vocab - very likely to appear on state exam Flashcards
Ad Valorem
A method of taxation using the value of the real estate to determine the amount of the tax.
Agency
Any relationship in which one party (agent) acts for or represents another (principal), under the authority of the latter.
Agent
One who acts for and with authority from another called the principal.
Air rights
The rights in real property to the reasonable use of the airspace above the surface of the land.
Alienation
The transferring of property to another; the transfer of property and possession of land, or other things from one person to another.
ALTA Title Policy
(American land title Association) A type of title insurance policy issued by title insurance companies which expands the risks normally insured against under the standard policy to include unrecorded mechanics lien; on recorded physical easements; facts a physical survey would show; water and mineral rights; and rights of parties in possession, such as tenants and buyers under unrecorded instruments.
Appurtenances
Any part of Real Property which passes upon the transfer, either attached or not, such as a barn or an easement.
Assignment
A transfer to another of any property, real or personal, or of any rights or Estates in said property.
Assignor
One who assigns or transfers property.
Assigns, assignees
Those to whom property or interests therein shall have been transferred.
Assumption
Agreement by a buyer to assume the liability under an existing note secured by a mortgage or deed of trust.
Attachment
The process by which real or personal property of a party to a lawsuit is seized and retained in the custody of the court for the purpose of acquiring jurisdiction over the property, to compel an appearance before the court, or to furnish security for a debt or costs arising out of the litigation.
Attest
To affirm to be true or genuine; an official act establishing authenticity.
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 insufficient to fully amortize the loan, or due prior to the end of the amortization period.
Band of investment
Used to determine a cap rate using a weighted average of select rates.
Base and Meridian
Imaginary lines used by surveyors to find and describe the location of private or public lands. In government surveys, a baseline runs due east and west, meridians run due north and south, and are used to establish township boundaries.
Basis
(1) Cost basis is the dollar amount assigned to property at the time of acquisition under provisions of the internal revenue code for the purpose of determining gain, loss and depreciation in calculating the income tax to be paid upon the sale or exchange of property. (2) Adjust basis is the cost basis after the application of certain additions for improvements, Etc., and deductions for depreciation, etc.
Beneficiary
(1) The lender on the security of a note and deed of trust. (2) One entitled to the benefit of a trust. (3) One who receives profit from an estate, the title of which is vested in the trustee.
Bill of sale
An instrument by which one transfers personal property.
Block busting
The practice on the part of unscrupulous speculators or real estate agents of inducing panic selling of homes at prices below market value, especially by exploiting the prejudices of property owners in neighborhoods in which the racial make-up is changing or appears to be on the verge of changing. This practice is prohibited by fair housing laws.
Boot
Unlike property used to equalize equities in an exchange that will trigger tax on the amount of the boot.
Bridge loan
An interim loan, generally made between a short-term loan and long-term loan, when the borrower needs to have more time before taking the long term, or permanent, financing.
Build to suit
The building of a structure to meet the specifications of a purchaser.
Bundle of rights
All rights and interests of ownership in Real Property considered together but separable.
Capital gains
Gains realized from the sale of capital assets, and generally the difference between cost and selling price, less deductible expenses. Used mainly for income tax purposes.
Capitalization
The determination of present value of income property by taking the annual net income, and dividing by a rate of return percentage which is commonly acceptable to buyers of similar properties (i.e. $10,000/11% = $90,909).
Capitalization rate
The percentage used to determine the value of income property through capitalization. The selected capitalization rate is the yield rate that is necessary to attract the money of the average investor to a particular kind of investment. The yield rate is used in the process of determining value based upon net income.
Caveat emptor
Let the buyer beware. The buyer must examine the goods or property and buy at his or her own risk, absent misrepresentation.
Chain of title
The chronological order of conveying of a parcel of land, starting from original owner.
Chattel
Personal property. Goods or every species of property movable or immovable which are not real property.
Closing statement
The required computation of financial adjustment between buyer and seller as of the date of closing. The final statement in most real estate transactions is known as a HUD-1 statement.
Collateral
Marketable real or personal property which a borrower pledges as security for a loan. In mortgage transactions, specific land is the collateral to secure the performance of a principal agreement (the promissory note).
Community property
Property acquired by husband and or wife during a marriage when not acquired as the separate property of either spouse. Each spouse has equal rights of management, alienation and testamentary disposition of community property. Washington is a community property state.
Comparables
Similar properties used as a comparison to determine the value of a specific property. Also known as comparable sales.
Comparative analysis
A comparison of similar properties to a subject property for the purpose of evaluating market value and proper pricing.
Condemnation
The taking of private property for public use without the consent of the owner, but only upon payment of just compensation.
Condition
(1) In contract law, a future and uncertain event which must happen to create an obligation or which extinguishes an existent obligation. (2) in conveyances of real property conditions in the conveyance may cause an interest to be vested or defeated.
Condominium
A structure of two or more units, the interior space of which are individually owned, with the balance of the property (both land and building) owned in common by the owners of each unit.
Contract
And agreement to do or not to do a certain thing. It must have four essential elements – parties capable of contracting, consent of the parties, a lawful object or purpose and consideration. A contract for sale of real property must also be in writing and signed by the party or parties to be charged with performance.
Contract for deed
An installment contract for the sale of real estate, where the seller has legal title until paid in full. The buyer only has equitable title during the contract term. Also known as a land sale contract or installment sale contract.
Contribution, principle of
An appraisal term wherin a component part of a property is valued in proportion to its contribution to the value of the home. Holds that maximum values are achieved when the improvements on a site produce the highest (net) return, commensurate with the investment.
Conventional loan
A mortgage or deed of trust not obtained under a government program, i.e. which is not FHA insured or VA guaranteed. Type of loan customarily made by a bank or savings and loan association.
Conveyance
Transfer of title to land. Includes most instruments by which an interest in real estate is created, mortgaged, or assigned.
Cotenancy
Ownership interest in a particular parcel of land by more than one person, I.E., tenancy in common, joint tenancy.
Creative financing
A general term which encompasses any method of financing property going beyond traditional real estate lending.
Dedication
The giving of land by its owner to a public use and the acceptance for such use by authorized officials on behalf of the public.
Deed
A conveying written instrument used to pass title to property upon sale from one person (grantor) to another person (grantee). To be valid a deed must be properly executed and delivered.
Deed of trust
Similar to a mortgage, a security instrument whereby Real Property is given as security for a debt. See trust deed.
Deferred maintenance
Repairs necessary to put a property in good condition.
Depreciation
Loss of value of property brought about by age, physical deterioration or functional or economic obsolescence. The term is also used in accounting to identify the amount of the decrease in value of an asset that is allowed in computing the value of the property for tax purposes.
Discount points
The amount of money the buyer or seller must pay the lender to get a mortgage at a stated interest rate. A point is equal to 1% of the loan amount.
Distress sale
A sale of property when the seller is under extreme pressure to sell, and which generally results in the property selling for less than market value.
Domicile
A person’s legal residence.
Dual agency
The representation by an agent of opposing principals (buyer and seller) at the same time. This practice is legal only if properly disclosed.
Duress
Unlawful constrain exercised upon a person whereby he or she is forced to do some act against his or her will.
Easement
A right created by Grant, reservation, agreement, prescription, or necessary implication, which one has in the land of another.
Economic life
Very profitable life of an improvement, which is generally shorter than the physical life.
Economic obsolescence
Loss of desirability and useful life of a property through economic forces, such as zoning changes, traffic pattern changes, etc., rather than deterioration.
Emblements
Growing crops. Are considered personal property.
Eminent domain
A governmental right to acquire property for public use by condemnation, and the payment of just compensation.
Encroachment
Generally, construction onto the property of another, as of a wall, fence, building, etc.
Encumbrance
A claim, lien, charge, or liability attached to and binding Real Property.
Equitable ownership
Ownership by one who does not have legal title, such as a vendee under a land sales contract.
Equity
Market value of Real Property, less the amount of existing loan balances.
Escheat
A reversion of property to the state in the absence of an individual owner, usually when a property owner dies without a will.
Escrow
A neutral third-party which receives all funds and instruments necessary to a sale, and which processes them according to instructions.
Estate
The interest or nature of the interest which one has in property.
Estate for life
An estate in Real Property for the life of a living person. The estate then reverts back to the grantor or to a third-party.
Estate for years
Any estate for a definite period of time, such as a lease.
Estate from period to period
An interest in land where there is no definite termination date but the rental period is fixed at a certain sum per week, month, or year. Also called a periodic tenancy.
Estate of inheritance
And the state which may descend to heirs.
Estate in remainder
An estate which vests in one other than a grantor, after the termination of an intermediate estate.
Estoppel
A legal theory under which a person is barred from asserting or denying a fact because of the person’s previous acts or words.
Exclusive agency listing
A listing under which the brokers commission is protected against a sale by other agents but not by a sale by the principal.
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, regardless of whether or not the broker is the cause of sale.
Fair housing law
Title VIII of the civil rights act, which for bids discrimination in the sale or rental of residential property because of race, color, sex, religion, or national origin.
Fair market value
This is the amount of money that would be paid for a property offered on the open market for a reasonable period of time with both buyer and seller knowing all the uses to which the property could be put and with neither party under pressure to sell or buy.
Federal housing administration
(FHA) an agency of the federal government that insures private mortgage loans for financing of new and existing homes and home repairs.
Fee
An estate of inheritance in real property.
Fee simple estate
An estate under which the owner is entitled to unrestricted powers to dispose of the property, and can be left by will or inherited. The greatest interest one can have in Real Property.
Fiduciary
One acting in a relationship of trust and confidence. In real estate practice as between a principal (seller or buyer) and a broker. The fiduciary owes the duties of loyalty, accounting, disclosure, care and confidentiality. These duties cannot be breached.
Fiduciary duty
The duty owed by an agent to act in the highest good faith toward the principal and not to obtain any advantage over the principal by the slightest misrepresentation, concealment, duress or pressure. The common law fiduciary duties are loyalty, accounting, disclosure, care and confidentiality.
