Principles And Practices Flashcards
1
Q
A life estate “for another’s life”, where the measuring life is someone other than the life tenant
A
Life Estate Pur Autre Vie
2
Q
Someone who owns a life estate; the person entitled to possession of the property during the measuring life.
A
Life Tenant
3
Q
A business that serves as an intermediary between buyers and sellers and:or lessees and lessors of real estate
A
Brokerage
4
Q
A type of freehold estate conveying ownership interest that comes with a condition. Also called QUALIFIED FEE
A
Defeasible Fee
5
Q
A person, other than the grantor, who has a future interest in the fee estate when a life estate ends. A remainder interest is inheritable.
A
Remainderman
6
Q
A person whose life determines the length of a life estate.
A
Measuring Life
7
Q
Generally speaking, a person who, for a fee, sells, lists, leases, exchanges, negotiates, or otherwise deals in the real estate of others or represents publicly that he or she does so.
A
Broker
8
Q
Possession of property by a tenant who once has a valid lease, but stays on after the lease expires without the landlord’s permission. Also called ESTATE AT SUFFERANCE
A
Tenancy at Sufferance
9
Q
Characteristic of real property that says there is a limited supply of real estate.
A
Scarcity
10
Q
The temporary interest that an owner gives to a tenant (lessee) that includes the right of possession and quiet enjoyment, without title. Also called LESS-THAN-FREEHOLD ESTATE.
A
Leasehold Estate
11
Q
The surface of the earth, and everything under the ground to the center of the earth, and the airspace above as far as can reasonably be used.
A
Land
12
Q
Someone in lawful possession of real property, especially, someone who has leased property from the owner.
A
Tenant
13
Q
A leasehold estate that continues for successive periods of equal length (such as from week to week or month to month), until terminated by proper notice from either party. Also called PERIODIC ESTATE, ESTATE FROK YEAR TO YEAR, or PERIOD TO PERIOD TENANCY
A
Periodic Tenancy
14
Q
When a tenant is in possession with the owner’s permission, but with no definite lease term and no rent being paid ( or rent is not paid on a regular basis) ; e.g., a landlord lets a holdover tenant remain on the premises without paying rent until the landlord finds a new tenant. Also called ESTATE AT WILL
A
Tenancy at Will
15
Q
Generally speaking, a real estate licensee who is associated with a licensed broker and as such may perform most of the acts of a broker can on behalf of the broker. Also called SALES ASSOCIATE.
A
Salesperson
16
Q
Any real estate licensee who is a member of the National Association of REALTORS (NAR) and his or her affiliated state/local boards. Only members may use the term REALTOR as it’s a registered trademark of NAR
A
Realtor
17
Q
A possessory interest in real property of uncertain (and often unlimited) duration; an ownership estate in real property; either a fee simple or life estate. The holder of freehold estate has title.
A
Freehold Estate
18
Q
Water rights of landowners whose land touches a commercial lake, sea, or ocean.
A
Litttoral Rights
19
Q
Water rights of landowners whose land touches a natural body of water such as a stream, a river, or an inland lake.
A
Riparian Rights
20
Q
A person who leases property to another. Also called a LANDLORD
A
Lessor
21
Q
A person who leases property. Also called a TENANT.
A
Lessee
22
Q
A leasehold estate set to last for a definite period (e.g., one week, three years), after which it automatically terminates. Also called TERM TENANCY
A
Estate for Years
23
Q
An interest in property that entitles the holder to possess and occupy the property, now or in the future; an estate, which may be either a freehold or leasehold
A
Possessory Interest
24
Q
A process through which fixtures are detached from the land and so revert back to personal property.
A
Severance
25
A lessee who remains in possession of property after the lease has expired; a tenant who refuses to surrender possession of property at the tenancy’s end.
Holdover Tenant
26
The person who has a future estate interest in reversion
Reversioner
27
Personal property associated with real property in such a way that the law treats it as a fixture, even though it is not physically attached to the real property.
Annexation, Constructive
28
A statutory or legal life estate recognized in some states that protects the estate belonging to a deceased person for the use of a surviving spouse and minor children.
Homestead
29
A possessory interest in real property; either a freehold estate or a leasehold estate.
Estate
30
Water rights allocated by government permit accourding to an appropriation system. It is not necessary to own property beside the body of water in order to apply for an appropriation permit
Appropriative Rights
31
The interest rate that people or businesses must pay to use another’s money for their own purposes.
Cost of Money
32
Under common law, a person who contracts to do a job for another, but maintains control over how the task is carried out, rather than following detailed instructions.
Independent Contractor
33
An increase in the cost of goods or services, or too many people wanting too few goods
Inflation
34
A person licensed under state law to practice real estate.
Licensee
35
General swings in real estate activity, resulting in increasing or decreasing activity and property values, during different phases of the cycle.
Real Estate Cycles
36
A document used to transfer ownership of personal property from one person to another.
Bill of Sale
37
A crop that is planted and cultivated through someone’s labor and industry. Emblements are considered to be personal property. Also called FRUCTUS INDUSRIALES
Emblement
38
A physical object intruding onto neighboring property, often due to a mistake regarding the boundary.
Encroachment
39
A physical object intruding into neighboring property, often due to a mistake regarding the boundary
Encroachment
40
Naturally occurring plants (“fruits of nature”) generally considered part of real property. Also called NATURAL ATTACHMENTS
Fructus Naturales
41
A person with easement rights on another’s property; either the owner of a dominant tenement, or someone who has an easement in gross
Dominant Tenant
42
Property that receives
Dominant Tenement
43
The non-ownership right acquired by a person to use the land of another for a specific purpose. An ___________ is irrevocable— if it is in writing and recorded in the public records — and creates an interest in the property.
Easement
44
The right acquired by the owner of one parcel of land to use another’s adjacent land for a specific purpose. There must be two tracts of land; one becomes the dominant tenement (it benefits from the easement), and the other becomes the servient tenement.
Easement Appurtenant
45
An easement created by open and notorious, hostile and adverse use of another persons land for a specific period of time determined by state law. _________ use does not have to be exclusive (the owner may be using the property too), and the user does not acquire title to the property.
Easement by Prescription
46
An easement that benefits a person or company, rather than benefiting another parcel of land
Easement in Gross
47
Any claim, Lien, charge or liability that affects or limits the fee simple title to real property
Encumbrance
48
A lien against all property of a debtor, instead of a particular piece of property
General Lien
49
A lien that arises by operation of law, without the consent of the property owner
Involuntary Lien
50
A recorded claim against another for a wrongful act, as ordered by a court (often for money owed). The result of this type of lien can be the forced public sale of real estate.
Judgement Lien
51
Revocable, non-assignable permission to enter another persons land for a stated purpose.
License
52
A non-possessory interest in property, giving a lien holder the right to foreclose if the owner does not pay a debt owed the lien holder
Lien
53
A record notice stating that there is a lawsuit pending that may affect title to the defendants real estate.
Lis Pendens
54
A specific lien claimed by someone who performed work on the property ( construction, repairs, or improvements) and has not received payment.
Mechanics Lien
55
Rights, conditions or restrictions that are associated with the property as opposed to the individual who owns the property. They pass from owner to owner when the land is conveyed; an appurtenance.
Runs with the Land
56
The owner of a ___________ that is, someone whose property is burdened by an easement
Servient Tenant
57
Property burdened by an easement; the owner of the _________ is required to allow someone who has an easement (the dominant tenant) to use his property
Servient Tenement
58
A tax levied only against properties that benefit from a public improvement. (E.g., a sewer or street light) to cover the cost of the improvement; creates a _________ lien (an involuntary, specific lien).
Special Assessment
59
A person with easement rights on another’s property; either the owner of a dominant tenement or someone who has an easement in gross
Dominant Tenant
60
Property that receives the benefit of an appurtenant easement
Dominant Tenement
61
A lien placed against a property with the consent of the owner e.g., a mortgage or deed of trust
Voluntary Lien
62
Lien that attaches only to a particular parcel of property
Specific Lien
63
Successive periods of use or possession by more than one person that are added together to equal the number of years required under state law for easement by prescription or adverse possession
Tacking
64
The land and improvements in a condominium or cooperative that all residents use and own as tenants in common, such as the parking lot, hallways and recreational facilities.
Common Areas
65
Each co-owner acquiring title through the same instrument (deed, will or court order)
Unity of Title
66
Each co-owner acquiring title at the same time.
Unity of Time
67
Each co-owner being equally entitled to possession of the entire property, because the ownership interest are undivided.
Unity of Possession
68
Each co-owner having an equal interest )equal share of ownership) in a piece of property.
Unity of Interest
69
A co-tenants interest, giving him the right to possession of the whole property, rather than a particular section of it.
Undivided Interest
70
A form of co-ownership in which two or more persons each have an undivided interest in the entire property (unity of possession), but no right of survivorship
Tenancy in Common
71
A form of property co-ownership by legally married spouses, in which each spouse has an undivided one half interest without the others consent.
Tenancy by Entirety
72
A business owner and managed by one person (or for tax purposes, legally married spouses) who is personally liable for all business debts. It could be organized under a fictitious or assumed name.
Sole Proprietorship
73
A characteristic of statutory survivorship tenancy, joint tenancy and tenancy by the entirety; surviving co-tenants automatically acquire a deceased co-tenants interest in the property
Right of Survivorship
74
A company that owns and often operates income producing real estate; it is organized as a trust with the investors as the beneficiaries.
Real Estate Investment Trust (REIT)
75
76
An exclusive, longer term lease given to a person who lived in and owns stock in a cooperative
Proprietary lease.
77
Ownership by a sigg no or individual person or legal entity as opposed to co-ownership. Also called SOLE OWNERSHIP or SEPARATE PROPERTY
Ownership in severalty
78
Areas in a condominium or cooperative owned by all but used by only one owner (e.g., a balcony or designated parking space)
Limited Common Areas
79
A brief, chronological summary of the recorded documents affecting title to a particular parcel of real property
Abstract of Title
80
A gradual addition to dry land by the forces of nature, as when the tide deposits waterborne sediment onto shoreline property.
Accretion
81
Recognition of validity; a document signer's declaration to an authorized official (usually a notary public) that he is signing voluntarily.
Acknowledgment
82
Actual knowledge of a fact, rather than knowledge imputed or inferred by law
Actual Notice
83
The open, notorious, hostile, adverse, exclusive, and continuous possession of another persons property for a number of years, after which time the adverse possessor may obtain title to the property
Adverse Possession
84
The transfer of ownership or an interest in property from one person to another by any means
Alienation
85
Solid material deposited along a shore by accretion. Also called ALLUVIUM
Alluvion
86
A natural process in which land is removed from one persons property and deposited onto another’s. This happens very suddenly as in a flash flood
Avulsion
87
The chain of deeds and other documents transferring title to a piece of property from one owner to the next as disclosed in the public record
Chain of Title
88
Taking private property for public use, through the governments power of eminent domain. Also called APPROPRIATION.
this is the action. Eminent domain is the right
Condemnation
89
Knowledge of a fact imputed to a person by law. A person is held to have constructive notice of something when he or she should have known it, even if he or she didn’t know it. Everyone is considered to have constructive notice of the contents of recorded documents, since everyone is expected to protect their interests by searching the public record
Constructive Notice
90
A guarantee that a buyer has the right to exclusive, undisturbed possession of an estate, and the right to be undisturbed by the previous owner or anyone else claiming an interest in the property
Covenant of Quiet Enjoyment
91
A written instrument transferring the grantors ownership of or interest in, real property
Deed
92
A requirement for the legal transfer of property through a deed. Delivery refers to the grantors intention to transfer the property’s title and signing a deed; acceptance refers to the grantees receiving the deed while the grantor is alive.
Delivery and Acceptance
93
To transfer real property by will; real property transferred in a will
Devise
94
The governments constitutional power to take private property for public use, as long as the owner is paid just compensation. (Condemnation is the action, eminent domain is the right.)
Eminent Domain
95
Any present right to acquire legal title to property
Equitable Title
96
The reversion of property to the state (or in some states the county) after a person dies without leaving a valid will or having any heirs.
Escheat
97
A deed in which the grantor warrants the title against any and all defects that might have arisen before or during his or her period of ownership. Also called STANDARD WARRANTY DEED or SIMPLE WARRANTY DEED
General Warranty Deed
98
Person receiving a grant of real property
Grantee
99
A person who conveys his interest in real property
Grantor
100
A clause in a deed, usually beginning with “to have and to hold” that describes the type of estate granted
Habendum Clause
101
When circumstances should have alerted someone to a possible problem prompting further investigation, a person may be held to have had notice of the problem even if he or she does not have actual knowledge of it.
Inquiry Notice
102
The state of dying without making a will, causing the descendent estate to pass on according to the state laws of descent and distribution
Intestate
103
When title to property is transferred during the owners lifetime without his consent
Involuntary Alienation
104
A deed in which the grantor warrants title only against defects arising during the time he owned the property and not against defects arising before his ownership. Also called SPECIAL WARRANTY DEED
Limited Warranty Deed
105
A title that is free and clear from undisclosed encumbrances or other defects that would expose a purchaser to litigation or impede a purchasers ability to enjoy the property or to later sell the property; required to be delivered by the seller to the purchaser at settlement.
Also called MERCHANTABLE TITLE
Marketable Title
106
A deed that grants any interest in property that the grantor may have without making any promises, including the promise that the grantor has any interest in the property being conveyed; often used to clear clouds on title.
Quitclaim Deed
107
When a body of water gradually recedes, exposing land that was previously underwater
Reliction
108
A lawsuit to determine who has title to a piece of property, or to remove a cloud from the title. Also called QUIET TITLE ACTION
Suit to Quiet Title
109
Refers to someone who has died and left a will
Testate
110
The actual, lawful ownership interest in a property; title is not a document but a concept.
Title
111
Insurance policy that protects lenders and homeowners against losses resulting from undiscovered title defects and encumbrances.
Title Insurance
112
A measure of land area that is equal to 43,560 square feet. One square mile contains 640 acres.
Acre
113
Length x width x depth = cubic feet
Divide cubic feet by 27 to find cubic yards
Cubic Feet
114
The dimension across the access side of a parcel of land. The access could be a road, railroad tracks, or water. When referring to lot size, frontage is the first number. Also called FRONT FOOT
Frontage
115
Legal description for land referencing principal meridians and baselines designated throughout the country. Also called RECTANGULAR SURVEY SYSTEM
Government Survey System
116
Residential space that is finished, heated and above grade. Garages, finished basements and storage areas do not count in GLA
Gross Living Area
117
Precise description of a specific piece of property; the most common systems are lot and block, metes and bounds, rectangular (or government) survey
Legal Description
118
A parcel of land; a parcel in a subdivision
Lot
119
The type of legal description used for platted property. The description states only the property’s lot number and block number in a particular subdivision. To find out the exact location of the property’s boundaries, one can consult the plat map for that subdivision at the county recorders office.
Lot and Block System
120
A legal description that starts at an easily identifiable point of beginning (POB), then describes the property’s boundaries in term of courses (compass directions) and distances, ultimately returning to the point of beginning.
Metes and Bounds System
121
A detailed survey map of a subdivision, recorded in the county where the land is located. Subdivided property is often called platted property. Also called a PLAT MAP
Plat
122
Land that has been subdivided into blocks and lots
Platted Property
123
North-south lines designated and named throughout the country for use with the government survey system. They are based off of the prime meridian, which is the line of longitude passing through the Royal Greenwich Observatory in England (0 degrees)
Principal Meridian
124
The six-mile distance between range lines in the rectangular survey system
Range
125
Part of a township, one mile by one mile square. Used for the rectangular survey system; one section equals 640 acres, 36 sections equal one township.
Section
126
Square division of land, six miles by six miles in the rectangular survey system. One township contains 36 sections
Township
127
128
A form of co-ownership in which the co-owners have equal undivided interests and the right of survivorship. Requires the unities of time, title, interest and possession
Joint Tenancy
129
An association organized according to strict regulations, in which individuals purchase ownership shares; regarded by the law as an artificial person, separate from the individual shareholders
Corporation
130
Any form of ownership in which two or more people share title to a piece of property, holding undivided interests. Also called CO-TENANCY or CONCIRRENT OWNERSHIP
Co-ownership
131
A type of property ownership under which residents have the right to occupy a unit by purchasing stock shares in the corporation that owns the property
Cooperative
132
A property developed for co-ownership with each co-owner having a separate interest in an individual unit combined with an undivided interest in the common areas of the property and air space consisting of the area between the walls, floor and ceiling.
Condominium
133
134
In an agency relationship, the agents fiduciary duty to the principal to strictly account for all monies received.
Accounting
135
A relationship of trust created when one person (the principal) gives another person (the agent) the right to represent the principal in dealings with third parties.
Agency
136
A licensed broker who represents another (the principal) in a real estate transaction; a person authorized to represent the principal in dealings with third parties (clients or customers)
Agent
137
A person being represented by a licensee. Also called a PRINCIPAL
Client
138
The protection of the clients confidential information. This duty lasts even after the agency relationship has terminated
Confidentiality
139
A party to a transaction with whom a real estate licensee does not have a fiduciary duty or relationship, but with whom a licensee must be honest and fair
Customer
140
A contractual relationship between a broker and a client in which one or more licensees associated with the broker are appointed to represent the client in an in-house transaction. Also called SPLIT AGENCY
Designated Agency
141
A real estate licensees fiduciary obligation to reveal material facts or defects.
Diclosure
142
143
Governmental powers
Police power
Eminent domain
Taxation
Escheat
144
145
Real Property Doctrine. /Law
D- disposal
E- exclusion
E- enjoyment
P- possession
C- control
146
147
An agency relationship in which a licensee represents both buyer and seller (or both landlord and tenant) in the same transaction. Usually requires informed written consent from both parties.
Dual Agency
148
Actual consent to represent intentionally given by agreement — either oral or written — by a principal to an agent
Express Authority
149
A person in a position of trust, held by law to high standards of good faith and loyalty
Fiduciary
150
A person authorized to handle a principals affairs in one area or in specified areas.
General Agent
151
A fiduciary duty that requires a real estate licensee to put the principals interests above all others interests including her own
Loyalty
152
A truth that would change the individuals actions if it were known; in real estate this usually refers specifically to things wrong with the property itself
Material Fact
153
154
A fiduciary duty that requires a licensee to follow the legal instructions of the principal l, obey the parameters of the agency relationship and not stray beyond the scope of authority
Obedience
155
When someone who has been granted something or has accepted something later gives it up or rejects it; as when a broker withdraws from an agency relationship with a client
Renunciation
156
When someone who granted or offered something withdraws it; as when a principal withdraws the authority granted to an agent or an offer or withdraws the offer
Revocation
157
The conduct of a fiduciary that consists of taking advantage of this position in a transaction and acting in his own interests rather than in the interests of his clients
Self Dealing
158
An agent with limited authority to do a specific thing or conduct a specific transaction. Also called LIMITED AGENT
Special Agent
159
A real estate licensee who acts as a representative of his or her brokers client, providing the same duties and responsibilities of that broker.
Subagent
160
A brokerage relationship in which a licensee provides only administrative services to buyers and sellers to assist in a transaction, remaining neutral and having no fiduciary responsibility toward either party. Also called Facilitational Brokerage, Transaction Broker or non agency
Transactional Brokerage
161
A fee paid from one broker to another broker for directing a buyer or seller to a real estate agent in that brokerage
Referral Fee
162
An uninterrupted series of events leading to the creation of a contract; the party whose efforts resulted in the creation of a binding contract for sale; ie, a broker whose efforts resulted in an executed contract, thus entitling her to a commission.
Procuring cause
163
A non exclusive listing between a seller and as many brokers as he chooses. If the property sells, a broker is entitled to a commission only if she is the procuring cause of the sale.
Open Listing
164
A compensation strategy in which the sellers sets a net amount that is acceptable for the property ; if the actual selling price exceeds that amount, the broker is entitled to keep the excess as commission. Net listings are illegal in many states and discouraged in others
Net Listing
165
166
An agency contract between a seller and a broker that entitles the broker to a commission if anyone, including the seller, finds a buyer for the property during the listing term.
Exclusive Right to Sell Listing
167
An agency contract between a seller and a broker that entitles the broker to a commission if anyone other than the seller finds a buyer for the property during the listing term
Exclusive Agency Listing
168
A written agency contract between a seller and a broker, stating the broker earns a commission for finding (or attempting to find) a buyer for the sellers real property. A listing is a personal services contract.
Listing Agreement
169
An agent who works with a listing agent to sell property in a real estate transaction; the selling agent who finds a buyer for the listed property. Also called COOPERATING BROKER
Cooperating Agent
170
Compensation paid to a broker for services in a real estate transaction; usually a percentage of the sales price. Commission is negotiable and should be clearly spelled out in a written brokerage agreement
Commission
171
172
173
Local laws that divide a city or county into different areas or zones. These zones determine how land can be used, subdivided, or improved along with the specific requirements for compliance.
Zoning Ordinance
174
An ecosystem where the land is permeated with water which either lies on or near the surface of the land; an environment where specialized plants, aquatic species and wildlife live
Wetlands
175
The actions of a life tenant who uses the property in a way that damages it or reduces its market value
Waste
176
A deed in which the grantor fully warrants good and clear title to the property and agrees to defend the premises against the lawful claims of third parties
Warranty Deed
177
When title to property is transferred voluntarily through a sale, gift, dedication or grant
Voluntary Alienation
178
A contract that one of the parties can end without liability because of a lack of legal capacity or other factor such as fraud or duress
Voidable Contract
179
A contract that isn’t enforceable because it lacks one or more of the requirements for contract formation or is otherwise defective.
Void Contract
180
The seller in a land contract
Vendor
181
The buyer in a land contract
Vendee
182
Permission granted to a property owner by the zoning authority allowing some deviation from strict compliance with the zoning law
Variance
183
Operating expense necessary to the property but dependent on the property’s occupancy level
Variable Expense
184
A binding, legally enforceable contract. It meets all of the legal requirements for contract formation
Valid Contract
185
Mortgage loan made by lenders to eligible veterans that is guaranteed by the Department of Veterans Affairs protecting the lender up to specified dollar amounts.
VA - Guaranteed Loan
186
Charging a higher interest rate than the law allows
Usury
187
Allows landowners to use their land in a way that is not permitted under current zoning laws such as commercial use in a residential zone.
Use Variance
188
A type of insulation that can be blown in or injected behind walls and other areas that are hard to access
Urea-Formaldehyde Foam Insulation (UFFI)
189
A potentially toxic chemical used in manufacturing building materials such as particleboard, plywood paneling, carpeting and insulation
Urea-Formaldehyde
190
A cost approach appraisal method for determining the cost of a building that estimates the cost of reproducing a building by looking at the unit cost of each of the component parts of the structure and adding all of these unit costs together
Unit-in-Place Method
191
A contract in which only one party is legally bound.
Unilateral Contract
192
A general set of laws adopted by most states with the purpose of providing uniformity and fairness in commercial transactions, including the sale and financing of personal property
Uniform Commercial Code (UCC)
193
A contract that a court would refuse to enforce. Some oral contracts or vaguely worded contracts could be deemed unenforceable.
Unenforceable Contract.
194
The process of evaluating and deciding whether to make a new loan and on what terms.
Underwriting
195
Individual who evaluated a loan application to determine its risk level for a lender or investor; final decision maker on a loan application
Underwriter
196
A receptacle, at least 10% is underground, used to store a variety of substances such as heating oil, gasoline, chemicals, and hazardous waste; an environmental hazard due to corrosion, spills, leaks and overfills. Regulated by the EPA
Underground Storage Tank (UST)
197
Federal law that requires disclosure of the terms of credit by a creditor to a prospective borrower. Implemented by Regulation Z, which is under the oversight of the Consumer Financial Protection Bureau
Truth in Lending Act (TILA)
198
The property owner who grants a trust to a third party for the benefit of someone else.
Trustor
199
A person appointed to manage a trust on behalf of the beneficiaries; in a trust deed, an independent third party that holds the trust instrument.
Trustee
200
A legal arrangement in which title to property ( or funds) is vested in one or more trustees who manage the property (or invest the funds) on behalf of the trusts beneficiaries, in accordance with instructions set forth in the document establishing the trust.
Trust
201
A word or phrase that describes a loan, including the down payment, terms, and monthly payment. If an ad uses a trigger phrase, disclosures are needed to tell everything about the loan. Also called TRIGGER PHRASE
Trigger Term
202
The TILA-RESPA integrated disclosure rule, issued by the Consumer Financial Protection Burrau to create standardized consumer friendly disclosure documents, including the loan estimate and the closing disclosure.
TRID Rule
203
A tax levied on the transfer of a piece of real property from one person to another; it could be levied by the state, the county or the municipality.
Transfer Tax
204
State in which a mortgagee holds actual title to property until the loan is repaid
Title Theory State
205
A report issued by a title company disclosing the condition of the title to a specific piece of property; evidence of marketable title.
Title report
206
An inspection of the public record to determine all rights and encumbrances affecting title to a piece of property
Title Search
207
A form of property ownership in which several buyers purchase interests in real estate with each party having the right to use the property and facilities for a designated period of time.
Timeshare
208
A clause added to a contract that voids the contract when the deadline passes. The party that fails to perform by the deadline is in material breach of the contract
Time is of the Essence
209
A person working with a fair housing organization who pretends to be interested in buying or renting property from someone suspected of unlawful discrimination. Also called CHECKER.
Tester
210
An unconditional offer by one party to preform his part of a contract. Also called TENDER
Tendering Preformance
211
When a lender refuses to make loans secured by property in a certain neighborhood because of the racial or ethnic composition of the the neighborhood.
Redlining
212
Charges for filing documents at the county recorders office so that they become part of the public record
Recording Fees
213
The appraisal process of analyzing the values derived from the different appraisal approaches to arrive at a final value estimate or opinion
Reconciliation
214
Any change or modification in the environment or the way things are customarily accomplished (e.g., rules, services, policies) that enables a qualified individual with a disability to enjoy equal opportunities.
Reasonable Accommodation
215
Federal law dealing with real estate closings that provides specific procedures and guidelines for the disclosure of settlement costs. Inplemented by Regulation X, which is under the oversight of the Consumer Financial Protectuon Bureau.
Real Estate Settlement Procedures Act (RESPA)
216
Property acquired by a lending institution through foreclosure and held in inventory
Real Estate Owned (REO)
217
The expensing of the cost of business or investment property over a set number of years, determined by the IRS to be an assets useful life (27.5 years for residential property; 39 years for non residential property)
Tax Depreciation
218
An association of people or entities formed to operate an investment business. A syndicate is not a recognized legal entity; it can be organized as a corporation, partnership, or trust. Also called SYNDICATION
Syndicate
219
An act that amended CERCLA, designated more money to the Superfund Trust, and established new environmental laws and regulations
Superfund Amendments and Reautorization Act (SARA)
220
The implication that an owner of land has rights to the land below the surface to the center of the earth even though this part is not documented
Subsurface Rights
221
An economic theory that says that an informed buyer will not pay more for a property or a feature in a property than a comparable substitute
Substitution
222
When a promise doesn’t preform all of his contractual obligation but does enough so that the promised is required to fulfill her part of the deal
Substantial Performance
223
Loan that has more risks than allowed in the conforming market. Also called B-C LOANS or B-C CREDIT
Subprime Loan
224
A written agreement between lien holders on a property that changes the priority f mortgages, judgements, and other liens
Subordination Agreement
225
The purpose or objective of a contract must be lawful at the time the contract is made
Lawful and possible Objective
226
227
A bluish white metal added to exterior and interior paint as a drying agent and for pigmentation before 1978. Also once used for pipes in plumbing systems in homes and businesses; can cause health issues especially in children
Lead
228
A defect that is not visible or apparent; a hidden defect that would not be discovered in a reasonably thorough inspection of property
Latent Defect
229
A lease under which the tenant leases the land from the owner but the tenant owns the building. Also called a ground lease
Land Lease
230
A real estate installment agreement under which the buyer (gender) makes payment to the seller (vendor) in exchange for the right to occupy and use the property. No deed or title is transferred until all or a specified portion of payments have been made.
Land contract
231
The loss of a right through undue delay or a failure to assert
Laches
232
Generally the fair market value for a property. A requirement when the government exercises its constitutional power of eminent domain
Just Compensation
233
A lawsuit filed by a lender or other creditor to foreclose on a mortgage or other lien; a court ordered sheriffs sale of the property to repay the debt.
Judicial Foreclosure
234
The flow of funds through financial intermediaries (such as banks and thrifts) on its way to borrowers. Money deposited at financial institutions that then make the money available to corporate borrowers is an example of this.
Intermediation
235
1. Right or share in something such as a parcel of real estate
2. A charge a borrower pays to a lender for the use of the lenders money
Interest
236
A court ordered prohibition against a particular act as opposed to a judgment for money.
Injunction
237
A situation in which a single brokerage represents both the buyer and the seller in the same real estate transaction.
In-House Transaction
238
A statistical report that is generally a reliable indicator of the approximate change in the cost of money. Often used to adjust the interest rate of adjustable rate mortgages
Index
239
An agreement that hasn’t been put into words but is implied by actions of the parties.
Implied Contract
240
An agency relationship created through the behavior (actions or words) of one or both parties
Implied agency
241
The act of pledging property to be the security for a loan without giving up possession of it (as with a mortgage)
Hypothecation
242
Heating, ventilation and air conditioning
HVAC
243
The relationship of a borrowers total monthly housing expense to gross monthly income expressed as a percentage. (Total housing expense \ income = ratio %) also called income to payment ratio or front end ratio
Housing expense ratio
244
A contract between a homeowner and a home warranty company that provides for discounted repair and replacement service on a homes major components.
Home Warranty
245
A visual examination of the physical structure and systems of a home.
Home Inspection
246
A loan taken by a homeowner that is secured by a mortgage on her principal residence; not for the purchase of the property
Home Equity Loan
247
One who acquires a negotiable instrument in good faith for consideration and thus has certain rights above the original payee
Holder in Due Course
248
The most profitable, legally permitted feasible and physically possible use of a piece of property
Highest and Best Use
249
A conversion factor derived from the sales price of a comparable rental property divided by its gross monthly rent. This factor is multiplied by the estimated gross rent of the subject to estimate its value.
Gross Rent Multiplier
250
A lease for which the tenant pays a fixed amount to the landlord and the landlord pays all expenses related to ownership
Gross Lease
251
A partnership in which each member has an equal right to manage the business, share in the profits and carry equal responsibility for the partnerships debts
General Partnership
252
Consent given freely to create binding contract. If offer or acceptance is given as a result of fraud, undue influence, duress or mistake then the contract is voidable by the victimized party
Genuine Assent
253
When a building is less desirable because of something inherent in the design of the structure.
Functional Obsolescence
254
A deliberate act with the intent to deceive or with reckless indifference to the truth
Fraud
255
A lawsuit filed by a creditor to begin foreclosure proceedings
Foreclosure Action
256
The remedy a lien holder uses to force the sale of property, applying the proceeds of the sale toward debt satisfaction
Foreclosure
257
A summary legal action to regain possession of real property; especially a lawsuit filed by a landlord to evict a defaulting tenant and regain possession of property.
Forcible Entry and Detainer
258
Land areas adjacent to rivers and streams that are subject to recurring flooding
Floodplains
259
A loan for which the interest rate remains constant
Fixed Rate Loan
260
Ongoing operating expenses that to not vary based on occupancy levels of the property (eg, taxes, insurance etc.)
Fixed Expenses
261
An event triggering agency disclosure (prior to entering into a listing agreement, prior to showing a property, at an open house when a buyer displays serious interest etc.)
First Substantive Contact
262
263
A deed executed by a person in a position of trust, held by law to high standards of good faith and loyalty
Fiduciary Deed
264
A mortgage loan insured by the Federal Housing Administration that protects the lender against losses from default
FHA Insured Loan
265
A defensible fee that terminates automatically if certain conditions occur. The grantor or his heirs have a possibility of reverter
Fee Simple Determinable
266
A protected group under the federal fair housing act. Making it illegal to discriminate against a person for being the parent or guardian of a child under 18 years of age
Familial Status
267
Common name for Title VIII of the civil rights act of 1968 and its amendments
Fair Housing Act
268
When something outside of a property and outside of the control of a property owner makes it less desirable.
External Obsolescense
269
An agreement that’s been expressed in words, either spoken or written
Express Contract
270
A contract in which one or both parties have not yet completed performance of their contractual obligations
Executory Contract
271
A person appointed in a will to carry out the provisions of the will.
Executor
272
A contract in which both parties have fully performed their contractual obligations
Executed Contract
273
A contract between a buyer and broker in which the broker earns the negotiated fee even if the buyer purchases property through another broker or finds it on his own
Exclusive Buyer Agency Agreement
274
Evidence of title to real estate is provided through a title report or issuance of title insurance
Evidence of Title
275
When a landlord uses physical force, a lockout, or a utility shutoff to remove a tenant, instead of going through the legal process
Eviction, self-help
276
When a landlord evicts a tenant in retaliation for complaining about code violations or for participating in a tenants rights group
Eviction, retalitory
277
When a landlords act (or failure to act) interferes with the tenants quiet enjoyment of the property or makes the property unfit for its intended use to such an extent that the tenant is forced to move out
Eviction, constructive
278
The legal process of forcing someone off property or preventing someone from reentering property
Eviction, actual
279
The fundamental principals of honesty and integrity that guide a persons behavior
Ethics
280
A legal doctrine that prevents a person from asserting rights or facts that are inconsistency with his earlier actions or statements when he failed to object (or attempt to stop) another persons actions
Estoppel
281
An account maintained by a lender for the deposit of borrowers extra 1/12 monthly deposits to cover next years insurance and tax payments
Escrow Reserves
282
A settlement procedure cinducted by a disinterested third party often an escrow agent where the buyer and seller are not present
Escrow Closing
283
1. A separate account maintained by a broker for the deposit of clients money (i.e., good faith deposits) also called Trust Account.
2. The account a lender maintains to hold a borrowers monthly payments for property insurance and property tax until those bills are due.
Escrow Account
284
A lease clause that provides for an increase in rent to reflect increases in expenses paid by the landlord such as real estate taxes, operating costs, and cost of living expenses.
Escalation Clause
285
A gradual loss of soil due to the action of wind, water or other forces
Erosion
286
An owners unencumbered interest in property; the difference between the value of the property and the liens, such as a mortgage, against it.
Equity
287
The right of a debtor to redeem the property from foreclosure proceedings prior to a confirmation of sale
Equitable Right of Redemption
288
A law that requires all lenders to make credit available with fairness and without discrimination based on race, color, religion, national origin, age, sex, marital status, or receipt of income from public assistance programs
Equal Credit Opportunity Act
289
The federal agency tasked with creating and enforcing environmental protection standards, helping others with environmental pollution problems and providing research on environmental issues
Environmental Protection Agency (EPA)
290
The maximum dollar amount of a loan guarantee to which an eligible veteran is entitled
Entitlement
291
A contract that would be upheld by the courts. The requirements for this are: capacity, mutual consent (offer and acceptance), lawful objective, and consideration. In addition, certain contracts must be in writing to be this
Enforceable Contract
292
The date for which value was established when doing an appraisal
Effective Date
293
The age of a structure based on the actual wear and tear that the building shows from physical, functional, or external obsolescence; not necessarily the structures actual age
Effective Age
294
The time during which a building can be used for its intended purpose and generate more income than operating expenses cost
Economic Life
295
Money offered as an indication of good faith regarding future performance of a purchase agreement
Earnest Money
296
A licensee who represents both the buyer and the seller (or both landlord and tenant) in a single real estate transaction
Dual Agent
297
The amount of money a buyer pays to obtain a property in addition to the money that the buyer borrows
Down Payment
298
A legal doctrine that allows a court to enforce an oral agreement that should have been in writing when one party has taken irrevocable steps to perform his or her side of the bargain and failure to enforce the contract would result in an unjust benefit for the other party
Doctrine of Part Performance
299
A rule that allows a tenant farmer to re-enter the land to harvest crops that were planted by the tenant farmer even after the land has been sold to a new owner
Doctrine of Emblements
300
When a law that isn’t discriminatory on the face of it has a greater impact on a minority group than it has on other groups
Disparate Impact
301
The movement of money out of savings accounts and into higher yield investments such as corporate securities or government instruments
Disintermediation
302
Treating people unequally because of their race, religion, sex, national origin, age, or some other characteristic of a protected class in violation of civil rights laws
Discrimination
303
The interest rate charged by the Federal Reserve Banks on loans to member commercial banks
Discount Rate
304
A form of prepaid interest that a lender charges to increase the yield on a lower than market interest rate loan. One point equals 1% of the loan amount. One discount point equals approximately 1/8 of a percent
Discount Point
305
A physical or mental impairment that substantially limits or curtails one or more major life activities
Disability
306
A rate of return, stated as a percent, used to derive a value opinion from the anticipated net operating income a property could generate. It is used for direct capitalization in the income approach
Direct Capitalization Rate
307
A licensee appointed by a broker as the legal agent of a client.
Designated Agent
308
A loss in value of a piece of property over the time it is expected to be useful for any reason
Depreciation
309
A clause used to defeat or cancel a certain right upon the occurrence of a specific event.
Defeasance Clause
310
Failure to fulfill an obligation, duty, or promise as when a borrower fails to make payments, a tenant fails to pay rent, or a party fails to performs a contract. A mortgage, note, or other document will define what constitutes this
Default
311
A security instrument placing into the hands of a disinterested third party (a trustee) a specific financial interest in the title to real property as security for the payment of a note, making the lender the beneficiary
Deed of trust
312
Process by which the deed to a property is given by a borrower to the lender to avoid foreclosure
Deed in lieu of foreclosure
313
The relationship of a borrowers total monthly debt to gross monthly income, expressed as a percentage. (Total debt/income=ratio %) debt obligations include housing and long term debts with more than 10 payments remaining
Debt to income ratio
314
The amount of money paid in regular intervals toward reducing the principal and interest owed on a debt
Debt Service
315
A certificate of release or discharge from active duty, issued by the department of defense. This identifies the character of service and reason for discharge.
DD-214
316
Sum of money that is to be received
Credit
317
A contract, promise or guarantee ( express or implied) in a document such as a deed or lease
Covenant
318
A person who makes a counteroffer
Counterofferor
319
A person who receives a counteroffer or to whom a counteroffer is made
Counterofferee
320
A response to an offer to enter into a contract, changing some of the terms of the original offer. A counter offer is a rejection of the original offer and does not create a binding contract until it is accepted by the original offeror
Counteroffer
321
The act of transferring interest in property from one person to another
Conveyance
322
A loan made by an institutional lender or a private party with real estate as security for the loan that the government neither guarantees nor insures
Conventional Loan
323
The theory that a specific item or feature of a property is worth only what it actually contributes in value to that parcel of real estate
Contribution
324
The legal ability to enter into a contract
Contractual Capacity
325
An agreement between two or more parties to do, or not do, something. Contracts are legally enforceable promises, with the law providing remedies for breach.
Contract
326
A provision in a contract, deed, law, regulation, guideline, etc. that makes the parties rights and obligations depend on the occurrence (or non occurrence) of a specified event.
Contingency Clause
327
An agency funded by the Federal Reserve with rulemaking and enforcement authority over many cunsumer financial laws. Established under the provisions of the Dodd-Frank Act.
Consumer Financial Protection Bureau
328
Anything of value— such as money, goods, services or promises— that is given to induce another oerson to enter into a contract
Consideration
329
An economic principle that says a home usually achieves maximum value when it is surrounded by homes similar in style and function
Conformity
330
A loan that meets the qualifying standards of Fannie Mae or Freddie Mac and thus can be sold on the secondary Market
Conforming Loan
331
A land use that does not comply with the general zoning rules for the zone in which it is located but is permitted because it benefits the public. A hospital in a residential neighborhood.
Conditional Use
332
A negligent misrepresentation or concealment of a material fact; when a person carelessly fails to disclose material information, or makes statements that she should realize are false or misleading.
Constructive Fraud
333
Provision in a deed or other document that makes the parties rights and obligations dependent on the occurrence or non occurrence of some event
Condition
334
Occurs when a licensee fails to disclose information that is material to a decision to a party to whom the licensee has such a duty
Concealment
335
A federal law enacted by congress whose primary emphasis is the cleanup of inactive hazardous waste sites and the liability for cleanup costs on strangers and transporters of hazardous substances and on current and former owners of facilities where hazardous substances were disposed.
Comprehensive Environmental Response, compensation and liability act. (CERCLA)
337
A licensed agent representing the interests of the buyer of a property
Buyers agent
338
Official documents from a local government or other authority that allow the beginning of a construction or remodeling project
Building Permits
339
A mortgage agreement where payments include principle and interest on the loan +1/12 of the years ad valorem property, taxes, and hazard insurance premiums
Budget Mortgage
340
Provides the broker is still entitled to commission if the property sells during a certain time period under certain circumstances.
Broker Protection Clause
341
The estimated value of a property as determined by a real estate licensee or other qualified individual. Often done at the request of a lender for non-federally related property transactions.
Broker Price Opinion
342
The illegal practice of inducing owners to sell their homes by suggesting the ethnic or racial composition of the neighborhood is changing with the implication that property values will decline as a result
Block busting
343
Any real estate advertisement used by a licensee that does not include the brokers’s business name. Prohibited in most states.
Blind advertisement
344
A mortgage loan that covers more than one parcel of real estate, usually used to finance entire subdivision development rather than an individual unit or lot
Blanket mortgage
345
A contract in which both parties make a binding promise to each other
Bilateral contract
346
Person designated to receive benefits from a certain act, such as one who benefits from a trust
Beneficiary
347
A type of deed that implies that the grantor owns the property and has the right to convey it, but there are no warranties that go with it
Bargain and sale deed
348
A final lump sum payment at the end of a loan term to pay off the entire remaining balance of principle and interest, not covered by payments during the loan term
Balloon payment
349
A lien intended to prevent property transfer, pending the outcome of litigation
Attachment lien
350
The transfer of rights are interests under a contract to another party
Assignment
351
The amount used to calculate taxes due and sometimes representing a percentage of market value
Assessed value
352
The act of combining two or more parcels of land into one larger parcel
Assemblage
353
A statement in a contract that indicates the property is being sold without warranty in its present condition at the time of the contract
As is clause
354
A fibrous material that was once very common in many building materials because if it’s insulating and heat resistant value
Can cause breathing issues and illness
Asbestos
355
Entitled land owners to use land and away that is typically not allowed by the dimensional or physical requirements of the zoning law
Area variance
356
The increase in value of an asset overtime
Appreciation
357
When one party to a contract informs the other before the set time of performance that he or she doesn’t intend to perform as agreed. The other party may immediately file a lawsuit for breach of contract without making a tender offer.
Anticipatory repudiation
358
Relationship between the total cost of borrowing and the amount financed represented as a percentage
Annual percentage rate
359
Occurs when a loan balance decreases because of periodic installments paid on the principle and interest
Amortization
360
A wide ranging federal civil rights law signed in 1990 that prohibits under certain circumstances discrimination based on disability
Americans With Disabilities Act
361
A mortgage clause, allowing the lender to demand the full and immediate payment of the mortgage because the owner transferred or pledge to transfer ownership of the property
Alienation clause
362
A situation in which the agent has a personal interest in the subject of the agency, as when one co-owner has been authorized by the others to sell their property
Agency coupled with an interest
363
A statement sworn in front of a notary public or other authorized official by the seller or grantor of property that identifies the grantor identifies the grantor marital status and certify that the grantor has no new judgments, liens, divorces, unrecorded, deeds, or other potential title defect since the title examination was completed.It also certified that the grantor is indeed in possession of the property.
Affidavit of title
364
Fundamental rights guaranteed to all persons by the law. The term primarily refers to constitutional and statutory protections against discrimination based on race, religion, sex, or national origin.
Civil rights
365
A document prepared by an attorney, stating the attorney’s opinion of the status of the title to a piece of property after performing a title search and reviewing the public records
Certificate of title
366
A certificate establishing the current market value of a property based on approved VA appraisal. Issued by the VA this certificate is a limit on the amount of a VA guaranteed loan.
Certificate of reasonable value
367
A certificate issued by the department of veterans affairs to establish status and amount of a veterans eligibility to qualify for a loan guarantee
Certificate of eligibility
368
A declaration of covenant conditions and restrictions usually recorded by a developer to create a general plan of private restrictions for a subdivision
Cc&r’s
369
The taxable profit, derived from the sale of a capital asset. The difference between the sales price and the adjusted basis of the property.
Capital gain
370
Termination of a contract without undoing acts that have been performed under it. Can be done without going to court.
Cancellation
371
A damage award usually money intended to compensate the plaintiff for harm caused by the defendant act or failure to act
Compensatory damages
372
A method of determining the approximate market value of a home by comparing the subject property to similar homes that have sold our presently for sale or did not sell in a given area
Comparative market analysis
373
Recently sold properties with similar characteristics (size, room, count, design, utility, etc.) that are in close proximity to the property being appraised.
Comparables
374
Occurs when a licensee mixes client funds with brokerage funds
Commingling
375
Property zoned and used for business purposes, such as warehouses, restaurants, and office buildings
Commercial property
376
A set of principles and standards based on core values by which a group of professionals are expected to conduct themselves
Code of ethics
377
A claim encumbrance or defect that could make the title to real property unmarketable
Cloud on the title
378
The transfer of real property ownership from seller to buyer according to terms and conditions in a sales contract or escrow arrangement. The final stage in a real estate transaction.
Closing
379
A standardized document that presents a final detailed accounting for a real estate transaction listing each parties, debits and credits, and the amount each will receive or be required to pay at closing. Required for all RESPA related transactions.
Closing disclosure
380
A type of loan structure that permits the Lender to periodically change or vary the interest rate charged based on a standardized index
Adjustable rate mortgage
381
Latin phrase meaning “according to value “. Used to refer to taxes assessed on the value of property.
Ad valorem
382
Simple depreciation method that takes the total cost of the building and divides that by the number of years the building is expected to be useful
Straight line depreciation
383
A non-amortized loan in which the regular payment cover only the interest over the term of the loan
Straight loan
384
Channeling, prospective buyers or tenants to particular neighborhoods based on their race or membership in another protected class
Steering
385
Allows a mortgage or to redeem a property for a set timeframe after a foreclosure sale, regardless of the timing of other events. Time frames vary by state not available in all states
Statutory right of redemption
386
A state law that requires certain types of contracts to be in writing and signed to be enforced
Statute of frauds
387
Income that can reasonably be expected to continue in the future
Stable monthly income
388
A cost approach appraisal method for determining cost of a building, relying on cost manuals
Square foot method
389
The illegal rezoning of a single parcel or a small area to benefit one or more property owners rather than carry out the objectives of the master plan
Spot zoning
390
Legal remedy in which a court order someone who has breached a contract to perform as agreed rather than paying monetary damages
Specific performance
391
A place where something exists. An area with preferred features, giving it value to the property.
Situs
392
The value of land with the enhancements necessary to make it ready for building such as water, sewer, and electricity
Site valuation
393
A lender approved sale from which the proceeds are not sufficient to cover the mortgage amount
Short sale
394
A foreclosure sale held after a judicial foreclosure
Sheriff’s sale
395
A deed issued by the court to a property buyer from a foreclosure sale
Sheriff’s deed
396
The concept that one part or provision of a contract can be held unenforceable without making the entire contract unenforceable
Severable
397
Any service provided in connection with a perspective or actual settlement of a real estate transaction, including but not limited to those provided by Lender’s title companies, real estate brokers property, inspectors attorneys appraisers, etc.
Settlement services
398
Illegal distance that a building must be from a designated position, such as a property line determined by zoning requirements
Setback
399
The licensee who secures a buyer for a property. May also be the buyers agent if an agency relationship was created.
400
A licensee representing the interests of the seller of a property
Sellers agent
401
The possession of a freehold estate ownership
Seizin
402
Money a tenant gives a landlord at the beginning of the tenancy to ensure the tenant will comply with lease terms. The landlord may retain all or part of the deposit at the end of the tenancy to cover unpaid rent repair cost or other damages.
Security deposit
403
A financial domain in which investors buy and sell securities such as stocks bonds or mortgage loans that were created in the primary market
Secondary market
404
When a buyer borrows money from another source, in addition to the primary lender to pay for a part of the purchase price or closing costs
Secondary financing
405
A method for financing commercial or industrial properties in which a company constructs the building and then becomes a tenant by selling the building to an investor
Sale and leaseback
406
Legal principle that grants a landowner the right to all oil and gas produced by well on his or her land, even if it migrated from underneath land belonging to another
Rule of capture
407
A settlement procedure conducted with all parties present
Round table closing
408
The right of a consumer to resend any credit transaction involving his or her principal residence as collateral lasting up to midnight of the third business day after the transaction
Right of rescission
409
An option to be given the first chance to buy or lease property if the owner decides to sell or lease after receiving a bona fide offer from a third-party
Right of preemption
410
A future interest that becomes possessory when a temporary estate terminates, and that the grantor holds
Reversion
411
Allows qualified homeowners age, 62 or older to convert equity in the home into a lump sum, a monthly cash stream or a line of credit. Becomes due when the last surviving borrower dies, sells the home or ceases to live in the home for 12 consecutive months.
Reverse mortgage
412
The gain or profit and investor experiences from an investment relative to its cost to acquire
Return on investment
413
A restriction on real property use imposed by a former owner, promise to do or not do an act relating to real property, usually an owners promised to not use property in a particular way. May or may not run with land.
Restrictive covenant
414
The return of consideration by both parties when a contract is rescinded
Restitution
415
The amount of a borrowers income remaining after subtracting taxes, housing, expenses, and all recurring debts and obligations. A factor when qualifying perspective borrowers for VA guaranteed loans.
Residual income
416
A federal law that requires all sellers and landlords to disclose known lead paint hazards for homes built before 1978
Residential lead based paint, hazard reduction act
417
Cash on deposit or other highly liquid assets a borrower must have to cover two months of PITI mortgage payments after they make the cash down payment payment and pays all closing costs
Reserves
418
The termination of a contract with each party, giving anything acquired under the contract back to the other party
Rescission
419
Building an exact duplicate of the original building, giving the new structure, the same exact look and feel as the original
Reproduction
420
The act of stopping or reversing, something specific, often environmental damage
Remediation
421
A future interest that becomes possessory when a life state terminates, and that someone other than the grantor of the life estate holds
Remainder
422
An irreversible refusal of an offer by an offeree
Rejection
423
The rules implementing the truth in lending act that require borrowers to be shown how much they are going to pay for credit in dollars and percentages. Requires use of annual percentage rate and full disclosure of credit terms in advertising once any specific financials are mentioned.
Regulation Z
424
A contract between a buyer and a broker that granted the broker the right to represent the buyer in the purchase or lease of property, and that makes the buyer responsible for paying commission commissions to the broker
Buyer agency agreement
425
An agent authorized to do everything that can be lawfully delegated to a representative
Universal agent
426
A contract where a tenant pays rent for temporary possession and has the option to purchase the property at some point in the future
Lease with option to buy
427
A promissory note or other finance instrument that is freely transferable
Negotiable instrument
428
The effect when a loan balance grows because of deferred interest when payments are not covering the interest portion of the loan
Negative amortization
429
Natural registry managed by the federal trade commission that limits commercial telemarketers from phoning consumers who placed their telephone numbers on a list
National do not call registry
430
A nickname for the fair housing act exemption for the rental of a unit or a room in an owner occupied dwelling with four units or less. This exemption is provided only when rental advertising is not discriminatory, a real estate agent is not involved, and there are no discrimination based on race or color. Not recognized in all states
Mrs Murphy exemption
431
A person who borrows money and gives a mortgage to the lender as security for repayment
Mortgagor
432
A type of title insurance that the lender may have drawn in its own name to protect its interest in the property. This policy is for the loan amount that’s outstanding at the time a claim would be paid.
Mortgagees policy
433
A lender who accepts a mortgage as security for the repayment of a loan
Mortgagee
434
The fee charge for FHA mortgage insurance coverage. Initial premium can be financed, and there is a monthly premium.
Mortgage insurance premium
435
A person who for compensation makes negotiates acquires cells or arranges for a mortgage loan
Mortgage broker
436
A security instrument that creates an involuntary lien on real property to secure repayment of a debt
Mortgage
437
A fungus that can release toxins in the environment, causing all allergic reactions in some people
Mold
438
Action taken by the non-breaching party to minimize the losses resulting from a breach of contract
Mitigation
439
A false or misleading statement
Misrepresentation
440
Rights to the minerals located beneath the surface of land
Mineral rights
441
A rate of taxation for real property calculated as one dollar per $1000 or .00 one of assessed value
Millage
442
When all parties involved agreed to terms of a contract. This is achieved through offer and acceptance.
Meeting of the minds
443
A person who supplies, materials, equipment, or fuel for a construction project
Materialman
444
An unexcused failure to perform according to the terms of a contract that are important enough to excuse the non-breaching party from performing her contractual obligations
Material breach
445
Process of determining the value of specific property characteristics or features by comparing pairs of similar properties
Matched pair analysis
446
The relationship between the loan amount and the sales price or appraised value of the property which ever is less
Loan to value ratio
447
The disclosure of loan terms, an annual percentage rate and other credit costs and estimated settlement costs that lender must present to borrowers within three business days of a complete completed loan application in order to satisfy provisions of the truth and lending act and real estate settlement procedures act
Loan estimate
448
A sum of money that the parties to contract agree to in advance that will serve as compensation in the event of breach. Often it’s the forfeiture of the earnest money deposit in purchase contracts.
Liquidated damages
449
A partnership comprised of one or more general partners, and one or more limited partners. Limited partners have no say in partnership matters and their liability is limited to their investment.
Limited partnership
450
A type of business organization that has the limited liability protection of a corporation, and the tax advantages of a partnership
Limited liability company
451
A state in which real estate mortgages are regarded as liens. Title remains with the mortgage as long as no default occurs
Lien theory state
452
1. The interest in property held by the rightful owner.
2. The sellers interest in property under a land contract.
Legal title
453
Generally describes a mortgage used to finance the purchase of real property. May specifically refer to a situation where the seller finances all are part of the sales price of real property for the buyer.
Purchase money mortgage
454
A contract in which a seller promises to convey title to real property to a buyer and exchange for the purchase price
Purchase agreement
455
The allocation of expenses between buyer and seller and proportion to their actual usage of the item or service
Proration
456
Superlative statements about the quality of a property that should not be considered assertion of fact
Puffing
457
A person hired by a real property owner to administer market and maintain property especially rental property
Property manager
458
Leasing or renting or offering to lease or rent real property of others for a fee commission compensation or other valuable consideration, pursuant to a property management employee contract
Property management
459
A written agreement that creates an agency relationship between the property owner/investor, and the property manager
Property management agreement
460
An evaluation of the conditions of a property by a train professional often required by a lender before the approval of a loan is granted. Inspections usually include looking for evidence of termites, structural integrity and septic systems, etc..
Property inspection
461
A financing instrument that evidence is a promise to pay a specific amount of money to a specific person with a specific timeframe, a written legally binding promise to repay a debt
Promissory note
462
A judicial proceeding in which the validity of a will is established, and the executor is authorized to distribute the estate property. When there is no valid will a judicial proceeding in which an administrator is appointed to distribute the estate to heirs according to the laws of interstate succession.
Probate
463
A restriction impose on property by a previous owner or the subdivision developer. A restrictive covenant or a condition in a deed.
Private restriction
464
Insurance offered by private companies to ensure a lender against a borrowers default on a loan
Private mortgage insurance
465
The theory that the added value of an additional feature, addition, repair, etc. is more than the actual cost of the items
Principle of increasing returns
466
Theory that says that beyond a certain point the added value of a feature, addition, repair, etc. is less than the actual cost of that item
Principle of decreasing returns
467
The sum of money loaned to a borrower. The outstanding balance of a loan.
Principal
468
The short term interest rate a bank charges its most creditworthy customers
Prime Rate
469
A financial domain in which various entities— including banks and other financial institutions — produce and issue new securities such as stocks, bonds and mortgage loans
Primary Market
470
An antitrust violation that occurs when two or more competitors agreed to fix the prices that they will charge. In real estate, it might occur when brokers agree with other brokers on commission rates. Even the implication that brokers have discussed and or reached agreement on fees could be illegal.
Price fixing
471
The amount are already willing and able buyer agrees to pay for a property and a seller agrees to accept
Price
472
The informal process of determining how much a potential homebuyer might be eligible to borrow
Prequalification
473
Additional money charged by a lender for the borrower paying off a loan early. Not permitted for a FHA insured loans or VA guaranteed loans.
Pre-payment penalty
474
A contract clause that gives a Lender the right to charge the borrower, a penalty for paying off a loan early
Prepayment clause
475
Expense items on a settlement statement the seller has already paid in advance, usually at the beginning of a month for the rest of the month or at the beginning of the year for the rest of the year or longer
Prepaid expenses
476
Loan tactics that take advantage of ill informed consumers through obsessively high fees, misrepresented loan terms or frequent refinancing that does not benefit the borrower
Predatory lending
477
The formal process by which a lender determines if potential borrowers can be financed through the lender and for what amount of money preapproval is generally binding on the lender
Preapproval
478
A clause that allows the trustee to sell trust deed property without court supervision, when terms of the trust deed are not kept
Power of clause sale
479
An instrument authorizing one person to act as another’s agent to the extent stated in the instrument
Power of attorney
480
Financial institutions that make real estate loans that they keep and service in house instead of selling them on the secondary markets
Portfolio lenders
481
One percent of the loan amount. A fee charged by a lender for making a loan calculated based on the loan amount.
Point
482
The substitution of a new contract for the original contract both parties must give their consent
Novation
483
Foreclosure by a trustee under the power of sale clause in a deed of trust without the involvement of a court. Not used in all states.
Non-judicial foreclosure
484
Property that doesn’t conform to current zoning laws, but is allowed because the property was being used that way before the new zoning law was passed
Non-conforming use
485
Loan that does not mean Fannie Mae or Freddie Mac standards, and thus cannot be sold on the secondary market
Non-conforming loan
486
An estimate of the money, a seller should receive from a real estate transaction based on a certain selling price after all costs and expenses have been paid
Net to seller
487
Net income after all operating expenses have been deducted
Net operating income
488
Conduct that falls below the standard of care that a reasonable person would exercise under the same circumstances. An unintentional breach of a legal duty, resulting from carelessness, recklessness or incompetence.
Negligence
489
Lease agreement that requires the lease C to pay some of the operating expenses and other cost of the property in addition to paying the rent
Net Lease
490
A contract clause that gives the lender the right to declare all outstanding payments immediately due upon a default by the borrower
Acceleration clause
491
The acquisition of title to land by addition to real estate already owned through human actions or natural processes
Accession
492
An intentional misrepresentation or concealment of a material fact when a person actively conceal material information or make statements that he knows are false or misleading
Actual fraud
493
An increase in value over the cost of acquiring the separate parcels by successful assembled, usually due to a change in use
Plottage
494
A type of subdivision in which developers do not have to comply with all standard zoning and subdivision regulations such as setback and lapse requirements
Planned unit development
495
A typical mortgage payment that includes principal, interest, taxes, and insurance
PITI
496
A roofs vertical rise in inches divided by its horizontal span in feet
Pitch
497
Official government documents that acknowledge work a person wants to do on a property and allow it to be done
Permits
498
A lease for which the tenants rent is calculated as a percentage of the tenant sales
Percentage lease
499
The purpose or objective of a contract must me lawful at the time the contract is made
Lawful and possible objective
