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RealEstate Flashcard

Real Estate Flashcards CA-2021

Term	Definition
Principal	(1) one who employs an agent, (2) money or capital.
Fully Amortized Mortgage	A method of loan repayment in which the dollar amount of each payment is the same. The first part of each payment is interest and the remainder reduced the principal. Over the life of the mortgage, the outstanding balance is reduced to zero.
Listing Contract	An employment agreement between an owner and broker defining the duties and rights of both parties. (Unilateral contract)
Irrevocable	Not capable of being changed or terminated.
Rate of Return	A percentage relationship between the investment price or equity invested and the composite returns.
Deed	A written instrument, usually under seal, which contains an agreement to transfer some property interest from a grantor to a grantee.
Abandonment	Non–payment of taxes
Quitclaim Deed	Only conveys what present interest a person may have in a particular property but makes no representations or warranties of title.
Curable Depreciation	Depreciation is considered curable if the cost of the repair is less than what the repair adds to the value of property.
Junior Lien	An encumbrance, second in priority, to a previously recorded lien or to a lien to which the encumbrance has been subordinated.
Promissory Note	The primary legal financing obligation in which the borrower promises to pay back a sum of money borrowed. (A contract)
Graduated Lease Provisions	This lease provides for periodic step increases in the rental payments.
Possibility of Reverter	The right retained when a fee simple determinable is granted.
Reversion	A future interest in the grantor, which occurs whenever the owner of real estate conveys an estate of lesser duration than the owner has.
Deed in Lieu of Foreclosure	Used by the mortgagor (borrower) who is in default to convey the property to the mortgagee (lender) in order to eliminate the need for a foreclosure.
Curtesy	The rights that a husband acquires in the wife's property upon her death.
Periodic Tenancy	A lease, which has the original terms automatically renewed for successive periods, until proper notice to terminate is given by either the landlord or tenant. Month to month rental.
Lot and Block	A method of land description frequently used after land has been subdivided into building lots; also referred to as the recorded plat method. (Must have a plat map to find the property)
Warranty Deed	A deed in which the grantor makes formal assurance as to quality of title.
Functional Obsolescence	20 of 423 A loss in value due to conditions within the structure which make the building outdated when compared with a new building. (4 bedrooms and 1 bath, insulation, narrow stairway, etc.)
Null and Void	Invalid and unenforceable.
Escheat	The right of government to ownership of property, which is left by a deceased property owner who leaves no will, and dies without descendants.
Capital Gains	The tax profit realized from the sale of property. (A “tax free” exchange is a deferment of capital gains).
Fixture	Broadly defined as personal property which has become realty. Examples include built–in cabinets or bathtubs. Business (trade) fixtures can be removed if they leave no damage to the real estate, and they are removed before the end of a lease or by agreeme
Annual Percentage Rate (APR)	The yearly cost of credit. Interest Rate plus finance charge.
Open Listing	An agreement between an owner and many brokers. If a broker produces a ready willing, and able buyer, a commission is due. However, the owner still has the right to sell his/her property and is not obligated to pay a commission to anyone.
Collateral	Property which has been pledged as security for a loan.
Covenant	Included in a deed; a guarantee.
Proration	Dividing property taxes, hazard insurance and other expenses or income between the buyer and seller, as of date of settlement.
Unsecured Loan	A loan made on the signature and credit of the borrower, not secured by collateral. Credit card. (Debenture)
General Warranty Deed	Contains covenants in which the grantor formally guarantees that good and marketable title is being conveyed. Highest deed – 5 covenants.
Exclusive Right to Sell Listing	Under this listing arrangement, the broker employed is entitled to a commission no matter who sells the property during the listing period. (Even the Seller)
Setback Lines	A requirement in zoning ordinances in which all structures are to be a minimum distance from property lines.
Fee Simple Determinable	An estate which has been created to exist only until the occurrence or nonoccurrence of a particular event. Returns automatically.
Condemnation	The process of exercising eminent domain through court action.
36 of 423 Satisfaction Piece	An instrument issued by a person holding a lien to indicate lien is discharged.
Due–on–Sale Clause	A clause, included in many mortgages, permitting the lender to require the borrower to repay the outstanding balance when the property is sold. Prevents loan assumption.
Federal Deposit Insurance Corporation – (FDIC)	A federal agency established to insure the deposits in member commercial banks. The current maximum insurance per account is $100,000.00.
Title Insurance	A policy that protects the insured against loss or damage due to defects in title.
Voluntary Lien	An encumbrance placed on property through some willful act of the owner.
Replacement Cost	The cost of substituting a similar structure with utility equivalent to the subject property but constructed with modern materials.
Specific Performance	An equitable remedy in which the court orders the contract to be performed as agreed to by the parties.
Seisin	The actual possession of land by one who claims rightful ownership of a freehold estate therein.
PMI	Private Mortgage Insurance.
Urban Renewal	The acquisition of certain areas by government action for the purpose of redevelopment.
First Lien	Claim with highest priority against property; also known as a superior to the rights of subsequent lenders. (Recorded first)
Buffer Zone	A means by which planners use space to separate two adjoining districts which have incompatible uses. A buffer zone consists of uses which are compatible with uses in each adjoining district.
Agency	A relationship in which one party (the principal) authorizes another party (the agent) to act as the principal's representative in dealing with third parties.
Lien	A legally recognized right to enforce a claim or charge on the property of another for payment of some debt, duty or obligation.
Metes and Bounds	A method of land description which involves identifying distances and directions and makes use of both the physical boundaries and measurements of the land.
Joint Venture	An agreement by two or more individuals or entities to engage in a single project or undertaking.
Bench mark	A bronze disk permanently placed and precisely identified by government survey teams.
Prepayment Penalty	The charge levied by the lender for paying off a mortgage prior to its maturity date.
Life Estate	An interest which only lasts for the term of a life, or lives, of one or more persons. Death terminates
As is	A phrase which disclaims any promises or warranties. A person purchasing real estate “as is” takes it in exactly the condition in which it is found. Seller cannot hide latent defects.
Tenancy by the Entireties (Entirety)	A special joint tenancy between a lawfully married husband and wife, which places all title to property (real or personal) into the marital unit, with both spouses having an equal undivided interest in the whole property. In essence, each spouse owns the
Package Mortgage	A mortgage, used in the purchase of new residential property which, in addition to real property, covers certain personal property items and equipment. (Washer, dryer, drapes, refrigerator, stove)
Mortgage Broker	A person who brings together the user of capital (borrower) and the supplier of capital (lender). For this service, a finder's fee is usually paid by the borrower.
Counteroffer	A rejection of an offer to buy or sell, by a seller or buyer, with a simultaneous substitute offer.
Escrow	The deposit of funds with a neutral third party who is instructed to carry out the provisions of an agreement.
Lien Theory State	The mortgage merely creates a lien right on the mortgagee with the mortgagor retaining the title.
Common Elements	Property jointly owned on a pro–rata basis with other unit owners in a condominium regime.
Lessor	Landlord.
Defeasance Clause	A necessary mortgage clause in title theory states. When the debt is satisfied, this clause causes title to pass automatically back to the borrower. Satisfaction of mortgage; release from records.
Mortgage	A legal document used to secure the performance of an obligation, in which the borrower or mortgagor agrees to pledge property to secure the debt represented by the promissory note. (A contract).
Undivided Interest	The interest of co–owners in which individual interest is indistinguishable. (Everyone owns part of the whole property.)
Open–end Mortgage	A loan containing a clause which allows the mortgagor to borrow additional money without rewriting the mortgage.
Color of Title	Adverse possession.
Trustor	The person who creates a trust and voices the instructions to the trustee. (The borrower.)
Title Theory States	States in which a mortgage actually conveys title subject to a condition.
General Lien	A lien that attaches to all property owned by an individual. Real and personal.
Implied Agency	Agency is created by implication (implied) when, from the behavior of the client (customer) and the behavior of the agent (sales person/associate) that they act as if the agency exists by performing in such areas where an agency would exist.
Easement	A right to limited use or enjoyment by one or more persons in the land of another.
Market Data Approach	A means of estimating value by comparing similar properties. Used when there is an active market and where comparable can be identified. Also called comparable sales approach.
Mortgagor	A borrower who pledges property through a mortgage to secure a debt.
Special Assessment	From time to time jurisdictions levy a charge on certain pieces of property for the purpose of paying for the cost of a public improvement such as sewers or sidewalks, which particularly benefit properties being assessed as opposed to those impr
Covenant Against Encumbrances	The assurance that no encumbrances other than those specified in the deed exist.
Earnest Money	A sum of money given to bind an offer or agreement.
General Agent	One authorized to transact all of the principal's affairs within the context of a broad commercial or other kind of endeavor. Property manager.
Certificate of Eligibility Certificate	Given to veterans bearing evidence of their qualifications for a VA mortgage loan.
Estate in Fee	The maximum possible estate one can possess in real property; also referred to as fee simple or fee simple absolute.
Special Warranty Deed	The grantor warrants against defects that have occurred after the grantor acquired title. (No warrantee forever–only for the time the grantor owns the property)
Possession	The physical control of real property.
Grantor	Owner making conveyance of title or interest in property
Certificate of Title	A document given by the title examiner stating the quality of title the seller possesses.
Contract	An agreement resulting from the objective expression of mutual assent by competent parties, which the law recognizes in some way as a duty, and the breach of which the law gives a remedy.
Second Mortgage	A mortgage subordinate to a first mortgage; also referred to as a junior mortgage. (Recorded Second)
Estate from Period to Period	A leasehold, which is automatically renewed for the same term as in the original lease; also referred to as a periodic tenancy or an estate from period to period. Month to month rental. Notice needed to terminate.
Easement Appurtenant	An easement created to benefit adjacent land.
Ownership	The right to hold, possess, control and dispose of property.
Liquidity	The ease with which an asset may be converted into cash.
Judgment Lien	The charge upon the land of a debtor, resulting from the decree of a court, entered in the judgment docket. Lawsuit
Acknowledgment	A formal declaration made by the grantor conveying the property to the grantee—a necessary element for validity of a deed.
Comparative Analysis	A method of determining the value of property in which the selling prices of similar properties are used as the basis for estimating the value of the subject property.
Equity	Value of real estate less any liens against it.
REALTOR®	A registered trademark of the NATIONAL ASSOCIATION OF REALTORS. It is used by brokers and salespersons who hold active membership in the association.
Wraparound Mortgage	A junior mortgage which provides an owner additional capital without refinancing the first mortgage. (The original mortgage is not disturbed)
Vendor's Lien	The amount of the purchase price still due to the seller.
Points	1% of loan.
Encroachment	The extension of some improvement or object across the boundary of an adjoining tract. (Off sides).
Chain of Title	A history of the ownership affecting title to a parcel of land.
Defect in Title	Any lien, claim or encumbrance, on a particular piece of real estate, that has been properly recorded in the public records. Recorded defects impair clear title and may result in the title being unmarketable.
Land Contract	The seller accepts a down payment on a parcel of land but title to the property does not pass until the last principal payment has been received. This is referred to as an installment sales contract or a contract for a deed.
Optionee	The holder of the option. Buyer
Steering	The channeling of prospective home purchasers or renters, by real estate brokers or salespersons, into racially homogeneous neighborhoods, and actively discouraging them away from neighborhoods of different racial or ethnic composition.
Assignment	(1) the means by which a person transfers contract rights;(2) occurs when the lessee parts with the entire estate, retaining no interest.
Refinancing	A description of an extension of the existing financing either through the same lender or through a new financial arrangement.
Veterans Administration (VA)	An agency of the federal government created to provide a loan guaranty program which enables qualified veterans to finance real estate purchases with a higher loan–to–value ratio than is normally possible with conventional financing.
Statute	A law passed by a state legislature.
Percentage Lease	The lessor receives a percentage of the gross sales or net profits as the rental payment for the lease of the property.
Equitable Lien	Created when justice and fairness would require a court of equity to declare such a lien exists or when conduct of parties would imply that a lien was intended.
Lessee	Tenant
Valid Contract	A binding agreement containing all of the essential legal elements.
Assemblage	Bringing two or more lots together under one ownership.
Express Contract	An agreement formed through the oral or written words of the parties.
Freehold Estate	One which continues for an indefinite period of time. For as “least a lifetime or greater” (will)
Dominant Estate	The tract of land in an easement appurtenant which benefits from the easement.
Remainder–man	The person who has a future interest in a life estate once the present estate terminates.
Mechanic's Lien	A statutory lien levied on property by a person who is wrongfully not compensated after providing labor (mechanic) or material (material–man) for the improvement to land. (Only on the specific property where the work was complete.) Not on perso
Time Is of the Essence	A phrase included in contracts to require punctual performance of all obligation.
Commingling	Illegally mixing deposits or monies, collected from a client, with one's personal or business account. Taking money out too soon or putting it into escrow too late (10 banking days).
Gross Income	The actual income received from property before the deduction for any expenses.
Fair Market Value	The price negotiated for a parcel of real estate in a competitive market where both buyer and seller are free to act and under no undue pressure.
Action to Quiet Title	The lawsuit filed by a person to remove or clear the claims of others against property
Deed of Trust	A deed to real property, which serves the same purpose as a mortgage, involving three parties instead of two. The third party holds naked title for the benefit of the lender. Beneficiary (Lender), Trustor (Borrower), Trustee (Third Party)
Re–entry	The right of the landlord to repossess leased property following the violation of the terms in the lease.
Topography	A description of surface features of land.
Market	Economic function of bringing buyers and sellers together through the price mechanism
Rescission	Repealing a contract either by mutual consent of the parties to the contract or by one party when the other party is in breach of the contract.
Covenant of Further Assurance	A promise that the grantor will perform further acts reasonably necessary to correct any defects in the title or in the deed instrument.
Management Agreement	An employment contract between the owner of real estate and a property management firm that agrees to oversee the management of the property.
Police Power	The inherent power of the state to regulate in order to promote public health, safety, morality or welfare. For example, zoning and building codes.
Time Sharing	A form of condominium ownership in which the buyer owns the property for a certain specified time interval.
Mill	A mill is equal to one–tenth of one cent and is used to state the property tax rate. (.001)
Consideration	Anything of value offered to induce someone to enter into a contractual agreement. For example, sale price, earnest money, a promise for a promise.
Effective Gross Income	The anticipated income resulting from the estimated potential gross income from a rental property less an allowance for vacancy and bad debts.
Millage Rate	A tax rate stated in tenths of a cent. For example, a millage rate of 150 mills on property assessed at $100,000 would result in a property tax of $1,500 ($100,000 × .150).
Government Survey	A method of land description based on townships and sections. (Rectangular survey system).
Estate	A legally recognized interest in the use, possession, control and disposition that a person has in land, and defines the nature, degree, extent and duration of a person's ownership in land.
Redemption Period	The right of a mortgagor (borrower) to make good on the default within a specified time and receive the property back.
Attachment	The process of taking a person's property into legal custody by a court order called a writ of attachment. Property is frozen.
Real Estate Investment Trust (REIT)	A method of pooling investment money using the trust form of ownership if certain tax requirements are met. One advantage of the REIT is the avoidance of corporate tax (thus no double taxation) + many more.
Contract for a Deed	A means by which the seller passes possession but retains title to the property until the total or a substantial portion of the purchase price is paid. Installment contract. The two parties here are the vendor (owner) and the vendee (buyer).
Acre	A measure of land equal to 43,560 square feet.
Resident Manager	An employee of the property management firm and its representative on the premises.
Prescriptive Easement	An easement obtained by the open, notorious, hostile and continuous use of the property belonging to someone else for a statutory period of time (POACH)
Devise	Transferring title to real property by means of a will.
Prime Rate	The interest rate charged to a lender's AAA customer. This is normally the base from which other interest rates are derived.
Partial Release Clause	A part of a mortgage, which provides for the release of part of the property (used as security in the loan) upon payment of a certain amount of the mortgage. Blanket mortgage.
Receiver	A court–appointed person who is charged with preserving a property, collecting rents and doing anything necessary to maintain the property's condition.
Less than Freehold Estate	Estates in possession generally referred to as leaseholds. Considered to exist for a definite period of time, or successive periods, of time until terminated by notice; also known as nonfreehold estates.
Assessed Value	The value placed on property, by the tax assessor, for the purpose of determining the property tax
Rectangular Survey	method of land description used in about 30 states based on imaginary lines of longitude (meridians) and latitude (base lines); also referred to as the US government survey system.
Reversionary Interest	A future interest a person has in property after present possession is terminated.
Right of Survivorship	Upon the death of a joint tenant or tenant by the entirety the interest does not pass to the tenant's heirs but to the other join tenant(s).
Allodial	The free and full ownership of rights in land by individuals, which is the basis of real property in the United States.
Attestation	The act of witnessing a person’s signing of an instrument by a notary public.
Unity of Title	States that the joint tenancy interests were created in a single conveying instrument.
Physical Deterioration	The loss in value due to wear and tear of the structure.
Deed of Release	Given by lien holders, remainder–men or mortgages to relinquish their claims on the property.
Civil Rights Act of 1866	A law which prohibits discrimination in all real estate transactions based on race—commercial and residential.
Bill of Sale	A document used to transfer ownership of personal property.
Attorney's Opinion of Title	A statement issued by an attorney after analyzing an abstract as to quality of title.
Run with the land	Certain restrictions, easements and covenants are part of the ownership of land and thus are not terminated when title is transferred but remain in effect from owner to owner.
Ownership in Severalty	Individual ownership.
Grantee	Purchaser or donee receiving title to property.
Personal Property	Movables, which are not annexed to or part of, the land; also referred to as chattels.
Amortized Loan	A financial debt that is paid off over a period of time by a series of periodic payments. A loan can be fully amortized or partially amortized requiring a balloon payment to satisfy the debt at the end of the term.
Tax Base	The total tax–assessed value of all real property in a particular jurisdiction.
Satisfaction of Mortgage	An instrument issued by the mortgagee (Lender) when the mortgage has been paid in full.
Zoning Ordinance	A zoning law passed by a local government which consists of a text of regulations and a map.
Building Code	Ordinances passed by local governments with special minimum standards of construction for new buildings. They also apply to major additions to old construction.
Tenancy from Period to Period	A leasehold, which is automatically renewed for the same term as in the original lease; also referred to as a periodic tenancy or an estate from year to year. Notice needed to terminate.
Descent	Refers to any passage of title to property, upon intestacy to those heirs, related by blood or marriage, whom the law designates.
Usury	Charging more than the legal rate of interest for the use of money.
Syndicate	An arrangement to raise equity capital for real estate purchases or for other types of investments
Duress	Involves the use of force or improper actions, against a person or property, in order to induce a party to enter into a contract.
Gross Rent Multiplier (GRM):	A method of appraising single family or duplexes based on the monthly gross income.
Voluntary Alienation	The transfer of title by a deed.
VA Mortgage	(GI Mortgage) Mortgage guaranteed by Veterans Administration.
Master Plan	A program for the future development of a community which serves as the guideline for capital expenditures.
Income Approach	A traditional means of appraising property based on the assumption that value is equal to the present worth of future rights to income.
Universal Agent	Has the authority to do all acts that can be lawfully delegated to a representative. (Power of attorney— attorney in fact)
Price	An amount usually expressed in terms of money paid for property.
Planning Commission	A local government agency which determines plans for the physical growth of a community.
Minor	An infant; one who has not attained majority in a state and does not have legal capacity to be bound by most contracts. (Voidable contracts)
Liquidated Damages	An agreed to sum, which will be paid if the contract is breached.
Escalation Clause	(1) in finance, permits the lender to raise the interest rate upon the occurrence of certain stipulated condition, (2) in leasing, permits the lessor to raise lease payments upon the occurrence of certain stipulated condition.
Will	A legal declaration in which a person disposes of property to take effect upon his or her death.
Quiet Title	A court action to remove a cloud on the title.
Capitalization Rate	The rate of return considered to be a reasonable return on investment—given the risk.
Renegotiable Rate Mortgage	A renegotiated loan where the maturity is fixed (for example, 30 years) but the interest rate, and hence the monthly payment, is renegotiated periodically (for example, every 3 or 5 years.)
Capitalization	Used in the income approach to value. To capitalize income means to convert future income into present (current) value.
Zoning	A police power device which allows for legislative division of space into districts and imposition of regulation prescribing use and intensity of use to which land within each designated district may be put.
Quiet Enjoyment	The right of an owner or lessee legally in possession of property, to uninterrupted use of the property without interference from the former owner, lessor or any third party claiming superior title.
Air Rights	The right to use, control and occupy the space above a particular parcel of land.
Purchase Money Mortgage	A mortgage given by the seller to the buyer to cover all or part of the sale price. Seller financing.
Marketable Title	One which is free from reasonable doubts or objections, and which the courts would compel a purchaser to accept under the terms of a sales contract.
Comparable	Comparable property recently sold which is used in the market data approach.
Option	A right which is given for consideration to a party (optionee) by a property owner (optionor) to purchase or lease property within a specified time, at a specified price and terms. An option is irrevocable by the optionee and will not be extinguished by d
Truth–in–Lending Law	Common name given to the National Consumer Credit Protection Act. Requires lenders to make credit disclosures to individual borrowers for certain types of loans. (Regulation Z)
Bargain and Sale Deed	An instrument conveying title which recites a valuable consideration and commonly uses the words “bargain and sale” or words of similar import.
Fraud	A misrepresentation of a material fact, which is made with knowledge of its falsity, and with intent to deceive a parry who in fact relies on the misrepresentation to his or her detriment and injury
Ordinance	A statute enacted by the legislative branch of a local government.
Sales Contract	An agreement in which the buyer and seller agree to the terms and conditions of the sale of property. (Bilateral Contract)
Sale–leaseback	A technique used by owners of property as a means of raising capital. The process involves the simultaneous selling and leasing back of the property usually through a net lease.
Exclusive Agency Listing	207 of 423 The owner employs only one broker but retains the right to personally sell the property, and thereby not pay a commission. However, if any other real estate company sells the property, the listing broker is still entitled to the commission sti
Bad Title	Title with defects making it unmarketable.
Blockbusting	209 of 423 Any activity which attempts to drive prices down for the purpose of causing transition from one ethnic group to another. This is a violation of Federal Fair Housing Laws. Also called “panic selling”.
Offer and Acceptance	210 of 423 The necessary elements of mutual assent; for example, an agreement of one party to buy and another party to sell.
Owner's Title Policy	A policy insuring the owner of real estate against certain defects of title.
Avulsion	Occurs in cases where there is a sudden loss of land through nature.
Variable Interest Rate Mortgage (VRM)	The interest rate charged by the lender varies according to some index not controlled by the lender.
Encumbrance	Any interest in or claim on, the land of another, which in some manner burdens or diminishes the value of the property.
Conveyance	The transfer of title to land from one party to another
Graduated Payment Mortgage (GPM):	A financing technique for residential real estate in which monthly payments start at a lower rate and increase periodically over the life of the mortgage; FHA 245.
Water Table	The distance from ground level to natural groundwater.
Eminent Domain	The right of government to acquire property, for a public purpose, after paying just compensation.
Block A	Means of subdividing large tracts of land into smaller sections, each of which is numbered. For example, Lot 4, Block 8.
Co–Insurance	Coinsurance is a common clause or provision in building insurance policies under which the insured agrees to maintain insurance on his or her property in an amount equal to at least 80% of the replacement cost. It the property is not insured to that amoun
Alienation Clause	221 of 423 A provision in a mortgage requiring full payment of the debt upon the transfer of title to the property, due on sale. Prevents loan assumptions.
Accretion	Refers to land which is accumulated by the gradual washing or motion of water.
Parol Evidence Rule	223 of 423 A rule of evidence designed to achieve a degree of certainty in a transaction and to prevent fraudulent and perjured claims. Although the word "parol" means oral, in this context, it refers to evidence that is extrinsic to, or outside and separ
Regulation Z	Regulation Z requires disclosure of all costs of financing the purchase of owner occupied residential purchases of one to four units. It also requires disclosure of the annual percentage rate of the loan. Implementation of Regulation Z is over seen by the
Tenancy at Sufferance	tenancy which is created when one is in wrongful possession of realty, even though the original possession may have been legal.
Federal Fair Housing Act of 1968	226 of 423 An act prohibiting discrimination in the sale or rental of housing on the basis of race, color, religion or national origin sex, handicap and familial status.
Bundle of Rights	The rights of an owner to possess, control, enjoy, sell, lease, mortgage, and dispose of the property.
Special Agent	One limited in authority to transact a single business affair or a specific series of business affairs or to perform restricted acts for the principal. (Listing one property for sale)
Habendum clause	229 of 423 That part of a deed beginning with the words, “To have and to hold”, followed by the granting clause and reaffirming the extent of ownership that the grantor is transferring. The habendum clause defines or limits the extent of ownership in the
Market Value	The price at which a willing buyer and a willing seller will agree upon, where neither is under any undue pressure, and both are negotiating at arms length with complete knowledge of the market.
Bilateral Contract	231 of 423 A contract in which a promise is given for the promise of another. It becomes binding when mutual promises are communicated. (A real estate contract).
Cost Approach	A method of estimating value based on the economic principle of substitution; the value of a building cannot be greater than the cost of purchasing a similar site and constructing a building of equal utility.
Tax Rate	The rate, normally stated in units of $100, multiplied by the assessed value of property to determine the amount of the property tax due.
Life Tenant	The holder of a life estate
Latent Defect	A defect which cannot be discovered by ordinary inspection.
Federal Home Loan Bank System – (FHLBB)	A federal agency which oversees and regulates all federally charted savings and loan association.
Gross Income Multiplier (GIM):	A method of appraising income–producing property based on a multiple of the annual gross income; also called a gross rent multiplier.
Federal Home Loan Mortgage Corporation – (FHLMC)	“Freddie Mac” is a wholly owned subsidiary of the Federal Home Loan Bank System, which serves as a secondary mortgage market for savings and loan associations, who are members of the FHLBB; also referred to as The Mortgage Corporation.
Federal Housing Administration – (FHA)	A federal agency established in 1943 to increase home ownership by providing an insurance program to safeguard the lender against the risk of nonpayment. Currently part of HUD.
Competent Parties	Those who are legally capable of entering into contracts.
Voidable Contract	An agreement in which one or more of the parties may elect to avoid or to ratify the legal obligations created by the contract. Minor, someone under duress.
Real Estate	Land and all man–made improvements both on and to the land, plus all tangible interest in the real property. Surface, subsurface and air rights.
Fee Simple Subject to a Condition Subsequent	An estate which is subject to a power in the original grantor, or the grantor's heirs, to terminate the estate upon the happening of an event. Back to court.
Accession	The idea that the owner of land is entitled to all that the soil produces or all that is added to the land either intentionally or by mistake. Trade fixtures not removed are “assessed” by the owner of the property.
Appraisal	An opinion or estimate of value performed by a person licensed to do so.
Optionor	The seller of the option.
Partially Amortized Mortgage	A method of loan repayment in which the balance of the outstanding loan is not zero at maturity, and thus a balloon payment is due at that time.
Leverage	Using borrowed capital to finance the purchase of real estate or other assets. (No money down)
Situs	Refers to the economic location of real estate
Planned Unit Development (PUD)	A type of exception, or special use, permitted under many modern zoning ordinances, allowing a mixture of different land uses or densities.
Reproduction Cost	The cost of exactly duplicating a structure using the same material and design.
Interest	1) the sum paid for the use of money (2) the degree of rights in the ownership of land.
Independent Contractor	One whose time and effort are regulated by the individual and are not under the direction or control of others.
Suit	A court action to enforce a legal claim or right.
Quiet Enjoyment	The right of an owner or lessee legally in possession of property, to uninterrupted use of the property without interference from the former owner, lessor or any third party claiming superior title.
Air Rights	The right to use, control and occupy the space above a particular parcel of land.
Purchase Money Mortgage	A mortgage given by the seller to the buyer to cover all or part of the sale price. Seller financing.
Marketable Title	One which is free from reasonable doubts or objections, and which the courts would compel a purchaser to accept under the terms of a sales contract.
Comparable	Comparable property recently sold which is used in the market data approach.
Option	A right which is given for consideration to a party (optionee) by a property owner (optionor) to purchase or lease property within a specified time, at a specified price and terms. An option is irrevocable by the optionee and will not be extinguished by d
Truth–in–Lending Law	Common name given to the National Consumer Credit Protection Act. Requires lenders to make credit disclosures to individual borrowers for certain types of loans. (Regulation Z)
Bargain and Sale Deed	An instrument conveying title which recites a valuable consideration and commonly uses the words “bargain and sale” or words of similar import.
Fraud	A misrepresentation of a material fact, which is made with knowledge of its falsity, and with intent to deceive a parry who in fact relies on the misrepresentation to his or her detriment and injury
Ordinance	A statute enacted by the legislative branch of a local government.
Sales Contract	An agreement in which the buyer and seller agree to the terms and conditions of the sale of property. (Bilateral Contract)
Sale–leaseback	A technique used by owners of property as a means of raising capital. The process involves the simultaneous selling and leasing back of the property usually through a net lease.
Exclusive Agency Listing	The owner employs only one broker but retains the right to personally sell the property, and thereby not pay a commission. However, if any other real estate company sells the property, the listing broker is still entitled to the commission sti
Bad Title	Title with defects making it unmarketable.
Blockbusting	Any activity which attempts to drive prices down for the purpose of causing transition from one ethnic group to another. This is a violation of Federal Fair Housing Laws. Also called “panic selling”.
Offer and Acceptance	The necessary elements of mutual assent; for example, an agreement of one party to buy and another party to sell.
Owner's Title Policy	A policy insuring the owner of real estate against certain defects of title.
Avulsion	Occurs in cases where there is a sudden loss of land through nature.
Variable Interest Rate Mortgage (VRM)	The interest rate charged by the lender varies according to some index not controlled by the lender.
Encumbrance	Any interest in or claim on, the land of another, which in some manner burdens or diminishes the value of the property.
Conveyance	The transfer of title to land from one party to another
Graduated Payment Mortgage (GPM):	A financing technique for residential real estate in which monthly payments start at a lower rate and increase periodically over the life of the mortgage; FHA 245.
Water Table	The distance from ground level to natural groundwater.
Eminent Domain	The right of government to acquire property, for a public purpose, after paying just compensation.
Block A	Means of subdividing large tracts of land into smaller sections, each of which is numbered. For example, Lot 4, Block 8.
Co–Insurance	Coinsurance is a common clause or provision in building insurance policies under which the insured agrees to maintain insurance on his or her property in an amount equal to at least 80% of the replacement cost. It the property is not insured to that amoun
Alienation Clause	221 of 423 A provision in a mortgage requiring full payment of the debt upon the transfer of title to the property, due on sale. Prevents loan assumptions.
Accretion	Refers to land which is accumulated by the gradual washing or motion of water.
Parol Evidence Rule	223 of 423 A rule of evidence designed to achieve a degree of certainty in a transaction and to prevent fraudulent and perjured claims. Although the word "parol" means oral, in this context, it refers to evidence that is extrinsic to, or outside and separ
Regulation Z	Regulation Z requires disclosure of all costs of financing the purchase of owner occupied residential purchases of one to four units. It also requires disclosure of the annual percentage rate of the loan. Implementation of Regulation Z is over seen by the
Tenancy at Sufferance	tenancy which is created when one is in wrongful possession of realty, even though the original possession may have been legal.
Federal Fair Housing Act of 1968	226 of 423 An act prohibiting discrimination in the sale or rental of housing on the basis of race, color, religion or national origin sex, handicap and familial status.
Bundle of Rights	The rights of an owner to possess, control, enjoy, sell, lease, mortgage, and dispose of the property.
Special Agent	One limited in authority to transact a single business affair or a specific series of business affairs or to perform restricted acts for the principal. (Listing one property for sale)
Habendum clause	229 of 423 That part of a deed beginning with the words, “To have and to hold”, followed by the granting clause and reaffirming the extent of ownership that the grantor is transferring. The habendum clause defines or limits the extent of ownership in the
Market Value	The price at which a willing buyer and a willing seller will agree upon, where neither is under any undue pressure, and both are negotiating at arms length with complete knowledge of the market.
Bilateral Contract	231 of 423 A contract in which a promise is given for the promise of another. It becomes binding when mutual promises are communicated. (A real estate contract).
Cost Approach	A method of estimating value based on the economic principle of substitution; the value of a building cannot be greater than the cost of purchasing a similar site and constructing a building of equal utility.
Tax Rate	The rate, normally stated in units of $100, multiplied by the assessed value of property to determine the amount of the property tax due.
Life Tenant	The holder of a life estate
Latent Defect	A defect which cannot be discovered by ordinary inspection.
Federal Home Loan Bank System – (FHLBB)	A federal agency which oversees and regulates all federally charted savings and loan association.
Gross Income Multiplier (GIM):	A method of appraising income–producing property based on a multiple of the annual gross income; also called a gross rent multiplier.
Federal Home Loan Mortgage Corporation – (FHLMC)	“Freddie Mac” is a wholly owned subsidiary of the Federal Home Loan Bank System, which serves as a secondary mortgage market for savings and loan associations, who are members of the FHLBB; also referred to as The Mortgage Corporation.
Federal Housing Administration – (FHA)	A federal agency established in 1943 to increase home ownership by providing an insurance program to safeguard the lender against the risk of nonpayment. Currently part of HUD.
Competent Parties	Those who are legally capable of entering into contracts.
Voidable Contract	An agreement in which one or more of the parties may elect to avoid or to ratify the legal obligations created by the contract. Minor, someone under duress.
Real Estate	Land and all man–made improvements both on and to the land, plus all tangible interest in the real property. Surface, subsurface and air rights.
Fee Simple Subject to a Condition Subsequent	An estate which is subject to a power in the original grantor, or the grantor's heirs, to terminate the estate upon the happening of an event. Back to court.
Accession	The idea that the owner of land is entitled to all that the soil produces or all that is added to the land either intentionally or by mistake. Trade fixtures not removed are “assessed” by the owner of the property.
Appraisal	An opinion or estimate of value performed by a person licensed to do so.
Optionor	The seller of the option.
Partially Amortized Mortgage	A method of loan repayment in which the balance of the outstanding loan is not zero at maturity, and thus a balloon payment is due at that time.
Leverage	Using borrowed capital to finance the purchase of real estate or other assets. (No money down)
Situs	Refers to the economic location of real estate
Planned Unit Development (PUD)	A type of exception, or special use, permitted under many modern zoning ordinances, allowing a mixture of different land uses or densities.
Reproduction Cost	The cost of exactly duplicating a structure using the same material and design.
Interest	1) the sum paid for the use of money (2) the degree of rights in the ownership of land.
Independent Contractor	One whose time and effort are regulated by the individual and are not under the direction or control of others.
Suit	A court action to enforce a legal claim or right.
Caveat Emptor	Means “Let the Buyer beware”.
Deficiency Judgment	A personal claim based on a judicial order against the debtor. This occurs when the property fails to bring in a price at the foreclosure sale which covers the mortgage amount.
Life Estate Pur Autre Vie	A life estate in one person with another person serving as the measuring life.
Monument	Physical evidence of a point–of–beginning established by surveyors for use in locating parcels of land.
Mortgagee	A lender who receives a pledge of property to secure a debt
Lis Pendens	A notice filed for the purpose of serving constructive notice that title, or some matter involving particular real property, is in litigation.
Sublease	The transfer when the original lessee retains a reversion. Primary liability remains with the original lessee.
Water Rights	The right of a landowner to water adjoining or passing through property.
Ready, Willing and Able	Someone fully qualified to enter into a transaction.
Straight Note	A promissory note evidencing a loan in which payments of interest only are made periodically during the term of the note, with the principal payment due in one lump sum upon maturity. A straight note is usually a non amortized note made for
Chattel Mortgage	One in which personal property is pledged to secure a note.
Inheritable	An interest in land which can be passed to a relative upon the death of the owner.
Trustee	A person who holds title and control over property and manages it for another person called a beneficiary. (Called “Naked Legal Title”)
Mortgage Banker	268 of 423 A financial middleman who, in addition to bringing the borrower and the lender together, makes loans, packages them, and sells the packages to both primary and secondary investors. Also services loans.
Unencumbered Property	Property that is free and clear of any liens.
Economic Obsolescence	270 of 423 A loss in value due to factors outside the subject property, such as changes in competition or surrounding land use. Also referred to as external obsolescence.
City Planning	The effort on the part of the city to coordinate, direct and control the type of development taking place, so as to ensure maximum benefits to the populace.
Good Title	One which is free from encumbrances such as liens, pending litigation and other such defects
Executed Contract	One in which the obligations have been performed on both sides of the contract and nothing is left to be completed. (Closed Deal)
Incurable Depreciation	Elements of a structure which are neither physically possible nor economically feasible to correct.
Revocation	The nullification of an offer to contract by the original offeror.
Reciprocity	276 of 423 The recognition that states give whereby a licensee of one state can be involved in real estate transactions in other states.
Economic Life	The time period over which an improvement to land earns more income than the cost incurred in generating the income. Profitability.
Subordination Clause	A clause in which the holder of a mortgage permits a subsequent mortgage to take priority. Subordination is the act of yielding priority
Trust	A legal relationship under which title to property is transferred to a person, called a trustee, who has control over the property, and must manage it for some other person—called a beneficiary.
Arrears	Not on time; late in making payments or completing work. Interest is paid in arrears.
Interest Rate	The cost of using money expressed as a percent per period.
Covenant of Seisin	Gives the assurance that the grantor has the exact estate in the quantity and quality which is being conveyed. “I own and I have the right to sell it.”
Township	283 of 423 A 6–by–6 mile area containing 36 sections each 1 mile square. A division of land in the rectangular survey method of land description.
Trade Fixtures	Personal property used in business which has been annexed to real property and is removable by the owner. (Tenant) If it is not taken by the tenant it becomes the property of the landlord.
Taxation	The right of government to require contribution from citizens to pay for government services.
Immobility	Incapable of being moved; fixed in location, such as land.
Variance	type of safety valve to allow a property owner, who is unfairly burdened by zoning restrictions, to find relief.
Joint Tenancy	A form of concurrent ownership, which occurs when two or more persons own a single estate in land, with right of survivorship. Must have equal shares, right to partition.
Breach of Contract	A failure to perform, as promised, at the time the performance was due.
Loyalty	The duty owed by an agent, to avoid conflicts of interest or any activity which is detrimental to a principal.
Fee Simple Absolute	The maximum possible estate one can possess in real property; also referred to as fee simple or fee.
Legal Description	A written description of a parcel of land which locates it precisely and will hold up in court. (Does not include address.)
Acceleration Clause	States that upon default, all of the principal installments come due immediately.
Common Law	(1) a body of legal rules derived from accepted customs and procedures in England. Serves as the foundation for most laws in every state except Louisiana, which uses the system of civil law; (2) system of judge–made law (“case law”) as opposed
Covenant of Quiet Enjoyment	A promise that no one has superior or paramount title to that of the grantor; assures the grantee of peaceful possession without fear of being ousted by a person with a superior claim to the property.
Transferability	The ability to exchange goods and services. In real estate legal rights are transferred.
Federal Reserve System – (FRS)	A federal agency which oversees and regulates monetary policy, which in turn affects interest rates and the availability of credit. All federally chartered commercial banks must be members.
Estate at Sufferance	Retention of possession without the consent of the landlord after the lease has expired; also referred to as tenancy at sufferance.
Adverse Possession	A method of acquiring original title to property by open, notorious and hostile possession for a statutory period of time; also referred to as prescription. POACH.
Certificate	The first thing a veteran should request if attempting to purchase a property using VA eligibility.
Closing Costs	The expenses incurred and paid at the time of settlement in the transferring of property.
Balloon Payment	The remaining balance, at maturity, on a loan that has not been completely repaid through periodic payments. Once paid, the outstanding balance is zero. Partially amortized loan.
Vendee's Lien	Held by the purchaser for the purchase price paid if the seller defaults on the delivery of the deed.
Partition suit	The dividing of real estate held by two or more people which results in each of the parties holding individual or severalty ownership. (Tenants in common and joint tenants)
Hypothecate	Process of pledging something (house) as security, but retaining possession of it.
Obsolescence	A loss in value due to reduced desirability and usefulness of a structure because its design and construction have become obsolete. A loss due to a structure’s becoming old fashion, not in keeping with today’s standards or needs, with consequential loss o
Implied Contract	Contract formed through the acts or conduct of the parties involved.
Increasing and Decreasing Returns	This economic principle states that the addition of more factors of production will add higher amounts to new income up to a certain point, which is the point where the maximum value of the asset has been reached; any further addition of factor
Mutual Assent	An offer and acceptance which together form the terms of a contract.
Real Estate Settlement Procedures Act (RESPA)	310 of 423 A law which covers most mortgage loans made for one to four–unit residential property. It requires the lender to provide the loan applicant with pertinent information so that the borrower can make informed decisions as to which lender will be u
Easement in Gross	A personal right to use the land of another.
Discount Points	A fee charged by the lender at settlement that results in increasing the lender's effective yield on the money borrowed. One discount point equals one percent of the loan amount.
Real Estate Commission	The state regulatory body whose duty it is to carry out the real estate license laws in a particular state.
Riparian Rights	314 of 423 A legal right of a landowner who owns land next to a natural watercourse to reasonable use of whatever water flows past the property.
Down Payment	The amount paid by the purchaser, which when added to the mortgage amount, equals the total sales price. At time of closing this is referred to as equity.
Installment Land Contract	See Land Contract.
Participation Mortgage	An agreement between a mortgagee and a mortgagor which provides the lender with a certain percentage of ownership in the project once the lender makes the loan
Unity of Time	States that the joint tenancy interests of the joint tenants must have been acquired at the same moment
Pro–rata	To divide or distribute proportionately.
Defeasible Fee Simple	Or FEE SIMPLE DEFEASIBLE Ownership with conditional restrictions which, if broken, can result in title to the property reverting back to the grantor or his heirs.
PITI	An abbreviation which means “Principal, Interest, Taxes and Insurance.” In residential financing, it is common for the monthly mortgage to include these four payments.
Grandfather Clause	Creating an exemption from application of a new law due to previously existing circumstances; non conforming use.
Misrepresentation	An innocent or negligent misstatement of a material fact, detrimentally relied upon by the other party.
Appurtenance	Any right or privilege which belongs to and passes with land.
Lease Purchase Agreement	An arrangement whereby part of the rent payment is applied to the purchase price, and when the prearranged total amount has been paid, title is transferred.
Month–to–Month Tenancy	A lease which has a term of one month but renewable for successive months at the option of both parties
Limited Partnership	An entity with one or more general partners and one or more passive investors, called limited partners.
Procuring Cause	The actions by a broker which result in the owner being able to make a sale
Easement by Implication	Occurs because of necessity, such as the conveyance of a land–locked property.
Wear and Tear	The lessening in value of an asset due to ordinary and normal use.
Attorney in Fact	A person given the authority to act on behalf of another under a power of attorney.
Statutory Period of Redemption	The time within which property may be redeemed after a foreclosure sale.
Cloud on Title	Any claim affecting title to property.
Writ of Execution	A court order to an officer to carry out judicial decree
Emblements	Refers to crops which require annual planting.
Plottage	Occurs when two or more sites are combined, with the result that the value of the assembled site is worth more than the value of the sum of each of the individual sites.
Effective Age	The difference between the theoretical economic life of a structure and its actual remaining economic life. Maintaining the property.
Notary Public	A person with the authority to take oaths and acknowledgments
Dower	The rights that a wife acquires in her husband's fee simple property.
Statute of Frauds	Every state has some form of laws which require that certain contracts must be in writing in order to be enforceable in a court.
Tenancy at Will	An occupation of space for an indefinite period which can be terminated by either the lessor or lessee at any time.
Leasehold	The interest that the tenant has created by a lease.
Outbuilding	An accessory structure other than the main structure on land
Actual Notice	The actual knowledge that a person has about the existence of a particular fact.
Certificate of Reasonable Value (CPR)	Issued by the Veterans Administration to certify the value of property secured by a VA mortgage. Appraisal.
Intestate	Dying without a will.
Subrogation	The substitution of a third person in place of a creditor to whose rights the third person succeeds in relation to the debt. (Title company)
Debit	Money owed. (Debt) The opposite of a credit.
Percolation	Ability of soil to absorb water; used for septic systems.
Site	A lot ready for development.
Depreciation	A decrease in value due to physical deterioration, functional or economic obsolescence.
Commercial Banks	The largest financial intermediary directly involved in the financing of real estate. Their primary real estate activity involves short–term loans.
Undue Influence	Occurs when a person in a fiduciary capacity or in a position of authority misuses the trust or power in order to unfairly induce a party to enter into a contract.
Agent	One who acts for and in place of a principal for the purpose of affecting the principal's legal relations with third persons.
Multiple Listing	Marketing service in which many brokers pool all of their listings and establish procedures for sharing commissions.
Estate at Will	An occupation of space, for an indefinite period, which can be terminated by either the lessor or lessee at any time. Also referred to as tenancy at will.
Equal Credit Opportunity Act. (ECOA)	A federal act, which prohibits discrimination by lenders on the basis of sex or marital status in any aspect of a credit transaction.
Unities	Joined in one; for example, in order for a joint tenancy to exist four unities are necessary (1) time, (2) title, (3) interest and (4) possession. (TTIP)
Valuable Consideration	Anything of value offered as an inducement. (Money, ring, boat, etc.)
Restrictive Covenant	A clause in a deed which restricts use of property for a specified time.
Constructive Eviction	Occurs when the tenant's use of the premises is substantially disturbed or interfered with by the landlord's actions or failure to act where there is a duty to act. The tenant is effectively forced to move out and terminate the lease without fu
Rent	The payment made for the use of land
Executor	A person appointed in the will to carry out the instructions of the testator, pay the debts of the estate, and dispose of the property as instructed.
Index Lease	The rental is tied to some commonly agreed to price index such as the Consumer Price Index or the Wholesale Price Index.
Net Listing	The broker agrees to sell the property in order to achieve a net price to the owner, and anything which is received above the net price is the broker's commission. A net listing is prohibited by the licensing law in many states.
Appreciation	An increase in value
Corporation	A legal entity organized to have perpetual legal existence and to have legal power to carry on certain activities such as owning real estate.
Servient Estate	The tract of land burdened by an easement.
Invalid	Without legal force.
Community Property	Any property acquired in certain states by purchase, or as compensation by either spouse during the period of marriage, is considered to be owned in an undivided half interest by each.
Plat	A map showing the division of land into lots and blocks.
Fiduciary	A person who essentially holds the character of trustee. A fiduciary must carry out the duties in a manner which best serves the interest of the party for whom the fiduciary relationship is established. A real estate licensee has a fiduciary du
First Mortgage	A mortgage on real estate in which the lender's rights are superior to the rights of subsequent lenders. (Recorded first)
Real Property	Refers to land and improvements both on and to the land, and also to the physical aspects of real estate, including surface, air and subsurface rights plus, bundle of rights.
Loan–to–Value Ratio	The relationship between the amount borrowed and the appraised value of the property. (Purchase price 100,000 – Loan 80,000 = LTV 80%)
Lease	An agreement by which a landlord gives the right to a tenant to use, and to have exclusive possession, but not ownership of realty, for a specified period of time, in consideration for the payment of rent.
Severalty Ownership	Ownership by one person.
Accrued	An accumulation.
Private Mortgage Insurance	A private insurance program which insures the lender for loan amounts in excess of 80% of value.
Yield	The interest earned by an investor on the investment.
Grant	Transferring real estate by means of a deed.
Estate for Years	A conveyance of realty for a definite stated period of time. The term may be one year, one month, one week or even one day. No notice needed to terminate.
Prescription	A means of acquiring title to property through open and continuous use.
Net Income, Net Operating Income	Gross income less all operating expenses. Is used in the income approach to value.
Amortization	The repayment of a financial obligation over a period of time in a series of periodic installments. In a level payment mortgage, this is the portion of the debt service that reduces the principal.
Economic Rent	The amount of rental which a building would receive, if set by the market, as opposed to contract rent set by the lease
Probate	The process of proving a will before a duly authorized court or person.
Purchase and Leaseback	The simultaneous buying of property and leasing it back to the seller.
Foreclosure	A legal procedure whereby property used as security for a debt is sold to satisfy the debt in the event of default in payment of the mortgage note or default of other terms in the note.
Vendor	Seller in a contract for deed.
Ostensible Agency	A person who has been given the appearance of being an employee or acting (an agent) for another (principal), which would make anyone dealing with the ostensible agent reasonably believer he/she was an employee or agent.
Abstract of Title	A history of the ownership of a parcel of land which lists transfers of title, rights, and liabilities.
Government National Mortgage Association (GNMA):	Commonly known as “Ginnie Mae,” this agency of HUD operates in the secondary mortgage market. It is involved with special government financing programs.
Vendee	Purchaser in a contract for deed.
Tenancy in Common	A form of concurrent ownership where two or more persons hold separate titles in the same estate. May have equal or unequal shares. Right of partition.
Bylaws	396 of 423 Legal documentation in a condominium regime which provides the establishment of the homeowner's association; provides the powers and authority given to the board of directors; and indicates various rights and responsibilities of the unit owne
License	A personal privilege to go upon the land of another; not considered an interest in land. Permission only to use.
Nonconforming Use	A pre–existing use of land which does not conform to the zoning ordinance but which may legally remain.
Scarcity	The scarcity of real estate refers to the limited supply of certain types of real estate at particular locations.
Salesperson	400 of 423 A natural person licensed to perform on behalf of any licensed real estate broker any act or acts authorized to be performed by the broker
Novation	Occurs when the person in a contract, to whom the duty was owed, expressly agrees to substitute the delegate, or new obligor, for a consideration, and agrees to discharge the old obligor from the obligations under the contract. For example, loan assumptio
Note	A signed instrument acknowledging the existence of a debt and the promise to pay.
Decree	Court order
Specific Lien	One that attaches to a particular property.
Blanket Mortgage	405 of 423 A mortgage which covers more than one piece of real estate. Often used by a developer in the financing of undeveloped lots. Contains a partial release clause.
Title	The legally recognized evidence of a person's right to possess property.
Real Estate Market	407 of 423 The mechanism by which rights and interests in real estate are sold, prices set, supply adjusted to demand, space allocated among competing alternate uses, and land–use patterns set.
Housing and Urban Development (HUD)	An agency of the federal government which oversees many federal housing programs.
Right of Re–entry	The right retained when a fee simple on condition subsequent exists; also referred to as the power of termination. Back to court.
Term Mortgage (Straight Term)	410 of 423 A method of financing in which interest only is paid during the time of the loan. At maturity, generally five years or less, the entire principle is due.
Bounds	Refers to boundaries; used with the word “metes” in the metes and bounds method of land description
Redlining	The practice of some lending institutions that restricts the number of loans or the loan–to–value ratio in certain areas of a community, i.e., it is illegal for a lending institution to require a higher down payment because the home the borrower is buying
Right of Redemption	The legal ability to buy back one's property within the time specified in each state after a judicial sale by paying the debt, interest and certain costs.
Armslength Transaction	Occurs between willing buyer and willing seller with each party completely knowledgeable about the market. A purchaser of property between relatives (father & son) would not be an “arms length transaction”.
Non–resident	One whose primary residence is in another state.
Unity of Possession	The right of each tenant to the possession and use of the whole property. (Joint tenants and tenants in common
Constructive Notice	The knowledge that the law presumes a person has about a particular fact irrespective of whether the person knows about the fact or not. (Recording).
Highest and Best Use	The legal use of a parcel of land, which when capitalized, will generate the greatest net present value of income. The first thing an appraiser should determine.
Ad Valorem	A prefix meaning “based on value”. Most local governments levy an ad valorem tax on property.
Puffing	To exaggerate—for example, to refer to a house as having “the most gorgeous view in the city.”
Landlocked	Completely shut in by adjoining parcels of land with no access to public roads.
Cooperative	A form of property ownership in which a corporation is established to hold title in property and to lease the property to shareholders in the corporation. Own stock.
Federal National Mortgage Association – (FNMA)	Commonly known as “Fannie Mae”, this quasi–private corporation is the largest buyer of existing mortgages in the secondary mortgage market.

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