Terms Flashcards
The business of bringing buyers and sellers together and assisting in negotiations for the terms of sale of real estate.
Brokerage
A person or an organization acting as the agent for others in negotiating the purchase and sale of real property or other commodities for a fee.
Real Estate Broker
A person performing any of the acts included in the definition of real estate broker but while associated with and supervised by a broker.
Real Estate Salesperson
A type of property that includes one to four dwelling units.
Residential Property
Property that produces rental income or that is used in business. Properties with five or more dwelling units are considered commercial property.
Commercial Property
Property that is used by companies or persons for manufacturing, warehousing, or the assemblage of components.
Industrial Property
A category of real property created as a result of combining the land and its improvements for a single highest and best use.
Special Purpose Property
Any urban, suburban or village development, or even a single building, that blends a combination of residential, commercial, cultural, institutional, or industrial uses, where those functions are physically and functionally integrated, and that provides pedestrian connections.
Mixed-use Property
Changes or additional made to a property, such as walls and roads. These typically increase the value of a property, except in some cases of over improvement.
Improvements
A physical characteristic of land describing that land as a unique commodity.
Non-homogeneity
The present worth of future benefits.
Value
The amount a purchaser agrees to pay and a seller agrees to accept under the circumstances surrounding a transaction.
Price
The total dollar expenditure for labor, materials, and other items related to construction.
Cost
The amount of goods offered for sale within a given market at a given price during a given time period.
Supply
The amount of goods consumers are willing and able to buy at any given price during any given time period.
Demand
The study of the social and economic statistics of a community.
Demography
A person authorized to act on behalf of another.
Agent
The employer of an agent.
Principal
The party the agent brings to the principal as seller or buyer of the property.
Customer
An agent with full authority over one property of the principal, such as a property manager.
General Agent
An agent with limited authority to act on behalf of the principal, such as created by a listing.
Special Agent
A contract in which a property owner employs a real estate broker to market the property described in the contract.
Listing Contract
That duty owed by an agent to act in the highest good faith toward the principal and not to obtain any advantage over the latter by the slightest misrepresentation, concealment, duress or pressure.
Fiduciary Duty
A person in a position of trust and confidence, as between principal and broker; broker as fiduciary owes certain loyalty which cannot be breached under the rules of agency.
Fiduciary
Let the buyer beware. The buyer must examine the goods or property and buy at his or her own risk.
Caveat Emptor
An evaluation of a property’s value based on a given point in time that is performed by a professional appraiser during the mortgage origination process.
Appraised Value
A means of comparing similar type properties, which have recently sold, to the subject property. Commonly used in comparing residential properties.
Market Comparison Approach
An analysis in which a value estimate of a property is derived by estimating the replacement cost of the improvements, deducting therefrom the estimated accrued depreciation, then adding the market value of the land.
Cost Approach
One of the three methods of the appraisal process generally applied to income producing property, and involves a three-step process – (1) find net annual income, (2) set an appropriate capitalization rate or “present worth” factor, and (3) capitalize the income dividing the net income by the capitalization rate.
Income Approach
A valuation placed upon a piece of property by a public authority as a basis for levying taxes on the property.
Assessed Value
The cost of replacing a structure completely destroyed by an insured hazard.
Insured Value
The basis of a depreciable asset used to compute the taxable gain from its sale; the basis is acquisition cost plus capital improvements less accrued depreciation.
Depreciated Value
The material of the earth, whatever may be the ingredients of which it is composed, whether soil, rock, or other substance, and includes free or unoccupied space for an indefinite distance upwards as well as downwards.
Land
The rights of an owner of a freehold estate to possession, enjoyment, control, and disposition of real property.
Bundle of Rights
The landowner’s ability to take minerals from the earth or to sell or lease this right to others.
Mineral Rights
The rights in real property to the reasonable use of the air space above the surface of the land.
Air Rights
Land and everything permanently attached to land.
Real Estate
The aggregate of rights, powers, and privileges conveyed with ownership of real estate.
Real Property
All property that is not land and is not permanently attached to land; everything that is movable.
Personal Property
Personal property.
Chattel
The crops and other annual plantings considered to be personal property of the cultivator.
Emblements
Personal property that has become real property by having been permanently attached or adapted to real property.
Fixtures
Items that are installed by a commercial tenant and are removable upon termination of the tenancy.
Trade Fixtures
A form of ownership of real property recognized in all states that consists of individual ownership of some aspects and co-ownership in other aspects of the property.
Condominium
A form of ownership in which stockholders in a corporation occupy property owned by the corporation under a lease.
Cooperative
A form of cluster zoning providing for both residential and commercial land uses within a zoned area.
Planned Unit Development (PUD)
Any urban, suburban or village development, or even a single building, that blends a combination of residential, commercial, cultural, institutional, or industrial uses, where those functions are physically and functionally integrated, and that provides pedestrian connections.
Mixed-use Property
A structure transportable in one or more sections, designed and equipped to contain not more than two dwelling units to be used with or without a foundation systems.
Mobile Home
A license or contractual or membership right of occupancy in a project which is not coupled with an estate in the real property.
Time-Share
The profit realized from the sale of real estate or other investment. Capital loss occurs when an investment property or another type of investment is sold at a loss.
Capital Gain
An insurance policy protecting against a variety of hazards.
Homeowners Policy
The insured is covered and reimbursed for the actual cost of replacing the damaged property.
Replacement Costs
An acronym denoting that a mortgage payment includes, principal, interest, taxes, and insurance.
PITI
The business of bringing buyers and sellers together and assisting in negotiations for the terms of sale of real estate.
Brokerage
A person who is licensed to buy, sell, exchange, or lease real property for others and to charge a fee for these services.
Real Estate Broker
The relationship between the principal and the principal’s agent which arises out of a contract, either expressed or implied, written or oral, wherein the agent is employed by the principal to do certain acts dealing with a third party.
Agency
A person authorized to act on behalf of another.
Agent
The employer of an agent.
Principal
The party the agent brings to the principal as seller or buyer of the property.
Customer
That duty owed by an agent to act in the highest good faith toward the principal and not to obtain any advantage over the latter by the slightest misrepresentation, concealment, duress or pressure.
Fiduciary Duty
A contract in which a property owner employs a real estate broker to market the property described in the contract.
Listing Contract
An agent with full authority over one property of the principal, such as a property manager.
General Agent
An agent with limited authority to act on behalf of the principal, such as created by a listing.
Special Agent
An agency relationship created by oral or written agreement between principal and the agent.
Express Agency
Agency that exists as a result of actions of the parties.
Implied Agency
A person in a position of trust and confidence, as between principal and broker; broker as fiduciary owes certain loyalty which cannot be breached under the rules of agency.
Fiduciary
Reimbursement or compensation paid to someone for a loss already suffered.
Indemnification
The exaggeration of the good points of a product, or real property, and the prospects for future rise in value, profits, and growth.
Puffing
The intentional and successful employment of any cunning, deception, collusion, or artifice, used to circumvent, cheat or deceive another person whereby that person acts upon it to the loss of property and to legal injury.
Fraud
Let the buyer beware. The buyer must examine the goods or property and buy at his or her own risk.
Caveat Emptor
A federal law that prohibits all discrimination on the basis of race.
Civil rights act of 1866
A law that prohibited discrimination on the basis of race, sex, color, national origin, or gender in any housing program receiving federal money.
Civil Rights Act of 1964
A federal prohibition on discrimination in sale, rental, financing, or appraisal of housing on the basis of race, color, religion, gender, national origin, handicap, or familial status.
Fair Housing Act of 1968
A federal law protecting the rights of individuals with physical or mental impairments
Americans with Disabilities Act (ADA)
The channeling of home seekers to a particular area, or areas, on the basis of race, religion, country of origin, or other protected class either to maintain the homogeneity of an area, or to change the character of an area in order to create a speculative situation.
Steering
The illegal practice of inducing homeowners to sell their properties by making representations regarding the entry, or prospective entry of minority persons into the neighborhood.
Blockbusting
The practice of refusing to make loans or otherwise denying financial assistance for housing in a particular area.
Redlining
Anyone younger than 18 being domiciled with a parent or other person having legal custody of such individual, or the designee of such parent or other person having such custody, with the written permission of the parent.
Familial Status
Any medical disorder, condition, disfigurement or loss affecting one of the body systems, such as neurological, musculoskeletal, special sense organs, respiratory, cardiovascular, reproductive, digestive, genitourinary, immune, circulatory, hemic, lymphatic, skin, and endocrine.
Physical Impairment
Any mental or psychological disorder, such as intellectual disability, organic brain syndrome, emotional or mental illness, and specific learning disabilities.
Mental Impairment
Volunteers from state or private agencies who enforce fair housing by claiming to be home seekers, thereby finding out if brokers deal fairly with all clients/customers.
Testers
Moral principles that govern a person’s or group’s behavior.
Ethics
An exact way of describing real estate in a contract, deed, mortgage, or any other document that will be accepted by a court of law.
Legal Description
The process of precisely determining the area, dimensions, and location of a piece of land.
Survey
A term used in describing the boundary lines of land, setting forth all the boundary lines together with their terminal points and angles.
Metes and Bounds
A monument used to establish the elevation of the point, usually relative to Mean Sea Level, but often to some local datum.
Bench Mark
A fixed object and point established by surveyors to establish land locations.
Monument
A method of specifying the location of a parcel of land using prime meridians, base lines, standard parallels, guide meridians, townships and sections.
Government Survey System
Imaginary north-south lines which intersect base lines to form a starting point for the measurement of land.
Principal Meridians
Imaginary east-west lines which intersect meridian lines to form a starting point for the measurement of land.
Base Lines
A strip or column of land six miles wide, determined by a government survey, running in a north-south direction, lying east or west of a principal meridian.
Range
A series of government survey lines running north and south at six-mile intervals starting with the principal meridian and forming the east and west boundaries of townships.
Range Lines
In the survey of public lands of the United States, a territorial subdivision six miles long, six miles wide and containing 36 sections, each one mile square, located between two range lines and two township lines.
Township
The Mean Sea Level at New York Harbor
Datum
Equal to 16-1/2’ or 5-1/2 yards.
Rod
Equal to 66’-0” in length or 4 rods
Chain
Equal to 5,280’ or 320 rods.
Mile
Equal to 43,560 sq.ft. or 160 rods.
Acre
Established by a government survey and contains 640 acres and is one mile square.
Section
Equal to 12”x12” or 144 sq.in..
Square Foot
Equal to 3’x3’ or 9 sq.ft..
Square yard
Equal to 3’x3’x3’ or 27 cubic feet.
Cubic yard
A voluntary, legally enforceable promise between two legally competent parties, to perform some legal act in exchange for legal consideration.
Contract
A contract that has been put into words, either spoken or written.
Express Contract
An agreement that has not been put into words, but is implied by the actions of the parties.
Implied Contract
A contract in which a property owner employs a real estate broker to market the property described in the contract.
Listing Contract
A contract in which each party promises to do something.
Bilateral Contract
When one party promises to do something if the other party performs a certain act, but the other party does not promise to perform it; the contract is formed only if the other party does perform the requested act.
Unilateral Contract
A contract that has been fully performed
Executed Contract
A contract in which something remains to be done by one or both of the parties.
Executory Contract
A contract that complies with all of the essential elements of a contact, and is enforceable and binding on all parties.
Valid Contract
To have no force or effect; that which is unenforceable.
Void Contract
That which is capable of being adjudged void, but is not void unless action is taken to make it so.
Voidable
Anything given or promised by a party to induce another to enter into a contract, ex: personal services or even love and affection. It may be a benefit conferred upon one party or a detriment suffered by the other.
Consideration
A condition of a contract expressing the essential nature of performance of the contract by a party in a specified period of time.
“Time is of the essence”
A transfer of benefits and obligations within a contract to a 3rd party who is not originally a party to the contract.
Assignment
One who assigns or transfers property.
Assignor
Those to whom property or interests therein shall have been transferred.
Assignee
The substitution or exchange of a new obligation or contract for an old one by the mutual agreement of the parties.
Novation
An action to compel performance of an agreement, ex: sale of land as an alternative to damages or rescission.
Specific Performance
A violation of the terms or conditions of a contract without a legal excuse.
Breach of Contract
Damages benefiting the non-defaulting party as a result of a default of a contract.
Liquidated Damages
A law establishing the time period within which certain lawsuits may be brought.
Statute of Limitations
A contract by which a buyer and seller agree to the terms of a sale.
Sales Contract
A response to an offer to enter into a contract, changing some of the terms of the terms of the original offer. A counter offer is a rejection of the offer (not a form of acceptance), and does not create a binding contract unless accepted by the original offeror.
Counter Offer
An interest in real estate such that a court will take notice and protect the owner’s rights.
Equitable Title
A down payment made by a purchaser of real estate as evidence of good faith.
Earnest Money Deposit
To mingle or mix, for example, a client’s funds in the broker’s personal or general account.
Commingling
The unlawful appropriation of another’s property, as in the conversion of trust funds.
Conversion
The right of any political body to enact laws and enforce them, for the order, safety, health, morals and general welfare of the public.
Police Power
A right of the government to acquire property for necessary public use by condemnation; the owner must be fairly compensated.
Eminent Domain
Taking private property for public use, with fair compensation to the owner; exercising the right of eminent domain.
Condemnation
The reversion of the State of property in event the owner thereof abandons it or dies, without leaving a will and has no distributes to whom the property may pass by lawful descent.
Escheat
An estate of indeterminable duration, e.g., fee simple or life estate.
Freehold Estate
Absolute ownership of real property; a person has this type of estate where the person is entitled to the entire property with unconditional power of disposition during the person’s life and descending to the person’s heirs or distributees.
Fee simple estate
An inheritable estate in land providing the greatest interest of any form of title.
Fee simple absolute
An estate that will end automatically when the stated event or condition occurs. The interest will revert to the grantor or the heirs of the grantor.
Fee simple determinable
A person who inherits or is entitled to inherit property upon the termination of the estate of the former owner.
Remainderman
A freehold estate created for the duration of the life or lives of certain named persons; a non-inheritable estate.
Life estate
The owner of a life estate.
Life Tenant
Property or estate ownership that reverts back to the grantor after a temporary ownership period.
Estate in Reversion
An estate which vests after the termination of the prior estate.
Estate in Remainder
The interest which a person has in lands or other property, upon the termination of the preceding estate. A future interest.
Reversionary Interest
One who disposes of real property by will.
Devisor
One who receives a gift of real property by will.
Devisee
A legal life estate in land that is owned and occupied as a family home.
Homestead
A claim, charge, or liability that attaches to, and is binding on real estate.
Encumbrance
A limitation on the use of real property.
Restriction
A claim against a property that provides security for the repayment of a debt or an obligation of the property owner.
Lien
A right acquired by one party to use the land of another party for a special purpose.
Easement
A right of use in the adjoining land of another that moves with the title to the property benefiting from the easement.
Easement Appurtenance
Exists when a landowner has no access to roads and is landlocked.
Easement by Neccessity
A right of use in the land of another without the requirement that the holder of the right own adjoining land.
Easement in Gross
Obtained by use of the land of another for the legally prescribed length of time.
Easement by Prescription
A grantor conveys the right to use the grantor’s land to a grantee for the purpose of ingress and egress.
Easement by voluntary grant
Land encumbered by an easement.
Servient Tenement
Land benefiting from an easement appurtenant.
Dominant Tenement
Any lien placed on property with consent of, or as a result of, the voluntary act of the owner.
Voluntary lien
A lien imposed against property without consent of an owner (ex: taxes, special assessments, federal income tax liens, etc.).
Involuntary lien
A lien on all the property of a debtor.
General Lien
A lien that attaches to one specific property only.
Specific Lien
The order in which liens are given legal precedence or preference.
Priority of Lien
An agreement by the holder of an encumbrance against real property to permit that claim to take an inferior position to other encumbrances against the property.
Subordination Agreement
A valuation placed upon a piece of property by a public authority as a basis for levying taxes on the property.
Assessed Valuation
A form of action taken to impose a tax.
Tax Levy
The amount of money needed by a municipality to meet budgetary requirements divided by the taxable assessed and nonexempt value of all real property within that jurisdiction.
Tax Rate
An encumbrance against a property filed by the taxing jurisdiction for delinquency in paying real property taxes.
Tax Lien
A specific lien that gives security to persons or companies who perform labor or furnish material to improve real property.
Mechanic’s Lien
A legal claim on all of the property of a judgment debtor which enables the judgment creditor to have the property sold for payment of the amount of the judgment.
Judgment Lien
The process by which real or personal property of a party to a lawsuit is seized and retained for payment of an existing note secured by a mortgage or deed of trust against the property, becoming a co-guarantor for the payment of a mortgage or deed of trust note.
Attachment
The rights of a landowner or land occupier to use flowing water (such as a river) that is adjacent to the land.
Riparian Rights
The right of a property owner whose land borders on a body of water, such as a lake, ocean or sea, to reasonable use and enjoyment of the shore and water the property borders on.
Littoral Rights
An addition to property through the efforts of man or by natural forces.
Accession
The increasing in land area resulting from the deposit of soil by the natural action of the water.
Accretion
The gradual increase of earth on a shore of an ocean or bank of a stream resulting from the action of the water.
Alluvium
Increased soil, gravel, or sand on a stream bank resulting from flow or current of the water.
Alluvion
A sudden and perceptible loss of land by the action of water as by a sudden change in the course of a river.
Avulsion
The eating away of a coastline or land by the action of water, ice, and/or wind, or wearing away of a surface by corrosion or traffic.
Erosion
Water under the earth’s surface, below the saturation point.
Ground Water
The rights in real property to the reasonable use of the air space above the surface of the land.
Air Rights
Owned by one person only. Sole ownership.
Severalty Ownership
An ownership of realty by two or more persons, each of whom has an undivided interest, without the “right of survivorship”.
Tenancy in Common
Two or more natural persons own that comes with a special benefit called the right of survivorship.
Undivided ownership of a property interest by two or more persons each of whom has a right to an equal share in the interest and a right of survivorship, i.e., the right to share equally with other surviving joint tenants in the interest of a deceased joint tenant.
Joint Tenancy
The right of a surviving tenant or tenants to succeed to the entire interest of the deceased tenant; the distinguishing feature of a joint tenancy.
Right of Survivorship
Property acquired by husband and/or wife during a marriage when not acquired as the separate property of either spouse. Each spouse had equal rights of management, alienation, and testamentary disposition of community property.
Community Property
A division of real or personal property or the proceeds therefrom among co-owners.
Partition
A legal device whereby one person transfers ownership of property to someone else to hold or manage for the benefit of a third party.
Trusts
one entitled to the benefit of a trust.
Beneficiary
An agreement where the trustee holds legal possession of a fund or assets that belong to another person, the beneficiary, and it is created while the person is alive.
Living Trust
An entity established and treated by law as an individual or unit with rights and liabilities, or both, distinct and apart from those of the persons composing it. A corporation is a creature of law having certain powers and duties of a natural person. Being created by law it may continue for any length of time the law prescribes.
Corporation
An association of two or more people who operate a business as co-owners and share in the business profits and losses.
Partnership
An arrangement by which partners conducting a business jointly have unlimited liability, which means their personal assets are liable to the partnership’s obligations.
General Partnership
A partnership consisting of a general partner or partners and limited partners in which the general partners manage and control the business affairs of the partnership while limited partners are essentially investors taking no part in the management of the partnership and having no liability for the debts of the partnership in excess of their invested capital.
Limited Partnership
A business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.
Limited Liability Company (LLC)
A contract in which a property owner employs a real estate broker to market the property described in the contract.
Listing Contract
A listing given to only one broker who is entitled to the commission if anyone sells the property during the term of the listing contract.
Exclusive Agreement (Exclusive Right to Sell Listing Agreement)
A listing given to only one broker (exclusive) who is entitled to the commission if the broker or any agent of the listing broker effects a sale but imposes no commission obligation on the owner who sells the property to a person who was not interested in the property by efforts of the listing broker or an agent of the listing broker.
Exclusive Agency Agreement
A listing given to one or more brokers in which the broker procuring a sale is entitled to the commission but imposes no commission obligation on the owner when the owner sells the property.
Non-Exclusive Listing (Open Listing)
A listing which provides that the agent may retain as compensation for agent’s services all sums received over and above a net price to the owner.
Net Listing
