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