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