Listing Service (MLS)
An obligation, such as a second mortgage, that is subordinate in right or lien priority to an existing lien on the same property.
Junior Lien
A deed used by a trustee under a deed of trust to return title to the trustor.
Reconveyance Deed
Exaggerated or superlative comments or opinions.
Puffing
A strip of land, usually used as a park or designated for a similar use, separating land dedicated to one use from land dedicated to another use (e.g., residential from commercial).
Buffer Zone
Insurance that covers a residential real estate owner against financial loss from fire, theft, public liability, and other common risks.
Homeowners Insurance
Point at which additional property improvements do not increase the property’s income or value.
Law Of Diminishing Returns
Transfer of property from one owner to another
Alienation
A financing technique used to reduce the monthly payments for the first few years of a loan. Funds in the form of discount points are given to the lender by the builder or the seller to buy down or lower the effective interest rate paid by the buyer, thus reducing the monthly payments for a set time.
Buydown
Occurs when the real estate professional should have known that a statement about a material fact was false.
Negligent Misrepresentation
A clause in a lease that grants the lessee the privilege of renewing the lease.
Renewal Option
Under the act, which was revised most recently in 2008, financial institutions are expected to meet the deposit and credit needs of their communities; participate and invest in local community development and rehabilitation projects; and participate in loan programs for housing, small businesses, and small farms.
Community Reinvestment Act Of 1977 (CRA)
The illegal practice of channeling home seekers to particular areas based on their race, national origin, religion, or other protected classification.
Steering
A method of describing real property that identifies a parcel of land by reference to lot and block numbers within a subdivision, as specified on a recorded subdivision plat.
Lot-and-block (recorded Plat) Method
A charge imposed on a borrower who pays off the loan principal early. This penalty compensates the lender for interest and other charges that would otherwise be lost.
Prepayment Penalty
A loan under which a property owner uses the property as collateral and can then draw funds up to a prearranged amount against the property. Also called a home equity line of credit, or HELOC.
Home Equity Loan
Private agreements that affect land use. They may be enforced by an owner of real estate that benefits from them and can be included in the seller’s deed to the buyer.
Covenants, Conditions, And Restrictions (CC&Rs)
A clause in a listing that entitles a broker to a commission for a set period of time after the listing has expired if the property is sold to a prospect that the broker introduced to the property during the listing period.
Extender Clause
(or protection clause, or safety clause)
The form that must be provided to a consumer on loan application, as specified by the Consumer Financial Protection Bureau.
Loan Estimate
A method of refinancing in which the new mortgage is placed in a secondary, or subordinate, position; the new mortgage includes both the unpaid principal balance of the first mortgage and whatever additional sums are advanced by the lender. In essence, it is an additional mortgage in which another lender refinances a borrower by lending an amount over the existing first mortgage amount without disturbing the existence of the first mortgage.
Wraparound Loan
A document, also known as a deed of reconveyance, that transfers all rights given a trustee under a deed of trust loan back to the grantor after the loan has been fully repaid.
Release Deed
Occurs when a disinterested third party is authorized to act as escrow agent (escrow holder) and to coordinate the closing activities on behalf of the buyer and the seller.
Escrow Closing
Written governmental permission allowing a use inconsistent with zoning but necessary for the common good, such as locating an emergency medical facility in a predominantly residential area.
Conditional-use Permit
A legal procedure whereby property used as security for a debt is sold to satisfy the debt in the event of default in payment of the mortgage note or default of other terms in the mortgage document. The foreclosure procedure brings the rights of the parties to a conclusion and passes the title in the mortgaged property to either the holder of the mortgage or a third party who may purchase the realty at the foreclosure sale. Depending on the priority of the foreclosed mortgage, the property may be sold free of all other encumbrances incurred prior to the sale.
Foreclosure
A fee simple estate qualified by a special limitation. Language used to describe the limitation includes the words so long as, while, or during.
Fee Simple Determinable
An easement that follows along with the land.
Easement Appurtenant
An act that makes contracts (including signatures) and records legally enforceable regardless of the medium in which they are created.
Electronic Signatures In Global And National Commerce Act (E-Sign)
Implements the Truth in Lending Act, requiring credit institutions to inform borrowers of the true cost of obtaining credit.
Regulation Z
A lease requiring the tenant to pay not only rent but also costs incurred in maintaining the property, including taxes, insurance, utilities, and repairs.
Net Lease
A tenant’s right to occupy real estate during the term of a lease, generally considered a personal property interest, although a long-term lease may be eligible for treatment as real property for financing purposes.
Leasehold Estate
Any provision added to an existing contract without altering the content of the original. It must be signed by all parties.
Addendum
A right given by law to certain creditors to have their debts paid out of the property of a defaulting debtor, usually by means of a court sale.
Lien
A real estate professional authorized by a broker to act as the agent for a specific principal in a particular transaction; also may be called assigned agent or appointed agent.
Designated Agent
(appointed agent)
A property that has acquired an undesirable reputation due to an event that occurred on or near it, such as violent crime, gang-related activity, illness, or personal tragedy. Some states restrict the disclosure of information about stigmatized properties.
Stigmatized Property
Amended the Fair Housing Act to provide that housing intended for persons aged 55 or older no longer needs to have significant facilities and services designed for the elderly.
Housing For Older Persons Act Of 1995 (HOPA)
Regulations issued by Fannie Mae that must be followed by appraisers to ensure accurate and objective appraisals.
Appraiser Independence Requirements (AIR)
A fiduciary arrangement whereby property is conveyed to a person or an institution, called a trustee, to be held and administered on behalf of another person, called a beneficiary. The one who conveys the trust is called the trustor.
Trust
That part of a deed beginning with the words “to have and to hold,” following the granting clause and defining the extent of ownership the grantor is conveying.
Habendum Clause
Establishes the basic structure for regulating discharges of pollutants into United States waters and regulating standards for surface waters.
Clean Water Act
An advertisement that does not include the name and physical address of the person or firm placing the ad .
Blind Ad
A charge against property, created by operation of law. Tax liens and assessments take priority over all other liens.
Tax Lien
A loan that only requires the payment of interest for a stated period of time with the principal due at the end of the term.
Interest-only Loan
(or straight loan)
A real estate loan used to finance the purchase of both real property and personal property, such as in the purchase of a new home that includes carpeting, window coverings, and major appliances.
Package Loan
Laws designed to preserve the free enterprise of the open marketplace by making illegal certain private conspiracies and combinations formed to minimize competition. Most violations of antitrust laws in the real estate business involve either price-fixing (real estate professionals conspiring to set fixed compensation rates) or allocation of customers or markets (real estate professionals agreeing to limit their areas of trade or dealing to certain areas or properties).
Antitrust Laws
Items, called chattels, that do not fit into the definition of real property; movable objects.
Personal Property
An agreement to keep open for a set period an offer to sell or purchase property.
Option
A person empowered to do anything the principal could do personally.
Universal Agent
A person who performs real estate activities while employed by a licensed real estate broker.
Sales Associate
An appraisal principle that the maximum value of a property tends to be set by the cost of purchasing an equally desirable and valuable substitute property, assuming that no costly delay is encountered in making the substitution.
Substitution
The four unities of tenants in a joint tenancy:
PITT
possession, interest, time, and title.
The bringing together of parties interested in making a real estate transaction.
Brokerage
A lease of property according to which a landlord pays all property charges regularly incurred through ownership, such as repairs, taxes, insurance, and operating expenses. Most residential leases are this type
Gross Lease
The legally permitted and physically possible use of a property that would produce the greatest net income and, thereby, develop the highest value.
Highest And Best Use
The appraisal principle holding that the greater the similarity among properties in an area, the better they will hold their value.
Conformity
(1) The person for whom a trust operates or in whose behalf the income from a trust estate is drawn. (2) A lender in a deed of trust loan transaction
Beneficiary
A formal declaration made before a duly authorized officer, usually a notary public, by a person who has signed a document.
Acknowledgment
The process used to extract natural gas from the deep layers of rock in which it is embedded.
Hydraulic Fracturing (fracking)
Loss in a property’s value resulting from physical deterioration, external depreciation, and functional obsolescence.
Accrued Depreciation
A database of consumer claims history that allows insurance companies to access prior claims information in the underwriting and rating process.
Comprehensive Loss Underwriting Exchange (CLUE)
People’s desire for one area over another, based on a number of factors such as history, reputation, convenience, scenic beauty, and location.
Area Preference
A federal law that regulates the sale of certain real estate in interstate commerce
Interstate Land Sales Full Disclosure Act (ILSA)
A type of residential dwelling with two floors that is connected to one or more dwellings by a common wall or walls. Title to the unit and lot vest in the owner who shares a fractional interest with other owners in any common areas.
Town House
On a closing statement, items that have been paid in advance by the seller, such as fuel costs and some real estate taxes, for which the seller must be reimbursed by the buyer.
Prepaid Items
A written document, properly witnessed, providing for the transfer of title to property owned by the deceased, called the testator.
Will
Buyer takes title of property and makes payments on the existing loan but is not personally obligated to pay the debt in full. Original seller might continue to be liable for debt.
Subject To
A horizontal plane from which heights and depths are measured.
Datum
A form filed with the county recorder for the county in which a property is located that provides information about specific types of known hazards on the property.
Groundwater Hazard Statement
A person’s present right to an interest in real property that will not result in possession or enjoyment until sometime in the future, such as a reversion or right of reentry.
Future Interest
A conveyance that transfers whatever interest the grantor has in the specified real estate, without warranties or obligations.
Quitclaim Deed
An interest in real or personal property that is limited in duration to the lifetime of its owner or some other designated person or persons.
Life Estate
A kind of grace period provided by law or by contract in which a party to a contract can legally back out of it.
Cooling-off Period
Trust ownership of real estate by a group of individuals who purchase certificates of ownership in the trust, which in turn invests the money in real property and distributes the profits back to the investors free of corporate income tax.
Real Estate Investment Trust (REIT)
An easement allowed by law as necessary for the full enjoyment of a parcel of real estate (e.g., a right of ingress and egress over a grantor’s land).
Easement By Necessity
The gradual and sometimes imperceptible wearing away of the land by natural forces, such as wind, rain, and flowing water.
Erosion
A tax or levy customarily imposed against only those specific parcels of real estate that will benefit from a proposed public improvement like a street or sewer.
Special Assessment
The legal right or interest, recognized in some states, that a wife acquires in the property her husband held or acquired during their marriage. During the husband’s lifetime, the right is only a possibility of an interest; upon his death, it can become an interest in land.
Dower
The relationship between the amount of the mortgage loan and the value of the real estate being pledged as collateral.
Loan-to-value (LTV) Ratio
The federal law that prohibits discrimination in the extension of credit because of race, color, religion, national origin, sex, age, marital status, or receipt of public assistance.
Equal Credit Opportunity Act (ECOA)
