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