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Dictionary of Real Estate Terminology
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Abstract of Title: A compilation of the recorded documents which relate to a parcel of land, from which an attorney may give an opinion of the condition of title. Acceleration Clause: Clause used in a mortgage or deed of trust, which gives the lender the right to demand full payment upon a certain event, such as change of ownership without the lender's consent. Acceptance: Voluntary agreement to the price and terms of an offer, which creates a contract. Acre: A unit of land measure in any shape equal to 43,560 square feet. Acquisition Costs: The costs of acquiring property other than purchase price, such as escrow fees, title insurance, lenders fees, attorney fees, etc. Ad Valorem: A method of taxation using the value of the real estate to determine the amount of the tax. Addenda: Plural for ADDENDUM; more than one addendum. Addendum: Something added to a document, letter, escrow instructions, contractual agreement, etc. Adjustable Rate Loan: Loan in which the interest rate is periodically adjusted to more closely coincide with current rates. Adverse Possession: A method of acquiring title by possession under certain conditions. Generally, possession must be open, continuous, and hostile. Exact time of possession and specific requirements vary from state to state. Agency: Any relationship in which one party (Agent) acts for or represents another (Principal), under the authority of the latter. Alienation Clause: A type of acceleration clause, calling for a debt under a mortgage or
onlineEd, Dictionary of Real Estate Terminology
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deed of trust to be due in its entirety upon transfer of ownership of the secured property. A.L.T.A. American Land Title Association, an organization composed of title insurance companies, which has adopted certain forms to standardize coverage on a national basis. Amortization: The payment of debt in regular and periodic installments of principal and interest, as opposed to interest only payments. Annual Percentage Rate: The yearly interest percentage of a loan, as expressed by the actual rate of interest paid, including up-front loan fees. Appraisal: An opinion of value based upon factual analysis. Appreciation: An increased value of property due to either a positive improvement of the area or elimination of negative factors, but not due to an increase in value from inflation. Appurtenance: Any part of real property which passes upon the transfer, either attached or not, such as a barn or an easement. Arbitration Clause: A clause in a contract calling for the decision of a third party in the event of a dispute. Asbestos: A hazardous material, used for fire resistance, once commonly used in insulation, flooring, and roofing materials. As Is Condition: Premises accepted by a buyer or tenant in the condition existing at the time of the sale or lease, including all physical defects. Asking Price: The price at which the seller is offering property for sale. Assessment: Estimate of value for tax purposes. Assessment District: An area whose boundaries are set for tax assessment purposes only. Assignment: A transfer to another of any property, real or personal, or of any rights or estates in said property. Assumption: Agreement by a buyer to assume the liability under an existing note secured by a mortgage or deed of trust. Assumption Fee: Lender's charge for paperwork involved in the processing for a new buyer to assume an existing loan.
Backup Offer: A secondary offer to buy property, used in case the first offer fails. Balloon Note: 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 Payment: A lump sum payment, usually at the end of the term of a note with terms
etc. landlord-tenant. less deductible expenses. $10. Brokerage: The act of bringing together principals (buyer-seller. Capitalization: The determination of present value of income property by taking the annual net income. or permanent. C Call: To demand payment due to default. and repair. construction. Cancellation Clause: A clause in a lease or other contract setting forth the conditions under which each party may cancel or terminate the agreement. Bridge Loan: An interim loan. Bundle of Rights: All rights and interests of ownership in real property considered together. including design. and generally the difference between cost and selling price. Cash Flow: In investment property.000 / 11% = $90. Building Code: A comprehensive set of laws which control the construction of buildings. Buyer's Market: A market condition favoring the buyer. Bill of Sale: An instrument by which one transfers personal property. financing. materials used.onlineEd. Capital Gains: Gains realized from the sale of capital assets. dishwashers.909). Built-ins: Commonly. generally made between a short term loan and long term loan. usually when more homes are for sale than there are interested buyers. or due prior to the end of the amortization period. Build to Suit: The building of a structure to meet the specifications of a purchaser. but separable. Capitalization Rate: The percentage used to determine the value of income property through capitalization. stoves. Buy Down: A payment to the lender for the purpose of reducing the interest rate for the loan. Cap: The maximum increase of an adjustable rate mortgage. ovens. Blanket Mortgage: A mortgage covering more than one property. use.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. and dividing by a rate of return percentage which is commonly acceptable to buyers of similar properties (i. Used mainly for income tax purposes. the actual cash that the investor will receive after http://www.e.htm 5/20/2006 .) for a fee. and other appliances. framed into the home construction. Dictionary of Real Estate Terminology Page 3 of 26 insufficient to fully amortize the loan.onlineed. when the borrower needs to have more time before taking the long term.
Comparative Analysis: A comparison of similar properties to a subject property for the purpose of evaluating market value and proper pricing. Chain of Title: The chronological order of conveying of a parcel of land. and other related costs.htm 5/20/2006 . recording fees. starting from original owner. with the balance of the property (both land and building) owned in common by the owners of each unit. Closing Costs: Expenses incidental to a sale of real estate. Construction Loan: Short term financing of real estate construction which is generally followed by a long term loan. The buyer only has equitable title during the contract term. such as in a deed of trust.onlineEd. Chattel: Personal property. but which are under separate ownership. and restrictions. which.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms.onlineed. conditions. including the signing and transfer of documents and the distribution of funds. where the seller has legal title until paid in full. Condemnation: The taking of private property for public use without the consent of the owner. escrow fees. Contingency: The dependence upon a stated event that must occur before a contract is binding. Common Wall: A wall erected on a property boundary as a common support to structures on both sides. if valid. appraisal fees. Comparables: Similar properties used as comparisons to determine the value of a specific property. Chattel Mortgage: A lien on personal property. Cash Out: To take the entire amount of a seller's equity in cash rather than to retain some interest in the property. A term used to describe the limitations which may be placed on property. the interior space of which are individually owned. Cloud on Title: An invalid encumbrance on real property. title fees.& Rs: Covenants. C. such as loan fees. Contract for Deed: An installment contract for the sale of real estate. issued upon completion of improvements. transfer fees. Condominium: A structure of two or more units. but only upon payment of just compensation. Closing: Process by which all parties to the transaction conclude the details of a sale. would affect the rights of ownership. brokerage fees. http://www. Dictionary of Real Estate Terminology Page 4 of 26 deduction of operating expenses and debt service from his gross income. Closing Statement: The computation of financial adjustment between buyer and seller as of the day of closing.C.
onlineEd. or by the recording of the deed.onlineed. Deed Restrictions: Limitations on the use of property placed in the conveying deed by the grantor. which binds all future owners. Courtesy to Brokers: Willingness of a seller to pay a commission to any broker supplying a suitable buyer. or a loss in value as an accounting procedure to use as a deduction for income tax purposes. estimating the replacement cost of a structure. Deed of Trust: Similar to a mortgage. the placing of the property in the actual or constructive possession of the grantee. D Debt Service: The amount of financing. mortgaged. Discount Points: The amount of money the borrower or seller must pay the lender to get a http://www. Depreciable Life: A tax term meaning the number of years used to determine the depreciation of an asset. Covenant: Assurances set forth in a deed by the grantor. Creative Financing: A general term which encompasses any method of financing property going beyond traditional real estate lending. Depreciation: A decrease in value to real estate improvements caused by deterioration or obsolescence. Conveyance: Transfer of title to land. on a property.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. less depreciation. Cooperating Broker: The broker who finds the buyer and so shares in the commission with the listing broker. Deferred Maintenance: Repairs necessary to put a property in good condition. Counter Offer: An offer (instead of acceptance) in response to an offer. Delivery: In conveying. including interest and principal payments. a security instrument whereby real property is given as security for a debt. Dictionary of Real Estate Terminology Page 5 of 26 Conventional Loan: A mortgage or deed of trust not obtained under a government program. Deed: A conveying instrument used to pass title to property upon sale. Devise: Real estate left by will. Includes most instruments by which an interest in real estate is created. or assigned.htm 5/20/2006 . or implied by law. Cost Approach: An appraisal method. plus land value. usually accomplished by delivery of a deed to the buyer.
This practice is illegal in some states. prescription. as opposed to that portion of the purchase price which is financed. or liability attached to and binding real property. Dual Agency: The representation by an agent of opposing principals (buyer and seller) at the same time. viewed from the front. usually but not always. Down Payment: Cash portion paid by the buyer from his own funds. agreement. etc. building. Effective Age: Age of a structure as estimated by condition rather than actual age. and which generally results in the property selling for less than market value. which is generally shorter than the physical life. etc. Dictionary of Real Estate Terminology Page 6 of 26 mortgage at a stated interest rate. Elevation: The exterior design of a structure. http://www. less the amount of existing loan balances. Economic Rent: The market rental value of a property at any given time. such as zoning changes. A point is equal to one percent of the loan amount. as of a wall. Encroachment: Generally. reservation. which one has in the land of another. Equal Credit Opportunity: Federal act granting women certain independent status. Ejectment: A court action to recover real property. even though the actual rent may be different. and preventing lenders from considering such negative credit aspects as the possibility of a woman having children and dropping out of the labor market. Equity: Market value of real property.onlineed. Distress Sale: A sale of property when the seller is under extreme pressure to sell. fence. Easement: A right created by grant. Economic Obsolescence: Loss of desirability and useful life of a property through economic forces. lien. charge. Encumbrance: A claim. or necessary implication. traffic pattern changes. E Earnest Money: The money from a purchaser which is deposited into escrow upon the signing of the agreement of sale to show that the purchaser is serious about buying the property.. Eminent Domain: A governmental right to acquire property for public use by condemnation. Equitable Ownership: Ownership by one who does not have legal title.htm 5/20/2006 . construction onto the property of another. and the payment of just compensation. such as a vendee under a land sales contract.onlineEd. Economic Life: The profitable life of an improvement. rather than deterioration.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms.
F Fair Credit Reporting Act: A federal law giving one the right to see his or her credit report. religion.H. enabling lenders to loan a very high percentage of the sales price.htm 5/20/2006 . F. Escrow Instructions: Instructions which are signed by both buyer and seller. and can be left by will or inherited. http://www.onlineed. such as a lease. or national origin. Estate for Life: An estate in real property for the life of a living person. and which enable an escrow agent to carry out the procedures necessary to transfer real property. Exclusive Agency Listing: A listing under which the broker's commission is protected against a sale by other agents but not by a sale by the principal. Fee Simple: An estate under which the owner is entitled to unrestricted powers to dispose of the property. and which processes them according to instructions. Estate in Remainder: An estate which vests in one other than a grantor. F. regardless of whether or not the broker is the cause of sale. usually when a property owner dies without a will. Estate of Inheritance: An estate which may descend to heirs. Estate: The interest or nature of the interest which one has in property.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. which forbids discrimination in the sale or rental of residential property because of race. Fair Housing Law: Title VIII of the Civil Rights Act. Dictionary of Real Estate Terminology Page 7 of 26 Equity Loan: A loan based upon the equity in a property.onlineEd. Escheat: A reversion of property to the state in the absence of an individual owner. after the termination of an intermediate estate. The estate then reverts back to the grantor or to a third party.A. Exclusive Right to Sell: A listing contract whereby the owner promises to pay a commission to the broker if property is sold during a stated period. Exchange: A reciprocal transfer of real property which has certain tax advantages over a sale. Escalation Clause: A clause in a lease providing for an increased rental at a future time.A. sex.H. among other rights. Estate for Years: Any estate for a definite period of time. color. Escape Clause: A clause stating that the borrower shall not be obligated to buy nor shall any deposit be lost if the appraisal is less than purchase price.:A federal agency which insures first mortgages. Escrow: A neutral third party which receives all funds and instruments necessary to a sale.
M. First Refusal Right: A right which gives the lessee a first chance to buy the property if the owner decides to sell. Fiduciary: One acting in a relationship of trust.L. from members of the Federal Reserve System and the Federal Home Loan Bank System. including any known property defects or problems. F. Dictionary of Real Estate Terminology Page 8 of 26 F. the portion fronting on a major road. usually regarding financial transactions. during which time a payment may be made and not considered delinquent. also called Freddie Mac.onlineEd. at discounts. at least of duration of a lifetime.A. and is legally treated as real property while it is so attached. secured under the same instrument and by the same real property. Functional Obsolescence: The need for replacement because a structure or equipment has become inefficient because of improvements since discovered or invented. Fixed Rate Loan: A loan having a rate of interest which remains the same for the life of the mortgage.N. both conventional and federally insured.M. Foreclosure: A procedure in or out of court. G Gap Financing: Loans secured as interim financing until more permanent financing can be obtained. Free and Clear: Real property against which there are no liens. First Mortgage: A mortgage having priority over all other voluntary liens against certain property. especially voluntary liens. It is usually used for commercial property.Federal National Mortgage Association.Federal Home Loan Mortgage Corporation. and interest of the owners of property in order to sell the property to satisfy a lien against it. Future Advance Clause: A clause in a mortgage or deed of trust which allows the borrower to borrow additional sums at a future time.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. Freehold: An estate.H. to extinguish all rights. Front Foot Cost: The determination of the value of real property based on a value per foot as measured along the frontage of a parcel. Fixtures: Personal property which is attached to real property. Full Disclosure: The act of revealing all known facts which may affect the decision of a buyer.onlineed. A private corporation which deals in the purchase of first mortgages. http://www. that is. Grace Period: A period of time past the due date for a payment. title. Front Footage: Linear measurement along the front of a parcel.htm 5/20/2006 . whereby the lessee can match a legitimate offer. A federal agency which purchases first mortgages. also called Fannie Mae.C.
htm 5/20/2006 . Holdback: Portion of a loan held back by the lender until a certain contingency is met. usually based on periodic appraisal or simply the passage of time. Highest and Best Use: The use of land which will bring the greatest economic return over a given time. the outside dimensions determine the gross area. etc. Hectare: A unit of measurement.000 square meters (2. Ground Lease: A lease of vacant land. when multiplied by the annual gross income. some natural causes.. H Habendum Clause: The clause in a deed which defines the extent of the estate of the grantee. or land exclusive of any buildings on it. either actual or estimated.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. irrespective of the area inside actually usable or rentable. insurance. etc.onlineEd. A general rule of thumb which varies with specific properties and areas. such as taxes. If the property is improved. graduated payment loan. Ground Rent: Rent paid for vacant land. allowing low beginning payments and a shorter term because of higher payments as loan progresses.onlineed. depending upon the terms of the policy. Grandfather Clause: The clause in a law permitting the continuation of a use. Gross Lease: A lease which obligates the lessor to pay all or part of the expenses of the leased property. http://www.471 acres). One who gives a deed. Gross Income Multiplier: A figure which. Growing Equity Mortgage: A fixed rate. derived from a business or property. vandalism.560 square feet). utilities. generally the buyer. Hazard Insurance: Real estate insurance protecting against loss caused by fire. was permissible. business. which. Dictionary of Real Estate Terminology Page 9 of 26 Graduated Lease: A lease calling for a varying rental. Gross Rent Multiplier: A method of obtaining an approximate value of income property by using gross yearly rents. Gross Acre: An acre (43. is not now permissible.. but because of a change in the law. equaling 10. etc. Gross Area: In building measurement. ground rent is that portion which is attributable to the land only. Grantor: One who transfers property or property rights. as distinguished from a net (usable) acre. Gross Income: The scheduled total income. will theoretically determine the market value. when established. Grantee: One to whom property or property rights is given.
normally including improvements but not land or other indestructible parts. and other such coverage. formed for the purpose of improving or maintaining the quality of the area. Homeowners' Insurance: Includes the coverage of personal liability and theft from the home.A. protecting homestead property (usually to a set maximum amount) against the rights of creditors. insurance. according to inflation or suitable rate index. Impound Account: Account held by a lender for payment of taxes. Some states grant statutory exemptions.onlineEd. but may include any permanent structure or other development. Indexing: Altering the mortgage term. utilities. Hypothecate: To mortgage or pledge without delivery of the security to the lender. Income Property: Property which produces income.R.S. Insured Mortgage: A mortgage which is insured against loss to the mortgagee in the event of default and a failure of the property to satisfy the balance owing plus the costs of foreclosure. Improvements: Generally. Income Approach: An appraisal method to determine the value of rental property by use of the estimated net income over the life of the structure. http://www.The Department of Housing & Urban Development.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. offsite improvements. Homeowners' Association: An association of people who own homes in a given area. such as a street. Insurable Value: Value of property for insurance purposes. or other periodic debts against real property. Improved Land: Land having either on-site improvements. buildings. Home Warranty Insurance: Private insurance insuring a buyer against defects (usually in plumbing. or both.D. to determine a long or short term capital gain. etc. H.onlineed. I Implied Agency: An agency which is not expressly set out but must be deduced from the circumstances. and heating) in the home he has purchased. The period during which the taxpayer owns the asset. such as F.U. electrical.H. payment or rate. usually from rental. Homestead: The dwelling (house and contiguous land) of the head of a family.htm 5/20/2006 . Interest: Money charged for the use of money (principal). Dictionary of Real Estate Terminology Page 10 of 26 Holding Period: The time period used by the I. A federal cabinet department responsible for the major housing programs in the United States.
the interest passes to the surviving joint tenants.onlineEd. Junior Mortgage: Any mortgage of lesser priority than a first mortgage. Interest Included Note: A note having equal payments (usually monthly). rather than a mortgage lien. applying more of each payment to the principal. The amount applied to principal remains the same. which attaches to property without the consent of the owner. Upon the death of a joint tenant. plus interest.onlineed. J Joint Tenancy: An undivided interest in property. and to sell property at a public sale to collect delinquent rent. and beginning at the same time. As the interest decreases. based on declining principal balance. Interim Financing: Temporary financing. Investment Yield: The gain from an investment in real property.htm 5/20/2006 . Intestate: Without leaving a will. Involuntary Lien: A lien. Expressed as a percentage of the amount invested. Landlord: An owner of leased real estate. Interest is figured on the declining principal balance. including both income and resale. interest also decreases. Periodic interest payments are made. K L Land Sales Contract: An installment contract for the sale of land. Usually expressed as an annual percentage. Interest Only Mortgage: A mortgage under which the principal amount borrowed is repaid in one payment. Judgment Lien: An involuntary lien against the property of someone who has been made a debtor on the basis of a judgment. http://www. The buyer (vendee) has equitable title during the contract term. The interests must be equal. occurring under the same conveyance. Interest Rate: The percentage of an amount of money which is paid for its use for a specified time. taken by two or more joint tenants. such as a tax lien or judgment lien. Dictionary of Real Estate Terminology Page 11 of 26 Interest Extra Note: A note requiring an equal (usually monthly) payment on principal. rather than to the heirs of the deceased. to which the owner agrees. Landlord's Warrant: A warrant enabling a landlord to levy upon a tenant's personal property. the total payment decreases. The seller (vendor) has legal title until paid in full.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. As the principal decreases. usually for construction.
Dictionary of Real Estate Terminology Page 12 of 26 Land Use Planning: The development of long range plans for the use of land in a given area. Lien Theory: A theory followed in several states that assumes a mortgage has only a lien on the mortgaged property. which is acceptable in a court of law. Listing Agent: A real estate agent who obtains a listing. All liens are encumbrances. Lease-Purchase Option: A lease under which the lessee has the right to purchase the property. The term does not refer to the physical similarity of the properties. Loan Origination Fee: A one time set-up fee charged by the lender. which could not be discovered by inspection. whereby the agent agrees to secure a buyer or tenant for specific property at a certain price and terms in return for a fee. Latent Defect: A hidden or concealed defect. Legal Description: A method of geographically identifying a parcel of land. but not all encumbrances are liens. or lessee. is interested in property. for a specified period of time.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms.onlineed. Listing: An agreement between the owner of real property and a real estate agent. as opposed to a selling agent. Loan Package: The file of all items necessary for the lender to consider giving a loan. and usually a percentage of the loan amount. Property may be exchanged for like in kind property and the tax deferred. and for consideration. Lessee: The party to whom a lease is given in return for consideration (rent). Leverage: The use of financing to allow a small amount of cash to purchase a large property investment. and the mortgagor has legal title. using reasonable care. under certain conditions. Letter of Intent: A formal method of stating that a prospective developer. Lessor: The party (usually the owner) who gives the lease in return for consideration (rent). who finds a buyer. buyer. Like Kind Property: A tax term used in exchanges. Lis Pendes: A legal notice recorded to show pending litigation related to real property. either voluntary or involuntary. such as through zoning plans. Leasehold: An estate held under a lease for a fixed term.htm 5/20/2006 .onlineEd. Not an offer and creates no obligation. but to purpose and intent (investment) of the taxpayer. 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. Lease: An agreement by which the owner of real property gives the right of possession to another. These http://www. Lien: An encumbrance against property for money.
The federal government writes this form of insurance through the F. The price paid for insurance protecting the mortgage lender against loss incurred by a mortgage default. or in some areas. thus enabling the lender to loan a higher percentage of the sales price. M Market Approach: Appraising the value of property by comparing the price of similar properties (comparables) recently sold. Loan Ratio: The ratio. financial statement. Usually refers to a portion of a subdivision.A. of the amount of a loan to the value or selling price of real property. any portion or parcel of real property. five years or longer.). credit report. and the property exposed for a reasonable period of time. M. Month to Month Tenancy: A tenancy where no written lease is involved. Lot: Generally. Lock-In: The prohibition of a loan secured by a mortgage or deed of trust. rent being paid http://www. Marketable Title: Title which can be readily marketed (sold) to a reasonably prudent purchaser aware of the facts and their legal meaning concerning liens and encumbrances. Dictionary of Real Estate Terminology Page 13 of 26 items would include the information on the prospective borrower (loan application. Long Term Lease: A general term which may refer to a lease ten years or longer in term.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. Master Policy: An insurance policy to a lender covering property in more than one location.H. Maturity: Termination period of a note.onlineed. with their terminal points and angles. Mechanic's Lien: A lien created by statute for the purpose of securing priority of payment for the price or value of work performed and materials furnished in construction or repair of improvements. Master Plan: A zoning plan for an entire governmental entity.I.htm 5/20/2006 . and the V.A. etc. Long Term Financing: A mortgage or deed of trust for a term of ten years or more. Master Lease: A lease controlling subsequent leases. etc. expressed as a percentage.onlineEd. Metes and Bounds: Description of land by boundary lines. and which attaches to land as well as improvements. so that the borrower is 'locked-in' to the loan for a specified period.).P. and information on the property (appraisal.Mortgage insurance premium. as distinguished from interim loans or construction loans. employment letters. survey. Market Value: The highest price a willing buyer would pay and a willing seller would accept. both being fully informed.
an association of people dedicated to the betterment of the real estate industry.onlineEd. Net Acre: An acre which may be used for the building of structures. National Association of Realtors®.A. through legislation. Servicing may be done by the lender or a company acting for the lender. so that each may have the opportunity to sell the property. as does a mortgage broker. foreclosing if in default.H.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. making sure taxes are paid and insurance is in force.R. who for a fee. and V. education. Mortgage Banker: A company providing mortgage financing with its own funds rather than simply bringing together lender and borrower. In the event of death of the insured. for a fee. Mortgage: The instrument by which real estate is hypothecated as security for the repayment of a loan. releasing the lien upon payment in full. such as collecting payments. http://www. Multifamily Dwelling: A building designed as a dwelling for more than one family. the amount owing increases. Mortgagee: The party lending the money and receiving the mortgage. Mortgage Broker: One.A. thus enabling the lender to loan a higher percentage of the sales price. sidewalks. N N. Mortgagor: The party who borrows the money and gives the mortgage. etc. and high ethical standards. Mortgage Servicing: Controlling the necessary duties of a mortgagee. the mortgage is paid in full. Even though payments are made on time. Negative Cash Flow: When the income from an investment property does not equal the usual expenses. Mortgage Insurance: Insurance written by an independent mortgage insurance company protecting the mortgage lender against loss incurred by a mortgage default. The federal government writes this type of insurance through the F.A. etc. Dictionary of Real Estate Terminology Page 14 of 26 monthly. Mortgage Life Insurance: A term life insurance policy for the amount of the declining balance of a loan secured by a mortgage or deed of trust. The beneficiary is the mortgagee. as opposed to that area which is not usable or must be used for off-site improvements such as streets.onlineed.htm 5/20/2006 . submitted to all members of an association. Negative Amortization: A condition created when a loan payment is less than interest alone. and handles the necessary applications for the borrower to obtain a loan against real property by giving a mortgage or deed of trust. brings together borrower and lender. Multiple Listing:An exclusive listing.
the expenses of the property leased. Dictionary of Real Estate Terminology Page 15 of 26 Net Income: The difference between adjusted gross income and operating expenses. debt. To be legally binding an offer must be definite as to price and terms. during certain hours and days of the week. Usually provides for interest and is secured by a mortgage or deed of trust. for an existing one. Net Listing: A listing under which a real estate broker receives any amount over a given net amount to the seller. etc. the broker has no exclusive right to sell. Note: A unilateral agreement containing an express and absolute promise of the signer to pay a named person a definite sum of money at a specified date. usually as to the assets of the mortgage. or obligation.onlineEd. stating that a commission will be paid to the broker upon presentation of an offer which meets a specified price and terms. for inspection. such as a fire or other natural disaster. with certain conditions. Open Listing: A written authorization to a real estate broker by a property owner. and must bring in his offer before any other offer is accepted.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. Illegal in some states. Notice of Cessation: A notice stating that work has stopped on a construction project. in addition to a fixed rental. Open Mortgage: A mortgage that can be prepaid without penalty. Offer and Acceptance: Necessary elements of a contract to sell real estate. Non recurring Expense: An expense. Open-End Mortgage: A mortgage permitting the mortgagor to borrow additional money under the same mortgage. Used in zoning requirements.onlineed. insurance. in order to form a contract. with the secured property as the only recourse. Notice of Completion: A notice. However.htm 5/20/2006 . Novation: Substitution of a new contract. Net Lease: A lease requiring the tenant to pay. Open House: A house which is open without an appointment to prospective buyers or tenants. between the same or different parties. http://www. Open Space Ratio: Ratio of land area to floor area of an apartment building. which does not usually repeat itself. such as taxes. Notice to Quit: A notice by a landlord to a tenant to vacate rented property. Non-recourse Loan: A loan not allowing for a deficiency judgment. recorded to show that a construction job has been completed. but before debt service. O Offer: A presentation or proposal for acceptance.
Percentage Lease: A lease. Participation: Lender involvement in a development for a percentage of the gross sales or profit. as well as interest on the loan. Planned Unit Development: A subdivision of five or more individually owned lots with one or more other parcels owned in common or with reciprocal rights in one or more other parcels. taxes. Payoff Escrow: An escrow specifically for the purpose of paying off an existing loan. Usually part of an existing escrow. usually on a retail business property. and insurance. interest. If the payment is less than the interest alone. negative amortization is created. when properly maintained. When the escrow agent has all instruments and instructions necessary to carry out the transaction.onlineEd. in the event of poor sales.Principal and interest. P. or one that would be discovered by the exercise of ordinary care. regardless of the increase in the interest rate. Dictionary of Real Estate Terminology Page 16 of 26 P Partial Release: A release of a portion of property covered by a mortgage.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. Plat Map: A map dividing a parcel of land into lots. Used to indicate what's included in a monthly payment on real property. and called a sub escrow. Also called a take out loan. resulting in individual ownership and interests. Physical Life: An improvement's life. The four main portions of a usual monthly payment. Perfect Escrow: A complete escrow. Performance Bond: A bond posted by a builder to insure completion of a project.T. as in a subdivision. Payment Cap: The maximum amount for a payment under an adjustable mortgage loan. Partition: Any division of real property between co-owners. Plat Book: A book which contains the plat maps for an area.I. usually over ten years. Payoff: The payment in full of an existing loan balance or other lien. There is usually a minimum base rental.Principal. Piggyback Loan: Loan made jointly by two or more lenders on the same property under one mortgage or trust deed.htm 5/20/2006 .onlineed. Patent Defect: A defect plainly visible. P. using a percentage of the gross or net sales to determine the rent.I. http://www. Permanent Mortgage: A mortgage on completed construction for a long period of time.I.
but intended to enhance the value of property.htm 5/20/2006 . based on the presumption that a written easement was given. It may be necessary to have a prime tenant to obtain construction financing.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. insurance. or other agreed upon time. mortgage. Public Housing: A governmental housing project. Puffing: An opinion not made as a representation of fact.onlineEd.M. Purchase Money Mortgage: A mortgage given from buyer to seller to secure all or a portion of the purchase price. setting forth price and terms of sale. Dictionary of Real Estate Terminology Page 17 of 26 Plottage Increment: The increase in value created by joining smaller adjacent properties into one large parcel. After completion of the transaction. and other items between buyer and seller proportionately to time of use. although none existed. or trust deed imposed when the loan is paid before it is due. under a single ownership. Prepaid Interest: Interest paid before coming due. Principal: 1. which presents for a prospective investor. Prepayment Privilege: The right to prepay a loan without penalty. Prescriptive Easement: The granting of an easement by a court. Purchase Agreement: An agreement between a buyer and seller or real property. such as taxes. the details of an offering. http://www. Debt amount. a title insurance policy is issued. less the interest. Prospectus: A brochure.onlineed. insurance. Point: One percent of the amount of the loan. Power of Sale: Clause in a mortgage or deed of trust giving the mortgagee or trustee the power to sell the property in the event of default. closing date. see Private Mortgage Insurance. Preliminary Title Report: A report showing the condition of title before a sale or loan transaction. Prime Lending Rate: The most favorable interest rates charged by a commercial bank on short term loans. usually to accommodate low income families. etc.I. rental income. 2. either in full or in part. P. The person who gives authority to an agent or attorney. Prepayment Penalty: A penalty under a note. Prepaid Items: Those expenses of property which are paid in advance and will usually be prorated upon sale. after a period of open and continuous use of land. Proration: The dividing of property tax. rent. Prime Tenant: The major tenant in an office building or shopping center.
as distinguished from remodeling. being a six mile wide row of townships.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. from the reduction of loan principal. Rate of Return: The annual percentage of return on investment of income property. light fixtures. appreciation. R Range: A division of land in the government survey system. and used in legal descriptions. Recapture: The return of money invested in property. but not containing any warranty of a valid interest or title by the grantor. fences.onlineed. or other such items. Dictionary of Real Estate Terminology Page 18 of 26 Q Quitclaim Deed: A deed operating as a release. Reclamation: A process of bringing economically unusable land to a higher value by physically changing it. Recorded Plat: A subdivision map filed as a matter of public record. or other improvements. or claim which the grantor may have in the property.htm 5/20/2006 . Recordation: Filing instruments for public record and notice with a county recorder. Recorded Map: A map recorded in a county recorder's office. May be a subdivision map or describe a nonsubdivided parcel. Recorder's Office: A county office where instruments are recorded. It is usually realized when the property is sold. when title is held as secured collateral. Reconditioning: Restoring a property to good condition without changing its plan or character. and does not have streets. intended to pass any title. and income received. interest. running North and South. Realtor®: A designation given to a real estate broker or agent who is a member of a board associated with the National Association of Realtors®. and those things attached to the buildings. which has not been subdivided into lots. Reconveyance: An instrument used to transfer title from a trustee to the equitable owner of real estate. Raw Land: Land in its natural state. http://www. Reassessment: Re-estimating the value of all property in a given area for tax assessment purposes. Real Estate: Land and anything permanently affixed to the land.onlineEd. trees. Rate Index: An index used to adjust the interest rate of an adjustable rate mortgage. such as buildings. such as heating and plumbing fixtures. utilities.
creditors. such as created by a mortgage foreclosure or tax sale. Redemption Period: A time period during which a mortgage. or contract can be redeemed. Redemption: The process of canceling a defeasible title to land.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. http://www. Remodeling: Improving the structure by changing the plan. except when used in connection with urban renewal. elevators hallways. deed of trust. Rehabilitation: Synonymous with reconditioning. giving notice to future purchasers. Regulation Z: A regulation issued under the Truth-In-Lending Law. R. and after judicial foreclosure. and not including stairways. including structural. Remaining Economic Life: Number of years between the time of an appraisal and the point in time when an improvement becomes economically valueless. A method of investing in real estate in a group. public restrooms. The reissue rate is less than the original charge. at current market rates.I. Dictionary of Real Estate Terminology Page 19 of 26 Recording: Filing documents affecting real property as a matter of public record. Red Lining: An outlining on a map of certain high risk areas for real estate loan purposes. Rent: Consideration paid for the occupancy and use of real property. with certain tax advantages. Release: An instrument releasing property from a lien of a mortgage. or function. meaning that lenders will not extend credit in those areas. the instrument's called a reconveyance.htm 5/20/2006 . which requires that a credit purchaser be advised in writing of all costs connected with the credit portion of the purchase. When a deed of trust is used. judgment. as opposed to reconditioning.onlineed. or mortgage to bring it from default to good standing. and even street changes. characteristics.onlineEd. etc. Reinstatement: Payment of a note. Real estate investment trusts.E. Recording Fee: An amount paid to the recorder's office in order to make a document a matter of public record. Release Clause: A clause in a blanket encumbrance allowing for the release of certain parcels upon payment of a specified amount.T. deed of trust. at which time it encompasses all types of changes. Reissue Rate: A charge for a title insurance policy if a previous policy on the same property was issued within a specified time period. etc. Usually set by statute. Rentable Area: The area (square footage) for which rent can be charged. or other interested parties. Illegal in most states. Refinance: The renewing of an existing loan with the same borrower and lender.
A. Secondary Mortgage Market: The buying and selling of first mortgages or trust deeds. Satisfaction: Discharge of an obligation by payment of the amount due. The mortgages are normally sold at a discount. and subsequent adjustment of rent.htm 5/20/2006 . Second Mortgage: A mortgage which ranks after a first mortgage in priority. http://www. either permanent or temporary.E. Revenue Stamps: Formerly federal tax on the sale of real estate. Revaluation Clause: A clause in a lease calling for a periodic revaluation (appraisal) of the leased property. as part of the same transaction. comprising one square mile (640 acres). as on a mortgage or trust deed. either identical or of equal utility. created and retained by a grantor of property. Right of Anticipation: The right to prepay without penalty. Restrictions are set forth by former orders in a deed or by a recorded declaration of restrictions by a developer of a subdivision. Thirty-six sections comprise a township. Reproduction Cost: The cost of reproducing a property at current prices using similar materials. R. Secondary Financing: A loan secured by a mortgage or trust deed. Replaced by state tax stamps. Reservation: A right. from the buyer back to the seller. or payment of a debt awarded.S.P. which lien is secondary to another mortgage or trust deed.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. a federal statute. Restoration: Repair to a building to cause it to look like it did at an earlier time. Section: A division or parcel of land on a government survey. Dictionary of Real Estate Terminology Page 20 of 26 Replacement Cost: In appraising. Resident Manager: A manager of an apartment project who lives at the property. S Sale-Leaseback: A sale and subsequent lease.onlineed.onlineEd. the cost of a substitute property. Restriction: A use or uses prohibited to the owner of land. Right of Survivorship: The right of the survivor of a deceased person to the property of the deceased. which requires disclosure of certain costs in the sale of residential property that is financed by a federally insured lender. Real Estate Settlement Procedures Act. they are affixed to the deed to show the amount of the tax. such as satisfaction of a judgment. enabling lenders to keep adequate supplies of money for new loans.
Specific Performance: An action to compel the performance of a contract when money damages are inadequate. or lender. usually for a term of one to five years. There are nine square feet in one square yard. not having as broad of coverage as A. Short Term Capital Gain: Profit from the sale of a capital asset not held long enough to qualify as a long term capital gain. Square: A unit of measure in roofing or siding which equals ten feet by ten feet (100 square feet). Set Back Ordinance: Part of a zoning ordinance. giving a complete breakdown of costs involved in a real estate sale. Standard Coverage Policy: Title insurance policy used in some states. The standby loan is usually at a higher interest rate than a permanent loan.onlineed. policy. The listing and selling agent may be the same person or company. after completion of construction.onlineEd. under ten in others. some expenses are shared. Square Foot Cost: The cost of one square foot of floor space in a building or of land. in the event a permanent loan can not be obtained. Standard Depth: Depth of a lot considered to be the normal depth. By agreement. Shared Appreciation: The gaining or retaining of equity in a property by someone other than the buyer.L. Selling Agent: The real estate agent obtaining the buyer rather than listing the property. as well as any increase in value when the property is sold. Settlement Statement: A statement prepared by the broker.T. Standby Commitment: A commitment to issue a loan. Usually used to determine rental price of a building.A. escrow. indicating a lease under five years in some states. which regulates the distance from the lot line to the point where improvements may be constructed. pursuant to the execution of a judgment. Severalty: An estate of property held by one person alone. Traditionally. Special Assessment: Lien assessed against real property by a public authority to pay costs of public improvements which directly benefit the assessed property. Sheriff's Deed: Deed given at sheriff's sale in foreclosure of mortgage. as additional protection for the lender's interest.htm 5/20/2006 . The seller and buyer receive separate settlement statements. Short Term Lease: A general term. Dictionary of Real Estate Terminology Page 21 of 26 Security: Real or personal property pledged or hypothecated by a borrower. for appraisal purposes. 100 feet for a residential lot. Also given at a court ordered sale. The giving of said deed begins a statutory redemption period.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. and a standby fee is http://www. Square Foot: The area contained by boundaries of one foot long by one foot wide.
which contains the descriptions of all parcels within the county. its area. Statute of Frauds: Laws requiring certain types of contracts to be in writing. Statutory Lien: An involuntary lien. has become to be expressed as a percentage of valuation. the assessed values. Step-Up Lease: A lease calling for set increases in rent at set intervals.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms.onlineEd. Subdivision: A division of a single parcel of land into smaller parcels or lots. A lien for nonpayment of property taxes. and obtaining approval from a governmental commission. Dictionary of Real Estate Terminology Page 22 of 26 charged.htm 5/20/2006 . Sweat Equity: A program which allows a purchaser to do work on the property in place of all or part of the down payment and other costs of the purchase. over the economic life of the property. Modernly. attaching only to the property upon which the taxes are unpaid. and sometimes its topography. A federal income tax lien. Subcontractor: One who works under a general contractor. the ratio of dollars of tax per hundred or per thousand dollars of valuation. judgment liens. Straight-Line Depreciation: A method of replacing the capital investment of income property. Tax Rate: Traditionally. Survivorship: Gaining an interest in property by outliving another who had the interest. 2. etc. Tax Lien: 1. under which the lessor is the lessee of a prior lease of the same property. or cement contractor. including tax liens. created by law rather than by contract. and the tax amounts.onlineed. and leases for more than one year must be in writing. such an electrical. Standing Loan: A loan requiring interest payments only. mechanic's liens. the principal being paid in full at maturity. Survey: The measurement of the boundaries of a parcel of land. the names of the owners. Straight Lease: A lease calling for the same amount of rent to be paid periodically for the entire lease term. Sublease: A lease. by reducing the value of the property by a set amount annually from the income. T Take Out Loan: The permanent or long term financing of real estate after completion of construction. attaching to all property of one owing taxes. usually published by the county. by filing a map which describes the division. Tax Roll: A list. plumbing. All contracts for the sale of real property must be in writing. http://www.
Tract: A parcel of land. Time-Share: The purchase of an undivided interest (usually in a resort area condominium) for a fixed or variable time period. being six miles square and containing 36 sections. as one of many similar homes in a subdivision. the survivor owns the property without probate. Dictionary of Real Estate Terminology Page 23 of 26 Tenancy by the Entirety: A form of ownership by husband and wife whereby each owns the entire property. and in the event of the death of one.onlineed. synonymous with a subdivision. Title Search: A review of all recorded documents affecting a specific piece of property to determine the present condition of title. http://www. but who holds over after termination of his interest. In the event of the death of one. conditions of sale. Township: A territorial division of land established by federal survey. Title Plant: A filing of all recorded information to real property. each one mile square. as opposed to a custom house. Terms: The considerations. other than price. which is built to the specifications of the owner. The interests need not be equal. the specific payment schedule. Title: Evidence one has of right to land possession. etc. etc.htm 5/20/2006 . Tenancy in Common: An undivided ownership in real estate by two or more persons. paralleling the records of the county recorder's office. lease. in a sale. mortgage. pro ration dates. Tenant for Life: An estate in real property for the life of a living person. Testate: Having written a last will and testament. Tenant at Will: One who holds possession by permission of the owner or landlord. the survivor owns the property without probate. Title Insurance: Insurance against loss resulting from defects of title to a specifically described parcel of real property. but without agreement for a fixed term of possession. The estate then reverts back to the grantor or on to a third party. For example. Tenancy for Years: Any estate for a definite time period (a lease). Tenant in Severalty: One who owns property alone. Tract House: A house built using the plan of the builder. Title Theory: A theory followed in several states that the mortgagee has legal title to the mortgaged property and the mortgagor has equitable title.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. possession and closing dates. In some states. Tenant at Sufferance: One who comes into possession lawfully.onlineEd.
Underwriter: One who insures another. 2. Trustee: One who holds title to real property under the terms of a deed of trust. the life set for depreciation. At any time during that period. Trustor: The borrower under a deed of trust. and reconveyed upon full payment. for sale purposes. or contract prior to new security instruments on the same property. Use Density: The relationship of the number of buildings of a particular use to a given land area. whether the interest of each is equal or unequal. Trust Account: An account used by brokers. Property is transferred to a trustee by the borrower (trustor). land without buildings. Vacant Land: Land without buildings. Unencumbered: Free of liens and other encumbrances. Unimproved Land: Most commonly. in favor of a lender (beneficiary). Dictionary of Real Estate Terminology Page 24 of 26 Transfer Tax: A state tax on the transfer of real property. sewers. escrow agents. deed of trust. Useful Life: 1. the true economic value of a building in terms of years use to the owner. a new life could begin with a new owner. such as grading.onlineEd. One who deeds his property to a trustee as security for the repayment of a loan. a small title company may buy insurance from a larger one (underwriter) for all or part of the liability of its policies.onlineed.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. Trust Deed: An instrument used in many states in place of a mortgage.htm 5/20/2006 . etc. or anyone holding money in trust for another. U Underlying Financing: A mortgage. Upset Price: A legal term signifying the minimum price at which a property can be sold at auction. V Vacancy Factor: The estimated percentage of vacancies in a rental project. http://www. usually foreclosure. Undivided Interest: A partial interest by two or more people in the same property. May or may not have improvements. It can also mean land in its natural state. For tax purposes. Free and clear. For example. pursuant to foreclosure. Trustee's Deed: A deed by a trustee under a deed of trust. In appraisal.
This is done when the mortgage company wishes to assemble a block of loans for sale.A. there are usually maximums as to the frequency and the amount of fluctuation. In mortgages.A. Wrap-Around Mortgage: 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 under the wrap-around collects a payment based on its face value and then pays the first mortgagee. W Warehousing: The depositing of loans by a lender such as a mortgage company. Commonly used in land contract sales. Dictionary of Real Estate Terminology Page 25 of 26 V. Vendor: The seller or person who transfers property by sale. enabling the veteran to buy with little or no down payment. or when the company believes that the discount rate is dropping and the loans may be sold for a higher price in the future.onlineEd. Vendee: The purchaser. Variance: Change of a portion of zoning requirements for a specific property. Writ of Ejectment: An action for the recovery of real property.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. V. An appraisal. or other lender which is insured by the Veteran's Administration. Escape Clause: A clause stating that the borrower shall not be obligated to buy nor shall any deposit be lost if appraisal is less than the agreed upon price. X Y Yield: Ratio of income from an investment to the total cost of the investment over a given time period. Most commonly.onlineed. Warranty Deed: A deed used in many states to convey fee title to real property. Writ of Execution: An action to carry out the judgment or decree of a court. Variable Interest Rate: An interest rate which fluctuates as the prevailing rate moves up or down. for sale at a later date. savings and loan. Loan: Housing loan to a veteran by a bank. especially on a land contract. without changing the zoning. Voluntary Lien: A lien placed against real property by the voluntary act of the owner.htm 5/20/2006 . http://www. in a bank. Valuation: The estimating of value. a mortgage or deed of trust. The mortgage company then borrows against these loans.
Dictionary of Real Estate Terminology Page 26 of 26 Z Zero Lot Line: The construction of a building on any of the boundary lines of a lot.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. TOP OF PAGE http://www. Zoning: The division of a city or county by legislative regulations into areas or zones.onlineEd.onlineed. specifying the uses allowable for the real property in those areas. such as a store built to a sidewalk. Usually built on the front line.htm 5/20/2006 .
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