Real Estate Terminology Flashcards
1
Q
Parcels of land next to each other that share a common border.
A
Abutting
2
Q
A summary of all of the recorded instruments and proceedings which affect
the title to property, arranged in the order in which they were recorded.
A
Abstract of Title
3
Q
Term given to the practice of paying off a mortgage loan faster than
required by terms of the mortgage agreement.
A
Acceleration Clause
4
Q
A mode of acquiring property that involves the addition of value to property
through labor or the addition of new materials. For example, a person who owns a property on a
river delta also takes ownership of any additional land that builds up along that riverbank due to
natural deposits or man made deposits.
A
Accession
5
Q
A second residential unit that may be contained within an
existing single-family home, garage, or carriage house. An accessory apartment is usually
required to be a complete housekeeping unit that can function independently with separate
access, kitchen, bedroom, and sanitary facilities.
A
Accessory Apartment Uses
6
Q
The use of land that is subordinate, incidental to, and customarily found in
connection with the principal use allowed on a lot by the zoning law. A garage is incidental to the
principal use of a lot as a single-family residence and customarily found on a single-family
parcel.
A
Accessory Uses
7
Q
The addition of land through processes of nature, as by water or wind.
A
Accretion
8
Q
A formal declaration before a duly authorized officer by a person who
has executed an instrument that such execution is the person’s act and deed.
A
Acknowledgement
9
Q
A measure of land equaling 43,560 square feet.
A
Acre
10
Q
Describes a cause of action that can be brought in court to address a change in
condition of a property brought about by a current tenant that damages or destroys the value of
that property.
A
Act of Waste
11
Q
Income for which services have been performed.
A
Active Income
12
Q
A method of valuing insured property.
A
Actual Cash Value
13
Q
Where one is either by force or by process of law, actually put out of possession.
A
Actual Eviction
14
Q
Notice delivered in such a way as to give legally sufficient assurance that actual
knowledge of the matter has been conveyed to the recipient.
A
Actual Notice
15
Q
According to valuation.
A
Ad Valorem Taxes
16
Q
The original cost of a property minus depreciation and sales of portions
thereof plus allowable additions such as capital improvements and certain carrying costs and
assessments. A bookkeeping rather than appraisal term.
A
Adjusted Basis
17
Q
A mortgage loan with the interest rate on the note
periodically adjusted based on an index which reflects the cost to the lender of borrowing on the
credit markets.
A
Adjustable Rate Mortgage (ARM)
18
Q
The Department of State’s ability to enforce license laws
through reprimand and denial as well as the suspension and revocation of licenses.
A
Administrative Discipline
19
Q
The seller or buyer agrees to dual agency before it
occurs by indicating the same on the agency disclosure form.
A
Advance Consent to Dual Agency
20
Q
A means of acquiring title where an occupant has been in actual, open,
notorious, exclusive, and continuous occupancy of property under a claim of right for the
required statutory period.
A
Adverse Possession
21
Q
The net profit/loss realized after taxes are deducted.
A
After Tax Cash Flow
22
Q
A written explanation, to be signed by a prospective buyer or seller of real estate, explaining to the client the role that the broker plays in the transaction.
A
Agency Disclosure Form
23
Q
One who undertakes to transact some business or to manage some affair for another by
authority of the latter.
A
Agent
24
Q
Rights in real property to use the space above the surface of the land.
A
Air Rights
25
Allows lender to require the balance of a loan to be paid in full if the collateral is sold (also known as a “due on sale” clause).
Alienation Clause
26
The increase in the area of land due to sediment deposited by a river. This changes
the size of a piece of land (a process called accession) and thus it value over time.
Alluvion
27
Describes the terms under which the cooperative gives permission to
a shareholder before making any changes or improvements to the unit the shareholder occupies.
Alteration Agreement
28
A wide-ranging civil rights law enacted by the U.S.
Congress in 1990, that prohibits, under certain circumstances, discrimination based on
disability.
Americans with Disabilities Act
29
The process by which a loan principal decreases over the life of a loan.
Amortization
30
A unit measure of electricity.
Amperage
31
A key tenant in retail. Typically one of the larger stores in a shopping mall,
usually a department store or a major retail chain (Macys, Nordstrom, etc.).
Anchor Stores
32
Any person who engages in the business of claiming,
demanding, charging, receiving, collecting, or contracting for the collection of, a fee from a
customer for furnishing information concerning the location and availability of real property,
including apartment housing, which may be leased, rented, shared or sublet as a private
dwelling, abode, or place of residence.
Apartment Information Vendor
33
any person who, for a fee, arranges, conducts, coordinates,
handles or causes meetings between a customer and the current owner or occupant of legally
occupied real property, including apartment housing, who wishes to share that housing with one
or more individuals.
Apartment Sharing Agent
34
An estimate of a property’s value by an appraiser who is usually presumed to be
expert in his work.
Appraisal
35
Monetary gain resulting from the increase in the market value of an
investment, excluding additions of capital. For example, a house which is sold five years after it
was purchased for 50% more than the purchase price.
Appreciation
36
– A sum of money or total of assets devoted to a special purpose.
Appropriation
37
A city or town which has been certified by the State Board of Real
Property Tax Services to have completed a revaluation or an update in conformance with its
rules and regulations.
Approved Assessing Unit
38
Something which is outside property itself but belongs to the land and adds
to its greater enjoyment such as a right-of-way or a barn or a dwelling.
Appurtenances
39
Oversees and upholds the quality and aesthetics of a
| neighborhood, town, or city.
Architectural Review Board
40
Permission to modify or exceed the bulk regulations imposed by local zoning
ordinances.
Area Variance
41
The section of the New York Real Property Law pertaining to real estate
salespersons and brokers.
Article 12-A
42
An appeal brought forth because of a ruling by a government agency.
Article 78 Proceeding
43
A legal term used to disclaim some implied warranties for an item being sold. Denotes
that the seller is selling, and the buyer is buying a property in whatever condition it presently
exists.
“As is”
44
A naturally occurring mineral fiber sometimes found in older homes. It is hazardous
to health when a possibility exists of exposure to inhalable fibers. Homeowners should be alert
for friable asbestos and always seek professional advice in dealing with it.
Asbestos
45
A chronic lung disease caused by inhaling asbestos fibers.
Asbestosis
46
A valuation placed upon property by a public officer or a board, as a basis for
taxation.
Assessed Value
47
A city, county, town or village with the authority to value real property for
purposes of taxation.
Assessing Unit
48
An independent tribunal established to hear assessment
| appeals.
Assessment Review Board
49
A charge against real estate made by a unit of government to cover a
proportionate cost of an improvement such as a street or sewer.
Assessments
50
The method or manner by which a right or contract is transferred from one
person to another.
Assignment
51
A licensed real estate broker who by choice elects to work
| under the name and supervision of another real estate broker.
Associate Real Estate Broker
52
A clause found in real estate contracts that may allow buyers to
walk away from an agreed upon sale for any reason.
Attorney Review Clause
53
A sudden and perceptible loss or addition to land by the action of water, or a sudden
change in the bed or course of a stream.
Avulsion
54
A mortgage which does not amortize over the term of the note, thus
leaving a balance due at maturity.
Balloon Mortgage
55
A deed conveying real property without covenants.
Bargain and Sale Deed
56
One or more floors of a building that are either completely or partially below the
ground floor.
Basement
57
A major accounting method that recognizes revenues and expenses at the time physical
cash is actually received or paid out.
Basis
58
A horizontal structural member that supports a floor. Beams are typically wood, cold
formed metal framing or steel.
Beam
59
Structural walls that transfer building loads down to the foundation. Joists,
beams, and roofs are typically supported by bearing walls.
Bearing Walls
60
The net profit/loss calculated by subtracting expenses from income
before taxes are paid.
Before Tax Cash Flow
61
The person who receives or is to receive the benefits resulting from certain acts.
Beneficiary
62
A type of loan used to fund the purchase of more than one piece of real
property. A blanket mortgage is often used for subdivision financing.
Blanket Mortgage
63
An ad that remains anonymous as to who is advertising. Blind ads are illegal.
Blind Ad
64
The practice of inducing homeowners in a particular neighborhood to sell their
homes quickly, often at below market prices, by creating the fear that the entry of a minority
group or groups into the neighborhood will cause a precipitous decline in property values.
Blockbusting
65
Architectural drawings that describe the layout and construction of a house.
Blueprint
66
A series of documents submitted for the review by a cooperative board.
Board Package
67
Cash received in a tax-deferred exchange.
Boot
68
A type of short-term loan, typically taken out for a period of 2 weeks to 3 years.
Bridge Loan
69
The amount of heat energy needed to raise the temperature of
one pound of water by one degree F. This is the standard measurement used to state the amount
of energy that a fuel has as well as the amount of output of any heat generating device.
British Thermal Unit (BTU)
70
A broker’s agent is an agent that cooperates or is engaged by a listing agent
or a buyer’s agent (but does not work for the same firm as the listing agent or buyer’s agent) to
assist the listing agent or buyer’s agent in locating a property to sell or buy, respectively, for the
listing agent’s seller or the buyer agent’s buyer.
Broker’s Agent
71
Regulations established by state or local governments stating fully that
structural requirements for building.
Building Code
72
A town or city agency that oversees and reviews building applications
by licensed professionals to ensure compliance with local building code and zoning ordinances.
Building Department
73
Refers to the massing or bulk of a building. Typically defined by the
exterior walls of a building.
Building Envelope
74
Written governmental permission for the construction, renovation or
substantial repair of a building.
Building Permit
75
The premise that the ownership of real estate consists of the ownership of
various rights associated with it. These rights include the right to use and/or occupy, the right to
sell in whole or in part, the right to lease, the right to bequeath and the right to do none of the
foregoing.
Bundle of Rights
76
Obtaining a lower interest rate by paying additional points to the lender.
Buydown
77
An agent who represents the buyer of real property.
Buyer Agent
78
The owner’s rights and obligations for a condominium.
By-laws
79
Expenditures creating future value. Incurred when a property
owner spends money to upgrade a building in an effort to add value and/or extend the useful life
of the building
Capital Expense (CAPEX)
80
A profit that results from a the sale of a property where the amount realized
from the sale exceed the purchase price.
Capital Gain
81
The difference between a lower selling price and a higher purchase price,
resulting in a financial loss to the seller.
Capital Loss
82
Money set aside by a property owner for long-term capital
| expenditures to a property.
Capital Reserve Budget
83
The percentage which is the sum of the discount rate, the effective tax
rate and the recapture rate representing the relationship between net operating income and
present value.
Formula: Value = Income / Rate
Capitalization Rate
84
The net result when income from an investment property is subtracted from the
expenses. The result is used to determine the rate of return on an investor’s money.
Cash Flow
85
A percentage return on money invested in a property by an
| investor. Formula: Cash Flow / Down Payment.
Cash on Cash Return
86
A Latin term that means “let him beware.” Caveats have many applications in law and
finance, pertaining to all parties involved being aware of all of the facts of a transaction. Caveat is
usually interpreted as a sort of warning or cautionary expression.
Caveat
87
Let the buyer beware. The buyer must examine the goods or property and
buy at the buyer’s own risk.
Caveat Emptor
88
Upon the establishment of a cease and desist zone by the Secretary, a
list of homeowners who have filed owner’s statements expressing their wish not to be solicited by
real estate brokers or salesperson. Soliciting of listed homeowners by licensees is prohibited.
Violators of such prohibition are subject to licensure suspensions or revocation.
Cease and Desist List
89
Small, relatively permanent statistical subdivisions of a country or equivalent
entity that are updated by local participants prior to each decennial census. The primary purpose
of the census tracts is to provide a stable set of geographic units for the presentation of statistical
data.
Census Tract
90
A document issued by a governmental authority that a
| building is ready and fit for occupancy.
Certificate of Occupancy (CO)
91
The sequence of historical transfers of title to a property. It runs from the
present owner back to the original owner of the property.
Chain of title
92
The process by which a salesperson’s license changes sponsorship.
Change of Association
93
Personal property, such as household goods.
Chattel
94
A colorless, odorless, viscous liquid used as an insecticide. It may be toxic to
humans and wildlife as a result of its effect on the nervous system.
Chlordane
95
A fluid, containing hydrocarbons, that absorbs heat from a
reservoir at low temperatures and rejects heat at higher temperatures. When emitted into the
atmosphere, CFCs cause depletion of the stratospheric ozone layer.
Chloro-flouro Carbons (CFCs)
96
The safety valves for electrical systems. It interrupts an electric circuit when
an unusual condition arises such as lightning and malfunctioning appliances. Unlike a fuse, it
can be reset.
Circuit Breaker
97
A federal law that prohibits all discrimination on the basis of race.
Civil Rights Act of 1866
98
Federal law designed to control air pollution on a national level.
Clean Air Act (CAA)
99
The one by whom a broker is employed.
Client
100
A document commonly used in real estate transactions, detailing the
fees, commissions, insurance, etc. that must be transacted for a successful transfer of ownership
to take place.
Closing Statement
101
To mingle or mix, for example, a client’s funds in the broker’s personal or
general account.
Commingling
102
A sum due a real estate broker for services in that capacity.
Commission
103
Spaces in a commercial building shared by the tenants or residents of the
building. Common areas include lobbies, corridors, stairs, elevators, etc.
Common Areas
104
Also known as Common Areas; refers to the spaces in a building shared
by residents of the building. Common areas include lobbies, corridors, stairs, elevators, etc.
Common Elements
105
A property evaluation that determines property value by
| comparing similar properties sold within the last year.
Comparative Market Analysis
106
Enacted in 1980, a federal law designed to clean up sites contaminated with
hazardous substances.
Comprehensive Environmental Response, Compensation and Liability Act
(CERCLA)
107
Taking private property for public use, with fair compensation to the owner;
exercising the right of eminent domain.
Condemnation
108
A form of fee simple ownership of part of a structure having multiple units.
Owners have title to their own units plus a share of the common elements.
Condominium
109
A residential establishment that includes both a condominium and cooperative
ownership structures. Typically the condop refers to the residential portion of a building which
is treated as a single condominium unit owned through a cooperative-ownership structure.
Condop
110
An agent is obligated to safeguard his/her principal’s lawful confidences and
secrets. Therefore, a real estate broker must keep confidential any information that may weaken
a principal’s bargaining position. The duty of confidentiality precludes a broker who represents a
seller from disclosing to a buyer that the seller can, or must, sell a property below the listed price.
Conversely, a broker who represents a buyer is prohibited from disclosing to a seller that the
buyer can, or will, pay more than what has been offered for a property.
The duty of confidentiality does not include an obligation by a broker who represents a seller to
withhold know material facts about the condition of the seller’s property from the buyer, or to
misrepresent the property’s condition. To do so constitutes misrepresentation and may impose
liability on both the broker and/or the seller.
Confidentiality
111
Created by the local legislature to advice in the
development, management, and protection of the community’s natural resources and to prepare
an inventory and map of open spaces.
Conservation Advisory Council
112
Anything given to induce another to enter into a contract such as money or
personal services.
Consideration
113
A loan secured by real estate which is for the purpose of funding
the construction of improvements or building(s) upon the property.
Construction Mortgage
114
Any disturbance of the tenant’s possession of the leased premises by
the landlord whereby the premises and rendered unfit or unsuitable for the purpose for which
they were leased.
Constructive Eviction
115
Information or knowledge of a fact imputed by law to a person because
the person could have discovered the fact by proper diligence and inquiry (e.g. via public
records).
Constructive Notice
116
A provision in a contract that requires the occurrence of a specific event before
the contract can be completed.
Contingency
117
Post license education required by salespersons and brokers. New
York State demands 22.5 hours of continuing education.
Continuing Education
118
The transfer of the title of land from one to another. The means or medium by
which title of real estate is transferred.
Conveyance
119
A real estate agent who sells a property. The selling agent may be (1) the
subagent or listing agent of the seller; (2) a buyer’s agent; or (3) a dual agent. Also called a selling
agent or participating agent.
Cooperating Agent
120
A dwelling unit owned by a corporation in which an owner owns stock
commensurate with the value of his or her apartment compared to the value of the building as a
whole. The stockholder has a proprietary lease to the apartment.
Cooperative
121
A maintenance task performed to identify, isolate, and rectify a
problem with a property so that the property can be restored to an acceptable condition.
Corrective Maintenance
122
The total dollar expenditure for labor, materials, legal services, architectural design,
financing, taxes during construction, interest, contractor’s overhead and profit, and
entrepreneurial overhead and profit (may or may not equal value).
Cost
123
A method of estimating the value of real property by calculating a current
construction cost, subtracting accrued depreciation and adding a land value obtained from the
market. This method works best when the improvements are relatively new and estimates of
depreciation are thus more likely to be accurate.
Cost Approach
124
A type of offer made in response to another offer, which was seen as
unacceptable. A counteroffer revises the initial offer, making it more appealing for the person
making the new offer.
Counteroffer
125
A local unit with the responsibility for protecting, assuring,
and improving the health of its citizens.
County Health Department
126
Agreements written into deeds and other instruments promising performance or
nonperformance of certain acts, or stipulating certain uses or non-uses of the property.
Covenant
127
Limitations and rules on a group of
homes by a builder, developer, neighborhood association and/or homeowner associations; when
living in a building, a buyer gives up certain freedoms to be part of a shared community.
Covenants, Conditions and Restrictions (CCRs)
128
Shallow space between the underside of the first floor of a house and the
ground.
Crawl Space
129
an agreement that a person will borrow money and repay it to the lender over time.
Credit
130
A blind alley: a street with only one outlet.
Cul-de-sac
131
A husband’s interest upon the death of his wife in the real property of an estate that
she either solely owned or inherited provided they bore a child capable of inheriting the estate.
Curtesy
132
The party the agent brings to the principal as seller or buyer of the property.
Customer
133
Also known as a Master Deed, is a fundamental document that establishes the
existence of and further governs the use and maintenance of a condominium property.
Declaration
134
Annual amount to be paid by a debtor on an obligation to repay borrowed
money.
Debt Service
135
The amount charged as due or owing.
Debits
136
An appropriation of land to some public use, made by the owner, and accepted
for such use by or on behalf of the public.
Dedication
137
Land that has been put aside for a public use by a deed which states
exactly what the property will be used for.
Dedication by Deed
138
The amount of expenses that must be paid out of pocket before an insurer will
pay any expenses.
Deductible
139
A imposed restriction in a deed for the purpose of limiting the use of the
land such as:
1) A restriction against the sale of liquor thereon.
2) A restriction as to the size, type, value or placement of improvements that may be erected
thereon.
Deed Restriction
140
The failure to pay back a loan.
Default
141
Legal policy mandates that a deed to real property be a matter of
public record; therefore, subsequent to delivery and acceptance, a deed must be properly
recorded.
Delivery and Acceptance
142
The statistical study of human populations.
Demography
143
Established in 1965, HUD
works to create a decent home and suitable living environment for all Americans; it does this by
addressing housing needs, improving and developing American communities, and enforcing fair
housing laws.
Department of Housing and Urban Development (HUD)
144
A loss of utility and thus value caused by physical deterioration, functional
obsolescence or economic obsolescence or any combination thereof.
Depreciation
145
Consists of the written words which delineate a specific piece of
real property.
Description (Schedule A)
146
Appointing one or more individual agents in a firm to represent
only the interests of the seller and one or more different individual agents in the firm to
represent only the interests of the buyer when a firm has an “in-house” dual agency situation.
Designated Sales Agent
147
The cost of labor and materials.
Direct Cost
148
The release of relevant information about a property that may influence the final
sale, especially if it represents defects or problems.
Disclosure
149
A form of pre-paid interest where 1 point equals 1 percent of the loan
amount.
Discount points
150
Failure to do something at the proper time, especially such delay as will
bar a party from bringing a legal proceeding.
Doctrine of Laches
151
A parcel of real property that has an easement over another piece of
property (the servient estate).
Dominant Tenement
152
The part of or interest in real estate of a deceased husband given by law to his widow
during her life.
Dower
153
The portion of a home’s purchase price that is paid in cash and is not part of
the mortgage loan. This amount varies based on the loan type, but is determined by taking the
difference of the sale price and the actual mortgage loan amount. Mortgage insurance is required
when a down payment less than 20 percent is made.
Down Payment
154
Representing both principals (seller and buyer) to a transaction.
Dual Agency
155
The review and investigation of a property to evaluate any legal liability.
Due Diligence
156
Allows lender to require the balance of a loan to be paid in full if the
collateral is sold (also known as an Alienation Clause).
“Due on Sale” Clause
157
Down payment made by a purchaser of real estate as evidence of
good faith.
Earnest Money Deposit
158
A right that may be exercised by the public or individuals on, over or through the
lands of others.
Easement
159
An easement that benefits the dominant estate and “runs with the land”. In other words, an easement appurtenant generally transfers automatically when the
dominant estate is transferred.
Easement Appurtenant
160
An easement created by the government or government
| agency that has exercised its right under eminent domain.
Easement by Condemnation
161
The creation of an easement by one party expressly transferring the
easement to another party.
Easement by Grant
162
An easement that is not created by express statements between
the parties; but as a result of surrounding circumstances that dictate that an easement must have
been intended by the parties.
Easement by Implication
163
Parcels without access to a public way may have an easement of
access over adjacent land if crossing that land is absolutely necessary to reach the landlocked
parcel and there has been some original intent to provide the lot with access.
Easement by Necessity
164
Implied easements granted after the dominant estate has used
the property in a hostile, continuous, and open manner for a statutorily prescribed number of
years.
Easement by Prescription
165
A type of negative easement. This easement prevents an
adjoining land owner from building any structure that would obstruct the passage of light or air
from reaching the dominant land.
Easement for Light and Air
166
An easement that benefits an individual or a legal entity, rather than a dominant estate.
Easement in Gross
167
The section of the roof that overhangs the walls of a house.
Eave
168
A loss in value caused by influences external to the property such
as increasing industrial activity near a residential neighborhood.
Economic Obsolescence
169
Created when electricity flows through a wire.
Electro-magnetic Field
170
A right of the government to acquire property for necessary public use by
condemnation; the owner must be fairly compensated.
Eminent Domain
171
A person who is hired to provide services to a company on a regular basis in
exchange for compensation and who does not provide these services as part of an independent
business.
Employee
172
A building, part of a building, or obstruction which intrudes upon or invades
a highway or sidewalk or trespasses upon the property of another.
Encroachment
173
Any right to or interest in the land interfering with its use or transfer, or
subjecting it to an obligation.
Encumbrance
174
A report addressing the potential effects on the
| environment of a proposed federal government project.
Environmental Impact Statement
175
The reversion to the State of property in event the owner thereof abandons it or dies,
without leaving a will and has no distributees to whom the property may pass by lawful descent.
Escheat
176
A written agreement between two or more parties providing that certain instruments
or property be placed with a third party to be delivered to a designated person upon the
fulfillment or performance of some act or condition.
Escrow
177
A leasehold estate for any specific period of time. An estate for years is not
automatically renewed.
Estate for Years
178
An instrument executed by the mortgagor setting forth the present status and the
balance due on the mortgage as of the date of the execution of the certificate.
Estoppel
179
A study of the nature, quality, or utility of certain property interests in which a
value estimate is not necessarily required, e.g. highest and best use, feasibility, market supply
and demand, etc.
Evaluation
180
A legal proceeding by a lessor landlord to recover possession of real property.
Eviction
181
An agreement of employment of a broker to the exclusion of all other
brokers; if sale is made by any other broker during term of employment, broker holding
exclusive agency is entitled to commissions in addition to the commissions payable to the broker
who effected the transaction
Exclusive Agency
182
An agreement of employment by a broker under which the exclusive
right to sell for a specified period is granted to the broker; if a sale during the term of the
agreement is made by the owner or by any other broker, the broker holding such exclusive right
to sell is nevertheless entitled to compensation.
Exclusive Right to Sell
183
An agreement that has been fully performed.
Executed Contract
184
A person or institution appointed by a testator to carry out the terms of their will.
Executor
185
A contract which has not yet been fully performed (fully executed).
Executory Contract
186
Conditions under which a property condition disclosure statement is not
required.
Exemption
187
A contract in which all elements of a contract are specifically stated (offer,
acceptance, consideration), and the terms are stated, as compared to an “implied” contract in
which the existence of the contract is assumed by the circumstances.
Express Contract
188
An actual agency created by written or oral agreement between the
principal and the agent.
Expressed Agency
189
A federal prohibition that protects buyer/renter of a dwelling
from seller/landlord discrimination with regards to race, color, religion, gender, or national
origin.
Fair Housing Act of 1968
190
A single person, pregnant woman or a household with children under 18
living with parents or legal custodians who might experience housing discrimination.
Familial Status
191
A group consisting of parents and children living together in a household.
Family
192
Architectural term for a band running horizontally and situated vertically under a roof
edge, or which forms the outer surface of a cornice, visible to an observer. Typically consisting of
a wooden board or sheet metal.
Fascia
193
Absolute ownership of real property; a person has this type of estate
where the person is entitled to the entire property with unconditional power of disposition
during the person’s life and descending to the person’s heirs or distributees.
Fee Simple Estate
194
Backed loans that usually require a lower down payment and may sometimes
have a lower interest rate.
FHA Mortgage
195
A person who on behalf of or for the benefit of another transacts business or
handles money or property not the person’s own; such relationship implies great confidence and
trust.
Fiduciary
196
The legal duty of a fiduciary to act in the best interests of the beneficiary.
One common duty includes confidentiality.
Fiduciary Duties
197
The decline in value of properties in neighborhoods that were once middle
or upper-middle income.
Filtering Down
198
The first contact or meeting by a licensee when some detail and
information about the property is shared with parties who express some interest in the real
estate transaction.
First Substantive Contact
199
Personal property so attached to the land or improvements as to
become part of the real property.
Fixture / Trade Fixture
200
Sheet metal used at wall and roof junctions and around chimneys to prevent water
entry.
Flashing
201
A fee paid by a seller or buyer on a housing co-op transaction typically in New York
City. It is not a tax, and not deductible as a property tax. It is a transfer fee payable upon the
sale of an apartment to the co-op.
Flip Tax
202
A term used for buying a home and then turning around and reselling it for a profit.
Flipping
203
Concrete set in the soil (foundation bed) that support the foundation of the house.
Footing
204
A special agreement between the lender and the borrower to delay a
foreclosure.
Forbearance
205
The part of the structure, typically below grade, upon which all other
construction is built.
Foundation Walls
206
Moderately toxic gases or liquids which have typically been used as refrigerants (in air
conditioning units) and as aerosol propellants.
Freon
207
Easily crumbled or reduced to powder. Asbestos is an example of a friable substance.
Friable
208
Refers to the length of a parcel facing a street.
Front Foot
209
A type of deed where the grantor guarantees that he or
she holds clear title to a piece of real estate and has a right to sell it to the grantee. This type of
deed contains the strongest guarantee of title.
Full Covenant and Warranty Deed
210
Impairment of useful capacity or efficiency; loss of value caused
by super adequacy, inadequacy or changes in the art inherent in the property itself. not to be
confused with external effects of economic obsolescence. Curable if the cost to cure is justified
by the resulting increase in value of the property; otherwise incurable.
Functional Obsolescence
211
A device used in electrical systems to protect against excessive current.
Fuse
212
An agent with the full authority over one property of the principal, such as a
property manager.
General Agent
213
A lien that attaches to all personal and real property of a person or firm.
General Lien
214
A primary horizontal structural element. Typically a deep beam in which smaller
joists or beams frame into.
Girder
215
A time past the deadline for an obligation during which a late penalty that
would have been imposed is waived.
Grace Period
216
A lease which provides for a graduated change at stated intervals in the
amount of the rent to be paid; used largely in long-term leases.
Graduated Lease
217
A type of fixed-rate mortgage in which the payment
| increases gradually from an initial low base level to a desired, final level.
Graduated Payment Mortgage
218
The buyer in a transaction.
Grantee
219
The seller in a transaction.
Grantor
220
Total income from property before any expenses are deducted.
Gross Income
221
A lease of property whereby the lessor is to meet all property charges regularly
incurred through ownership.
Gross Lease
222
An agreement in which a tenant is permitted to develop a piece of property
during the lease period, after which the land and all improvements are turned over to the
property owner.
Ground Lease
223
Water located beneath the earth’s surface in soil pore spaces and in the
fractures of rock formations.
Groundwater
224
An agreement between members of a trade to exclude other members from
fair participation in the trade.
Group Boycott
225
A home where a small number of unrelated people in need of care, support, or
supervision can live together, such as those who are elderly or mentally ill.
Group Home
226
A clause in a deed or lease that defines the type of interest and rights to
be enjoyed by the grantee or lessee. Also known as the “to have and to hold’” clause.
Habendum clause
227
Local horizontal structural elements used in wood framing to span doors and
windows.
Headers
228
Equal to 10,000 square meters.
Hectare
229
Established to review proposed
projects within historic districts for compliance with standards established for new development
or alteration or improvement of historic buildings and landmarks.
Historic Preservation / Landmark Commissions
230
A tenant who remains in possession of leased property after the expiration
of the lease term.
Holdover Tenant
231
A loan secured by equity value in the borrower’s property.
Home Equity Loan
232
An examination of a real estate property’s condition, usually performed in
connection with the property’s sale. A qualified home inspector can assess the condition of a
property’s roof, foundation, heating and cooling systems, plumbing, electrical work, water and
sewage, and some fire and safety issues. In addition, the home inspector will look for evidence of
insect, water or fire damage or any other issue that may affect the value of the property.
Home Inspection
233
A business conducted in a residential dwelling unit that is incidental
and subordinate to the primary residential use.
Home Occupations
234
The home which is owned by and is the usual residence of the client along with
all the surrounding land and any building on that land, provided the land is not separated from
the home by an property owned by others.
Homestead
235
Rules in a cooperative that cover common issues including garbage disposal,
maintenance, noise, and conflict resolution.
House Rules
236
The concept that property is an illiquid asset because it cannot easily be sold or
exchanged for cash.
Illiquidity
237
Form of agency that occurs when the words and actions of the parties
indicate that there is an agency relationship.
Implied Agency
238
A legal substitute for a contract. An implied contract is an agreement
created by actions of the parties involved, but it is not written or spoken. This is a contract
assumed to have been drawn
Implied Contract
239
A proceeding against the reality directly; as distinguished from a proceeding against a
person. (Used in taking land from nonpayment of taxes, etc.)
In Rem
240
An appraisal technique whereby the value of an income producing
property is estimating by capitalizing its net operating income using an appropriate
capitalization rate.
Value = Income / Rate.
Income Approach
241
A person that provides services to another under terms specified
in a contract or within a verbal agreement. An independent contractor is not an employee.
Independent Contractor
242
Costs that support a construction project, such as legal or architectural fees.
Indirect Cost
243
A lease tied to an index such as the Consumer Price Index.
Index Lease
244
The rate at which the general level of prices for goods and services is rising, and,
subsequently, purchasing power is falling.
Inflation
245
An agreement to do something or to allow something to happen only
after all the relevant facts are disclosed.
Informed Consent
246
Basic physical and organizational structures needed for the operation of a
society or city.
Infrastructure
247
The value of an asset or asset group that is covered by an insurance policy;
can be estimated by deducting cost of noninsurable items (e.g. land value) from market value.
Insured Value
248
A fee paid by the borrower of a loan as a form of compensation for the use of money.
Interest
249
Reductions of the income subject to tax, for various items,
| especially expenses incurred to produce income.
Interest and Tax Deductibility
250
The specific value of an investment to a particular investor or class of
investors based on individual investment requirements; distinguished from market value, which
is impersonal and detached.
Investment Value
251
Loss of property through attachment, condemnation, foreclosure,
sale of taxes or other involuntary transfer of title.
Involuntary Alienation –
252
A lien imposed against property without consent of the owner, e.g., taxes,
special assessments.
Involuntary Lien –
253
Incapable of being recalled or revoked; unchangeable; unalterable.
Irrevocable Consent –
254
Ownership of realty by two or more persons, each of whom has an undivided
interest with the “right of survivorship”.
Joint Tenancy –
255
A business agreement in which the parties agree to develop, for a finite time, a
new entity and new assets by contributing equity.
Joint Venture –
256
Horizontal timbers, beams or bars supporting a floor.
Joists –
257
Held that Congress could regulate the
sale of private property in order to prevent racial discrimination. Bars all racial discrimination,
private as well as public, in the sale or rental of property, and that the statute, thus construed, is
a valid exercise of the power of Congress to enforce the 13th Amendment.
Jones vs. Mayer Supreme Court Decision (1968) –
258
Payment by a broker of any part of compensation to a real estate transaction to
anyone who is not licensed or who is not exempt from the license law.
Kickback –
259
Rounded columns that serve as a structural post. Typically found in
basements and are made of steel or iron.
Lally Columns –
260
A land lease–also called a ground lease–is a lease agreement that permits the
tenant to use a piece of land owned by the landlord in exchange for rent.
Land Lease –
261
A supreme title to land which was originally acquired within the United States
of America by a treaty. It grants the rights to the described land under the treaty to the
individual person named on the patent and to their heirs and their assigns forever.
Land Patent –
262
A person who has oral or written authority, either express or implied, to
act for or on behalf of a landlord.
Landlord’s Agent –
263
Setup to protect consumers from dishonest
| attorneys.
Lawyer’s Fund for Client Protection –
264
A material used in pipes and paint of many older homes. We now know that lead is
hazardous to health. The local environmental protection agency should be consulted for
guidelines on handling, removal and applicable laws.
Lead –
265
The governmental agency that oversees the environmental impact process and
makes final decisions.
Lead Agency –
266
A contract whereby, for a consideration, usually termed rent, one who is entitled to the
possession of real property transfers such rights to another for life, for a term of years, or at will.
Lease –
267
A contract provision allowing for one to pass an increase in costs
to another party. Escalation clauses are usually related to influences beyond both parties
control, such as inflation.
Lease Escalation Clause –
268
The interest or estate which a lessee of real estate has therein by virtue of
the lessee’s lease.
Leasehold Estate –
269
A payment to a mortgage broker by a lender.
Lender Rebate –
270
A person to whom property is rented under a lease.
Lessee –
271
One who rents property to another under a lease.
Lessor –
272
Generally an agreement to agree. It outlines the terms between
parties who have not formalized an agreement into a contract. LOIs are generally not binding
and unenforceable.
Letter of Intent (LOI) –
273
The use or borrowed capital (mortgage) to increase the potential return of an
investment.
Leverage –
274
An assessment of tax.
Levy –
275
Policy that covers civil liabilities to third parties, arising from bodily
injury, property damage, or other wrongs due to the action or inaction of the insured.
Liability Insurance –
276
Permission granted by a party to another party as an element of an agreement
between both parties.
License –
277
A legal right or claim upon a specific property which attaches to the property until a debt
is satisfied.
Lien –
278
The conveyance of title property for the duration of the life of the grantee.
Life Estate –
279
Some mortgages have interest rate ceilings (or limits) which are
similar to, and sometimes referred to as, lifetime caps.
Lifetime Cap/Ceiling –
280
A provision in certain legal contracts that allows for the payment of a
specified sum should one of the parties be in breach of contract.
Liquidated Damages –
281
A legal document, filed in the office of the county clerk giving notice that an
auction or proceeding is pending in the courts affecting the title to the property. (Not applicable
in commission disputes.)
Lis Pendens –
282
An employment contract between principal and agent, authorizing the
agent to perform services for the principle involving the latter’s property.
Listing Agreement –
283
The right of a property owner whose land borders on a body of water, such as
a lake, ocean or sea, to reasonable use and enjoyment of the shore and water the property
borders on.
Littoral Rights –
284
A financial term used by lenders to express the ratio of a loan to
the value of an asset (property) purchased.
Loan To Value ratio (LTV) –
285
Method of identifying legal description of property.
Lot and Block –
286
An agent’s duty to place the client’s interest above those of all others, including the
agent’s own self-interest.
Loyalty –
287
Monthly payments by a shareholder to a cooperative corporation.
Maintenance –
288
A contract between the owner of a property and someone who
| agrees to manage it.
Management Agreement –
289
A document that sets forth the duties of the manager when
| employed by the owner.
Management Proposal –
290
The amount of interest a bank charges on a loan over the base rate.
Margin –
291
Indicated whether the person is married. The only possible answers are
“married” or “single”.
Marital Status –
292
An agreement between members of a trade to refrain from competition
in specific market areas.
Market Allocation –
293
The actual selling price of a property.
Market Price –
294
The most probable price that a property should bring if exposed for sale in the
open market for a reasonable period of time, with both the buyer and seller aware of current
market conditions, neither being under duress.
Market Value –
295
A title that a court of equity considers to be so free from defect that it will
legally force its acceptance by a buyer.
Marketable Title –
296
A long-term planning document. It establishes the framework and key elements
of a site reflecting a clear vision created and adopted in an open process. It synthesizes civic
goals and the public’s aspirations for a project, gives them form and organization, and defines a
realistic plan for implementation, including subsequent approvals by public agencies.
Master Plan –
297
A security interest in the title to property for the benefit of those who have
supplied labor or materials that improve the property.
Mechanic’s Lien –
298
A term used in describing the boundary lines of land, seeing forth all the
boundary lines together with their terminal points and angles.
Metes and Bounds –
299
A crime punishable by up to a year in prison and/or a $1,000 fine.
Misdemeanor –
300
Making an intentionally false statement to induce someone to contract.
Misrepresentation –
301
A fungus that grows in the form of multicellular filaments called hyphae.
Mold –
302
A temporary prohibition of an activity.
Moratorium –
303
An instrument in writing, duly executed and delivered, that creates a lien upon real
estate as security for the payment of a specified debt, which is usually in the form of a bond.
Mortgage –
304
A company, individual or institution that originates mortgages. Mortgage
bankers use their own funds, or funds borrowed from a warehouse lender, to fund mortgages.
Mortgage Banker –
305
An intermediary who brings mortgage borrowers and mortgage lenders
together, but does not use its own funds to originate mortgages. A mortgage broker gathers
paperwork from a borrower, and passes that paperwork along to a mortgage lender for
underwriting and approval. The mortgage funds are then lent in the name of the mortgage
lender. A mortgage broker collects an origination fee and/or yield spread premium from the
lender as compensation for its services.
Mortgage Broker –
306
A banking department form required
| when a person is acting as a mortgage broker and a real estate broker in the same transaction.
Mortgage Broker Dual Agency Disclosure Form –
307
A written notice from the bank or other lending institution saying
it will advance mortgage funds in a specified amount to enable a buyer to purchase a house.
Mortgage Commitment –
308
A clause in a contract that states a mortgage must be
| obtained in order for the contract to be binding.
Mortgage Contingency Clause –
309
The amount paid by a mortgagor for mortgage
insurance, either to a government agency such as the FHA or to a private mortgage insurance
(MI) company.
Mortgage Insurance Premium (MIP) –
310
The estimate worth of a particular asset which is established for the
purposes of obtaining financing secured against that asset.
Mortgage Value –
311
The lender or bank who provides a loan to the borrower or homeowner.
Mortgagee –
312
the borrower, typically a home owner.
Mortgagor –
313
A service provided by a group of real estate brokers. They
band together to create a Multiple Listing Service that allows each of them to list each other’s
houses. Under this arrangement, the listing broker and the selling broker split the commission
for each sale.
Multiple Listing Service (MLS)
314
Occurs whenever the loan payment for any period is less than the
interest charged over that period so that the outstanding balance of the loan increases.
Negative amortization –
315
The result of subtracting expenses from income.
Net Income –
316
A lease that requires the tenant to pay, in addition to rent, some or all of the
property expenses that normally would be paid by the property owner. These include expenses
such as real estate taxes, insurance, maintenance, repairs, utilities, and other items.
Net Lease –
317
A price below which an owner will not sell the property, and at which price a
broker will not receive a commission; the broker receives the excess over and above the net
listing as the broker’s commission.
Net Listing –
318
Equal to the Gross income minus expenses (and sometimes debt
| service). Also referred to as cash flow.
Net Operating Income –
319
Protects individuals from the discrimination based
on their age, creed, race, color, sex, sexual orientation, national origin, marital status, disability,
military status, domestic violence victim status, arrest record, conviction record, predisposing
genetic characteristics, and familial status.
New York State Human Rights Law –
320
Oversees public recreational areas and administrators federal and state preservation programs
authorized by federal and state law.
New York State Office of Parks, Recreation and Historic Preservation (OPRHP) –
321
A loan that fails to meet bank criteria for funding.
Non-Conforming Loan
322
Utilization of a use that does not comply with local zoning for a
particular parcel.
Non-Conforming Use
323
Real property that does not meet the definition of homestead. Nonhomestead real property is generally counted as an asset; however, it is considered unavailable
during the time the client make a reasonable effort to sell the property.
Non-Homestead –
324
A term of the law of property to describe any of a category of rights held by
one person to use land that is in the possession of another.
Non-Possessory –
325
A rule adopted by the Secretary of State which prohibits any or all
types of solicitation directed towards homeowners within a defined geographic area. Such rule
may be adopted after a public hearing and upon the Secretary’s determination that homeowners
within the subject area have been subject to intense and repeated solicitations by real estate
brokers or salespersons and that such solicitations have caused owners to reasonably believe that
property values may decrease because persons of different race, ethnic, religious or social
backgrounds are moving or about to move into such area.
Non-Solicitation Order –
326
– The act of either:
1) replacing an obligation to perform with a new obligation; or
2) adding an obligation to perform; or
3) replacing a party to an agreement with a new party.
Novation
327
The fiduciary relationship obligates the agent to act in good faith at all times,
obeying the client’s instructions in accordance with the contract.
Obedience –
328
One of the causes of depreciation. It is the loss of desirability and usefulness
caused by new inventions, changes in design, and improved processes for production, or from
the influence of external factors. Obsolescence may be either economic or functional.
Obsolescence –
329
Elements required for the formation of a legally binding contract.
The expression of an offer to contract on certain terms by one person (the “offeror”) to another
person (the “offeree”), and an indication by the offeree of its acceptance of those terms.
Offer and Acceptance –
330
A document prepared by the attorneys representing the builders of a
newly constructed condominium building. The statement includes information about the
number and type of units in the building, the Homeowners Association rights and duties to
owners, and a list of any easements or liens affecting the title of the building. In most cases,
buyers looking to purchase a new construction condo get the Offering Statement from their
agent before they make an offer on a unit.
Offering Statement –
331
A listing given to any number of brokers without liability to compensate any
except the one who first secures a buyer ready, willing and able to meet the terms of the listing,
or secures the acceptance by the seller of a satisfactory offer; the sale of the property
automatically terminates the listing.
Open Listing –
332
An amount of money set aside by the owner for a specific period for the
property manager to manage the property effectively.
Operating Budget –
333
A right given for a consideration to purchase or lease a property upon specified terms
within a specified time; if the right is not exercised the option holder is not subject to liability for
damages; if exercised, the grantor of option must perform.
Option –
334
– A clause in a lease that outlines the terms for renewing or extending an
original lease agreement.
Option to Renew
335
A method of financing in which the loan that finances the purchase of a
home also finances the purchase of personal items such as a washer and dryer, refrigerators,
stove, and other specified appliances.
Package Mortgage –
336
Insurance policy that combines coverage from two or more types of
insurance (such as property and liability) into one policy.
Package Policy –
337
A piece of land under one ownership.
Parcel –
338
The division which is made of real property between those who own it in undivided
shares.
Partition –
339
A wall built along the line separating two properties, partly on each, which wall
either owner, the owner’s heirs and assigns has the right to use; such right constituting an
easement over so much of the adjoining owner’s land as is covered by the wall.
Party Wall –
340
Earnings an individual derives from a rental property in which he
or she is not actively involved.
Passive Activity Income –
341
The limit to the monthly payment on a mortgage.
Payment Cap –
342
A lease of property in which the rental is based upon the percentage of the
volume of sales made upon the leased premises, usually provides for minimal rental.
Percentage Lease –
343
The rate, usually expressed as inches per hour or inches per day, at which
water moves through soil.
Percolation Rate –
344
Also known as a tenancy from year to year, month to month, or week to week,
is an estate that exists for some period of time determined by the term of the payment of rent.
Periodic Lease -
345
Any property which is not real property.
Personal Property –
346
Also known as the slope. Typically used in describing the slope of a roof, driveway,
sidewalk, etc.
Pitch –
347
A highly designed residential project that features relatively
dense clusters of houses, which are usually surrounded by areas of commonly owned open space
maintained by a nonprofit community association.
Planned Unit Development –
348
A local elected or appointed government board charged with recommending
to the local town or city council the boundaries of the various zoning districts and appropriate
regulations to be enforced therein.
Planning Board –
349
Gypsum board panels that are typically used in interior wall
construction. Wall board usually has a painted finish and are supported by wood or metal studs
behind.
Plaster Board / Wall board –
350
Wood frame construction commonly found in residential
| construction in which floors are supported by joists, beams, and bearing walls.
Platform Construction –
351
Money is placed in a pledged savings account. This
| fund, plus earned interest, is used to gradually reduce mortgage payments.
Pledged Account Mortgage (PAM) –
352
Increment in unity value of a plot of land created by assembling smaller ownerships
into one ownership.
Plottage –
353
A card issued by the Department of State to each licensee which contains the
photo, name and business address of the licensee, and, in the case of a real estate salesperson,
the name and business address of the broker with whom he or she is associated and shall certify
that the person whose name appears thereon is a licensed real estate broker or salesperson.
Pocket Card –
354
Equal to 1 percent of a loan amount. For example, 1 point on a $100,000 is equal to
$1,000.
Point –
355
The right of any political body to enact laws and enforce them, for the order,
safety, health, morals and general welfare of the public.
Police Power –
356
A synthetic, odorless, liquid organic compound and
| carcinogen appearing in groundwater and soil.
Poly-chlorinated Byphenols (PCBs) –
357
The intent and right of a person to occupy and/or exercise control over a
particular plot of land.
Possessory –
358
A type of construction in which the beams and joists are
larger, allowing the floor to span longer than the typical 16” or 24” found in residential
construction.
Post and Beam Construction –
359
A written instrument duly signed and executed by a person which
authorizes an agent to act on his/her behalf to the extent indicated in the instrument.
Power of Attorney –
360
A form used between mortgage brokers or mortgage
bankers and a home buyer that provides certain disclosures prior to the application of a
mortgage.
Pre Application and Fee Agreement –
361
An evaluation of a potential borrower by a lender that determines whether the
borrower qualifies for a loan from the lender, or the maximum amount that the lender would be
willing to lend.
Pre-approval –
362
A process whereby a loan officer takes information from a borrower and
makes a tentative assessment of how much the lending institution is willing to lend them.
Pre-qualification –
363
The Unfair, deceptive, or fraudulent practices of some lenders during
the loan origination process.
Predatory Lending –
364
A clause in a mortgage contract that says if the mortgage is
prepaid within a certain time period, a penalty will be assessed. The penalty is usually based on
percentage of the remaining mortgage balance or a certain number of months worth of interest.
Prepayment Penalty Clause –
365
Keeping property and equipment in a good state of repair so as
to minimize the need for more costly major repair work or replacement.
Preventative Maintenance –
366
The amount a purchaser agrees to pay and a seller agrees to accept in an arms length
transaction.
Price –
367
Conspiring to establish fixed fees or prices for services or products.
Price Fixing –
368
The market where borrowers and mortgage originators come
together to negotiate terms and effectuate mortgage transaction. Mortgage brokers, mortgage
bankers, credit unions and banks are all part of the primary mortgage market.
Primary Mortgage Market –
369
(1) The employer of an agent or broker; the broker’s or agent’s client. (2) A sum of
money lent or invested on which interest is paid.
Principal –
370
Insurance payable to a lender or trustee for a pool of
| securities that may be required when taking out a mortgage loan.
Private Mortgage Insurance (PMI) –
371
An accounting statement that forecasts income and expenses for a
period of time, typically five or more years. Pro-forma statements are typically used by investors
to estimate their rate of return for a particular property.
Pro-forma Statement –
372
A signed document containing a written promise to pay a stated sum to a
specified person/institution or the bearer at a specified date or on demand.
Promissory Note –
373
Provides protection against most risks to property, such as fire, theft
and some weather damage.
Property Insurance –
374
The administration of residential, commercial and/or industrial real
estate. Property management typically involves the managing of property that is owned by
another party or entity. Property managers are typically paid a fee and/or a percentage of the
rent brought in for the property while under management.
Property Management –
375
An accounting report issued periodically by the property
| manager to the owner outlining all income and expenditures for that accounting period.
Property Management Report –
376
An individual or company responsible for the day-to-day functioning of a
piece of real estate.
Property Manager –
377
A lease given by a corporation to another. It is often used in a co-op
context, where the owner is given a certain number of shares in the co-op, along with a
proprietary lease for one of the residences in the building.
Proprietary Lease –
378
Allocation of closing costs and credits to buyers and sellers.
Proration –
379
A term that is used for a gift of land that is from the government.
Public Grant –
380
The right of an owner or a person legally in possession to the use of
property without interference of possession.
Quiet Enjoyment –
381
A deed which conveys simply the grantor’s rights or interest in real estate,
without any agreement or covenant as to the nature or extent of that interest, or any other
covenants; usually used to remove a cloud from the title.
Quitclaim Deed –
382
A measurement of the ability of insulation to slow the transfer of heat or cold. The
higher the R value, the greater the insulation power.
R-Value –
383
A colorless, odorless gas that is emitted from soils, rocks and water as a result of
radioactive decay in certain areas of the country. Radon is known to cause cancer. Homes should
be tested for radon. The local environmental agency should be consulted on its handling,
removal and any applicable laws.
Radon –
384
The structural member or beam that supports the roof. It spans from the exterior wall
to the ridge board of the peak of the roof.
Rafter –
385
Limits to the interest rate on an adjustable-rate mortgage.
Rate Cap –
386
An agreement between a borrower and a lender that allows the borrower to lock in
the interest rate on a mortgage over a specified time period at the prevailing market interest
rate.
Rate Lock –
387
A profit on an investment over a period of time, expressed as a proportion of
the original investment.
Rate of Return –
388
Land, and generally whatever is erected upon or affixed
| thereto.
Real Estate / Real Property –
389
A practitioner who has the knowledge and expertise necessary to
estimate the value of an asset, or the likelihood of an event occurring, and the cost of such an
occurrence. Ideally, an appraiser acts independently of the buying and selling parties in a
transaction in order to arrive at the fair value of an asset without bias.
Real Estate Appraiser –
390
A licensed individual or firm that charges a fee to serve as the mediator
between the buyer and seller. Mortgage brokers are individuals in the business of arranging
funding or negotiating contracts for a client, but who does not loan the money. A real estate
broker is someone who helps find a house.
Real Estate Broker –
391
An individual who is licensed to negotiate and arrange real estate
sales; works for a real estate broker.
Real Estate Salesperson –
392
A consumer protection statute, first
passed in 1974. The purpose of RESPA are
1) To help consumers become better shoppers for settlement services and
2) To eliminate kickbacks and referral fees that unnecessarily increase the costs of certain
settlement services.
Real Estate Settlement Procedures Act (RESPA) –
393
The tax levy divided by the total taxable assessed value of a taxing
jurisdiction, usually expressed in dollars per thousand, dollars per hundred, or mills.
Real Property Tax Rate
394
The degree of caution and concern for the safety of himself/herself and
others an ordinarily prudent and rational person would use in the circumstances. This is a
R
subjective test of determining if a person is negligent, meaning he/she did not exercise
reasonable care.
Reasonable Care –
395
When real property is sold at a gain and accelerated depreciation
has been claimed, the owner may be required to pay a tax at ordinary (non-accelerated) rates to
the extent of the excess accelerate depreciation.
Recaptured Depreciation –
396
The collecting officer for each city and town that receives real property
taxes and assessments.
Receiver of Taxes –
397
The right of an individual involved in a contract to return to a state identical to
that before they entered into the agreement, due to courts not recognizing the contract as legally
binding. In many cases, rescission may be an option if there is a material error in the contract,
among other reasons.
Rescission –
398
– The agreement between the cooperative building and the bank
lending money for purchase of shares of stock in the cooperative.
Recognition Agreement
399
The final stage in the appraisal process where the appraiser reviews the data
and estimates the subject property’s value.
Reconciliation –
400
The refusal to lend money within a specific area for various reasons. This
practice is illegal.
Red-Lining –
401
Used to convey real property sold pursuant to a judicial order in an action for
the foreclosure of a mortgage or for partition.
Referees deed –
402
A section of a deed that may refer to a plat map, which includes the
block and lot number of a particular piece of property.
Reference to a Plat –
403
A remedy whereby a court orders a change in a written document to reflect
what it ought to have said in the first place.
Reformation –
404
The Truth in Lending Act of 1968 is United States federal law designated to
promote the informed use of consumer credit, by requiring disclosures about its terms and cost
to standardize the manner in which costs associated with borrowing are calculated and
disclosed.
Regulation Z –
405
A clause found in a blanket mortgage which gives the owner of the property
the privilege of paying off a portion of the mortgage indebtedness, and thus freeing a portion of
the property from the mortgage.
Release Clause –
406
The person who is to receive the property after
| the termination of the prior estate.
Remainder Interests / Remainderman –
407
Usable area that can be leased/rented to a tenant.
Rentable Square Footage –
408
Normal cost of exact duplication of a property as of a certain date.
Replacement Cost –
409
A manager of a property who lives on-site.
Resident Manager –
410
Any type of agreement that requires the buyer to either take or
abstain from a specific action. In real estate transactions, restrictive covenants are binding legal
obligations written into the deed of a property by the seller.
Restrictive Covenant –
411
A form of mortgage in which the lender makes periodic
| payments to the borrower using the borrower’s equity in the home as satisfaction of mortgage.
Reverse Annuity Mortgage –
412
The interest which a grantor has in lands or other property upon the
termination of the preceding estate.
Reversionary Interest –
413
An act of recalling a power of authority conferred, as the revocation of a power of
attorney; a license, an agency, etc.
Revocation –
414
Also known as an addendum, in general, is a writing annexed to an agreement.
Rider –
415
A contractual right that gives its holder the option to enter a business
transaction with the owner of something, according to specified terms, befor he owner is entitled
to enter into the transaction with a third party.
Right of First Refusal –
416
Right of the surviving joint owner to succeed to the interests of the
deceased joint owner, distinguishing feature of a joint tenancy or tenancy by entirety.
Right of Survivorship –
417
The right to pass over another’s land pursuant to an easement or license.
Right-of-Way –
418
The right of a property owner whose land borders a natural water course,
such as a river, to reasonable use and enjoyment of the water that flows past the property.
Riparian literally means “riverbank”.
Riparian Rights –
419
Controlling and limiting risk in property ownership.
Risk Management –
420
Enacted in 1974, a federal law intended to ensure safe
| drinking water for the public.
Safe Drinking Water Act (SDWA) –
421
A transaction where one sells an asset and leases it back for the longterm; therefore, one continues to be able to use the asset but no longer owns it.
Sale-and-Leaseback –
422
Valuation method which compares a subject property’s
characteristics with those of comparable properties which have recently sold in similar
transactions.
Sales Comparison Approach –
423
A document acknowledging the payment of a mortgage debt.
Satisfaction of Mortgage –
424
The market where mortgage loans and servicing rights are
bought and sold between mortgage originators, mortgage aggregators (securitizers) and
investors. The secondary mortgage market is extremely large and liquid.
Secondary Mortgage Market –
425
A monetary deposit given to a lender, seller or landlord as proof of intent.
Security deposits can be either refundable or nonrefundable, depending on the terms of the
transaction.
Security Deposit –
426
The conduct of a trustee, an attorney, a corporate officer, or other fiduciary that
consists of taking advantage of his position in a transaction and acting for his own interests
rather than for the interests of his clients.
Self Dealing –
427
An agent who represents the seller of real property.
Seller’s Agent –
428
A small-scale sewage treatment system common in areas with no connection
to main sewage pipes provided by local governments or private corporations.
Septic System –
429
A parcel of real property that is encumbered by an easement of a
dominant estate.
Servient Tenement –
430
The distance from the curb or other established line, within which no buildings may
be erected.
Setbacks –
431
– Ownership by only a single individual.
Severalty
432
A loan in which shares of stock are used as collateral. Typically found in
cooperative purchases.
Share Loan –
433
– Joint ownership of real estate by both lenders and property
dwellers. When the property is eventually sold, the owners share in the proceeds, or equity. In
the meantime the property occupants benefit from interest and property tax write-offs.
Shared Equity Mortgage
434
– Panels that cover the exterior wall. Typically made of plywood or exterior grade
gypsum board.
Sheathing
435
– A veneer cover found on the side of residential construction. Typically made of wood
boards (horizontal), vinyl, or aluminum.
Siding
436
– The bottom member of wood frame stud wall.
Sill Plates
437
– A structure which does not include a basement. The first
| floor is made up of a concrete slab, which lays on the ground and supported by foundation walls.
Slab-on-Grade Construction
438
– The underside of a roof overhang.
Soffit
439
An agent with limited authority to act on behalf of the principal, such as
created by a listing.
Special Agent –
440
An assessment made against a property to pay for a public
| improvement by which the assessed property is supposed to be especially benefited.
Special Assessment –
441
A geographic area in which the market value of real estate is
enhanced due to the influence of a public improvement and in which as tax is apportioned to
recover the costs of the public improvement.
Special Assessment Districts –
442
Property that is appropriate for one type of use or limited use.
This type of property has unique design or layout, uses special construction materials, or other
features that limit the property’s utility for purposes other than the one for which it was built.
For example, a church, theater, or school.
Special Purpose Real Estate –
443
– A document provided by Architects that describe the quality of construction.
Specifications
444
– A lien that only binds to a specific asset or property.
Specific Lien
445
– An order of a court which requires a party to perform a specific act,
usually what is stated in a contract.
Specific Performance
446
– (1) A licensed real estate broker that holds the license of a salesperson. (2) The
developer or owner organizing and offering for sale a condominium or cooperative development.
Sponsor
447
– The application of zoning to a specific parcel of land within a larger zoned area
when the rezoning is usually at odds with a city’s master plan and current zoning restrictions.
Spot Zoning
448
– A forecast of income and expenses for a property, typically over a three to
five year period.
Stabilized Budget
449
– A mortgage program that assists
| first-time homebuyers with the purchase of a home in New York State.
State of New York Mortgage Association (SONYMA)
450
– State law which provides that certain contracts must be in writing in order
to be enforceable at law.
Statute of Frauds
451
– A statute barring all right of action after a certain period of time
from the time when a cause of action first arises.
Statute of Limitations
452
– The practice in which real estate brokers guide prospective home buyers towards or
away from certain neighborhoods based on their race. Steering is highly illegal.
Steering
453
– A non-amortizing mortgage under which the principal is paid in its
entirety upon the maturity date.
Straight Mortgage
454
– A method of calculating the depreciation of an asset which
| assumes the asset will lose an equal amount of value each year.
Straight-line Depreciation
455
– Vertical framing members found in wall construction. Typically placed 12”, 16” or 24”
on center.
Studs
456
- An agent of a person already acting as an agent of a principal.
Sub-agent
457
– The control of the division of a tract of land into individual lots by
requiring development according to specific design standards and procedures adopted by local
ordinances.
Subdivision Regulations
458
– An arrangement in which the lessee (tenant) in a lease assigns the lease to a third
party, thereby making the old lessee the sublessor, and the new lessee the sublessee, or
subtenant.
Sublease
459
– A legal document used to make the claim of one party junior to
(or inferior to) a claim in favor of another.
Subordination Agreement
460
Enacted in 1986, made several
| important changes and additions to CERCLA, including minimum cleanup requirements.
Superfund Amendments and Reauthorization Act –
461
– The process by which a parcel of land is measured and its area ascertained; also the
blueprint showing the measurements, boundaries and area.
Survey
462
– The right of the Department of State to deactivate a broker’s or salesperson’s
license for wrongdoing.
Suspension
463
– The act of a government body obtaining a property under its power of eminent
domain.
Taking
464
– An elected or appointed official of a county, city, town or village whose function
is to value real property for the purposes of taxation.
Tax Assessor
465
– Under Section 1031 of the US Internal Revenue Code, the
exchange of certain types of property may defer the recognition of capital gains or losses due
upon sale, and hence defer any capital gains taxes otherwise due.
Tax-Deferred Exchange
466
– An income deduction that allows a taxpayer to recover the cost or other
basis of certain property. It is an annual allowance for the wear and tear, deterioration, or
obsolescence of the property.
Tax Depreciation
467
– A lien imposed by law upon a property to secure the payment of taxes.
Tax Lien
468
– Any method of reducing taxable income resulting in a reduction of the payments
to tax collecting entities, including state and federal governments.
Tax Shelter
469
– A lease for a fixed period of time. For a tenancy for years lease, no notice
is needed for termination, the lessee knows the termination date from the outset of the lease.
Tenancy for Years
470
– An ownership of realty by two or more persons, each of whom has an
undivided interest, without the “right of survivorship”.
Tenancy in Common
471
– A licensed real estate agent who acts on behalf of a tenant in a commercial
property transaction.
Tenant’s Agent
472
– The discontinuance of an agent’s relationship with his/her sponsoring broker.
Termination
473
A written document that terminates the relationship
| between an agent and his/her sponsoring broker.
Termination of Association Notice –
474
– Volunteers from state or private agencies who enforce fair housing by claiming to be
home seekers, thereby finding out if brokers deal fairly with all clients/customers.
Testers
475
A contract where one transaction depends upon another.
Tie-in Arrangement –
476
“Time is of the Essence” – A phrase in a contract that means that performance by one party
at or within the period specified in the contract is necessary to enable that party to require
performance by the other party.
“Time is of the Essence”
477
The idea that money available at the present time is
| worth more than the same amount in the future due to its potential earning capacity.
Time Value of Money (TVM) –
478
– Legal term for a bundle of rights in a piece of property in which a party may own either a
legal interest or equitable interest.
Title
479
– The process in which the title company oversees the closing or document
signing of the loan in close conjunction with the entity performing the escrow function on the
loan. Once the loan documents are signed and all contingencies are satisfied, the title company
records the security instrument and releases the proceeds of the loan.
Title Closing
480
– A policy of insurance which indemnifies the holder for any loss sustained by
reason of defects in the title.
Title Insurance
481
– An examination of the public records to determine the ownership and
incumbrances affecting real property.
Title Search
482
– The arrangement of the natural and artificial physical features of an area.
Topography
483
The purchase and use of air rights from adjoining or
| nearby properties.
Transfer of Development Rights –
484
A lease in which the tenant or lessee is responsible for paying a portion of
or all of the common expenses related to real estate ownership, in addition to base rent.
Triple Net Lease –
485
– Any person who holds property, authority, or a position of trust and responsibility for
the benefit of another.
Trustee
486
– A person who conveys title to a trustee.
Trustor
487
– Insurance policy that covers amounts above those covered under one or
more other primary policies, and which does not pay until the losses exceed a certain sum. Also
called excess insurance.
Umbrella Policy
488
A tank and any underground piping connected to the tank
| that has at least 10 percent of its combined volume underground.
Underground Storage Tanks –
489
– The process by which a lender decides whether a potential creditor is
creditworthy and should receive a loan.
Underwriting
490
– The interest in property owned by tenants whereby each tenant has an
equal right to enjoy the entire property.
Undivided Interest
491
– The fiduciary duty that prohibits the agent from advancing any interests
adverse to the principal’s interest or conducting the principal’s business in such a way as to
benefit a customer, a subagent, the agent or any other party to the detriment of the principal’s
interest unless required by statute, regulation or common law – e.g., disclosing material facts
and defects of a property.
Undivided Loyalty
492
– A relationship in which the real estate agent is found to be the
agent of both the buyer and seller in a transaction, but without the knowledge and informed
consent of both parties. Undisclosed Dual Agency is illegal in all states.
Undisclosed Dual Agency
493
– A standard set of business laws that regulate financial
contracts. The Uniform Commercial Code has been adopted by most states in the U.S. The code
itself has nine separate articles. Each article deals with separate aspects of banking and loans.
The UCC better enabled lenders to loan money secured by the borrower’s personal property.
Uniform Commercial Code
494
Describes the conditions that must exist
in order for certain kinds of property interests to be created. In order for two or more people to
own property as joint tenants with right of survivorship, or for a married couple to own property
as tenants by the entirety, they must have the four unities (Interest, Possession, Time, and Time)
Unities of Interest, Possession, Time and Title –
495
A type of foamed in-place insulation that
releases formaldehyde gas. It was banned by the Consumer Public Safety Commission in 1982
from use in residences and schools. Holding that the risks had not been proven, a Federal Court
lifted the ban in 1983. The local consumer and/or environmental protection agency should be
consulted for additional information on this type of insulation.
Urea Formaldehyde Foam Insulation (UFFI) –
496
– Permission to use or develop land other than that permitted by local zoning
ordinances.
Use Variance
497
Space that can be used or occupied by a tenant.
| Typically does not include elevators, stairs, mechanical spaces, etc.
Useable (usable) Square Footage –
498
– On a loan, claiming a rate of interest greater than that permitted by law.
Usury
499
A mortgage loan designed to offer long-term financing to eligible American
veteran or their surviving spouses (provided they do not remarry). The basic intention of the VA
direct home loan program is to supply home financing to eligible veterans in areas where private
financing is not generally available and to help veterans purchase properties with no down
payment.
VA Mortgage –
500
– The process of estimating market value, investment value, insurable value, or
other properly defined value of an identified interest or interests in a specific parcel or parcels of
real property as of a given date.
Valuation
501
The net present value (NPV) of a cash flow or other benefits that an asset (real
property) generates for a specific owner under a specific use.
Value-in-Use –
502
Property expenditures that vary depending of the operations of the
property.
Variable Expense –
503
– The authorization to improve or develop a particular property in a manner not
authorized by zoning.
Variance
504
– A situation in which one party is held partly responsible for the unlawful
actions of a third party.
Vicarious Liability
505
The governing body of villages.
Village Board of Trustees –
506
– Act, deed or conditions contrary to law or permissible use of real property.
Violation
507
– To have no force or effect; that which is unenforceable.
Void
508
– That which is capable of being adjudged void, but is not void unless action is taken
to make it so.
Voidable
509
– Electromotive force or potential difference expressed in volts.
Voltage
510
Transfer of title to an asset with the consent of the owner.
Voluntary Alienation –
511
– A contractual or consensual lien that is created by an action taken by the
debtor, such as a mortgage loan to buy real estate.
Voluntary Lien
512
– An area that is inundated or saturated by surface or groundwater at a frequency
and duration sufficient to support, and that under normal circumstances does support, a
prevalence of vegetation typically adapted for life in saturated soil conditions. Wetlands
generally include swamps, marshes, bogs, and similar areas, but exclude irrigation ditches unless
delineated as part of an adjacent wetland.
Wetlands
513
A form of secondary financing for the purchase of real property.
The seller extends to the buyer a junior mortgage which wraps around the exits in addition to
any superior mortgages already secured by the property.
Wrap-around Mortgage –
514
A local appointed board that has the power to review
| administrative rulings made by the planning board or another legislative body.
Zoning Board of Appeals –
515
– Act of city or country of other authorities specifying type and use to
which property may be put in specific areas.
Zoning Ordinance
