modern real estate book vocabularyy Flashcards
easement
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 appurtenant
an easement that follows along with the land
easement by implication
an easement that occurs when a party’s actions reflect the intention to create an easement
easement by necessity
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 prescription
an easement acquired by open, notorious, continuous, hostile and adverse use of the property for the period of time prescribed by state law
easement in gross
an easement that is not created for the benefit of any land owned by the owner of the easement but that attaches personally to the easement owner. for example, a right granted by a property owner to a friend to use a portion of the property for the rest of the friend’s life would be an easement in gross
economic life
the number of years during which an improvement will add value to land
electronic contracting
a process of integrating information electronically in a real estate transaction between clients, lender, and title and closing agents
Electronic Signatures in Global and National Commerce Act (E-Sign)
an act that makes contracts (including signature) and records legally enforceable regardless of the medium in which they are created
emblements
growing crops, such as corn, that are produced annually through labor and industry; also called fructus industriales
eminent domain
the right of a government or municipal quasi-public body to acquire property for public use through a court action called condemnation, in which the court decides that the use is a public use and determines the compensation to be paid to the owner
employee
for tax purposes, someone who works as a direct employee of an employer and has employee status. the employer is obligated to withhold income taxes and social security taxes from the compensation of employees. see also independent contractor
employment agreement
employment contract
employment contract
a document evidencing formal employment between employer and employee or between principal and agent or representative. in the real estate business, this generally takes the form of the agreement between broker and sales associate, client representation agreement (including a listing agreement or buyer representation agreement), or property management agreement
enabling acts
state legislation that confers zoning and other powers on municipal governments
encapsulation
a method of controlling environmental contamination by sealing off a dangerous substance, such as asbestos
encroachment
a building or some portion of it - a wall or fence, for instance - that extends beyond the land of the owner and illegally intrudes on the land of an adjoining owner or public street or alley
encumbrance
anything - such as a mortgage, tax, or judgment lien; an easement; a restriction on the use of the land; or an outstanding dower right - that may diminish the value or use and enjoyment of a property
enforceable contract
a contract that meets all the elements of a valid contract, including compliance with any applicable statute of frauds or other law that requires it to be in writing and signed by the parties
environmental impact statement (EIS)
a statment that details the impact a project will have on the environment
environmental site assessment (ESA)
an evaluation of property to show that due care was exercised in the determination of environmental impairments
equal credit opportunity act (ECOA)
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
equalization
the raising or lowering of assessed values for tax purposes in a particular county or taxing district to make them equal to assessments in other counties or districts
equalization factor
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
equitable lien
satutory lien
equitable right of redemption
the right of a defaulted property owner to recover the property before its sale by paying the appropriate fees and charges
equitable title
the interest held by a vendee (buyer) under a contract for deed or an installment contract in which title is not immediately transferred; the equitable right to obtain absolute ownership to property when legal title is held in another’s name
equity
the interest or value that an owner has in property over and above any indebtedness
equity buildup
that portion of the loan payment directed toward the principal rather than the interest, plus any gain in property value due to appreciation
erosion
the gradual and sometimes imperceptible wearing away of the land by natural forces, such as wind, rain, and flowing water
escheat
the reversion of property to the state or county, as provided by state law, in cases in which a decedent dies intestate without heirs capable of inheriting, or when the property is abandoned
escrow
the closing of a transaction through a third party called an escrow agent, or escrowee, who receives certain funds and documents to be delivered upon the performance of conditions outlined in the escrow instructions
escrow account
the trust account established by a real estate professional under the provisions of the license law for the purpose of holding funds on behalf of the real estate professional’s principal or some other person until the consummation or termination of a transaction; trust account established by the escrow agent to hold funds pending distribution at the closing of a transaction
escrow closing
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 contract
an agreement between a buyer, a seller, and an escrow holder setting forth rights and responsibilities of each
escrow instructions
a document that sets forth the duties of the escrow agent, as well as the requirements and obligations of the parties, when a transaction is closed through an escrow
estate (tenancy) at sufferance
the tenancy of a lessee who lawfully comes into possession of a landlord’s real estate but who continues to occupy the premises improperly after the lease rights have expired
estate (Tenancy) at will
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 for term
estate for years
estate (tenancy) for years
an interest for a certain exact period of time in property leased for a specified consideration
estate (tenancy) from period to period
an interest in leased property that continues from period to period - week to week, month to month, or year to year
estate in land
the degree, quantity, nature, and extent of interest a person has in real property
estate tax
federal tax on a decedent’s real nad personal property
estoppel
method of creating an agency relationship in which someone states incorrectly that another person is his agent and a third person relies on that representation
estoppel certificate
a document in which a borrower certifies the amount owed on a mortgage loan and the rate of interest
ethics
the system of moral principles and rules that becomes the standard for professional conduct
eviction
a legal process to oust a person from possession of real estate
evidence of title
proof of ownership of property; commonly a certificate of title, an abstract of title with lawyer’s opinion, title insurance, or a torrens registration certicate
exception
the exclusion of a part of the property conveyed
exchange
a transaction in which all or part of the consideration is the transfer of like-kind property (e.g., real estate for real estate)
exclusive agency listing
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 buyer representation agreement
agreement in which the buyer works with only one broker, although the broker is free to represent other buyer clients
exclusive right-to-sell listing
a listing contract under which the owner appoints a real estate professional as his exclusive agent for a designated period of time to sell the specified property on the owner’s stated terms and agrees to pay the real estate professional a commission when the property is sold, whether by the real estate professional, the owner, or another real estate professional
executed listing
a contract in which all parties have fulfilled their promises and thus performed the contract
execution
the signing and delivery of an instrument. also, a legal order directing an official to enforce a judgment against the property of a debtor
executor
an appointed person who carries out the directions of a will. a woman might be referred to as executrix, although executor is the term most commonly used to refer to either a man or a woman
executory contract
a contract under which something remains to be done by one or more of the parties
express agency
an agency relationship based on a formal agreement between the parties
express agreement
an oral or written contract in which the parties state the contract’s terms and express their intentions in words
express contract
express agreement
external depreciation
reduction in a property’s value caused by outside factors (i.e., those that are off the property)
external obsolescence
incurable depreciation caused by factors not on the subject property, such as environmental or economic factors
facilitator
nonagent
fair housing act
the federal law that prohibits discrimination in housing based on race, color, religion, sex, disability, familial status, and national origin
fair housing amendments act of 1988
expansion of the fair housing act to include families with children and those with physical or mental disabilities
familial status
one or more individuals under age 18 living with a parent or guardian; also included a woman who is pregnant and anyone who is in the process of assuming custody of a child under age 18
Fannie Mae
a government-supervised enterprise established to purchase any kind of mortgage loans in the secondary mortgage market from the primary lenders
Farmer Mac
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 us department of agriculture (USDA)
federal deposit insurance corporation ( FDIC )
an independent federal agency established by congress to exaxamine and supervise financial institutions, manage receiverships, and insure deposits (currently up to $250,000 per depositor per financial institution)
federal emergency management agency (FEMA)
a federal agency that is responsible for assisting the nation in preparing for, protecting against, responding to, and recovering from hazards
federal funds rate
the rate recommended by the federal reserve for the member banks to charge each other on short-term loans. these rates form the basis on which the banks determine the percentage rate of interest they will charge their loan customers
federal home loan mortgage corporation
freddie mac
federal national mortgage association
fannie mae
federal reserve system (fed)
the country’s central banking system, which establishes the nation’s monetary policy by regulating the supply of money and interest rates
fee-for-service
arrangement by which a consumer asks a real estate professional to perform specific real estate services for an agreed-upon fee
fee simple
the highest interest in real estate recognized by the law; the holder is entitled to all rights to the property
fee simple absolute
the maximum possible estate or right of ownership of real property, continuing forever
fee simple defeasible
defeasible fee estate
fee simple determinable
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 subject to a condition subsequent
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
feudal system
a system of ownership usually associated with precolonial England, in which the king or other sovereign is the source of all rights. the rights. the right to possess real property was granted by the sovereign to an individual as a life estate only. upon the death of the individual, title passed back to the sovereign, not to the decedent’s heirs
FHA-insured loan
a loan insured by the federal housing administration and made by an approved lender in accordance with fha regulations
fiduciary
one in whom trust and confidence is placed; a reference to a real estate professional employed under the terms of a listing contract or buyer representation agreement
fiduciary relationship
a relationship of trust and confidence, as between trustee and beneficiary, attorney and client, or principal and agent.
financial institutions reform, recovery, and enforcement act (FIRREA)
this act restructured the savings and loan association regulatory system; enacted in response to the savings and loan crisis of the 1980s
financing
the business of providing the funds that make real estate transactions possible
first mortgage
a mortgage that has priority over all other mortgages
fiscal policy
the government’s policy in regard to taxation and spending programs. the balance between these two areas determined the amount of money the government will withdraw from or feed into the economy, which can counter economic peaks and slumps
fixture
an item of personal property that has been converted to real property by being permanently affixed to the realty
forcible detainer
removal of a tenant from a rental property by the landlord if the tenant has breached one of the terms of the lease agreement, in compliance with statuary law.
foreclosure
a legal procedure whereby property used as security for a debit 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.
formal will/ witnessed will
a document having written instructions of property disbursements upon the death of the owner. the document must be signed and witnessed
formaldehyde
an air pollutant that is a colorless chemical used to manufacture building materials and many household products, such as particleboard, hardwood plywood paneling, and urea-formaldehyde foam insulation
fraud
deception intended to cause a person to give up property or a lawful right
freddie mac
a government-supervised enterprise established to purchase primarily conventional mortgage loans in the secondary mortgage market
freehold estate
an estate in land in which ownership is for an indeterminate length of time, in contract to a lease-hold estate
front footage
the measurement of a parcel of land by the number of feet of street or road frontage
frontage
the length of property along the street or waterfront
fully amortized loan
a loan consisting of equal, regular payments satisfying the total payment of principal and interest by the due date
functional obsolescence
a loss of value to an improvement to real estate arising from problems of design or utility
future interest
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
gap
a defect in the chain of title of a particular parcel of real estate; a missing document or conveyance that raises doubt as to the present ownership of the land
general agent
one who is authorized by a principal to represent the principal in a specific range of matters
general lien
the right of a creditor to have all of a debtor’s property - both real and personal - sold to satisfy a debt
general partnership
partnership
general real estate tax
a tax that is made up of the taxes levied on the real estate by government agencies and municipalities
general warranty deed
a deed in which the grantor fully warrants good, clear title to the premises. used in most real estate deed transfers, a general warranty deed offers the greatest protection of any deed.
ginnie mae
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
good and indefeasible title
a title that cannot be annulled or rendered void
good faith estimate (GFE)
an estimate of all closing fees that was formerly provided to a borrower within three days of the loan application as was required by the real estate settlement procedures act (respa)
government national mortgage association
ginnie mae
government-sponsored enterprises (GSEs)
organizations created by the federal government (Fannie Mae, Freddie Mac, Farmer Mac, Ginnie Mae) to help increase loan opportunities for homebuyers
government survey system
retangular (government) survey system
graduated-payment mortgage (GPM)
a loan in which the monthly principal and interest payments increase by a certain percentage each year for a certain number of years and then level off for the remaining loan term
grantee
a person who receives a transfer of real property from a grantor
granting clause
words in a deed of reconveyance 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
grantor
the owner transferring title to or an interest in real property to a grantee
gross income multiplier (GIM)
a figure used as a multiplier of the gross annual income of a property to produce an estimate of the property’s value; usually used for commercial property
gross lease
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 gross leases
gross rent multiplier (GRM)
the figure used as a multiplier of the gross monthly income of a property to produce an estimate of the property’s value; usually used for single-family residential property
ground lease
a lease of land only, on which the tenant usually owns a building or is required to build as specified in the lease. such leases are usually long-term net leases; the tenantn’s rights and obligations continue until the lease expires or is terminated through default
groundwater
water that exists exists under the earth’s surface within the tiny spaces or crevices in geological formations
growing-equity mortgage
loan in which the monthly payments increase annually, with the increased amount being used to directly reduce the principal balance outstanding and thus shorten the overall term of the loan
habendum clause
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
habitability
a property that is suitable for living in or on
heir
one who might inherit or succeed to an interest in land under the state law of descent when the owner dies without leaving a valid will
highest and best use
the legally permitted and physically possible use of a property that would produce the greatest net income and, thereby, develop the highest value
holdover tenancy
a tenancy in which a lessee retains possession of leased property after the lease has expired nad the landlord, by continuing to accept rent, agrees to the tenant’s continued occupancy as definied by state law
holographic will
a will that is written, dated, and signed in the testator’s handwriting
home equity loan
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 inspection
a thorough visual survey of a property’s structure, systems, and site conditions conducted by a professional
Home Mortgage Disclosure Act
a federal law, implemented at its creation by Regulation C of the Federal Reserve, that requires lenders to annually disclose the number of loan applications and loans made in certain areas to avoid the practce of redlining. On July 21, 2011, the rule-making authority of the law was transferred to the Consumer Financial Protection Bureau.
homeowners insurance
insurance that covers a residential real estate owner against financial loss from fire, theft, public liability, and other common risks
homestead
land that is owned and occupied as the family home. in many states, a portion of the area or value of this land is protected or exempt from judgments for debts other than those secured by the property
Housing for Older Persons Act of 1995 (HOPA)
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
HUD-1
A form that was formerly used to itemize fees and services charged to a borrower and seller during a real estate transaction
hydraulic fracturing (fracking)
the process used to extract natural gas from the deep layers of rock in which it is embedded
hypothecation
to pledge property as security for an obligation or loan without giving up possession of it
immobility
the fact that property cannot be relocated to satisfy demand where supply is low, nor can buyers always relocate to areas with greater supply
implied agency
if the actions of the parties imply that they have mutually consented to an agency relationship, an implied agency relationship is formed
implied agreement
a contract under which the agreement of the parties is demonstrated by their acts and conduct
implied contract
implied agreement
implied warranty of habitability
a theory in landlord/tenant law in which the landlord renting residential property implies that the property is habitable and fit for its intended use
impound accounts
an account that the mortgage lender may require a borrower to have to accumulate funds to pay future real estate taxes and insurance premiums
improvement
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 (e.g., a curb, sidewalk, street, or sewer)
income approach
the process of estimating the value of an income-producing property through capitalization of the annual net income expected to be produced by the property during its remaining useful life
income property
property held for current income as well as a potential profit upon its sale
incorporeal right
a nonpossessory right in real estate (e.g., an easement or a right-of-way)
independent contractor
someone who is retained to perform a certain act but who is subject to the control and direction of another only as to the end result and not as to the way in which the act is performed. unlike an employee, an independent contractor pays for all expenses and social security and income taxes and received no employee benefits. most real estate sales associates are independent contractors, meeting the internal revenue service definition for a qualified real estate agent
index
an objective economic indicator to which the interest rate for an adjustable-rate mortgage is tied
inflation
the gradual reduction of the purchasing power of the dollar, usually related directly to increases in the money supply by the federal government
inheritance taxes
state-imposed taxes on a decedent’s real and personal property
installment sale
a transaction in which the sales price is paid in two or more installments over two or more years. if the sale meets certain requirements, a taxpayer can postpone reporting such income until future years by paying tax each year only on the proceeds received that year
interest
a charge made by a lender for the use of money
interest-only loan
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
interim financing
a short-term loan usually made during the construction phase of a building project (often referred to as a construction loan)
intermediary
nonagent
internal revenue service tax lien
a lien charged by the internal revenue service for nonpayment of income taxes
internet data exchange (IDX) policy
policy that allows all multiple listing service (MLS) members to restrict internet access to MLS property listings
interstate land sales full disclosure act (ILSA)
a federal law that regulates the sale of certain real estate in interstate commerce
intestate
the condition of a property owner who dies without leaving a valid will. title to the property will pass to the decedent’s heirs, as provided in the state law of descent
intrinsic value
an appraisal term referring to the value of a property unaffected by a person’s personal preferences
inverse condemnation
an action brought by a property owner seeking just compensation for diminished use and value of land because of an adjacent property’s public use
investment
money directed toward the purchase, improvement, and development of asset in expectation of income or profits
involuntary alienation
alienation
involuntary lien
a lien placed on property without the consent of the property owner
joint tenancy
ownership of real estate between two or more parties who have been named in one conveyance as joint tenants. upon the death of a joint tenant, the decedent’s interest usually passes to the surviving joint tenant or tenants by the right or survivorship
