Terms C Flashcards
Expenditures creating future value. Incurred when a property owner spends money to upgrade a building in an effort to add value and/or extend the useful life of the building.
Capital Expense (CAPEX)
A profit that results from a the sale of a property where the amount realized from the sale exceed the purchase price.
Capital Gain
The difference between a lower selling price and a higher purchase price, resulting in a financial loss to the seller.
Capital Loss
Money set aside by a property owner for long-term capital expenditures to a property.
Capital Reserve Budget
The percentage which is the sum of the discount rate, the effective tax rate and the recapture rate representing the relationship between net operating income and present value.
Formula: Value = Income / Rate
Capitalization Rate
The net result when income from an investment property is subtracted from the expenses. The result is used to determine the rate of return on an investor’s money.
Cash Flow
A percentage return on money invested in a property by an investor.
Formula: Cash Flow / Down Payment
Cash on Cash Return
A Latin terms that means “ let him beware.” Caveats have many applications in law and finance, pertaining to all parties involved being aware of all of the facts of a transaction. Caveat is usually interpreted as a sort of warning or cautionary expression.
Caveat
Let the buyer beware. The buyer must examine the goods or property and buy at the buyer’s own risk.
Caveat Emptor
Upon the establishment of a cease and desist zone by the Secretary, a list of homeowners who have filed owner’s statements expressing their wish not to be solicited by real estate brokers or salespersons. Soliciting of listed homeowners by licensees is prohibited. Violators of such prohibition are subject to licensure suspensions or revocation.
Cease and Desist List
Small relatively permanent statistical subdivisions of a country or equivalent entity that are updated by local participants prior to each decennial census. The primary purpose of the census tracts is to provide a stable set of geographic units for the presentation of statistical data.
Census Tract
A document issued by a governmental authority that a building is ready and fit for occupancy.
Certificate of Occupancy (CO)
The sequence of historical transfers of title to a property. It runs from the present owner back to the original owner of the property.
Chain of Title
The process by which a salesperson’s license changes sponsorship.
Change of Association
Personal property, such as household goods.
Chattel
A colorless, odorless, viscous liquid used as an insecticide. It may be toxic to humans and wildlife as a result of its effect on the nervous system.
Chlordane
A fluid, containing hydrocarbons, that absorbs heat from a reservoir at low temperatures and rejects heat at higher temperatures. When emitted into the atmosphere, CFCs cause depletion of the stratospheric ozone layer.
Chloro-flouro Carbons (CFCs)
The safety valves for electrical systems. It interrupts an electric circuit when an unusual condition arises such as lightning and malfunctioning appliances. Unlike a fuse, it can be reset.
Circuit Breaker
A federal law that prohibits all discrimination on the basis of race.
Civil Rights Act of 1866
Federal law designed to control air pollution on a national level.
Clean Air Act (CAA)
The one by whom a broker is employed.
Client
A document commonly used in real estate transactions, detailing the fees, commissions, insurance, etc. that must be transacted for a successful transfer of ownership to take place.
Closing Statement
To mingle or mix, for example, a client’s funds in the broker’s personal or general account.
Commingling
A sum due a real estate broker for services in that capacity.
Commission
Spaces in a commercial building shared by the tenants or residents of the building. Common areas include lobbies, corridors, stairs, elevators,etc.
Common Areas
Also known as Common Areas; refers to the spaces in a building shared by residents of the building. Common areas include lobbies, corridors, stairs, elevators,etc.
Common Elements
A property evaluation that determines property value by comparing similar properties sold within the last year.
Comparative Market Analysis
Enacted in 1980, a federal law designed to clean up sites contaminated with hazardous substances.
Comprehensive Environmental Response, Compensation and Liability Act (CERCLA)
Taking private property for public use, with fair compensation to the owner; exercising the right of eminent domain.
Condemnation
A form of fee simple ownership of part of structure having multiple units. Owners have title to their own units plus a share of common elements.
Condominium
A residential establishment that includes both a condominium and cooperative ownership structures. Typically the condop refers to the residential portion of a building which is treated as a single condominium unit owned through a cooperative-ownership structure.
Condop
An agent is obligated to safeguard his/her principal’s lawful confidences and secrets. Therefore, a real estate broker must keep confidential any information that may weaken a principal’s bargaining position. The duty of confidentiality precludes a broker who represents a seller from disclosing to a buyer that the seller can, or must, sell a property below the listed price. Conversely, a broker who represents a buyer is prohibited from disclosing to a seller that the buyer can, or will, pay more than what has been offered for a property.
The duty of confidentiality does not include an obligation by a broker who represents a seller to withhold know material facts about the condition of the seller’s property from the buyer, or to misrepresent the property’s condition. To do so constitutes misrepresentation and may impose liability on both the broker and/or the seller.
Confidentiality
Created by the local legislature to advice in the development, management, and protection of the community’s natural resources and to prepare an inventory and map of open spaces.
Conservation Advisory Council
Anything given to induce another to enter into a contract such as money or personal services.
Consideration
A loan secured by real estate which is for the purpose of funding the construction of improvements or building(s) upon the property.
Construction Mortgage
Any disturbance of the tenant’s possession of the leased premises by the landlord whereby the premises and rendered unfit or unsuitable for the purpose for which they were leased.
Constructive Eviction
Information or knowledge of a fact imputed by law to a person because the person could have discovered the fact by proper diligence and inquiry.
Constructive Notice
A provision in a contract that requires the occurrence of a specific event before the contract can be completed.
Contingency
Post license education required by salespersons and brokers. New York State demands 22.5 hours of continuing education.
Continuing Education
The transfer of the title of land from one to another. The means or medium by which title of real estate is transferred.
Conveyance
A real estate agent who sells a property. The selling agent may be (1) the subagent or listing agent of the seller; (2) a buyer’s agent; or (3) a dual agent. Also called a selling agent or participating agent.
Cooperating Agent
A dwelling unit owned by a corporation in which an owner owns stock commensurate with the value of his or her apartment compared to the value of the building as a whole. The stockholder has a proprietary lease to the apartment.
Cooperative
A maintenance task performed to identify, isolate, and rectify a problem with a property so that the property can be restored to an acceptable condition.
Corrective Maintenance
The total dollar expenditure for labor, materials, legal services, architectural design, financing, taxes during construction, interest, contractor’s overhead and profit, and entrepreneurial overhead and profit (may or may not equal value).
Cost
A method of estimating the value of real property be calculating a current construction cost, subtracting accrued depreciation and adding a land value obtained from the market. This method works best when improvements are relatively new and estimates of depreciation are thus more likely to be accurate.
Cost approach
A type of offer made in response to another offer, which was seen as unacceptable. A counteroffer revises the initial offer, making it more appealing for the person making the new offer.
Counteroffer
A local unit with the responsibility for protecting, assuring, and improving the health of its citizens.
County Health Department
Agreements written into deeds and other instruments promising performance or nonperformance of certain acts, or stipulating certain uses or non-uses of the property.
Covenant
Limitations and rules on a group of homes by a builder, developer, neighborhood association and/or homeowner associations; when living in a building, a buyer gives up certain freedoms to be part of a shared community.
Covenants, Conditions and Restrictions (CCRs)
Shallow space between the underside of the first floor of a house and the ground.
Crawl Space
An agreement that a person will borrow money and repay it to the lender over time.
Credit
A blind alley; a street with only one outlet.
Cul-de-sac
A husband’s interest upon the death of his wife in the real property of an estate that she either solely owned or inherited provided they bore a child capable of inheriting the estate.
Curtesy
The party the agent brings to the principal as seller or buyer of the property.
Customer
