Duties owed by an agent to act in the highest good faith and not obtain any advantage over the principal by the slightest misrepresentation, concealment, duress or pressure.

Fiduciary Relationship

A special relationship of trust, confidence, or responsibility.

The dollar amount credit will cost the borrower over the term of a loan.

Financial Institutions Reform, Recover and Enforcement Act (FIRREA)

A federal law that requires that a real estate appraisal used in connection with a federally-related transaction meet standards set by the Appraisal Foundation and be performed by a person licensed or certified by the state.

Financial Intermediary

Financial institutions such as commercial banks, savings banks and life insurance companies that receive relatively small sums of money from the public and invest them in large sums.

A mortgage with no other mortgages on the property with prior lien rights.

Action by Congress to increase or decrease income taxes. To slow the economy and half inflation, Congress can increase income tax rates, limiting the amount people can spend or save.

Expenses that do not vary based on the level of occupancy, such as property taxes and insurance.

A lease that provides for a fixed rental amount to be paid periodically throughout the term of the lease. Also called a flat lease.

A mortgage in which the rate of interest stays the same over the life of the loan.

Appurtenances attached to the land or improvements so they become real property; for example, plumbing fixtures, cabinets, ceiling light bulbs, house keys, etc.

Flexible Rate Mortgage

A mortgage that provides for the interest rate to go up or down according to some indicator, for example an index tied to Treasury bill rates (ARM, VRM, renegotiated rate mortgage, rollover mortgage).

Flood Disaster Protection Act

Federal law that requires the purchase of flood insurance as a condition of receipt of federal or federally-related financial assistance for acquisition and/or construction of a building in Special Flood Hazard Areas (SFHA) of any community.

A procedure designed to terminate a borrower's interest in the property and enable the lender to acquire the value of the pledged collateral.

An auction sale of real property to the highest bidder, due to default in the terms of the loan.

Foreign Investment in Real Property Tax Act (FIRPTA)

A federal law that requires a buyer to withhold 10% of the gross proceeds, unless he uses the property as a residence and the purchase price is less than $300,000, in the purchase of property from a non-resident alien.

Loss of money or property, due to failure to perform.

A colorless, gaseous chemical compound that is generally present at low, variable concentrations in both indoor and outdoor air.

The intentional and successful employment of any cunning, deception, collusion or artifice, used to circumvent, cheat or deceive another person so he acts to his detriment.

An affiliate of the Federal Home Loan Bank, that purchases conventional, FHA and VA loans from members of the Federal Reserve System and the Federal Home Loan Bank System. Formerly known as Federal Home Mortgage Corporation.

A right of ownership. An estate of indeterminable duration, e.g., fee simple or life estate.

Property measurement for sale or valuation purposes, by the front linear foot on its street line - each front foot extending the depth of the lot.

A term used to describe or identify that part of a parcel of land or an improvement on the land facing a street.

FSBO (For Sale By Owner)

A property for sale by the owner without the services of an agent.

When all parties have performed all of their duties under the contract.

Fully Amortized Mortgage

A mortgage loan scheduled to be repaid in its entirety by the end of the mortgage term, without the need for a balloon payment.

Functional Obsolescence

Loss of value due to factors of inadequacy or over-adequacy within the property itself, often caused by changes in construction materials, methods, equipment and the desires of people.

An agent with authority to conduct a series of transactions of a continuing nature in a broad, but specified, range of business matters, for his principal.

General Common Elements

In a common interest development, common elements used by all unit owners, such as the land on which the building is located, yards, gardens, parking areas, and outside storage space.

A lien on all the property of a debtor.

A partnership in which all partners are co-equals in ownership and management, and have full authority to act on behalf of the partnership and other partners.

A deed for which there is no consideration

Govt corp. within HUD manages and liquidates portfolio of fed-owned mortgages; provides special assistance functions, such as financing support for urban renewal projects, housing for the elderly, below-market mortgage risks and experimental housing proj.

In a transaction subject to RESPA, the written estimate of what a lender proposes to charge the borrower. It must be presented to the borrower within three days of receipt of the borrower's loan application.

Lots of land considerably larger or smaller than the normal 40 acres in a quarter-quarter section of land, usually caused by an error in a survey or prevention of normal designation and staking by a bordering waterway.

Government Survey Method

A method of specifying the location of parcels of land using prime meridians, base lines, guide meridians, townships and sections.

Provides for a gradually increasing rental rate.

Graduated Payment Mortgage

Provides for partially deferred payments of principal at the start of the loan. During the initial period of the loan, the payments gradually increase. Then they level off at an amount that will include the principal deferred initially.

A form of deed used in some states, instead of warranty deeds.

A person to whom title or an interest is granted in a deed.

A person who grants title or an interest in property to another in a deed.

Total income before any expenses are deducted.

Lease used in residential leases, in which rent paid by lessee is gross income to lessor, as he will pay the operating expenses of the property (repairs, maintenance and other operating expenses), as well as property insurance premiums and taxes from it.

Gross Rent Multiplier

Number by which gross income of property can be multiplied to produce estimate of value of property.

An agreement for the use of the land only, sometimes secured by improvements placed on the land by the user.

Groundwater Contamination

Contamination due to hazardous chemical wastes, pesticides and fertilizer that seep down through soil into underground water, as well as faulty septic systems, improperly managed sewer systems, leaking injection wells, and leaking underground storage.

An illegal restraint of trade in which two or more brokers agree to refuse to deal with a third broker (perhaps because of his discount fees) in order to force him to change his method of doing business or to drive him out of business.

Defines or limits the quality and quantity of the estate being conveyed. Only needed when the grantor is conveying less than a fee estate.

One who inherits property after the owner has died without a will (intestate).

That use most likely to produce the greatest net return to the land and/or buildings over a given period of time.

Tenant who remains in possession of leased property after the expiration of the lease term.

Help

Options

focusNode

Didn't know it?
click below

Knew it?
click below

Don't Know

Remaining cards (0)

Know

retry

shuffle

restart

0:00

Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.

Normal Size Small Size show me how

Real Estate Terms 2

All Real Estate Terms V. 2

Term	Definition
Fiduciary Duties	Duties owed by an agent to act in the highest good faith and not obtain any advantage over the principal by the slightest misrepresentation, concealment, duress or pressure.
Fiduciary Relationship	A special relationship of trust, confidence, or responsibility.
Finance Charge	The dollar amount credit will cost the borrower over the term of a loan.
Financial Institutions Reform, Recover and Enforcement Act (FIRREA)	A federal law that requires that a real estate appraisal used in connection with a federally-related transaction meet standards set by the Appraisal Foundation and be performed by a person licensed or certified by the state.
Financial Intermediary	Financial institutions such as commercial banks, savings banks and life insurance companies that receive relatively small sums of money from the public and invest them in large sums.
First Mortgage	A mortgage with no other mortgages on the property with prior lien rights.
Fiscal Policy	Action by Congress to increase or decrease income taxes. To slow the economy and half inflation, Congress can increase income tax rates, limiting the amount people can spend or save.
Fixed Expenses	Expenses that do not vary based on the level of occupancy, such as property taxes and insurance.
Fixed Lease	A lease that provides for a fixed rental amount to be paid periodically throughout the term of the lease. Also called a flat lease.
Fixed Rate Mortgage	A mortgage in which the rate of interest stays the same over the life of the loan.
Fixture	Appurtenances attached to the land or improvements so they become real property; for example, plumbing fixtures, cabinets, ceiling light bulbs, house keys, etc.
Flexible Rate Mortgage	A mortgage that provides for the interest rate to go up or down according to some indicator, for example an index tied to Treasury bill rates (ARM, VRM, renegotiated rate mortgage, rollover mortgage).
Flood Disaster Protection Act	Federal law that requires the purchase of flood insurance as a condition of receipt of federal or federally-related financial assistance for acquisition and/or construction of a building in Special Flood Hazard Areas (SFHA) of any community.
Foreclosure	A procedure designed to terminate a borrower's interest in the property and enable the lender to acquire the value of the pledged collateral.
Foreclosure Sale	An auction sale of real property to the highest bidder, due to default in the terms of the loan.
Foreign Investment in Real Property Tax Act (FIRPTA)	A federal law that requires a buyer to withhold 10% of the gross proceeds, unless he uses the property as a residence and the purchase price is less than $300,000, in the purchase of property from a non-resident alien.
Forfeiture	Loss of money or property, due to failure to perform.
Formaldehyde	A colorless, gaseous chemical compound that is generally present at low, variable concentrations in both indoor and outdoor air.
Fraud	The intentional and successful employment of any cunning, deception, collusion or artifice, used to circumvent, cheat or deceive another person so he acts to his detriment.
Freddie Mac (FHMC)	An affiliate of the Federal Home Loan Bank, that purchases conventional, FHA and VA loans from members of the Federal Reserve System and the Federal Home Loan Bank System. Formerly known as Federal Home Mortgage Corporation.
Freehold Estate	A right of ownership. An estate of indeterminable duration, e.g., fee simple or life estate.
Front Foot	Property measurement for sale or valuation purposes, by the front linear foot on its street line - each front foot extending the depth of the lot.
Frontage	A term used to describe or identify that part of a parcel of land or an improvement on the land facing a street.
FSBO (For Sale By Owner)	A property for sale by the owner without the services of an agent.
Full Performance	When all parties have performed all of their duties under the contract.
Fully Amortized Mortgage	A mortgage loan scheduled to be repaid in its entirety by the end of the mortgage term, without the need for a balloon payment.
Functional Obsolescence	Loss of value due to factors of inadequacy or over-adequacy within the property itself, often caused by changes in construction materials, methods, equipment and the desires of people.
General Agent	An agent with authority to conduct a series of transactions of a continuing nature in a broad, but specified, range of business matters, for his principal.
General Common Elements	In a common interest development, common elements used by all unit owners, such as the land on which the building is located, yards, gardens, parking areas, and outside storage space.
General Lien	A lien on all the property of a debtor.
General Partnership	A partnership in which all partners are co-equals in ownership and management, and have full authority to act on behalf of the partnership and other partners.
Gift Deed	A deed for which there is no consideration
Ginnie Mae (GNMA)	Govt corp. within HUD manages and liquidates portfolio of fed-owned mortgages; provides special assistance functions, such as financing support for urban renewal projects, housing for the elderly, below-market mortgage risks and experimental housing proj.
Good Faith Estimate	In a transaction subject to RESPA, the written estimate of what a lender proposes to charge the borrower. It must be presented to the borrower within three days of receipt of the borrower's loan application.
Government Lots	Lots of land considerably larger or smaller than the normal 40 acres in a quarter-quarter section of land, usually caused by an error in a survey or prevention of normal designation and staking by a bordering waterway.
Government Survey Method	A method of specifying the location of parcels of land using prime meridians, base lines, guide meridians, townships and sections.
Graduated Lease	Provides for a gradually increasing rental rate.
Graduated Payment Mortgage	Provides for partially deferred payments of principal at the start of the loan. During the initial period of the loan, the payments gradually increase. Then they level off at an amount that will include the principal deferred initially.
Grant Deed	A form of deed used in some states, instead of warranty deeds.
Grantee	A person to whom title or an interest is granted in a deed.
Grantor	A person who grants title or an interest in property to another in a deed.
Gross Income	Total income before any expenses are deducted.
Gross Lease	Lease used in residential leases, in which rent paid by lessee is gross income to lessor, as he will pay the operating expenses of the property (repairs, maintenance and other operating expenses), as well as property insurance premiums and taxes from it.
Gross Rent Multiplier	Number by which gross income of property can be multiplied to produce estimate of value of property.
Ground Lease	An agreement for the use of the land only, sometimes secured by improvements placed on the land by the user.
Groundwater Contamination	Contamination due to hazardous chemical wastes, pesticides and fertilizer that seep down through soil into underground water, as well as faulty septic systems, improperly managed sewer systems, leaking injection wells, and leaking underground storage.
Group Boycott	An illegal restraint of trade in which two or more brokers agree to refuse to deal with a third broker (perhaps because of his discount fees) in order to force him to change his method of doing business or to drive him out of business.
Habendum Clause	Defines or limits the quality and quantity of the estate being conveyed. Only needed when the grantor is conveying less than a fee estate.
Heir	One who inherits property after the owner has died without a will (intestate).
Highest and Best Use	That use most likely to produce the greatest net return to the land and/or buildings over a given period of time.
Holdover Tenant	Tenant who remains in possession of leased property after the expiration of the lease term.
Home Equity Line of Credit (HELOC)	A form of revolving credit in which a person's home serves as collateral.
Home Equity Loan	A junior loan in which the homeowner uses the equity in his home for a loan for home improvements, consolidating and paying credit card and consumer debts, car purchases, education, medical expenses, etc.
Homeowners Association (HOA)	An association of homeowners, created by the homeowners or the developer, for the purpose of improving or maintaining the quality of the area.
Homestead Exemption	Statutory protection of a home from claims of certain creditors and judgments up to a specified amount.
Housing and Urban Development (HUD)	Department of the federal government that includes FHA and administers RESPA, the Fair Housing ACt and the Interstate Land Sales Disclosure Act, makes rules to implement them, and provides investigations to enforce them.
HUD-1 Settlement Statement	The standard form used to disclose all charges imposed in the transaction separately, and in detail.
Hypothecate	To pledge a thing as security without the necessity of giving up possession of it.
Implication	An agency relationship created when a person acts in a manner that implies he is an agent. Creates legal liabilities for the agent.
Implied Authority	The authority an agent reasonably needs to perform duties given by express authority.
Implied Contract	A contract that results from the actions of the parties involved, rather than from words.
Impossibility of Performance	When the subject matter of the contract is destroyed (for example, in a fire), or when changes in law make performance illegal.
Improvements	Generally, everything artificial or constructed on the land.
Imputed Knowledge	A doctrine that considers a principal to have the same knowledge or notice of facts as his agent or subagent, and an agent to have the same knowledge or notice as his subagents.
Inchoate	In some states, an expected right to the estate upon the spouse's death.
Income Approach	Real estate appraisal approach in which estimate of value based on anticipated net income to be obtained from a property, such as commercial or rental property and rate of return a new owner should desire on his investment (capitalization approach).
Income Tax	A tax on income earned. Considered progressive taxes because the tax rates increase as taxable income increases.
Income Tax Lien	A general lien created when a government files a tax warrant in the county in which property of a delinquent income taxpayer is located.
Incompetent	One who is by reason of mental incompetence, old age, disease, weakness of mind, or any other cause, unable, unassisted, to properly manage and take care of himself or his property, and therefore likely to be deceived or imposed upon.
Independent Contractor	A person who acts for another, but whose methods of achieving the desired results are not subject to the control of another.
Injunction	A writ or order of a court to restrain one or more parties to a suit or proceeding from doing an act which is deemed to be inequitable or unjust in regard to the rights of some other party or parties in the suit or proceeding.
Installment Sale	A way to defer tax on a gain, so it is recognized (taxed) in a different year than it is realized.
Institutional Lender	A financial intermediary or depository, such as a savings bank, commercial bank, or life insurance company, which pools money of its depositors to invest the funds in various ways, including trust deed and mortgage loans.
Instrument	Written legal document created to give formal expression to legal act or agreement for purpose of creating, modifying or terminating a right, such as: promissory notes, deeds of trust, mortgages, installment sales contracts, leases and assignments.
Interest	The sum paid for borrowing money, to pay the lender's costs of doing business and provides a profit
Interest Only Loan	A non-amortizing loan in which the lender receives only interest during the term of the loan and principal in a lump sum at maturity.
Interest Rate	Rent or charge paid for use of money, expressed as a percentage per month or year of the sum borrowed.
Interstate Land Sales Full Disclosure Act	A federal law, administered by HUD, regulating the sale or lease of undeveloped land by means of interstate commerce or the mail. It applies to subdivisions with 25 or more lots.
Intestate	The status of an estate when a person has died having made no valid will, so the estate will descend to the heirs at law or next of kin.
Involuntary Lien	A lien imposed against property without the consent of the owner. For example: property tax lien, special assessment, construction lien, federal income tax lien, etc.
Irrevocable	Incapable of being recalled or revoked. Unchangeable.
Joint Tenancy	Undivided ownership of property interest by two or more persons each of whom has right to an equal share in interest and right of survivorship; i.e., the right to share equally with other surviving joint tenants in interest of deceased joint tenant.
Joint Venture	Two or more individuals or firms joining together on a single project as partners.
Judgment	The final determination of a court of competent jurisdiction of a matter presented to it. Money judgments provide for the payment of claims presented to the court, or are awarded as damages.
Judgment Lien	A legal claim on all of the property of a judgment debtor, which enables the judgment creditor to have the property sold for payment of the amount of the judgment.
Judicial Foreclosure	Foreclosure of property through the court.
Junior Mortgage	A mortgage recorded after another mortgage on the same property or made subordinate by agreement to a later-recorded mortgage.
Laches	Delay or negligence in assuring ones legal rights.
Land Trust	A form of trust in which legal title to land is transferred to a trustee.
Landlord	One who rents his property to another. The lessor under a lease.
Late Payment Penalty	A charge assessed by a lender against a borrower failing to make loan installment payments when due, or by a lessor against a lessee failing to pay rent when due.
Lateral Support	The support which the soil of an adjoining owner gives to a neighbor's land.
Lead-Based Paint	Used in housing prior to 1978, lead can be present in drinking water, in paint used to decorate the interior or exterior of a home, in the dust within a home and in soil around the home. Can enter body when individual breathes particles or swallows dust.
Lease	A contract between an owner and tenant, setting forth the conditions upon which a tenant may occupy and use the property, including the term of occupancy.
Lease With Option to Purchase	Gives a tenant the right to buy the property he is leasing at preset terms prior to the end of the term of the lease. Also called a lease option.
Leasehold Estate	A tenant's right to occupy real estate during the term of the lease. A personal property interest of the tenant.
Leasehold Title Insurance Policy	Insurance used to protect a tenant (or lessee) who has entered into a long-term lease.
Legal Concept of Land Ownership	Provides that a person who owns the land owns property to the sky above and downward to the center of the earth, as well as the surface.
Legal Description	A description based on a survey, identifying the property being conveyed.
Legal Object	A purpose for a contract that is not illegal or against public policy, and is possible to perform.
Legatee	Person named in a will to receive personal property.
Less Than Freehold Estate	A lease of limited duration that is considered to be a personal property interest. Also called non-freehold estate, leasehold estate or chattel real.
Lessee	One who contracts to rent, occupy and use property under a lease agreement; a tenant.
Lessor	An owner who enters into a lease agreement with a tenant; a landlord.
Level Payment Plan	Mortgage that provides for equal payments of principal and interest throughout the loan period.
Leverage	Using financing to allow a small amount of cash to purchase a large property investment.
Lien	A form of encumbrance that makes property security for the payment of a debt or discharge of an obligation, i.e., judgment, taxes, mortgage, deed of trust, etc.
Lien Theory	A concept under which a mortgage creates a specific voluntary lien against the borrower's property that may be enforced by foreclosure, but does not convey title to the lender (as it would in a title theory state).
Life Estate	An estate or interest in real property held for the duration of the life of one or more persons, including the person holding the estate or some other person.
Like-Kind Exchange	An exchange of tangible like-kind properties, e.g., real estate for real estate or personal property for personal property, but not real property for personal property.
Limited Common Elements	Common elements in a common interest development, reserved for the exclusive use of one or more units, e.g., party walls, patios, balconies, and parking spaces reserved for certain unit owners.
Limited Liability Company (LLC)	A business entity that combines the best features of a corporation and a partnership.
Limited Partnership	Partnership consisting of one or more general partners as well as limited ones. Gen. partners manage and control business affairs. Limited partners take no part in management and have no liability for debts of partnership in excess of investment.
Liquidated Damages	A sum agreed upon by the parties to be full damages if a certain event occurs, e.g., earnest money.
Lis Pendens	Notice of a pending lawsuit, recorded to give constructive notice to any future purchaser of the property, so he will be bound by all proceedings after the filing of the notice.
List-Back Agreement	A financial arrangement in which a developer sells land to a builder, conditioned on the builder's agreement to list-back the improved property with the developer's brokerage firm, for sale to individuals. It may be illegal.
Listing Agreement	An employment contract in which a principal authorized an agent to find persons to buy, lease, or rent his property. May also be used by a prospective purchaser or lessee to employ an agent to locate property.
Littoral Owners	Owners of property adjoining lakes and oceans.
Loan Application	Source of information where prospective borrower defines terms of contract, gives name, place of employment, salary, accounts, and credit ref, describes real estate to be mortgaged and stipulates amount and repayment terms of loan applying for.
Loan Commitment	Lender's commitment to make a loan subject to an appraisal and underwriting.
Loan-to-Value Ratio	The percentage of a property's value that a lender can or may loan to a borrower. An 80% LTV means a lender may loan 80% of the property's appraised value to a borrower.
Lock-In Clause	Clause prohibiting any loan prepayment, at least for a certain period.
Lot and Block	The shortest, easiest and simplest method to legally describe real property. Also called Recorded Plat Method.
Management Plan	A plan that projects income and expenses, as well as programs of capital improvement, alteration, modernization, and rehabilitation.
Market Data Approach	Appraisal approach in which value is determined by comparing prices paid for similar properties.
Market Value	The most probable price a property should bring in a competitive and open market under all conditions requisite to a fair sale.
Material Fact	An important fact that significantly affects a person's decision to enter into the contract.
Mediation	An attempt by a third party to get parties to a contract to agree to a resolution of their conflict. Neither party has to agree to mediation or to be bound by mediation.
Meridian	An imaginary line running in a north/south direction to guide in surveying property in the government survey.
Metes and Bounds	A method of describing the land by providing the measurement and direction (also called the course and bearing) of each boundary line.
Mills	One-tenth of a cent or one-one thousandth (.001) of a dollar.
Misrepresentation	A false statement of a fact.
Mold	Fungus that can sometimes produce chemicals, called mycotoxins, which may cause illness in people who are sensitive to them or who are exposed to large amounts in the air.
Monetary Policy	The regulation, by the Federal Reserve System, of the supply and flow of money and credit available in order to promote economic growth and stability.
Monument	Fixed object used to establish real estate boundary. May be natural (river or rock formation) or manmade (fence, building, or iron stake placed by surveyor). It may be tangible (point established by another surveyor) or intangible (centerline of street).
Mortgage	A written contract hypothecating the borrower's property as security for a loan.
Mortgage Broker	An individual who brings borrowers and lenders together for a real estate loan.
Mortgagee	A lender who receives a mortgage as security for a loan.
Mortgagee's Title Policy	A title insurance policy protecting a lender who has a lien on the borrower's property. Also called a "lender's title policy."
Mortgagor	A buyer who gives a lender a mortgage hypothecating his property as security for a loan.
Multiple Listing	Listings submitted to a multiple listing service.
Multiple Listing Service (MLS)	A number of local brokers who circulate their listings among themselves.
Mutual Mortgage Insurance	The FHA mortgage insurance program insuring lenders against loss due to foreclosure of FHA loans.
National Association of Realtors	An organization which lobbies at the national level for the industry, and also creates a code of ethics, model forms and policies, and provides educational opportunities for members.
National Environmental Policy Act	Requires federal agencies to prepare an environmental impact statement disclosing the effects of a development whenever a proposed project would have a major impact on the environment.
Natural Drainage	The right of a property owner to natural drainage of surface waters derived from rain or snow.
Necessity	A type of implied easement created when justice or necessity makes it necessary that an easement be provided for access (ingress and egress) to and from the property.
Negative Amortization	Occurs when the payment does not cover all of the interest being charged on the loan, and the unpaid interest is added to the loan balance.
Negative Easement	A right held by the dominant estate, which restricts the use of the servient estate, such as a view easement.
Net Income	The result of deducting expenses and reserves from effective gross income.
Net Lease	Provides for the tenant to pay a rent amount that is net income to the landlord. In addition to rent, the tenant pays some or all of the property expenses , property taxes, and property insurance premiums separately.
Net Listing	A commission that is "all proceeds in excess of the seller's listing price."
Nominal Interest Rate	The rate of interest stated in the loan documents. Also called named interest rate.
Non-Agency	When a licensee acts as a facilitator, rather than as an agent, and does not owe fiduciary duties to any party in the transaction. Only allowed in some states.
Nonconforming Use	Buildings and land uses that had been legal prior to the effective date of a zoning change, that no longer conform to the new requirements. Such buildings and uses remain legal.
Nondisturbance Clause	A clause providing that foreclosure of a prior mortgage would not terminate the lease.
Nonexclusive Listing	Allows a broker to recover a commission if he can prove he has a current real estate license, has found a steady, willing and able buyer and was the procuring cause of the sale (was the person whose efforts bring about a substantial agreement).
Nonfreehold Estate	Estate which lasts for a lesser and temporary period of time. A leasehold estate.
Nonrecourse Loan	A loan in which the lender has no recourse against the borrower personally, as the borrower is not personally liable for repayment of the loan.
Non-taxable Exchange	A method of deferring taxes owed in the sale of real estate. Also called a 1031 exchange.
Note	A promise to repay a loan on specified terms. Evidence of a debt.
Novation	Substition of a new obligation for an existing one, or of new parties to the same obligation.
Nuisance	A use that unreasonably interferes with the reasonable use of others' property (such as offensive noise or odor).
Objective Value	The value resulting from the actions of a willing buyer and willing seller in an open marketplace.
Obsolescence	Loss in usefulness of structures that causes them to become less desirable.
Offer and Acceptance	Agreement between the parties (also called meeting of the minds, mutual consent or mutual assent).
Open-End Mortgage	A mortgage that allows the borrower to borrow additional funds up to a specified maximum amount, without negotiating a new mortgage.
Open Market Operations	The purchase and sale of U.S. Treasury securities, such as Treasury bills and notes by the Federal Reserve
Operating Budget	A projection of anticipated income and costs for the annual operation of the property.
Operating Expenses	Expenses of running a business or property, such as management fees, utilities, janitorial service, maintenance, insurance premiums, etc.
Operation of Law	The effect of law, often by court action, rather than actions of the parties.
Option	An agreement to keep open, over a specified period of tie, an offer to sell, purchase or lease property.
Option to Renew	Gives a lessee the option to renew a lease at a preset rent amount at the expiration of its term.
Optionee	The purchaser or tenant who receives an option.
Optionor	The property owner who gives an option.
Or More Clause	Allows the borrower to pay more than the amount due, without a prepayment penalty.
Origination Fee	Generally of 1-2% of the loan amount as compensation for processing the loan package.
Ostensible Authority	Apparent authority. The authority created by estoppel.
Owner's Title Insurance Policy	An insurance policy used to protect a buyer (grantee) who receives a deed upon closing, against adverse claims to the ownership of the property, except those excluded in the policy.
Package Mortgage	A type of mortgage used in financing that includes the real property, improvements, and movable equipment/appliances as security for the loan.
Parol Evidence Rule	Provides that spoken words (parol evidence) cannot be used in court to change, modify or contradict the terms of a written agreement that appears complete.
Partial Performance	When one party performs part of the obligations and the other party relieves him of the obligation to perform the rest.
Partial Reconveyance Deed	Recorded by a borrower to show that a parcel has been released from the encumbrance of a blanket trust deed.
Partially Amortized Mortgage	Provides for some, but not total, amortization during the term of the mortgage.
Participation Certificates	Securities, representing individual interests in a pool of loans, that provide for mortgage payments received from mortgagors, less servicing costs and certain fees, to be passed through to those holding the securities.
Participation Mortgage	A mortgage in which the lender earns interest as well as a percentage of the project's net income or of its ownership in return for granting the loan or for granting concessions, such as a higher loan to value ratio or a lower interest rate.
Partition Suit	A suit to force a division of the property or a sale of the property, with the proceeds being divided among the co-owners.
Partnership	An association of two or more persons to operate as co-owners of a business for profit. It may be a general partnership or a limited partnership.
Party Wall	A wall that connects adjoining townhouses.
Patent	The first grant in the chain of title, issued by the government.
Percentage Lease	A lease in which the rent depends upon the volume of the tenant's gross business, as some or all of the rent will be a percentage of the lessee's gross sales or income.
Periodic Estate	An estate without a fixed termination date, it automatically renews at the end of each term (e.g., month-to-month). Also called periodic tenancy.
Personal Property	Any property that is not real property (e.g., a table).
Physical Deterioration	Breaking down of physical structure, which takes place over time. Caused by natural forces and use, and may be evidenced by decay, dry and wet rot, insect damage, wear and tear, and vandalism. Major contributing factor is deferred maintenance.
Physical Life	The period of time between completion of building construction and the time when the building is no longer fit or safe to use.
Planned Unit Development	Common interest subdivision where owners own interests in property in common. Each lot is sold separately and open space property and property used in common by property owners (e.g., club house or pool) is owned by HOA.
Plat	A map of land made by a surveyor showing the boundaries, buildings and other improvements.
Pledge	The depositing of person property by a debtor with a creditor as security for a debt.
Plottage	The added value resulting from putting several parcels of land under one ownership (assemblage).
Point of Beginning	A permanent reference point, which is a monument, that starts a metes and bounds description.
Police Power	The right of the state to enact laws and enforce them for the order, safety, health, morals and general welfare of the public such as zoning and building codes.
Power of Sale Clause	A clause in a security instrument that gives the lender or its representative (e.g. a trustee) the power to sell the property without a judicial foreclosure, upon default.
Predatory Lending	The extension of credit to borrowers who cannot afford the credit on the terms being offered, with features designed to increase the likelihood of foreclosure.
Preliminary Title Report	A report of the title insurance company, based on a title search, disclosing the current status of the title to interested parties contemplating a transfer of title or interest or a new loan affecting real property.
Prepaid Interest	Mortgage interest paid in advance of its due date, such as interest required by a lender at closing for the days until the first of the following month, or the amount charged as discount points.
Prepayment Penalty	A clause providing for a fee for the privilege of paying off the loan ahead of schedule.
Prepayment Privilege	The right to pay all or some of the outstanding principal balance during the term of the note before it is due, either with or without a prepayment charge. It could be written as an or more clause.
Prescription	Unauthorized, non-exclusive, open, notorious and visible, hostile, continuous and uninterrupted use of another's property for a period set by state statute.
Prescriptive Easement	An easement acquired through adverse use.
Price-fixing	When real estate brokers conspire to agree directly or through their trade associations to fix or stabilize their fees or commission rates, whether formally, informally, or even innocently.
Primary Mortgage Market	Origination of mortgage loans by lending funds directly to borrowers.
Prime Rate	The interest rate commercial banks typically charge their most creditworthy commercial customers for short-term loans, and often a basis for establishing interest rates on higher-risk loans. Each bank sets its own separate prime rate.
Principal Meridian	An imaginary line that runs in a true north-south direction.
Prior Appropriation	A doctrine under which ownership and use of water is granted to riparian and non-riparian owners, in states where water is scarce.
Procuring Cause	The person whose efforts bring about a substantial agreement of sale, so that he is entitled to a commission.
Progression	A concept that the value of a lesser property will be enhanced if it is placed in an area of better homes. The value of a home built at a cost of $250,000 would be enhanced if placed in an area of $400,000 homes.
Promissory Note	A document signed by a borrower and given to the lender to provide legally acceptable evidence of the borrower's debt and his promise to repay the debt.
Property	Anything that can be owned, i.e., anything that can be exclusively possessed, used, controlled and disposed of. It is either real or personal.
Property Management	An organized profession dealing primarily with the management of buildings.
Property Management Agreement	A contract between a property manager and the property owner making the property manager an agent (fiduciary) of the owner.
Property Tax Lien	A specific lien encumbering a parcel of real estate until the property tax is paid.
Proprietary Lease	A lease held by one of the owners of the company owning the cooperative building, giving the owner the right of possession to his unit.
Proration	Adjustment of interest, taxes, and insurance, etc., on a pro rata basis as of a closing or agreed upon date.
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.
Puffing	Statements understood by most people to be nothing more than an exaggeration, and at best an opinion that is not to be taken as factual.
Purchase Money Mortgage	A mortgage taken by the seller as partial payment for the property.
Purchaser's Title Insurance Policy	A policy is issued at the time a contract for deed is initiated, to protect a buyer purchasing real estate under a contract for deed.
Qualified Fee Estate	A fee estate of potentially unlimited duration that does not terminate upon the death of the owner, but that will revert to the grantor if qualifications or conditions are violated. Also called a conditional fee, defeasible fee, or fee simple defeasible.
Qualifying Ratio	Housing expense and debt to income ratios used in analysis of an applicant's qualifications for a loan.
Quantifying Survey Method	A detailed method used to estimate construction cost, involving itemization of all direct costs (e.g., hours of labor, cubic yards of concrete, etc.) and indirect costs (e.g., office overhead, insurance, interests, permits, contractor's profit, etc.)
Quiet Title Action	Court action taken to remove a cloud on title.
Quitclaim Deed	Passes any present interest the signer may have in the property, without any warranty.
Range Lines	Imaginary lines parallel to the meridian, running north-south and six miles apart.
Ratification	Authority given after an act has already been performed.
Real Estate Investment Trust (REIT)	A trust formed to allow investment in real estate as a long-term investment, providing income from rentals, as well as long-term capital gains when property is sold.
Real Estate Settlement Procedures Act (RESPA)	Law that requires lenders of federally-related loans to finance purchase, refinance or obtain home equity loan or line of credit using residential real property as security to provide borrowers with information about process of settlement of transaction.
Real Property	Land and everything permanently attached to the land. Also called real estate or realty, it is property that is basically immovable.
Recapture Clause	Provides for termination of a lease if the tenant does not realize a specified minimum level of business.
Recapture Rate	Added to the return on the investment to provide for return of the investment (or accruals for depreciation)
Rescission	Termination of all obligations under a contract with refund to each party to the contract of any consideration received, so that they would return to their status prior to entering the agreement.
Reconciliation	The weighing of different factors or affecting or methods of appraising real property, as the final step in estimating market value.
Reconveyance	An instrument used to show satisfaction of a deed of trust.
Recording	Enables people to give public and constructive notice concerning documents affecting the title to real estate. Once recorded, the information in a deed or other document is available for public inspection.
Redemption	A right to buy back property by paying off the entire debt within a specified period before or after a foreclosure.
Redlining	The arbitrary denial of a residential real estate loan application in certain geographical areas, without considering the individual applicant's qualifications.
Refinance	The repayment of a debt from the proceeds of a new loan, using the same property as security for the new loan.
Reformation Deed	A deed used to correct a specific error in a previous deed. Also called a correction deed.
Regression	A concept that holds the value of better property will suffer if it is placed in an area of lesser-valued homes. The value of a home built at a cost of $250,000 would suffer if placed in an area of $160,000 homes.
Regulation Z	Regulation written by the Federal Reserve Board to implement the Federal Truth-in-Lending Act, requiring full written disclosures of the credit portion of all consumer loans, including APR, etc.
Rehabilitation	Restoration of a parcel of real property, or a neighborhood, to bring it back to its full (highest and best) potential use.
Reinstatement	The curing of all loan defaults by a borrower, to return it to a current status.
Release Clause	Needed by a borrower with a blanket encumbrance on a subdivision to allow portions of the property to be released from the mortgage lien before the entire loan is repaid. Also called partial release, parcel release, or lot release.
Reliction	The gradual recession of water from its usual high water mark so that the newly uncovered land becomes the property of the adjoining riparian property owner.
Remainderman	A third party to whom a title will pass upon termination of a life estate. He holds a remainder interest or estate in remainder during the entire term of the life estate.
Replacement Cost Approach	Cost of building a new building of equivalent utility with same or similar materials (or with "modern materials")
Reproduction Cost Approach	Cost of building exact replica; seeks to determine cost of construction at current prices of exact duplicate using same materials, construction standards, design, layout and qualify of workmanship.
Reservation	Reduces rights conveyed by creating a new right in favor of a grantor, such as when a grantor keeps an easement or mineral rights on land he is conveying.
Reserve Requirements	A percentage of the assets banks must hold in reserve, as established by the Fed. The Fed may increase reserve requirements to slow inflation, or decrease reserve requirements to stimulate the economy.
Reserves for Replacement	Amounts set aside for replacing equipment or portions of the building that have a relatively short life expectancy, e.g., setting aside enough money each year to replace ranges and refrigerators in ten years.
Resource Conservation and Recovery Act (RCRA)	Enacted to protect human health and the environment from hazardous waste disposal, conserve energy and natural resources, reduce waste, and ensure waste is handled in an environmentally sound way.
Restriction	Limitation on use of real property. Zoning ordinances are examples of public variety. Private variety, created typically in deeds, agreements, or general plans of subdivisions, are usually in form of covenant, or promise to do or not do a certain thing.
Reverse Annuity Mortgage	Mortgage loan available to person 62 or older who already owns real estate, allowing to convert some of equity into cash. Payable on default or when property is sold or no longer used as principal residence. Also called a reverse mortgage.
Reversion	The right to future possession or enjoyment by the person who created a life estate, or by the lessor upon termination of a lease.
Right of First Refusal	Gives a lessee the first opportunity to lease additional space or to purchase the property, if the landlord decides to offer additional space for lease or offer the property for purchase.
Right of Survivorship	The surviving co-owners' rights to acquire the interest of a deceased co-owner.
Riparian Right	The right the owner of real property has to use the water from an adjacent waterway.
Rural Housing Service (RHS)	Primarily makes financing available in rural areas for the purchase, repair and rehabilitation of housing occupied by low-to-moderate income families and senior citizens.

Created by: Joshjcreek

"Know" box contains:
Time elapsed:
Retries: