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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
and dividing by a rate of return percentage which is commonly acceptable to buyers of similar properties (i.e.) for a fee. Dictionary of Real Estate Terminology Page 3 of 26 insufficient to fully amortize the loan. Capitalization: The determination of present value of income property by taking the annual net income. generally made between a short term loan and long term loan. Cap: The maximum increase of an adjustable rate mortgage. Cancellation Clause: A clause in a lease or other contract setting forth the conditions under which each party may cancel or terminate the agreement. Brokerage: The act of bringing together principals (buyer-seller. construction. Capitalization Rate: The percentage used to determine the value of income property through capitalization. Blanket Mortgage: A mortgage covering more than one property. stoves. and generally the difference between cost and selling price. Build to Suit: The building of a structure to meet the specifications of a purchaser. and repair.909). framed into the home construction.htm 5/20/2006 . materials used.onlineed. $10. Capital Gains: Gains realized from the sale of capital assets. Bundle of Rights: All rights and interests of ownership in real property considered together. the actual cash that the investor will receive after http://www. Bridge Loan: An interim loan.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. dishwashers. ovens. landlord-tenant. when the borrower needs to have more time before taking the long term. Bill of Sale: An instrument by which one transfers personal property. but separable.000 / 11% = $90. usually when more homes are for sale than there are interested buyers. C Call: To demand payment due to default. financing. Built-ins: Commonly. etc. use. Used mainly for income tax purposes. Buyer's Market: A market condition favoring the buyer. Buy Down: A payment to the lender for the purpose of reducing the interest rate for the loan. Cash Flow: In investment property. including design. or permanent. Building Code: A comprehensive set of laws which control the construction of buildings.onlineEd. or due prior to the end of the amortization period. and other appliances. less deductible expenses.
onlineEd. starting from original owner. the interior space of which are individually owned. where the seller has legal title until paid in full. Chain of Title: The chronological order of conveying of a parcel of land. Dictionary of Real Estate Terminology Page 4 of 26 deduction of operating expenses and debt service from his gross income. transfer fees.onlineed. but only upon payment of just compensation. Cash Out: To take the entire amount of a seller's equity in cash rather than to retain some interest in the property. Comparative Analysis: A comparison of similar properties to a subject property for the purpose of evaluating market value and proper pricing. http://www. issued upon completion of improvements. Condemnation: The taking of private property for public use without the consent of the owner. Comparables: Similar properties used as comparisons to determine the value of a specific property. escrow fees. Construction Loan: Short term financing of real estate construction which is generally followed by a long term loan. Contingency: The dependence upon a stated event that must occur before a contract is binding. A term used to describe the limitations which may be placed on property. such as in a deed of trust.C. Contract for Deed: An installment contract for the sale of real estate. appraisal fees. would affect the rights of ownership. Chattel Mortgage: A lien on personal property. brokerage fees. and other related costs. title fees. Closing Statement: The computation of financial adjustment between buyer and seller as of the day of closing. such as loan fees. if valid. conditions. The buyer only has equitable title during the contract term.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. Closing Costs: Expenses incidental to a sale of real estate. but which are under separate ownership. which. C. Closing: Process by which all parties to the transaction conclude the details of a sale.htm 5/20/2006 . and restrictions. Condominium: A structure of two or more units. including the signing and transfer of documents and the distribution of funds.& Rs: Covenants. with the balance of the property (both land and building) owned in common by the owners of each unit. Cloud on Title: An invalid encumbrance on real property. recording fees. Chattel: Personal property. Common Wall: A wall erected on a property boundary as a common support to structures on both sides.
Cost Approach: An appraisal method. Includes most instruments by which an interest in real estate is created. Creative Financing: A general term which encompasses any method of financing property going beyond traditional real estate lending. Deferred Maintenance: Repairs necessary to put a property in good condition. or a loss in value as an accounting procedure to use as a deduction for income tax purposes. less depreciation. Courtesy to Brokers: Willingness of a seller to pay a commission to any broker supplying a suitable buyer. Depreciation: A decrease in value to real estate improvements caused by deterioration or obsolescence. Counter Offer: An offer (instead of acceptance) in response to an offer. including interest and principal payments. or implied by law. the placing of the property in the actual or constructive possession of the grantee. Depreciable Life: A tax term meaning the number of years used to determine the depreciation of an asset.onlineEd. mortgaged. Devise: Real estate left by will. Discount Points: The amount of money the borrower or seller must pay the lender to get a http://www. Conveyance: Transfer of title to land.onlineed. Delivery: In conveying. Deed Restrictions: Limitations on the use of property placed in the conveying deed by the grantor. which binds all future owners.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms.htm 5/20/2006 . D Debt Service: The amount of financing. Covenant: Assurances set forth in a deed by the grantor. Cooperating Broker: The broker who finds the buyer and so shares in the commission with the listing broker. usually accomplished by delivery of a deed to the buyer. estimating the replacement cost of a structure. Deed of Trust: Similar to a mortgage. Dictionary of Real Estate Terminology Page 5 of 26 Conventional Loan: A mortgage or deed of trust not obtained under a government program. Deed: A conveying instrument used to pass title to property upon sale. or by the recording of the deed. on a property. plus land value. or assigned. a security instrument whereby real property is given as security for a debt.
Encumbrance: A claim. viewed from the front. Distress Sale: A sale of property when the seller is under extreme pressure to sell. Economic Life: The profitable life of an improvement. 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. Easement: A right created by grant. which one has in the land of another. Encroachment: Generally. Down Payment: Cash portion paid by the buyer from his own funds. building. agreement. as of a wall. and the payment of just compensation. or necessary implication. Equitable Ownership: Ownership by one who does not have legal title. Dictionary of Real Estate Terminology Page 6 of 26 mortgage at a stated interest rate. such as a vendee under a land sales contract. etc.. fence. which is generally shorter than the physical life. or liability attached to and binding real property.htm 5/20/2006 . Dual Agency: The representation by an agent of opposing principals (buyer and seller) at the same time. Ejectment: A court action to recover real property.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms.onlineEd. Equal Credit Opportunity: Federal act granting women certain independent status. Economic Obsolescence: Loss of desirability and useful life of a property through economic forces. even though the actual rent may be different. rather than deterioration. Equity: Market value of real property. This practice is illegal in some states. usually but not always. reservation. charge. http://www. Effective Age: Age of a structure as estimated by condition rather than actual age. and which generally results in the property selling for less than market value. Eminent Domain: A governmental right to acquire property for public use by condemnation. etc. Economic Rent: The market rental value of a property at any given time. less the amount of existing loan balances. such as zoning changes. and preventing lenders from considering such negative credit aspects as the possibility of a woman having children and dropping out of the labor market.onlineed. Elevation: The exterior design of a structure. traffic pattern changes. A point is equal to one percent of the loan amount. as opposed to that portion of the purchase price which is financed. lien. prescription. construction onto the property of another.
Escrow Instructions: Instructions which are signed by both buyer and seller. sex. enabling lenders to loan a very high percentage of the sales price. The estate then reverts back to the grantor or to a third party.A. Fair Housing Law: Title VIII of the Civil Rights Act. 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. usually when a property owner dies without a will. F.A. Estate: The interest or nature of the interest which one has in property. which forbids discrimination in the sale or rental of residential property because of race. Estate in Remainder: An estate which vests in one other than a grantor. Estate of Inheritance: An estate which may descend to heirs. Exchange: A reciprocal transfer of real property which has certain tax advantages over a sale. F.:A federal agency which insures first mortgages. and can be left by will or inherited. or national origin.H. 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. Fee Simple: An estate under which the owner is entitled to unrestricted powers to dispose of the property. http://www. color. and which processes them according to instructions. regardless of whether or not the broker is the cause of sale.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. Estate for Life: An estate in real property for the life of a living person. after the termination of an intermediate estate.onlineEd. Escrow: A neutral third party which receives all funds and instruments necessary to a sale. Dictionary of Real Estate Terminology Page 7 of 26 Equity Loan: A loan based upon the equity in a property.onlineed. religion. 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. Escalation Clause: A clause in a lease providing for an increased rental at a future time. and which enable an escrow agent to carry out the procedures necessary to transfer real property. Escheat: A reversion of property to the state in the absence of an individual owner.H.htm 5/20/2006 . Estate for Years: Any estate for a definite period of time. among other rights. F Fair Credit Reporting Act: A federal law giving one the right to see his or her credit report. such as a lease.
Front Footage: Linear measurement along the front of a parcel. including any known property defects or problems. Fixed Rate Loan: A loan having a rate of interest which remains the same for the life of the mortgage. It is usually used for commercial property. G Gap Financing: Loans secured as interim financing until more permanent financing can be obtained. Fiduciary: One acting in a relationship of trust. Functional Obsolescence: The need for replacement because a structure or equipment has become inefficient because of improvements since discovered or invented.H. Free and Clear: Real property against which there are no liens. to extinguish all rights.Federal Home Loan Mortgage Corporation. Freehold: An estate.A. First Mortgage: A mortgage having priority over all other voluntary liens against certain property. secured under the same instrument and by the same real property. both conventional and federally insured.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. from members of the Federal Reserve System and the Federal Home Loan Bank System. usually regarding financial transactions.htm 5/20/2006 .onlineed. Future Advance Clause: A clause in a mortgage or deed of trust which allows the borrower to borrow additional sums at a future time. Dictionary of Real Estate Terminology Page 8 of 26 F. also called Fannie Mae. at discounts. Grace Period: A period of time past the due date for a payment. and interest of the owners of property in order to sell the property to satisfy a lien against it. whereby the lessee can match a legitimate offer. the portion fronting on a major road. title. during which time a payment may be made and not considered delinquent.C. A federal agency which purchases first mortgages. Full Disclosure: The act of revealing all known facts which may affect the decision of a buyer.M. A private corporation which deals in the purchase of first mortgages. 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. 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 Freddie Mac. http://www.Federal National Mortgage Association. Fixtures: Personal property which is attached to real property.N. especially voluntary liens. that is.L.M.onlineEd. and is legally treated as real property while it is so attached. Foreclosure: A procedure in or out of court. F.
which. vandalism. utilities. Gross Income: The scheduled total income. such as taxes. allowing low beginning payments and a shorter term because of higher payments as loan progresses. If the property is improved. Gross Acre: An acre (43. depending upon the terms of the policy. usually based on periodic appraisal or simply the passage of time. Dictionary of Real Estate Terminology Page 9 of 26 Graduated Lease: A lease calling for a varying rental. insurance. derived from a business or property. was permissible. will theoretically determine the market value. etc. when multiplied by the annual gross income. irrespective of the area inside actually usable or rentable. Grantee: One to whom property or property rights is given. Hazard Insurance: Real estate insurance protecting against loss caused by fire. the outside dimensions determine the gross area. but because of a change in the law. etc.htm 5/20/2006 .. Hectare: A unit of measurement. or land exclusive of any buildings on it. generally the buyer. H Habendum Clause: The clause in a deed which defines the extent of the estate of the grantee. A general rule of thumb which varies with specific properties and areas. as distinguished from a net (usable) acre. Grantor: One who transfers property or property rights. Gross Income Multiplier: A figure which. Ground Lease: A lease of vacant land. Gross Area: In building measurement.000 square meters (2. http://www. is not now permissible. One who gives a deed. either actual or estimated. Holdback: Portion of a loan held back by the lender until a certain contingency is met.onlineed. Gross Rent Multiplier: A method of obtaining an approximate value of income property by using gross yearly rents.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. some natural causes. Ground Rent: Rent paid for vacant land. business. graduated payment loan.560 square feet). Growing Equity Mortgage: A fixed rate. Gross Lease: A lease which obligates the lessor to pay all or part of the expenses of the leased property.onlineEd.. Highest and Best Use: The use of land which will bring the greatest economic return over a given time. ground rent is that portion which is attributable to the land only. Grandfather Clause: The clause in a law permitting the continuation of a use. when established. equaling 10.471 acres). etc.
Dictionary of Real Estate Terminology Page 10 of 26 Holding Period: The time period used by the I.R. to determine a long or short term capital gain. etc. H. Hypothecate: To mortgage or pledge without delivery of the security to the lender. payment or rate. A federal cabinet department responsible for the major housing programs in the United States.htm 5/20/2006 .The Department of Housing & Urban Development. Improvements: Generally. Interest: Money charged for the use of money (principal).A. The period during which the taxpayer owns the asset. formed for the purpose of improving or maintaining the quality of the area. Indexing: Altering the mortgage term.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms.S. insurance. such as a street. or both. Homeowners' Association: An association of people who own homes in a given area. protecting homestead property (usually to a set maximum amount) against the rights of creditors. Home Warranty Insurance: Private insurance insuring a buyer against defects (usually in plumbing. http://www.D. 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. I Implied Agency: An agency which is not expressly set out but must be deduced from the circumstances. offsite improvements. buildings. such as F. normally including improvements but not land or other indestructible parts. utilities. and other such coverage. Impound Account: Account held by a lender for payment of taxes. or other periodic debts against real property.U. usually from rental.onlineed. 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. and heating) in the home he has purchased. Improved Land: Land having either on-site improvements. Homestead: The dwelling (house and contiguous land) of the head of a family. Insurable Value: Value of property for insurance purposes. Some states grant statutory exemptions. according to inflation or suitable rate index. Homeowners' Insurance: Includes the coverage of personal liability and theft from the home. but may include any permanent structure or other development.onlineEd. electrical.H. Income Property: Property which produces income.
As the interest decreases. The interests must be equal. and beginning at the same time. Landlord's Warrant: A warrant enabling a landlord to levy upon a tenant's personal property. rather than a mortgage lien. Expressed as a percentage of the amount invested. which attaches to property without the consent of the owner. Interim Financing: Temporary financing. Dictionary of Real Estate Terminology Page 11 of 26 Interest Extra Note: A note requiring an equal (usually monthly) payment on principal. http://www. Landlord: An owner of leased real estate. taken by two or more joint tenants. As the principal decreases. occurring under the same conveyance.htm 5/20/2006 . including both income and resale. Interest is figured on the declining principal balance. and to sell property at a public sale to collect delinquent rent. based on declining principal balance. the interest passes to the surviving joint tenants. Usually expressed as an annual percentage. Periodic interest payments are made. such as a tax lien or judgment lien. Investment Yield: The gain from an investment in real property. The seller (vendor) has legal title until paid in full. Intestate: Without leaving a will. The buyer (vendee) has equitable title during the contract term.onlineEd. The amount applied to principal remains the same. Interest Included Note: A note having equal payments (usually monthly). plus interest. rather than to the heirs of the deceased.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. applying more of each payment to the principal.onlineed. Junior Mortgage: Any mortgage of lesser priority than a first mortgage. K L Land Sales Contract: An installment contract for the sale of land. interest also decreases. Judgment Lien: An involuntary lien against the property of someone who has been made a debtor on the basis of a judgment. the total payment decreases. to which the owner agrees. usually for construction. Interest Only Mortgage: A mortgage under which the principal amount borrowed is repaid in one payment. Upon the death of a joint tenant. Interest Rate: The percentage of an amount of money which is paid for its use for a specified time. J Joint Tenancy: An undivided interest in property. Involuntary Lien: A lien.
Lien Theory: A theory followed in several states that assumes a mortgage has only a lien on the mortgaged property. and for consideration. 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). which could not be discovered by inspection. Listing: An agreement between the owner of real property and a real estate agent. These http://www. is interested in property. 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. but not all encumbrances are liens.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms.onlineEd. either voluntary or involuntary. Legal Description: A method of geographically identifying a parcel of land. using reasonable care. and usually a percentage of the loan amount. who finds a buyer. such as through zoning plans. but to purpose and intent (investment) of the taxpayer. as opposed to a selling agent. Loan Package: The file of all items necessary for the lender to consider giving a loan.onlineed. Leasehold: An estate held under a lease for a fixed term. whereby the agent agrees to secure a buyer or tenant for specific property at a certain price and terms in return for a fee. or lessee. Letter of Intent: A formal method of stating that a prospective developer. Listing Agent: A real estate agent who obtains a listing. Like Kind Property: A tax term used in exchanges. Loan Origination Fee: A one time set-up fee charged by the lender. buyer. under certain conditions. The term does not refer to the physical similarity of the properties. for a specified period of time. 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. which is acceptable in a court of law. 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. Lessee: The party to whom a lease is given in return for consideration (rent).htm 5/20/2006 . Lease-Purchase Option: A lease under which the lessee has the right to purchase the property. Lis Pendes: A legal notice recorded to show pending litigation related to real property. and the mortgagor has legal title. Lien: An encumbrance against property for money. Latent Defect: A hidden or concealed defect. All liens are encumbrances.
Lot: Generally.A. and information on the property (appraisal.onlineEd. Month to Month Tenancy: A tenancy where no written lease is involved.A. Maturity: Termination period of a note. and which attaches to land as well as improvements. Market Value: The highest price a willing buyer would pay and a willing seller would accept. or in some areas. thus enabling the lender to loan a higher percentage of the sales price. survey. any portion or parcel of real property.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. of the amount of a loan to the value or selling price of real property. Metes and Bounds: Description of land by boundary lines. The federal government writes this form of insurance through the F. as distinguished from interim loans or construction loans. 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.H. credit report. M. etc. Long Term Financing: A mortgage or deed of trust for a term of ten years or more. financial statement. expressed as a percentage. with their terminal points and angles.onlineed. and the V. both being fully informed. 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.). Master Policy: An insurance policy to a lender covering property in more than one location.htm 5/20/2006 . Dictionary of Real Estate Terminology Page 13 of 26 items would include the information on the prospective borrower (loan application. Master Plan: A zoning plan for an entire governmental entity. Long Term Lease: A general term which may refer to a lease ten years or longer in term. Master Lease: A lease controlling subsequent leases. so that the borrower is 'locked-in' to the loan for a specified period. Usually refers to a portion of a subdivision. and the property exposed for a reasonable period of time.I. five years or longer. The price paid for insurance protecting the mortgage lender against loss incurred by a mortgage default. etc. Loan Ratio: The ratio. rent being paid http://www. Lock-In: The prohibition of a loan secured by a mortgage or deed of trust. M Market Approach: Appraising the value of property by comparing the price of similar properties (comparables) recently sold.P. employment letters.Mortgage insurance premium.).
com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. Mortgage Banker: A company providing mortgage financing with its own funds rather than simply bringing together lender and borrower.htm 5/20/2006 . releasing the lien upon payment in full.H. education. National Association of Realtors®. Mortgage Broker: One. 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. Multifamily Dwelling: A building designed as a dwelling for more than one family. the mortgage is paid in full. an association of people dedicated to the betterment of the real estate industry. through legislation. sidewalks. and high ethical standards. Negative Cash Flow: When the income from an investment property does not equal the usual expenses. such as collecting payments. http://www. etc. Net Acre: An acre which may be used for the building of structures. for a fee.A. Even though payments are made on time. Mortgage Servicing: Controlling the necessary duties of a mortgagee. as does a mortgage broker. Negative Amortization: A condition created when a loan payment is less than interest alone. N N. submitted to all members of an association.onlineEd. Servicing may be done by the lender or a company acting for the lender. Mortgagor: The party who borrows the money and gives the mortgage.R. and V. In the event of death of the insured. Multiple Listing:An exclusive listing. as opposed to that area which is not usable or must be used for off-site improvements such as streets. so that each may have the opportunity to sell the property. The beneficiary is the mortgagee. brings together borrower and lender. thus enabling the lender to loan a higher percentage of the sales price. the amount owing increases. Mortgage Insurance: Insurance written by an independent mortgage insurance company protecting the mortgage lender against loss incurred by a mortgage default. Mortgage: The instrument by which real estate is hypothecated as security for the repayment of a loan. The federal government writes this type of insurance through the F. foreclosing if in default. Dictionary of Real Estate Terminology Page 14 of 26 monthly. Mortgagee: The party lending the money and receiving the mortgage.onlineed. who for a fee. making sure taxes are paid and insurance is in force.A. etc.A. and handles the necessary applications for the borrower to obtain a loan against real property by giving a mortgage or deed of trust.
Net Listing: A listing under which a real estate broker receives any amount over a given net amount to the seller. but before debt service. such as a fire or other natural disaster. insurance. Open Space Ratio: Ratio of land area to floor area of an apartment building. debt. Open Mortgage: A mortgage that can be prepaid without penalty. Open House: A house which is open without an appointment to prospective buyers or tenants. or obligation. and must bring in his offer before any other offer is accepted. usually as to the assets of the mortgage. such as taxes.htm 5/20/2006 . which does not usually repeat itself. http://www. Open Listing: A written authorization to a real estate broker by a property owner. during certain hours and days of the week. Used in zoning requirements. etc. 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. Notice to Quit: A notice by a landlord to a tenant to vacate rented property. for an existing one. the broker has no exclusive right to sell. for inspection. with the secured property as the only recourse. However. the expenses of the property leased.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. Usually provides for interest and is secured by a mortgage or deed of trust. Notice of Cessation: A notice stating that work has stopped on a construction project.onlineEd. stating that a commission will be paid to the broker upon presentation of an offer which meets a specified price and terms. in order to form a contract. between the same or different parties. Novation: Substitution of a new contract. recorded to show that a construction job has been completed. with certain conditions. To be legally binding an offer must be definite as to price and terms.onlineed. Non-recourse Loan: A loan not allowing for a deficiency judgment. Dictionary of Real Estate Terminology Page 15 of 26 Net Income: The difference between adjusted gross income and operating expenses. Offer and Acceptance: Necessary elements of a contract to sell real estate. Illegal in some states. Open-End Mortgage: A mortgage permitting the mortgagor to borrow additional money under the same mortgage. in addition to a fixed rental. Notice of Completion: A notice. O Offer: A presentation or proposal for acceptance. Net Lease: A lease requiring the tenant to pay.
usually over ten years. Participation: Lender involvement in a development for a percentage of the gross sales or profit. regardless of the increase in the interest rate.I.Principal and interest. Dictionary of Real Estate Terminology Page 16 of 26 P Partial Release: A release of a portion of property covered by a mortgage. and insurance. Patent Defect: A defect plainly visible. as well as interest on the loan. Usually part of an existing escrow. P. negative amortization is created. If the payment is less than the interest alone. Perfect Escrow: A complete escrow. 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. http://www. There is usually a minimum base rental.htm 5/20/2006 . or one that would be discovered by the exercise of ordinary care. The four main portions of a usual monthly payment. Also called a take out loan. usually on a retail business property. P.Principal. Payoff: The payment in full of an existing loan balance or other lien.onlineEd. using a percentage of the gross or net sales to determine the rent. Plat Book: A book which contains the plat maps for an area. Physical Life: An improvement's life. when properly maintained. Used to indicate what's included in a monthly payment on real property. Piggyback Loan: Loan made jointly by two or more lenders on the same property under one mortgage or trust deed. as in a subdivision.I. Percentage Lease: A lease.onlineed.T. Plat Map: A map dividing a parcel of land into lots. taxes. When the escrow agent has all instruments and instructions necessary to carry out the transaction. resulting in individual ownership and interests. Performance Bond: A bond posted by a builder to insure completion of a project.I. interest. Payment Cap: The maximum amount for a payment under an adjustable mortgage loan. Payoff Escrow: An escrow specifically for the purpose of paying off an existing loan. in the event of poor sales. and called a sub escrow. Permanent Mortgage: A mortgage on completed construction for a long period of time.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. Partition: Any division of real property between co-owners.
Prepayment Privilege: The right to prepay a loan without penalty. Prospectus: A brochure. less the interest. 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. although none existed. Prescriptive Easement: The granting of an easement by a court. insurance. Prepaid Interest: Interest paid before coming due. Debt amount. rental income. Puffing: An opinion not made as a representation of fact. setting forth price and terms of sale. but intended to enhance the value of property. either in full or in part. 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.I. etc. P.onlineed. mortgage. and other items between buyer and seller proportionately to time of use. The person who gives authority to an agent or attorney. a title insurance policy is issued.M. http://www. After completion of the transaction. Preliminary Title Report: A report showing the condition of title before a sale or loan transaction. It may be necessary to have a prime tenant to obtain construction financing. or trust deed imposed when the loan is paid before it is due. Purchase Money Mortgage: A mortgage given from buyer to seller to secure all or a portion of the purchase price. or other agreed upon time. Prime Tenant: The major tenant in an office building or shopping center.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. which presents for a prospective investor. Point: One percent of the amount of the loan. under a single ownership. Purchase Agreement: An agreement between a buyer and seller or real property. Prepayment Penalty: A penalty under a note. after a period of open and continuous use of land. insurance. the details of an offering. Prime Lending Rate: The most favorable interest rates charged by a commercial bank on short term loans.htm 5/20/2006 . Prepaid Items: Those expenses of property which are paid in advance and will usually be prorated upon sale. see Private Mortgage Insurance. 2. closing date.onlineEd. based on the presumption that a written easement was given. rent. usually to accommodate low income families. Principal: 1. Proration: The dividing of property tax. such as taxes.
Reconveyance: An instrument used to transfer title from a trustee to the equitable owner of real estate. and used in legal descriptions. Reconditioning: Restoring a property to good condition without changing its plan or character. and does not have streets. intended to pass any title.htm 5/20/2006 . fences. light fixtures. or other such items. Real Estate: Land and anything permanently affixed to the land. Recordation: Filing instruments for public record and notice with a county recorder. Recapture: The return of money invested in property. 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. interest. http://www. R Range: A division of land in the government survey system. which has not been subdivided into lots. but not containing any warranty of a valid interest or title by the grantor. such as heating and plumbing fixtures.onlineEd. May be a subdivision map or describe a nonsubdivided parcel.onlineed. Recorded Plat: A subdivision map filed as a matter of public record. It is usually realized when the property is sold. or other improvements. Reassessment: Re-estimating the value of all property in a given area for tax assessment purposes. utilities. and income received. from the reduction of loan principal. Dictionary of Real Estate Terminology Page 18 of 26 Q Quitclaim Deed: A deed operating as a release. 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®. running North and South. Recorder's Office: A county office where instruments are recorded. trees. being a six mile wide row of townships.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. Raw Land: Land in its natural state. or claim which the grantor may have in the property. Rate Index: An index used to adjust the interest rate of an adjustable rate mortgage. such as buildings. appreciation. and those things attached to the buildings. as distinguished from remodeling. Recorded Map: A map recorded in a county recorder's office. when title is held as secured collateral.
and not including stairways.I. etc. Release Clause: A clause in a blanket encumbrance allowing for the release of certain parcels upon payment of a specified amount.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. Regulation Z: A regulation issued under the Truth-In-Lending Law. http://www.T. and even street changes. at current market rates. Rent: Consideration paid for the occupancy and use of real property. with certain tax advantages. at which time it encompasses all types of changes. Recording Fee: An amount paid to the recorder's office in order to make a document a matter of public record. Usually set by statute. or mortgage to bring it from default to good standing. Redemption: The process of canceling a defeasible title to land.E. Illegal in most states. public restrooms.onlineEd. such as created by a mortgage foreclosure or tax sale. Rentable Area: The area (square footage) for which rent can be charged. Remaining Economic Life: Number of years between the time of an appraisal and the point in time when an improvement becomes economically valueless. Dictionary of Real Estate Terminology Page 19 of 26 Recording: Filing documents affecting real property as a matter of public record. Red Lining: An outlining on a map of certain high risk areas for real estate loan purposes. including structural. Reissue Rate: A charge for a title insurance policy if a previous policy on the same property was issued within a specified time period. giving notice to future purchasers. deed of trust. or contract can be redeemed. A method of investing in real estate in a group.htm 5/20/2006 . judgment.onlineed. etc. Refinance: The renewing of an existing loan with the same borrower and lender. The reissue rate is less than the original charge. or other interested parties. and after judicial foreclosure. deed of trust. meaning that lenders will not extend credit in those areas. characteristics. Reinstatement: Payment of a note. creditors. which requires that a credit purchaser be advised in writing of all costs connected with the credit portion of the purchase. or function. Rehabilitation: Synonymous with reconditioning. When a deed of trust is used. Remodeling: Improving the structure by changing the plan. except when used in connection with urban renewal. the instrument's called a reconveyance. as opposed to reconditioning. Release: An instrument releasing property from a lien of a mortgage. R. Real estate investment trusts. Redemption Period: A time period during which a mortgage. elevators hallways.
S. R. from the buyer back to the seller. S Sale-Leaseback: A sale and subsequent lease.onlineed. either identical or of equal utility. The mortgages are normally sold at a discount. Secondary Financing: A loan secured by a mortgage or trust deed. either permanent or temporary. which lien is secondary to another mortgage or trust deed. comprising one square mile (640 acres). Satisfaction: Discharge of an obligation by payment of the amount due.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms.onlineEd. Dictionary of Real Estate Terminology Page 20 of 26 Replacement Cost: In appraising. Reproduction Cost: The cost of reproducing a property at current prices using similar materials. which requires disclosure of certain costs in the sale of residential property that is financed by a federally insured lender.htm 5/20/2006 . Secondary Mortgage Market: The buying and selling of first mortgages or trust deeds. Restoration: Repair to a building to cause it to look like it did at an earlier time. Revenue Stamps: Formerly federal tax on the sale of real estate.E.P. Replaced by state tax stamps. http://www. Right of Anticipation: The right to prepay without penalty. Section: A division or parcel of land on a government survey. and subsequent adjustment of rent. they are affixed to the deed to show the amount of the tax. Right of Survivorship: The right of the survivor of a deceased person to the property of the deceased. a federal statute. Real Estate Settlement Procedures Act. created and retained by a grantor of property. Revaluation Clause: A clause in a lease calling for a periodic revaluation (appraisal) of the leased property.A. as on a mortgage or trust deed. the cost of a substitute property. Reservation: A right. Thirty-six sections comprise a township. as part of the same transaction. or payment of a debt awarded. Second Mortgage: A mortgage which ranks after a first mortgage in priority. such as satisfaction of a judgment. Restriction: A use or uses prohibited to the owner of land. 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.
T. Sheriff's Deed: Deed given at sheriff's sale in foreclosure of mortgage. as well as any increase in value when the property is sold. The seller and buyer receive separate settlement statements. Shared Appreciation: The gaining or retaining of equity in a property by someone other than the buyer.A. usually for a term of one to five years. indicating a lease under five years in some states. The listing and selling agent may be the same person or company. Standard Coverage Policy: Title insurance policy used in some states. There are nine square feet in one square yard. Square Foot Cost: The cost of one square foot of floor space in a building or of land.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. Dictionary of Real Estate Terminology Page 21 of 26 Security: Real or personal property pledged or hypothecated by a borrower.onlineEd. Short Term Capital Gain: Profit from the sale of a capital asset not held long enough to qualify as a long term capital gain. and a standby fee is http://www.htm 5/20/2006 .L. 100 feet for a residential lot.onlineed. after completion of construction. Specific Performance: An action to compel the performance of a contract when money damages are inadequate. as additional protection for the lender's interest. in the event a permanent loan can not be obtained. Square Foot: The area contained by boundaries of one foot long by one foot wide. Set Back Ordinance: Part of a zoning ordinance. Usually used to determine rental price of a building. giving a complete breakdown of costs involved in a real estate sale. Severalty: An estate of property held by one person alone. policy. some expenses are shared. The standby loan is usually at a higher interest rate than a permanent loan. Square: A unit of measure in roofing or siding which equals ten feet by ten feet (100 square feet). Standby Commitment: A commitment to issue a loan. which regulates the distance from the lot line to the point where improvements may be constructed. under ten in others. for appraisal purposes. pursuant to the execution of a judgment. Also given at a court ordered sale. The giving of said deed begins a statutory redemption period. Standard Depth: Depth of a lot considered to be the normal depth. By agreement. Settlement Statement: A statement prepared by the broker. not having as broad of coverage as A. Selling Agent: The real estate agent obtaining the buyer rather than listing the property. or lender. Special Assessment: Lien assessed against real property by a public authority to pay costs of public improvements which directly benefit the assessed property. escrow. Traditionally. Short Term Lease: A general term.
Tax Lien: 1. Tax Roll: A list.onlineed. or cement contractor. A lien for nonpayment of property taxes. mechanic's liens. the ratio of dollars of tax per hundred or per thousand dollars of valuation. and obtaining approval from a governmental commission. Statute of Frauds: Laws requiring certain types of contracts to be in writing. its area. the assessed values. by filing a map which describes the division. A federal income tax lien. Sublease: A lease. 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. 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. Statutory Lien: An involuntary lien. over the economic life of the property. and leases for more than one year must be in writing. Modernly. Survivorship: Gaining an interest in property by outliving another who had the interest. Straight-Line Depreciation: A method of replacing the capital investment of income property. by reducing the value of the property by a set amount annually from the income. the principal being paid in full at maturity. judgment liens. T Take Out Loan: The permanent or long term financing of real estate after completion of construction. which contains the descriptions of all parcels within the county. http://www. Dictionary of Real Estate Terminology Page 22 of 26 charged. Standing Loan: A loan requiring interest payments only. etc. the names of the owners. and the tax amounts. Subcontractor: One who works under a general contractor. Subdivision: A division of a single parcel of land into smaller parcels or lots. such an electrical. plumbing. under which the lessor is the lessee of a prior lease of the same property. Survey: The measurement of the boundaries of a parcel of land. Tax Rate: Traditionally. 2. and sometimes its topography.onlineEd.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. has become to be expressed as a percentage of valuation. Step-Up Lease: A lease calling for set increases in rent at set intervals. All contracts for the sale of real property must be in writing. including tax liens. created by law rather than by contract.htm 5/20/2006 . attaching only to the property upon which the taxes are unpaid. attaching to all property of one owing taxes.
onlineEd. but who holds over after termination of his interest. synonymous with a subdivision. being six miles square and containing 36 sections. as opposed to a custom house. lease. the specific payment schedule. Title: Evidence one has of right to land possession. Tract: A parcel of land. Terms: The considerations.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. Title Plant: A filing of all recorded information to real property. as one of many similar homes in a subdivision. Tenant at Sufferance: One who comes into possession lawfully. Tenant at Will: One who holds possession by permission of the owner or landlord. Tenant in Severalty: One who owns property alone. and in the event of the death of one. the survivor owns the property without probate. Tenant for Life: An estate in real property for the life of a living person. The estate then reverts back to the grantor or on to a third party. Title Search: A review of all recorded documents affecting a specific piece of property to determine the present condition of title. Title Theory: A theory followed in several states that the mortgagee has legal title to the mortgaged property and the mortgagor has equitable title. The interests need not be equal. other than price.onlineed. Tenancy for Years: Any estate for a definite time period (a lease). In the event of the death of one. etc. For example. In some states. in a sale. 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. Tract House: A house built using the plan of the builder. Time-Share: The purchase of an undivided interest (usually in a resort area condominium) for a fixed or variable time period. http://www. which is built to the specifications of the owner. Tenancy in Common: An undivided ownership in real estate by two or more persons. etc. each one mile square. mortgage. pro ration dates. Title Insurance: Insurance against loss resulting from defects of title to a specifically described parcel of real property. Township: A territorial division of land established by federal survey. conditions of sale. Testate: Having written a last will and testament. but without agreement for a fixed term of possession. the survivor owns the property without probate.htm 5/20/2006 . possession and closing dates. paralleling the records of the county recorder's office.
Vacant Land: Land without buildings. Unencumbered: Free of liens and other encumbrances. Upset Price: A legal term signifying the minimum price at which a property can be sold at auction.onlineEd. escrow agents. deed of trust. etc. for sale purposes. Use Density: The relationship of the number of buildings of a particular use to a given land area. Trust Account: An account used by brokers. and reconveyed upon full payment.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. sewers. usually foreclosure. 2. such as grading. Free and clear. or contract prior to new security instruments on the same property. Useful Life: 1. Underwriter: One who insures another. Trustee: One who holds title to real property under the terms of a deed of trust. pursuant to foreclosure. whether the interest of each is equal or unequal. the life set for depreciation. Trustee's Deed: A deed by a trustee under a deed of trust. Unimproved Land: Most commonly. land without buildings. For tax purposes. http://www. One who deeds his property to a trustee as security for the repayment of a loan.onlineed. or anyone holding money in trust for another. In appraisal. It can also mean land in its natural state. Property is transferred to a trustee by the borrower (trustor). 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. Trust Deed: An instrument used in many states in place of a mortgage. May or may not have improvements. U Underlying Financing: A mortgage. For example. Trustor: The borrower under a deed of trust. Dictionary of Real Estate Terminology Page 24 of 26 Transfer Tax: A state tax on the transfer of real property.htm 5/20/2006 . a new life could begin with a new owner. Undivided Interest: A partial interest by two or more people in the same property. in favor of a lender (beneficiary). At any time during that period. a small title company may buy insurance from a larger one (underwriter) for all or part of the liability of its policies.
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. X Y Yield: Ratio of income from an investment to the total cost of the investment over a given time period. savings and loan. The mortgage company then borrows against these loans. V.onlineEd. Warranty Deed: A deed used in many states to convey fee title to real property. Variable Interest Rate: An interest rate which fluctuates as the prevailing rate moves up or down.A. or other lender which is insured by the Veteran's Administration. enabling the veteran to buy with little or no down payment. Valuation: The estimating of value. Commonly used in land contract sales. The mortgagee under the wrap-around collects a payment based on its face value and then pays the first mortgagee. without changing the zoning. Vendee: The purchaser. An appraisal. 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. This is done when the mortgage company wishes to assemble a block of loans for sale. Loan: Housing loan to a veteran by a bank. Most commonly. for sale at a later date. Vendor: The seller or person who transfers property by sale. Writ of Ejectment: An action for the recovery of real property. or when the company believes that the discount rate is dropping and the loans may be sold for a higher price in the future. W Warehousing: The depositing of loans by a lender such as a mortgage company. http://www. Writ of Execution: An action to carry out the judgment or decree of a court. in a bank. Dictionary of Real Estate Terminology Page 25 of 26 V. Voluntary Lien: A lien placed against real property by the voluntary act of the owner. In mortgages.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms. a mortgage or deed of trust.htm 5/20/2006 .onlineed. there are usually maximums as to the frequency and the amount of fluctuation.A. Variance: Change of a portion of zoning requirements for a specific property.
Zoning: The division of a city or county by legislative regulations into areas or zones. TOP OF PAGE http://www.com/schools/courses/or_p_lic/File_Cab/dictiona/re_terms.htm 5/20/2006 .onlineEd. such as a store built to a sidewalk. specifying the uses allowable for the real property in those areas. Usually built on the front line.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.
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