Modern Real Estate book vocabulary Flashcards Preview

Real Estate > Modern Real Estate book vocabulary > Flashcards

Flashcards in Modern Real Estate book vocabulary Deck (102):
1

abstract of title

the condensed history of the recorded ownership of a particular parcel of real estate, consisting of a summary of the original grant and all subsequent conveyances and encumbrances affecting the property and a certification by the abstractor that the history is complete and accurate

2

accelerated cost recovery system (ACRS)

method for claiming tax deductions for certain property purchased before 1987 in which it was possible to claim greater deductions in the early years of ownership, gradually reducing the amount deducted in each year of useful life.

3

acceleration clause

the clause in a mortgage or deed of trust that can be enforced to make the entire debt due immediately if the borrower defaults on an installment payment or other obligation

4

accession

acquiring title to additions or improvements to real property as a result of the annexation of fixtures or the accretion of alluvial deposits along the banks of streams

5

accretion

the increase or addition of land by the deposit of sand or soil washed up naturally from a river, lake, or sea

6

accrued depreciation

loss in a property's value resulting from physical deterioration, external depreciation, and functional obsolescence

7

accrued items

on a closing statement, items of expense that are incurred but not yet payable, such as interest on a mortgage loan or taxes on real property

8

acknowledgment

a formal declaration made before a duly authorized officer, usually a notary public, by a person who has signed a document

9

acre

a measure of land equal to 43,560 square feet, 4,840 square yards, 4,047 square meters, 160 square rods, or 0.4047 hectares

10

acre (feet)

43,560 square feet

11

acre (yards)

4,840 square yards

12

acre (meters)

4,047 square meters

13

acre (rods)

160 square rods

14

acre (hectares)

0.4047 hectares

15

action to quiet title

a court action that establishes ownership when ownership cannot be traced through an unbroken chain of title

16

actual eviction

the legal process that results in a tenant's being physically removed from leased premises

17

actual notice

express information or fact; that which is known; direct notice

18

ad valorem tax

a tax levied according to value, generally used to refer to real estate tax. also called the general tax

19

addendum

any provision added to an existing contract without altering the content of the original. must be signed by all parties

20

adjustable-rate mortgage (ARM)

a loan characterized by a fluctuating interest rate, usually one tied to a bank or savings and loan association cost-of-funds index

21

adjusted basis

the new basis

22

administrative law judge (ALJ)

the official who presides over a hearing involving a government agency and someone affected by a decision of that agency. The ALJ hears evidence, including the testimony of witnesses, and renders a decision

23

administrator

a court-selected person who assists with the settlement of an estate of a person who died without leaving a will. a woman might be called an administratrix although administrator is the term used most often to refer to either a man or a woman

24

adverse possession

the actual, open, notorious, hostile, and continuous possession of another's land under a claim of title.

25

affidavit of title

a written statement, made under oath by a seller or grantor of real property and acknowledged by a notary public, in which grantors (1) identify themselves and indicate marital status, (2) certify that since the examination of the title, on the date of the contract no defects have occurred in the title, and (3) certify that they are in possession of the property (if applicable)

26

affiliated business arrangement (ABA)

practice of one company offering a package of services to consumers

27

agency

the relationship between a principal and an agent wherein the agent is authorized to represent the principal in certain transactions

28

agency by ratification

an agency relationship created after the fact

29

agent

one who acts or has the power to act for another. a fiduciary relationship is created under the law of agency when a property owner, as the principal, executes a listing agreement or management contract authorizing a licensed real estate broker to be his or her agent. A prospective property buyer may authorize a real estate broker to act as the buyer's agent ot find a suitable property

30

air lots

designated airspace over a piece of land. an air lot, like surface property, may be transferred

31

air rights

the right to use the open space above a property, usually allowing the surface to be used for another purpose

32

alienation

the act of transferring property to another. alienation may be voluntary, such as by gift or sale, or involuntary, as through eminent domain or adverse possession

33

alienation clause

the clause in a mortgage or deed of trust stating that the balance of the secured debt becomes immediately due and payable at the lender's option if the property is sold by the borrower. in effect, this clause prevents the borrower from assigning the debt without the lender's approval

34

allodial system

a system of land ownership in which land is held free and clear of any rent or service due to the government; commonly contrasted to the feudal system. land is held under the allodial system in the United States

35

amendment

a change to the existing content of a contract (i.e., if words or provisions are added to or deleted from the body of the contract). must be initialed by all parties

36

American Land Title Association (ALTA)policy

a title insurance policy that protects the interest in a collateral property of a mortgage lender who originates a new real estate loan

37

Americans with Disabilities Act (ADA)

act addresses rights of individuals with disabilities in employment and public accommodations

38

amortized loan

a loan in which the principal, as well as the interest, is payable in monthly or other periodic installments over the term of the loan

39

annexation

process of converting personal property into real property

40

annual percentage rate (APR)

the relationship of the total finance charges associated with a loan. this must be disclosed to borrowers by lenders under the Truth in Lending Act

41

anticipation

the appraisal principle holding that value can increase or decrease based on the expectation of some future benefit or detriment produced by the property

42

antitrust laws

laws designed to preserve the free enterprise of the open marketplace by making illegal certain private conspiracies and combinations formed to minimize competition. most violations of antitrust laws in the real estate business involve either price-fixing (real estate professionals conspiring to set fixed compensation rates) or allocation of customers or markets (real estate professionals agreeing to limit their areas of trade or dealing to certain areas or properties)

43

appointed agency

designated agency

44

appraisal

an estimate of the quantity, quality, or value of something. the process through which conclusions of property value are obtained; also refers to the report that sets forth the process of estimation and conclusion of value

45

appraisal report

an opinion of a property's market value given to a lender or client with detailed market information

46

appraiser

an independent person trained to provide an unbiased estimate of value

47

appraiser independence requirements (AIR)

regulations issued by Fannie Mae that must be followed by appraisers to ensure accurate and objective appraisals

48

appreciation

an increase in the worth or value of a property due to economic or related causes, which may prove to be either temporary or permanent; opposite of depreciation

49

appurtenance

a right, privilege, or improvement belonging to, and passing with, the land; "runs with the land"

50

appurtenant easement

an easement that is annexed to the ownership of one parcel and allows the owner the use of the neighbor's land

51

area

a level surface or piece of ground; the size of a surface; the amount of a two-dimensional object

52

area preference

people's desire for one are over another, based on a number of factors such as history, reputation, convenience, scenic beauty, and location

53

asbestos

a mineral once used in insulation and other materials that can cause respiratory diseases

54

assemblage

the combining of two or more adjoining lots into one larger tract to increase their total value

55

assessed value

the value set on property for taxation purposes

56

assessment

the imposition of a tax, charge, or levy, usually according to established rates

57

assessment equalization factor

a factor (number) by which the assessed value of a property is multiplied to arrive at a value for the property that is in line with statewide tax assessments. The ad valorem tax would be based on this adjusted value. An equalization factor may be applied to raise or lower assessments in a particular district or county.

58

assigned agency

designated agency

59

assignment

the transfer in writing of interest in a bond, mortgage, lease, or other instrument

60

associate license

a licensed real estate salesperson who is employed by or associated with the broker to perform brokerage activities on behalf of or for the broker

61

assumption of mortgage

acquiring title to property on which there is an existing mortgage and agreeing to be personally liable for the terms and conditions of the mortgage, including payments

62

attachment

the act of taking a person's property into legal custody by writ or other judicial order to hold it available for application to that person's debt to a creditor

63

attorney's opinion of title

an abstract of title that an attorney has examined and has certified to be, in the attorney's opinion, an accurate statement of the facts concerning the property's ownership

64

automated underwriting

computer systems that permit lenders to expedite the loan approval process and reduce lending costs

65

automatic extension clause

a listing agreement clause stating that the agreement will continue automatically for a certain period of time after its expiration date. in many states, use of this clause is discouraged or prohibited

66

avulsion

the sudden tearing away of land, as by earthquake, flood, volcanic action, or the sudden change in the course of a stream.

67

balance

the appraisal principle stating that the greatest value in a property will occur when the type and size of the improvements are proportional to each other as well as the land

68

balloon payment

a final payment of a mortgage loan that is considerably larger than the required periodic payments because the loan amount was not fully amortized

69

bargain and sale deed

a deed that carries with it no warranties against liens or other encumbrances but that does imply that the grantor has the right to convey title. the grantor may add warranties to the deed

70

base line

the main imaginary line running east and west and crossing a principal meridian at a definite point; used by surveyors for reference in locating and describing land under the rectangular (government) survey system of legal description

71

basis

the financial interest that the internal revenue service attributes to an owner of an investment property for the purpose of determining annual depreciation and gain or loss on the sale of the asset. if a property was acquired by purchase, the owner's basis is the cost of the property plus the value of any capital expenditures for improvements to the property, minus any depreciation allowable or actually taken. this new basis is called the adjusted basis

72

benchmarks

permanent reference marks or points established for use by surveyors in measuring differences in elevation

73

beneficiary

1) the person for whom a trust operates or in whose behalf the income from a trust estate is drawn 2) a lender in a deed of trust loan transaction

74

binder

an agreement that may accompany an earnest money deposit for the purchase of real property as evidence of the purchaser's good faith and intent to complete the transaction

75

blanket loan

a mortgage covering more than one parcel of real estate, providing for each parcel's partial release from the mortgage lien upon repayment of a definite portion of the debt

76

blockbusting

the illegal practice of inducing homeowners to sell their properties by making representations regarding the entry or prospective entry of persons of a particular race or national origin into the neighborhood

77

blue-sky laws

common name for those state and federal laws that regulate the registration and sale of investment securities

78

boot

money or property given to make up any difference in value or equity between two properties in an exchange

79

boycott

when individuals or businesses withhold their patronage to a business as a protest or to reduce competition

80

branch office

a secondary place of business apart from the principal or main office from which real estate business is conducted. a branch office usually must be run by a licensed real estate professional

81

breach of contract

violation of any terms or conditions in a contract without legal excuse; for example, failure to make a payment when it is due

82

bring down

a second title search that is made after the closing and before any new documents are filed

83

broker

one who acts as an intermediary on behalf of others for a fee or commission.

84

broker protection clause

clause in a contract that protects a broker from losing a commission in the event a transaction is not completed or is intentionally delayed until after the listing expires

85

brokerage

the bringing together of parties interested in making a real estate transaction

86

broker's price opinion (BPO)

an opinion of real estate value commissioned by a bank or an attorney and provided by a broker

87

brownfields

defunct, derelict, or abandoned commercial or industrial sties; many have toxic wastes

88

budget comparison statement

compares actual results with the original budget, often giving either percentages or a numerical variance of actual versus projected income and expenses

89

buffer zone

a strip of land, usually used as a park or designated for a similar use, separating land dedicated to one use from land dedicated to another us (e.g., residential from commercial)

90

building code

an ordinance that specifies minimum standards of construction for buildings to protect public safety and health

91

building permit

written governmental permission for the construction, alteration, or demolition of an improvement, showing compliance with building codes and zoning ordinances.

92

building-related illness (BRI)

an illness due to air quality problems, typically toxic substances or pathogens; a clinically diagnosed condition. symptoms include asthma, allergies, and hypersensitivity

93

bulk transfer

uniform commercial code

94

bundle of legal rights

the concept of land ownership that includes ownership of all legal rights to the land - possession, control within the law, enjoyment, exclusion, and disposition

95

buydown

a financing technique used to reduce the monthly payments for the first few years of a loan. funds in the form of discount points are given to the lender by the builder or the seller to buy down or lower the effective interest rate paid by the buyer, thus reducing the monthly payments for a set time

96

buyer representation agreement

a principal-agent relationship in which the real estate professional acts on behalf of the buyer, usually as an agent, with fiduciary responsibilities to the buyer

97

buyer's agent

a real estate professional who is under contract to locate property for a buyer and represent the buyer's interests in a transactions

98

buyer's broker

a residential real estate professional who represents prospective buyers exclusively

99

buyer's representative

a residential real estate professional who represents the prospective purchaser in a transaction, often through a sales associate of the broker. the buyer's representative who acts as a buyer's agent owes the buyer-principal the common-law or statutory agency duties

100

capital gain

profit earned from the sale of an asset

101

capitalization

a mathematical process for estimating the value of a property using a proper rate of return on the investment and the annual net operating income expected to be produced by the property. the formula is expressed as follows: income / rate = value

102

capping

the process of laying two to four feet of soil over the top of a landfill site and then planting grass on it to enhance the aesthetic value and prevent erosion