GLOSSARY Flashcards
(291 cards)
1
Q
A written summary of the chain of title.
A
ABSTRACT OF TITLE
2
Q
Any clause in a loan requiring the loan to be paid off upon the occurrence of a certain event. An alienation clause is an example.
A
ACCELERATION CLAUSE
3
Q
the acquisition of property by its being added to other property.
A
ACCESSION
4
Q
the process of gradual or imperceptible additions to land bordering a river or stream.
A
ACCRETION
5
Q
The declaration before a notary by a person who executed a document stating that he did
in fact sign the document. A deed must be {BLANK} to be recorded. Once {BLANK}ed, it is accepted as
prima facie evidence in court.
A
ACKNOWLEDGMENT
6
Q
ACRE
A
43,560 square feet, or 4,840 square yards, or about 209 feet by 209 feet (if square)
7
Q
the authority that a principal actually confers on the agent.
A
ACTUAL AUTHORITY
8
Q
for income tax purposes, it is determined by subtracting the adjusted cost basis from the exchange value of a property.
A
ACTUAL GAIN (profit)
9
Q
when a person actually knows something, such as when an agent knows someone has taken
possession of a property.
A
ACTUAL NOTICE
10
Q
a property tax is an {BLANK} tax.
A
AD VALOREM (according to value)
11
Q
for income tax purposes, it is the cost basis plus capital improvements, plus existing
assessment liens assumed by the buyer, minus depreciation, minus gain(s) deferred from prior transactions.
A
ADJUSTED COST BASIS
12
Q
for income tax purposes, it is the selling price minus the expenses of the sale.
A
ADJUSTED SELLING PRICE
13
Q
acquiring title by five years of exclusive, notorious, and open possession of a property (contrary to the best interests of the true owner) under a claim of right or color of title. When property is
acquired by adverse possession, a quiet title action would be used to perfect title.
A
ADVERSE POSSESSION
14
Q
a person authorized to represent a principal in business dealings with other parties. Does not need to be paid consideration to be considered this.
A
AGENT
15
Q
as of January 1, 1988, the California {BLANK} requires agents to disclose agency relationships as soon as their relationship with a buyer or seller becomes more than casual. This applies to transactions concerning the sale, or a lease (for more than one year), of four or less residential units.The three steps to agency disclosure are disclose, elect, and confirm.
A
AGENCY DISCLOSURE LAW
16
Q
to sell, transfer or convey.
A
ALIENATE
17
Q
requires the borrower to pay off the loan upon sale
A
ALIENATION (DUE ON SALE) CLAUSE
18
Q
a junior lien which is subordinate to, yet includes, the liens to which it is subordinated. Commonly used with land contracts.
A
ALL INCLUSIVE TRUST DEED (AITD, wrap around trust deed, hold harmless trust deed, overriding trust deed)
19
Q
the soil deposited by accretion.
A
ALLUVION (Alluvium)
20
Q
requires the disclosure of earthquake fault lines on a map.
A
ALQUIST-PRIOLO ACT
21
Q
a home. appraised by the Market Data Approach.
A
AMENITY PROPERTY
22
Q
the federal law which requires equal access to public buildings for handicapped persons.
A
AMERICANS WITH DISABILITIES ACT (ADA)
23
Q
the liquidation of a financial obligation, such as a loan.
A
AMORTIZATION
24
Q
used to determine monthly payments.
A
AMORTIZATION TABLES
25
a promissory note which calls for periodic payments of both principal and
interest.
AMORTIZED INSTALLMENT NOTE
26
a change in geographic direction is often referred to by using an {BLANK} expressed in degrees, minutes and seconds; it is often described as "so many degrees from the North or South points of the compass."
ANGLES
27
used in the Capitalization Approach to appraisal and determined by this formula: Gross
Income - Vacancies - Expenses = {BLANK}
ANNUAL NET INCOME
28
the relative cost of credit expressed in percentage terms and disclosed under the Truth-In-Lending Law (also called Reg. Z).
ANNUAL PERCENTAGE RATE (APR)
29
an opinion of the value of a specific property on a given date; it is valid for that date only.
APPRAISAL
30
occurs when the government gives permission to a non-riparian owner to take water from a
public waterway.
APPROPRIATION
31
things used with the land for its benefit. {BLANKS} are real property.
APPURTENANCES
32
benefits the land of a dominant tenement. The buyer of the dominant tenement
automatically receives the {BLANK}.
APPURTENANT EASEMENT
33
a clause in a contract in which the parties agree to arbitrate a dispute rather than go to court.
ARBITRATION CLAUSE
34
a lien which is recorded by a local government when a property owner fails to pay for street improvement within 30 days of receipt of the bill.
ASSESSMENT LIEN
35
establishes the tax base. Property is assessed every year at 100% of its taxable value
(100% of fair market value or 100% of full cash value). If sold, property is reassessed during the year.
ASSESSMENT ROLL
36
a contract is usually {BLANK}able. Leases can be {BLANK}ed; when a lease holder {BLANK}s a lease, the person who acquires the lease (the {BLANK}ee) becomes the tenant. Listings cannot be {BLANK}ed because a listing is a personal service contract calling for the personal performance of the broker.
ASSIGNMENT
37
a preexisting assessment lien which is assumed (taken over) by a buyer of real property.
ASSUMED ASSESSMENT LIEN
38
when a buyer assumes a loan, he or she becomes primarily liable. The seller is still liable, but is
in a secondary position.
ASSUMPTION
39
property is held by court order as security for a possible judgment in a pending lawsuit. An {BLANK} is valid for three years.
ATTACHMENT LIEN (WRIT OF ATTACHMENT)
40
acting for another with a duly executed and recorded power of attorney.
ATTORNEY-IN-FACT
41
sudden violent tearing away of land by water.
AVULSION
42
dirt used to fill in excavations or brace a foundation.
BACKFILL
43
partially amortized.
BALLOON NOTE
44
any payment which is significantly larger than the other payments.
BALLOON PAYMENT
45
based on a 30 day month and 360 day year, used for proration and loan calculations.
BANKER'S YEAR
46
a wall supporting any vertical load in addition to its own weight. It is normally left in place during remodeling and can be constructed at any angle to doorways. {BLANK} are real property.
BEARING WALL
47
the lender in a trust deed. A {BLANK} holds the promissory note and trust deed during the life
of the loan.
BENEFICIARY
48
statement by a lender disclosing the current loan balance.
BENEFICIARY STATEMENT
49
```
a contract in which the promise of one party is given in exchange for the promise of the
other party (a promise for a promise). Both parties are bound to perform. These promises are often the basis for a contract (for example, exclusive listings, deposit receipts).
```
BILATERAL CONTRACT
50
a real estate loan which covers (blankets or secures) more than one parcel of land; it
is commonly used when building new homes.
BLANKET ENCUMBRANCE
51
does not disclose that an agent is representing the seller. When advertising, a licensee must disclose that he is an agent. Additionally, the ad must name the broker.
BLIND ADVERTISING
52
a unit of measurement of lumber which is one foot wide, one foot long, and one inch thick (any
combination of 144 cubic inches) .
BOARD FOOT
53
loan instruments
BONDS
54
in good faith, without fraud or deceit, genuine. A {BLANK} land contract or listing has all the ele-
ments required by law.
BONA FIDE
55
cash, other "unlike" property, or "mortgage relief" used to balance the equities of the properties in a 1031 tax deferred exchange.
BOOT
56
provides the lender with information used to determine the risk inherent in the
loan.
BORROWER'S CREDIT HISTORY
57
a person employed for a fee by another to perform a real estate act requiring a license. A {BLANK} is the employer of salespersons.
BROKR
58
a measurement of heat used in rating the capacity of heating systems.
BTU (British Thermal Unit)
59
an appraiser uses the building residual technique when the value of a building is an unknown factor. The technique determines how the building contributes to the value of the entire property.
BUILDING RESIDUAL TECHNIQUE
60
a set of California laws regulating business, such as the real estate industry.
BUSINESS AND PROFESSIONS CODE
61
these are personal property. The document used to transfer title to personal property is a bill of sale, not a deed.
BUSINESS OPPORTUNITIES
62
the state purchases homes and sells them to California veterans using land contracts
CALIFORNIA VETERANS FARM AND HOME PURCHASE PLAN (Cal-Vet)
63
everyone is capable of contracting, except minors and those who are mentally incompetent. It is one of the four essential elements of a contract.
CAPABLE PARTIES
64
investment of money in physical improvements of a property (for example, adding a wall, remodeling, or upgrading a heating system) . It is not deductible as an expense, but is added to the cost basis and depreciated over the life of the improvements.
CAPITAL IMPROVEMENT
65
establishes the current value of future benefits which may be obtainedfrom an income producing property (apartments, commercial buildings, restaurants, etc.) . The value of an asset is determined by dividing the annual net income by a desired rate of return called the capitalization rate (V = I/R) .
CAPITALIZATION (INCOME) APPROACH
66
the rate of interest which is considered a reasonable return on an investment. The greater the risk, the higher the capitalization rate demanded by an investor. {BLANK}s consider the quantity, quality, and durability of the rent. The three methods of calculating capitalization rate are (C.B.S.) Market Comparison, Band of Investment, and Summation.
CAPITALIZATION RATE
67
covenants, conditions, and restrictions usually placed in a "declaration of restrictions" which restricts land use in a subdivision.
CC&R's
68
receipt from the State Board of Equalization showing that the seller of a business opportunity has paid all sales taxes.
CERTIFICATE OF CLEARANCE
69
government appraisal for a VA loan. The {BLANK} determines the amount of the down payment. Some VA loans do not require a down payment.
CERTIFICATE OF REASONABLE VALUE (CRV)
70
the record of prior transfers and encumbrances affecting the title of a parcel. It is usually
searched by a title company employee.
CHAIN OF TITLE
71
items effecting title which may prevent transfer. For example, if a woman purchased a home prior to marriage, but sold it during the marriage and signed her married name on the grant deed, it would create a {BLANK}.
CLOUD ON TITLE
72
that which appears to be good title but isn't
COLOR OF TITLE
73
COMMERCIAL ACRE (Buildable Acre)
43,560 sq. ft. minus the space taken by streets, alleys, and sidewalks.
74
a single line of store buildings along a major route, also known as a strip commercial
development or a strip center.
COMMERCIAL AREA
75
occurs when an agent mixes a principal's or client's money with the agent's own money.
COMMINGLING
76
a subdivision in which an owner sells apartment units to the tenants, with the tenants owning the parking area, halls, walks, etc., in common.
COMMUNITY APARTMENT PROJECT
77
each spouse owns 50%. {BLANK} is assumed when title says "husband and wife." {BLANK} is also assumed whenever a husband and wife buy property, unless they specifically take title as joint tenants or tenants in common.
COMMUNITY PROPERTY
78
comes from the Treaty of Guadalupe Hidalgo between the United States and
Mexico.
COMMUNITY PROPERTY LAW
79
funded through the issuance of tax allocation bonds and secured by anticipated property tax revenues.
COMMUNITY REDEVELOPMENT AGENCY (CRA)
80
compressing fill dirt to bear the weight of a building. A report on soil stability should be obtained from a registered civil engineer if a building~s foundation is cracked, and the doors and windows do not close
properly.
COMPACTION
81
calculated by subtracting commissions paid to sales agents from the gross income of the
brokerage.
COMPANY DOLLAR
82
a provision in a loan requiring the borrower to keep a certain amount of money on deposit with the lender in return for the loan.
COMPENSATING BALANCE
83
occurs when all terms of the escrow instructions have been met.
COMPLETION OF ESCROW
84
ownership by two or more persons, with title held jointly and severally.
CONCURRENT ESTATES
85
something which must happen or be performed before an estate is vested in the grantee.
CONDITION PRECEDENT
86
something which will cause an estate to be lost should a certain event happens.
CONDITION SUBSEQUENT
87
a metal pipe in which electrical wiring is installed.
CONDUIT
88
the selling price minus any existing loans assumed by the buyer.
CONSIDERATION (Documentary Transfer Tax)
89
may be anything of value; it does not have to be money. It is one of the four essential elements of a contract.
CONSIDERATION (contract law)
90
any disturbance of a tenant's use or possession of a leased premises which is caused by the landlord. The property must be rendered wholly or substantially unsuitable for the use for which it
was leased.
CONSTRUCTIVE EVICTION
91
events which by law put people on notice. Recording a document gives {BLANK}. The act of taking possession of land, while holding an unrecorded deed, gives {BLANK}.
CONSTRUCTIVE (LEGAL) NOTICE
92
a statistical measure of changes in the prices of goods and services over time.
CONSUMER PRICE INDEX (CPI)
93
the date the contract was formed. A contract is formed when the final acceptance is communicated to the offeror.
CONTRACT DATE
94
loans made by lenders without governmental guarantees.
CONVENTIONAL LOAN
95
stealing client's money.
CONVERSION
96
an apartment building, owned by a corporation, in which tenancy in an apartment unit is obtained by purchase of shares of the stock of the corporation. The owner of the shares (a tenant or lessee) is entitled to occupy a specific apartment in the building.
COOPERATIVE APARTMENT (stock cooperative, co-op, stock co-op)
97
a {BLANK} on a deed implies that the person signing the deed is authorized to sign for the corporation.
CORPORATE SEAL
98
used by an appraiser when other approaches are inappropriate (special purpose buildings, new subdivision homes) . The cost approach is the least appropriate for appraising older buildings because as a building gets older, depreciation becomes difficult to calculate.
COST APPROACH
99
for tax purposes, it is the purchase price.
COST BASIS
100
an agreement or promise to do or not do a particular thing, such as an agreement to build a house of a particular architectural style or to use (or not use) property in a certain way.
COVENANT
101
measures the cost of living.
CPI (Consumer Price Index)
102
the distance between the ground and the first floor of a building. Most building codes require
them to be at least 18 inches high.
CRAWL SPACE
103
prepaid taxes appear as a credit to the seller in the escrow closing statement. A {BLANK} increases the account balance.
CREDIT (in Escrow Closing Statement)
104
used to determine the replacement cost of improvements in multistory structures when
the height between floors vary (for example, the replacement cost of a warehouse would be calculated by cost per {BLANK}) .
CUBIC FOOT METHOD
105
economically and physically possible to correct.
CURABLE DEPRECIATION
106
the date of the final writing or delivery of an appraisal report.
DATE OF THE APPRAISAL
107
the date a property is inspected is generally used as the date of {BLANK}.
DATE OF VALUE
108
the fictitious business statement filed by a broker. It must be approved by the Real Estate Commissioner. Good for five years.
DBA (Doing Business As)
109
the selling price appears as a {BLANK} on the buyer's closing statement. A {BLANK} decreases the account balance.
Debit
110
used by lenders as a loan qualifying tool.
DEBT-INCOME RATIO
111
plants that lose their leaves in autumn and winter. It is not a type of soil.
DECIDUOUS
112
the written instrument which, when properly executed, delivered, and accepted, conveys title to real property from one person (the grantor) to another (the grantee) . {BLANKS} are indexed by the names of the parties (grantor and grantee) .
DEED
113
a borrower voluntarily deeds property back to a lender to stop foreclosure. Junior liens against the property remain in place.
DEED-IN-LIEU OF FORECLOSURE
114
- usually requires court foreclosure. After a court foreclosure sale on a mortgage, the mortgagor (borrower) can redeem the property by paying the loan in full (statutory right of redemption) . The
mortgagor retains possession of the property until the right of redemption expires.
DEFAULT ON A MORTGAGE
115
is possible only when there is a court foreclosure on a non-purchase money loan and the fair market value is less than the loan amount (this rarely occurs).
DEFICIENCY JUDGMENT
116
prices decrease. A decrease in prices causes an increase in the value of money.
DEFLATION
117
construction, sales financing, and refinancing are all {BLANK} sources of borrowers for mortgage money.
DEMAND SOURCES
118
a federal agency overseeing the nation's
| housing.
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD)
119
the state agency which regulates the real estate industry.
BUREAU OF REAL ESTATE (BRE)
120
the contract used to write an offer, the contract selling real property.
DEPOSIT RECEIPT
121
any loss in value. {BLANK} accrues over time. Accrued {BLANK} is the most difficult kind to measure accurately. Unlike taxation, for appraisal purposes land can and does {BLANK}.
DEPRECIATION (appraisal)
122
allowed on improved income, trade, or business property. It is based on the cost of
improvements. For taxation purposes, land never {BLANKS}.
DEPRECIATION (taxation)
123
calculated by dividing the operating expenses of the office by the number of agents.
DESK COST
124
prepaid interest demanded by lender when a loan is negotiated. Each {BLANK} costs one percent of the face amount of the loan.
DISCOUNT POINTS
125
the interest rate charged by the Federal Reserve Board when banks borrow money from it.
Raising the {BLANK} tightens the money market.
DISCOUNT RATE
126
selling a note for less than the face amount or the current balance. When an investor buys a loan at a {BLANK} and later forecloses, the lender forecloses for the current loan balance, not the {BLANK} amount.
DISCOUNTING A NOTE
127
collected when a deed is recorded. The tax is based on consideration (selling price minus any existing loans assumed by the buyer).
DOCUMENTARY TRANSFER TAX
128
the land that gets the benefit of an easement.
DOMINANT TENEMENT
129
changing zoning from high density use to a lower density use, such as changing from commercial C-1 zoning to residential R-1, or from R-3 to R-1.
DOWNZONING
130
panels made of gypsum.
DRYWALL
131
acting as an agent for more than one party (principal) in a real estate transaction. {BLANK}
is illegal unless the agent has obtained the knowledge and consent of both parties.
DUAL AGENCY
132
occurs when an agent promises to search for a buyer in an exclusive listing. It includes an
obligation to advertise the property.
DUE DILIGENCE
133
the right to enter or use another person's land within definable limits; it may be created for any
length of time and is irrevocable during the time limit specified. All {BLANKS} are real property.
EASEMENT
134
Benefits a person or corporation (such as a utility {BLANK} for power lines).
EASEMENT IN GROSS
135
the court case that held that a seller and his or her agent must disclose to a buyer all facts materially affecting the value or desirability of the property. This decision led to the passage of the Seller Transfer Disclosure law.
EASTON V. STRASSBURGER
136
the period of time in which an income property generates income in excess of its expenses.
The {BLANK} of a property is usually shorter than its physical life.
ECONOMIC LIFE
137
the apparent age of an improvement as opposed to its actual age (for example, a property
which is 20 years old, but has been superbly maintained, may have an {BLANK} age of 9 years) .
EFFECTIVE AGE
138
used to appraise income property, it is the income left over after vacancies are subtracted from gross income, but before expenses are subtracted (used in the Capitalization Approach).
EFFECTIVE GROSS INCOME (Adjusted Gross Income)
139
the interest rate that is actually paid by the borrower for the use of the money.
EFFECTIVE RATE
140
shows the front and side views of homes in a subdivision.
ELEVATION SHEET
141
married minors and veterans who are minors are considered {BLANK} and can enter into contracts.
EMANCIPATED
142
Occurs when the government takes property, also called condemnation. It is the power of government to take private property for public use; fair market value is paid for property taken under {BLANK}. {BLANK} is not part of police power or zoning.
EMINENT DOMAIN
143
wrongful placement of an improvement on the property of another, a type of trespass. An
owner is allowed three years in which to sue a neighbor to have the {BLANK} removed.
ENCROACHMENT
144
burdens on property, including money burdens (liens, such as trust deeds, mortgages, taxes,
judgments, etc.) and non-money burdens (zoning, easements, deed restrictions, etc.).
ENCUMBRANCES
145
measures the efficiency of appliances, such as air conditioners. The higher the ratio, the more efficient the unit.
ENERGY EFFICIENT RATIO (EER)
146
when a contract is required to be in writing, the authority of an agent to enter into a contract for his principal must also be in writing.
EQUAL DIGNITIES RULE
147
the difference between the value and the loan on a property, the owner's share of the total value of the
property, or the initial down payment.
EQUITY
148
the gradual wearing away of land by natural forces. It results in the loss of title.
EROSION
149
occurs when a person dies, leaving no heirs and no will, and the state gets his or her property. Land
may never be acquired by escheat.
ESCHEAT
150
the deposit of instruments and/or funds with a neutral third party who has been instructed to carry out the provisions of an agreement or contract. The purpose of {BLANK} is to make sure that the conditions of transfer are met prior to closing.
ESCROW
151
a detailed accounting of all money received and distributed at close of escrow.
ESCROW CLOSING STATEMENT
152
are not usually notarized or recorded.
ESCROW INSTRUCTIONS
153
created when a lessee stays in possession of the premises after the proper time.
ESTATE AT SUFFERANCE
154
a lessee can stay as long as both the lessor and the lessee mutually agree.
ESTATE AT WILL
155
any lease creates an {BLANK}. An {BLANK} must have a termination date.
ESTATE FOR YEARS (lease)
156
held by the original grantor if a property is to revert to him.
ESTATE IN REVERSION
157
rental agreement that continues from period to period.
ESTATE QF PERIODIC TENANCY (month-to-month)
158
ownership rights and interests.
ESTATES (what is owned)
159
a legal and equitable doctrine under which a person is barred from asserting or denying a fact
because of the person's previous acts or words.
ESTOPPEL
160
and others.
ET AL
161
and wife.
ET UX
162
a contract in which a seller agrees to pay a commission to a listing agent if a property is sold by any agent; the seller also retains the right to sell directly to a buyer and pay no commission.
EXCLUSIVE AGENCY LISTING
163
a contract in which an owner agrees to sell
through the listing broker only. If property is sold by anyone (the listing broker, another broker, the owner, or any other source) during the term of the listing, the listing broker is entitled to a commission.
EXCLUSIVE AUTHORIZATION AND RIGHT TQ SELL LISTING
164
a contract employing a broker to find a loan for a borrower. It may not exceed a term of more than 45 days.
EXCLUSIVE LOAN LISTING
165
when escrow instructions are "{BLANK}" by both buyer and seller, they are signed. When escrow
instructions are "{BLANK" by an escrow agent, they have been fulfilled. When an escrow officer records a deed, he or she is {BLANK}ing escrow instructions.
EXECUTED
166
a contract in which both parties have completely performed their duties.
EXECUTED CONTRACT
167
occurs when property is sold under a "writ of execution" to satisfy a judgment.
EXECUTION SALE
168
there is no such thing as an {BLANK}. This is used in a trick question.
EXECUTIVE SALE
169
a contract in which something remains to be done by one or both parties.
EXECUTQRY CONTRACT
170
merchants prefer properties on the south and west sides of the street, and the southwest corner of
intersections. The north and east sides are less desirable.
EXPOSURE
171
a contract expressed in words, either oral or written.
EXPRESS CONTRACT
172
a title insurance policy that includes a survey and protects against unrecorded
events.
EXTENDED COVERAGE POLICY
173
obsolescence caused by external events occurring outside property lines.
EXTERNAL (ECONOMIC OR SOCIAL) OBSOLESCENCE
174
prohibits discrimination in supplying housing accommodations based on race, color, religion, sex, marital status, national origin, ancestry, age, familial status or disability.
FAIR EMPLOYMENT AND HOUSING ACT (Rumford Act)
175
- an untrue statement about what a promisor is going to do. A {BLANK} and a misrepresentation are not the same thing. A misrepresentation is a false statement of fact.
FALSE PROMISE
176
A major participant in the secondary mortgage market.
FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC, Freddie Mac)
177
created by the National Housing Act to encourage home ownership. {BLANK} loans enable buyers to purchase homes with a small down payment, while insuring lenders against loss.
FEDERAL HOUSING ADMINISTRATION (FHA)
178
the best source for farm loans and loans on large tracts of land.
FEDERAL LAND BANK SYSTEM
179
a major participant in the secondary mortgage market. Formerly a government agency, it is now a corporation with stock traded on the New York Stock Exchange.
EDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA, Title 3, Fannie Mae)
180
regulates banks and influences the money supply of the economy.
FEDERAL RESERVE BOARD
181
the greatest estate one can have in real property.
FEE SIMPLE ABSOLUTE
182
conditions or limits on the use of the property.
FEE SIMPLE DEFEASIBLE
183
an estate which is indefinite in duration and can be sold or inherited.
FEE SIMPLE ESTATE (of inheritance, perpetual estate, estate in fee)
184
a recorded trust deed or mortgage containing details which apply to later loan documents.
FICTITIOUS TRUST DEED OR MORTGAGE
185
a relationship of trust and good faith. The relationship is similar to a trustee and a beneficiary; however, a trustor does not necessarily have a {BLANK} relationship with a beneficiary.
FIDUCIARY RELATIONSHIP
186
issued by the Commissioner when all his requirements for a subdivision have been met.
It is valid for five years unless there is a material change.
FINAL PUBLIC REPORT
187
property taxes and insurance.
FIXED EXPENSES
188
objects attached to the land. Fixtures may become real property.
FIXTURES
189
sheet metal used to protect a building from seepage of water, such as in the valley of a roof.
FLASHING
190
the concrete base or bottom of a foundation wall.
FOOTING
191
occurs when an appraiser projects or estimates the annual expenses for an income producing property in a reconstructed operating statement.
FORECASTING
192
requires that a buyer of real property must
withhold and send to the Internal Revenue Service (IRS) 10% of the gross sales price if the seller of the real property is a foreign person.
FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT (FIRPTA)
193
shows the location of the footings and piers under a house.
FOUNDATION PLAN
194
a misrepresentation which usually makes a contract voidable. The buyer or seller must have relied upon the misrepresentation to claim fraud.
FRAUD
195
an estate of indeterminable duration.
FREEHOLD ESTATE
196
an offer which no rational person would accept.
FRIVOLOUS OFFER
197
the deeper the lot, the greater the front foot value.
FRONT FOOT VALUE
198
the measurement of property on its street line, used for sale or valuation purposes.
FRONT FOOTAGE
199
the distance a property adjoins a street or thoroughfare.
FRONTAGE
200
crops which must be planted annually.
FRUCTUS INDUSTRIALES
201
occurs when escrow notifies lender to release funds for the loan.
FUNDING OF THE BUYERS LOAN
202
a pitched roof, sloping on two sides.
GABLE ROOF
203
government loan instruments. When the Federal Reserve Board sells existing {BLANK} through the Federal Open Market Committee, it tightens the money supply.
GOVERNMENT BONDS
204
major participant in the secondary mortgage market. It is a federal agency within the Department of Housing and Urban Development (HUD).
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA, Ginnie Mae)
205
allows an owner to continue to use structures which do not conform with new zoning laws.
GRANDFATHER CLAUSE
206
the most commonly used deed, containing two implied warranties: (1) the grantor has not conveyed title to any other person, and (2) the estate is free from undisclosed encumbrances. These facts are warranted by the {BLANK} and not covered by title insurance.
GRANT DEED
207
the lessor pays expenses (a fixed amount).
GROSS LEASE
208
Found by dividing the sale price of comparable
| properties by their gross monthly or gross annual incomes.
GROSS MULTIPLIER (rent multiplier, gross rent multiplier)
209
the measure of goods and services produced by the nation during any one calendar year.
GROSS NATIONAL PRODUCT (now called the Gross Domestic Product)
210
a seller or agent guarantees the yield or return; it is classified as a real property security.
GUARANTEED NOTE
211
a cash loan in which the borrower receives cash using a new note secured by a trust deed
(for example, a home equity loan) . The commissions, costs, and expenses to negotiate {BLANK} first trust deeds of less than $30,000, and {BLANK} junior loans of less than $20,000, are limited by law.
HARD MONEY LOAN
212
a roof sloping on all four sides.
HIP ROOF
213
an innocent party who purchases a negotiable instrument without knowledge of any
defects.
HOLDER IN DUE COURSE
214
a method of protecting a limited amount of equity in a personal residence from subsequent unsecured creditors. A {BLANK} must be recorded, and may be recorded by either spouse without
the knowledge or consent of the other. A {BLANK} is not an encumbrance.
HOMESTEAD EXEMPTION
215
improved or unimproved real property used or intended to be used as a residence by the owner; it consists of no more than four dwelling units.
HOUSING ACCOMMODATIONS
216
California state law making discrimination in lending practices illegal.
HOUSING FINANCIAL DISCRIMINATION ACT (Holden Act)
217
the Heating, Ventilation, Air Conditioning system in a commercial lease.
HVAC
218
the borrower retains possession of the item securing the debt (for example, a trust deed,
mortgage, or the pink slip for a car loan).
HYPOTHECATE
219
a trust account established to hold funds for future needs relating to a parcel of real estate. {BLANK} means to hold, reserve, or impress.
IMPOUND ACCOUNT
220
property which produces income to the owner.
INCOME, TRADE OR BUSINESS PROPERTY
221
either too expensive or physically impossible to correct.
INCURABLE DEPRECIATION
222
caused when there is more money available than there are goods for sale.
INFLATION
223
transaction in which both the buyer and the seller are represented by agents working for one
broker. When a brokerage has a property listed for sale, no agent in the brokerage may be the agent for the buyer only, because the brokerage has an agency relationship with the seller.
IN-HOUSE SALE
224
a court order restricting a party from doing an act (such as violating private restrictions). A court
order saying "Stop that!"
INJUNCTION
225
they receive most of their deposits from "household savings" of individual depositors.
INSTITUTIONAL LENDERS (insurance companies, savings and loans, and commercial banks)
226
the "R value" measures the insulation~s resistance to heat. The higher the R value, the greater the {BLANK}. Wall {BLANK} is considered adequate if the inside of an exterior wall is about the same temperature as interior walls.
INSULATION
227
finances construction. The terms "{BLANK}" and "construction loan" are synonymous (they mean the same thing).
INTERIM LOAN (short-term)
228
the current use, when the highest and best use is expected to change.
INTERIM USE
229
caused by events occurring within the property lines and observable during an inspection by an appraiser.
INTERNAL (FUNCTIONAL) OBSOLESCENCE
230
escrow would file an interpleader action in court to settle a dispute between a buyer and seller over the deposit.
INTERPLEADER ACTION
231
occurs when a person dies without a will, but with heirs.
INTESTATE SUCCESSION
232
occurs when a private party forces government to purchase, (for example, as a result of freeway or airport noise). It is the opposite of eminent domain.
INVERSE CONDEMNATION
233
vacant land held for an investment. When it is sold, losses can be deducted. {BLANK} cannot be depreciated.
INVESTMENT PROPERTY
234
when there is more than one obligator (borrower) on a promissory note, the lender will include the terms "{BLANK}"
JOINT AND SEVERAL LIABILITY
235
created when two or more persons take title as {BLANK}. Four unities are required for {BLANK} (T-TIP) -Time, Title, Interest, Possession.
JOINT TENANCY
236
TTIP -- For joint tenants
Unity of Time, Title, Interest, Possession.
237
one of a series of parallel beams used to support the ceiling and floors. It is a parallel.
JOIST
238
the U.S. Supreme Court case (decided in 1968) which upheld anti-discrimination laws on the basis of the Thirteenth Amendment to the U.S. Constitution.
JONES VS. MAYER
239
when an abstract of judgment is recorded, it creates a court ordered general, involuntary lien
upon all real property of the debtor located in the county of recordation. A {BLANK} is valid for ten years and enforced by way of an execution sale. The court orders the sale of property to satisfy a judgment with a writ of execution.
JUDGMENT LIEN
240
any loan which is not first (for example, a second trust deed, or third trust deed, etc.)
JUNIOR LOAN
241
any type of compensation from escrow companies, termite companies and title companies given to a licensee for referring business. {BLANK}s are illegal.
KICKBACKS
242
a free-standing information booth in a mall.
KIOSK
243
an unfair delay in asserting legal rights which will not be excused by the court.
LACHES
244
a written contract where the seller (vendor) agrees to transfer title to real property (give a grant deed) to the buyer (vendee) after the buyer has met the contract conditions.
LAND CONTRACT (real property sales contract, installment sales contract, agreement to convey, agreement for purchase and sale, or land contract of sale)
245
an appraiser uses the {BLANK} Method when the unknown factor is the value of the land.
LAND RESIDUAL METHOD
246
a contract must be legal in formation and operation. Both its consideration and its object must be lawful.
LAWFUL OBJECT
247
includes a survey and provides the lender with extended coverage protection.
LENDER~S (ALTA) POLICY
248
personal property, not real property. It is the
| legal interest in real property held by a tenant who is leasing or renting.
LESS-THAN-FREEHOLD ESTATE (leasehold estate or chattel real)
249
tenant
LESSEE
250
landlord
LESSOR
251
using borrowed money (financing) to the maximum extent possible.
LEVERAGE
252
the personal and nonassignable right to do a particular act (or acts) on the land of another.
LICENSE
253
money encumbrances placed against a property either voluntarily (with the owner's consent) or involuntarily (without the owner's consent). A {BLANK} is a "charge" against real property.
LIENS
254
a freehold estate, limited to the duration of someone's life.
LIFE ESTATE
255
holder of the life estate.
LIFE TENANT
256
in a 1031 tax deferred exchange it is "income, trade, business, or investment
properties."
LIKE FOR LIKE PROPERTIES
257
a clause in a contract fixing the amount of damages in case one of the parties defaults.
LIQUIDATED DAMAGES CLAUSE
258
describes how quickly an investment can be converted into cash.
LIQUIDITY
259
measured by subtracting current liabilities from current assets.
LIQUIDITY OF A BUSINESS
260
notice of pending litigation concerning title or possession of real property.
LIS PENDENS
261
an employment contract between a principal (usually the seller) and an agent (broker) employing the agent to do certain things for the principal.
LISTING
262
An agent who has an {BLANK} a property which he has also listed for sale has a conflict of interest. To exercise his option to buy, the agent must reveal to the seller (in writing) any offers on the property and the amount of his profit. Additionally, to exercise his {BLANK}, the agent must obtain the written consent of the seller.
LISTING WITH OPTION TO BUY
263
refer to non-movingwater (a pond, lake, ocean).
LITTORAL RIGHTS
264
the percentage of the appraised value which a lender will lend on a property. If a lender requires a 80/20 {BLANK}, the lender will lend 80% of the lender's appraised value and require a 20% cash down
payment.
LOAN TO VALUE RATIO (LTV)
265
a borrower is prohibited from paying off a loan in advance.
LOCK-IN CLAUSE
266
the tax rate on the next dollar earned.
MARGINAL TAX RATE
267
the most important test of functional utility.
MARKETABILITY
268
the rent a property would bring in the open market on the date of appraisal. It represents the potential gross income the property can produce.
MARKET RENT (economic rent, scheduled gross income)
269
sales of similar properties in the area are studied to form an opinion of value. The {BLANK} approach is the oldest, quickest, and easiest to learn
approach. It is very adaptable and commonly used to appraise of residences and land. The {BLANK} approach is also used to appraise amenity properties.
MARKET DATA APPROACH (Comparison, Comparative or Substitution Method)
270
based on a "willing buyer" and "willing seller" concept. It is the most likely price the property should bring on the open market within a reasonable length of time.
MARKET VALUE (objective value)
271
facts which are likely to influence or persuade a party to enter into a contract.
MATERIAL FACTS
272
liens recorded by persons who have performed work or furnished materials for the improvement of real property, for which they were not paid. They must be verified and recorded.
MECHANIC'S LIENS
273
a legal description of land created by a survey. Metes and bounds describes boundaries
but does not measure land or buildings.
METES AND BOUNDS
274
the Federal Reserve Board requires banks to keep a small percentage of money deposited in their vaults as a reserve to meet cash requirements of depositors. Raising the {BLANK}
requirement tightens the money market.
MINIMUM CASH RESERVE
275
failure to disclose material facts, lying.
MISREPRESENTATION
276
contract is void or voidable.
MISTAKE
277
a document used to secure payment of a promissory note; it is seldom used in California. Mortgages are not negotiable instruments.
MORTGAGE
278
a loan secured (collateralized) by real estate.
MORTGAGE LOAN
279
provides a borrower with detailed information about a loan, including all costs and expenses that will be charged to the borrower. This statement must be given to the borrower when signed, for every loan negotiated by a broker.
MORTGAGE LOAN DISCLOSURE STATEMENT (Loan Broker Statement)
280
the interest (not the principal) which a lender receives from a mortgage.
MORTGAGE YIELD
281
the lender in a mortgage.
MORTGAGEE
282
the borrower in a mortgage.
MORTGAGOR
283
for a contract to be valid, there must be {BLANK} or assent to the terms. In real
estate contracts, {BLANK} is created by three steps: (1) offer, (2) acceptance, (3) communication of acceptance back to offeror.
MUTUAL CONSENT
284
Mutual consent for a valid contract.
(1) offer, (2) acceptance, (3) communication of acceptance back to offeror.
285
required for FHA loans. It protects the lender in case of foreclosure and is paid by the borrower, either as a lump sum or amortized.
MUTUAL MORTGAGE INSURANCE
286
occurs when monthly loan payments are insufficient to pay the interest and/or principal payments necessary to pay off the loan. As a result, the loan balance increases.
NEGATIVE AMORTIZATION
287
under the Environmental Quality Act, a {BLANK} indicates that a subdivision does not harm the environment.
NEGATIVE DECLARATION
288
a written document which is freely transferrable, like money (such as personal checks, bank drafts and promissory notes) . Mortgages, trust deeds and land contracts are not {BLANK}s.
NEGOTIABLE INSTRUMENT
289
a lessee pays expenses such as taxes, insurance, and maintenance.
NET LEASE
290
any listing where an agent receives all money over a set selling price as his commission, rather than a percentage of the selling price.
NET LISTING
291
the interest rate named in the loan document.
NOMINAL RATE
