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