Real Estate Word Power Flashcards
(724 cards)
1
Q
“Or More” Clause
A
A clause in a note or security device that indicates no
pre-payment penalty. The debt can be paid in full at
any time by the debtor.
**_See_** Pre-payment Penalty
2
Q
1099 S
A
Reports proceeds from a real estate
transaction to the IRS.
2
Q
Abandonment of Homestead
A
A document recorded to terminate
a homestead exemption.
**_See_** Homestead
3
Q
Abatement
A
To reduce in amount, such as the removal or
the encapsulation of asbestos.
**_See_** Asbestos
4
Q
Ability to Repay Rule
A
A residential lender is to verify that the borrower
has a reasonable ability to repay the loan.
**_See_** Dodd-Frank Act, Qualified Mortgage
5
Q
Abstract of Title
A
A summary of all documents that appear on
public record affecting a parcel of real property.
**_See_** Certificate of Title, Chain of Title
6
Q
Abutting Land
A
Parcels of land having common boundaries.
6
Q
Acceleration
A
The Lender’s right to call the entire loan all due &
payable if certain conditions are violated.
**_See_** Alienation Clause, Due on Sale Clause
7
Q
Acceptance
A
An agreement binding one of the terms of an offer.
**_See_** Bilateral Contract, Contract, Offer, Unilateral Contract
8
Q
Accretion
A
The gradual build up of land by wind or water.
**_See_** Alluvium, Reliction
9
Q
Accrued Depreciation
A
For tax purposes, the cumulative amount of
depreciation up to a certain time.
**_See_** Economic Depreciation, Functional Depreciation, Physical Depreciation
10
Q
Acknowledgement
A
Signing a legal document before a Notary Public
or other authorized person.
**_See_** Notary Public
11
Q
Acre
A
43,560 square feet. If it were in the shape of a
square, it would measure approximately
208.71 feet on each side.
11
Q
Acre Foot
A
One acre of land with water one foot deep.
325,850 gallons of water.
**_See_** Acre
12
Q
Active Management Area
A
Areas in Arizona with heavy reliance on ground water;
Phoenix, Prescott, Pinal, Pima, Santa Cruz
**_See_** Assured Water Supply
13
Q
Actual Age
A
The chronological age of a structure.
**_See_** Economic Life, Effective Age
14
Q
Actual Delivery
A
The Grantor physically hands the Deed to the Grantee.
**_See_** Escrow Delivery
15
Q
Actual Eviction
A
Direct actions of a landlord to remove a tenant
from the premises through the legal process.
**_See_** Constructive Eviction
15
Q
Actual Notice
A
Facts that are known to be true, actual knowledge.
**_See_** Constructive Notice
16
Q
Ad Valorem
A
According to the value.
Arizona property taxes are based on ad valorem.
**_See_** Assessed Value, Assessment, Dollar Rate, Mill Rate
16
Q
Adequate Water Supply
A
Subdivisions in Arizona located outside an
Active Management Area are not required
to have a 100 year water supply.
**_See_** Assured Water Supply
17
Q
Adjusted Basis
A
Purchase price plus the value of any capital improvements
or the original cost minus deductions such as depreciation.
**_See_** Adjusted Purchase Price, Basis
18
Q
Adjusted Gross Income
A
The total potential gross income minus vacancy and
credit loss. Also called Effective Gross Income.
**_See_** Capitalization Approach, Gross Schedule Income, Net Operating Income
19
Q
Adjusted Purchase Price
A
Original purchase price plus capital improvements.
**_See_** Adjusted Basis, Basis, Capital Improvements
19
**Administrator**
An individual appointed by the court to handle
the estate of a party who dies without a will.
**_See_**
Executor, Intestate, Testate
20
**Adult**
A person who is in his/her majority -
usually 18 years old.
**_See_**
Infancy, Majority
21
**Adverse Possession**
Acquiring title to real property due to continuous,
open, and hostile use for a prescribed length of time.
**_See_**
Easement by Prescription
21
**Affidavit of Value**
A sworn document that identifies the Grantor,
Grantee and states the value paid for real property.
Signed by both parties and notarized.
22
**Agency**
A legal relationship in which the Principal
appoints an agent to act in his behalf.
**_See_**
Agency Coupled with an Interest, Agent, Client,
Customer, Dual Agency, Fiduciary, Principal
23
**Agency by Ratification**
Unauthorized actions of an agent that
are later approved by the Principal.
**_See_**
Ostensible Authority
24
**Agency Coupled with an Interest**
```
An agency (listing) in which an agent has an interest
(usually financial) in the subject property.
```
**_See_**
Agency, Estoppel
24
**Agent**
One who is authorized to act for a Principal.
**_See_**
Agency, Fiduciary, General Agent, Limited Agent,
Subagent, Universal Agent
24
**Agent by Necessity**
An act of law or circumstance requiring a limited agent
to act beyond his authority.
(Principal's consent not necessary.)
**_See_**
Limited Agent, Principal
25
**Aggrieved**
To cause grief or to injure one's legal rights.
**_See_**
Civil Law, Recovery Fund
26
**Agreement for Sale**
A document giving equitable title to a buyer (vendee) of
real property. Also called "*Contract for Deed*."
Parties are usually called Vendor and Vendee
**_See_**
Equitable Title, Land Contract
27
**Agreement to Sell**
Another name for a purchase contract.
**_See_**
Bilateral Contract, Executed Contract, Executory Contract
28
**Air Rights**
The right to use the air space above a property.
**_See_**
Caissons
29
**Alienation Clause**
A clause in a loan document calling for the entire
balance due and payable when the property is sold.
**_See_**
Acceleration Clause, Due on Sale Clause
30
**All-Inclusive Deed of Trust**
A wraparound loan arrangement whereby a
Deed of Trust is used in place of a mortgage.
**_See_**
Deed of Trust, Wraparound
32
**Allodial System**
The rights of individuals to private
ownership of real property.
**_See_**
Bundle of Rights, Feudal System
32
**Alluvium**
Sand, clay, etc., deposited by flowing water.
**_See_**
Accretion
33
**ALTA**
**A**merican **L**and **T**itle **A**ssociation
A national asssociation of title companies.
** _See_
**Extended Coverage Policy, Lender's Policy,
Owner's Policy, Title Insurance
34
**Amendatory Clause**
Also known as the F.H.A. Escape Clause.
**_See_**
Escape Clause
34
**Amenities**
Those desirable features (extras) of a
property that may benefit an owner.
**_See_**
Objective Value, Subjective Value
34
**Americans With Disabilities Act (ADA)**
Federal law designed to eliminate discrimination
against individuals with disabilities by
requiring equal access to accommodations.
**_See_**
Federal Fair Housing
35
**Amortization**
A schedule of payments that will eventually
extinguish the entire obligation.
**_See_**
Balloon Payment, P,I.T.I.
36
**Anchor Tenant**
A Triple-A tenant that gives exposure
and stability to a shopping center.
36
**Annexation**
The method of attaching personal property to
real property so that it becomes a fixture.
**_See_**
Fixture
37
**Annuity**
A series of payments made at specified intervals.
38
**Anticipation**
The present value of property is determined by the
future benefits to be obtained from that property.
**_See_**
Conformity, Contribution, Substitution
39
**Appraisal**
An opinion of the value of a property
given for a specified date in time.
**_See_**
Appraisal Methods
39
**Appraisal Methods**
Market Data Approach, Cost Approach, Income Approach
**_See_**
Cost Approach, Income Approach, Market Data Approach
40
**Appreciation**
The increase in property value due
to external or internal causes.
**_See_**
Unearned Increment
41
**Appurtenant**
That which belongs to the property rights,
privileges, and improvement.
**_See_**
Corporeal, Incorporeal, Tenements
42
**APR**
**A**nnual **P**ercentage **R**ate
The calculations of all financing charges pertaining
to a loan, expressed in an annual rate.
**_See_**
RESPA, Regulation "Z"
43
**Arbitrage**
To charge a higher interest rate to the buyer
that is currently being charged on the loan.
**_See_**
Wrap Around Mortgage
44
**Arbitration**
The settling of a dispute between
two parties by a neutral party.
**_See_**
Interpleader
45
**Arm's Length Transaction**
A business transaction in which all parties
have equal bargaining opportunity.
**_See_**
Undue Influence
46
**Arrears**
(Paid) after its usage, such as Arizona property
taxes and interest on real estate loans.
46
**Asbestos**
A fire resistant mineral used in building and household
products that has been found to cause lung cancer.
**_See_**
Abatement
47
**Assemblage**
The process of combining two or more smaller
parcels of land into one large tract.
**_See_**
Plottage
47
**Assessed Value**
The value placed on real or personal
property for tax purposes.
**_See_**
Ad Valorem
47
**Bearing Wall**
A wall in a building that supports a ceiling load.
**_See_**
Joist, Ridgeboard, Stud
48
**Assessment**
A tax charged to the owner of real property for benefits
received. Tax is usually based on a pro rata share.
**_See_**
Ad Valorem, Pro Rata Share
48
**Bench Mark**
A mark made on a permanent object that
has a known location and elevation.
**_See_**
Survey
49
**Asset**
All valuable items held by a person
which may be used to liquidate a debt.
**_See_**
Capital, Frozen Asset, Liquid Asset
49
**Assignee**
One to who interest in property is transferred.
**_See_**
Assignment
50
**Assignment**
The transferring of interest from one party
to another in a purchase contract or lease.
**_See_**
Assignee, Assignor, Nominee
50
**Beneficiary**
The lender under a Deed of Trust security.
**_See_**
Mortgagee, Mortgagor, Trustor, Trustee
51
**Assignment of Lease**
The transferor of all or part of the
tenant's rights to another party.
**_See_**
Sandwich Lease, Sublease
51
**Beneficiary Deed**
A deed that is used to transfer real property to one's heirs without going through the probate process.
**_See_**
Probate
52
**Assignment of Rents**
The right of a lender to collect rents from the
borrower's tenants in case of loan default.
**_See_**
Foreclosure
52
**Bequest**
Leaving personal property to an heir through a Will.
**_See_**
Devise, Legacy
52
**Bilateral Contract**
A contract binding two or more parties.
**_See_**
Contract, Unilateral Contract
53
**Assignor**
One who transfers a specified interest in property.
**_See_**
Assignee, Assignment
53
**Bill of Sale**
A document used to transfer personal property.
**_See_**
Deed, Tangible
54
**Assumption of Mortgage**
The Grantee taking title to real property and assuming
liability for an existing obligation. The original
mortgagor still remains liable.
**_See_**
Novation, Subject to
54
**Assured Water Supply**
Subdivisions in Arizona located in an *Active Management*
*Area* need to provide a _100 year_ water supply.
**_See_**
Adequate Water Supply
54
**Attachment**
The taking of property into custody, pending
the outcome of a legal action.
**_See_**
Garnishment, Judgement Lien, Lis Pendens, Specific Lien
54
**Blanket Mortgage**
A security that covers more than one parcel of land.
**_See_**
Lot Release
54
**Blind Ad**
A real estate ad that does not indicate
that a brokerage firm is involved.
54
**Block Busting**
An illegal action usually concerning fair housing
that creates panic selling for monetary gain.
**_See_**
Federal Fair Housing Act, Redlining, Steering
54
**Blue Sky Law**
State laws regulating the sale of investment securities.
55
**Attorney-In-Fact**
One who has written authorization to act for
another under a power of attorney.
**_See_**
Agent, General Agent, Limited Agent, Power of Attorney
55
**Boiler Plate**
The standard pre-printed language that exists in a contract.
**_See_**
Contract of Adhesion
56
**Authorization to Sell**
Another term for a listing agreement.
**_See_**
Listing Agreement
56
**Bona Fide Buyer**
A Buyer who is acting in good faith
for valuable consideration.
**_See_**
Actual Notice, Constructive Notice
57
**Book Value**
The value of an asset carried on the books of business.
**_See_**
Depreciation (tax)
57
**Boot**
Anything of value given to make up the difference
in equities between two properties exchanged.
**_See_**
Exchanging, Mortgage Relief
57
**Breach of Contract**
Failure to perform a contractual obligation.
**_See_**
Default, Specific Performance Suit
58
**Automatic Stay**
In bankruptcy an automatic injunction
that halts actions by creditors.
**_See_**
Chapter 7, Chapter 11, Chapter 13
59
**Bring Down Fee**
Updating the title report from the original
report to the recording of the loan documents.
**_See_**
Preliminary Title Report
59
**Broker**
A third party who, for a fee, acts as an
intermediary in a business transaction.
**_See_**
Agent, Commission
59
**Brown vs. Board of Education**
Court case that overturned Plessy vs. Ferguson
**_See_**
Plessy vs. Ferguson
60
**Avulsion**
The loss of land due to sudden
and violent acts of nature.
**_See_**
Accretion, Erosion, Involuntary Alienation
60
**Budget Payment**
Monthly payment including principal, interest,
taxes and insurance.
**_See_**
Amortization, Level Payment Mortgage, P,I.T.I.
61
**Axial Theory**
Theory of land use development along major highways.
**_See_**
Concentric Theory, Multiple Nuclei Theory
62
**Buffer Zone**
An area of land that separates one
type of zoning from another.
**_See_**
Zoning
63
**Back End Ratio**
A ratio that indicates what portion of an individual's
income is used to pay all long term debt.
**_See_**
Front End Ratio
64
**Balloon Payment**
A lump sum paid to liquidate a debt
or paid anytime during a loan period.
**_See_**
Interest Only, Straight Note, Term Loan
64
**Building Codes**
Special construction standards enforced through a permit.
**_See_**
Police Power, Zoning
65
**Bulk Transfer**
The sale of a business which involves transfer of inventory.
**_See_**
Uniform Commercial Code
66
**Band of Investment**
An appraisal method used for income property that establishes
a capitalization rate by using mortgage interest rates available,
rate of return required, & the debt and equity in said property.
```
**_See_**
Capitalization Rate (Overall)
```
67
**Bundle of Rights**
Legal rights of real property ownership:
Possession, Usage, Transfer, Encumber, Exclusion
**_See_**
Allodial System, Feudal System
68
**Bankruptcy**
A financial situation when a person's
liabilities exceed their ability to pay. (assets)
**_See_**
Chapter 7, Chapter 11, Chapter 13
69
**Buyer Broker**
A licensee who represents the buyer
only in a fiduciary manner.
**_See_**
Agent, Client, Fiduciary
70
**Bare-Naked Title**
Title held by a trustee in a Deed of Trust document.
The trustee does not have any of the bundle of rights
provided in ownership.
**_See_**
Deed of Trust
71
**Caisson**
A tract of land purhased or leased that serves
as the building foundation for air rights.
**_See_**
Air Rights
71
**CAN-SPAM Act**
Federal law regulating commercial emails,
providing the recipient an opt-out provision.
**_See_**
FTC
72
**Bargain and Sale Deed**
A conveying Deed that has three covenants but no warranties.
Frequently used in an operation of law transaction.
**_See_**
Covenants in a Deed, General Warranty Deed
73
**Capital**
Income or sources of income.
**_See_**
Asset
74
**Base Line (Principal)**
In the Government Rectangular Survey System, the reference line that runs east and west
and crosses the principal meridian.
**_See_**
Government Rectangular Survey System Meridian (Principal)
75
**Capital Gain**
The taxable gain received from the
sale of a capital asset.
**_See_**
Basis, Long-Term Capital Gain, Short-Term Capital Gain
76
**Basis**
The actual price paid for the property.
**_See_**
Adjusted Basis
77
**Capital Improvements**
Any permanent improvements to real property.
**_See_**
Adjusted Basis
78
**Basis Point**
1/100 of one percent.
79
**Capital Loss**
The loss realized from the sale of a capital asset.
**_See_**
Capital Gain
80
**Capitalization**
A method used to estimate the value of property by
dividing the net annual income by a capitalization rate.
```
**_See_**
Capitalization Rate (Overall), Income Approach
```
80
**Capitalization Approach**
Also known as the Income Approach in appraising.
```
**_See_**
Capitalization Rate (Overall), Income Approach
```
81
**Capitalization Rate (Overall)**
An overall rate of return which includes a return on
investment on land, improvements and recapture.
**_See_**
Capitalization
83
**Case Law**
Laws based on an aggregate of previous court decisions.
**_See_**
Civil Law, Common Law
85
**Cash on Cash Return**
Cash flow divided by the amount of capital invested.
**_See_**
Internal Rate of Return
86
**CC&R's**
Covenants, Conditions & Restrictions
**_See_**
Deed Restrictions
86
**Cease and Desist Order**
A governmental order directing the parties
violating the law to refrain from further activity.
87
**Ceiling Value**
An appraisal concept in which the current listings
in a neighborhood set the highest value.
**_See_**
Comparable, Floor Value, Value
88
**Certificate of Eligibility**
A certificate from the Veteran's Administration that
establishes the Veteran's eligibility for a V.A. guaranteed loan.
**_See_**
V.A. Guarantee
89
**Certificate of Occupancy**
A document issued by the building inspector
showing that a structure is ready for occupancy.
90
**Certificate of Purchase**
A document given to the winner at a tax lien sale.
**_See_**
Treasurer's Deed
91
**Certificate of Reasonable Value**
A V.A. appraisal that states the maximum V.A.
guarantee on a certain property.
**_See_**
V.A. Guarantee
92
**Certificate of Sale**
The lien document given to the high bidder
at a mortgage foreclosure sale.
**_See_**
Foreclosure, Sheriff's Deed
92
**Certificate of Title**
A document issued by a Title examiner stating the
condition of title to a given parcel of property.
**_See_**
Abstract of Title, Torrens System
93
**Cession Deed**
A Deed that conveys private property for public usage.
**_See_**
Dedication, Deed, Patent Deed
94
**Chain of Title**
A history of constructive notice as it
pertains to a certain parcel of real estate.
**_See_**
Constructive Notice, Title, Wild Deed
95
**Chapter 11**
A reorganization under the bankruptcy code usually
pertaining to corporations - the debtor remains in possession.
**_See_**
Bankruptcy
95
**Chapter 13**
A reorganization of a wage earner's assets - under the bankruptcy code - a trustee is appointed
**_See_**
Bankruptcy
95
**Chapter 7**
Complete liquidation of a person's assets
to pay liabilities. A trustee is appointed.
**_See_**
Bankruptcy
96
**Chattel**
Personal property - also called personalty.
**_See_**
Bill of Sale, Personal Property
98
**Chattel Mortgage**
A security device used for personal property.
**_See_**
Chattel, Security Agreement, Uniform Commercial Code
99
**Chattel Real**
Another name for a lease.
**_See_**
Leasehold
99
**Check Lines**
In the Government Rectangular Survey System, a
twenty-four mile square parcel containing 16 townships.
**_See_**
Government Rectangular Survey System, Township
99
**Civil Law**
The body of law that protects a party's private rights.
**_See_**
Case Law, Common Law
99
**Civil Rights Act of 1866**
Prohibits discrimination based on race.
**_See_**
Federal Fair Housing
99
**Client**
The party the Broker represents or the party who hires
the broker and agrees to pay a fee upon performance.
**_See_**
Customer, Dual Agency, Fiduciary, Principal
99
**Close of Escrow (COE)**
The day on which all terms & conditions of the contract &
escrow have been met & the title is transferred. COE
usually occurs when all necessary documents are recorded.
**_See_**
Constructive Notice, Escrow
99
**Cloud on Title**
A claim on Title that hinders it from being marketable.
**_See_**
Quiet Title Suit, Quit Claim Deed
100
**CLUE Report**
A history of insurance claims on a specific property.
100
**Co-Maker**
A person who signs a promissory note with another.
**_See_**
Joint & Several Liability, Promissory Note
101
**Codicil**
An Amendment to a formal Will.
**_See_**
Formal Will
102
**Collateral**
Property used as security for a loan.
**_See_**
Deed of Trust, Hypothecate, Mortgage
102
**Collusion**
A secret agreement between two or more
people for an illegal purpose against another.
**_See_**
Mutual Assent
103
**Color of Title**
Title that appears to be valid but due
to a hidden fact is actually void.
**_See_**
Adverse Possession, Quit Claim Deed
103
**Commercial Banks**
Institutions primarily involved in short
term loans and demand deposits.
**_See_**
F.D.I.C., Federal Reserve System
104
**Commingling**
The mixing of trust funds with the Broker's personal funds.
**_See_**
Conversion
104
**Commission**
The fees paid a Broker resulting from a transaction.
**_See_**
Broker, Procuring Cause
105
**Common Area Maintenance**
Fees charged to tenants for the upkeep of the
common grounds.
**_See_**
Gross Lease, Net Lease
105
**Common Law**
A system of law that is based on custom
and usage as opposed to statutes.
**_See_**
Statutory Law
106
**Community Facility District**
A method of financing infrastructure and improvements in
a development. Bonds will be sold and repaid through
increased property taxes.
**_See_**
Property Taxes
107
**Community Property**
Property acquired by the efforts of a husband and wife
during their marriage, belonging to them equally.
**_See_**
Concurrent Tenancy, Curtesy, Dower, Legal Life Estate,
Undivided Interest
107
**Compaction**
To compress additional soil to those
uneven areas of a lot.
107
**Comparable**
An appraisal method that compares similar properties
to establish market value.
**_See_**
Ceiling Value, Market Data Approach
109
**Compensatory Damages**
Damages recovered in payments for actual losses.
**_See_**
Actual Damages
110
**Competent Party**
An individual who is legally capable of
entering into a binding agreement.
**_See_**
Incompentent Party
110
**Compound Interest**
Interest paid on interest.
**_See_**
Interest, Simple Interest
111
**Concentric Theory**
Theory of land use developing around
a central business district.
**_See_**
Axial Theory, Multiple Nuclei, Theory
112
**Concurrent Tenancy**
Two or more parties own undivided
interest in the same property.
**_See_**
Community Property, Joint Tenancy, Tenancy in Common
112
**Condemnation Suit**
The legal process of taking private property for public use.
**_See_**
Eminent Domain, Involuntary Alienation
112
**Condominium**
Individual ownership of realty limited to cubage,
plus an undivided interest in the common ground.
**_See_**
Horizontal Property Regime, Town House
112
**Conformity**
A principle which states that value in a given area can best
be obtained when all structures are in some way uniform.
**_See_**
Contribution, Progression, Regression, Substitution
113
**Consideration**
That which is given in exchange for the transfer of property
or service. One of the legal requirements for validity of a
contract, deed, lease, or option. Example: The purchase
price would be the consideration for the property.
**_See_**
Contract Requirements, Good Consideration,
Love and Affection, Valuable Consideration
114
**Construction Loan**
A short term loan based on draws
during the construction process.
**_See_**
Draws, Takeout Loan
115
**Constructive Eviction**
When the inaction of the Lessor makes the use of the
property unsuitable, the Lessee moves out. The tenant
moves out through no fault of his own.
**_See_**
Actual Eviction
116
**Constructive Notice**
A term used when a document is recorded or
printed in a public document.
**_See_**
Recording
116
**Consumer Financial Protection Bureau**
A regulatory agency charged with overseeing financial
services offered to consumers.
**_See_**
Ability to Repay, Dodd-Frank Act, Qualified Mortgage
117
**Contingency**
Future conditions that must be met for a
contract to be binding.
**_See_**
Counteroffer, Executory Contract
118
**Contingent Remainder**
A life estate that passes to the life tenants' heirs,
pending the death of the person on whom the
estate is based.
**_See_**
Life Estate, Pur Autre Vie, Remainder Estate
119
**Contour Map**
A map showing the physical features of
land using lines to indicate elevations.
**_See_**
Relief Map
119
**Contract**
An agreement based on a promise "consideration"
to do or refrain from doing something.
**_See_**
Bilateral Contract, Covenant, Unilateral Contract
120
**Contract for Deed**
A real estate transaction where the seller retains legal
title to the property until final payment is made.
**_See_**
Agreement for Sale, Equitable Title, Vendee, Vendor
121
**Contract of Adhesion**
Terms of a contract are set by one party. The
other party is instructed to "take it or leave it."
**_See_**
Boiler Plate
121
**Contract Rate**
The rate of interest stated in the contract.
**_See_**
Legal Rate, Usury
122
**Contract Rent**
Rental amount due as specified in the lease.
**_See_**
Economic Rent, Negative Leasehold, Positive Leasehold
123
**Contract Requirements**
Every valid & enforceable real estate contract must have
the following requirements. Competent parties, in writing,
legal description, mutual assent, legal consideration, legal
purpose, signatures, and communication.
**_See_**
Statute of Fraud
123
**Contribution**
Any improvement to property is only worth its
market value, not the cost of the improvement.
**_See_**
Anticipation, Conformity, Substitution
124
**Conventional Life Estate**
A life estate created for the life of
some stated natural person.
**_See_**
Natural Person
126
**Conventional Loan**
Real estate loans that are not insured
by any governmental agency.
**_See_**
Federal Housing Administration (F.H.A.), V.A. Guarantee
126
**Conversion**
In real estate law, the unlawful use and
misappropriation of another's personal property.
**_See_**
Commingling
127
**Conveyance**
Transfer of title to real property.
Such transfer is usually evidenced by a deed.
**_See_**
Deed
127
**Cooperating Broker**
A broker who works with and
through the listing Broker.
**_See_**
Buyer Broker, Multiple Listing Service, Subagent
127
**Cooperative**
Ownership of stock in a corporation which gives the holder
the right to occupy a certain unit -
a long term proprietary lease.
**_See_**
Condominium, Town House
128
**Corporate Resolution**
The written authorization of the Board of Directors for
the corporation to act in a certain manner.
**_See_**
Corporation, Legal Person
129
**Corporation**
A legal person created by law which is owned
by stockholders who act as one.
**_See_**
Corporate Resolution, Legal Person
130
**Corporeal**
Real property such as land and fixtures.
**_See_**
Incorporeal
131
**Correction Deed**
A Deed that corrects an error on
a previously recorded Deed.
132
**Correctional Lines**
In the Government Rectangular Survey System, the
lines that compensate for the curvature of the earth.
**_See_**
Check Lines, Government Rectangular Survey System
132
**Correlation**
The final step in an appraisal that weighs (usually by
percentage) the comparables used to arrive at a final
estimate of value. Also called Reconciliation.
132
**Cost Approach**
An appraisal process that estimates the value of
property by using replacement or reproduction costs
minus depreciation plus the value of the land.
**_See_**
Depreciation (Appraisal), Income Approach, Market Data
Approach, Replacement Cost, Reproduction Cost
134
**Counteroffer**
A new offer made in response to an original offer.
**_See_**
Contingency
135
**Covenant**
A promise made between two or more parties,
usually pertaining to contracts and deeds.
**_See_**
Bargain and Sale Deed, Bilateral Contract, Unilateral
Contract
135
**Covenant Against Encumbrances**
The Grantor promises that he has revealed
all items that burden the property.
**_See_**
Covenants in a Deed
136
**Covenant Not to Compete**
The seller of a business agrees not to open a like
business for a specific period of time.
136
**Covenant of Quiet Enjoyment**
A promise that the Grantee has the
highest claim to ownership.
**_See_**
Covenants in a Deed
136
**Covenant of Seizin**
The Grantor promises that he has possession of the
property and has the right to convey it.
**_See_**
Covenants in a Deed
137
**Covenants in a Deed**
Promises in a deed made by the Grantor for the
protection of the Grantee, usually found in Bargain & Sale
and Warranty Deeds.
**_See_**
Covenant Against Encumbrances, Covenant of Quiet
Enjoyment, Covenant of Seizin
138
**Curtesy**
A husband's right or interest in his wife's
property upon her death.
***\*Not legal in AZ***
**_See_**
Dower, Legal Life Estate
140
**Customer**
Usually referred to as the Buyer or Prospect.
**_See_**
Client
140
**Debt Relief**
Forgiveness of an obligation, usually
results in a taxable event.
142
**Debt Service**
The payments made to satisfy a mortgage loan,
including principal and interest.
**_See_**
Amortization
143
**Decedent**
Party who died.
**_See_**
Intestate, Testate
143
**Dedication**
The voluntary transferring of private property
for public usage.
**_See_**
Cession Deed
144
**Deed**
The legal written document used to transfer
ownership of real property.
**_See_**
General Warranty Deed, Quit Claim Deed,
Special Warranty Deed
146
**Deed in Lieu of Foreclosure**
An out of court settlement whereby a Lender accepts
the Deed from the Borrower - friendly foreclosure.
**_See_**
Foreclosure
147
**Deed of Reconveyance**
An instrument issued by the trustee when the debt
secured by a Deed of Trust is paid in full.
**_See_**
Defeasance Clause, Satisfaction of Mortgage
148
**Deed of Trust**
Security for a debt using a neutral third party
(Trustee) who holds legal title.
**_See_**
Beneficiary, Deed of Reconveyance, Trustee, Trustor
149
**Deed Restrictions**
Limits placed on public record by the Grantor that
affect property usage by future owners.
**_See_**
CC&R's, Reservations
149
**Default**
Failure to comply with a contractual agreement.
**_See_**
Breach of Contract, Foreclosure, Forfeiture,
Specific Performance Suit
150
**Defeasance Clause**
Clause stating that when a condition is met, the Lender's
claim has been nullified and requiring the lender to issue
a satisfaction piece.
**_See_**
Deed of Reconveyance, Satisfaction of Mortgage
151
**Defeasible Fee**
A fee simple estate subject to certain limitations
imposed by the Grantor.
**_See_**
Fee Simple Conditional, Fee Simple Determinable
153
**Deferred Maintenance**
Loss of value due to lack of maintenance.
**_See_**
Depreciation (Curable), Depreciation (Incurable),
Physical Depreciation
154
**Deficiency Judgment**
The legal right of Lender through court action to collect
from a borrower the remaining debt still owed after a
foreclosure.
**_See_**
Foreclosure
155
**Delivery of Deed**
The final transferring of a Deed from Grantor to Grantee.
A prerequisite for valid conveyance.
**_See_**
Actual Delivery, Escrow Delivery
156
**Demise**
The conveying of an interest in property by means of
a lease. A giving up of some interest but not all rights
in ownership.
**_See_**
Lease
156
**Depreciation (Appraisal)**
The loss of value due to any and all causes. Functional,
economic, physical social obsolescence.
**_See_**
Economic Depreciation, Functional Depreciation,
Physical Depreciation
158
**Depreciation (Curable)**
A defect in real property that is economically
feasible to correct.
**_See_**
Economic Depreciation, Functional Depreciation,
Physical Depreciation
159
**Depreciation (Incurable)**
A defect in real property that would not be economically
feasible to correct.
**_See_**
Economic Depreciation, Functional Depreciation,
Physical Depreciation
161
**Depreciation (tax)**
For income tax purpose, a deduction taken for
an investment.
**_See_**
Economic Life, Straight Line Depreciation
163
**Descent**
Distribution of property to heirs when one
dies intestate.
**_See_**
Escheat, Intestate, Probate
164
**Designated Broker**
The Broker who is responsible for day to day
operation of the business.
**_See_**
Broker, Cooperating Broker
165
**Devise**
The conveyance of real property through a Will.
**_See_**
Bequest, Devisor, Legacy
165
**Devisee**
The one who receives real property
through a Will.
**_See_**
Devise
165
**Devisor**
The person who transfers real property
through a Will.
**_See_**
Bequest, Legacy
166
**Direct Endorsement Lenders**
HUD approved lenders that approve FHA
loans by themselves.
**_See_**
HUD
166
**Directional Growth**
The direction in which a residential community
appears to be developing.
**_See_**
Axial Theory, Concentric Theory, Multiple Nuclei Theory
167
**Disclaimer Deed**
A document signed by a party to disavow any
interest in a particular property.
**_See_**
Quit Claim Deed
168
**Discount Points**
A loan charge in addition to interest that increases
the Lender's yield.
**_See_**
APR, Regulation Z, Yield
169
**Discrimination**
```
Failure to give equal treatment - this concept
is usually referring to a protected class of people.
```
170
**Distraint Clause**
Landlord's right to seize a Lessee's personal property
for past due rent. (Commercial property only.)
Unlawful in residential rental properties.
**_See_**
Actual Eviction
170
**Docketed Judgment**
A recorded judgment.
**_See_**
Constructive Notice
171
**Doctrine of Relation Back**
Document stating that the death of the Grantor
does not terminate a valid escrow.
**_See_**
Escrow Delivery
172
**Dodd-Frank Act**
A federal law that places regulations on
financial institutions.
**_See_**
Ability to Repay, Dodd-Frank Act, Qualified Mortgage
173
**Dollar Rate**
Tax rate charged per $100 of assessed value.
**_See_**
Mill Rate, Tax Rate
173
**Dominant Estate**
The parcel of land that benefits from the easement
against the servient estate.
**_See_**
Easement Appurtenant, Servient Estate
174
**Dower**
A wife's right in her husband's property
upon his death.
Not legal in Arizona.
**_See_**
Curtesy, Legal Life Estate
175
**Down Zoning**
A change from a higher to a lower zoning
classification, such as commercial to residential.
**_See_**
Zoning
177
**Draws**
Monies released under the terms of an
open-ended loan.
**_See_**
Construction Loan, Obligatory Advances
178
**Dual Agency**
A transaction that involves two principals.
When a broker represents both buyer and seller.
**_See_**
Agency, Client, Principal
179
**Due Diligence**
The use of good faith and a degree of care required
to perform one's obligations.
181
**Due on Sale Clause**
The Lender's right to call the entire loan balance
due upon resale of property.
**_See_**
Acceleration Clause, Alienation Clause
182
**Duress**
The use of force in obtaining an agreement.
**_See_**
Menace, Undue Influence, Voidable
183
**Earnest Money**
Advance money given by a Buyer to show
good faith in a purchase agreement.
**_See_**
Equitable Interest
185
**Easement**
The right one has to use the land of another
for a specific purpose.
**_See_**
Easement Appurtenant, Easement by Prescription
Easement in Gross, Encumbrance
186
**Easement Appurtenant**
An easement that is attached to and transfers
with title to real property.
**_See_**
Easement, Dominant Estate, Servient Estate
188
**Easement by Necessity**
An easement created by law, usually to have ingress
and egress to land-locked property.
**_See_**
Easement, Ingress and Egress
190
**Easement by Prescription**
The legal process of acquiring an easement due
to adverse use that is open, constant and notorious
for a period of time.
**_See_**
Adverse Possession, Easement
191
**Easement in Gross**
A personal right given to an individual or business to use
the land of another. This privilege is irrevocable.
**_See_**
Easement Appurtenant
192
**Eaves**
The edge of a roof that projects beyond a building.
**_See_**
Rafters
193
**Economic Depression**
Loss of value due to exterior forces beyond the
property owner's control, which is always incurable.
**_See_**
Functional Depreciation, Physical Depreciation
193
**Economic Life**
In appraisal, the number of years a property
will contribute value to the land.
**_See_**
Salvage Value
194
**Economic Rent**
The amount of rent a property could or would bring
in an open market at a given time.
**_See_**
Contract Rent, Excess Rent
195
**Effective Age**
The age of a property based on its appearance.
**_See_**
Actual Age, Deferred Maintenance
195
**Elevation**
The view of the property as seen from the street.
**_See_**
Setback
196
**Embellishment**
To improve the item described by adding fictitious
details. Overstating one's opinion.
**_See_**
Misrepresentation, Puffing the Goods
196
**Emblements**
The pre agreed right that the Seller or Lessee has
to return to the land to harvest crops.
**_See_**
Industrial Fruit
196
**Eminent Domain**
The right of the government to permanently take
private property for public use with just compensation.
**_See_**
Condemnation Suit
196
**Enabling Legislation**
Legislative authority extended to municipal
government to enact zoning laws.
**_See_**
Police Power
197
**Encroachment**
Illegal intrusion upon another's real property -
usually physical in nature.
**_See_**
Encumbrance
197
**Encumbrance**
Any lien, liability, or restriction upon ownership
of real estate that will lessen its value.
**_See_**
Deed Restrictions, Easement, Encroachment, Lien
198
**EPA**
**E**nvironmental **P**rotection **A**gency - A federal agency
that sets standards on environmental issues.
200
**Equal Dignities Rule**
A law that states if a contract must be in writing, then
the agent's authority to act for a principal must also be
in writing. If a Purchase Contract needs to be in writing
to be enforceable, then any changes or alterations must
also be in writing.
**_See_**
Parol Evidence Rule
200
**Equitable Interest**
The Buyer's interest in property at the signing of a
purchase contract. Vendee's interest in an agreement
for sale.
**_See_**
Earnest Money, Forfeiture
202
**Equitable Period of Redemption**
The Mortgagor's chance to redeem the property prior
to sheriff's sale by paying th entire debt.
**_See_**
Acceleration, Statutory Period of Redemption
202
**Equitable Title**
The Vendee's right to ownership of real property.
(Vendor still retains legal title.)
**_See_**
Agreement for Sale, Vendee, Vendor
202
**Equity**
"Dollar value" interest remaining after liens are deducted
from current property value.
**_See_**
Equity Build-up, Lien
203
**Equity Build-up**
The increase of equity due to the reduction of
the loan amount.
**_See_**
Principal
204
**Erosion**
The gradual wearing away of land by acts of wind or water.
**_See_**
Accretion, Avulsion
206
**Escalator Clause**
A contract clause that allows the interest to
increase upon loan assumption.
**_See_**
Assumption of Mortgage
207
**Escape Clause**
The Buyer is not obligated to buy if the FHA appraisal
is less than the contract price.
**_See_**
Amendatory Clause
209
**Escheat**
The right of the state to take property of the deceased who
dies without a Will and has no heirs after a statutory
period of time.
**_See_**
Government Rights, Intestate
210
**Escrow**
Depositing documents with a neutral third party until
the terms of an agreement are met.
**_See_**
Close of Escrow, Doctrine of Relation Back, Escrow Agent
211
**Escrow Agent**
A third party that acts on instructions of the Buyer & Seller.
When all terms and conditions are met, the agent will
close the transaction.
**_See_**
Close of Escrow, Doctrine of Relation Back, Dual Agency,
Escrow Delivery, Interpleader
212
**Escrow Delivery**
The act of delivering the Deed to a 3rd party w/instructions
to deliver said Deed to the Grantee after all conditions
are met.
**_See_**
Actual Delivery
213
**Estate**
A right or interest one has in all property real & personal.
**_See_**
Freehold, Less than Freehold
214
**Estate in Land**
A right or interest one has in real property.
**_See_**
Fee Simple, Freehold, Legal Life Estate,
Less than Freehold
214
**Estoppel**
A legal doctrine which prohibits a person from going
back on previous facts or acts of conduct.
**_See_**
Estoppel Certificate
215
**Estoppel Certificate**
A document used to verify the terms and
balances of existing leases or loans.
215
**Evidence of Title**
The method used to show one's proof of ownership.
**_See_**
Certificate of Title, Title Insurance, Torrens System
217
**Excess Rent**
Contract rent that exceeds the economic rent.
**_See_**
Contract Rent, Economic Rent
219
**Exchanging**
A transaction where like properties are traded,
usually for tax benefits.
**_See_**
Boot, Mortage Relief, Tax Deferment
220
**Exclusive Agency Listing**
Appointing one Broker in a listing agreement w/the owner
reserving the right to sell the property without
paying a commission
**_See_**
Exclusive Right to Sell
220
**Exclusive Right to Sell**
Appointing one Broker in a listing agreement, who will be
paid regardless of who sells the property, including
the owner.
**_See_**
Bilateral Contract, Exclusive Agency Listing
Listing Agreement
221
**Exculpatory Clause**
A clause in a document that relieves the Landlord of any
blame or guilt as relating to the actions of the Tenants.
An Escape Clause.
**_See_**
Hold Harmless Clause, Indemnify
221
**Executed Contract**
A contract in which all terms & conditions have been met.
**_See_**
Executory Contract
223
**Executor**
A person appointed in a Will to carry out its provisions.
**_See_**
Administrator, Testate
224
**Executory Contract**
A contract in which all terms & conditions have
not yet been met.
**_See_**
Contingency, Executed Contract
225
**Expressed Contract**
A contract in which the terms are specifically
stated either orally or in writing.
**_See_**
Statute of Frauds
226
**Extended Coverage Policy**
A title insurance policy that normally covers items in the
public record plus questions of survey and
unrecorded mechanics liens.
**_See_**
A.L.T.A.
227
**Facade**
The front of a building; the part seen from the street.
**_See_**
Elevation
229
**FDIC**
**F**ederal **D**eposit **I**nsurance **C**orporation
Insures deposits for the depositor up to a
certain dollar amount.
**_See_**
Federal Reserve System
229
**Familial Status**
A protected class under the Fair Housing Law -
A family is one or more persons 18 years or
older living with a parent or guardian.
**_See_**
Federal Fair Housing Act 1988
229
**Federal Fair Housing Act**
Law enacted by Congress that prohibits discrimination
by race, color, religion, national origin, sex, familial status,
& handicap. The law relates primarily to the sale or lease
of residential real estate.
230
**Federal Fair Housing Act 1968**
Prohibits discrimination based on race, religion, color,
creed, national origin and sex.
231
**Federal Fair Housing Act 1988**
Prohibits discrimination based on handicap and familial
status - these items were added to the 1968 act.
233
**Federal Housing Administration (FHA)**
FHA - insures lenders against loss by requiring the
borrower to pay a mortgage insurance premium.
**_See_**
MIP
234
**Federal Reserve System**
Regulatory agency for Federally chartered commercial
banks.
**_See_**
Commercial Banks, FDIC
235
**Fee Simple**
The highest form of ownership under the
allodial system.
**_See_**
Allodial System, Freehold
236
**Fee Simple Conditional**
If previously agreed conditions are violated, the Grantor
must take action to terminate the Grantee's interest in
property (Not automatic termination).
**_See_**
Defeasible Fee, Fee Simple Determinable
237
**Fee Simple Determinable**
A fee interest in real estate that may be automatically
terminated if certain circumstances are violated.
**_See_**
Defeasible Fee, Fee Simple, Fee Simple Conditional
238
**Fee Tail**
A freehold estate that may terminate when and if the
Grantor's specified heirs die.
"Unlawful in most states."
**_See_**
Feudal System
239
**FEMA**
A federal agency that coordinates disaster relief, also
designates flood areas and creates flood maps.
240
**FHA - Conditional Commitment**
An FHA appraisal based on a future loan commitment.
The property has qualified but a buyer has not yet qualified.
**_See_**
FHA - Firm Commitment
240
**Feudal System**
All rights of land ownership remain with the king.
**_See_**
Allodial System
241
**FHA - Firm Commitment**
A final statement that FHA will insure a specified loan.
**_See_**
FHA - Conditional Commitment
242
**FHA - Title I**
FHA insures home improvement loans.
**_See_**
Federal Housing Administration, MIP
243
**FHA - Title II**
FHA insures home"203B" loans.
**_See_**
Federal Housing Administration, MIP
244
**FHA - Title III**
Originally established FNMA
**_See_**
FNMA, Secondary Market
245
**FHLMC**
Federal Home Loan Mortgage Corporation
(Freddie Mac), active in the secondary
mortgage market.
**_See_**
FNMA, GNMA, Secondary Market
246
**FICO Score**
Fair Isaac Company - calculates credit scores
247
**Fiduciary**
The trust and confidence an agent owes a principal
in an agency relationship.
**_See_**
Agency, Principal
248
**Financing Statement**
A document recorded to protect a creditor's interest
in personal property.
**_See_**
Bulk Transfer, Security Agreement,
Uniform Commercial Code
250
**FIRPTA**
**F**oreign **I**nvestment **R**eal **P**roperty **T**ax **A**ct
251
**First Right of Refusal**
A party who has the first opportunity to meet an offer
to either buy or lease a property.
**_See_**
Executory Contract, Option, Unilateral Contract
251
**Fissure**
A long narrow crack in the earth's surface.
253
**Fixture**
Personal property that is now affixed and is
considered real property.
**_See_**
Annexation, Personal Property, Trade Fixture
254
**Flexible Payments**
A loan payment plan in which the payments increase
over a set number of years.
**_See_**
Variable Rate Mortgage
254
**Flood Plain**
An area of low-lying ground adjacent to a stream
that is subject to flooding.
**_See_**
Flood Way
255
**Flood Way**
A channel for diverting flood water.
**_See_**
Flood Plain
256
**Floor Value**
An appraisal concept which states that the sales price of
comparable properties set the lowest market price.
**_See_**
Ceiling Value, Comparable
258
**FNMA**
Federal National Mortgage Association
(Fannie Mae), purchases paper from primary lenders.
**_See_**
FHLMC, GNMA, Primary Lenders, Secondary Market
259
**Forcible Detainer**
A legal action that a landlord can take if the existing
occupant refuses to leave.
**_See_**
Holdover Tenant
260
**Foreclosure**
An action by which property used as security is
sold to pay debt.
**_See_**
Deed in Lieu of Foreclosure, Deficiency Judgment,
Equitable Period of Redemption, Reinstatement Period,
Statutory Period of Redemption
261
**Forfeiture**
The losing of equity one has in a property due to
nonperformance of an obligation - such as in an Agreement
for Sale. The process by which a Vendor retakes the property
from the Vendee due to default by the Vendee.
**_See_**
Agreement for Sale, Equitable Interest
263
**Foundation**
The supporting portion of a structure on which
all else rests.
**_See_**
Monolithic Slab
264
**Fractional Sections**
Irregular sctions due to the curvature of the Earth.
There are 11 fractional and 25 full sections in a township.
**_See_**
Section, Township
265
**Fraud**
Intentional deception that, when relied upon, causes
financial loss or personal injury.
**_See_**
Collusion, Misrepresentation, Puffing the Goods
266
**Freehold**
An estate held in fee simple or for life -
no pre-determined time for termination.
**_See_**
Conventional Life Estate, Fee Simple
267
**Friable**
When asbestos particles become air-born.
**_See_**
Asbestos
269
**Front End Ratio**
A ratio that indicates what portion of an individuals
income is used to make mortgage payments.
**_See_**
Back End Ratio
269
**Frozen Asset**
An asset that cannot be easily converted into cash
without taking a loss.
**_See_**
Liquid Asset
269
**FTC**
Federal Trade Commission
regulates the "CAN-SPAM ACT"
**_See_**
CAN-SPAM ACT
270
**Functional Depreciation**
Physical features within the property lines that are
obsolete and no longer desirable. May be curable
or incurable.
**_See_**
Depreciation (Appraisal), Economic Depreciation,
Physical Depreciation
271
**Funding Fee**
A fee paid to the VA to guarantee a VA loan.
**_See_**
VA Guarantee
273
**Gable Roof**
A pitched roof with two sloping sides.
275
**Garnishment**
A court directive to the party who is holding the
assets of another to freeze said assets.
**_See_**
Attachment, Specific Lien
276
**General Agent**
An agent having the power to perform any and all acts
on behalf of a Principal as expressed in a legal document.
**_See_**
Agency, Limited Agent, Universal Agent
277
**General Lien**
A lien that encumbers both real and personal property.
**_See_**
Lien, Specific Lien
279
**General Partnership**
Each partner is responsible and liable for the total
profit or loss of the operation regardless of
the initial investment.
**_See_**
Limited Partnership, Partnership
280
**General Warranty Deed**
A conveying deed in which the grantor states that he
or she will forever guarantee the title of real property.
**_See_**
Special Warranty Deed, Warranty Forever, Warranty of
Further Assurance
281
**Gift Deed**
A deed conveyed with love and affection
as the consideration.
**_See_**
Consideration, Good Consideration, Quit Claim Deed
282
**GNMA**
**G**overnment **N**ational **M**ortgage **A**ssociation
(Ginnie Mae) active in secondary mortgage market.
**_See_**
FHLMC, FNMA, Secondary Market
284
**Good Consideration**
Love and affection given in exchange for real property.
**_See_**
Consideration, Gift Deed, Valuable Consideration
284
**Good Faith Estimate**
An estimate of all anticipated closing costs regarding a
residential transaction. This estimate is required to be
given to all buyers by the lender under RESPA guidelines.
**_See_**
Regulation Z
285
**Good Will**
The intangible value of a business due to the habit of
patronage. Good will may be depreciated for accounting
purposes.
**_See_**
Covenant Not to Compete
286
**Government Lot**
In a Government Rectangular Survey System, those
irregular sections due to curvature of the Earth or acts
of nature.
**_See_**
Check Lines, Correctional Lines, Fractional Sections,
Government Rectangular Survey System
287
**Government Rectangular Survey System**
A governmental method of surveying land located by
using a principal base line and principal meridian.
**_See_**
Base Line (Principal), Meridian (Principal), Section,
Township
289
**Government Rights**
Taxation, Escheat, Eminent Domain, Police Power
**_See_**
Enabling Legislation
291
**Graduated Lease**
A lease that will go up in rent at specified intervals.
**_See_**
Index Lease, Percentage Lease
292
**Grandfather Clause**
A clause that indicates something was once allowed
and may still continue despite changes in the law.
**_See_**
Non-conforming Use, Variance
292
**Grant**
The transferring of real property by a deed.
**_See_**
Deed, Grantee, Grantor
293
**Grantee**
The person who receives an interest in real property
via a deed.
**_See_**
Deed, Grantor
294
**Granting Clause**
The words in a deed that state, "I hereby grant
and convey..."
**_See_**
Hebendum Clause
295
**Grantor**
The person who conveys an interest in real property
via a deed.
**_See_**
Deed, Grantee
296
**Gross Lease**
A lease where the lessor is responsible for all expenses.
**_See_**
Net Lease
298
**Gross Rent Multiplier**
A figure used that, when multiplied by the annual
gross rent, will estimate the property value.
**_See_**
Capitalization Rate
298
**Gross Schedule Income**
The total potential of all income that can be derived
from an investment property.
**_See_**
Adjusted Gross Income, Net Operating Income
299
**Ground Lease**
A lease for land only.
**_See_**
Subordination Clause
301
**Ground Water**
The classification of all underground water
except for underground streams.
**_See_**
Surface Water
302
**Guardian**
One appointed by the court to handle the
affairs of an incompetent party.
**_See_**
Incompetent Party, Personal Representative
303
**Habendum Clause**
The degree, quantity or quality of the estate conveyed.
**_See_**
Deed, Life Estate
305
**Handicap**
A protected class under the Fair Housing Law;
a handicap is considered an impairment that
substantially limits life's activities.
**_See_**
Federal Fair Housing Act 1988
307
**Hard Money Mortgage**
A mortgage that is given for direct cash.
**_See_**
Soft Money Mortgage
308
**Hereditament**
The right to will another personal and real property.
**_See_**
Incorporeal
310
**High Water Mark**
Highest place on shoreline reached by rising water.
**_See_**
Non-navigable Stream
311
**Highest and Best Use**
Land usage at the time of an appraisal which
would create the highest net return.
**_See_**
Appraisal
313
**Hold Harmless Clause**
A contract clause stating one party agrees to protect
another from losses.
**_See_**
Exculpatory Clause, Indemnify
314
**Holder in Due Course**
The party who is holding a note for value and has
the protection of law for its enforcement.
**_See_**
Negotiable Instrument, Promissory Note
315
**Holdover Tenant**
A tenant who remains in possession of the
property after lease expiration.
**_See_**
Actual Eviction, Tenancy at Sufferance
316
**Holographic Will**
Hand-written Will that is signed by the maker
but does not require witnessing.
**_See_**
Formal Will, Nuncupative Will, Will
318
**Homestead**
A legal right of a homeowner to protect a portion
of his equity against a forced sale.
**_See_**
Abandonment of Homestead, Legal Life Estate
319
**Homogeneous**
A word used in appraising that describes
similar or like properties.
**_See_**
Conformity
320
**Horizontal Property Regime**
Condominium - the owner of the unit only has cubage rights;
air rights and sub-surface rights are not included.
**_See_**
Town House
321
**HUD**
Department of
**H**ousing and **U**rban **D**evelopment
**_See_**
Federal Housing Administration (FHA), GNMA
322
**Hypothecate**
To pledge property as collateral and still retain
possession of the pledged property.
**_See_**
Deed of Trust, Mortgage
322
**Illusory Contract**
An expression of intent to do something,
not a binding agreement.
**_See_**
Unenforceable
322
**Implied Agency**
An agency created by the actions or words
of the parties involved.
**_See_**
Agency, Ostensible Authority
324
**Impound Account**
An amount held by the lender to pay the
taxes and insurance.
**_See_**
PITI
326
**INA**
Irrigation Non Expansive Area
**_See_**
Assured Water Supply
327
**Inchoate**
Incomplete (not perfected) - additional steps must
be taken to strengthen the claim.
**_See_**
Community Property, Mechanic's Lien
327
**Income Approach**
An appraisal process that estimates the value of income
property by converting annual net income into value.
**_See_**
Adjusted Gross Income, Capitalization, Capitalization
Rate (Overall), Net Operating Income
327
**Incompetent Party**
One who is not legally qualified to manage his or her own
affairs due to age, mental capabilities, or legal action.
**_See_**
Competent Pary, Guardian, Infancy
328
**incorporeal**
The rights accompanying ownership of property.
**_See_**
Easement, Hereditament
329
**Indemnify**
An agreement to hold harmless another from damages.
**_See_**
Exculpatory Clause, Hold Harmless Clause
330
**Index Lease**
A lease that is based on a certain price index such as
the Consumer Price Index found in commercial leases.
**_See_**
Graduated Lease
331
**Index Rate**
A rate in a variable rate loan that is tied to a T-Bill,
11th District or U.S. Cost of Funds.
**_See_**
Variable Rate Mortgage
332
**Industrial Fruit**
Fruits or crops that are produced on a property for
income - personal property.
**_See_**
Emblements
333
**Infancy**
A person who is under the legal age
(usually under 18 years).
**_See_**
Incompetent Party, Majority
334
**Ingress and Egress**
The right to enter and exit a parcel of land.
**_See_**
Easement, Landlocked, Right of Way
335
**Installment Sale**
A tax method of reporting only the amount of income
actually received as it is received.
**_See_**
Tax Deferment
335
**Intangible**
The rights that accompany personal property.
**_See_**
Goodwill, Tangible
336
**Inter-State Land Disclosure Act**
A federal registration system when 25 or more lots are
offered for sale or lease inter-state.
337
**Interest**
Rent paid for the use of money.
**_See_**
Compound Interest, Simple Interest, Usury
338
**Interest Only**
Payment consists of interest only and no
repayment of principal.
**_See_**
Amortization, Straight Note, Term Loan
340
**Interim Financing**
A short term loan sometimes called a gap or bridge loan.
**_See_**
Construction Loan, Take Out Loan
341
**Internal Rate of Return**
A rate of discount that is calculated on the basis of
projected cash flows from the initial investment.
343
**Interpleader**
A third party (court) who is called upon to settle a
dispute, usually in an escrow situation.
**_See_**
Escrow, Escrow Agent
344
**Intestate**
A person who dies without a Will.
**_See_**
Descent, Testate
346
**Involuntary Alienation**
The transferring of ownership against one's will.
**_See_**
Avulsion, Condemnation Suit, Foreclosure
347
**Involuntary Lien**
A lien placed on property without the owner's
permission or by act of law.
**_See_**
Mechanic's Lien, Property Tax, Statutory Lien
348
**Joint and Several Liability**
One party only or all parties together can be
held liable for the debt.
350
**Joint Tenancy**
Co-ownership that features the right of survivorship
and requires the four unities:
Possession, Interest, Time, Title.
**_See_**
Concurrent Tenancy, Unities of Joint Tenancy
351
**Joist**
The horizontal supports that hold up a floor or ceiling.
**_See_**
Stud
352
**Jones v Mayer**
A court case that prohibits discrimination by race both
in private and governmental properties.
**_See_**
Civil Rights Act of 1866
353
**Judgment Lien**
An involuntary lien on both real and personal property
- a general lien.
**_See_**
General Lien, Specific Lien
354
**Junior Mortgage**
Any security agreement having a priority after
the first mortgage.
**_See_**
Subordination Clause
356
**K 1**
A form to report income or loss in a business,
partnership, or trust.
358
**Laches**
The legal time has expired to file a valid claim.
**_See_**
Statute of Limitations
360
**Land Contract**
Contract where the Seller finances the Buyer's
purchases of realty and retains legal title.
**_See_**
Equitable Title, Forfeiture, Vendee, Vendor
361
**Landlocked**
A parcel of land having no ingress or egress without
crossing over another's property.
**_See_**
Easement by Necessity, Ingress and Egress
363
**Landlord**
One who owns real property but transfers a leasehold
interest to another with the reversion right.
**_See_**
Lease, Leasehold, Lessee, Lessor
364
**Law of Situs**
Real Estate is subject to the laws of the state
in which it is located.
365
**Law or Agency**
A legal relationship in which one is hired to represent
another with trust and confidence. The party hired
is referred to as the Agent.
**_See_**
Agency, Buyer Broker, Fiduciary, Listing Agreement
366
**Lawful Object**
A contract requirement stating that a valid contract must be
for an item or purpose that is legal in the eyes of the law.
**_See_**
Contract Requirements
367
**Lease**
An agreement giving possession and use of property in
return for a specified consideration.
**_See_**
Leasehold, Tenancy at Will, Tenancy for Years,
Tenancy from Period to Period
368
**Leasehold**
The Lessee's right to use property for a
specified period of time.
**_See_**
Lease, Less than Freehold
370
**Legacy**
Money or personal property left to another through a Will.
**_See_**
Bequest, Devise, Will
372
**Legal Description (Formal)**
A formal description that defines the boundaries of real
property. This description is sufficient to locate the property
and may be enforced through a court of law.
**_See_**
Government Rectangular Survey System, Legal
Description (Informal), Metes & Bounds, Plat Map
374
**Legal Description (Informal)**
Identifying a parcel of land by a street address
or local terminology.
```
**_See_**
Legal Description (Formal), Metes & Bounds, Monument
```
375
**Legal Life Estate**
A non-inheritable right provided by law.
**_See_**
Community Property, Curtesy, Dower, Homestead
376
**Legal Person**
A person created by law such as a corporation.
**_See_**
Corporation, Natural Person
377
**Legal Rate**
The interest rate the court assigns to those documents
that have no specified interest rate.
**_See_**
Contract Rate
379
**Legal Title**
The lawful claim to ownership.
**_See_**
Chain of Title, Title
380
**Legatee**
One who receives money or personal property
through a Will.
**_See_**
Bequest, Devise, Legacy
382
**Lender's Policy**
An extended coverage Title Insurance policy
purchased for the Lender.
**_See_**
Extended Coverage Policy, Owner's Policy
383
**Less than Freehold**
An estate of possession but not ownership - a lease.
**_See_**
Freehold, Leasehold
384
**Lessee**
The tenant in a lease.
**_See_**
Lease, Lessor
385
**Lessor**
A Landlord in a lease.
**_See_**
Landlord
387
**Level Payment Mortgage**
A repayment plan that includes principal & interest.
The total of which is the same amount each payment.
**_See_**
Amortization
388
**Leverage**
Using borrowed funds to finance investments with
little or no personal cash invested.
**_See_**
Loan to Value Ratio
389
**License**
A personal privilege one has to use the land of another.
(Privilege revocable)
**_See_**
Easement
390
**Lien**
A money claim against property.
**_See_**
Encumbrance, General Lien, Specific Lien
391
**Lien Theory State**
States in which the Lender of cash does not hold legal
title, but only a lien as security against title.
**_See_**
Title Theory State
391
**Life Estate**
An interest in property that is limited to the life grantee -
or the life of some specified person.
**_See_**
Contingent Remainder, Legal Life Estate, Remainder
Estate, Reversionary Estate
392
**Life Tenant**
One who possesses a life estate.
**_See_**
Conventional Life Estate, Remainder (Vested)
393
**Like-Kind Property**
Property held for an investment when qualifying for a
real estate tax deferred exchange.
**_See_**
Exchanging
394
**Limited Agent**
An agent having the power to perform only in those areas
expressed in a legal document.
**_See_**
Agent, Agent of Necessity, General Agent
396
**Limited Partnership**
Parties who contribute capital to an investment
and are responsible for the amount invested.
**_See_**
General Partnership, Partnership
397
**Liquid Asset**
An asset that can easily be converted into cash.
**_See_**
Asset, Frozen Asset, Leverage
398
**Liquidated Damages**
The dollar amount stated in the contract paid to the injured
party if a breach occurs. The dollar amount is usually
pre-agreed.
**_See_**
Aggrieved, Breach of Contract, Forfeiture
400
**Lis Pendens**
Lawsuit pending.
**_See_**
Attachment, Judgment Lien
401
**Listing Agreement**
A written agreement between a principal and Broker
to sell or lease property for compensation.
**_See_**
Agency, Agent, Exclusive Agency Listing,
Exclusive Right to Sell, Law of Agency
402
**Listing Broker**
The agent who acts for the owner of
property in either leasing or selling.
**_See_**
Agent, Fiduciary, Principal
403
**Littoral Land**
A property owners right to use the land
abutting a lake or ocean.
**_See_**
Riparian Rights
403
**Loan to Value Ratio**
The amount of loan in relationship to property value.
**_See_**
Leverage
404
**Long Term Capital Gain**
The taxable gain on the sale of a capital asset
held for more than the statutory period of time.
**_See_**
Asset, Capital, Capital Gain
405
**Lot Release**
Clause in a Blanket Mortgage to release individual lots.
**_See_**
Blanket Mortgage
406
**Lot, Block, Subdivision**
A method of identifying land in a subdivision by referring
to a certain lot, block, and a recoded plat of that subdivision.
```
**_See_**
Legal Description (Formal), Plat Map
```
407
**Love and Affection**
Consideration that is given to support a gift deed.
**_See_**
Consideration, Good Consideration,
Valuable Consideration
408
**Majority**
A person who is legally competent according
to the minimum age law of that state.
**_See_**
Competent Party, Contract Requirements,
Incompetent Party
410
**Margin**
In an adjustable rate loan, the amount added
to the index to determine the rate.
**_See_**
Variable Rate Mortgage
411
**Market Data Approach**
An appraisal process that uses comparables
to estimate the value of a specified property.
**_See_**
Appraisal, Comparable, Correlation
413
**Market Price**
The price a property actually sells for.
**_See_**
Floor Value, Market Value
414
**Market Value**
The price a property should sell for if enough time is
allowed & neither Seller nor Buyer is under pressure to act.
**_See_**
Market Price
415
**Master Plan**
A long-range guide for the orderly growth of a given area.
**_See_**
Zoning
416
**Mechanic's Lien**
The legal right of a contractor to place a lien on real
property for work or materials rendered.
**_See_**
Inchoate, Lien, Notice of Completion,
Satisfaction of Mortgage
418
**Megalopolis**
A continuous series of ongoing cities
all heavily populated.
419
**Megan's Law**
A law requiring sex offender registration and notification.
420
**Menace**
The threat of force in acquiring an agreement.
**_See_**
Duress, Mutual Agreement, Undue Influence, Voidable
422
**Meridian (Principal)**
In the Government Rectangular Survey System, a reference
line that runs North & South & crosses the principal baseline.
**_See_**
Baseline (Principal),
Government Rectangular Survey System
423
**Metes & Bounds**
A legal description of land that uses an identifiable
starting point to define the boundaries of real property.
**_See_**
Monument, Point of Beginning
424
**Mill Rate**
A property tax that is equivalent to one tenth of one unit.
Expressed as .001 or 1/1000 of a dollar.
**_See_**
Dollar Rate
425
**Mineral Rights**
Sub-surface rights to all underground assets.
**_See_**
Air Rights, Sub-surface Rights
426
**MIP**
**M**ortgage **I**nsurance **P**remium
Insurance pertaining to an FHA Insured loan.
**_See_**
Federal Housing Administration,
Private Mortgage Insurance
428
**Misrepresentation**
To represent falsely or to give untrue statements.
**_See_**
Fraud, Puffing the Goods
429
**Monolithic Slab**
A foundation formed by a single pouring of concrete.
**_See_**
Foundation
430
**Monument**
A natural object that is given as part of a survey.
**_See_**
Bench Mark, Legal Description (Informal),
Metes & Bounds
432
**Moral Turpitude**
An act of conduct that is base, vile, or depraved.
434
**Moratorium**
A temporary halting of payments due on a debt.
435
**Mortgage**
A security document given to insure the payment of a Note.
**_See_**
Mortgage, Mortgagor, Satisfaction of Mortgage
436
**Mortgage Assumption**
The Buyer assumes the Seller's mortgage and agree to pay
the debt. Original maker is not necessarily free from liability.
**_See_**
Novation, Subject to
437
**Mortgage Broker**
One who is paid a fee to arrange loans
between a Lender and a Borrower.
**_See_**
Primary Lenders
438
**Mortgage Relief**
In a tax deferred exchange - the assumption of a mortgage
of lesser value than an existing mortgage.
**_See_**
Boot, Debt Relief, Exchanging, Tax Deferment
439
**Mortgagee**
The Lender under a mortgage-type transaction. The
receiver of the security instrument.
**_See_**
Mortgage, Mortgagor
440
**Mortgagor**
The party who gives and is the maker of the security.
**_See_**
Hypothecate, Mortgagee, Trustor
441
**Mud Sill**
The lowest horizontal member of a frame house
that rests on the foundation.
**_See_**
Sill
442
**Multiple Listing Service**
A general pooling of listing information available to those
members of the local Board of Realtors.
**_See_**
Cooperating Broker, Exclusive Right to Sell,
Realtor
443
**Multiple Nuclei Theory**
Theory of land use development around
several central business areas.
**_See_**
Axial Theory, Concentric Theory
445
**Mutual Assent**
A meeting of the minds between two parties in a contract.
**_See_**
Contract, Contract Requirements
446
**Narrative Appraisal Report**
A written appraisal showing in detail the reasoning
behind the assigned estimate of value.
**_See_**
Appraisal
447
**Natural Person**
A person by birth, not by operation of law.
**_See_**
Legal Person
448
**Navigable Stream**
A designated public highway of water. The stream
bed is owned by the government.
**_See_**
Non-navigable Stream
450
**Negative Leasehold**
Contract rent exceeds the economic rent.
**_See_**
Contract Rent, Leasehold, Positive Leasehold
451
**Negotiable Instrument**
A written document that, when endorsed,
can be assigned to another.
**_See_**
Assignment, Holder in Due Course
453
**Neighborhood**
Adjoining areas of land that have common
characteristics and similar usage.
**_See_**
Buffer Zone
454
**Net Lease**
Tenant pays rent and other costs
pertaining to the property.
**_See_**
Gross Lease
455
**Net Listing**
An agreement in which a minimum sales price is set by
the Seller. The Broker receives his commission from that
amount over and above the minimum sales price.
**_See_**
Exclusive Agency Listing, Exclusive Right to Sell,
Listing Agreement
456
**Net Operating Income**
The income obtained from property
after operating expenses.
**_See_**
Adjusted Gross Income, Gross Schedule Income,
Income Approach
457
**Nominee**
A person who is acting for a party to be named later.
**_See_**
Assignee, Assignment
458
**Non-conforming Use**
The continuance of a certain use even though the area has
been zoned for a different purpose; a property use that is
not consistent with current zoning.
**_See_**
Conformity, Grandfather Clause, Variance, Zoning
459
**Non-disturbance Clause**
A mortgage clause which states that the Lender will not
disturb the present tenant's rights even in the event
of foreclosure.
**_See_**
Foreclosure
460
**Non-Homogeneous**
No two parcels of real estate are alike
or occupy the same geographic location.
**_See_**
Situs
462
**Non-Inheritable Estate**
An estate which cannot be
passed to one's heirs.
**_See_**
Conventional Life Estate, Legal Life Estate,
Less than Freehold
463
**Non-navigable Stream**
A stream not designated as a public highway;
the stream bed is owned privately.
**_See_**
Navigable Stream, Reliction
464
**Notary Public**
A public officer who is able to attest and certify
legal documents by a signature and seal.
**_See_**
Acknowledgement
466
**Note**
A document that is evidence of debt - an obligation.
**_See_**
Deed of Trust, Mortgage
467
**Notice of Completion**
A legal notice that indicates a completed and a
mechanic's lien must be filled within a certain time period.
**_See_**
Mechanic's Lien
468
**Novation**
The original obligor is relieved of any further loan obligation
due to the substitution of a new party.
**_See_**
Assumption of Mortgage, Subject to
469
**Nuncupative Will**
An oral Will that is witnessed.
**_See_**
Formal Will, Holographic Will, Will
470
**Objective Value**
The value in the object itself.
**_See_**
Subjective Value, Value
472
**Obligatory Advances**
An open-ended loan has lien priority as per
recondition regardless of future draws.
**_See_**
Construction Loan, Draws, Open End Loan
473
**Obsolescence**
A loss in property value due to outmoded
functional or economic changes.
**_See_**
Depreciation (Appraisal), Depreciation (Curable),
Depreciation (Incurable)
473
**Offer**
A proposal freely made by one party to another.
**_See_**
Contract Requirements, Mutual Assent
474
**Open End Loan**
A loan in which draws are available up to a set limit.
**_See_**
Draws, Obligatory Advances
475
**Open Listing**
A listing between the principal and
numerous agents simultaneously.
**_See_**
Listing Agreement, Procuring Cause, Unilateral Contract
477
**Option**
A future right of a party to buy or lease
property at a specified price.
**_See_**
Bilateral Contract, First Right of Refusal, Unilateral Contract
478
**Optionee**
The party who receives an option.
**_See_**
Option
480
**Optionor**
The party who gives an option.
**_See_**
Option
481
**Orientation**
Placing a house on property so that it brings
the best advantages to the occupant.
**_See_**
Setback
482
**Origination Fee**
A fee charged by the Lender for processing a new loan.
483
**Ostensible Authority**
Authority arising when a principal has intentionally
caused a third party to rely upon the apparent authority
even though it has not been given.
**_See_**
Agency by Ratification, Implied Agency
484
**Owner's Policy**
A Title Insurance purchased for the benefit of
the Buyer in a real estate transaction.
**_See_**
Title Insurance
485
**Paper**
A lending term referring to a note
and a security instrument.
**_See_**
Primary Lenders, Secondary Market
487
**Parol Evidence Rule**
A rule stating that oral evidence may not
be added to a written agreement.
**_See_**
Contract Requirements, Equal Dignities Rule
488
**Partition**
The dividing of co-ownership in property so that each
holds his or her interest sole and separate. A legal
process terminating a co-tenancy.
**_See_**
Tenancy in Common
489
**Formal Will**
A written Will that is written, signed & witnessed.
**_See_**
Codicil, Holographic Will, Nuncupative Will, Testate
490
**Partnership**
Consists of two or more people conducting
business as co-owners.
**_See_**
General Partnership, Limited Partnership, Syndication
492
**Patent Deed**
The instrument used by a Sovereign Power
to transfer real property to an individual.
**_See_**
Cession Deed, Deed
493
**Percentage Lease**
A rental payment which is based on a
percentage of the gross sales.
**_See_**
Gross Lease, Net Lease
494
**Percolation Test**
A soil test which determines drainage and absorption.
495
**Perpetuity**
With no end - to go on forever.
**_See_**
Corporation, Legal Person
497
**Personal Property**
Items that are tangible and movable, not real property.
**_See_**
Fixture, Tangible, Trade Fixture
498
**Personal Representative**
An appointed individual authorized to settle an estate.
**_See_**
Administrator, Executor, Intestate
499
**Phase I Audit**
An evaluation of a site to determine environmental
problems. Phase I inspects public records and
adjacent properties.
500
**Phase II Audit**
An environmental survey that requires soil sampling to
determine the level of hazardous substances.
501
**Physical Depreciation**
A loss of value due to the physical
deterioration of the property.
**_See_**
Depreciation (Appraisal), Depreciation (Curable),
Depreciation (Incurable)
502
**PITI**
**P**rincipal, **I**nterest, **T**axes, **I**nsurance
**_See_**
Budget Payment
504
**Plat Map**
A recorded map that shows the smaller parcels
in a subdivision by book and page number.
**_See_**
Legal Description (Formal), Lot Block Subdivision,
Subdivision
505
**Plate**
A horizontal piece that supports
the trusses or rafters of a roof.
506
**Plessy v Ferguson**
A court case that established the doctrine of
"Separate but Equal".
**_See_**
Brown v Board of Education
507
**Plottage**
The process of combining two or more parcels of land
so that together they have a greater total value.
**_See_**
Assemblage, Contribution, Subdivision
509
**Point of Beginning**
The starting point at one corner of the surveyed
land in a Metes & Bounds description.
**_See_**
Bench Mark, Metes & Bounds, Monument
510
**Police Power**
The right of government to enact laws for the protection,
health, and welfare of the general public.
**_See_**
Enabling Legislation, Zoning
512
**Positive Leasehold**
Economic rent exceeds the contract rent.
**_See_**
Contract Rent, Economic Rent, Leasehold,
Negative Leasehold
514
**Power of Attorney**
A written document that authorizes one party
to act for another.
**_See_**
Agent, Attorney-in-Fact, General Agent, Limited Agent
515
**Preliminary Title Report**
A document provided in escrow which shows
all claims affecting title.
**_See_**
Abstract of Title, Schedule "A", Schedule "B"
516
**Prepayment Penalty**
An additional charge for paying off
a debt before its time.
**_See_**
"Or More" Clause
518
**Primary Lenders**
Those Lenders that originate loans,
thereby creating "paper".
**_See_**
Paper, Secondary Market
519
**Principal**
The party represented in an agency relationship.
**_See_**
Agency, Agent, Client, Fiduciary
520
**Principal Balance**
The original loan amount. The current remaining
unpaid debt on the loan.
**_See_**
Interest
521
**Prior Appropriation**
Water rights that are based on a government permit
system. The rights to use the water in a river
or stream adjacent to the land.
**_See_**
Riparian Rights
523
**Private Mortgage Insurance**
A form of insurance required on conventional loans
that exceed a loan value - ratio of 80%.
**_See_**
Loan to Value Ratio, MIP
524
**Pro Rata Share**
Per front foot or a specific portion allocated to a property
owner - usually used in an assessment calculation.
**_See_**
Assessment
525
**Probate**
A court action to prove the validity of a will,
or settle an estate.
**_See_**
Administrator, Executor, Intestate, Testate, Will
526
**Procuring Cause**
The actions of a Broker that bring about the
desired results.
**_See_**
Commission
528
**Progression**
Lesser value properties will be increased by
locating near more expensive properties.
**_See_**
Regression
529
**Promissory Note**
A written promise by a person to pay a debt
under terms specified in the note.
**_See_**
Deed of Trust, Mortgage, Note
530
**Property Tax**
Tax levied by the local governments to meet the needs
of the community - Real estate taxes are primary liens
and are usually based on Ad Valorem.
**_See_**
Ad Valorem
532
**Proration**
To divide or assess proportionately between Buyer
and Seller the obligations that have been paid or
due. The close of escrow is the buyer's day.
534
**Public Report**
A report required before a subdivision can be offered
for sale or lease - Discloses all facts about the property
for the buyer's protection.
**_See_**
Subdivision
536
**Puffing the Goods**
Over exaggeration of one's opinion.
**_See_**
Misrepresentation, Embellishment
538
**Punitive Damages**
Damages extending far beyond the actual loss.
**_See_**
Liquidated Damages
539
**Pur Autre Vie**
A life estate that is based on a life of another.
**_See_**
Life Estate
540
**Purchase Money Mortgage**
A mortgage given by a buyer as part of the consideration
for the price - one usually carried by the seller in
a credit transaction.
**_See_**
Mortgage, Soft Money Mortgage
541
**Qualified Mortgage**
A home loan that meets certain standards set forth by
the federal government. The loan is presumed to have
met the "ability to repay rule" per the Dodd-Frank Act.
**_See_**
Ability to Repay Rule, Dodd-Frank Act
543
**Quantity Survey Method**
An appraisal method which takes into account all the
component parts along with the installation costs.
**_See_**
Cost Approach, Unit-in-Place Method
544
**Quarter Section**
One fourth of a township that contains 160 acres.
**_See_**
Section
545
**Quiet Title Suit**
A court action to remove a cloud on title
and create marketable title.
**_See_**
Cloud on Title
546
**Quit Claim Deed**
A Deed which releases any or all interest
one may have in real property.
**_See_**
Deed, Quiet Title Suit
547
**Radon Gas**
A colorless, odorless gas from decaying minerals in
high concentrations that is known to cause lung cancer.
547
**Rafters**
Sloping boards that extend from the top
of the exterior wall to the ridge board.
**_See_**
Ridge board
548
**Range Lines**
Survey lines that are six miles apart and
run parallel to the principal meridian.
**_See_**
Government Rectangular Survey System, Tier Line,
Township
549
**Rate of Return**
The percentage earned on an investment.
**_See_**
Cash on Cash Return
551
**Realtor**
A term used to identify members
of the National Association of Realtors.
552
**Recapture**
The amount of depreciation taken
for tax purposes is now taxable.
553
**Recording**
Entering a document in the Recorder's
office at the prescribed county.
**_See_**
Chain of Title, Constructive Notice
555
**Recovery Fund**
A state fund that monitarily reimburses the aggrieved
public due to dishonest acts of the licensee.
**_See_**
Aggrieved, Subrogation
555
**Redemption Period**
The statutory period of time the borrower has to redeem
in a mortgage foreclosure, usually six months after the
sheriff sale.
**_See_**
Mortgage, Reinstatement Period
557
**Redlining**
An illegal practice that restricts loans
by geographical area.
**_See_**
Blockbusting, Federal Fair Housing, Steering
558
**Reduction Certificate**
A document issued by lender for buyer's
benefit stating the existing loan balance.
**_See_**
Assumption of Mortgage, Estoppel Certificate
559
**Regression**
An appraisal principle which states that the worth of
an expensive property is lessened by the presence
of less expensive properties.
**_See_**
Progression
560
**Regulation Z**
Truth in Lending Laws apply to residential financing -
full disclosure of all financing charges. Interest rates
are expressed in APR.
**_See_**
APR, RESPA
561
**Reinstatement Period**
The period of time the trustor has to make all
delinquent payments prior to the trustee foreclosure
sale in a Deed of Trust.
**_See_**
Trustee's Deed, Redemption
563
**REIT**
**R**eal **E**state **I**nvestment **T**rust
A corporation with a minimum of 100 investors and 95%
of the profit passes to the shareholders.
564
**Release Clause**
A clause in a blanket security instrument that allows
for individual release of secured lots from the lien.
**_See_**
Blanket Mortgage
566
**Reliction**
The gaining of land due to the subsidence of
water of a non-navigable stream.
**_See_**
Accretion, Non-navigable Stream
568
**Relief Map**
A map indicating by lines, shading, or color,
different elevations of land.
**_See_**
Contour Map
570
**Remainder (Vested)**
One who is entitled to an estate upon
termination of a life estate.
**_See_**
Contingent Remainder, Reversionary Estate
571
**Remainder Estate**
A future interest in real estate after a life estate.
**_See_**
Contingent Remainder, Remainder (Vested)
572
**Rent**
Consideration given for the use of property.
**_See_**
Contract Rent, Economic Rent
574
**Replacement Cost**
The cost of replacing a property
using today's materials.
**_See_**
Cost Approach, Reproduction Cost
575
**Reproduction Cost**
The cost of rebuilding an exact replica.
**_See_**
Cost Approach, Replacement Cost
576
**Reservations**
Rights retained by the grantor when property is
conveyed. Frequently called Deed Restrictions.
**_See_**
Deed Restrictions
577
**Residual Value**
The value that remains after a
property's economic life.
**_See_**
Economic Life, Salvage Value
579
**RESPA**
**R**eal **E**state **S**ettlement **P**rocedures **A**ct
Requires disclosures of closing costs to buyers & sellers.
Required within 72 hours of a loan application - Required
on residential loans, one, three or four-plex.
**_See_**
Regulation Z
580
**Reversionary Estate**
An estate returned to the original grantor.
Usually at the end of a life estate or lease.
**_See_**
Remainder Estate
581
**Ridge board**
A large horizontal beam placed at the peak
of a roof to which rafters are attached.
**_See_**
Rafters
582
**Right of Way**
The right one has to cross the land of another.
**_See_**
Easement, Ingress and Egress
583
**Rights of Survivorship**
An incident whereby the surviving joint tenant
automatically receives the interest and rights
of the deceased joint tenant.
**_See_**
Joint Tenancy, Tenancy by Entireties
584
**Riparian Rights**
The property owner's right to enjoy or use
the water abutting his land.
**_See_**
Reliction
585
**Rod**
A unit of measurement that consists of 16.5 feet.
585
**Run With The Land**
A right that remains with the land even upon
transfer such as an easement appurtenant.
**_See_**
Appurtenant
586
**S Corporation**
A regular corporation that has elected to be treated
as a partnership for tax purposes - restictions do apply.
**_See_**
Corporation, Partnership
588
**Sale & Leaseback**
The selling of property to an investor while at the same
time leasing it back for a specified period.
**_See_**
Net Lease
590
**Salvage Value**
The estimated economic value of an asset
at the end of its economic life.
**_See_**
Depreciation (Appraisal), Residual Value
591
**Sandwich Lease**
A lease in which a lessee rents the property to another
party, putting himself in the middle position.
**_See_**
Assignment, Sublease
592
**Satisfaction of Judgment**
A document which, when recorded,
releases the judgment lien.
**_See_**
Judgement Lien
594
**Satisfaction of Mortgage**
A document stating that the mortgage
debt has been paid in full.
**_See_**
Deed of Reconveyance, Defeasance Clause
595
**Schedule "A"**
Description page of a preliminary title report
and the type of insurance being issued.
**_See_**
Schedule "B"
596
**Schedule "B"**
The portion of a title insurance policy that
lists the exceptions to coverage by the policy.
**_See_**
Schedule "A", Title Insurance
597
**Scheduled Gross Income**
The maximum potential income a property can
generate before any deductions or expenses.
**_See_**
Adjusted Gross Income
598
**Seasoned Loan**
A loan repayment record that is consistent.
599
**Secondary Market**
Agencies which purchase mortgages from primary
lenders thereby creating funds for additional mortgages.
**_See_**
FHLMC, FNMA, GNMA, Primary Lenders
600
**Section**
In the Government Rectangular Survey System,
a parcel of land one mile square containing 640 acres.
**_See_**
Quarter Section, Township
601
**Security Agreement**
Under the UCC, a document used
to secure personal property.
**_See_**
Chattel Mortgage, Financing Statement,
Uniform Commercial Code
602
**Servient Estate**
The land against which an easement has been granted
for the benefit of the dominant estate.
**_See_**
Dominant Estate, Easement Appurtenant
603
**Setback**
The distance a structure must be from a
given point such as a street or an easement.
**_See_**
Variance, Zoning
604
**Settlement Sheet**
A full disclosure of all charges and
disbursements in a real estate transaction.
**_See_**
Proration, Regulation Z
605
**Sheathing**
The inner covering of boards on the
roof or outside walls of a frame house.
606
**Sheriff's Deed**
Deed given by the Sheriff at the completion
of a mortgage foreclosure sale.
**_See_**
Bargain and Sale Deed, Foreclosure,
Involuntary Alienation
607
**Sherman Antitrust Act**
Prohibits certain business activities that
are anti-competitive such as price fixing.
608
**Short Term Capital Gain**
The gain on the sale of a capital asset
usually held for 12 months or less.
**_See_**
Asset, Capital Gain
609
**Sill**
The lowest horizontal board in
a window or door frame.
**_See_**
Mud Sill
610
**Simple Interest**
Interest paid only on the unpaid principal balance.
**_See_**
Compound Interest, Interest, Principal
611
**Sinking Fund**
A fund made up of sums of money set aside
to pay a debt or meet depreciation expenses.
612
**Situs**
Land has an economic value due to its location.
**_See_**
Law of Situs
613
**Soft Money Mortgage**
A mortgage given to finance a specified property. Usually
a carryback between the seller and buyer that reflects an
extension of credit.
**_See_**
Hard Money Mortgage, Mortgage,
Purchase Money Mortgage
614
**Sole and Separate**
Owned by one person - Severalty
**_See_**
Concurrent Tenancy
615
**Special Service Properties**
Properties such as churches and theaters
having a single purpose and little demand.
**_See_**
Cost Approach
616
**Special Warranty Deed**
A conveying deed in which the grantor guarantees
the title property for only as long as he has owned it.
**_See_**
General Warranty Deed
617
**Specific Lien**
A lien which encumbers only a
certain parcel of property.
**_See_**
Lien, General Lien
618
**Specific Performance Suit**
A court action that forces a party to
comply with the contract as promised.
**_See_**
Breach of Contract
619
**Square Foot Method**
Estimating the value of a building using
the exterior measurements.
**_See_**
Cost Approach, Replacement Cost,
Reproduction Cost
621
**Statute of Frauds**
A law that states all real estate contracts must
be in writing to be enforceable (except a lease
for one year or less).
**_See_**
Contract Requirements, Equal Dignities Rule,
Parol Evidence Rule
622
**Statute of Limitations**
A time limit during which a legal action must take place.
**_See_**
Laches
623
**Statutory Law**
Laws passed by a legislative body.
624
**Statutory Lien**
A lien place against property by operation of law.
**_See_**
Assessment, Involuntary Lien, Judgment Lien,
Property Tax
625
**Statutory Period of Redemption**
The mortgagor's last chance to redeem the property
after the foreclosure sale by paying the entire debt.
**_See_**
Acceleration, Certificate of Sale, Equitable Period
of Redemption
626
**Steering**
An illegal practice that guides home buyers
to a particular area of town.
**_See_**
Blockbusting, Federal Fair Housing, Redlining
628
**Stepped-up Basis**
The basis of the property acquired from a decedent
will equal the value at the time of the death.
**_See_**
Basis
629
**Straight Line Depreciation**
A method of depreciation in which the asset is
written off evenly over its useful life.
**_See_**
Depreciation (Tax)
630
**Straight Note**
A note that calls for payments of interest only
followed by a balloon payment of the principal.
**_See_**
Interest Only, Term Only
631
**Straw Man**
One who acts for another for the purpose of concealing
the other's identity - or a third party used to create a
joint tenancy.
**_See_**
Unities of Joint Tenancy
632
**Stud**
The vertical supports in a wall of a frame house.
**_See_**
Joists
633
**Sub-surface Rights**
The right to use the land below ground
level to the center of the earth.
**_See_**
Mineral Rights
634
**Subagent**
A licensee who represents a designated Broker but
does not have the direct contractual obligation to
Buyer or Seller.
**_See_**
Agent, Cooperating Broker
635
**Subdivision**
A large tract that has been divided into smaller parcels
for sale. Six or more parcels improved or unimproved
any of which are less than thirty-six acres each.
**_See_**
Plat Map, Public Report
636
**Subject to**
A buyer takes over real property but is not
liable for the mortgage on the property.
**_See_**
Assumption of Mortgage, Novation
637
**Subjective Value**
Value that is created in the minds of people.
**_See_**
Objective Value
638
**Sublease**
A re-renting of space held under a lease to a third party.
**_See_**
Assignment, Sandwich Lease
640
**Subordination Clause**
A clause in which the lien holder agrees to be
secondary to a future encumbrance.
**_See_**
Junior Mortgage
641
**Subpoena**
A written order directing a person to appear
in court or produce documents.
642
**Subrogation**
The substitution of a claim for monies paid.
**_See_**
Recovery Fund
643
**Substitution**
An appraisal concept that states that the value of one
property is set by the cost of buying an equally
desirable property.
**_See_**
Conformity, Regression
644
**Summation Approach**
Also called the cost approach in appraising.
**_See_**
Cost Approach
646
**Superfund**
Known as CERCLA - **C**omprehensive **E**nvironmental
**R**esponse **C**ompensation and **L**iability **A**ct. Purpose is to
focus on cleanup of hazardous substances in given
areas as so determined by the EPA.
**_See_**
EPA
647
**Surety Bond**
A private company that promises to perform
if the bonded party fails.
648
**Surface Water**
The classification of water that includes
all natural streams, lakes or ponds.
**_See_**
Ground Water, Prior Appropriation, Riparian Rights
649
**Survey**
Determining the location of land by measuring
the determined lines and angles.
**_See_**
Metes & Bounds, Plat Map
650
**Sweat Equity**
An increase in value to real property
due to the owner's labor.
**_See_**
Equity
652
**Syndication**
A combination of parties joined together to
undertake an investment as an entity.
**_See_**
General Partnership, Limited Partnership,
Partnership
653
**Tacking**
Adding successive time periods to continuous usage.
**_See_**
Adverse Possession, Easement by Prescription
654
**Take Out Loan**
A permanent financing arrangement that pays
off a construction loan.
**_See_**
Open End Loan
655
**Tangible**
Personal property that can be moved.
**_See_**
Intangible
656
**Tax Deferment**
A real estate investment that postpones
the paying of taxes.
**_See_**
Exchanging, Installment Sale
657
**Tax Rate**
The rate applied to the assessed value
of property to establish a tax.
**_See_**
Assessment (Special), Dollar Rate, Mill Rate
658
**Tax Shelter**
Using investments to postpone the
payment of income tax.
**_See_**
Depreciation (tax)
659
**Tenancy**
A mode of holding title to real property.
**_See_**
Concurrent Tenancy, Sole & Separate
660
**Tenancy at Sufferance**
The quality of the tenancy one has if he remains on the
property after the lease has expired. Least possible
estate in land.
**_See_**
Actual Eviction, Holdover Tenant
662
**Tenancy at Will**
A lease that can be terminated by
either party at their will.
**_See_**
Tenancy at Sufferance, Tenancy for Years
663
**Tenancy by Entireties**
A method of joint ownership whereby the remaining
portion of the property automatically passes to the
surviving spouse.
**_See_**
Joint Tenancy, Rights of Survivorship
664
**Tenancy for Period to Period**
A lease that is automatically renewed
for the same like time.
**_See_**
Tenancy
665
**Tenancy for Years**
Any lease for a specified period of time.
**_See_**
Leasehold, Tenancy at Sufferance, Tenancy at Will
666
**Tenancy in Common**
Co-ownership in property. Interests need not be equal
and no right of survivorship exists.
**_See_**
Concurrent Tenancy, Partition, Undivided Interest
668
**Tenant**
One who occupies or uses property under a lease.
**_See_**
Lessee
669
**Tenements**
Real property and those rights that remain,
and are attached to the land.
**_See_**
Appurtenant
670
**Term Loan**
A mortgage which must be paid off in a
specified period of time. Interest only.
**_See_**
Amortization, Balloon Payment
672
**Testate**
Having died with a Will.
**_See_**
Executor, Intestate, Will
673
**Tier Line**
Survey line that are six miles apart and
run parallel to the principal baseline.
```
**_See_**
Base Line (Principal), Range Lines, Township
```
674
**Time is of the Essence**
All obligations set forth in the contract must
be met on or before the date specified.
**_See_**
Close of Escrow
675
**Title**
The legal proof of real property ownership.
**_See_**
Chain of Title, Constructive Notice
677
**Title Insurance**
Insurance in a real estate transaction that
protects the parties against Title defects.
**_See_**
Lender's Policy, Owner's Policy, Schedule "A",
Schedule "B"
678
**Title Theory State**
A Lender of cash may hold legal Title to property.
**_See_**
Lien Theory State
679
**Torrens System**
A registration system that accurately determines
ownership and claims to real property.
**_See_**
Evidence of Title
680
**Tort**
A wrongful act against a party in which
civil action can be brought.
**_See_**
Lis Pendens
681
**Townhouse**
Individual ownership of a specified structure plus interest
in the common area - ownership includes air and
subsurface rights.
**_See_**
Condominium
682
**Township**
A parcel of land that is six miles
square and contains 36 sections.
**_See_**
Section
683
**Trade Fixture**
Items used in business that appear to be real
property but remain personal property.
**_See_**
Fixture
684
**Treasurer's Deed**
The Deed one receives as a result of
a tax foreclosure sale.
**_See_**
Bargain & Sale Deed, Certificate of Purchase,
Involuntary Alienation
685
**Trust Account**
A Broker's bank account used specifically
for earnest money or rental deposits.
**_See_**
Commingling, Conversion, Earnest Money
686
**Trustee**
One who holds bare-naked title in a Deed of Trust
for the beneficiary until the entire debt is paid.
**_See_**
Beneficiary, Deed of Trust, Trustor
687
**Trustee's Deed**
A Deed given by the Trustee to convey
property out of Trust.
**_See_**
Bargain and Sale Deed
688
**Trustor**
The party who signs the Trust Deed. The borrower
in a Deed of Trust.
**_See_**
Beneficiary, Deed of Trust, Trustee
689
**Truth in Lending**
Covered by Reg Z - Borrowers are to be given truthful and
complete information as it relates to the cost of credit.
**_See_**
Regulation Z
690
**Undivided Interest**
Co-ownership whereby each party
has the right to use the entire property.
**_See_**
Community Property, Concurrent Tenancy, Joint Tenancy,
Tenancy in Common
691
**Undue Influence**
Taking unfair advantage of one's position
in acquiring an agreement.
**_See_**
Duress, Menace, Mutual Assent
692
**Unearned Increment**
An increase of property value due to external
causes such as inflation.
**_See_**
Appreciation, Sweat Equity
694
**Unenforceable Contract**
A contract that appears to be valid but neither
party can be legally forced to perform.
**_See_**
Parol Evidence Rule, Valid, Void, Voidable
695
**Uniform Commercial Code**
A code of law that regulates the security
used in personal property transactions.
**_See_**
Bulk Transfer, Financing Statement,
Security Agreement
696
**Unilateral Contract**
A contract that is binding only on one party.
**_See_**
Bilateral Contract, First Right of Refusal, Option
697
**Tenancy in Severalty**
Owned by one person. Sole and Separate.
**_See_**
Concurrent Tenancy
698
**Unit-in-Place Method**
An estimate of value that computes each unit times
the number of units in a given building.
**_See_**
Cost Approach
699
**Unities of Joint Tenancy**
Time, Title, Interest, Possession
700
**Universal Agent**
One authorized to act for another in every and
all actions, such as a Guardian.
**_See_**
General Agent, Limited Agent
701
**Useful Life**
The period of time a property will be useful
for its intended purpose.
**_See_**
Economic Life
702
**Usury**
Charging a higher rate of interest than the law allows.
**_See_**
Interest
703
**VA Guarantee**
VA will guarantee to the lender of funds a
specific amount in case of default.
**_See_**
Certificate of Eligibility
704
**Valid**
A contract that contains all essential legal requirements
and is enforceable through a court of law.
**_See_**
Contract Requirements, Void, Voidable
705
**Valuable Consideration**
Something of monetary value given in exchange
for the conveyance of real property.
**_See_**
Consideration, Good Consideration
706
**Value**
The amount of consideration an item can command;
also the present worth of future benefits.
**_See_**
Worth
707
**Value (Elements of)**
Demand, Utility, Scarcity, Transferability
**_See_**
Objective Value, Subjective Value
708
**Variable Rate Mortgage**
Lender may adjust the interest on
a loan based upon an index.
**_See_**
Flexible Payments, Index Lease, Margin
709
**Variance**
Permission obtained to act in a way that is
contrary to current zoning ordinances.
**_See_**
Non-conforming Use
710
**Vendee**
The buyer of real property under an agreement for sale.
**_See_**
Agreement for Sale, Equitable Title, Vendor
711
**Vendor**
The seller of real property under an agreement for sale.
**_See_**
Agreement for Sale, Equitable Title, Forfeiture
712
**Void**
A contract that never was legal and has no binding effect.
**_See_**
Valid, Voidable, Unenforceable Contract
713
**Voidable**
A contract that appears to be valid on its face
until action is taken to void it.
**_See_**
Void, Valid, Unenforceable Contract
714
**Warranty Forever**
The grantor guarantees forever the title conveyed.
The warranty is found in a General Warranty Deed.
**_See_**
General Warranty Deed, Warranty of Further Assurance
715
**Warranty of Further Assurance**
The grantor promises to deliver all necessary documents
in order to convey clear title. This warranty is found in a
General Warranty Deed.
**_See_**
General Warranty Deed, Warranty Forever
716
**Wild Deed**
An unrecorded document that creates a
gap in the chain of title.
**_See_**
Chain of Title, Constructive Notice, Recording
717
**Will**
A legal testament by which a person disposes of
his or her property at the time of death.
**_See_**
Formal Will, Holographic Will, Nuncupative Will, Testate
718
**With Recourse**
The seller of a negotiable instrument may be
held responsible for its future payments.
**_See_**
Without Recourse
719
**Without Recourse**
The seller of a negotiable instrument may not
be held responsible for its future payments.
**_See_**
With Recourse
720
**Worth**
The amount something should sell for
in an open and free market.
**_See_**
Market Value, Value
721
**Wraparound**
Creating a new obligation which consists of all
underlying debts plus the seller's equity.
**_See_**
All-Inclusive Deed of Trust
722
**Writ of Execution**
A decree of the court instructing an officer
of the court to carry out the judgment.
**_See_**
Judgment Lien
723
**Yield**
The financial benefits received from an investment.
**_See_**
APR, Rate of Return
724
**Zoning**
Local laws that regulate the specific
use and character of land.
**_See_**
Master Plan, Police Power
