"C" Vocab

Question 1

Cancellation Clause

Answer 1

a provision in a lease that confers on one or all parties to the lease the right to terminate the parties’ obligations, should the occurrence of the condition or contingency set forth in the clause happen

Question 2

Canvasing

Answer 2

the practice of searching for prospective clients by making unsolicited phone calls and/or visiting homes door–to–door

Question 3

Cap

Answer 3

the limit on fluctuation rates regarding ARMs. Limitations or caps, may apply to how much the laon may adjust over a six–month period, an annual period, and over the life of the loan

Question 4

Capital

Answer 4

money used to create income, or the net owrth of a business as represented by the amount by which its assets exceed its liabilities

Question 5

Capitalization

Answer 5

the process of estimating the present value of an income–producing piece of property by dividing anticipated future income by a capitialization rate

Question 6

Capitalization Rate

Answer 6

the rate of return a property will generate on an owner’s investment

Question 7

Cash Flow

Answer 7

the net income produced by an investment property, calculated by deducting operating and fixed expenses from gross income

Question 8

CC&R

Answer 8

covenants, conditions, and restrictions of a cooperative or condominium development

Question 9

Certificate of Discharge

Answer 9

a document used when the security instrument is a mortgage

Question 10

Certificate of Eligibility

Answer 10

document issued by the Veterans Administration that certifies a veteran’s eligibility for a VA loan

Question 11

Certificate of Reasonable Value

Answer 11

once the appraisal has been performed on a property being bought with a VA loan, the veterans administration issues a CRV

Question 12

Certificate of Sale

Answer 12

the document given to a purchaser of RE that is sold at a tax foreclosure sale

Question 13

Certificate of Title

Answer 13

a report stating an opinion on the status of a title, based on the examination of public records

Question 14

Chain of Title

Answer 14

the recorded history of conbeyances and encumbrances that affect the title to a parcel of land

Question 15

Chattel

Answer 15

personal property

Question 16

Chattel Mortgage

Answer 16

a loan in which personal property is pledged to secure the debt

Question 17

Clear Title

Answer 17

a title that is free of liens and legal questions as to ownership of a property that is a requirement for the sale of RE; sometimes referred to as just title, good title, or free and clear

Question 18

Closing

Answer 18

The point in a RE transaction when the purchase price is paid to the seller and the deed to the property is transferred from the seller to the buyer

Question 19

Closing Costs

Answer 19

“1) ‘Nonrecurring closings costs’–– any items paid once as a result of buying the property or obtaining a loan.
2) ‘prepaid items’.––– items that recur over times, such as property taxes and homeowners insurance.”

Question 20

Closing Date

Answer 20

the date on which the buyer takes over the property

Question 21

closing statement

Answer 21

a written accounting of funds received and disbursed during a RE transaction. The buyer and seller receive separate closing statements

Question 22

cloud on title

Answer 22

an outstanding claim or encumbrance that can affect or impair the owner’s title

Question 23

clustering

Answer 23

the grouping of home sites within a subdivision on smaller lots than normal, with the remaining land slated for use as common areas.

Question 24

coinsurance clause

Answer 24

a clause in an insurance policy that requires the insured to pay a portion of any loss experienced

Question 25

collateral

Answer 25

Something of value hypothecated (Real property) or pledged (personal property) by a borrower as security for a debt

Question 26

collection

Answer 26

when a borrower falls behind, the lender contacts the borrower in an effort to bring the loan current. The laon goes to 'collection'

Question 27

color of title

Answer 27

an instrument that gives evidence of title, but may not be legally adequate to actually convey title

Question 28

commingling

Answer 28

the illegal act of an agent mixing a client's monies, which should be held in a separate escrow account, with the agent's personal monies

Question 29

common law

Answer 29

the body of laws derived from local custom and judicial precedent

Question 30

common areas

Answer 30

portions of a building, land, and amenities owned by a planned unit development or condominium projects homeowners association or a cooperative projects co–op corporation. These areas are used by all of the unit owners, who share in the common expenses of thier operation and maintenance.

Question 31

community property

Answer 31

a system of property ownership in which each spouse has equal interest in property acquired during the marriage

Question 32

Comparable Sales

Answer 32

recent sales of similar properties in enarby areas that are used to help estimate the current market value of a property

Question 33

Competent Parties

Answer 33

people who are legally qualified to enter a contract, usually meaning that they are of legal age, of sound mind, and not under the influence of drugs or other mind–altering substances

Question 34

competitive market anylsis

Answer 34

an analysis inteded to assist a seller or buyer in determining a property's range of value

Question 35

condemnation

Answer 35

the judicial process by which the gov't exercises its power of eminent domain

Question 36

Condomimum

Answer 36

a form of ownership in which an individual owns a specific unit in a multiunit building and shares ownership of common areas with other unit owners

Question 37

Conformity

Answer 37

an appraisal principle that asserts that property achieves its maximum value when a neighborhood is homogenous in its use of land

Question 38

Consideration

Answer 38

something of value that induces parties to enter into a contracts, such as money or services

Question 39

Construction Mortgage

Answer 39

a short–term loan used to finance the building of improvements to RE

Question 40

Constructive Eviction

Answer 40

action or inaction by a landlord that renders a property uninhabitable, forcing a tenant to move out with no further liability for rent

Question 41

constructive notice

Answer 41

notice of a fact given by making the fact part of the public record. All persons are responsible for knowing the information, whether or not they have actually seen the record

Question 42

Contingency

Answer 42

a condition that must be met before a contract is legally binding. A satisfactory home inspection report from a qualified home inspector is an example of a common type of contingency

Question 43

Contract

Answer 43

an agreement between two or more legally competent parties to do or to refrain from doing some legal act in exchange for consideration

Question 44

Contract for deed

Answer 44

a contract for the sale of a parcel of RE in which the buyer makes periodic payments to the seller and recieves title to the property only after all, or a substantial part, of the purchase price has been paid, or regular payments have been made for one year or longer.

Question 45

Conventional Loan

Answer 45

a loan that is neither insured nor guaranteed by an agency of gov't

Question 46

Conversion option

Answer 46

an option in an ARM to convert it to a fixed–rate mortgage

Question 47

conveyance

Answer 47

the transfer of title from the grantor to the grantee

Question 48

cooperative

Answer 48

a form of property ownership in which a corporation owns a multi–unit building and stock holders of the co. may lease and occupy individual units of the building through a proprietary lease

Question 49

Correlation

Answer 49

or 'reconciliation' is the final step in an appraisal. The appraiser weighs the purpose of the appraisal against the estimated values.

Question 50

Cost Approach

Answer 50

an appraisal method whereby the value of a property is calculated by estimating the cost of constructing a comparable building, subtracting depreciation, and adding land value.

Question 51

Credit

Answer 51

an agreement in which a borrower recieves something of value in exchange for a promise to repay the lender