modern real estate book vocabulary Flashcards
carbon monoxide (CO)
a colorless, odorless gas that occurs as a by-product of fuel combustion that may result in death in poorly ventilated areas
cash flow
the net spendable income from an investment, determined by deducting all operating and fixed expenses from the gross income. when expenses exceed income, a negative cash flow results
cash flow report
a monthly statement that detail the financial status of the property
caveat emptor
a latin phrase meaning “let the buyer beware”
CC&Rs
covenants, conditions, and restrictions
certificate of occupancy
permission by the municipal inspector to occupy a completed building structure after being inspected and having complied with building codes
certificate of reasonable value (CRV)
a form indicating the appraised value of a property being financed with a VA loan
certificate of sale
the document generally given to the purchaser at a tax foreclosure sale. a certificate of sale does not convey title; normally, it is an instrument certifying that the holder received title to the property after the redemption period passed and that the holder paid the property taxes for that interim period
certificate of title
a statement of opinion on the status of the title to a parcel of real property based on an examination of specified public records
chain of title
the succession of conveyances, from some accepted starting point, whereby the present holder of real property derives title.
change
the appraisal principle that holds that no physical or economic condition remains constant
chattel
personal property
chlorofluorocarbons (CFCs)
nontoxic, nonflammable chemicals containing atoms o carbon, chlorine, and fluorine, such as air conditioners and refrigerators. CFCs are safe in application but cause ozone depletion.
Civil Rights Act of 1866
an act that prohibits racial discrimination in the sale and rental of housing
client
the principal in an agency relationship or other form of representation
closing
an event where promises made in a sales contract are fulfilled and mortgage loan funds (if any) are distributed to the buyer
closing diclosure
the CFPB form that itemizes all charges that are normally paid by a borrower and a seller in connection with settlement, whether required by the lender or another party, or paid by the lender or any other person
closing escrow
process of settlement in which the buyer and the seller never meet; the paperwork is handled by an escrow agent
closing statement
a detailed cash accounting of a real estate transaction showing all cash received, all charges and credits made, and all cash paid out in the transacction
cloud on the title
any document, claim, unreleased lien, or encumbrance that may impair the title to real property or make the title doubtful; usually revealed by a title search and removed by either a quitclaim deed or suit to quiet title
code of ethics
a written system of standards for ethical conduct
codicil
a supplement or an addition to a will, executed with the same formalities as a will, which normally does not revoke the entire will
coinsurance clause
a clause in insurance policies covering real property that requires the policyholder to maintain fire insurance coverage generally equal to at least 80% of the property’s actual replacement cost
collateral
something having value that is given to secure repayment of a debt
commingling
the illegal act by a real estate professional of placing client or customer funds with personal funds. by law, real estate professionals are required to maintain a separate trust or escrow account for other parties’ funds held temporarily by the real estate professional
commission
payment to a real estate professional for services rendered, such as in the sale or purchase of real property; usually a percentage of the selling price of the property
common elements
parts of a property that are necessary or convenient to the existence, maintenance, and safety of a condominium or are normally in common use by all the condominium residents. each condominium owner has an undivided ownership interest in the common elements.
common law
the body of law based on custom, usage, and court decisions
community association management
provides a team of property managers, accounting staff, office staff, and property consultants to manage property.
community property
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 us states; the system was unknown under english common law
community reinvestment act of 1977 (CRA)
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
comparables
properties used in an appraisal report that are substantially equivalent to the subject property
comparative market analysis (CMA)
a comparison of the prices of recently sold homes that are similar to a listing seller’s home in terms of location, style, and amenities.
competent party
a person who has the capacity to be engaged in a legal contract; being of sound mind and body
competition
the appraisal principle stating that excess profits generate competition
comprehensive environmental response, compensation, and liability act (CERCLA)
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. also called Superfund
comprehensive loss underwriting exchange (CLUE)
a database of consumer claims history that allows insurance companies to access prior claims information in the underwriting and rating process
comprehensive plan
master plan
computerized loan origination (CLO)
an electronic network for handling loan applications through remote computer terminals linked to various lenders’ computers
conciliation
a form of alternative dispute resolution in which a conciliator meets with each of the parties separately to help them settle their differences voluntarily, without the formality of a hearing or trial
condemnation
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.
conditional-use permit
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
condominium
the absolute ownership of a unit in a multiunit building based on a legal description of the airspace the unit actually occupies, or a separate dwelling unit in a multiunit development, plus an undivided interest in the ownership of the common elements in the building of development, which are owned jointly with the other condominium unit owners
confession of judgment clause
permits judgement to be entered against a debtor without the creditor’s having to institute legal proceedings
conformity
the appraisal principle holding that the greater the similarity among properties in an area, the better they will hold their value
consent
expressing or implying permission, approval, or agreements of an action or decision
consideration
1) that received by the grantor in exchange for the deed 2) something of value that induces a person to enter into a contract
construction loan
interim financing
constructive annexation
the combination of items into real property that are not fixed or fastened to the property
constructive eviction
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 notice
notice given to the world by recorded documents. all persons are charged with knowledge of such documents and their contents, whether or not they have actually examined them. possession of property is also considered constructive notice that the person in possession has an interest in the property
consumer
an individual who purchases goods or services that are not for resale
contingencies
provisions in a contract that require a certain act to be done or a certain event to occur before the contract becomes binding
contract
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 broker
nonagent
contribution
the appraisal principal 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
controlled business arrangement
an arrangement that offers consumers a package of services (E.g., a real estate firm, title insurance company, mortgage broker, and home inspection company)
conventional loan
a loan that requires no federally sponsored insurance or guarantee
conversion
the illegal use of money received on behalf of the principal
conveyance
a term used to refer to any document that transfers title to real property. the term is also used in describing the act of transferring
cooperating broker
listing broker
cooperative
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
co-ownership
title ownership held by two or more persons
corporation
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
corrective maintenance
correction of problems after they have occurred
cost
the total amount of money incurred for products or services
cost approach
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 recover
an Internal Revenue Service term for depreciation
counteroffer
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
covenant
a written agreement between two or more parties in which a party or parties pledge to perform or not perform specified acts with regard to property; usually found in such real estate documents as deeds, mortgages, leases, and contracts for deed
covenant of quiet enjoyment
the covenant implied by law by which a landlord guarantees that a tenant may take possession of leased premises and that the landlord will not interfere in the tenant’s possession or use of the property
covenants, conditions, nad restrictions (CC&Rs)
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
credit
on a closing statement, an amount entered in a person’s favor - either an amount the party has paid or an amount for which the party must be reimbursed
curtesy
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 curtesy
customer
the third party or nonrepresented consumer for whom some level of service is provided
datum
a horizontal plane from which heights and depths are measured
debit
on a closing statement, an amount charged; that is, an amount that the debited party must pay
debt to income (DTI)
information about an applicant’s gross income and total debt that lenders generally look at as a percentage to determine qualification for a loan
decedent
a person who has died
deed
a written instrument that, when executed and delivered, conveys title to or an interest in real estate
deed in lieu of foreclosure
a deed given by the mortgagor to the mortgagee when the mortgagor is in default under the terms of the mortgage. if accepted by the mortgagee, this is a way for the mortgagor to avoid foreclosure
deed in trust
an instrument that grants a trustee under a land trust full power to sell, mortgage, and subdivide a parcel of real estate. the beneficiary controls the trustee’s use of these powers under the provisions of the trust agreement
deed of reconveyance
a document that a trustee uses to transfer the title back to the trustor (borrower) when the note is repaid
deed of trust
trust deed
deed of trust lien
trust deed lien
deed restrictions
clauses in a deed limiting the future uses of the property. deed restrictions may impose a vast variety of limitations and conditions - for example, they may limit the density of buildings, dictate the types of structures that can be erected, or prevent buildings from being used for specific purposes or even from being used at all
default
the nonperformance of a duty, whether arising under a contract or otherwise; failure to meet an obligation when due
defeasance clause
a clause used in leases and mortgages that cancels a specified right upon the occurrence of a certain condition, such as cancellation of a mortgage upon repayment of the mortgage loan
defeasible fee estate
an estate in which the holder has a fee simple title that may be divested upon the occurrence or nonoccurrence of a specified event. There are two categories of defeasible fee estates: fee simple on condition precedent (fee simple determinable) and fee simple on condition subsequent
deficiency judgment
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, a deficiency judgment cannot be sought when the mortgage debt was used to purchase, and is secured by, the borrower’s principal residence
delinquent taxes
taxes that are unpaid and past due
delivery and acceptance
when the title to property is delivered by the grantor and accepted by the grantee
demand
the amount of goods people are willing and able to buy at a given price; often coupled with supply
demographics
the study and description of a population
denominator
the number written below the line in a fraction
density zoning
zoning ordinances that restrict the maximum average number of housing units per acre that may be built within a particular area, generally a subdivision
department of housing and urban development (HUD)
federal agency that has established rules and regulations that further interpret the practices affected by federal law; for example, HUD distributes an equal housing opportunity poster
depreciation
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.
descent
acquisition of an estate by inheritance in which an heir succeeds to the property by operation of law
designated agency
a process that accommodates an in-house sale in which two different agents are involved. the broker designates one agent to represent the seller and one agent to represent the buyer
designated agent
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
determinable fee estate
a fee simple estate providing that the property returns to the original grantor or heirs when a specified condition occurs, indicating that the property is no longer being used for the purpose prescribed
developer
one who attempts to put land to its most profitable use through the construction of improvements
development
the construction of improvements that benefit land
devise
a transfer of real property by will. the decedent is the devisor, and the recipient is the devisee
discharge
the act of terminating a contract or agreement; this may be done when it has been completely performed for by another party’s breach or default
disclaimer
a statement indicating no legal responsibility for information; no warranties or representations have been made
disclosure
relevant information or facts that are known or should have been known
discount point
a unit of measurement used for various loan charges; one point equals 1% of the amount of the loan
discount rate
the interest rate set by the federal reserve that member banks are charged when they borrow money through the fed
divisor
a number or quantity divided into another
do not call registry
a national registry, managed by the federal trade commission, that lists the phone numbers of consumers who have indicated their preference to limit the telemarketing calls they receive
dominant tenement
a property that includes in its ownership the appurtenant right to use an easement over another person’s property for a specific purpose
dower
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
dual agency
representing both parties to a transaction. this is unethical unless both parties agree to it, and it is illegal in some states.
due-on-sale clause
a provision in the mortgage stating that the entire balance of the note is immediately due and payable if the mortgagor transfers (sells) the property
duress
unlawful constraint or action exercised upon a person whereby the person is forced to perform an act against her will. a contract entered into under duress is voidable
dwelling
any building or part of a building designed for occupancy as a residence by one or more families
earnest money
money deposited by a buyer under the terms of a contract, to be forfeited if the buyer defaults but to be applied to the purchase price if the sale is closed
