Real Estate Definitions Flashcards
(269 cards)
1
Q
Latent Defects
A
Defects that are not visible or apparent
2
Q
Lease, Fixed
A
A lease in which the rent is a set amount, and the landlord pays most or all of the operating expenses (such as utilities, taxes, insurance, and maintenance costs). Also called a flat lease, gross lease, or straight lease.
3
Q
Lease, Graduated
A
A lease in which it is agreed the the rental payments will increase at intervals by a specified amount or according to a specified formula.
4
Q
Lease, Percentage
A
A lease in which at least part of the rent is based on the tenant’s monthly or annual gross sales.
5
Q
leasehold
A
A possessory interest in real property that has a limited duration, such as an estate for years or a periodic tenancy. Also called a less-than-freehold estate.
6
Q
leverage
A
The effective use of borrowed money to finance an investment such as real estate
7
Q
License
A
- Official permission to do a particular thing that the law does not allow everyone to do. 2. Revocable, non-assignable permission to use another person’s land for a particular purpose.
8
Q
Lien
A
A nonpossessory interest in real property, giving the holder the right to foreclose if the owner doesn’t pay a debt owed to the holder; a financial encumbrance on the owner’s title.
9
Q
lien, construction
A
A lien on property in favor of someone who provided labor or materials to improve it. Also called a mechanic’s lien or materialman’s lien.
10
Q
lien, general
A
A lien against all the property of a debtor, rather than a particular piece of his or her property.
11
Q
lien priority
A
The order in which liens are paid off out of the proceeds of a foreclosure sale.
12
Q
life estate
A
A freehold estate that lasts only as long as a specified person lives. That person is referred to as the measuring life.
13
Q
life estate per autre vie
A
Meaning “for another life;” a life estate in which the measuring life is someone other than the life tenant.
14
Q
life tenant
A
Someone who owns a life estate; the person entitled to possession of the property during the measuring life
15
Q
lis pendent
A
A recorded notice stating that there is a lawsuit pending that may affect title to the defendant’s real estate
16
Q
Listing, exclusive agency
A
A listing agreement that entitles the brokerage to a commission if anyone other than the seller finds a buyer for the property during the listing form.
17
Q
Listing, Exclusive Right to Sell
A
A listing agreement that entitles the brokerage to a commission if anyone–including the seller–finds a buyer for the property during the listing term.
18
Q
Listing, Open
A
A nonexclusive listing, given by a seller to as many brokerages as he or she chooses. If the property is sold, a brokerage is entitled to a commission only if it was the procuring cause of the state.
19
Q
Littoral Rights
A
The water rights of the power of land that borders water the is not flowing, such as a lake or ocean.
20
Q
Loan, Amortized
A
A loan that requires regular installment payments of other principal and interest
21
Q
Loan, Construction
A
A loan to finance the cost of constructing a building, usually providing that the loan funds will be advanced in installments as the work progresses. Also called an interim loan.
22
Q
Loan, Interest-only
A
A loan that requires the borrower to pay only the interest during the loan term, with the principal due at the end of the term. Also called a term loan.
23
Q
Loan, Take-out
A
Long-term financing used to replace a construction loan (an interim loan) when construction has been completed. Also called a permanent loan.
24
Q
Loan-to-Value Ration (LTV)
A
The relationship between the loan amount and either the sales price or the appraised value of the property (whichever is less), expressed as a percentage.
25
Maker
The person who signs a promissory note, promising to repay a debt
26
Margin
In an adjustable-rate mortgage, the difference between then index rate and the interest rate charged to the borrower.
27
Market Price
1. The current price generally being charged for something in the marketplace. 2. The price actually paid for a property.
28
Material Fact
Information that has substantial negative impact on the value of the property, on a party's ability to perform, or on the purpose of the transaction.
29
Merger
1. Uniting two or more separate properties by transferring ownership of all of them to one person. 2. When the owner of the parcel acquires title to one on more adjacent parcels.
30
Metes and Bounds Description
A type of legal description that starts at an identification point of beginning, then describes the property's boundaries in terms of courses (compass directions) and distances, ultimately returning to the point of beginning.
31
Mortgage
An instrument that creates a voluntary client on real property to secure repayment of a debt, and which does not include a power of sale, so it can only be foreclosed judicially; the parties are the mortgage (borrower) and mortgagee (lender)
32
Mortgage, Blanket
A mortgage that covers more than one parcel of property
33
Mortgage, Budget
A loan in which the monthly payments include a share of the property taxes and insurance, in addition to principal and interest; the lender places the money for taxes and insurance in an impound account
34
Mortgage, Hard Money
A mortgage given to a lender in exchange for cash, as opposed to one given to exchange for credit
35
Mortgage, Open-End
A loan that permits the borrower to re borrow the money she has repaid on the principal, usually up to the original loan amount, without executing a new loan agreement.
36
Mortgage, Package
A mortgage that is secured by certain items of personal property (such as appliances or carpeting) in addition to the real property.
37
Mortgage, Purchase Money
1. When a seller extends credit a buyer to finance the purchase of the property, accepting a deed of trust or mortgage instead of cash. Sometimes called a carry back loan. 2. In a more general sense, any loan the borrower uses to buy the security property (as opposed to a loan secured by property the borrower already owns)
38
Mortgages, Reverse
An arrangement in which is homeowner mortgages the home to a lender in exchange for a monthly check from the lender.
39
Mortgage Term
An interest-only loan, in which the borrower's regular payments during the loan term cover the interest on the loan, without paying any of the principal; the entire principal is due as as a balloon payment at the end of the loan term
40
Mortgage, Wraparound
A purchase money loan arrangement in which the seller uses part of the buyer's payments to make the payments on an existing loan (called an underlying loan); the buyer takes title subject to the underlying loan, but does not assume it.
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Mortgagor
A property owner (usually a borrower) who gives a mortgage to another (usually a lender) as security for payment of an obligation.
44
Nonconforming Use
A property use that does not conform to current zoning requirements, but is allwoed because the property was being used in that way before the present zonging ordinace was enacted.
45
Notary Public
Someone who is officialy authorized to witness and certify the acknowledgement made by someone signing a legal document.
46
Note, Installment
A promissory note that calls for regular payments of principal and interst unti the debt is fully paid.
47
Note, Straight
A promissory note that calls for regular payments of interest only, so that the entire principal amount is due in one lump sum at the end of the loan term.
48
Notice, Constructive
Knowledge of a fact imputed to a person by law. A person is held to have this wen he or she should have known the fact (because he or she could have learned it through reasonable diligence or an inspection of the public record), even if he or she did not actually know it.
49
Novation
When one party to a contract withdraws and a new party is submitted, relieving the withdrawing party of liability. 2. THe substitution of a new obligation for an old one.
50
Obsolescence, External
Loss is value resulting from factors outside the property itself, such as proximity to an airport. Also called economic obsolescence or external inadequacy.
51
Obsolescence, Functional
Loss of value due to inadequate or outmoded equipment, or as a result of a poor or outmoded design.
52
Option
A contract giving one party the right to do something, without obligating him or her to do it.
53
Origination Fee
A fee a lender charges a borrower upon making a new loan, intended to cover the administrative costs of making the loan. Also called a loan fee.
54
Partial Reconveyance
The instrument given to the borrower when part of the security property is realeased from a blanket deed of trust under a partial release clause.
55
Partnership, General
A partnership in which each member has an equal right to manage the business and share in teh profits, as well as equal responsibilty for the partnership's debts
56
Partnership, Limited
A partnership made up of one or more general partners and one or more limited partners
57
Percoloation Test
A test that measures the rate at which water passes through soil, usually performed in order to assess whether soil on a property is suitable for a septic system
58
Personal Property
Any property that is not real property; movable property not affixed to land. Also called chattels or personalty.
59
Plottage
The increment of value that results when two or more lots are combined to produce a greater value
60
Police Power
The constiutional power of state and local governments to enact and enforce laws for the protection of the public's health, safety, morals, and general welfare
61
Possibility of Reverter
In a qualified (or limited) fee estate, the chance that the estate will revert back to the grantor automatically if the condition attached to the estate is violated.
62
Power of Attorney
An instrument authorizing one person (the attorny in fact) to act as another's agent, to the extent state in the instrument
63
Prepayment Penalty
A penalty charged to a borrower who prepays
64
Principal
One who grants another person (an agent) authority to represent him or her in dealings with third parties. 2. One of the parties to a transaction (such as buyer or seller), as opposed to those who are invovled as agents or employees (such as a real estate or escrow agent). 3. In regard to a loan, the amount originally borrowed, as opposed to the interest.
65
Procurring Cause
The real estate agent who is primarily responsibly for bringing about a sale (for example, by negotiating the agreement between the buyer and seller).
66
Probate Court
A court that oversees the distribution of property under a will or inestate succession
67
Profit
The right to enter another's land to remove somthing from the soil such as oil, gas or crops.
68
Proration
The process of dividing or allocating something (especially a sum of money or an expense) proportionally, according to time, interest, or benefit
69
Progression, Principle of
An appraisal principle which holds that a property of lesser value tends to be worth more when it is located in an area with properties of greater value than it would be if located elsewhere.
70
Quiet Title Action
A lawsuit to determine who has title to a piece of property, or to remove a cloud from the title
71
Real Estate Investment Trust (REIT)
A real estate investment business with at least 100 investors organized as a trust.
72
Redemption
1. When a defaulting borrower prevents foreclosure by paying the full amount of the debt, plus costs. 2. WHen a mortgagor regains the proeprty after foreclosure by paying whatever teh foreclosure sale purchaser paid for it, plus interest and expenses.
73
Redlining
When a lender refuses to make loans secured by property in a certain neighnorhood because of the racial or ethnic composisiton of the neighborhood.
74
Regression, Principle of
An appriasal principle which hods that a valuable property surrounded by properties of lesser value will tend to be worth less than it would be in a different location.
75
Remainder
A future interest that becomes possessory when a life estate terminates, and that is held by someone other than the grantor of the life estate.
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Remainderman
The person who has an estate in remainder
77
Rescission
When a contract is terminated and each party gives anything acquired under the contract back tot he other party. (The verb form is rescind.)
78
RESPA
The Real Estate Settlement Procedures Act; a federal law that requires lenders to disclose certain information about closing costs to loan applicants.
79
Sales Comparison Approach
One of the three main methods of appraisal, in whih the sales prices of comparable properties are used to estimate the value of the subject property. Also called the market data approach.
80
Setback Requirements
Provisions in a zoning ordinance that do not allow structures to be built within a certain distance of the property line.
81
Settlement Statement
A document that presents the final, detailed accounting for a real estate transaction, listing each party's debits and creidts and the amount each will receive or be required to pay at closing. Also called a closing statement.
82
Ownership in Severalty
Ownership by a single individual
83
Special Assessment
A tax levieved only against the properties that have benefited from a public improvement (such as a sewer or a street light), to cover the cost of the improvement.
84
Specific Performance
A legal remedy in which a court orders someone who has breached to actually perform the contract as a agreed, rather than simply paying money damages
85
Spot Survey
With this report, the surveyor will find an old survey on the property and then go look at the property and update the original survey by adding new structurs to the report
86
Statute of Frauds
A law that requires certain types of contracts to be in writing and signed in order to be enforceable.
87
Statute of Limitations
A law requiring a particular type of lawsuit to be filed within a specificed time after the even giving rise to the suit occured.
88
Steering
Channeling prospective buyers or tenants to or away from particular neighborhoods based on their race, religion, national origin, or ancestry.
89
Stigmatized Property
When the propety (or a neighboring property) was the site of a violent crime, suicide or other death, drug activity, or some other negative occurrence.
90
Sublease
When a tenat grants someone else the right to possession of the leased property for part of the remainder of the lease term. Also called a sandwich lease.
91
Subordination Clause
A provision in a mortgage or deed of trust that permits a later mortgage or deed or trust to have higher lien priority than the one containing the clause.
92
Substitution, Principle of
A principle of appraisal holding that hte maximum value of a property is set by how much it would cost to obtain another property that is equally desirable, assuming that there would not be a long delay or signficianct incidental expenses invovled in obtainnig the substitute.
93
Surrender
The giving up an estate (such as a life estate or leasehold) before it has expired
94
Survivorship, Right of
A characteristic of joint tenancy; surviving joint tenants automatically acquire a deceased joint tenant's interest in the property
95
Tax, Progressive
A tax, such as a federal income tax, that imposses a higher tax rate on a taxpayer who earns a higher income.
96
Tax, Transfer
The tax paid by the seller at closing, based on the selling price of the property; also known as an excise tax in Wahsington, or stamp tax or documentary tax in other states.
97
Tax Credit
A credit that is subtracted directly from the amount of tax owed.
98
Tax-Deferred Exchange
A transaction in which a piece of property held for investment or used in a trade or business is traded for a piece of like-kind property, thus diferring tax on the gain; also called a tax-free exchange, or a Section 1031 exchange.
99
Tax Shelter
Any investment that generates income while also serving to shelter investors from tax liability on that income (such as real estate).
100
Tenancy, Joint
A form of concurrent ownership in whih the co-owners have unity of time, title, interest, and possession and the right of surviviorship.
101
Tenancy, Periodic
A leasehodl estate that continues for successive periods of equal length (such as from week to week or month to month), until terminated by property ntoice from either party. Also called a month-to-mont (or week-to-week, etc.) tenancy.
102
Tenancy at Sufferancy
When a tenat (who enteretd into possession of the property lawfully) stay on after the lease ends without the landlord's permission.
103
Tenancy in Common
A form of concurrent ownership in which two or more persons each have an undivided interest in the entire property but no right of survivorship.
104
Tenement, Dominant
Property that receives the benefit of an easement, appurtenant.
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Tenement, Servient
Property burdened by an easement
106
Time is of the Essence
A clause in contract that means performance on the exact dates specified is an essential element of the contract; failure to perform on time is a material breach.
107
Title, Equitable
The vendee's interest in propety under a land contract. Also called an equitable interest.
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Title, Legal
The vendor's interest in property under a land contract
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Title, Marketable
Title free and clear or objectionalable liens, encumbrances or defects, so that a reasonably prudent person with ull knowledge of the facts would not hesistate to purchase the property.
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Title Report, Preliminary
A report issued by a title company, disclosing the condition of the title to a specific piece of property, before the actual title insurance policy is issued.
111
Trade Fixtures
Articles of personal property annexed to real property by a tenant for use in hs or her trade or business, which the tenant is allowed to remove at the end of teh lease.
112
Trust Account
A bank account, separate from a real estate brokerage's personal and business accounts, used to segregate trust funds from the brokerage's own funds.
113
Trustee
1. A person appointed to manage a trust on behalf of the beneficiaries. 2. A neutral third party appointed in a deed of trust to handle the nonjudicial foreclosure process in case of default.
114
Trustor
The borrower in a deed of trust. Also called a grantor.
115
Truth in Lending Act
A federal law that requires lenders and credit arrangers to amake disclosures concerning loan costs (including the total finace charge and the annual percentage rate) to consumer loan applicants.
116
Undue Influence
Exerting excessing pressure on someone so as to overpower ther person's free will and prevent him or her rom kaing a rational or prudent decision; often involves abusing a relationship or trust
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Unlawful Detainer
A summary legal action to regain possession of real property; especially, a suit filed by a landlord to evict a defaulting tenant
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Usury
Charging an interest rate that exceeds legal limits
119
Value, Assessed
The value placed on property by the taxing authority (the county assessor, for example) for the purposes of taxation
120
Value, Market
The most probable price which a property should bbring in a competitive and open market udner all conditions requisited to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. (This is the definition fro the Uniform Standards of Professional Appriasal Practice.) Also called value in exchange, or objective value.
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Value, Utility
The value of a property to its owner or to a user. (A form of subjective value.) Also caleld value in use.
122
Variance
Permission (from the local zoning authority) to use property or build a structure in a way tha violates the strict terms of the zoning ordinance.
123
Vendee
A buyer or purchaser; particularly, someone buying property under a land contract.
124
Vendor
Destruction, damage, or material alteration of property by someone in possession who holds less than a fee estate (such as a life tenant or lessee), or by a co-owner.
125
Zoning
Government regulation of the uses of property within specified areas.
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Mortgage, Adjustable-Rate (ARM)
A loan in which the interest rate is periodically increased or decreased to reflect changes in the cost of money.
127
Age, Effective
The age of a structure indicated by its condition and remaining usefulness
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Agency, Dual
When an agent represents both parties to a transaction, as when a real estaet agent represents both the buyer and the seller.
129
Appraisal
An estimate on opition of the value of the piece of property as of a particular date. Also called valuation.
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Capitalization Rate
A percentage used in teh capitalization process, believed to represent the proper relationship betwen the value of the property and the income it produces; the rate that would be a reasonable returen on an investment of the type in question
131
Dedication
A voluntary or involuntary gift of private property for public use; may transfer owenrship or simply create an easement.
132
Foreclosure, Judicial
1. The sale of property pursuant to court order to satisfy a lien. 2. A lawsuit filed by a mortgage or deed of trust beneficieary to foreclose on the security property when the borrower has defaulted.
133
Lien, Specific
A lien that attaches only to a particular piece of property
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Lienholder, Junior
A secured creditor whose lien is lower in priority than another's lien.
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Mortgage, Balloon
A partially amortized mortgage loan that requires a large balloon payment at the end of the loan term.
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Partition
The division of a property among its co-owners, so that each owns part of it in severalty; this may occur by agreement of all the co-owners or by a court order
137
Affiliated Licensee
A real estate agent who is licensed under a particular brokerage firm
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Broker, Designated
A managing broker who is repsonsible for all the brokerage activities of a real estate firm
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Covenant Against Encumbrances
In a warranty deed, a promise that the property is not burdened by an encumbrances other than those that are disclosed in the deed.
140
Convenant of Seisin
In a warranty deed, a promise that the grantor actually owns the interest she is conveying to the grantee.
141
Deed, General Warranty
A deed in which the grantor warrants the title against defects that might have arisen before or during his period of ownership.
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Deed, Special Warranty
A deed in which the grantor warrants title only against defects that may have arisen during his period or ownership.
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Earnest Money
A deposity that a prospective buyer gives the seller as evidence of her good faith intent to emplete the transaction
144
Fee, Qualified
A fee simple estate that is subject to termination if a certain condition is not met or if a specified event occurs. Also called a conditional fee or defeasible fee.
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Negative Amortization
When unapaid interest on a loan in added to the principal balance, increasing the amount owed
146
Return of Investment
The after-tax cash flow divided by the amount of equity in the property multiplied by 100%
147
Right of First Refusal
A right that gives the holder the first opportunity to purchase or lease a particular parcel or real property, should the owener decide to sell or lease it.
148
Sherman Act
A federal law prohibiting any agreement that has the efect of an unreasonable restraint on trade, such as price fixing and tie-ie-arrangments.
149
Subagent
A peron that an agent has delegated authority to, so that that person can assist the agent in carrying out the principal's orders; the agent of an agent
150
Liabiility, Vicarious
A legal doctrice stating that a principal can be held liable for harm to third parties resulting from an agent's actions
151
Plat
A detailed survey map of a subdivision, recorded in the county where the land is located.
152
Reconciliation
The final step in the appraisal, when the appraiser assembles and interprets the data in order to arrive at a final value estimate. Also called a correlation.
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Tenancy by the Entireties
A form of joint ownership or property by husband and wife recognized in most states that don't use a commnity property system; not recognized in Washington.
155
Torrens System
A system of land registration used in some states, which allows title to be verified without the necessity of a title search; registerd land is free of all encumbrances or claims not registered with the title registrar.
156
PCBs
Cancer-causing chemicals that may leak from electrical equipment
157
Reversion
A future interest that becomes possessory when a life estate terminates, and that is held by the grnator of the life estate, or the grantor's heirs.
158
TRID Rule
Federal Regulationsthat combine the disclosure requirements of the Truth in Lending Act and the Real Estate Settlement Procedures Act; TRID stand for TILA-RESPA Integrated Disclosures.
159
Acceleration Clause
A provision in a promissiory note or security instrument allowing the lender to declare the entire debt due immediately if the borrower breaches one or more provisions of the loan agreement. Also referred to as a call provision.
160
Accession
Any addition to real property from natural or artificial causes, including accretion, reliction, and avulsion.
161
Acknowledgement
When a persona who has signed a document formally declares to an authorized official (usually a notary public) that he or she signed voluntarily. The official can then attest that the signatures is voluntary and genuine.
162
Addendum
An attachment to a purchase agreement or other contract that contains additional provisions that apply to that transaction.
163
Ad Valorem
A Latin phrase that means "according to value" used to refer to taxes that are assessed on the value of property.
164
Adverse Possession
Acquiring title to real property that belongs to someone else by taking possession of it without permission, in the manner and for the length of time prescribed by statute.
165
Agency, Disgnated
A term unsed in some states (but not Washington) to refer to a type of dual agency, in which the seller's agent and the buyer's agent both work for the same brokerage; also know as an in-house transaction
166
Alienation
The transfer of ownership or an interest in property from one person to another, by any means.
167
Alienation Clause
A provision in a security instrument that gives the lender the right to declare the entire laon balance due immediately if the borrower sells or otherwise transfers the security property. Also called a due-on-sale clause.
168
Amendment
A written modification to contract the occurs after both parties have signed the document
169
Annual Percentage Rate (APR)
All or the charges that the borrower will pay for the loan (including the interest, loan fees, discount points, and mortgage insurance costs), expressed as an annual percentage of the loan amount.
170
Anticipation, Principle of
The appraisal principle which holds that value is created by the expectation of benefits to be recieved in the future
171
Appurteneances
Rights that go along with ownership of a particular piece of property, such as air rights or mineral rights; they are oridinalry transferred with the property, but may, in some cases, be sold separately
172
Arm's Length Transaction
A transaction in which there is no pre-eisting famil your business relationship between teh parties.
173
Assignment
1. A transfer of contract rights from one person to another. 2. When a buyer assumes personal liability for a seller's mortgage. 3. In the case of the lease, when the original tenant transfers his orher entire leasehold estaet to another.
174
Assessment
The valuation of property for purposes of taxation
175
Assumption
When a buyer takes a personal liability for paying off the seller's existing mortgage or deed of trust. May also be referred to as an assignment.
176
Attorney in Fact
Any person authorized to represent another by a power of attorney; not necessary a lawyer (an attorney at law).
177
Backup Offer
A buyer might be enthusiastic about a particular house to the extent that she makes an offer on it even after the seller has accepted a different offer. This is known as a backup offer, and is contingent on the failure of the first contract.
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Balloon Payment
1. One of whom a trust is created and on whose behalf the trustee administers the trust. 2. The lender in ia ded of trust transaction. 3. One entitled to receive real or personal property under a will; a legatee or devisee.
179
Bequeath
To transfer personal property to another by will.
180
Bill of Sale
A document used to transfer title to personal property from one person to another.
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Blind Ad
An adverstisement placed by a real estaet licensee that does not include the brokerage's name.
182
Blockbusting
Attempting to induce owners to list or sell thier homes by predicting that members of another race or ethnic group, or people suffering form some disabilty, will be moving into neighbhorhoods; this violates anti-discrimination laws. Also called panic selling.
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boot
In a tax-free exchange, something given or recieved that is not like-kind property.
184
CAN-SPAM Act
The CAN-SPAM Act is a federal law that regulates unsolicited emails, including those that a real estate liencee might send as advertisements. It requires that nay unsuolicited email contain insturctions on how the recipient can opt out of recieving further emaisl from the sender.
185
Capital Gain
Profit realized from teh sale of a capital asset.
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Capitalization
A method of appraising real property by converting the antipated net income form the property into a present value. Also called the income approach to value.
187
Caveat Emptor
Meaning "let the ubyer beware," a tern that suggests that duty to investigate a potential purchase ultimately falls on the buyer.
188
CC&Rs
A declaration of covenants, conditions, and restricitions; usually recorded by a developer to place restrictions on all lots within a new subdivision.
189
Certificate of Eligibilty
A document issued by the Department of Veterans Affairs as evidence of a veteran's elegibilty for a VA-guaranteed loan.
190
Certificate of Reasonable Value
A document issued by the Department of Veterans Affairs, setting forth the current market value of a property, based on a VA-approved appraisal.
191
Change, Principle of
An appraisal principle which holds that property values are in a state of flux, increasing and decreasing in response to social, economic, and governmental forces.
192
Chattle Real
Personal property that is closely associated with real property; the primary example is a lease.
193
Cloud on Title
A claim encumbrance, or apparent defect that makes the title to a property unmarketable.
194
Commingling
Illegally mixing trust funds held on behalf of a client with personal funds.
195
Common Areas
1. The land and improvements in a condominium, planned unit development, or other housing development that are owned and used collectively by all of the residents, such as parking lots, hallways, and recreactional facilities available for common use. Also called common elements. 2. In a buildingwith leased units or spaces, the areas tha are availalble for use by all of the tenants.
196
Common Elements, Limited
In a condominium, areas outside of the units (such as balconies or assigned parking spaces) that are designated for the use of particular unit owners, rather than all of the residents.
197
Community Property
Property owned jointly by a married couple in Washington, California, and other community property states, as distinguished from each spouse's separate property; generally, and property acquired through the labor or skill or either spouse during marriage.
198
Comparable
A recently sold and similarly situated property that is used as a point of comparison by an appraiser using hte sales comparison approach.
199
Competitive Market Analysis
A CMA is similar to an appraisal, but performed by a real estate agent, who goal is to help the seller determine an accurate listing price based on comparable homes tha have recently sold in the area.
200
Condemnation
1. Talking private property for public use thorugh the government's power of eminent domain. 2. A declaration that a structure is unfit for occupancy and must by closed or demolished.
201
Condominium
Property developed for concurrent ownership, where each co-owner has a separate interest in an individual unit, combined with an undivided interest in the common areas of the property.
202
Conformit, Principle of
An appraisal principle which holds that the maximum value of property is realized when there is a reasonable degree of social and economic homogeneity in the neighborhood.
203
Consideration
Anything of value given to induce another to enter into a contract, such as money, goods, services, or a promise.
204
Contract, Bilateral
A contract, in which each party has made a binding promise to perform.
205
Contract, Executed
A contract in which both parties have completely performed their contractual obligations.
206
Contract, Executory
A contract in which one or both parties have not yet completed performance of their obligations
207
Contract, Land
A contract for the sale of real property in which the buyer (the vendee) pays in installments; the buyer takes possession of the property immediately, but the seller (the vendor) retains legal title until the full price has been paid. Also called a conditional sales contract, installment sales contract, real estate contract, or contract for deed.
208
Contract Unenforceable
An agreement that a court woudl refuse to enforce; for example because its contents can't be proven or the statute of limitations has run out.
209
Contract, Unilateral
A contract that is accepted by performance; the offeror has promised to perform his or her side of the bargain if the other party performs, but the other party has not promised to do so.
210
Contract, Void
An agreement that is not an enforceable contract, because it lacks a required element (such as consideration) or is defective in some other respect.
211
Contract, Voidable
A contract that one of the parties can disaffirm without liability, because of lack of capacity or a negative factor such as fraud or duress.
212
Contribution, Principle of
An appraisal principle which holds that the avlue of real property is greatest when the improvements produce the highest return commensurate with their cost (the investment).
213
Conversion
1. Missappropriating property or funds belonging to another; for example, converting trust funds to one's own house. 2. The process of changing an apartment complex into a condominium or coorperative.
214
Cooperative
A building owned by a corporation, where the residents are shareholders in the corporation; each shareholder receives a proprietary lease on an individual unit and the right to use the common areas.
215
Cost, Repalcement
In appraisal, the current cost of constructing a building with the same utility as the subject property using modern materials and construction methods.
216
Cost, Reproduction
In appraisal, the cost of contrsuting a replica (an exact duplicate) of the subject property, using the same materials and contruction methods that were originally used, but as current prices.
217
Covenant, Restrictive
A promise to do or not do an act relating to real property, especially a promise that runs with the land; usually an owner's promise to not use property in a specified manner.
218
Covenant of Quiet Enjoyment
A promise that a buyer or tenant's possession will not be disturbed by the previous owner, the lessor, or anyone else making a lawful claim against the property.
219
Damages, Liquidated
A sum that the parties to a contract agree in advance (at the tiem the contract is made) will serve as full compensation in the event of a breach.
220
Deed, Quitclaim
A deed the conveys any interest in a property that the grant or has at the time the deed is executed, without warranties.
221
Deed in Lieu of Foreclosure
A deed given by a borrower to the lender, relinquishing ownership of the security property, to satisfy the debt and avoid foreclosure.
222
Deed of Reconveyance
The instrument used to release the security property from the lien created by a deed of trust when the debt has been repaid.
223
Deed of Trust
An instrument that creates a voluntary lien on real property to secure the repayment of a debt, and which includes a power of sale clause permitting nonjudicial foreclosure (nonjudicial foreclosure is also known as foreclosure by advertisement); the parties are the grantor or trustor (borrower), the beneficiary (the lender), and the trustee (a neutral third party).
224
Defeasance Clause
A clause in a mortgage, deed of trust, or lease that cancels or defeats a certain right upon the occurrence of a particular event
225
Delivery
The legal transfer of a deed from the grantor to the grantee which results in the transfer of title.
226
Depreciation
1. A loss in value (caused by deferred maintenance, functional obsolescence, or external oboslescence). 2. For the purpose of income tax deductions, apportioning the cost of an asset over a period of time.
227
Depreciation, Incurable
Defered maintenance, functional obsolescence, or external obsolescence that is either impossible to correct, or not economically feasible to correct, because the cost could not be recovered in the sales price.
228
Devise
1. (noun) A gift of real property through a will. 2 (verb) To transfer real property by will.
229
Discount Points
A percentage of the principal amount of a loan, collected by the lender at the time a loan is orgininated, to give the lender an additional yield.
230
Downzoning
Rezoning land for amore limited use.
231
Duress
Unlawful force or constraint used to compel someone to do something (such as sign a contract) against his or her will.
232
Easement
An irrecovable right to use some part of another person's real property for a particular purpose.
233
Easement Appurtenant
An easment that benefits a piece of property, the dominant tenement.
234
Easement in Gross
An easement that benefits a person instead of a piece of land; there is a dominant tenat, but not dominant tenement.
235
Economic Life
The period during which improved property will yield a return over and above the rent due to the land itself; also called useful life.
236
Elements of Value
In appraisal, the four basic atributes of a property that help detemine its value: utility, scarcity, demand, and trasferabilty.
237
Eminent Domain
The government's constitutional power to take (condemn) private property for public use, as long as the owner is paid just compensation.
238
Encumbrance
A nonpossessory interest in real property; a right or interest held by someone other than the property owner, which may be a lien, an easement, a profit, or a restrictive covenant.
239
Equity
1. an owner's encumbered interest in his or her property; the difference between the value of the property and the liens against it. 2. A judge's power to soften or set aside strict legal rules, to bring about a fair and just result ina particular case.
240
Escheat
Whe property reverts to the estate after a person dies intestate and no heirs can be located.
241
Escrow
An arragement in which something of value (such as money or a deed) is held on behalf of the parties to a transaction by a disinterested third pary (an escrow agent) until specified conditions have been fulfilled.
242
Estate
1. An interest in real property that is or may become possessory; either a freehold or a leasehold. 2. The property left by someone who has died.
243
Estate for Years
A leasehold estate set to last for a definite period (one week, three years, etc.) after which it terminates automatsically. Also called a tenancy for years or term tenancy.
244
Eviction, Constructive
When a landlord's act (or failure to act) interfieres with the tenant's quiet enjoyment of the property, or makes the property unfit for its inended use, to such an extent that the the tenant is forced to move out.
245
Executor
A person named in a will to carry out its provisions.
246
Fee Simple
The highest and most complete form of ownership, which is of potentially infinite duration. Also called a fee or a fee simple absolute.
247
Fiduciary Relationship
A relationship of trust and confidence, where one party owes the other (or both parites owe each other) loyalty and a higher standard of good faith than is owed to third parties.
248
Fixture
An item that used to personal property but has been attached to or closely associated with real property in such a way that it has legally become part of the real property.
249
Foreclosure
When a lienholder causes property to be sold against the owner's wishes, so that the unpaid lien can be satisfied from the sale proceeds.
250
Fraud, Actual
Deceit or misrepresentation with the intention of cheating or defrauding another.
251
Fraud, Constructive
A breach of duty that misleads the person the duty wa owed to, without an intention to deceive.
252
Granting Clause
Words ina deed that indicate the grantor's intent to transfer an interest in property.
253
Gross Multiplier Method
A method of appraising residential property by reference to its rental value.
254
Habendum Clause
A clause included after the granting clause in many deeds; it begins "to have and to hold" and describes the type of estate the grantee will hold.
255
Habitability, implied Warranty of
A warranty implied by law in every residential lease, that the property is fit for habitation.
256
Highest and Best Use
The use which, at the time of appraisal, is most likely to produce the greatest net return from the property over a given period of time.
257
Historical Landmarks
Local rodinances may protect buildings designated as historical landmarks by prohibiting demolishing or modifying such buildings without a permit.
258
Holder in Due Course
A person who obtains a negotiable insturment for value, in good faith, without notice that it is overdue or notice of any defenses against it.
259
Impound Account
A bank account maintained by a lender for payment or property taxes and insurance premiums on the security property; the lender requires the borrower to make regular deposits, and pays the expenses out of the account. Also called a reserve account.
260
Income, Active
As classified by the IRS, income that includes wages, salaries, and commissions earned directly by an individual person.
261
Income, Effective Gross
A measure of a rental property's capacity to generate income; calculated by subtracting a bad debt/vacancy factor from the economic rent (poential gross income)
262
Income, Net
The income that is captialized to estimate the property's value; calculated by subtracting the property's operatin expenses (fixed expenses, maintenance expenses, and reserves for replacement) from the effective gross income.
263
Income, Passive
As classified by the IRS, income that includes earnings from rental property or a limited partnership.
264
Injunction
A court order prohibiting someone from performing an act or commanding performance of an act.
265
Insurance, Title Extended Coverage
Title insurance that covers problems that should be discovered by an inspection of the property (such as encorachments and adverse possession), in addition to the problems covered by standard coverage policies.
266
Insurance, Title, Standard Coverage
Title insurance that protects against latent title defects (such as forged deeds) and undiscovered recorded encumbrances, but does not protect against problems that would only be discovered by an inspection of the property.
267
Interpleader
A court action filed by someone holding funds that wo or more people are claiming. The holder turns the funds over to the court; the court resovlves the dispute and delivers the money to the party who is entitled to it.
268
Intestate Succession
Distritubtion of the property of a person who died without a will to his or her heirs.
269
Judgement, Deficiency
A personal judgement entered against a borrower in favor of the lender if the proceeds form a foreclosure sale of the secruity property are not enough to pay off the debt.
