Real Estate Vocabulary Flashcards
Abstract of Title
A report based on what was found in a title search, shows history of title
Acceleration Clause
A clause in a mortgage loan that allows the lender to declare the entire balance of the loan due immediately once the loan is declared in default after the borrower misses a certain number of payments
Accessory building
A separate building on a property that supports or is related to the main use of the property
Accretion
The gaining of land due to natural forces
Accrued depreciation
The total loss in value of a building from all causes; part of the cost approach to value.
Accrued item
an item that is owed by the seller but paid by the buyer opposite of prepaid item
Acknowledgment
In a deed, shows proof of witnessing the grantors signature
Actual eviction
Occurs when the landlord takes legal action, generally through a lawsuit, to repossess the premises
Ad Valorum
Used in connection with real estate taxes that are based on the value of the property
Add on factor
The percentage that is added to the useable space to arrive at the rentable space in a commercial building
Ex: rentable space + useable space = rent
Useable space =Common areas
Adjustable rate mortgage
A mortgage loan in which the interest rates can change throughout the life of the loan
Adverse possession
The claim of ownership of one persons property by another one based on how the encroaching person is using it and the length of the time involved
Ex:Squatters Rights
Agency by estoppel
An agency created when the principle doesn’t stop the agent from going beyond his normal duties thereby giving the impression that the agency relationship has been created
Agency by ratification
When the principal approves of an agents actions before the authorization of their agency relationship.
Agency coupled with an interest
An agency relationship where the agent has some kind of interest in the property being sold
Agency relationship
The relationship between the agent and the principal
Air Rights
Rights of a property owner to the infinite airspace above their land, That may be limited by government regulations regarding aircraft traffic.
Alienation clause - “Due on sales clause” “Call Clause” “Resale Clause”
A clause that requires a borrower to pay the remainder of their mortgage loan off immediately during the sale or transfer of a property title and before a new buyer can take ownership.
Fully Amortized loan
You make every payment according to the schedule, your loan will be fully paid off by the end of the term.
Partially amortized loan
Loan where portion of the debt is paid with regular monthly payments then, a balloon payment is made on the loan due date.
Amortized loan “direct reduction loan”
A type of mortgage loan in which the entire balance of the loan is paid off by the end of the term of the loan.
Annual Cap
the maximum amount the interest rate can be adjusted in any given year
Annual percentage rate (APR)
The cost you pay each year to borrow money, including fees, expressed as a percentage.
Antitrust laws
Federal laws designed to protect the public from unfair business practices.
Anticipation
The economic influence of value that indicates that present value is created by the valuation of future benefits
Appraisal
determines the fair market value of a home.
Appreciation “Capital Appreciation”
A rise in the value of a piece of property
Appurtenant easement
An easement that benefits a neighboring property
Ex: Granting your neighbor access to your driveway in order for them to access a public road
Aquifer
The location of an underground water supply
Area variance
One property’s exemption from the zoning regulations, due to a physical hardship on the property, that allows for exception to the rules.
Arm’s length
there is no relationship between the two parties
Non- Arms length
A transaction that occurs when the buyer and seller have a personal relationship
Assemblage
The process of joining several parcels to form a larger parcel
Assessed value
The dollar value assigned to a home or other piece of real estate for property tax purposes.
Market Value x (Assessment Rate / 100)=Assessed Value
Assessment ratio
The percentage by which the market value is multiplied to arrive to the assessed value for properly tax purposes
Market Value x (Assessment Rate / 100)=Assessed Value
Assignment
the assignee takes over The obligation and responsibilities of one of the parties to the contract
Associate broker
A person although holding a broker’s license who has status similar to that of a sales person, in that the associate broker is allowed to perform certain real estate activities but only under the supervision of a real estate broker
Avulsion
The sudden loss of land due to natural forces
Balance
The economic influence on value that states that a relationship exists between the value of the land and the value of the buildings on the land.
Balloon payment
The amount remaining to be paid in a single payment at the end of a partially amortized loan.
Bargain and sale deed
Only the seller of a property holds the title and has the right to transfer ownership. This type of deed offers no guarantees for the buyer against liens or other claims to the property.
This type of deed is generally used in tax sales, estate sales, and foreclosure actions
Basis
The initial price paid for a property.Once capital improvements are added and depreciation is subtracted, it becomes the adjusted basis.
Beneficiary
The Individual who will receive an inheritance upon the death of another
In a mortgage loan situation, the lender who will receive the deed from the trustee in the event of a default.
Bilateral contract
A contract in which both party promises to perform an act
Ex: Any sales agreement
Binder “Offer to purchase”
An agreement in writing signifying The intention of the parties to move forward with the sale
Blanket mortgage
A mortgage loan used to cover more than one piece of property sometimes used to buy multiple lots in a subdivision
Boot
Additional cash or a thing of value other than real property paid to either party in a tax deferred exchange that will be taxed at the time of the exchange taxable to the person receiving it
Brownfield
A former industrial, factory, manufacturing, or storage site that may have environmentally hazardous waste on or under it from previous use
Building code
A regulation that establishes minimum standards for construction electrical and plumbing work
Building permit
Usually issued by the local government in accordance with the building code allowing construction of a project to proceed
Bundle of rights “DEEPC”
Rights given to a property owner
Disposition-the right to sell or give the property to another.
Enjoyment-the right to possess the property without outside interference.
Exclusion-the right to keep others from using the property.
Possession-the right to occupy the property.
Control-the right to legally use the property by the owner how they see fit.
Buydown
a way for a borrower to obtain a lower interest rate by paying discount points at closing
Buyer agency
The establishment of an agency relationship that allows the buyer to be represented by their own broker
Buyer default
Buyer refuses to proceed with the purchase of the property
Capital gain
The Profit from the sale of a property for more than one paid for it
Adjusted basis is the original purchase price of property plus any capital improvements minus depreciation =capital gain
Capital improvement
A permanent improvement that usually adds value to the property such as a new roof
Capitalization rate “Cap rate”
Indicates the rate of return that is expected to be generated on a real estate investment property
Net Operating Income / Current Market Value= Capitalization Rate
Cash flow after taxes
The amount of money left for the year, from the property investment after all the expenses including the mortgage and income taxes are paid
Cash flow before taxes
The amount of money left for the year, from a property investment after all the expenses including the mortgage are paid but before the income taxes are paid
Casualty insurance
Covers losses caused by the theft, vandalism, and burglary
Certificate of occupancy
A document issued by the local government at the end of a project certifying that the building has been completed according to the approved plans
Certificate of title
A document that officially grants ownership to the holder of the property title
Civil rights act of 1866
A federal law that prohibits discrimination in the purchase, sell, leasing, or conveyance of real and personal property on the basis of race or color
client
Another word for principal whom agent is representing.
Customer
Third party in agency relationship
Principal
Client to whom agent owns fiduciary duties to
Closing in escrow
The point in the real estate transaction when the buyer, seller, and all participating parties have fulfilled their legal responsibilities to one another and the third party “escrow” releases the funds.
 cluster zoning
A regulation that permits the same number of lots in a subdivision but permits them to be grouped together on smaller lots.
Co-ownership “ concurrent ownership”
When more than one person owns the same piece of real estate
Codicil
In addition or change to an existing will made by the person who wrote the will
Collateral
Something of value that is used as security for a loan
Combination trust
A real estate investment trust (REIT) that invest shareholders money in property equities and mortgage loans
Commingling
Combining a clients funds with your own business funds usually considered to be some type of violation even if the money is accounted for
Community property
All property acquired during marriage is considered jointly owned an equally and I both spouses
Community reinvestment act
Requires the Federal Reserve and other federal banking regulators to encourage financial institutions to help meet the credit needs of the communities in which they do business, including low- and moderate-income (LMI) neighborhoods.
Comparable
A property that has been recently sold that is very similar to a property being appraised. Based on the principle of substitution the comparable is a good indicator of the value of the subject property
Compensatory damages
Money that may be paid in a default situation where one party (buyer or seller) sues the other party for money they believe they have lost as a result of the default by the other party
Comprehensive environmental response compensation and liability act of 1980 (CERCLA)
Federal legislation designed to identify sites of environmental pollution and provide funds called, the superfund, to clean it up.
Condominium ownership
A form of ownerships where the owner receives a deed for individual ownership of her unit but ownership as tenant in common for a common spaces
Conforming loans
A type of mortgage loan that meets the requirements necessary for the loan to be sold on the secondary mortgage market
Consideration clause
The mandatory words in a deed that indicate that something of value is being received in exchange for the title to the property
Construction loan
A loan made to a builder to finance a construction project whereby the funds are released periodically during the life of the project at
Construction eviction
When the landlord takes illegal actions that make the premise uninhabitable
Contract
A voluntary agreement to do or not to do something
Contribution
The economic influence on value that states that an improvement to a property is worth with the real estate market will pay, not what it cost.
Conventional loan
Mortgage loans that meet the criteria set by the lender but which often meet the criteria set by Fanny Mae in the secondary mortgage market.
Corporation
the real property that a company owns or holds for the purposes of housing its operations. It is legally a separate and distinct entity from its owners. Corporation is limited liability, which means that its shareholders are not personally responsible for the company’s debts.
Cost approach
One of the three approaches to value used to appraise properties based on the cost of the various components of the building in property. Especially used for unique properties for which there aren’t many comparable sales
Ex: A Church
Cost recovery period
The period of time, set by the government, over which an asset may be depreciated.
 Credit
In terms of proration at real estate closing, the amount that is owed to the buyer or seller or something for which they have already paid.
Curable  Deterioration
items of physical deterioration or functional obsolescence that are economically feasible to cure (easy to fix). Economic feasibility is indicated if the cost to cure (fix) is equal to or less than the anticipated increase in the value of the property
Debit
In terms of proration of the real estate closing in amount that the buyer or seller owes
Debit service
The mortgage payment
Dedication
The voluntary transfer of ownership of property from an individual to the government without payment
Deed
The document that transfers title ownership to the property from one person to another
Deed in lieu of foreclosure “ friendly foreclosure”
A deed signed by the owner giving the property to the lender to avoid foreclosure
Deed restrictions “ covenants, conditions, and restrictions (CCR), or restrictive covenants”
A limitation on the use of property that appears in a deed put there by one owner and will affect all future owners unless there’s an expiration time limit
Default
When a borrower doesn’t pay off the debt
Deficiency judgment
A court ruling allowing a lender to collect additional funds from a debtor when the sale of their secured property falls short of paying off the full debt.
Density zoning ordinance
A regulation that permits the same number of lots as normal zoning would but allows for varying lot sizes
Depreciation
In the cost approach to value the lost in value to any structure due to various factors such as wear and tear
Depreciation (cost recovery)
The recovery of the cost of an asset that wears out; used for tax purposes
Devisee
The person named in a will, who will receive the title to the real property
Direct cost (hard Cost)
Those expenses directly associated with the actual construction of a building, such as labor and materials.
Discharging a contract
A term that describes the end of the contract in one of several ways
Discount rate
The interest rate set by the federal reserve that member banks charge eachother for loans
Doctrine of prior appropriation
A state specific right regarding use of water especially where the water is scare
“First in time first in line”
Dominant tenement (dominant estate)
As it applies to an easement, the person or property that receives the benefit of the easement
Dual agency
Hey situation we’re both the buyer and the seller are represented by the same agent, may be illegal in some states.
 Duties of property manager
They are to maximize the income and maintain an increase the overall value of the property
Earnest money
A relatively small amount of money given at the time of the binder is signed to indicate good faith on the part of the purchaser to move ahead with the purchase.
Easement
The right to use someone else’s property for own benefit
Easement by necessity
A court ordered easement usually associated with gaining access to a property
Easement by prescription (prescriptive easement)
An easement that is created by the actions of one person against the interest of another person
Confrontation with the owner
Easement in gross
A type of easement that benefits another person rather than a property
Ex:utility company easement
Economic life
When speaking of building, the length of the time the structure contributes value to the land.
 Effective age
When speaking of a building, an estimate of the age the structure appears to be, given where in tear, maintenance, and upgrades
Effective gross income
The income available for property expenses after deducting a vacancy and collection loss from potential gross income and adding in other income
Eminent domain
The right of the government to take property against the owners will for public purpose
Encroachment
The unauthorized or illegal use of someone’s property by another person
Encumbrance
Limitations or restrictions that restrains your full ownership rights
Environmental assessment
The examination of a property for the presence of environmentally hazardous material. The four phases include document review, testing to determine the extent of hazardous materials, remediation recommendations, and management recommendations.
Environmental impact statement
A study of the potential environmental impacts of a project, often required as a part of the approval process by the local government.
Equal Credit opportunity act 1974
A federal act prohibiting discrimination in the granting or arranging of credit
Equalization rate
The rate used to equalize the differences between taxing units when calculating taxes to be paid to a higher authority
Equitable right of redemption
As it relates to a tax sale for nonpayment of taxes or a foreclosure cell for a nonpayment of a mortgage loan debt, the right to redeem a property by paying the taxes and the penalties or the loan that before the sale of the property.
Equitable title
Give the holder of the equitable title the right to transfer of title when all the conditions of a contract are met
Equity build up
The reduction of the mortgage loan debt by paying off the loan through the income of property investment
Equity trust
A real estate investment trust (REIT) that invest in a number of different types of real estate and sells shares to investors
Erosion
The gradual loss of land du to natural processes
Escheat
 The Process by which the government obtains property from those who die intestate
Escrow account
An account maintained by the lender into which the borrower deposit money from which the lender pays the property taxes and insurance. These funds may also be called reserves, inpounds, and trust account
Estate
The extend and type of interest or rights that someone has in a piece of land
Estate at sufferance
A situation where a tenant who had a legal right to occupy the premises continues to occupy the space after the right of occupancy has expired against the landlords will
Estate at will
A situation where the landlord allows the tenant to occupy the premises but there is no definite period of time when their arrangement will expire
Estate for years
A Lisa agreement with a definite starting and ending date also call tenancy for years
Ex:a summer house
Estoppel certificate (Reduction Certificate)
A statement of the amount of debt owed by one party to another. In the case of a mortgage loan, executed by the mortgagee/Lender. In the case of a lease, executed by the lesse tenant.
Exclusive agency buyer agency agreement
Agent gets paid ONLY if the broker finds the property the buyer ultimately purchases
Exclusive agency listing
Where a broker is given an exclusive right to market the property but is only paid if the broker sells the property. If the owner sells the property, no fee is paid to the broker.
Exclusive buyer agency agreement
Where the broker is the exclusive agent to the buyer and gets paid no matter who finds the property for the buyer
Executed contract
A contract in which all the terms of the contract have been completed
Executor
The person named to carry out the instructions in a will
Express agency
An agency relationship establish through an agreement
Express contract
In agreement where the parties to the contract (the participants) clearly state in words what they agree to do or not to do
External obsolescence
A form of depreciation (loss in value) caused by factors external to the land itself
Fair housing act of 1968
Part of the 1968s civil rights act, it prohibited certain discriminatory acts related to the property transactions, identified protected classes, and defined exceptions
Fannie Mae
Fannie Mae does not originate or provide mortgages to borrowers. But it does purchase and guarantee them through the secondary mortgage market to to low- and moderate-income borrowers.
Federal housing administration
A federal agency under the department of housing and urban development that provides loan guarantees for mortgage loans
Feesimple condition precedent
Ownership of the real estate that doesn’t pass until a certain condition is met
Feesimple condition subsequent
Ownership that can be reclaimed by the grandtor if a certain condition isn’t it by the new owner grantor would have to take specific action to reclaim property
Fee simple determinable
Ownership of the property remains with the new owner as long as the conditions of the ownership are being met. If violated ownership automatically reverts back to original owner 
Fee simple qualified (defeasible) estates
A fee simple estate with some limitations
Fiduciary
Describes the relationship between the broker and the clients; meaning faithful service
Fixed expenses
Expenses that aren’t dependent on building occupancy, when calculating net operating income. Fixed expenses are real estate taxes, property insurance, special assessments and license fees
Fixed rate mortgage
A mortgage loan throughout the life of the loan the interest rate doesn’t change in the monthly mortgage payment remain the same
Fixture
Personal property that becomes Real Estate usually by physical attachment
Foreclosure
Involuntary loss of property due to nonpayment of that related to the property such as a mortgage loan or property taxes
Forfeiture
The loss of property by disobeying some condition in the deed or not using the property for the purpose required in the deed
Forfeiture of the contract
A buyer default, when the buyer formally declares the contract forfeited
Fraud
The intentional misrepresentation or lying about the property or important issues related to the transaction
Freehold estate
Ownership in real estate that lasts for an indefinite or indeterminate a period of time.
Friability
The tendency of a spaces to break down and give of dust and fibers that can be dangerous if inhaled
Functional obsolescence
 Outmoded design and older structures or unacceptable design (by modern Standards) and newer structures
General agent
Someone hired to represent a person in a range or group of transactions. In real estate, the usual agency relationship of a property manager
General lien
A lean attached to a number of properties
General partnership
A form of ownership by two or more people(partners) coming together for business purposes who share management responsibility, profits and losses, and liability
General warranty deed*
Provides the greatest protection and warranties for the grantee.
Grant deed
I dead used in some states to provide limited warranty’s
Guarantee
The person receiving title (ownership) of a piece of property.
Granting clause (words of conveyance)
The words in a deed indicating that the grantor is conveying title (ownership) to someone else
Grandtor
The person who is the current owner of the property who is conveying title (ownership) to someone else
Gross income multiplier
A method for calculating the value of a property based on a multiple of the annual gross income
Gross lease
A lease where the tenant pays the same rent each month and the landlord pays all the building expenses. This is a lease used in a typical residential lease agreement
Ground lease (Land lease)
A lease for a tenant rents a vacant piece of property specifically to build a building on the land this is usually a long-term lease
Group boycotts
In the case of real estate brokerages, when two or more brokerages agree not to work with another broker
Growing equity mortgage
A fixed rate mortgage loan where the principal payments increase periodically to allow the loan to be paid off faster
Habendum clause*
A statement in the deed further define the right being granted to the grantee and characterized by the phrase “to have and to hold”
Highest and best use
The economic influence unvalue that states that every property has a single use that results in the highest value for the property
 Home equity
The difference between the value of the property and the dead attributed to the property
Home equity loan
A loan made against the equity in a property which allows withdrawal of all or part of the equity in the property
Homestead
A legal life estate the Grant the family home hey certain level of protection from creditors during the owners lifetime
Honest and fair dealing
One of the obligations that the broker has to the customer (third-party)
Housing and community development act of 1974
Federal law that protects against gender (sex) discrimination in housing, added to the protected classes in the 1968 fair housing act
Hypothecation
The process of using property as a security for a loan
Implied agency
 An agency relationship established by the actions of the parties rather than an expressed agreement
Implied contract
A contract that is created by the actions of the parties rather than the formal agreement
Impossibility to perform
In Contract terms where the activity for which of the contract was entered into can’t legally be performed
Lis Pendes
an official, public notice that a property has a pending lawsuit or claim attached to it.
Mortgage lien
A voluntary specific lien the borrower signs
 declaration of restrictions 
A statement made by a developer of a new subdivision, which sets out the restrictions of general applications throughout the new development
Warehousing
the process whereby banks and other lenders make mortgage loans to consumers for the purpose of quickly selling those loans on the secondary market.
Economic obsolescence
factors unrelated to the property itself, and outside of the owner’s control, diminish its value
Truth in Lending (regulations z)
The primary purpose is to Disclose the true costs of obtaining credit.
Police power
state’s authority to provide for the general welfare of the community through legislature and range of enabling acts/statutes that authorize agencies to organize, implement, and enforce obligation.
Zoning
primary mechanism for municipalities to implement police power by establishing regulations controlling how land is used. Begins with a master plan, or comprehensive plan, or general plan.
Taxation
government power to raise revenue for municipal expenses, like schools and roads; governmental right to set taxes allows a municipality to assess properties, levy taxes, and sell the property if taxes go unpaid
levy
the legal means by which a taxing authority or a bank can seize property for the payment of a debt
Special assessment tax
an additional property tax assessed by the local government to pay for their property and neighborhood projects
Ex:sidewalks
Eminent Domain
taking of title to real property for use, public or private, that benefits the community’s interest. Involuntary alienation of property (1) process of condemnation (2) payment of just compensation
Nonconforming use
continuing a prior use after a zoning change
Ex: Grandfathering
Variance
Exception to zoning rules
Open listing
Property owner has a right to use as many brokers as needed to sell the property agent who finds ready and willing and able buyer gets paid.
Net listing
Agent gets hired to sell property for a certain amount of money broker keeps any amount in excess of the net price
MLS
Multiple listing
marketing service
Blockbusting
Encouraging people to sell their homes because of the entry of a particular group of people to the neighborhood
Steering
Inducing people in someway to move or stay away from a certain area of a neighborhood
Redlining
Discrimination in the lending of mortgage money based on a location
Exclusive right to sell 
Broker gets paid regardless who sells the property
Open listing
Property owner has right to use as many brokers needed to sell property no broker has exclusive right
Net listing
Sell the property for a certain amount of money the broker keeps any amount in excess of the net price
ex: owner wants to net $200,000 from sell you sell it for $225,000 you get to keep $25,000 as your feet
Option listing
Gives a broker the right to buy the property
Fee simple absolute
Most complete form of ownership without limitations on the right of ownership
Leasehold interest 
Tenants interest in a real property call the tenant holds of rights assigned by lease
The least fee interest
Owner or landlords interest in the real property landlord hold the fee or title to the property
Littoral rights
Unrestricted right to use water and have ownership of the line out to the average or mean high watermark government owns the land below 
Riparian rights
Rights of property owner
Navigable: on the land up to the edge of the water or the average or mean high watermark 
Not navigable: rights extend to the centerline of the river or stream
Surface rights
Service right generally include construction of structures and physical improvements of all kinds as well as things like planting crops
Mineral rights
Right to take minerals out the ground associated with oil and gas leases
Subsurface rights
You own the property down to the center of earth you have the right to use the property beneath the surface or to permit others to use it
Reversion
Remainder
Redemption
Condition use permit
Tenancy in common
Form of ownership in which two or more people own property together Undivided interest Equal or unequal shares sale without permission No right of survivorship
Joint tenancy
Form of ownership two or more people Possession Interest Time Ttile
Tenancy by the entirety
Form of coownership specifically geared towards protecting interest of married couples by providing right of survivorship
Trust
Trustor person who owns a property and transferring 
Trustee Person who receives the property and administers it on the behalf of the beneficiary
Beneficiary The person who receives the benefits of the property 
Syndicate
Two or more people or companies joining together to work on a project or foreman ongoing relationship to own and manage buildings or other
Partnerships
Two or more companies combining to do a business
Limited liability corporation
Hybrid organization structure that has elements of a partnership and corporation liability of individual members within corporation is limited meanwhile they pay taxes as if they’re part of a general partnership
 joint venture
The joining of two companies to do a single project
Cooperative ownership
You own shares in a corporation that owns a real estate
Condominium ownership
Ownership that involves getting a deed you on your lot and air space as tenants in severalty and the land under around you as tenants in common with an undivided interest
Planned unit development
Hybrid organization differs from a condominium owner owns land beneath it
Timeshares
Person has fractional ownership of the property or right to use property for limited period of time each year or both
Hardship
Unusual Irregularities in your property that makes it difficult to comply with zoning standards
Legal description property description
In deed shows what’s being transferred
Meets and bounds
Survey system
Acknowledgment
proving that someone who signed the deed did it voluntarily
Equilibrium
Supply and demand are equaled
Illiquid economic product
Easy to sell convert into cash
Bass employment
The number of persons employed in a base industries in an area
Vacancy
The total existing space of a certain type that is an occupied at a given time
Moratorium
A temporary prohibition of an activity
sus·cep·ti·ble
Likely to be influenced or harmed by a particular thing
Reconcile
Make or showTo be compatible
Reproduction cost
Cost to construct an exact duplicate of the subject structures at today’s cost
Replacement cost
Cost to construct a structure with the same usefulness as a comparable structure using today’s materials and standards
Legal title
Title or ownership that normally transfers in a property sale
Equitable title
Gives a holder of equitable title the right to force the transfer of the title when all the conditions of contractor met
Discount point (prepaid interest)
1% of the loan amount
Primary Market
Lenders who lend money to people who want to buy property
Secondary market
Composed of financial institutions to which bank sell the mortgage to get more money to lend to the public 
Deed
Evidence of transfer
Quitclaim deed
Money is not exchanged just ownership
Chain of title
History of ownership
Blanket mortgage
Blanket mortgage covers more than one piece of property using to find out subdivision development has partial release provision
Partial release provision
Allows lien to remove separately from each parcel as it sold to a buyer and the bank is paid a portion of the loan amount
Construction loan
Loan to finance a construction project
Home equity loan
Six to use the equity that a mortgage or has built up on the property 
Open Mortgage
A loan that can be repaid back at any time without penalty
Open end mortgage
A loan that can be reopened and borrowed against after some of it has been paid down
Package mortgage
A loan that covers real estate and personal property being sold with real estate
Purchase money mortgage
A loan to use to buy real estate the mortgage that a seller takes back as a part of the sales price helping sale go through
Usury rate
Interest Rates set by the government That cannot be exceeded
Imputed interest rate
Interest rate at the IRS says should have been charged based on the market conditions
Reverse mortgage
Enable a property owner to use the equity in a property without selling the property 
Sale leaseback
Source of project financing a means of obtaining equity in the property used in commercial property situation and owner occupant uses a sale leaseback to sell the building but agrees to remain in the building under lease new owner has a tenant and the old owner has gotten his money out of the building to use
Wraparound mortgage
A new mortgage that wraps around the old mortgage
used when an old mortgage won’t be paid off at time of the sale of the property
 principal
The amount of money they borrowed andinterest 
Annual cap
Limits amount that an arms interest rate can be adjusted upward in any given year
Lifetime cap or ceiling
Limit the total upward adjustment that a lender can make to an interest rate during the life of the loan regardless of how high the index goes
Payment cap
Even if the rate adjustments reach the maximum each year if the resulting monthly payments increase to more than a specified amount the payment Keeps the payment within a reasonable limits
Negative amortization
The loan balance increases by the amount owed but not paid
Foreclosure
Lender takes over ownership of the property sells it for nonpayment of the debt
Judicial Foreclosure
Court orders property to be sold as a result of a foreclosure action brought by the lender

Non-judicial foreclosure
Involves filing a notice of the default in the county records office and providing appropriate public notice property is sold to pay off debt
Strict for closure
An action that is permitted in some states and requires that appropriate notice be given to the borrower and a period of time established by the courts during which the borrower may pay off the debt
Equitable redemption
A right that exist after foreclosure but before the sale of the property
Statutory right of redemption
Borrow can repay the debt and reclaim ownership of the property
Deed in lieu of foreclosure (friendly foreclosure)
Buyer voluntarily signs the property over to the lender by executing A deed to avoid foreclosure action
Subordination Agreement
Protection to the lender to be able to be paid first in a lien
Mortgage assumption
Assuming a mortgae
(reduction)Estoppel certificate
How much is left on the loan
The community reinvestment act CRA
Requires things to address the financial needs of the communities where they are located by making signs available for mortgages 
The equal credit opportunity act (ECOA)
Prohibits discrimination in granting or arranging of credit
The national affordable housing act
Requires that borrowers must be notified whenever servicing their loans is transferred to another institution 15 days before it becomes Effective
The truth in lending act (consumer credit protection act)
Requires creditors to provide information to consumers so they can make informed decisions about the use of credit in real estate transactions
Origination fees
Points charged on a mortgage loan that has no effect on the interest rate
The qualifying ratio
Amount of money a borrow can pay for a mortgage loan
Municipality services
Primary way municipality pay for services by collecting taxes on real estate
Levy
Charged against
Ad valorem (general tax)
Based on the value
Refers to the fact that taxes charge the property are based on the value of the property
Assessing units
Individual taxing districts 
Assessed
Means to sign or give a value to something
Market value
Price of property would bring in for an open sale on the real estate market
Assessed value
Value of the property that is used for real estate tax purposes
Fully tax exempt properties
Properties on by federal state county town city Village Township that are tax exempt and don’t have to pay taxes School district water district sewer district similar public service organizations out on property property owned by private educational institutions religious organizations hospitals and charitable groups
Partial tax exemption
Offered to senior citizens or disabled income qualifications
Reduction in assessment of the property typically offer to veterans maybe fix dollar amount or percentage of assessment and may vary according to any veteran was in combat or is disabled
Provide different assessment ratios for different types of properties
REM
foreclosure for unpaid taxes against a property
Investment properties
1-4 family houses Apartment buildings Large residential complexes Individual retail store buildings Strip mall/shopping centers Close retail malls Office buildings warehouses  Industrial properties vacant land motels and hotels
Real estate investment trust
Equity trust
Mortgage trust
Combination trust
Real estate mortgage investment conduits
Type of investment tool that uses shareholders funds to invest in mortgage loans
Leveraging
Borrowed money to increase the return on your investment
Pyramiding
Building multiple investments from one investment
Capital gain
Profit Main from selling property for a price higher than what you paid for
Debt service
What investors called a mortgage payment 
Tax Deduction
Something you can deduct from an investment properties and come to reduce your taxes
Tax credit
Some thing you can deduct from taxes you owe
1031 exchange
Like kind to qualify for an exchange the two properties must be like kind
Time limits exchanges generally have time limits during which texturing properties must be identified
Boot if properties are exchange and they don’t have equal value even if one or more property has increase in value capital gains taxes deferred but eventually must be paid when the property is sold if properties are not equal in value cash or personal property may be included in the deal called boot
Operating statement income and expense statement
The beginning of a real estate investment analysis prepared to keep track of finances for a building and for income tax purposes tracks the actual annual income and expenses in a building
Rent roll
Information about leases that exist the rent for each lease that exist 
Pro forma
It’s a financial statement of the buildings potential income and expenses
Market rent
What the market would pay for the kind of space or apartment in a building
Boot
Money or personal property given an exchange on the properties are not equal the person receiving boot pays taxes on it
