Vocab E-M Flashcards
A sum of money paid to evidence good faith given to bind an offer or agreement
Earnest Money
The right or privilege one party has to use land belonging to another for a special purpose. The holder does not have title or possession, only a specific limited use
Easement
involving two parcels of land in which an easement was created to benefit one tract by giving that owner an easement over the other tract. Run with the land.
Easement appurtenant
An easement created by law
Easement by necessity
acquisition of an easement because of prolonged use
Easement by prescription
a personal right to use the land of another for specific purpose. Ex: utility lines and sewer pipes
Easement in gross
the period of time in which improvements to land can be profitably used
Economic life
a loss in value created by factors OUTSIDE of the property
Economic obsolescence
an exit from a property
egress
crops that require annual planting
emblements
the constitutional right of the governmental agencies, public corporations, public utilities, and public service corporations to take privately owned property for a public use with just compensation to the owner.
Eminent domain
the document that converts a certain parcel of land into a condominium regime
enabling declaration/ master deed
the extension of some improvement or other object across the boundary of adjoining property. EX tree limb
encroachment
to burden a parcel of land with a lien or charge
encumber
any interest in, claim, or liability on the land of another. (IE zoning, restrictions, easements, claims, mortgages, liens, pending legal action, unpaid taxes, restrictive covenants)
encumbrance
an agreement in which the parties can be compelled to perform
enforceable
the federal act that prohibits discrimination of loan applicants….
equal credit opportunity act
the raising or lowering of assessed values for tax purposes in a particular county or taxing district to bring them in line with assessments in other counties or districts
equalization
The equitable right to obtain absolute ownership to property when title is held in another’s name
Equitable title
- the difference between the current market value of a property and all of the encumbrances against it
- in law, what is fair and morally right
Equity
the borrower’s right during foreclosure to get the property back by paying the debt owed, the interest due, and court costs
Equity of redemption
a loan in which the lender requires a percentage of the income or appreciation gain in addition to the normal interest charge
equity participation loan
gradual wearing away of land by a natural force
erosion
an insurance policy that covers liabilities for errors, mistakes, and negligence on the party of a real estate company
errors and omissions insurance
- in leasing, permits the lessor to raise the lease payments upon the occurrence of certain stipulated conditions
- in financing, permits the lender to raise the interest rate upon the occurrence of certain stipulated conditions
Escalation clause
the reversion of property to the state or county in cases where a person dies without a will and without heirs
escheat
the deposit of funds or documents with a neutral third party who is instructed to carry out the provisions of an agreement
Escrow
- a special bank account maintained by brokers, attorneys etc who are authorized to hold money in trust for others (aka trust account)
- An account set up in which a mortgagor or vendee places 1/12 of the taxes and/or insurance each month to cover these expenses
Escrow account
- the interest that a person owns in real property
2. the property left by a deceased person
Estate
the retaining of possession by a lessee without the consent of the landlord after their lease has expired
estate at sufferance (or tenancy at sufferance)
leasehold estate that can be terminated by the lessor or lessee at any time
Estate at will (or tenancy at will)
an ownership estate in which both husband and wife jointly own property. They are treated as if they were one person.
Estate by the entirety
any lease with a specific ending time or for a specific period of time for example 6 months, 4 years
Estate for years
an ownership estate held by only one owner
estate in severalty (or tenants in sevaralty)
Written payoff balance
- Estoppel certificate
- certificate of no defense
- declaration of no set-off
- waiver of defense
means “and others” (Latin)
Et AL
Means “and wife” (Latin)
Et UX
The process of a landlord ousting a tenant from possession
2 forms: actual and constructive
eviction
proof of ownership of property (ex: title insurance, abstract, torrens certificate)
Evidence of Title
a written contract between a real estate broker and a property owner in which the owner agrees to pay the broker a commission if the broker, or his agents, procure a ready, willing, and and able buyer to purchase property on the seller’s terms. the seller promise not to list with any other brokers during the listing term. The owner reserves the right to sell the property himself and not pay a commission.
Exclusive listing
a contract between a real estate broker and property owner in which the owner agrees to pay the broker a commission if the property is sold, by anyone, during the term of the listing
Exclusive right to sell listing
to sign; the act of making a document legally valid
Execute
a contract in which the obligations have been performed on both sides of the contract
executed contract
the man who is designated in a will to handle the estate of a person who died testate
executor
in the process of being completed
executory
an agreement formed through the oral or written words of the parties, where all terms are openly mentioned and explicitly agreed to
express contract
federal law that protects the public by giving each individual the right to inspect his or her file at the credit bureau
fair credit reporting act
the price which a property would sell for if it were offered for sale for a reasonable period of time in a competitive market, where both the buyer and seller were free to act and under no undue pressure
fair market value
a federal agency established to insure the deposits in commercial banks and savings banks that are members
federal deposit insurance corporation (FDIC)
prohibits discrimination in the sale or rental of housing on the basis of race, color, religion, national origin, sex, handicap, or familial status.
federal fair housing act (amended in 1988)
known as “freddie mac” a federal agency created to buy mortgages in the secondary mortgage market
Federal home loan mortgage corporation (FHLMC)
A federal agency which encourages lenders to loan on homes by providing insurance to safeguard the lenders against the risks. The borrowers pay an insurance premium to pay for this program.
Federal Housing Administration (FHA)
Known as “fannie Mae” a quasi-private corporation that buys mortgages in the secondary mortgage market. very active in purchasing FHA and VA mortgages
Federal National Mortgage Association (FNMA)
A federal agency that oversees and regulates monetary policy that affects the availability of credit and interest rates
Federal reserve system (FRS)
a savings and loan institution that is federally chartered and privately owned by shareholders or depositors and are members of the FSLIC
Federal savings and loan association
A federal agency that insures savers’ accounts at member savings and loan associations
Federal savings and loan insurance corporation (FSLIC)
an estate of inheritance in real property
fee
a fee estate that has been created to exist only until the occurrence or non occurrence of a particular event
Fee simple conditional
Fee simple defeasible/ fee simple determinable
the largest, most complete bundle of rights one can hold in land; the highest form of ownership recognized by law; it is of indefinite duration and is freely transferable and inheritable
fee simple title
an estate designed to restrict the conveyance of title to the descendants of the grantee. Michigan does not recognize this
Fee tail title
a system which prevailed in the past throughout Europe under which the actual ownership of the land was vested in the monarch and sovereign power
Feudal System
Insurance protecting the lender from loss due to default. The insurance premium is paid by the borrower
FHA insurance
- The trust relationship that an agent has toward his principal in which the agent owes him loyalty, obendience, full disclosure, and to account for all monies
- The person who is in a position of trust, responsibility, and confidence for another. Broker is called this when in a relationship with a client
Fiduciary
a fee paid to someone for finding and producing either a buyer, seller, property, borrower, or lender. It is illegal to pay this fee to an unlicensed person.
Finder’s fee
a mortgage that take priority over any other mortgages
First mortgage
an article that was once personal property but is now so affixed to real estate that it has become real property and transfers with the land
Fixture
the flat areas of land located along watercourses and streams that are subject to overflow and flooding
flood plain
the legal process, after the mortgagor defaults, by which a mortgagee forces the sale of the mortgaged property to pay the unpaid debt.
Foreclosure
the loss of property for a specified reason
forfeiture
deception or trickery used to gain an unfair advantage over another
fraud
an ownership estate in land of unpredictable duration and can be transferred without anyone’s permission
Freehold estate
a loss in value due to an improvement because it’s old fashioned, out of date, poorly designed etc.
Functional Obsolescence
a loan fee to veterans in VA mortgages
Funding fee
a person authorized to transact all of the principal’s affairs within the range of a certain area
General Agent
a person who enters into a contract with the land owner to construct a building project
General contractor
unlike a specific lien against certain property, this is a lien against the individual debtor and attaches all his or her property and gives the lender the right to have all of the debtor’s property sold to paid the debt
General Lien
a co-owner in a partnership who is empowered to enter into contracts on behalf of the partnership and is fully liable for the partnership debts
general partner
a form of co-ownership for business purposes in which all the partners share in management and have unlimited liability for debts
general partnership
a deed that contains covenants in which the grantor formally guarantees that he or she is conveying good and marketable title
general warranty deed
a deed used to convey property in a situation where no monetary consideration is given
gift deed
the intangible salable asset of a business consisting of its name, reputation, and patronage
good will
a federal agency that is a division of housing and urban development (HUD) “Ginnie Mae” as it is called, buys mortgages in the secondary market, particularly FHA mortgages
Government national mortgage association (GNMA)
a lease that contains provisions for periodic step by step increases in the rental payments
graduated lease
a mortgage in which the monthly payments start low and then increase, usually as the borrower’s income increases
Graduated payment mortgage (GPM)
An exemption from application of a new law due to previously existing circumstances
Grandfather clause
the act of conveying ownership
grant
a person who receives a conveyance of real property from the grantor
grantee
the words of conveyance in a deed that state the grantor’s intention to convey the property generally worded “conveys and warrants” “grant” or “grant bargain and sell”
Granting clause / Premise
the person transferring title to (or an interest in) real property to a grantee
Grantor
- the actual total income received from a business or property before deducting any expenses
- the total income that a person earns before deducting expenses
Gross income
a lease of property in which the landlord pays all of the property’s expenses regularly incurred through ownership, such as taxes, fire insurance, operating expenses
Gross lease
profits accrued before the deduction of expenses and taxes
Gross profit
a number that, when multiplied by a property’s gross rents, will produce an estimate of the property’s value
(GRM) Gross Rent multiplier
a lease of land, usually for long term, in which the tenant often agrees, in the lease, to build his or her building
ground lease
a mortgage in which the federal government guarantees to reimburse the lender if the borrower defaults
Guaranteed mortgage
a person, usually appointed by the court, to administer the affairs of an individual who is not capable of handling his or her own affairs
guardian
a deed signed by a guardian
guardian deed
the “to have and to hold” clause in a deed that follows the granting clause and defines or limits the extent of the ownership that is being conveyed such as a life estate, an easement, or a fee simple estate
habendum clause
an administrative legal proceeding, similar to a trial, held to determine fact. The parties have the right to be heard and have counsel
hearing
a person who has or will inherit property
heir
wording found in deeds contracts, and other documents when transferring interests. Refers to the recipients of an inheritance and the parties who may subsequently be designated by the assignor
“Heirs and Assigns”
every kind of property that can be inherited
hereditament
diverse or unique nonhomogeneous
heterogeneous
the utilization of real property to its greatest economic advantage
highest and best use
a tenant remaining in possession after his lease has expired
holdover tenant
a will hand-written by the testator
holographic will
state laws that protect against the forced sale of a person’s home for non-payment of debts
homestead exemption
alike, of the same or similar kind.
homogeneous
the name, in some states, that authorizes the creation fo the condominium type of ownership
horizontal property act
a federal department created to solve the housing problems in the cities by utilization of the federal government’s resources in coordination with the various state and local governments
Housing and urban development (HUD)
to pledge something as security of debt without giving up possession of it
hypothecate
that which is constructed upon land or its structure that enhances the value of the property
improvements
incomplete; unfinished
inchoate
an appraisal technique in which the value of income producing property is estimated by the amount of net income the property will produce over its remaining useful life
income approach
intangible property that is not visible but exists as a legal right (ie an easement)
incorporeal property
a deterioration of an item that would make it impossible or too expensive to fix or replace
incurable depreciation
something that cannot be voided
indefeasible
a self employed person who contracts to do work and is not subject to the control and direction of another except as to the final results
independent contractor
a lease in which the rent is tied to some commonly accepted price index such as the consumer price index or the wholesale price index
index lease
entering
ingress
property that is acquired buy descent; an estate that passes to the heirs upon the death of the owner
inheritance
in place of
in lieu of
a person that has more liabilities than assets
insolvent
the sale of real estate on an extended payment plan that requires regular payments of a certain sum to be paid on specific dates; sometimes called a land contract
installment sale
a written legal document, such as a contract, will, or deed
instrument
a mortgage in which the borrower pays a third party, such as FHA or PMI, an insurance premium so that they will assure the lender that they will make payment in the event of a default by the borrower
insured mortgage
- a sum of money paid for the use of money
2. the degree of rights in property
interest
the percentage of money charged for its use
interest rate
a temporary or short term loan often made for the construction of a building project.
interim loan
a federal law that regulates interstate land sales
interstate land sales act
dying without a will
intestate
the government dictated property division of property of a person who dies without a will
intestate succession
legal action by a property owner who demands that his property be purchased by a public agency because he or she feels they have somehow damaged his property
inverse condemnation
a “consent to service” agreement filed by a non-resident who is applying for a real estate license in MI.
irrevocable consent
a duty assumed when two or more people sign to be responsible for the repayment of a debt or obligation. The lender can collect from all of the signers or from each one of them individually
jointly and severally liable
a form of ownership that occurs when two or more persons own a single property with the full right of survivorship. If one owner dies, his or her share id divided among the other surviving owners.
Joint tenancy
One of the books in the two book system required in michigan in which the broker must record all of the transactions involving his trust account in chronological order
Journal
a mortgage that has a lower priority than the first mortgage
Junior Mortgage (or second mortgage)
fair and reasonable payment; the payment made to an owner whose land is taken through condemnation under eminent domain
just compensation
the secret payment to someone in return for a favorable decision, information, or assistance. This is usually considered unethical.
Kickbacks
a written agreement in which real estate is sold to a buyer who usually pays part of the purchase price when the contract is signed and then makes regular payments over a specified period of time. The title to the property remains with the seller until the total purchase price is paid (also called installment contract)
Land Contract
the owner or lessor of a property
landlord
the grant of land that conveys it from the government to an individual
land patent
an appraising technique in which the buildings and the land are examined separately to find their value
Land residual technique
hidden structural defects not easily seen
latent defects
an agreement in which the landlord gives a tenant the right of possession in exchange for rent
lease
the landlord’s interest in leased property during the lease
leased fee
the interest that the tenant has in the leased property
leasehold estate
one of the records in the two-book system in MI required by brokers that contains separate information about each transaction
Ledger
a precise description of a piece of real property
legal description
the tenant
lessee
the landlord
lessor
using borrowed money to finance an investment so that you will be making money on borrowed money
leverage
to assess property and set the rate of taxation
levy
book (latin)
Liber
- permission from a legal authority to engage in a certain profession
- a personal privilege to go upon the land of another for a specific purpose
license
a hold or claim that one person has on the property of another to secure payment of a debt or other obligation (ie a mortgage)
lien
states that give the lender a lien on the mortgaged property but not title
lien theory states
an interest in real property which is given to a person for only the duration of someone’s life
life estate
the person who has a life estate in the property
life tenant
a deed that only warrants against defects that have occurred AFTER the grantor acquired title
limited warranty deed (or special warranty deed)
the ease with which an asset can be converted into cash
liquidity
a notice that a lawsuit is pending
Lis Pendens
an agreement between a property owner and a broker in which the broker is employed as an agent for the seller
Listing contract
the rights that a landowner has to the use and enjoyment of a lake or sea that borders his land
littoral rights
- an agreement from a lender to loan a certain amount of money to a particular qualified borrower
- an FHA valuation
Loan commitment
A person who negotiates loans for lenders and borrowers
Loan correspondent (or mortgage broker)
the finance fee charged by the lender for creating the mortgage
Loan origination fee
the relationship between the amount borrowed and the appraised value of the property
loan/value ratio
the method of describing lots in a subdivision by reference to their lot number
Lot and block tract (or recorded plat)
a type of consideration (ie gifting to a family member for free for this reason)
love and affection
Land with low returns that barely pay for its cost of operation
Marginal real estate
title that is free from significant defects and which a purchaser would accept without any objections
marketable title
one of the three main methods of appraising real property. The value of the property is determined by comparing the prices paid for similar properties
Market data approach (or market comparison approach)
the actual amount that was paid for the property
market price
the highest price that a ready, willing, and able buyer would pay and the lowest price that a ready, willing, and able seller would accept
Market value
the date when a note or negotiable instrument is due and payable (end of the life of a loan )
maturity date
a lien placed on a property by an unpaid workman or material supplier for improvements to the property
mechanic’s lien
imaginary lines, in the rectangular survey system of land descriptions, that run north and south and intersect base lines to form reference points to measure or locate property
Meridian lines
a method of land description that identifies a parcel by describing the distance and directions of all the boundaries. Will always have a point of beginning
Metes and bounds
5280 linear feet
mile
one tenth of one cent. .001 used in taxation
Mill
owning a property’s minerals and being able to take them
mineral rights
a clause in a percentage lease that sets a certain “minimum” amount of rent to be paid regardless of the property’s gross
minimum rent clause
giving false or misleading information or concealing a material fact
misrepresentation
the lease for a specific period of time, usually one month, which automatically renews itself for the same period of time unless something is said to the contrary by the lessor or lessee
Month to month tenancy (or month to month estate, or periodic estate, or year to year)
a fixed natural or man made object used to establish real estate boundaries
monument
the pledge of property as security of a debt
mortgage
a person or firm that makes mortgage loans usually with their own capital then sells them to permanent investors
mortgage banker
a middleman paid a fee to bring lenders and borrowers together
mortgage broker
the lender (creditor) that lends money and is given a mortgage on property as security
mortgagee
an insurance policy that insures the lender against loss in case of a bad title. usually paid by the borrower
Mortgagee’s policy
a privately owned company that charges borrowers a fee. They then assure the lender that they will make restitution if the borrower defaults.
Mortgage guaranty insurance corporation (MGIC)
a borrower that gives a lender a mortgage on his property as security for debt
mortgagor
an organization of real estate brokers for the purpose of exchanging information on each other’s listings so that they all have an opportunity to sell the listing and, thereby, share the commission with the listing broker
multiple listing service
a meeting of the minds; a mutual assent
mutual agreement
