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Real Estate Basics

State Exam Prep: Kew Word Basics

TermDefinition
Accretion The gradual loss or increase of land on a stream, lake or sea by the action of water
Actual Authority Authority expressly given by the principal or given by the law and not denied by the principal
Agency The legal relationship created when a person acts on behalf of another in business and legal dealings with others
Attorney in Fact A person who is authorized to perform business related transactions on behalf of someone else.
Appraisal Activity The preparation, competition and issuance of an opinion as to the value on a given date of real property
Apparent Authority Authority that one person has led others to believe another person possesses, when there had been no actual agency authority granted.
Asbestos A building material used in insulation until 1978. If ingested, it can can cause cancer.
Americans with Disabilities Act (ADA) Federal law passed in 1990 to prohibit discrimination against those with disabilities, in public and commercial facilities.
Anti Trust Laws Laws prohibiting businesses from engaging in practices to create a monopoly or restrain fair trade, such as price fixing.
Broker Authorized to engage in all professional real estate activity associated with a principal
Blockbusting Inducing or attempting to induce, for profit, owners of housing to sell or rent their home by stating that a person of a certain stereotype are moving into their neighborhood.
Civil Rights Act of 1866 Law enacted by congress to provide all U.S. citizens the same rights, regardless of their race or color.
Civil Rights Act of 1968 (Fair Housing Act) Law enacted by congress to provide fair housing throughout the U.S. by prohibiting discrimination based on race, religion, color, sex, national origin, facial status, and handicap. Based in residential, not commercial.
Commingle Mixing of a clients funds with the funds of an agent or a broker.
Caveat Emptor "Buyer beware" The buyer must examine the good or property and buy at their own risk.
Compensation Any fee, commission, salary, money or valuable consideration for services rendered or to be rendered.
Competitive Market Analysis Method used by brokers by comparing similar properties to the subject property to determine the listing price on the house.
Closing Point in the transaction where the buyer and seller have signed all necessary final closing instructions and has executed all documents needed to conclude the transaction.
Common Carrier A person who transports or purports to be willing to transport persons, for hire, compensation or consideration by rail, vehicle, boat or aircraft from place to place.
Comparative Cost Method Estimate of the replacement cost of a subject property based on cost per square foot or per cubic foot. AKA the square foot method.
Consultant A person who provides expert advise professionally.
Community property An estate that is shared by husband and wife
Concurrent Estate Estate that is owned by two or more people.
Commercial Facility A private facility intended for no residential use whose operations effect commerce.
Cooperation Transaction An agreement of a broker to share a commission with a cooperating broker.
Downzoning A change in the zoning to permit less intensive developments than are currently permitted. For example; the conversion of commercial building to an apartment, or residential building.
Default Collateral Analysis A real property market analysis for use by a lending institution in considering its options with respect to a loan in default.
Dual Agent A principal broker or an agent who represents two parties in the same transaction. For example A broker who represents both the buyer and the seller.
Earnest Money Agreement A deposit made showing that the buyer is serious about purchasing. If the buyer defaults, he may lose his deposit.
Easement A right to cross someone else's land for an intended purpose.
Escrow A neutral party. Used to close the sale as well as hold funds.
Exclusive Listing Only one agent is hired to find a ready, willing and able buyer.
Exclusive Agency Listing Only one agent is hired to find a ready, willing and able buyer. If the owner sells their property, the agent will receive nothing.
Exclusive Right to Sell Listing Only one agent is hired to find a ready, willing and able buyer. Commission is paid to agent regardless of who sells it. Listing requires a specific termination date.
Express Authority Authority to act, given orally or in writing by the principal.
Fiduciary Relationship A special relationship of trust, confidence or responsibility.
Facilitator A person who represents a party in a transaction as a non agent and doesn't owe fiduciary duties to any party. But will have the duty to deal honestly and in good faith, with the reasonable skill and care.
Familial Status The relationship between one or more individuals under 18 years of age who reside with either: (I) a parent or legal guardian or (2) a designated person of the parent.
Farming A technique of becoming the real estate expert in a particular geographical area.
Finders Fee Compensation for finding, referring or recommending a prospective client.
Hotel representative A person who provides reservations or sales to independent hotels, Airlines steamship companies and government tourist agencies
HUD-1 Settlement Statement The standard form used to disclose all charges imposed in the transaction separately and in detail.
Independent contractor A person who ask for another but their methods of achieving the desired results are not subject to the control of another.
Joint Tenancy Property owned by two or more people. Each owner has the right to survivorship. T.T.I.P.
Lending Collateral Analysis Hey real property market analysis prepared for use by a lending institution in support of a loan application.
Letter Opinion A document that expresses a real estate licensee's conclusion regarding a recommended listing, selling or price, rental or lease consideration of certain real estate that results from the licensee's competitive market analysis.
Lease Option A type of contract where the property owner and the tenant agree that the tenant has the possibility of purchasing the property if he chooses either during or after the term of the lease. Unilateral.
List-back Agreement A financing arrangement in which an owner sells his estate, and then leases it back from the buyer. IE: A developer sells land to a builder only if the builder agrees to list back the improved property with the developers brokerage firm.
Mortgage The charging of real estate by a debtor to a creditor as security for a debt on the condition that it shall be returned on payment of the debt within a certain period. Bilateral
Manufactured Home A structure or home designed to be transported.
National Environmental Policy Act Requires federal agencies to prepare a environmental impact statement disclosing the effects of a development whenever a proposed project would have a major impact on the environment
Net listing A listing where an agent agrees selling a property for a minimum price and anything over that price belongs to the agent as commission
Nonconforming Use AKA The grandfather clause, which (is legal) allows an owner to continue land use that existed previously but no longer conforms to zoning.
Oregon Revised Statutes (ORS) Oregon State statutes, enacted by Oregon State legislature.
Open Listing A listing which allows several brokers to work on behalf of a seller, whichever party is the procuring cause of the buyer, is awarded the commission.
Ostensible Authority Apparent Authority. The authority created by estoppel.
Principal Broker A real estate broker who is authorized to employ, engage and/or supervise other licensees as well as engage in real estate transactions.
Property Manager Restricts the license to only the management of rental properties.
Police Power The power that is held by the state to legislate for the purpose of preserving the public health, safety, morals and general welfare.
Redlining The denial of a residential real estate loan insert when not even considering that individuals qualifications.
Estate in Severalty Owning by yourself. Sole ownership.
Sherman Anti-Trust Act A law that prohibits anti-competitive conduct by two or more separate parties involved in a common scheme, intended to unreasonably restrain trade or by a single party, trying to create a monopoly
Special Use Properties Properties that are there to benefit the public. Examples include; Schools, hospitals, police stations, libraries.
Special Agent An agent who has limited authority to conduct a single transaction for a principal.
General Agent An agent with authority to conduct a series of transactions of a continuing nature in a broad, but specific range of business matters, for his principal.
Split Agency Agency relationship where one agent represents the seller, and an agent from the same brokerage represents the buyer in the transaction. This would make the principal a dual agent. AKA: Assigned agency or Designated Agency.
Title Ownership
Steering The act of discouraging the choices of a buyer wanting to live in a certain area because of certain stereotypes, whether it be the buyers stereotype or the surrounding community's. Channeling homebuyers to or away from a certain area.
Tenancy in Common Undivided shared ownership of two or more people. Parties hold serrate titles and do not have right of survivorship. Upon death of an owner, their interest is passed along to their heirs.
Travel Agent A person who is engaged in the business of representing and selling travel services to the public.
Transaction Broker A person who helps both the buyer and the seller with the necessary paperwork is not an agent for either party, neutral.
Trust Account In account separate and physically segregated from a broker's own funds. An account which holds all of the clients funds.
Tying Arrangement (Tie-In) An agreement to sell one product, only on the condition that the buyer also buys another product
Undue Influence The use of a fiduciary relationship to obtain a criminal or unfair advantage over another's weakness, distress or necessity.
Universal Agent An agent who has the most authority that can be given. They are authorized to perform all acts that can lawfully be delegated to an agent.
Warehousing The packaging of a number of mortgage loans for sale in the secondary mortgage market by a financial institution or mortgage banker who has originated the loans.
Zoning The regulation of private land use and development by local government.
Variance An exception to a rule that will not affect the rest of the community.
Vicarious Liability Being responsible for someone else's actions.
Testate A person who dies living a valid will.
Intestate A person who dies without having a valid will.
Habendum Clause "To have and to hold" Defines limit and quality of estate being conveyed.
Bundle of Rights The rights that belong to an owner. The right to use, sell, enjoy, possess and to encumber, or the right to not use any rights.
Fixture Personal Property that was attached to property, making it real property.
Riparian Rights Rights to a person who owns property abutting a river or creek.
Trade Fixture Business personal property that go with the business, not the property.
Appurtenance Real or personal property that stays with the land. Fence, pool, etc.
Freehold Estate Type of ownership that is for an indefinite amount of time.
Fee Simple Absolute Estate The absolute highest level of ownership one can possess. Transfers
Fee Simple Defeasible Estate Type of ownership which includes a condition to it. If the condition is violated, the ownership can be revoked.
Less-than Freehold (leasehold) Estate A type of estate that is leased or rented and allows possession of property but not rights to the title.
Life Estate Type of Freehold estate which allows ownership for the life of a person.
Estate for Years Estate for a fixed period of time. No need for a notice to leave.Could be week to week, month to month, etc. Examples: Summer rentals, June 15 - August 15
Periodic Tenancy Tenancy that automatically continues from one rental period to the next, until terminated by either the landlord or the tenant. Proper notice is required to terminate tenancy. IE: Renting an apartment.
Estate at Sufferance A tenancy in which the tenant has overstayed his agreement and the landlord is suffering.
Encumbrance A burden. A claim or liability against real estate, which affects the title of the property.
Injunction A court order to stop.
Lis Pendens Lawsuit pending
Cloud on Title Something affecting the title, making it not clear. i.e.: After marriage, the wife forgets to change her last name on the title.
Alienation of title The act of transferring ones property rights to another.
Alienation Clause A clause which allows a lender to request full payment of the remaining mortgage balance of the property if it's sold or title is transferred to another person.
Eminent Domain Government takes property for public use.
Condemnation Compensation
Inverse Condemnation Owner who files suit against the government for not receiving compensation.
Escheat Title transfers to the state when someone dies intestate and no heirs are found
Avulsion A sudden loss of land from water
Encroachment Trespassing
Deed Evidence of the transfer of ownership
Chain of Title Complete history of the title. Showing owners, title defects, etc.
Abstract of Title Summary of the title history
Impounds An account that mortgage companies use to collect property taxes, homeowners insurance, private mortgage insurance and other payments that are required by the homeowner but are not part of principal and interest
RESPA To provide complete transparency providing parties with all facts and its also there to prevent illegal kickbacks .
Abandonment Tenant Voluntarily leaves his unit
Bilateral Contract A contract which provides a promise for a promise
Unilateral Contract A contract which provides a promise for an act. (Only one promise is given.) Examples; Lease Option.
Statute of Frauds Relates to which contracts need to be in writing
Statute of Limitations Relates to timeframes
Puffing An exaggeration, statement of someones opinion, legal.
Actual Fraud Intentional Lies.
Plottage The combination of two or more things combined equal a total that is greater than them separate. 1+1=3
Market Date Approach An approach when using comparable, or similar, properties to determine the value of the subject property. Used for residential and empty lots.
Cost Approach An approach which uses the cost of replacing the subject property brand new, to determine the value of the subject property. Used for Special service buildings or new construction. Church, library, Fire station.
Income Approach (Capitalization) An approach which determines the value of a property by the amount of revenue that it generates. Used for retail and commercial.
Surface Water Water on the surface of the earth. Lakes, rivers, creeks. Permit needed for all uses.
Ground Water Water beneath the surface of the earth obtained through artificial or altered openings.
Grantor The borrower of a deed
Grantee The lender receiving a deed.
Trustor The borrower of a trust deed
Trustee A third party. The receiver of a trust deed, which they hold as security for a loan.
Beneficiary The lender in a trust deed which holds the real title
Emblements Annual crops which require plantings and cultivations. The rights of the crops belong to the tenant to harvest them, even after lease expires.
Estate at Will A leasehold estate that continues for a indefinite period of time, until either the landlord or tenant gives notice.
Willamette Meridian In Oregon & Washington, all government survey descriptions are based on this principal meridian, running North-South.
Writ of Attachment issued by court ordering seizure of certain property as security.
Writ of Execution Courts have debtors property sold to pay off judgement creditors by an execution sale. Creditor requests court to sell whatever property is necessary.
Appurtenant Easement An easement between two separately owned properties with a servient and dominant tenant. Runs with the dominant tenant and passes with the land (title)
Loan Servicing Mortgage company will handle mortgage payment collections and handle defaulted & foreclosures on behalf of the lender. Mortgage company will usually charge less than 3/4 of 1% of the loan balance for the service.
Users Law Regulations governing the amount of interest that can be charged on a loan
Uniform Commercial Code Establishes uniform procedures and documents to be used in personal property transactions.
Exculpatory clause (harmless clause) provides the tenant to release the landlord from any liability in connection with damage to the tenants property or business as a result of an insurable casualty regardless of the landlord’s negligence
Protection Clause provides that the broker is entitled to a commission if within a certain specified period after the listing expires, the seller sells the property to a prospect who became aware of the property due to the broker’s actions during the listing period
Title Subject to Buyer takes over sellers mortgage but pays the seller for the payments and the seller remains responsible and primary liability for the loan.
Assume Loan Buyer takes over sellers mortgage and assumes all responsibility, releases seller from liability.
Vendor Seller in a Land sale contract (contract for deed)
Deed in lieu of foreclosure (Estoppel Deed) A voluntary act of a borrower, who is in default, to transfer title to the lender by deed.
Blanket Mortgage A mortgage that covers more than one parcel of property.
Participation Mortgage The lender conditions the loan commitment upon receiving part ownership interest in the development. He earns interest as well as a % of the of the income, in return for granting the loan or for granting concessions (higher LTV ratio or lower interest)
Shared appreciation (shared equity) mortgage In return for a relatively low interest rate, the borrower agrees to share with the lender a sizeable percent (e.g., 30% to 50%) of the appreciation in the value of the property, either after a specified number of years or when title is transferred.
Take-out loan a long-term loan taken out after construction is completed and used to pay off the construction loan
Construction Mortgage An open-end mortgage, usually financing is High interest, short term,
Principle of Highest and Best Use produces the greatest net return over given period
Principle of Substitution person won't pay more for a product that he could purchase the same identical product for less
Principle of Contribution added value to a property
Principle of anticipation holds that the value of something will increase or decrease over a period of time
Contour Map Map that shows the topography and elevations of an area.
Environmental impact Statement (EIS) A report addressing the potential effects on the environment of a proposed federal government project.
Probate The legal process where a deceased persons will is evaluated and determined valid or not a valid will
Master Plan A comprehensive plan to guide the long term physical development of a particular area
Police Power The states right to regulate an individuals conduct or property to protect the health, safety and general welfare and morals of the community
Abatement To become weaker, decrease in strength, reduce
Mitigation To reduce the harmful effects of something
Default Collateral Analysis A real property market analysis for use by a lending institution in considering its options with respect to a loan in default
Lending Collateral Analysis A real property market analysis prepared for use by a lending institution in support of a loan application.
Situs
Nominal rate The rate named (or specified) in the loan agreement. It would differ from the effective rate depending upon whether the interest is simple or compound and when it is due to be paid.
Unearned increment an increase in value to real property which comes about from forces outside the influence and control of the property owner, e.g., favorable rezoning, favorable shift of population in the neighborhood.
Syndicate any group of two or more people united for the purpose of making and operating an investment. A syndicate could operate in the form of a corporation, general partnership, limited partnership, tenancy in common, etc.
tentative plan a map showing the general design or layout of the proposed partition or subdivision.
Dedication the act of setting aside for public use such property as streets, utility easements, school sites, parks, recreational facilities and the like.
Created by: jaycaputo