Real Estate Word Power Flashcards
“Or More” Clause
A clause in a note or security device that indicates no
pre-payment penalty. The debt can be paid in full at
any time by the debtor.
**_See_** Pre-payment Penalty
1099 S
Reports proceeds from a real estate
transaction to the IRS.
Abandonment of Homestead
A document recorded to terminate
a homestead exemption.
**_See_** Homestead
Abatement
To reduce in amount, such as the removal or
the encapsulation of asbestos.
**_See_** Asbestos
Ability to Repay Rule
A residential lender is to verify that the borrower
has a reasonable ability to repay the loan.
**_See_** Dodd-Frank Act, Qualified Mortgage
Abstract of Title
A summary of all documents that appear on
public record affecting a parcel of real property.
**_See_** Certificate of Title, Chain of Title
Abutting Land
Parcels of land having common boundaries.
Acceleration
The Lender’s right to call the entire loan all due &
payable if certain conditions are violated.
**_See_** Alienation Clause, Due on Sale Clause
Acceptance
An agreement binding one of the terms of an offer.
**_See_** Bilateral Contract, Contract, Offer, Unilateral Contract
Accretion
The gradual build up of land by wind or water.
**_See_** Alluvium, Reliction
Accrued Depreciation
For tax purposes, the cumulative amount of
depreciation up to a certain time.
**_See_** Economic Depreciation, Functional Depreciation, Physical Depreciation
Acknowledgement
Signing a legal document before a Notary Public
or other authorized person.
**_See_** Notary Public
Acre
43,560 square feet. If it were in the shape of a
square, it would measure approximately
208.71 feet on each side.
Acre Foot
One acre of land with water one foot deep.
325,850 gallons of water.
**_See_** Acre
Active Management Area
Areas in Arizona with heavy reliance on ground water;
Phoenix, Prescott, Pinal, Pima, Santa Cruz
**_See_** Assured Water Supply
Actual Age
The chronological age of a structure.
**_See_** Economic Life, Effective Age
Actual Delivery
The Grantor physically hands the Deed to the Grantee.
**_See_** Escrow Delivery
Actual Eviction
Direct actions of a landlord to remove a tenant
from the premises through the legal process.
**_See_** Constructive Eviction
Actual Notice
Facts that are known to be true, actual knowledge.
**_See_** Constructive Notice
Ad Valorem
According to the value.
Arizona property taxes are based on ad valorem.
**_See_** Assessed Value, Assessment, Dollar Rate, Mill Rate
Adequate Water Supply
Subdivisions in Arizona located outside an
Active Management Area are not required
to have a 100 year water supply.
**_See_** Assured Water Supply
Adjusted Basis
Purchase price plus the value of any capital improvements
or the original cost minus deductions such as depreciation.
**_See_** Adjusted Purchase Price, Basis
Adjusted Gross Income
The total potential gross income minus vacancy and
credit loss. Also called Effective Gross Income.
**_See_** Capitalization Approach, Gross Schedule Income, Net Operating Income
Adjusted Purchase Price
Original purchase price plus capital improvements.
**_See_** Adjusted Basis, Basis, Capital Improvements
Administrator
An individual appointed by the court to handle
the estate of a party who dies without a will.
**_See_** Executor, Intestate, Testate
Adult
A person who is in his/her majority -
usually 18 years old.
**_See_** Infancy, Majority
Adverse Possession
Acquiring title to real property due to continuous,
open, and hostile use for a prescribed length of time.
**_See_** Easement by Prescription
Affidavit of Value
A sworn document that identifies the Grantor,
Grantee and states the value paid for real property.
Signed by both parties and notarized.
Agency
A legal relationship in which the Principal
appoints an agent to act in his behalf.
**_See_** Agency Coupled with an Interest, Agent, Client, Customer, Dual Agency, Fiduciary, Principal
Agency by Ratification
Unauthorized actions of an agent that
are later approved by the Principal.
**_See_** Ostensible Authority
Agency Coupled with an Interest
An agency (listing) in which an agent has an interest (usually financial) in the subject property.
**_See_** Agency, Estoppel
Agent
One who is authorized to act for a Principal.
**_See_** Agency, Fiduciary, General Agent, Limited Agent, Subagent, Universal Agent
Agent by Necessity
An act of law or circumstance requiring a limited agent
to act beyond his authority.
(Principal’s consent not necessary.)
**_See_** Limited Agent, Principal
Aggrieved
To cause grief or to injure one’s legal rights.
**_See_** Civil Law, Recovery Fund
Agreement for Sale
A document giving equitable title to a buyer (vendee) of
real property. Also called “Contract for Deed.”
Parties are usually called Vendor and Vendee
**_See_** Equitable Title, Land Contract
Agreement to Sell
Another name for a purchase contract.
**_See_** Bilateral Contract, Executed Contract, Executory Contract
Air Rights
The right to use the air space above a property.
**_See_** Caissons
Alienation Clause
A clause in a loan document calling for the entire
balance due and payable when the property is sold.
**_See_** Acceleration Clause, Due on Sale Clause
All-Inclusive Deed of Trust
A wraparound loan arrangement whereby a
Deed of Trust is used in place of a mortgage.
**_See_** Deed of Trust, Wraparound
Allodial System
The rights of individuals to private
ownership of real property.
**_See_** Bundle of Rights, Feudal System
Alluvium
Sand, clay, etc., deposited by flowing water.
**_See_** Accretion
ALTA
American Land Title Association
A national asssociation of title companies.
** See
**Extended Coverage Policy, Lender’s Policy,
Owner’s Policy, Title Insurance
Amendatory Clause
Also known as the F.H.A. Escape Clause.
**_See_** Escape Clause
Amenities
Those desirable features (extras) of a
property that may benefit an owner.
**_See_** Objective Value, Subjective Value
Americans With Disabilities Act (ADA)
Federal law designed to eliminate discrimination
against individuals with disabilities by
requiring equal access to accommodations.
**_See_** Federal Fair Housing
Amortization
A schedule of payments that will eventually
extinguish the entire obligation.
**_See_** Balloon Payment, P,I.T.I.
Anchor Tenant
A Triple-A tenant that gives exposure
and stability to a shopping center.
Annexation
The method of attaching personal property to
real property so that it becomes a fixture.
**_See_** Fixture
Annuity
A series of payments made at specified intervals.
Anticipation
The present value of property is determined by the
future benefits to be obtained from that property.
**_See_** Conformity, Contribution, Substitution
Appraisal
An opinion of the value of a property
given for a specified date in time.
**_See_** Appraisal Methods
Appraisal Methods
Market Data Approach, Cost Approach, Income Approach
**_See_** Cost Approach, Income Approach, Market Data Approach
Appreciation
The increase in property value due
to external or internal causes.
**_See_** Unearned Increment
Appurtenant
That which belongs to the property rights,
privileges, and improvement.
**_See_** Corporeal, Incorporeal, Tenements
APR
Annual Percentage Rate
The calculations of all financing charges pertaining
to a loan, expressed in an annual rate.
**_See_** RESPA, Regulation "Z"
Arbitrage
To charge a higher interest rate to the buyer
that is currently being charged on the loan.
**_See_** Wrap Around Mortgage
Arbitration
The settling of a dispute between
two parties by a neutral party.
**_See_** Interpleader
Arm’s Length Transaction
A business transaction in which all parties
have equal bargaining opportunity.
**_See_** Undue Influence
Arrears
(Paid) after its usage, such as Arizona property
taxes and interest on real estate loans.
Asbestos
A fire resistant mineral used in building and household
products that has been found to cause lung cancer.
**_See_** Abatement
Assemblage
The process of combining two or more smaller
parcels of land into one large tract.
**_See_** Plottage
Assessed Value
The value placed on real or personal
property for tax purposes.
**_See_** Ad Valorem
Bearing Wall
A wall in a building that supports a ceiling load.
**_See_** Joist, Ridgeboard, Stud
Assessment
A tax charged to the owner of real property for benefits
received. Tax is usually based on a pro rata share.
**_See_** Ad Valorem, Pro Rata Share
Bench Mark
A mark made on a permanent object that
has a known location and elevation.
**_See_** Survey
Asset
All valuable items held by a person
which may be used to liquidate a debt.
**_See_** Capital, Frozen Asset, Liquid Asset
Assignee
One to who interest in property is transferred.
**_See_** Assignment
Assignment
The transferring of interest from one party
to another in a purchase contract or lease.
**_See_** Assignee, Assignor, Nominee
Beneficiary
The lender under a Deed of Trust security.
**_See_** Mortgagee, Mortgagor, Trustor, Trustee
Assignment of Lease
The transferor of all or part of the
tenant’s rights to another party.
**_See_** Sandwich Lease, Sublease
Beneficiary Deed
A deed that is used to transfer real property to one’s heirs without going through the probate process.
**_See_** Probate
Assignment of Rents
The right of a lender to collect rents from the
borrower’s tenants in case of loan default.
**_See_** Foreclosure
Bequest
Leaving personal property to an heir through a Will.
**_See_** Devise, Legacy
Bilateral Contract
A contract binding two or more parties.
**_See_** Contract, Unilateral Contract
Assignor
One who transfers a specified interest in property.
**_See_** Assignee, Assignment
Bill of Sale
A document used to transfer personal property.
**_See_** Deed, Tangible
Assumption of Mortgage
The Grantee taking title to real property and assuming
liability for an existing obligation. The original
mortgagor still remains liable.
**_See_** Novation, Subject to
Assured Water Supply
Subdivisions in Arizona located in an Active Management
Area need to provide a 100 year water supply.
**_See_** Adequate Water Supply
Attachment
The taking of property into custody, pending
the outcome of a legal action.
**_See_** Garnishment, Judgement Lien, Lis Pendens, Specific Lien
Blanket Mortgage
A security that covers more than one parcel of land.
**_See_** Lot Release
Blind Ad
A real estate ad that does not indicate
that a brokerage firm is involved.
Block Busting
An illegal action usually concerning fair housing
that creates panic selling for monetary gain.
**_See_** Federal Fair Housing Act, Redlining, Steering
Blue Sky Law
State laws regulating the sale of investment securities.
Attorney-In-Fact
One who has written authorization to act for
another under a power of attorney.
**_See_** Agent, General Agent, Limited Agent, Power of Attorney
Boiler Plate
The standard pre-printed language that exists in a contract.
**_See_** Contract of Adhesion
Authorization to Sell
Another term for a listing agreement.
**_See_** Listing Agreement
Bona Fide Buyer
A Buyer who is acting in good faith
for valuable consideration.
**_See_** Actual Notice, Constructive Notice
Book Value
The value of an asset carried on the books of business.
**_See_** Depreciation (tax)
Boot
Anything of value given to make up the difference
in equities between two properties exchanged.
**_See_** Exchanging, Mortgage Relief
Breach of Contract
Failure to perform a contractual obligation.
**_See_** Default, Specific Performance Suit
Automatic Stay
In bankruptcy an automatic injunction
that halts actions by creditors.
**_See_** Chapter 7, Chapter 11, Chapter 13
Bring Down Fee
Updating the title report from the original
report to the recording of the loan documents.
**_See_** Preliminary Title Report
Broker
A third party who, for a fee, acts as an
intermediary in a business transaction.
**_See_** Agent, Commission
Brown vs. Board of Education
Court case that overturned Plessy vs. Ferguson
**_See_** Plessy vs. Ferguson
Avulsion
The loss of land due to sudden
and violent acts of nature.
**_See_** Accretion, Erosion, Involuntary Alienation
Budget Payment
Monthly payment including principal, interest,
taxes and insurance.
**_See_** Amortization, Level Payment Mortgage, P,I.T.I.
Axial Theory
Theory of land use development along major highways.
**_See_** Concentric Theory, Multiple Nuclei Theory
Buffer Zone
An area of land that separates one
type of zoning from another.
**_See_** Zoning
Back End Ratio
A ratio that indicates what portion of an individual’s
income is used to pay all long term debt.
**_See_** Front End Ratio
Balloon Payment
A lump sum paid to liquidate a debt
or paid anytime during a loan period.
**_See_** Interest Only, Straight Note, Term Loan
Building Codes
Special construction standards enforced through a permit.
**_See_** Police Power, Zoning
Bulk Transfer
The sale of a business which involves transfer of inventory.
**_See_** Uniform Commercial Code
Band of Investment
An appraisal method used for income property that establishes
a capitalization rate by using mortgage interest rates available,
rate of return required, & the debt and equity in said property.
**_See_**
Capitalization Rate (Overall)
Bundle of Rights
Legal rights of real property ownership:
Possession, Usage, Transfer, Encumber, Exclusion
**_See_** Allodial System, Feudal System
Bankruptcy
A financial situation when a person’s
liabilities exceed their ability to pay. (assets)
**_See_** Chapter 7, Chapter 11, Chapter 13
Buyer Broker
A licensee who represents the buyer
only in a fiduciary manner.
**_See_** Agent, Client, Fiduciary
Bare-Naked Title
Title held by a trustee in a Deed of Trust document.
The trustee does not have any of the bundle of rights
provided in ownership.
**_See_** Deed of Trust
Caisson
A tract of land purhased or leased that serves
as the building foundation for air rights.
**_See_** Air Rights
CAN-SPAM Act
Federal law regulating commercial emails,
providing the recipient an opt-out provision.
**_See_** FTC
Bargain and Sale Deed
A conveying Deed that has three covenants but no warranties.
Frequently used in an operation of law transaction.
**_See_** Covenants in a Deed, General Warranty Deed
Capital
Income or sources of income.
**_See_** Asset
Base Line (Principal)
In the Government Rectangular Survey System, the reference line that runs east and west
and crosses the principal meridian.
**_See_** Government Rectangular Survey System Meridian (Principal)
Capital Gain
The taxable gain received from the
sale of a capital asset.
**_See_** Basis, Long-Term Capital Gain, Short-Term Capital Gain
Basis
The actual price paid for the property.
**_See_** Adjusted Basis
Capital Improvements
Any permanent improvements to real property.
**_See_** Adjusted Basis
Basis Point
1/100 of one percent.
Capital Loss
The loss realized from the sale of a capital asset.
**_See_** Capital Gain
Capitalization
A method used to estimate the value of property by
dividing the net annual income by a capitalization rate.
**_See_**
Capitalization Rate (Overall), Income Approach
Capitalization Approach
Also known as the Income Approach in appraising.
**_See_**
Capitalization Rate (Overall), Income Approach
Capitalization Rate (Overall)
An overall rate of return which includes a return on
investment on land, improvements and recapture.
**_See_** Capitalization
Case Law
Laws based on an aggregate of previous court decisions.
**_See_** Civil Law, Common Law
Cash on Cash Return
Cash flow divided by the amount of capital invested.
**_See_** Internal Rate of Return
CC&R’s
Covenants, Conditions & Restrictions
**_See_** Deed Restrictions
Cease and Desist Order
A governmental order directing the parties
violating the law to refrain from further activity.
Ceiling Value
An appraisal concept in which the current listings
in a neighborhood set the highest value.
**_See_** Comparable, Floor Value, Value
Certificate of Eligibility
A certificate from the Veteran’s Administration that
establishes the Veteran’s eligibility for a V.A. guaranteed loan.
**_See_** V.A. Guarantee
Certificate of Occupancy
A document issued by the building inspector
showing that a structure is ready for occupancy.
Certificate of Purchase
A document given to the winner at a tax lien sale.
**_See_** Treasurer's Deed
Certificate of Reasonable Value
A V.A. appraisal that states the maximum V.A.
guarantee on a certain property.
**_See_** V.A. Guarantee
Certificate of Sale
The lien document given to the high bidder
at a mortgage foreclosure sale.
**_See_** Foreclosure, Sheriff's Deed
Certificate of Title
A document issued by a Title examiner stating the
condition of title to a given parcel of property.
**_See_** Abstract of Title, Torrens System
Cession Deed
A Deed that conveys private property for public usage.
**_See_** Dedication, Deed, Patent Deed
Chain of Title
A history of constructive notice as it
pertains to a certain parcel of real estate.
**_See_** Constructive Notice, Title, Wild Deed
Chapter 11
A reorganization under the bankruptcy code usually
pertaining to corporations - the debtor remains in possession.
**_See_** Bankruptcy
Chapter 13
A reorganization of a wage earner’s assets - under the bankruptcy code - a trustee is appointed
**_See_** Bankruptcy
Chapter 7
Complete liquidation of a person’s assets
to pay liabilities. A trustee is appointed.
**_See_** Bankruptcy
Chattel
Personal property - also called personalty.
**_See_** Bill of Sale, Personal Property
Chattel Mortgage
A security device used for personal property.
**_See_** Chattel, Security Agreement, Uniform Commercial Code
Chattel Real
Another name for a lease.
**_See_** Leasehold
Check Lines
In the Government Rectangular Survey System, a
twenty-four mile square parcel containing 16 townships.
**_See_** Government Rectangular Survey System, Township
Civil Law
The body of law that protects a party’s private rights.
**_See_** Case Law, Common Law
Civil Rights Act of 1866
Prohibits discrimination based on race.
**_See_** Federal Fair Housing
Client
The party the Broker represents or the party who hires
the broker and agrees to pay a fee upon performance.
**_See_** Customer, Dual Agency, Fiduciary, Principal
Close of Escrow (COE)
The day on which all terms & conditions of the contract &
escrow have been met & the title is transferred. COE
usually occurs when all necessary documents are recorded.
**_See_** Constructive Notice, Escrow
Cloud on Title
A claim on Title that hinders it from being marketable.
**_See_** Quiet Title Suit, Quit Claim Deed
CLUE Report
A history of insurance claims on a specific property.
Co-Maker
A person who signs a promissory note with another.
**_See_** Joint & Several Liability, Promissory Note
Codicil
An Amendment to a formal Will.
**_See_** Formal Will
Collateral
Property used as security for a loan.
**_See_** Deed of Trust, Hypothecate, Mortgage
Collusion
A secret agreement between two or more
people for an illegal purpose against another.
**_See_** Mutual Assent
Color of Title
Title that appears to be valid but due
to a hidden fact is actually void.
**_See_** Adverse Possession, Quit Claim Deed
Commercial Banks
Institutions primarily involved in short
term loans and demand deposits.
**_See_** F.D.I.C., Federal Reserve System
Commingling
The mixing of trust funds with the Broker’s personal funds.
**_See_** Conversion
Commission
The fees paid a Broker resulting from a transaction.
**_See_** Broker, Procuring Cause
Common Area Maintenance
Fees charged to tenants for the upkeep of the
common grounds.
**_See_** Gross Lease, Net Lease
Common Law
A system of law that is based on custom
and usage as opposed to statutes.
**_See_** Statutory Law
Community Facility District
A method of financing infrastructure and improvements in
a development. Bonds will be sold and repaid through
increased property taxes.
**_See_** Property Taxes
Community Property
Property acquired by the efforts of a husband and wife
during their marriage, belonging to them equally.
**_See_** Concurrent Tenancy, Curtesy, Dower, Legal Life Estate, Undivided Interest
Compaction
To compress additional soil to those
uneven areas of a lot.
Comparable
An appraisal method that compares similar properties
to establish market value.
**_See_** Ceiling Value, Market Data Approach
Compensatory Damages
Damages recovered in payments for actual losses.
**_See_** Actual Damages
Competent Party
An individual who is legally capable of
entering into a binding agreement.
**_See_** Incompentent Party
Compound Interest
Interest paid on interest.
**_See_** Interest, Simple Interest
Concentric Theory
Theory of land use developing around
a central business district.
**_See_** Axial Theory, Multiple Nuclei, Theory
Concurrent Tenancy
Two or more parties own undivided
interest in the same property.
**_See_** Community Property, Joint Tenancy, Tenancy in Common
Condemnation Suit
The legal process of taking private property for public use.
**_See_** Eminent Domain, Involuntary Alienation
Condominium
Individual ownership of realty limited to cubage,
plus an undivided interest in the common ground.
**_See_** Horizontal Property Regime, Town House
Conformity
A principle which states that value in a given area can best
be obtained when all structures are in some way uniform.
**_See_** Contribution, Progression, Regression, Substitution
Consideration
That which is given in exchange for the transfer of property
or service. One of the legal requirements for validity of a
contract, deed, lease, or option. Example: The purchase
price would be the consideration for the property.
**_See_** Contract Requirements, Good Consideration, Love and Affection, Valuable Consideration
Construction Loan
A short term loan based on draws
during the construction process.
**_See_** Draws, Takeout Loan
Constructive Eviction
When the inaction of the Lessor makes the use of the
property unsuitable, the Lessee moves out. The tenant
moves out through no fault of his own.
**_See_** Actual Eviction
Constructive Notice
A term used when a document is recorded or
printed in a public document.
**_See_** Recording
Consumer Financial Protection Bureau
A regulatory agency charged with overseeing financial
services offered to consumers.
**_See_** Ability to Repay, Dodd-Frank Act, Qualified Mortgage
Contingency
Future conditions that must be met for a
contract to be binding.
**_See_** Counteroffer, Executory Contract
Contingent Remainder
A life estate that passes to the life tenants’ heirs,
pending the death of the person on whom the
estate is based.
**_See_** Life Estate, Pur Autre Vie, Remainder Estate
Contour Map
A map showing the physical features of
land using lines to indicate elevations.
**_See_** Relief Map
Contract
An agreement based on a promise “consideration”
to do or refrain from doing something.
**_See_** Bilateral Contract, Covenant, Unilateral Contract
Contract for Deed
A real estate transaction where the seller retains legal
title to the property until final payment is made.
**_See_** Agreement for Sale, Equitable Title, Vendee, Vendor
Contract of Adhesion
Terms of a contract are set by one party. The
other party is instructed to “take it or leave it.”
**_See_** Boiler Plate
Contract Rate
The rate of interest stated in the contract.
**_See_** Legal Rate, Usury
Contract Rent
Rental amount due as specified in the lease.
**_See_** Economic Rent, Negative Leasehold, Positive Leasehold
Contract Requirements
Every valid & enforceable real estate contract must have
the following requirements. Competent parties, in writing,
legal description, mutual assent, legal consideration, legal
purpose, signatures, and communication.
**_See_** Statute of Fraud
Contribution
Any improvement to property is only worth its
market value, not the cost of the improvement.
**_See_** Anticipation, Conformity, Substitution
Conventional Life Estate
A life estate created for the life of
some stated natural person.
**_See_** Natural Person
Conventional Loan
Real estate loans that are not insured
by any governmental agency.
**_See_** Federal Housing Administration (F.H.A.), V.A. Guarantee
Conversion
In real estate law, the unlawful use and
misappropriation of another’s personal property.
**_See_** Commingling
Conveyance
Transfer of title to real property.
Such transfer is usually evidenced by a deed.
**_See_** Deed
Cooperating Broker
A broker who works with and
through the listing Broker.
**_See_** Buyer Broker, Multiple Listing Service, Subagent
Cooperative
Ownership of stock in a corporation which gives the holder
the right to occupy a certain unit -
a long term proprietary lease.
**_See_** Condominium, Town House
Corporate Resolution
The written authorization of the Board of Directors for
the corporation to act in a certain manner.
**_See_** Corporation, Legal Person
Corporation
A legal person created by law which is owned
by stockholders who act as one.
**_See_** Corporate Resolution, Legal Person
Corporeal
Real property such as land and fixtures.
**_See_** Incorporeal
Correction Deed
A Deed that corrects an error on
a previously recorded Deed.
Correctional Lines
In the Government Rectangular Survey System, the
lines that compensate for the curvature of the earth.
**_See_** Check Lines, Government Rectangular Survey System
Correlation
The final step in an appraisal that weighs (usually by
percentage) the comparables used to arrive at a final
estimate of value. Also called Reconciliation.
Cost Approach
An appraisal process that estimates the value of
property by using replacement or reproduction costs
minus depreciation plus the value of the land.
**_See_** Depreciation (Appraisal), Income Approach, Market Data Approach, Replacement Cost, Reproduction Cost
Counteroffer
A new offer made in response to an original offer.
**_See_** Contingency
Covenant
A promise made between two or more parties,
usually pertaining to contracts and deeds.
**_See_** Bargain and Sale Deed, Bilateral Contract, Unilateral Contract
Covenant Against Encumbrances
The Grantor promises that he has revealed
all items that burden the property.
**_See_** Covenants in a Deed
Covenant Not to Compete
The seller of a business agrees not to open a like
business for a specific period of time.
Covenant of Quiet Enjoyment
A promise that the Grantee has the
highest claim to ownership.
**_See_** Covenants in a Deed
Covenant of Seizin
The Grantor promises that he has possession of the
property and has the right to convey it.
**_See_** Covenants in a Deed
Covenants in a Deed
Promises in a deed made by the Grantor for the
protection of the Grantee, usually found in Bargain & Sale
and Warranty Deeds.
**_See_** Covenant Against Encumbrances, Covenant of Quiet Enjoyment, Covenant of Seizin
Curtesy
A husband’s right or interest in his wife’s
property upon her death.
*Not legal in AZ
**_See_** Dower, Legal Life Estate
Customer
Usually referred to as the Buyer or Prospect.
**_See_** Client
Debt Relief
Forgiveness of an obligation, usually
results in a taxable event.
Debt Service
The payments made to satisfy a mortgage loan,
including principal and interest.
**_See_** Amortization
Decedent
Party who died.
**_See_** Intestate, Testate
Dedication
The voluntary transferring of private property
for public usage.
**_See_** Cession Deed
Deed
The legal written document used to transfer
ownership of real property.
**_See_** General Warranty Deed, Quit Claim Deed, Special Warranty Deed
Deed in Lieu of Foreclosure
An out of court settlement whereby a Lender accepts
the Deed from the Borrower - friendly foreclosure.
**_See_** Foreclosure
Deed of Reconveyance
An instrument issued by the trustee when the debt
secured by a Deed of Trust is paid in full.
**_See_** Defeasance Clause, Satisfaction of Mortgage
Deed of Trust
Security for a debt using a neutral third party
(Trustee) who holds legal title.
**_See_** Beneficiary, Deed of Reconveyance, Trustee, Trustor
Deed Restrictions
Limits placed on public record by the Grantor that
affect property usage by future owners.
**_See_** CC&R's, Reservations
Default
Failure to comply with a contractual agreement.
**_See_** Breach of Contract, Foreclosure, Forfeiture, Specific Performance Suit
Defeasance Clause
Clause stating that when a condition is met, the Lender’s
claim has been nullified and requiring the lender to issue
a satisfaction piece.
**_See_** Deed of Reconveyance, Satisfaction of Mortgage
Defeasible Fee
A fee simple estate subject to certain limitations
imposed by the Grantor.
**_See_** Fee Simple Conditional, Fee Simple Determinable
Deferred Maintenance
Loss of value due to lack of maintenance.
**_See_** Depreciation (Curable), Depreciation (Incurable), Physical Depreciation
Deficiency Judgment
The legal right of Lender through court action to collect
from a borrower the remaining debt still owed after a
foreclosure.
**_See_** Foreclosure
Delivery of Deed
The final transferring of a Deed from Grantor to Grantee.
A prerequisite for valid conveyance.
**_See_** Actual Delivery, Escrow Delivery
Demise
The conveying of an interest in property by means of
a lease. A giving up of some interest but not all rights
in ownership.
**_See_** Lease
Depreciation (Appraisal)
The loss of value due to any and all causes. Functional,
economic, physical social obsolescence.
**_See_** Economic Depreciation, Functional Depreciation, Physical Depreciation
Depreciation (Curable)
A defect in real property that is economically
feasible to correct.
**_See_** Economic Depreciation, Functional Depreciation, Physical Depreciation
Depreciation (Incurable)
A defect in real property that would not be economically
feasible to correct.
**_See_** Economic Depreciation, Functional Depreciation, Physical Depreciation
Depreciation (tax)
For income tax purpose, a deduction taken for
an investment.
**_See_** Economic Life, Straight Line Depreciation
Descent
Distribution of property to heirs when one
dies intestate.
**_See_** Escheat, Intestate, Probate
Designated Broker
The Broker who is responsible for day to day
operation of the business.
**_See_** Broker, Cooperating Broker
Devise
The conveyance of real property through a Will.
**_See_** Bequest, Devisor, Legacy
Devisee
The one who receives real property
through a Will.
**_See_** Devise
Devisor
The person who transfers real property
through a Will.
**_See_** Bequest, Legacy
Direct Endorsement Lenders
HUD approved lenders that approve FHA
loans by themselves.
**_See_** HUD
Directional Growth
The direction in which a residential community
appears to be developing.
**_See_** Axial Theory, Concentric Theory, Multiple Nuclei Theory
Disclaimer Deed
A document signed by a party to disavow any
interest in a particular property.
**_See_** Quit Claim Deed
Discount Points
A loan charge in addition to interest that increases
the Lender’s yield.
**_See_** APR, Regulation Z, Yield
Discrimination
Failure to give equal treatment - this concept is usually referring to a protected class of people.
Distraint Clause
Landlord’s right to seize a Lessee’s personal property
for past due rent. (Commercial property only.)
Unlawful in residential rental properties.
**_See_** Actual Eviction
Docketed Judgment
A recorded judgment.
**_See_** Constructive Notice
Doctrine of Relation Back
Document stating that the death of the Grantor
does not terminate a valid escrow.
**_See_** Escrow Delivery
Dodd-Frank Act
A federal law that places regulations on
financial institutions.
**_See_** Ability to Repay, Dodd-Frank Act, Qualified Mortgage
Dollar Rate
Tax rate charged per $100 of assessed value.
**_See_** Mill Rate, Tax Rate
Dominant Estate
The parcel of land that benefits from the easement
against the servient estate.
**_See_** Easement Appurtenant, Servient Estate
Dower
A wife’s right in her husband’s property
upon his death.
Not legal in Arizona.
**_See_** Curtesy, Legal Life Estate
Down Zoning
A change from a higher to a lower zoning
classification, such as commercial to residential.
**_See_** Zoning
Draws
Monies released under the terms of an
open-ended loan.
**_See_** Construction Loan, Obligatory Advances
Dual Agency
A transaction that involves two principals.
When a broker represents both buyer and seller.
**_See_** Agency, Client, Principal
Due Diligence
The use of good faith and a degree of care required
to perform one’s obligations.
Due on Sale Clause
The Lender’s right to call the entire loan balance
due upon resale of property.
**_See_** Acceleration Clause, Alienation Clause
Duress
The use of force in obtaining an agreement.
**_See_** Menace, Undue Influence, Voidable
Earnest Money
Advance money given by a Buyer to show
good faith in a purchase agreement.
**_See_** Equitable Interest
Easement
The right one has to use the land of another
for a specific purpose.
**_See_** Easement Appurtenant, Easement by Prescription Easement in Gross, Encumbrance
Easement Appurtenant
An easement that is attached to and transfers
with title to real property.
**_See_** Easement, Dominant Estate, Servient Estate
Easement by Necessity
An easement created by law, usually to have ingress
and egress to land-locked property.
**_See_** Easement, Ingress and Egress
Easement by Prescription
The legal process of acquiring an easement due
to adverse use that is open, constant and notorious
for a period of time.
**_See_** Adverse Possession, Easement
Easement in Gross
A personal right given to an individual or business to use
the land of another. This privilege is irrevocable.
**_See_** Easement Appurtenant
Eaves
The edge of a roof that projects beyond a building.
**_See_** Rafters
Economic Depression
Loss of value due to exterior forces beyond the
property owner’s control, which is always incurable.
**_See_** Functional Depreciation, Physical Depreciation
Economic Life
In appraisal, the number of years a property
will contribute value to the land.
**_See_** Salvage Value
Economic Rent
The amount of rent a property could or would bring
in an open market at a given time.
**_See_** Contract Rent, Excess Rent
Effective Age
The age of a property based on its appearance.
**_See_** Actual Age, Deferred Maintenance
Elevation
The view of the property as seen from the street.
**_See_** Setback
Embellishment
To improve the item described by adding fictitious
details. Overstating one’s opinion.
**_See_** Misrepresentation, Puffing the Goods
Emblements
The pre agreed right that the Seller or Lessee has
to return to the land to harvest crops.
**_See_** Industrial Fruit
Eminent Domain
The right of the government to permanently take
private property for public use with just compensation.
**_See_** Condemnation Suit
Enabling Legislation
Legislative authority extended to municipal
government to enact zoning laws.
**_See_** Police Power
Encroachment
Illegal intrusion upon another’s real property -
usually physical in nature.
**_See_** Encumbrance
Encumbrance
Any lien, liability, or restriction upon ownership
of real estate that will lessen its value.
**_See_** Deed Restrictions, Easement, Encroachment, Lien
EPA
Environmental Protection Agency - A federal agency
that sets standards on environmental issues.
Equal Dignities Rule
A law that states if a contract must be in writing, then
the agent’s authority to act for a principal must also be
in writing. If a Purchase Contract needs to be in writing
to be enforceable, then any changes or alterations must
also be in writing.
**_See_** Parol Evidence Rule
Equitable Interest
The Buyer’s interest in property at the signing of a
purchase contract. Vendee’s interest in an agreement
for sale.
**_See_** Earnest Money, Forfeiture
Equitable Period of Redemption
The Mortgagor’s chance to redeem the property prior
to sheriff’s sale by paying th entire debt.
**_See_** Acceleration, Statutory Period of Redemption
Equitable Title
The Vendee’s right to ownership of real property.
(Vendor still retains legal title.)
**_See_** Agreement for Sale, Vendee, Vendor
Equity
“Dollar value” interest remaining after liens are deducted
from current property value.
**_See_** Equity Build-up, Lien
Equity Build-up
The increase of equity due to the reduction of
the loan amount.
**_See_** Principal
Erosion
The gradual wearing away of land by acts of wind or water.
**_See_** Accretion, Avulsion
Escalator Clause
A contract clause that allows the interest to
increase upon loan assumption.
**_See_** Assumption of Mortgage
Escape Clause
The Buyer is not obligated to buy if the FHA appraisal
is less than the contract price.
**_See_** Amendatory Clause
Escheat
The right of the state to take property of the deceased who
dies without a Will and has no heirs after a statutory
period of time.
**_See_** Government Rights, Intestate
Escrow
Depositing documents with a neutral third party until
the terms of an agreement are met.
**_See_** Close of Escrow, Doctrine of Relation Back, Escrow Agent
Escrow Agent
A third party that acts on instructions of the Buyer & Seller.
When all terms and conditions are met, the agent will
close the transaction.
**_See_** Close of Escrow, Doctrine of Relation Back, Dual Agency, Escrow Delivery, Interpleader
Escrow Delivery
The act of delivering the Deed to a 3rd party w/instructions
to deliver said Deed to the Grantee after all conditions
are met.
**_See_** Actual Delivery
Estate
A right or interest one has in all property real & personal.
**_See_** Freehold, Less than Freehold
Estate in Land
A right or interest one has in real property.
**_See_** Fee Simple, Freehold, Legal Life Estate, Less than Freehold
Estoppel
A legal doctrine which prohibits a person from going
back on previous facts or acts of conduct.
**_See_** Estoppel Certificate
Estoppel Certificate
A document used to verify the terms and
balances of existing leases or loans.
Evidence of Title
The method used to show one’s proof of ownership.
**_See_** Certificate of Title, Title Insurance, Torrens System
Excess Rent
Contract rent that exceeds the economic rent.
**_See_** Contract Rent, Economic Rent
Exchanging
A transaction where like properties are traded,
usually for tax benefits.
**_See_** Boot, Mortage Relief, Tax Deferment
Exclusive Agency Listing
Appointing one Broker in a listing agreement w/the owner
reserving the right to sell the property without
paying a commission
**_See_** Exclusive Right to Sell
Exclusive Right to Sell
Appointing one Broker in a listing agreement, who will be
paid regardless of who sells the property, including
the owner.
**_See_** Bilateral Contract, Exclusive Agency Listing Listing Agreement
Exculpatory Clause
A clause in a document that relieves the Landlord of any
blame or guilt as relating to the actions of the Tenants.
An Escape Clause.
**_See_** Hold Harmless Clause, Indemnify
Executed Contract
A contract in which all terms & conditions have been met.
**_See_** Executory Contract
Executor
A person appointed in a Will to carry out its provisions.
**_See_** Administrator, Testate
Executory Contract
A contract in which all terms & conditions have
not yet been met.
**_See_** Contingency, Executed Contract
Expressed Contract
A contract in which the terms are specifically
stated either orally or in writing.
**_See_** Statute of Frauds
Extended Coverage Policy
A title insurance policy that normally covers items in the
public record plus questions of survey and
unrecorded mechanics liens.
**_See_** A.L.T.A.
Facade
The front of a building; the part seen from the street.
**_See_** Elevation
FDIC
Federal Deposit Insurance Corporation
Insures deposits for the depositor up to a
certain dollar amount.
**_See_** Federal Reserve System
Familial Status
A protected class under the Fair Housing Law -
A family is one or more persons 18 years or
older living with a parent or guardian.
**_See_** Federal Fair Housing Act 1988
Federal Fair Housing Act
Law enacted by Congress that prohibits discrimination
by race, color, religion, national origin, sex, familial status,
& handicap. The law relates primarily to the sale or lease
of residential real estate.
Federal Fair Housing Act 1968
Prohibits discrimination based on race, religion, color,
creed, national origin and sex.
Federal Fair Housing Act 1988
Prohibits discrimination based on handicap and familial
status - these items were added to the 1968 act.
Federal Housing Administration (FHA)
FHA - insures lenders against loss by requiring the
borrower to pay a mortgage insurance premium.
**_See_** MIP
Federal Reserve System
Regulatory agency for Federally chartered commercial
banks.
**_See_** Commercial Banks, FDIC
Fee Simple
The highest form of ownership under the
allodial system.
**_See_** Allodial System, Freehold
Fee Simple Conditional
If previously agreed conditions are violated, the Grantor
must take action to terminate the Grantee’s interest in
property (Not automatic termination).
**_See_** Defeasible Fee, Fee Simple Determinable
Fee Simple Determinable
A fee interest in real estate that may be automatically
terminated if certain circumstances are violated.
**_See_** Defeasible Fee, Fee Simple, Fee Simple Conditional
Fee Tail
A freehold estate that may terminate when and if the
Grantor’s specified heirs die.
“Unlawful in most states.”
**_See_** Feudal System
FEMA
A federal agency that coordinates disaster relief, also
designates flood areas and creates flood maps.
FHA - Conditional Commitment
An FHA appraisal based on a future loan commitment.
The property has qualified but a buyer has not yet qualified.
**_See_** FHA - Firm Commitment
Feudal System
All rights of land ownership remain with the king.
**_See_** Allodial System
FHA - Firm Commitment
A final statement that FHA will insure a specified loan.
**_See_** FHA - Conditional Commitment
FHA - Title I
FHA insures home improvement loans.
**_See_** Federal Housing Administration, MIP
FHA - Title II
FHA insures home”203B” loans.
**_See_** Federal Housing Administration, MIP
FHA - Title III
Originally established FNMA
**_See_** FNMA, Secondary Market
FHLMC
Federal Home Loan Mortgage Corporation
(Freddie Mac), active in the secondary
mortgage market.
**_See_** FNMA, GNMA, Secondary Market
FICO Score
Fair Isaac Company - calculates credit scores
Fiduciary
The trust and confidence an agent owes a principal
in an agency relationship.
**_See_** Agency, Principal
Financing Statement
A document recorded to protect a creditor’s interest
in personal property.
**_See_** Bulk Transfer, Security Agreement, Uniform Commercial Code
FIRPTA
Foreign Investment Real Property Tax Act
First Right of Refusal
A party who has the first opportunity to meet an offer
to either buy or lease a property.
**_See_** Executory Contract, Option, Unilateral Contract
Fissure
A long narrow crack in the earth’s surface.
Fixture
Personal property that is now affixed and is
considered real property.
**_See_** Annexation, Personal Property, Trade Fixture
Flexible Payments
A loan payment plan in which the payments increase
over a set number of years.
**_See_** Variable Rate Mortgage
Flood Plain
An area of low-lying ground adjacent to a stream
that is subject to flooding.
**_See_** Flood Way
Flood Way
A channel for diverting flood water.
**_See_** Flood Plain
Floor Value
An appraisal concept which states that the sales price of
comparable properties set the lowest market price.
**_See_** Ceiling Value, Comparable
FNMA
Federal National Mortgage Association
(Fannie Mae), purchases paper from primary lenders.
**_See_** FHLMC, GNMA, Primary Lenders, Secondary Market
Forcible Detainer
A legal action that a landlord can take if the existing
occupant refuses to leave.
**_See_** Holdover Tenant
Foreclosure
An action by which property used as security is
sold to pay debt.
**_See_** Deed in Lieu of Foreclosure, Deficiency Judgment, Equitable Period of Redemption, Reinstatement Period, Statutory Period of Redemption
Forfeiture
The losing of equity one has in a property due to
nonperformance of an obligation - such as in an Agreement
for Sale. The process by which a Vendor retakes the property
from the Vendee due to default by the Vendee.
**_See_** Agreement for Sale, Equitable Interest
Foundation
The supporting portion of a structure on which
all else rests.
**_See_** Monolithic Slab
Fractional Sections
Irregular sctions due to the curvature of the Earth.
There are 11 fractional and 25 full sections in a township.
**_See_** Section, Township
Fraud
Intentional deception that, when relied upon, causes
financial loss or personal injury.
**_See_** Collusion, Misrepresentation, Puffing the Goods
Freehold
An estate held in fee simple or for life -
no pre-determined time for termination.
**_See_** Conventional Life Estate, Fee Simple
Friable
When asbestos particles become air-born.
**_See_** Asbestos
Front End Ratio
A ratio that indicates what portion of an individuals
income is used to make mortgage payments.
**_See_** Back End Ratio
Frozen Asset
An asset that cannot be easily converted into cash
without taking a loss.
**_See_** Liquid Asset
FTC
Federal Trade Commission
regulates the “CAN-SPAM ACT”
**_See_** CAN-SPAM ACT
Functional Depreciation
Physical features within the property lines that are
obsolete and no longer desirable. May be curable
or incurable.
**_See_** Depreciation (Appraisal), Economic Depreciation, Physical Depreciation
Funding Fee
A fee paid to the VA to guarantee a VA loan.
**_See_** VA Guarantee
Gable Roof
A pitched roof with two sloping sides.
Garnishment
A court directive to the party who is holding the
assets of another to freeze said assets.
**_See_** Attachment, Specific Lien
General Agent
An agent having the power to perform any and all acts
on behalf of a Principal as expressed in a legal document.
**_See_** Agency, Limited Agent, Universal Agent
General Lien
A lien that encumbers both real and personal property.
**_See_** Lien, Specific Lien
General Partnership
Each partner is responsible and liable for the total
profit or loss of the operation regardless of
the initial investment.
**_See_** Limited Partnership, Partnership
General Warranty Deed
A conveying deed in which the grantor states that he
or she will forever guarantee the title of real property.
**_See_** Special Warranty Deed, Warranty Forever, Warranty of Further Assurance
Gift Deed
A deed conveyed with love and affection
as the consideration.
**_See_** Consideration, Good Consideration, Quit Claim Deed
GNMA
Government National Mortgage Association
(Ginnie Mae) active in secondary mortgage market.
**_See_** FHLMC, FNMA, Secondary Market
Good Consideration
Love and affection given in exchange for real property.
**_See_** Consideration, Gift Deed, Valuable Consideration
Good Faith Estimate
An estimate of all anticipated closing costs regarding a
residential transaction. This estimate is required to be
given to all buyers by the lender under RESPA guidelines.
**_See_** Regulation Z
Good Will
The intangible value of a business due to the habit of
patronage. Good will may be depreciated for accounting
purposes.
**_See_** Covenant Not to Compete
Government Lot
In a Government Rectangular Survey System, those
irregular sections due to curvature of the Earth or acts
of nature.
**_See_** Check Lines, Correctional Lines, Fractional Sections, Government Rectangular Survey System
Government Rectangular Survey System
A governmental method of surveying land located by
using a principal base line and principal meridian.
**_See_** Base Line (Principal), Meridian (Principal), Section, Township
Government Rights
Taxation, Escheat, Eminent Domain, Police Power
**_See_** Enabling Legislation
Graduated Lease
A lease that will go up in rent at specified intervals.
**_See_** Index Lease, Percentage Lease
Grandfather Clause
A clause that indicates something was once allowed
and may still continue despite changes in the law.
**_See_** Non-conforming Use, Variance
Grant
The transferring of real property by a deed.
**_See_** Deed, Grantee, Grantor
Grantee
The person who receives an interest in real property
via a deed.
**_See_** Deed, Grantor
Granting Clause
The words in a deed that state, “I hereby grant
and convey…”
**_See_** Hebendum Clause
Grantor
The person who conveys an interest in real property
via a deed.
**_See_** Deed, Grantee
Gross Lease
A lease where the lessor is responsible for all expenses.
**_See_** Net Lease
Gross Rent Multiplier
A figure used that, when multiplied by the annual
gross rent, will estimate the property value.
**_See_** Capitalization Rate
Gross Schedule Income
The total potential of all income that can be derived
from an investment property.
**_See_** Adjusted Gross Income, Net Operating Income
Ground Lease
A lease for land only.
**_See_** Subordination Clause
Ground Water
The classification of all underground water
except for underground streams.
**_See_** Surface Water
Guardian
One appointed by the court to handle the
affairs of an incompetent party.
**_See_** Incompetent Party, Personal Representative
Habendum Clause
The degree, quantity or quality of the estate conveyed.
**_See_** Deed, Life Estate
Handicap
A protected class under the Fair Housing Law;
a handicap is considered an impairment that
substantially limits life’s activities.
**_See_** Federal Fair Housing Act 1988
Hard Money Mortgage
A mortgage that is given for direct cash.
**_See_** Soft Money Mortgage
Hereditament
The right to will another personal and real property.
**_See_** Incorporeal
High Water Mark
Highest place on shoreline reached by rising water.
**_See_** Non-navigable Stream
Highest and Best Use
Land usage at the time of an appraisal which
would create the highest net return.
**_See_** Appraisal
Hold Harmless Clause
A contract clause stating one party agrees to protect
another from losses.
**_See_** Exculpatory Clause, Indemnify
Holder in Due Course
The party who is holding a note for value and has
the protection of law for its enforcement.
**_See_** Negotiable Instrument, Promissory Note
Holdover Tenant
A tenant who remains in possession of the
property after lease expiration.
**_See_** Actual Eviction, Tenancy at Sufferance
Holographic Will
Hand-written Will that is signed by the maker
but does not require witnessing.
**_See_** Formal Will, Nuncupative Will, Will
Homestead
A legal right of a homeowner to protect a portion
of his equity against a forced sale.
**_See_** Abandonment of Homestead, Legal Life Estate
Homogeneous
A word used in appraising that describes
similar or like properties.
**_See_** Conformity
Horizontal Property Regime
Condominium - the owner of the unit only has cubage rights;
air rights and sub-surface rights are not included.
**_See_** Town House
HUD
Department of
Housing and Urban Development
**_See_** Federal Housing Administration (FHA), GNMA
Hypothecate
To pledge property as collateral and still retain
possession of the pledged property.
**_See_** Deed of Trust, Mortgage
Illusory Contract
An expression of intent to do something,
not a binding agreement.
**_See_** Unenforceable
Implied Agency
An agency created by the actions or words
of the parties involved.
**_See_** Agency, Ostensible Authority
Impound Account
An amount held by the lender to pay the
taxes and insurance.
**_See_** PITI
INA
Irrigation Non Expansive Area
**_See_** Assured Water Supply
Inchoate
Incomplete (not perfected) - additional steps must
be taken to strengthen the claim.
**_See_** Community Property, Mechanic's Lien
Income Approach
An appraisal process that estimates the value of income
property by converting annual net income into value.
**_See_** Adjusted Gross Income, Capitalization, Capitalization Rate (Overall), Net Operating Income
Incompetent Party
One who is not legally qualified to manage his or her own
affairs due to age, mental capabilities, or legal action.
**_See_** Competent Pary, Guardian, Infancy
incorporeal
The rights accompanying ownership of property.
**_See_** Easement, Hereditament
Indemnify
An agreement to hold harmless another from damages.
**_See_** Exculpatory Clause, Hold Harmless Clause
Index Lease
A lease that is based on a certain price index such as
the Consumer Price Index found in commercial leases.
**_See_** Graduated Lease
Index Rate
A rate in a variable rate loan that is tied to a T-Bill,
11th District or U.S. Cost of Funds.
**_See_** Variable Rate Mortgage
Industrial Fruit
Fruits or crops that are produced on a property for
income - personal property.
**_See_** Emblements
Infancy
A person who is under the legal age
(usually under 18 years).
**_See_** Incompetent Party, Majority
Ingress and Egress
The right to enter and exit a parcel of land.
**_See_** Easement, Landlocked, Right of Way
Installment Sale
A tax method of reporting only the amount of income
actually received as it is received.
**_See_** Tax Deferment
Intangible
The rights that accompany personal property.
**_See_** Goodwill, Tangible
Inter-State Land Disclosure Act
A federal registration system when 25 or more lots are
offered for sale or lease inter-state.
Interest
Rent paid for the use of money.
**_See_** Compound Interest, Simple Interest, Usury
Interest Only
Payment consists of interest only and no
repayment of principal.
**_See_** Amortization, Straight Note, Term Loan
Interim Financing
A short term loan sometimes called a gap or bridge loan.
**_See_** Construction Loan, Take Out Loan
Internal Rate of Return
A rate of discount that is calculated on the basis of
projected cash flows from the initial investment.
Interpleader
A third party (court) who is called upon to settle a
dispute, usually in an escrow situation.
**_See_** Escrow, Escrow Agent
Intestate
A person who dies without a Will.
**_See_** Descent, Testate
Involuntary Alienation
The transferring of ownership against one’s will.
**_See_** Avulsion, Condemnation Suit, Foreclosure
Involuntary Lien
A lien placed on property without the owner’s
permission or by act of law.
**_See_** Mechanic's Lien, Property Tax, Statutory Lien
Joint and Several Liability
One party only or all parties together can be
held liable for the debt.
Joint Tenancy
Co-ownership that features the right of survivorship
and requires the four unities:
Possession, Interest, Time, Title.
**_See_** Concurrent Tenancy, Unities of Joint Tenancy
Joist
The horizontal supports that hold up a floor or ceiling.
**_See_** Stud
Jones v Mayer
A court case that prohibits discrimination by race both
in private and governmental properties.
**_See_** Civil Rights Act of 1866
Judgment Lien
An involuntary lien on both real and personal property
- a general lien.
**_See_** General Lien, Specific Lien
Junior Mortgage
Any security agreement having a priority after
the first mortgage.
**_See_** Subordination Clause
K 1
A form to report income or loss in a business,
partnership, or trust.
Laches
The legal time has expired to file a valid claim.
**_See_** Statute of Limitations
Land Contract
Contract where the Seller finances the Buyer’s
purchases of realty and retains legal title.
**_See_** Equitable Title, Forfeiture, Vendee, Vendor
Landlocked
A parcel of land having no ingress or egress without
crossing over another’s property.
**_See_** Easement by Necessity, Ingress and Egress
Landlord
One who owns real property but transfers a leasehold
interest to another with the reversion right.
**_See_** Lease, Leasehold, Lessee, Lessor
Law of Situs
Real Estate is subject to the laws of the state
in which it is located.
Law or Agency
A legal relationship in which one is hired to represent
another with trust and confidence. The party hired
is referred to as the Agent.
**_See_** Agency, Buyer Broker, Fiduciary, Listing Agreement
Lawful Object
A contract requirement stating that a valid contract must be
for an item or purpose that is legal in the eyes of the law.
**_See_** Contract Requirements
Lease
An agreement giving possession and use of property in
return for a specified consideration.
**_See_** Leasehold, Tenancy at Will, Tenancy for Years, Tenancy from Period to Period
Leasehold
The Lessee’s right to use property for a
specified period of time.
**_See_** Lease, Less than Freehold
Legacy
Money or personal property left to another through a Will.
**_See_** Bequest, Devise, Will
Legal Description (Formal)
A formal description that defines the boundaries of real
property. This description is sufficient to locate the property
and may be enforced through a court of law.
**_See_** Government Rectangular Survey System, Legal Description (Informal), Metes & Bounds, Plat Map
Legal Description (Informal)
Identifying a parcel of land by a street address
or local terminology.
**_See_**
Legal Description (Formal), Metes & Bounds, Monument
Legal Life Estate
A non-inheritable right provided by law.
**_See_** Community Property, Curtesy, Dower, Homestead
Legal Person
A person created by law such as a corporation.
**_See_** Corporation, Natural Person
Legal Rate
The interest rate the court assigns to those documents
that have no specified interest rate.
**_See_** Contract Rate
Legal Title
The lawful claim to ownership.
**_See_** Chain of Title, Title
Legatee
One who receives money or personal property
through a Will.
**_See_** Bequest, Devise, Legacy
Lender’s Policy
An extended coverage Title Insurance policy
purchased for the Lender.
**_See_** Extended Coverage Policy, Owner's Policy
Less than Freehold
An estate of possession but not ownership - a lease.
**_See_** Freehold, Leasehold
Lessee
The tenant in a lease.
**_See_** Lease, Lessor
Lessor
A Landlord in a lease.
**_See_** Landlord
Level Payment Mortgage
A repayment plan that includes principal & interest.
The total of which is the same amount each payment.
**_See_** Amortization
Leverage
Using borrowed funds to finance investments with
little or no personal cash invested.
**_See_** Loan to Value Ratio
License
A personal privilege one has to use the land of another.
(Privilege revocable)
**_See_** Easement
Lien
A money claim against property.
**_See_** Encumbrance, General Lien, Specific Lien
Lien Theory State
States in which the Lender of cash does not hold legal
title, but only a lien as security against title.
**_See_** Title Theory State
Life Estate
An interest in property that is limited to the life grantee -
or the life of some specified person.
**_See_** Contingent Remainder, Legal Life Estate, Remainder Estate, Reversionary Estate
Life Tenant
One who possesses a life estate.
**_See_** Conventional Life Estate, Remainder (Vested)
Like-Kind Property
Property held for an investment when qualifying for a
real estate tax deferred exchange.
**_See_** Exchanging
Limited Agent
An agent having the power to perform only in those areas
expressed in a legal document.
**_See_** Agent, Agent of Necessity, General Agent
Limited Partnership
Parties who contribute capital to an investment
and are responsible for the amount invested.
**_See_** General Partnership, Partnership
Liquid Asset
An asset that can easily be converted into cash.
**_See_** Asset, Frozen Asset, Leverage
Liquidated Damages
The dollar amount stated in the contract paid to the injured
party if a breach occurs. The dollar amount is usually
pre-agreed.
**_See_** Aggrieved, Breach of Contract, Forfeiture
Lis Pendens
Lawsuit pending.
**_See_** Attachment, Judgment Lien
Listing Agreement
A written agreement between a principal and Broker
to sell or lease property for compensation.
**_See_** Agency, Agent, Exclusive Agency Listing, Exclusive Right to Sell, Law of Agency
Listing Broker
The agent who acts for the owner of
property in either leasing or selling.
**_See_** Agent, Fiduciary, Principal
Littoral Land
A property owners right to use the land
abutting a lake or ocean.
**_See_** Riparian Rights
Loan to Value Ratio
The amount of loan in relationship to property value.
**_See_** Leverage
Long Term Capital Gain
The taxable gain on the sale of a capital asset
held for more than the statutory period of time.
**_See_** Asset, Capital, Capital Gain
Lot Release
Clause in a Blanket Mortgage to release individual lots.
**_See_** Blanket Mortgage
Lot, Block, Subdivision
A method of identifying land in a subdivision by referring
to a certain lot, block, and a recoded plat of that subdivision.
**_See_**
Legal Description (Formal), Plat Map
Love and Affection
Consideration that is given to support a gift deed.
**_See_** Consideration, Good Consideration, Valuable Consideration
Majority
A person who is legally competent according
to the minimum age law of that state.
**_See_** Competent Party, Contract Requirements, Incompetent Party
Margin
In an adjustable rate loan, the amount added
to the index to determine the rate.
**_See_** Variable Rate Mortgage
Market Data Approach
An appraisal process that uses comparables
to estimate the value of a specified property.
**_See_** Appraisal, Comparable, Correlation
Market Price
The price a property actually sells for.
**_See_** Floor Value, Market Value
Market Value
The price a property should sell for if enough time is
allowed & neither Seller nor Buyer is under pressure to act.
**_See_** Market Price
Master Plan
A long-range guide for the orderly growth of a given area.
**_See_** Zoning
Mechanic’s Lien
The legal right of a contractor to place a lien on real
property for work or materials rendered.
**_See_** Inchoate, Lien, Notice of Completion, Satisfaction of Mortgage
Megalopolis
A continuous series of ongoing cities
all heavily populated.
Megan’s Law
A law requiring sex offender registration and notification.
Menace
The threat of force in acquiring an agreement.
**_See_** Duress, Mutual Agreement, Undue Influence, Voidable
Meridian (Principal)
In the Government Rectangular Survey System, a reference
line that runs North & South & crosses the principal baseline.
**_See_** Baseline (Principal), Government Rectangular Survey System
Metes & Bounds
A legal description of land that uses an identifiable
starting point to define the boundaries of real property.
**_See_** Monument, Point of Beginning
Mill Rate
A property tax that is equivalent to one tenth of one unit.
Expressed as .001 or 1/1000 of a dollar.
**_See_** Dollar Rate
Mineral Rights
Sub-surface rights to all underground assets.
**_See_** Air Rights, Sub-surface Rights
MIP
Mortgage Insurance Premium
Insurance pertaining to an FHA Insured loan.
**_See_** Federal Housing Administration, Private Mortgage Insurance
Misrepresentation
To represent falsely or to give untrue statements.
**_See_** Fraud, Puffing the Goods
Monolithic Slab
A foundation formed by a single pouring of concrete.
**_See_** Foundation
Monument
A natural object that is given as part of a survey.
**_See_** Bench Mark, Legal Description (Informal), Metes & Bounds
Moral Turpitude
An act of conduct that is base, vile, or depraved.
Moratorium
A temporary halting of payments due on a debt.
Mortgage
A security document given to insure the payment of a Note.
**_See_** Mortgage, Mortgagor, Satisfaction of Mortgage
Mortgage Assumption
The Buyer assumes the Seller’s mortgage and agree to pay
the debt. Original maker is not necessarily free from liability.
**_See_** Novation, Subject to
Mortgage Broker
One who is paid a fee to arrange loans
between a Lender and a Borrower.
**_See_** Primary Lenders
Mortgage Relief
In a tax deferred exchange - the assumption of a mortgage
of lesser value than an existing mortgage.
**_See_** Boot, Debt Relief, Exchanging, Tax Deferment
Mortgagee
The Lender under a mortgage-type transaction. The
receiver of the security instrument.
**_See_** Mortgage, Mortgagor
Mortgagor
The party who gives and is the maker of the security.
**_See_** Hypothecate, Mortgagee, Trustor
Mud Sill
The lowest horizontal member of a frame house
that rests on the foundation.
**_See_** Sill
Multiple Listing Service
A general pooling of listing information available to those
members of the local Board of Realtors.
**_See_** Cooperating Broker, Exclusive Right to Sell, Realtor
Multiple Nuclei Theory
Theory of land use development around
several central business areas.
**_See_** Axial Theory, Concentric Theory
Mutual Assent
A meeting of the minds between two parties in a contract.
**_See_** Contract, Contract Requirements
Narrative Appraisal Report
A written appraisal showing in detail the reasoning
behind the assigned estimate of value.
**_See_** Appraisal
Natural Person
A person by birth, not by operation of law.
**_See_** Legal Person
Navigable Stream
A designated public highway of water. The stream
bed is owned by the government.
**_See_** Non-navigable Stream
Negative Leasehold
Contract rent exceeds the economic rent.
**_See_** Contract Rent, Leasehold, Positive Leasehold
Negotiable Instrument
A written document that, when endorsed,
can be assigned to another.
**_See_** Assignment, Holder in Due Course
Neighborhood
Adjoining areas of land that have common
characteristics and similar usage.
**_See_** Buffer Zone
Net Lease
Tenant pays rent and other costs
pertaining to the property.
**_See_** Gross Lease
Net Listing
An agreement in which a minimum sales price is set by
the Seller. The Broker receives his commission from that
amount over and above the minimum sales price.
**_See_** Exclusive Agency Listing, Exclusive Right to Sell, Listing Agreement
Net Operating Income
The income obtained from property
after operating expenses.
**_See_** Adjusted Gross Income, Gross Schedule Income, Income Approach
Nominee
A person who is acting for a party to be named later.
**_See_** Assignee, Assignment
Non-conforming Use
The continuance of a certain use even though the area has
been zoned for a different purpose; a property use that is
not consistent with current zoning.
**_See_** Conformity, Grandfather Clause, Variance, Zoning
Non-disturbance Clause
A mortgage clause which states that the Lender will not
disturb the present tenant’s rights even in the event
of foreclosure.
**_See_** Foreclosure
Non-Homogeneous
No two parcels of real estate are alike
or occupy the same geographic location.
**_See_** Situs
Non-Inheritable Estate
An estate which cannot be
passed to one’s heirs.
**_See_** Conventional Life Estate, Legal Life Estate, Less than Freehold
Non-navigable Stream
A stream not designated as a public highway;
the stream bed is owned privately.
**_See_** Navigable Stream, Reliction
Notary Public
A public officer who is able to attest and certify
legal documents by a signature and seal.
**_See_** Acknowledgement
Note
A document that is evidence of debt - an obligation.
**_See_** Deed of Trust, Mortgage
Notice of Completion
A legal notice that indicates a completed and a
mechanic’s lien must be filled within a certain time period.
**_See_** Mechanic's Lien
Novation
The original obligor is relieved of any further loan obligation
due to the substitution of a new party.
**_See_** Assumption of Mortgage, Subject to
Nuncupative Will
An oral Will that is witnessed.
**_See_** Formal Will, Holographic Will, Will
Objective Value
The value in the object itself.
**_See_** Subjective Value, Value
Obligatory Advances
An open-ended loan has lien priority as per
recondition regardless of future draws.
**_See_** Construction Loan, Draws, Open End Loan
Obsolescence
A loss in property value due to outmoded
functional or economic changes.
**_See_** Depreciation (Appraisal), Depreciation (Curable), Depreciation (Incurable)
Offer
A proposal freely made by one party to another.
**_See_** Contract Requirements, Mutual Assent
Open End Loan
A loan in which draws are available up to a set limit.
**_See_** Draws, Obligatory Advances
Open Listing
A listing between the principal and
numerous agents simultaneously.
**_See_** Listing Agreement, Procuring Cause, Unilateral Contract
Option
A future right of a party to buy or lease
property at a specified price.
**_See_** Bilateral Contract, First Right of Refusal, Unilateral Contract
Optionee
The party who receives an option.
**_See_** Option
Optionor
The party who gives an option.
**_See_** Option
Orientation
Placing a house on property so that it brings
the best advantages to the occupant.
**_See_** Setback
Origination Fee
A fee charged by the Lender for processing a new loan.
Ostensible Authority
Authority arising when a principal has intentionally
caused a third party to rely upon the apparent authority
even though it has not been given.
**_See_** Agency by Ratification, Implied Agency
Owner’s Policy
A Title Insurance purchased for the benefit of
the Buyer in a real estate transaction.
**_See_** Title Insurance
Paper
A lending term referring to a note
and a security instrument.
**_See_** Primary Lenders, Secondary Market
Parol Evidence Rule
A rule stating that oral evidence may not
be added to a written agreement.
**_See_** Contract Requirements, Equal Dignities Rule
Partition
The dividing of co-ownership in property so that each
holds his or her interest sole and separate. A legal
process terminating a co-tenancy.
**_See_** Tenancy in Common
Formal Will
A written Will that is written, signed & witnessed.
**_See_** Codicil, Holographic Will, Nuncupative Will, Testate
Partnership
Consists of two or more people conducting
business as co-owners.
**_See_** General Partnership, Limited Partnership, Syndication
Patent Deed
The instrument used by a Sovereign Power
to transfer real property to an individual.
**_See_** Cession Deed, Deed
Percentage Lease
A rental payment which is based on a
percentage of the gross sales.
**_See_** Gross Lease, Net Lease
Percolation Test
A soil test which determines drainage and absorption.
Perpetuity
With no end - to go on forever.
**_See_** Corporation, Legal Person
Personal Property
Items that are tangible and movable, not real property.
**_See_** Fixture, Tangible, Trade Fixture
Personal Representative
An appointed individual authorized to settle an estate.
**_See_** Administrator, Executor, Intestate
Phase I Audit
An evaluation of a site to determine environmental
problems. Phase I inspects public records and
adjacent properties.
Phase II Audit
An environmental survey that requires soil sampling to
determine the level of hazardous substances.
Physical Depreciation
A loss of value due to the physical
deterioration of the property.
**_See_** Depreciation (Appraisal), Depreciation (Curable), Depreciation (Incurable)
PITI
Principal, Interest, Taxes, Insurance
**_See_** Budget Payment
Plat Map
A recorded map that shows the smaller parcels
in a subdivision by book and page number.
**_See_** Legal Description (Formal), Lot Block Subdivision, Subdivision
Plate
A horizontal piece that supports
the trusses or rafters of a roof.
Plessy v Ferguson
A court case that established the doctrine of
“Separate but Equal”.
**_See_** Brown v Board of Education
Plottage
The process of combining two or more parcels of land
so that together they have a greater total value.
**_See_** Assemblage, Contribution, Subdivision
Point of Beginning
The starting point at one corner of the surveyed
land in a Metes & Bounds description.
**_See_** Bench Mark, Metes & Bounds, Monument
Police Power
The right of government to enact laws for the protection,
health, and welfare of the general public.
**_See_** Enabling Legislation, Zoning
Positive Leasehold
Economic rent exceeds the contract rent.
**_See_** Contract Rent, Economic Rent, Leasehold, Negative Leasehold
Power of Attorney
A written document that authorizes one party
to act for another.
**_See_** Agent, Attorney-in-Fact, General Agent, Limited Agent
Preliminary Title Report
A document provided in escrow which shows
all claims affecting title.
**_See_** Abstract of Title, Schedule "A", Schedule "B"
Prepayment Penalty
An additional charge for paying off
a debt before its time.
**_See_** "Or More" Clause
Primary Lenders
Those Lenders that originate loans,
thereby creating “paper”.
**_See_** Paper, Secondary Market
Principal
The party represented in an agency relationship.
**_See_** Agency, Agent, Client, Fiduciary
Principal Balance
The original loan amount. The current remaining
unpaid debt on the loan.
**_See_** Interest
Prior Appropriation
Water rights that are based on a government permit
system. The rights to use the water in a river
or stream adjacent to the land.
**_See_** Riparian Rights
Private Mortgage Insurance
A form of insurance required on conventional loans
that exceed a loan value - ratio of 80%.
**_See_** Loan to Value Ratio, MIP
Pro Rata Share
Per front foot or a specific portion allocated to a property
owner - usually used in an assessment calculation.
**_See_** Assessment
Probate
A court action to prove the validity of a will,
or settle an estate.
**_See_** Administrator, Executor, Intestate, Testate, Will
Procuring Cause
The actions of a Broker that bring about the
desired results.
**_See_** Commission
Progression
Lesser value properties will be increased by
locating near more expensive properties.
**_See_** Regression
Promissory Note
A written promise by a person to pay a debt
under terms specified in the note.
**_See_** Deed of Trust, Mortgage, Note
Property Tax
Tax levied by the local governments to meet the needs
of the community - Real estate taxes are primary liens
and are usually based on Ad Valorem.
**_See_** Ad Valorem
Proration
To divide or assess proportionately between Buyer
and Seller the obligations that have been paid or
due. The close of escrow is the buyer’s day.
Public Report
A report required before a subdivision can be offered
for sale or lease - Discloses all facts about the property
for the buyer’s protection.
**_See_** Subdivision
Puffing the Goods
Over exaggeration of one’s opinion.
**_See_** Misrepresentation, Embellishment
Punitive Damages
Damages extending far beyond the actual loss.
**_See_** Liquidated Damages
Pur Autre Vie
A life estate that is based on a life of another.
**_See_** Life Estate
Purchase Money Mortgage
A mortgage given by a buyer as part of the consideration
for the price - one usually carried by the seller in
a credit transaction.
**_See_** Mortgage, Soft Money Mortgage
Qualified Mortgage
A home loan that meets certain standards set forth by
the federal government. The loan is presumed to have
met the “ability to repay rule” per the Dodd-Frank Act.
**_See_** Ability to Repay Rule, Dodd-Frank Act
Quantity Survey Method
An appraisal method which takes into account all the
component parts along with the installation costs.
**_See_** Cost Approach, Unit-in-Place Method
Quarter Section
One fourth of a township that contains 160 acres.
**_See_** Section
Quiet Title Suit
A court action to remove a cloud on title
and create marketable title.
**_See_** Cloud on Title
Quit Claim Deed
A Deed which releases any or all interest
one may have in real property.
**_See_** Deed, Quiet Title Suit
Radon Gas
A colorless, odorless gas from decaying minerals in
high concentrations that is known to cause lung cancer.
Rafters
Sloping boards that extend from the top
of the exterior wall to the ridge board.
**_See_** Ridge board
Range Lines
Survey lines that are six miles apart and
run parallel to the principal meridian.
**_See_** Government Rectangular Survey System, Tier Line, Township
Rate of Return
The percentage earned on an investment.
**_See_** Cash on Cash Return
Realtor
A term used to identify members
of the National Association of Realtors.
Recapture
The amount of depreciation taken
for tax purposes is now taxable.
Recording
Entering a document in the Recorder’s
office at the prescribed county.
**_See_** Chain of Title, Constructive Notice
Recovery Fund
A state fund that monitarily reimburses the aggrieved
public due to dishonest acts of the licensee.
**_See_** Aggrieved, Subrogation
Redemption Period
The statutory period of time the borrower has to redeem
in a mortgage foreclosure, usually six months after the
sheriff sale.
**_See_** Mortgage, Reinstatement Period
Redlining
An illegal practice that restricts loans
by geographical area.
**_See_** Blockbusting, Federal Fair Housing, Steering
Reduction Certificate
A document issued by lender for buyer’s
benefit stating the existing loan balance.
**_See_** Assumption of Mortgage, Estoppel Certificate
Regression
An appraisal principle which states that the worth of
an expensive property is lessened by the presence
of less expensive properties.
**_See_** Progression
Regulation Z
Truth in Lending Laws apply to residential financing -
full disclosure of all financing charges. Interest rates
are expressed in APR.
**_See_** APR, RESPA
Reinstatement Period
The period of time the trustor has to make all
delinquent payments prior to the trustee foreclosure
sale in a Deed of Trust.
**_See_** Trustee's Deed, Redemption
REIT
Real Estate Investment Trust
A corporation with a minimum of 100 investors and 95%
of the profit passes to the shareholders.
Release Clause
A clause in a blanket security instrument that allows
for individual release of secured lots from the lien.
**_See_** Blanket Mortgage
Reliction
The gaining of land due to the subsidence of
water of a non-navigable stream.
**_See_** Accretion, Non-navigable Stream
Relief Map
A map indicating by lines, shading, or color,
different elevations of land.
**_See_** Contour Map
Remainder (Vested)
One who is entitled to an estate upon
termination of a life estate.
**_See_** Contingent Remainder, Reversionary Estate
Remainder Estate
A future interest in real estate after a life estate.
**_See_** Contingent Remainder, Remainder (Vested)
Rent
Consideration given for the use of property.
**_See_** Contract Rent, Economic Rent
Replacement Cost
The cost of replacing a property
using today’s materials.
**_See_** Cost Approach, Reproduction Cost
Reproduction Cost
The cost of rebuilding an exact replica.
**_See_** Cost Approach, Replacement Cost
Reservations
Rights retained by the grantor when property is
conveyed. Frequently called Deed Restrictions.
**_See_** Deed Restrictions
Residual Value
The value that remains after a
property’s economic life.
**_See_** Economic Life, Salvage Value
RESPA
Real Estate Settlement Procedures Act
Requires disclosures of closing costs to buyers & sellers.
Required within 72 hours of a loan application - Required
on residential loans, one, three or four-plex.
**_See_** Regulation Z
Reversionary Estate
An estate returned to the original grantor.
Usually at the end of a life estate or lease.
**_See_** Remainder Estate
Ridge board
A large horizontal beam placed at the peak
of a roof to which rafters are attached.
**_See_** Rafters
Right of Way
The right one has to cross the land of another.
**_See_** Easement, Ingress and Egress
Rights of Survivorship
An incident whereby the surviving joint tenant
automatically receives the interest and rights
of the deceased joint tenant.
**_See_** Joint Tenancy, Tenancy by Entireties
Riparian Rights
The property owner’s right to enjoy or use
the water abutting his land.
**_See_** Reliction
Rod
A unit of measurement that consists of 16.5 feet.
Run With The Land
A right that remains with the land even upon
transfer such as an easement appurtenant.
**_See_** Appurtenant
S Corporation
A regular corporation that has elected to be treated
as a partnership for tax purposes - restictions do apply.
**_See_** Corporation, Partnership
Sale & Leaseback
The selling of property to an investor while at the same
time leasing it back for a specified period.
**_See_** Net Lease
Salvage Value
The estimated economic value of an asset
at the end of its economic life.
**_See_** Depreciation (Appraisal), Residual Value
Sandwich Lease
A lease in which a lessee rents the property to another
party, putting himself in the middle position.
**_See_** Assignment, Sublease
Satisfaction of Judgment
A document which, when recorded,
releases the judgment lien.
**_See_** Judgement Lien
Satisfaction of Mortgage
A document stating that the mortgage
debt has been paid in full.
**_See_** Deed of Reconveyance, Defeasance Clause
Schedule “A”
Description page of a preliminary title report
and the type of insurance being issued.
**_See_** Schedule "B"
Schedule “B”
The portion of a title insurance policy that
lists the exceptions to coverage by the policy.
**_See_** Schedule "A", Title Insurance
Scheduled Gross Income
The maximum potential income a property can
generate before any deductions or expenses.
**_See_** Adjusted Gross Income
Seasoned Loan
A loan repayment record that is consistent.
Secondary Market
Agencies which purchase mortgages from primary
lenders thereby creating funds for additional mortgages.
**_See_** FHLMC, FNMA, GNMA, Primary Lenders
Section
In the Government Rectangular Survey System,
a parcel of land one mile square containing 640 acres.
**_See_** Quarter Section, Township
Security Agreement
Under the UCC, a document used
to secure personal property.
**_See_** Chattel Mortgage, Financing Statement, Uniform Commercial Code
Servient Estate
The land against which an easement has been granted
for the benefit of the dominant estate.
**_See_** Dominant Estate, Easement Appurtenant
Setback
The distance a structure must be from a
given point such as a street or an easement.
**_See_** Variance, Zoning
Settlement Sheet
A full disclosure of all charges and
disbursements in a real estate transaction.
**_See_** Proration, Regulation Z
Sheathing
The inner covering of boards on the
roof or outside walls of a frame house.
Sheriff’s Deed
Deed given by the Sheriff at the completion
of a mortgage foreclosure sale.
**_See_** Bargain and Sale Deed, Foreclosure, Involuntary Alienation
Sherman Antitrust Act
Prohibits certain business activities that
are anti-competitive such as price fixing.
Short Term Capital Gain
The gain on the sale of a capital asset
usually held for 12 months or less.
**_See_** Asset, Capital Gain
Sill
The lowest horizontal board in
a window or door frame.
**_See_** Mud Sill
Simple Interest
Interest paid only on the unpaid principal balance.
**_See_** Compound Interest, Interest, Principal
Sinking Fund
A fund made up of sums of money set aside
to pay a debt or meet depreciation expenses.
Situs
Land has an economic value due to its location.
**_See_** Law of Situs
Soft Money Mortgage
A mortgage given to finance a specified property. Usually
a carryback between the seller and buyer that reflects an
extension of credit.
**_See_** Hard Money Mortgage, Mortgage, Purchase Money Mortgage
Sole and Separate
Owned by one person - Severalty
**_See_** Concurrent Tenancy
Special Service Properties
Properties such as churches and theaters
having a single purpose and little demand.
**_See_** Cost Approach
Special Warranty Deed
A conveying deed in which the grantor guarantees
the title property for only as long as he has owned it.
**_See_** General Warranty Deed
Specific Lien
A lien which encumbers only a
certain parcel of property.
**_See_** Lien, General Lien
Specific Performance Suit
A court action that forces a party to
comply with the contract as promised.
**_See_** Breach of Contract
Square Foot Method
Estimating the value of a building using
the exterior measurements.
**_See_** Cost Approach, Replacement Cost, Reproduction Cost
Statute of Frauds
A law that states all real estate contracts must
be in writing to be enforceable (except a lease
for one year or less).
**_See_** Contract Requirements, Equal Dignities Rule, Parol Evidence Rule
Statute of Limitations
A time limit during which a legal action must take place.
**_See_** Laches
Statutory Law
Laws passed by a legislative body.
Statutory Lien
A lien place against property by operation of law.
**_See_** Assessment, Involuntary Lien, Judgment Lien, Property Tax
Statutory Period of Redemption
The mortgagor’s last chance to redeem the property
after the foreclosure sale by paying the entire debt.
**_See_** Acceleration, Certificate of Sale, Equitable Period of Redemption
Steering
An illegal practice that guides home buyers
to a particular area of town.
**_See_** Blockbusting, Federal Fair Housing, Redlining
Stepped-up Basis
The basis of the property acquired from a decedent
will equal the value at the time of the death.
**_See_** Basis
Straight Line Depreciation
A method of depreciation in which the asset is
written off evenly over its useful life.
**_See_** Depreciation (Tax)
Straight Note
A note that calls for payments of interest only
followed by a balloon payment of the principal.
**_See_** Interest Only, Term Only
Straw Man
One who acts for another for the purpose of concealing
the other’s identity - or a third party used to create a
joint tenancy.
**_See_** Unities of Joint Tenancy
Stud
The vertical supports in a wall of a frame house.
**_See_** Joists
Sub-surface Rights
The right to use the land below ground
level to the center of the earth.
**_See_** Mineral Rights
Subagent
A licensee who represents a designated Broker but
does not have the direct contractual obligation to
Buyer or Seller.
**_See_** Agent, Cooperating Broker
Subdivision
A large tract that has been divided into smaller parcels
for sale. Six or more parcels improved or unimproved
any of which are less than thirty-six acres each.
**_See_** Plat Map, Public Report
Subject to
A buyer takes over real property but is not
liable for the mortgage on the property.
**_See_** Assumption of Mortgage, Novation
Subjective Value
Value that is created in the minds of people.
**_See_** Objective Value
Sublease
A re-renting of space held under a lease to a third party.
**_See_** Assignment, Sandwich Lease
Subordination Clause
A clause in which the lien holder agrees to be
secondary to a future encumbrance.
**_See_** Junior Mortgage
Subpoena
A written order directing a person to appear
in court or produce documents.
Subrogation
The substitution of a claim for monies paid.
**_See_** Recovery Fund
Substitution
An appraisal concept that states that the value of one
property is set by the cost of buying an equally
desirable property.
**_See_** Conformity, Regression
Summation Approach
Also called the cost approach in appraising.
**_See_** Cost Approach
Superfund
Known as CERCLA - Comprehensive Environmental
Response Compensation and Liability Act. Purpose is to
focus on cleanup of hazardous substances in given
areas as so determined by the EPA.
**_See_** EPA
Surety Bond
A private company that promises to perform
if the bonded party fails.
Surface Water
The classification of water that includes
all natural streams, lakes or ponds.
**_See_** Ground Water, Prior Appropriation, Riparian Rights
Survey
Determining the location of land by measuring
the determined lines and angles.
**_See_** Metes & Bounds, Plat Map
Sweat Equity
An increase in value to real property
due to the owner’s labor.
**_See_** Equity
Syndication
A combination of parties joined together to
undertake an investment as an entity.
**_See_** General Partnership, Limited Partnership, Partnership
Tacking
Adding successive time periods to continuous usage.
**_See_** Adverse Possession, Easement by Prescription
Take Out Loan
A permanent financing arrangement that pays
off a construction loan.
**_See_** Open End Loan
Tangible
Personal property that can be moved.
**_See_** Intangible
Tax Deferment
A real estate investment that postpones
the paying of taxes.
**_See_** Exchanging, Installment Sale
Tax Rate
The rate applied to the assessed value
of property to establish a tax.
**_See_** Assessment (Special), Dollar Rate, Mill Rate
Tax Shelter
Using investments to postpone the
payment of income tax.
**_See_** Depreciation (tax)
Tenancy
A mode of holding title to real property.
**_See_** Concurrent Tenancy, Sole & Separate
Tenancy at Sufferance
The quality of the tenancy one has if he remains on the
property after the lease has expired. Least possible
estate in land.
**_See_** Actual Eviction, Holdover Tenant
Tenancy at Will
A lease that can be terminated by
either party at their will.
**_See_** Tenancy at Sufferance, Tenancy for Years
Tenancy by Entireties
A method of joint ownership whereby the remaining
portion of the property automatically passes to the
surviving spouse.
**_See_** Joint Tenancy, Rights of Survivorship
Tenancy for Period to Period
A lease that is automatically renewed
for the same like time.
**_See_** Tenancy
Tenancy for Years
Any lease for a specified period of time.
**_See_** Leasehold, Tenancy at Sufferance, Tenancy at Will
Tenancy in Common
Co-ownership in property. Interests need not be equal
and no right of survivorship exists.
**_See_** Concurrent Tenancy, Partition, Undivided Interest
Tenant
One who occupies or uses property under a lease.
**_See_** Lessee
Tenements
Real property and those rights that remain,
and are attached to the land.
**_See_** Appurtenant
Term Loan
A mortgage which must be paid off in a
specified period of time. Interest only.
**_See_** Amortization, Balloon Payment
Testate
Having died with a Will.
**_See_** Executor, Intestate, Will
Tier Line
Survey line that are six miles apart and
run parallel to the principal baseline.
**_See_**
Base Line (Principal), Range Lines, Township
Time is of the Essence
All obligations set forth in the contract must
be met on or before the date specified.
**_See_** Close of Escrow
Title
The legal proof of real property ownership.
**_See_** Chain of Title, Constructive Notice
Title Insurance
Insurance in a real estate transaction that
protects the parties against Title defects.
**_See_** Lender's Policy, Owner's Policy, Schedule "A", Schedule "B"
Title Theory State
A Lender of cash may hold legal Title to property.
**_See_** Lien Theory State
Torrens System
A registration system that accurately determines
ownership and claims to real property.
**_See_** Evidence of Title
Tort
A wrongful act against a party in which
civil action can be brought.
**_See_** Lis Pendens
Townhouse
Individual ownership of a specified structure plus interest
in the common area - ownership includes air and
subsurface rights.
**_See_** Condominium
Township
A parcel of land that is six miles
square and contains 36 sections.
**_See_** Section
Trade Fixture
Items used in business that appear to be real
property but remain personal property.
**_See_** Fixture
Treasurer’s Deed
The Deed one receives as a result of
a tax foreclosure sale.
**_See_** Bargain & Sale Deed, Certificate of Purchase, Involuntary Alienation
Trust Account
A Broker’s bank account used specifically
for earnest money or rental deposits.
**_See_** Commingling, Conversion, Earnest Money
Trustee
One who holds bare-naked title in a Deed of Trust
for the beneficiary until the entire debt is paid.
**_See_** Beneficiary, Deed of Trust, Trustor
Trustee’s Deed
A Deed given by the Trustee to convey
property out of Trust.
**_See_** Bargain and Sale Deed
Trustor
The party who signs the Trust Deed. The borrower
in a Deed of Trust.
**_See_** Beneficiary, Deed of Trust, Trustee
Truth in Lending
Covered by Reg Z - Borrowers are to be given truthful and
complete information as it relates to the cost of credit.
**_See_** Regulation Z
Undivided Interest
Co-ownership whereby each party
has the right to use the entire property.
**_See_** Community Property, Concurrent Tenancy, Joint Tenancy, Tenancy in Common
Undue Influence
Taking unfair advantage of one’s position
in acquiring an agreement.
**_See_** Duress, Menace, Mutual Assent
Unearned Increment
An increase of property value due to external
causes such as inflation.
**_See_** Appreciation, Sweat Equity
Unenforceable Contract
A contract that appears to be valid but neither
party can be legally forced to perform.
**_See_** Parol Evidence Rule, Valid, Void, Voidable
Uniform Commercial Code
A code of law that regulates the security
used in personal property transactions.
**_See_** Bulk Transfer, Financing Statement, Security Agreement
Unilateral Contract
A contract that is binding only on one party.
**_See_** Bilateral Contract, First Right of Refusal, Option
Tenancy in Severalty
Owned by one person. Sole and Separate.
**_See_** Concurrent Tenancy
Unit-in-Place Method
An estimate of value that computes each unit times
the number of units in a given building.
**_See_** Cost Approach
Unities of Joint Tenancy
Time, Title, Interest, Possession
Universal Agent
One authorized to act for another in every and
all actions, such as a Guardian.
**_See_** General Agent, Limited Agent
Useful Life
The period of time a property will be useful
for its intended purpose.
**_See_** Economic Life
Usury
Charging a higher rate of interest than the law allows.
**_See_** Interest
VA Guarantee
VA will guarantee to the lender of funds a
specific amount in case of default.
**_See_** Certificate of Eligibility
Valid
A contract that contains all essential legal requirements
and is enforceable through a court of law.
**_See_** Contract Requirements, Void, Voidable
Valuable Consideration
Something of monetary value given in exchange
for the conveyance of real property.
**_See_** Consideration, Good Consideration
Value
The amount of consideration an item can command;
also the present worth of future benefits.
**_See_** Worth
Value (Elements of)
Demand, Utility, Scarcity, Transferability
**_See_** Objective Value, Subjective Value
Variable Rate Mortgage
Lender may adjust the interest on
a loan based upon an index.
**_See_** Flexible Payments, Index Lease, Margin
Variance
Permission obtained to act in a way that is
contrary to current zoning ordinances.
**_See_** Non-conforming Use
Vendee
The buyer of real property under an agreement for sale.
**_See_** Agreement for Sale, Equitable Title, Vendor
Vendor
The seller of real property under an agreement for sale.
**_See_** Agreement for Sale, Equitable Title, Forfeiture
Void
A contract that never was legal and has no binding effect.
**_See_** Valid, Voidable, Unenforceable Contract
Voidable
A contract that appears to be valid on its face
until action is taken to void it.
**_See_** Void, Valid, Unenforceable Contract
Warranty Forever
The grantor guarantees forever the title conveyed.
The warranty is found in a General Warranty Deed.
**_See_** General Warranty Deed, Warranty of Further Assurance
Warranty of Further Assurance
The grantor promises to deliver all necessary documents
in order to convey clear title. This warranty is found in a
General Warranty Deed.
**_See_** General Warranty Deed, Warranty Forever
Wild Deed
An unrecorded document that creates a
gap in the chain of title.
**_See_** Chain of Title, Constructive Notice, Recording
Will
A legal testament by which a person disposes of
his or her property at the time of death.
**_See_** Formal Will, Holographic Will, Nuncupative Will, Testate
With Recourse
The seller of a negotiable instrument may be
held responsible for its future payments.
**_See_** Without Recourse
Without Recourse
The seller of a negotiable instrument may not
be held responsible for its future payments.
**_See_** With Recourse
Worth
The amount something should sell for
in an open and free market.
**_See_** Market Value, Value
Wraparound
Creating a new obligation which consists of all
underlying debts plus the seller’s equity.
**_See_** All-Inclusive Deed of Trust
Writ of Execution
A decree of the court instructing an officer
of the court to carry out the judgment.
**_See_** Judgment Lien
Yield
The financial benefits received from an investment.
**_See_** APR, Rate of Return
Zoning
Local laws that regulate the specific
use and character of land.
**_See_** Master Plan, Police Power
