Vocab Flashcards
(1) Cost basis is the dollar amount assigned to property at the time of acquisition under provisions of the internal revenue code for the purpose of determining gain, loss and depreciation in calculating the income tax to be paid upon the sale or exchange of property. (2) Adjust basis is the cost basis after the application of certain additions for improvements, Etc., and deductions for depreciation, etc.
Basis
(1) The person who gives authority to an agent or attorney. (2) debt amount, less the interest.
Principal
(American land title Association) A type of title insurance policy issued by title insurance companies which expands the risks normally insured against under the standard policy to include unrecorded mechanics lien; on recorded physical easements; facts a physical survey would show; water and mineral rights; and rights of parties in possession, such as tenants and buyers under unrecorded instruments.
ALATA Title Policy
A burden on title; in other words, a temporary restriction on a property that can be removed when certain conditions are met. A mortgage against your property, you must pay it or you could lose the property. A claim, lien, charge, or liability attached to and binding Real Property.
Encumbrance
A claim, such as a taxes or a judgment, which attaches to a property without the consent of the owner for the purpose of paying of the debt.
Involuntary lien
A comparison of similar properties to a subject property for the purpose of evaluating market value and proper pricing.
Comparative analysis
A contractual agreement under which the listing broker acts as the agent and the seller(s) agrees to pay a commission to the listing broker if the property is sold through the efforts of any other real estate broker.
Exclusive agency listing
A conveying written instrument used to pass title to property upon sale from one person (grantor) to another person (grantee). To be valid it must be properly executed and delivered.
Deed
A court action brought to establish title. To remove a cloud on the title.
Quiet title
A deed in which the grantor guarantees the title only against defects arising during grantors ownership of the property and not against defects existing before the time of grantors ownership.
Special warranty deed
A deed operating as a release, intended to pass any title, interest, or claim which the grantor may have in the property, but not containing any warranty of a valid interest or title by the grantor. A legal form that allows a person, entity, or trust to transfer real estate in Nevada.
Quitclaim deed
A deed used to convey real property which contains warranties of title and quiet possession, and the grantor thus agrees to defend the premises against the lawful claims of third persons. The primary deed form used in Washington to convey fee title to real property.
Warranty deed
A feature of the house might be outdated and not easily improved. This reduces the property’s desirability and, in turn, its value. A structure or equipment has become inefficient because of improvements since discovered or invented. Having to go through a bathroom to get to a dining room.
Functional obsolescence
A federal law requiring the disclosure two borrowers of settlement (closing) procedures and costs by means of a pamphlet and forms prescribed by the United States department of housing and urban development (HUD).
Real estate settlement procedures act (RESPA)
A form of ownership by husband and wife whereby each owns the entire property. In the event of the death of one, the survivor owns the property without probate.
Tenancy by the entirety
A formal agreement between parties that may be rendered unenforceable for any number of legal reasons.
Voidable Contract
A general term which encompasses any method of financing property going beyond traditional real estate lending.
Creative financing
A gift of real property by will
Devise
A governmental right to acquire property for public use by condemnation, and the payment of just compensation.
Eminent domain
A judicial proceeding in which the validity of a will is established and the executor is authorized to distribute the estate property; or, when there is no valid will, an administrator is appointed to distribute the estate to the heirs.
Probate
A lease, under which the lessor is the lessee of a prior lease of the same property.
Sub lease
A lease, usually on a retail business property, using a percentage of the gross or net sales to determine the rent. There is usually a minimum base rental, in the event of poor sales.
Percentage lease
The way in which a property is described by law and by legal terms.
Legal Description
A legal document in which title to property is transferred to a third-party trustee as security for an obligation owed by the trustor (borrower) to the beneficiary (lender). Also called a trust deed. A deed of trust is similar to a mortgage – the main difference is that it involves three parties. When a borrower repays the note secured by a deed of trust, the trustee must reconvey title back to the borrower by way of a deed of reconveyance, which is also called a release deed.
Trust deed
A legal document pledging collateral for a loan that has first priority over all other claims against the property except taxes and bonded indebtedness. Is superior to all others, usually determined by the order in which it was recorded.
First trust deed
A legal document that details how you prefer to receive medical treatment when you can no longer make decisions for yourself and how assets are to be divided.
Living will
A legal document used to transfer real estate between a previous owner (the grantor) and a new owner (the grantee). A limited warranty deed that assures a grantee that the grantor has not already conveyed the land to another and that the estate is free from encumbrances placed by the grantor. The most common deed form used in California. Not used in Washington.
Grant deed
A legal notice recorded to show pending litigation related to Real Property, and giving notice that anyone acquiring an interest in said property subsequent to the date of the notice may be bound by the outcome of the litigation.
Lis Pendens
A legal promise made by a seller to a buyer that the property being sold is free from any liens or other claims that could prevent the buyer from enjoying full ownership of the property.
Covenant against encumbrances
A legal promise that the seller will do whatever is necessary to remove a defect associated with title, such as an encumbrance, if it arises, and if the problem is not fixed, damages will be awarded.
Covenant of further assurances
Easement given by one property owner to the other for commercial purposes. normally utilities.
Commercial easement
A legal theory under which a person is barred from asserting or denying a fact because of the person’s previous acts or words.
Estoppel
A lien on all the property of a debtor
General Lien
A lien which is senior or superior to all others.
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Prior lien
A life estate a wife acquires in the property her husband’s death.
Dower
A life estate a husband acquires in the property his wife’s death.
Curtsey
A listing contract whereby the owner promises to pay a commission to the broker if property is sold during a stated period, regardless of whether or not the broker is the cause of sale.
Exclusive right to sell
A lump sum payment, usually at the end of the term of a note with terms insufficient to fully amortize the loan, or due prior to the end of the amortization period.
Balloon payment
A method of obtaining an approximate value of income property by using yearly rents. Amount is calculated by dividing sale price of an investment property by annual rents relating to property.
Gross rent multiplier (GRM)
A method of taxation using the value of the real estate to determine the amount of the tax.
Ad Valorem
A mortgage or deed of trust not obtained under a government program, i.e. which is not FHA insured or VA guaranteed. Type of loan customarily made by a bank or savings and loan association.
Conventional loan
A mortgage or trust deed given from buyer to seller to secure all or a portion of the purchase price.
Purchase money mortgage or trust deed
A neutral third-party which receives all funds and instruments necessary to a sale, and which processes them according to instructions. Home Insurance, Property tax, etc.
Escrow
A nonprofit association of homeowners organized pursuant to a declaration of restrictions or protective covenants for a subdivision, PUD or condominium.
Homeowner’s Association (HOA)
A note calling for periodic payments which are insufficient to fully amortize the loan, so that a principal sum known as a balloon is due at maturity.
Balloon note
A partial interest by two or more people in the same property, whether the interest of each is equal or unequal.
Undivided interest
The full repayment of a loan,
Redemption
In possession of real estate owned by someone else attempts to claim title because they have a history of continuous use of the property 5 years in NV and paid property taxes.
Adverse possession
A person named in a will to carry out its provisions as to the disposition of the estate of a person deceased.
Executor
A person upon whom the powers of an agent have been conferred, not by the principal, but by an agent as authorized by the agents principal.
Sub agent
A person who died without leaving a will.
Intestate
A person’s legal residence.
Domicile
A present or future right to ownership and/or possession of real property. The interest or nature of the interest which one has in real property.
Estate
A procedure in or out of court, to extinguish all rights, title, and interest of the owners of property in order to sell the property to satisfy a lien against it. A notice of default, a danger notice, and a notice of sale.
Foreclosure
A property that was purchased and is owned jointly by two or more people. All owners are included on the title of the home, and all parties hold a portion of ownership in the property. Includes Joint tenancy, Tenancy in common.
Co-ownership
A real estate loan having priority over all other voluntary liens against certain property. The loan that is superior to all others, usually determined by the order in which it was recorded.
First mortgage
A regulation issued under the truth in lending law (TILA), which requires that a credit purchaser be advised in writing of all costs connected with the credit portion of the purchase.
Regulation Z
A reversion of property to the state in the absence of an individual owner, usually when a property owner dies without a will. the right of a government to take ownership of estate assets or unclaimed property in the event there are no heirs or beneficiaries.
Escheat
A revocable trust whereby one party (the Trustee) agrees to hold ownership of a piece of real property for the benefit of another party (the Beneficiary)
Land trust
A right given for a consideration to purchase or lease a property upon specified terms within a specified time, without obligation the party who receives the right to exercise the right.
Option
A right, either permanent or temporary, created and retained by a grantor of property.
Reservation
A sale of property when the seller is under extreme pressure to sell, and which generally results in the property selling for less than market value.
Distress sale
A second or junior mortgage with a face value of both the amount it secures and the balance due under the first mortgage. The mortgagee collects a payment based on its face value and then pays the first mortgagee.
Wrap around mortgage
A seizure of property by judicial process.
Levy
A short term warranty deed which warrants by inference that the seller is the undisputed owner, (protects the new owner), has the right to convey the property, and will defend the title if necessary. This type of deed protects the purchaser in that the conveyor covenants to defend all claims against the property. If conveyor fails to do so, the new owner can defend said claims and sue the former owner.
Statutory warranty deed
A small community that can contain many types of single-family homes, like townhomes or condominiums. Right to access common areas. Owning the footprint of real estate under the unit.
Planned unit development (PUD)
A structure of two or more units, the interior space of which are individually owned, with the balance of the property (both land and building) owned in common by the owners of each unit.
Condominium
A subdivision consisting of separately owned parcels of land together with membership in an association which owns common area. Sometimes the owners of separate interests also have an undivided interest in the common area.
Planned development
A summary comprehensive appraisal report of all factual materials, techniques and appraisal methods used by the appraiser in setting forth his or her value conclusions.
Narrative appraisal
A system of individual ownership of units in a multi-family structure, combined with joint ownership of common areas of the structure and the land.
Condominium
A territorial division of land established by federal survey, being 6 mile Square and containing 36 sections, each 1 mile Square.
Township
A time period during which a mortgage, deed of trust, or contract can be settled. Usually set by statute, and after judicial foreclosure.
Redemption period
The transfer of the right, title and interest in the property of one person to another. Ownership
Assignment
A trust in which the trustor cannot take back the trust once it has been formed.
Irrevocable trust
A use or uses prohibited to the owner of land.
Restriction
A will that is not written but rather is spoken aloud by an individual who is nearing death.
Nuncupative will
A written authorization to a real estate broker by a property owner, stating that a commission will be paid to the broker upon presentation of an offer which meets a specified price and terms. However, the broker has no exclusive right to sell, and must bring in his offer before any other offer is accepted.
Open listing
A written instrument whereby a principal gives authority to an agent. The agent acting under such a grant is sometimes referred to as the principles attorney-in-fact. Document allowing a person (“principal”) to designate someone else (“agent”) to represent them in financial affairs.
Power of attorney
A
A unilateral agreement containing an express and absolute promise of the signer to pay a named person a definite some of money at a specified date. Usually provides for interest and is secured by a mortgage or deed of trust.
Note
Acts of ownership must be observable by others, obvious, and not be secret or hidden. Requirement for adverse possession.
Open and notorious
Information that is learned by reading, seeing or hearing.
Actual notice
Affirms that the maximum value of a property tends to be set by the cost of acquiring an equally desirable and valuable property, assuming no costly delay is encountered in making the trade.
Substitution, principle of
Agreement by a buyer to assume the liability under an existing note secured by a mortgage or deed of trust.
Assumption
All rights and interests of ownership in Real Property considered together but separable.
Bundle of rights
Also known as tenancy at will. An estate in which a person holds or occupies real estate with the permission of the owner for an unspecified or uncertain period of time.
Estate at will
Marketable real or personal property which a borrower pledges as security for a loan. In mortgage transactions, specific land is used to secure the performance of a principal agreement (the promissory note).
Collateral
An account used by brokers, escrow agents, or anyone holding money securely for another.
Trust account
An acre (43,560 ft), as distinguished from a net (usable) acre.
Gross acre
An acre measured to remove certain features such as reads, utilities, and open space
Net acre
An action taken when another (such as a neighbor, puts a structure that intrudes on or over the owner’s land/boundary). There are several instances where boundary issues take place, and they can be quite difficult. Generally, construction onto the property of another, as of a wall, fence, building, etc.
Encroachment
An addition or supplement that explains, modifies, or revokes a will or part of one.
Codicil
An agency of the federal government that insures private mortgage loans for financing of new and existing homes and home repairs.
Federal Housing Administration (FHA)
An agreement between a buyer and seller of Real Property, setting forth price and terms of sale.
Purchase agreement
An agreement by which the owner of Real Property gives the right to hold and use the property to another, for a specified period of time, and for consideration.
Lease
An appraisal method to determine the value of rental property by use of the estimated net income over the life of the structure. The calculation of value is a three-step process 1) determine net annual income, 2) set an appropriate rate or “present” worth factor by deriving the rate or multiplier, and 3) Apply the derived rate or multiplier to value the subject property: Rate = Net Operating Income / Current Market Value
Income (capitalization) approach
An appraisal term wherin a component part of a property is valued in proportion to its contribution to the value of the home. Holds that maximum values are achieved when the improvements on a site produce the highest (net) return, commensurate with the investment.
Contribution, principle of
An arrangement whereby legal title to property is transferred by the grantor (or trustor) to a person called a trustee, to be held and managed by that person for the benefit of another, called a beneficiary
Trust
An association of two or more persons who invest as co-owners.
Partnership
An easement that is created when the owner of a landlocked parcel has no access to a public right of way such as a street or highway.
Easement by Necessity
An encumbrance against property for money, either voluntary or involuntary.
Lien
An estate held under a lease for the term of the lease.
Leasehold estate
The right to ownership of the land for the length or duration of a person’s life. Upon death, the ownership of the property may revert to the original owner or another designated party. Involves a grantor of the life estate and a remainderman, or the person receiving the estate.
Estate for life
An estate in Real Property for the life of a living person. The estate then reverts back to the grantor or onto a third-party.
Tenant for life
An estate lease agreement that lasts a specific amount of time, with opportunities for renewal at the end of each lease.
Tenancy for years
An estate of inheritance (land or other realty) over which a person has absolute ownership.
Fee
An estate of property held by one person alone. Sole ownership.
Severalty
An estate under which the owner is entitled to unrestricted powers to dispose of the property, and can be left by will or inherited. The greatest interest one can have in Real Property.
Fee simple estate
An estate, a freehold interest in land, which may descend to heirs.
Estate of inheritance
An estate which takes effect after the death of the prior estate, such as a life estate. A future possessory interest in real property created from Pur autre vie.
Remainder or remainderman
An estate which vests in one other than a grantor, after the termination of an intermediate estate.
Estate in remainder
An increase in value of real estate due to no effort on the part of the owner which is most often due to the increase in the population in an area that creates an increased demand for it.
Unearned increment
An instrument by which one transfers personal property.
Bill of sale
An instrument freeing property from a lien of a mortgage, judgment, etc. When a deed of trust is used, the instrument’s called a reconveyance.
Release
An instrument used to transfer title from a trustee to the equitable owner of real estate, when title is held as secured collateral.
Reconveyance deed
An interest in land where there is no definite termination date but the rental period is fixed at a certain sum per week, month, or year. Also called a periodic tenancy.
Estate from period to period
An interim loan, generally made between a short-term loan and long-term loan, when the borrower needs to have more time before taking the long term, or permanent, financing.
Bridge loan
An involuntary lean, created by law rather than by contract, including tax liens, mechanics liens, etc.
Statutory lien
An outlining on a map of certain high-risk areas for real estate loan purposes, meaning that lenders will not extend credit in those areas. Illegal in most states.
Redlining
An unattested will that is written and signed in the testator’s own handwriting. Must be witnessed to be valid.
Holographic will
There are multiple owners of a piece of property, and each owner owns their interest separately. Although the ownership interest is divided, the property itself is not. Each owner may sell, convey,
mortgage, or transfer their interest without consent of other co-owners. No individual tenant may transfer ownership of the entire property. the ownership transfers as defined by the deceased’s will or to his/her heirs if no will exists.
Tenancy in common, Cotenancy,
And agreement to do or not to do a certain thing. It must have four essential elements – parties who are capable, consent of the parties, a lawful object or purpose and consideration. For sale of real property must also be in writing and signed by the party or parties to be charged with performance.
Contract
Any division of Real Property between co-owners, resulting in individual ownership and interests. Comes from the basic word to break into “parts” as in physically dividing real estate into separate parts.
Partition
Any estate for a definite period of time, such as a lease.
Estate for years
Any encumbrance placed on property with consent of, or as a result of, the voluntary act of the owner.
Voluntary lien
Any part of Real Property which passes upon the transfer, either attached or not, such as a barn or an easement.
Appurtenances
Any property that is not Real Property that is not attached or made part of the structure itself. Also called chattel or personalty.
Personal property
Any relationship in which one party (agent) acts for or represents another (principal), under the authority of the latter.
Agency
Anything of value such as money, goods, services, or promises, given to induce another person to enter into a contract.
Consideration
Anything that is actually fastened to the real property. They become part of the real property.
Fixtures
Appraising the value of property by comparing the price of similar properties (comparables) recently sold. This is the most widely used of the three methods of appraisal for residential property.
Market data approach
Articles of personal property annexed to real property, but which are necessary to the carrying on of a trade and are removable by the owner of the fixtures.
Trade fixtures
Similar properties used as a comparison to determine the value of a specific property.
Comparables or comparable sales
Attaches the right of use to a single individual or entity rather than to the property itself. Utility worker, hunter, etc.
Easement in Gross
Land that borders a flowing water source, like a river.
Riparian
Clause in a mortgage or deed of trust giving the mortgagee or trustee the power to sell the property in the event of default.
Power of sale
Combining successive periods of continuous use or occupation of real property to establish adverse possession or a prescriptive easement
Tacking
A dividing structure owned by two tenants in common unless there is some proof suggesting otherwise.
Party wall easement
Communal ownership and use of real estate that permits multiple purchasers to buy undivided interests in real property (usually in a resort condominium or hotel) with a right to use the facility for a fixed or variable time period.
Timeshare
Conveyance of real property pursuant to a judge’s order.
Judicial deed
Court ordered easement,
Legal action easement
Created by deed, contract, or other written instrument which specifies the location and dimensions of the easement as well as the permitted use or uses of the easement and who may use it.
Express easement
Created when the parties intended to create an easement but, for whatever reason, did not include it in a written instrument and was used through the years.
Implied easement
