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CA Real Estate Princ

CA RE Terms (JM)

appreciation The increase in market value of real estate.
C.A.R. A California trade association representing REALTORS® statewide.
capitalism An economic system in which most of the economy’s resources are privately owned.
demographics Information from a variety of sources used to create a broad profile of any community.
gold rush A large migration of people to a newly discovered gold field.
housing inventory Housing units that are available for sale or in the process of being made ready for sale.
inflation The increase in the general price level of goods and services.
median home price The price that is middle value of a sample of sales, with one-half of the sales below and one-half of the sales above.
net worth The value of all assets minus all liabilities.
unemployment rate The percentage of the people classified as unemployed as compared to the total labor force.
acknowledgment A formal declaration to a public official (notary) by a person who has signed an instrument that states that the signing was voluntary.
appurtenance Those rights and improvements that belong to and pass with the transfer of real property but are not necessarily a part of the actual property.
bundle of rights An ownership concept describing all the legal rights that attach to the ownership of real property.
chattel Personal property.
constructive notice Notice given by recording a document or taking possession of the property.
easement Interest owned by one person in the land of another person.
emblements Annual crops produced for sale by tenant farmers
estate A legal interest in land; defines the nature, degree, extent, and duration of a person’s ownership in land.
fixture Personal property that has become affixed to real estate.
freehold estate An estate in real property which continues for an indefinite period of time.
less-than-freehold estate A leasehold estate; considered to exist for a definite period of time or successive periods of time until termination.
life estate An estate that is limited in duration to the life of its owner or the life of some other chosen person.
littoral Land bordering a lake, ocean, or sea.
personal property Anything movable that is not real property.
quiet enjoyment The right to peace without aggravation by others.
real property Land, anything affixed to the land, anything appurtenant to the land, anything immovable by law.
riparian rights The rights of a landowner whose land is next to a natural watercourse to reasonable use of whatever water flows past the property.
severalty Ownership of real property by one person or entity.
title Evidence of land ownership.
trade fixture Personal property that has become affixed to real estate.
estate in fee 1.The most complete form of ownership of property. 2.Freehold estate that's passed by descent or by will after an owner’s death. 3.Also known as estate of inheritance or fee simple estate.
fee simple absolute 1.The largest, most complete ownership recognized by law. 2.An estate in fee with no restrictions on its use. 3.Property transferred or sold with no conditions or limits on its use.
fee simple qualified 1.An estate in which the holder has a fee simple title, subject to return to the grantor if a specified condition occurs. 2.Also known as fee simple defeasible.
patents The legal document that transmits real property from the state or federal government to a person.
prescription The process of acquiring an interest, not ownership, in a certain property.
abandonment The obvious and intentional surrender of the easement.
accession Process by which there is an addition or reduction to property by the efforts natural forces.
accretion Gradual buildup of alluvium by natural causes on property bordering a river, lake, or ocean.
alienate The act of transferring ownership, title, or interest.
avulsion The sudden washing or tearing of land by the action of water.
bequest A gift of personal property by will.
codicil A change in a will before the maker’s death.
easement in gross An easement that is not appurtenant to any one parcel.
encroachment The unauthorized placement of permanent improvements that intrude on adjacent property owned by another.
executor A person named in a will to handle the affairs of the deceased.
grantee The person receiving the property, or to whom it is being conveyed.
grantor The person conveying or transferring the property.
homestead Status provided to a homeowner’s principal residence that protects the home against judgments up to specified amounts.
instrument A document in real estate.
intestate Dying without leaving a will.
license Permission to use a property which may be revoked at any time.
lis pendens Notice that indicates pending litigation affecting title on a property
quiet title action It is a court proceeding to clear a cloud on the title of real property.
reliction Occurs when land that has been covered by water is exposed by receding of the water.
succession The legal transfer of a person’s interest in real and personal property under the laws of descent.
abrogation (1)The rescission or annulling of a contract. (2) The revocation or repealing of a contract by mutual consent of parties to the contract.
addendum Additional documents attached to and made part of a contract.
assignee Party to whom a lease is assigned or transferred.
assignor The person transferring a claim, benefit, or right in property to another.
consideration Something of value—such as money, a promise, property, or personal services.
counteroffer The rejection of an original offer that becomes a new offer.
executory contract A contract in which obligation to perform exists on one or both sides.
express contract Parties declare the terms and put their intentions in oral or written words.
forbearance (1) Refraining from action by a creditor against a debt or after the debt has become due. (2) Forgiving a debt or obligation.
novation The substitution by agreement of a new obligation for an existing one.
offer A presentation or proposal for acceptance to form a contract.
offeree The party receiving an offer.
offeror The party making an offer.
rescission Legal action taken to repeal a contract either by mutual consent of theparties or by one party when the other party has breached a contract.
revocation The canceling of an offer to contract by the person making the original offer.
specific performance A court action brought to compel a party to carry out the terms of a contract.
statute of frauds The law that requires contracts to be in writing.
statute of limitations The period of time limited by statute within which certain court actions must be brought by one party against another.
tender An offer by one of the parties to carry out his or her part of the contract.
waiver The relinquishment or refusal to accept a right.
agency relationship A special relationship of trust by which one person (agent) is authorized to conduct business, sign papers, or otherwise act on behalf of another person (principal). This relationship may be created by expressed agreement, ratification, or estoppel.
agent A person who acts for and in the place of another, called a principal, for the purpose of affecting the principal’s legal relationship with third persons.
associate licensee Another term used for a licensed real estate salesperson employed by a licensed real estate broker.
attorney-in-fact 1.The person holding the power of attorney. 2.A competent & disinterested person who is authorized by another person to act in his or her place in legal matters.
commingling Depositing client funds in the broker’s personal account or general business account.
conversion The appropriation of property belonging to another as in a broker using a client’s funds.
customer A prospective buyer of real estate; not to be confused with a property seller, who is the listing broker’s client.
dual agent A broker who represents both parties in a transaction.
fiduciary relationship A relationship that implies a position of trust or confidence.
general agent A person authorized by a principal to perform any and all tasks associated with the continued operation of a particular project.
listing agreement A written contract by which a principal, or seller, employs a broker to sell real estate.
misrepresentation 1.Making a false statement or concealing a material fact. 2.A false statement of fact.
net listing An employment contract in which the commission is not definite.
principal In a real estate transaction, the one (seller) who hires the broker to represent him or her in the sale of the property.
procuring cause The broker who produces a buyer ready, willing, and able to purchase the property for the price and on the terms specified by the seller, regardless of whether the sale is completed.
puffing Exaggerated comments or opinions not made as representations of fact, thus not grounds for misrepresentation.
ratification The approval of a previously authorized act, performed on behalf of a person, which makes the act valid and legally binding.
ready, willing, and able A buyer who is prepared to enter a purchase contract, who really wants to buy, and who meets the financing requirements of purchase.
real estate salesperson A person with a real estate license and employed by a real estate broker-agent of the broker-not the seller or buyer.
RLA – exclusive form The new C.A.R. name for the Exclusive Authorization and Right to Sell Listing Agreement.
safety clause Clause that protects the listing broker’s commission, if the owner personally sells the property to someone who was shown the property or made an offer during the term of the listing.
single agency When a broker represents only the buyer or only the seller in the transaction.
special agent A person employed to perform a specific task.
subagent A broker delegated by the listing agent (if authorized by the seller) who represents the seller in finding a buyer for the listed property.
third party A person who would be considered the customer in an agency relationship.
assignee Party to whom a lease is assigned or transferred.
assignment The transfer of the entire leasehold estate to a new person.
counteroffer The rejection of an original purchase offer and the submission of a new and different offer.
CPI An index used for rent adjustments on commercial leases.
deposit receipt Contract that acts as the receipt for earnest money given by the buyer to secure an offer, as well as being the basic agreement, between the buyer and seller.
gross lease A type of commercial lease where the landlord pays for the building's property taxes, insurance and maintenance. A gross lease can be modified to meet the needs of a particular building's tenants. It may require the tenant to pay the utility bills
ground lease A lease for only the land.
implied warranty of habitability The property will be maintained to meet bare living requirements
interim occupancy agreement An agreement used if a buyer takes possession of a property prior to close of escrow.
lease A contract between an owner and tenant.
leased fee estate The interest of the lessor.
lessee (1) Tenant. (2) The one to whom property is rented or leased.
lessor The person who owns the property and signs the lease to give possession and use to the tenant.
liquidated damages clause Clause in a contract that allows parties to the contract to decide in advance the amount of damages to be paid, should either party breach the contract.
net lease The tenant pays an agreed-upon sum as rent, plus certain agreed-upon expenses per month (i.e., taxes, insurance, and repairs).
option A contract to keep open, for a set period of time, an offer to purchase real property.
percentage lease The tenant pays a percentage of gross monthly receipts in addition to a base rent.
proprietary lease A lease used on co-op apartment buildings
rent Payment for the use of a property.
residential lease A lease is used for single-family homes and duplexes.
retaliatory eviction An eviction that occurs in revenge for some complaint made by the tenant.
security deposit Money given to a landlord to prepay for any damage that might occur to a property during a lease term that is more than just normal wear and tear.
sublease Transfers less than the entire leasehold, with the original lessee being primarily liable for the rental agreement
time is of the essence clause A clause in a contract that emphasizes punctual performance as a requirement of the contract.
unlawful detainer action The legal remedy to remove a tenant.
100-year flood Boundary indicating areas of special flood zone areas.
as is Term stating the seller is not responsible for repairing any defect.
asbestos Mineral fiber used in construction materials that causes cancer.
caveat emptor Let the buyer beware
Easton v Strassburger The California Court of Appeals addressed, whether a broker is negligent if he fails to disclose defects which he should have discovered through visual inspection or reasonable diligence.
earthquake fault zone An area delineated by state officials to have an active fault with the potential for surface rupture
FIRPTA Tax withholding requirement if the seller is a foreign person.
formaldehyde Chemical organic, carcinogenesis compound found in building materials.
hazardous household waste Consumer products such as paints, cleaners, stains, varnishes, car batteries, motor oil, and pesticides that contain hazardous components.
hazardous waste Materials whose disposal is regulated by the EPA.
Mello-Roos District Special tax is imposed on real property owners within a Community Facilities District.
mold Fungus that reproduces by means of spores.
public report A document disclosing all important facts about a subdivision such as marketing & financing as well as any negative aspects to a potential buyer (e.g., natural or environmental hazards, unusual costs, restrictions, easements, or financing arrangements).
radon Colorless, odorless, carcinogenesis gas that is detectable by a spectrometer.
red flag Something that alerts a reasonably observant person of a problem.
stigmatized property 1. Property buyers or tenants may avoid for reasons unrelated to physical conditions or features. The most common are those in which there have been murders, suicides, or criminal activity. (2) Also known as psychologically impacted property.
Subdivided Lands Law State law that protects buyers when buying homes in new subdivisions.
target housing Housing not exempt from the lead based paint disclosure.
Transfer Disclosure Statement (TDS) Detailed statement from the seller describing the condition of the property.
abstract of title Written summary of all useful documents discovered in a title search.
ad valorem A Latin phrase meaning according to value.
assessment roll A list of all taxable property showing the assessed value of each parcel;establishes the tax base.
beneficiary statement A statement of the unpaid condition of a loan and describes the condition of the debt.
calendar year Begins on January 1 and continues through December 31 of the same year.
completed escrow All terms of the escrow instructions have been met.
escrow A small and short-lived trust arrangement.
escrow holder Acts as a neutral agent of both buyer and seller.
fiscal year Starts on July 1 and runs through June 30 of the following year; used for real property tax purposes.
impound account A trust account set up for funds set aside for future costs relating to a property.
marketable title Good or clear saleable title reasonably free from risk of litigation over possible defects.
metes and bounds Land description that delineates boundaries and measures distances between landmarks to identify property.
plat map Map of a subdivision indicating the location and boundaries of individual lots.
preliminary report An offer to issue a policy of title insurance in the future for a specific fee.
property taxes Taxes used to operate the government in general.
proration The division and distribution of expenses and/or income between the buyer and seller of property as of the date of closing or settlement.
section An area of land, one square mile, or 640 acres; 1/36 of a township.
special assessments Taxes used for specific local purposes
title insurance policy An insurance policy that protects the insured against loss or damage due to defects in the property’s title.
vesting The way title will be taken.
acceleration clause mortgage A clause in a loan document describing certain events that would cause the entire loan to be due.
adjustable-rate A note whose interest rate is tied to a movable economic index.
adjustable-rate mortgage (ARM) Is one whose interest rate is tied to a movable economic index.
alienation clause A clause in a loan document that would allow the lender to call the entire loan due upon the sale of the property.
all-inclusive trust deed (AITD) A purchase money deed of trust subordinate to but still including the original loan.
amortization The liquidation of a financial obligation.
assumption clause A clause in a document that allows a buyer to take over the existing loan and agree to be liable for the repayment of the loan.
beneficiary The lender under a deed of trust.
blanket loan A loan secured by several properties. The security instrument used can be a blanket deed of trust or a blanket mortgage.
CAL-VET Program A program administered by the State Department of Veterans Affairs for the direct financing of farm and home purchases by eligible California veterans of the armed forces.
certificate of eligibility Issued by Department of Veterans Affairs; evidence of individual’s eligibility to obtain VA loan.
certificate of reasonable value (CRV) The Federal VA appraisal commitment of property value.
collateral Something of value given as security for a debt.
conforming loans Have terms and conditions that follow the guidelines set forth by Fannie Mae and Freddie Mac. These loans are called “A” paper loans, or prime loans, and can be made to purchase or refinance homes (one-to-four residential units).
construction loan An interim loan made to finance the actual construction or improvement on land. Funds are usually disbursed in increments as the construction progresses.
contract of sale For the sale of property where the seller gives up possession but retains title until the total purchase price is paid. Also called installment sales contract, a contract of sale, an agreement of sale, a conditional sale contract, or a land sales contract
conventional loan Any loan made by lenders without any governmental guarantees.
deed of trust Is a three party security instrument guaranteeing loan repayment and conveying naked legal title to land from a trustor (borrower) to a trustee (titleholder) to be held as security for the beneficiary (lender) for payment of a debt in case of default on t
deficiency judgment A judgment against a borrower for the balance of a debt owed when the security or the loan is not sufficient enough to pay the debt.
discounting a note Selling a note for less than the face amount or the current balance.
endorsement Signature.
equitable title The interest held by the trustor under a trust deed and gives the borrower the equitable right to obtain absolute ownership to the property when the terms of the trust deed are met.
equity The difference between the appraised value and the loan.
fictitious trust deed Recorded trust deed containing details that apply to later loan documents.
first trust deed The trust deed recorded first against a property with first priority over all other claims and is superior to any other.
fully amortized fixed-rate note Describes a loan with an interest rate that is fixed and payments that are level for the life of the loan. It is characterized by regular, periodic payments of fixed amounts, to include both interest and principal, which pay off the debt completely by the
hard money loan Any loan made on real property in exchange for cash. The borrower gets the entire loan balance at one time. It is a fixed-rate second mortgage with principal and interest payments remaining the same over the life of the loan.
home equity line of credit (HELOC) The borrower takes money as it is needed-up to the credit limit. It has a low starting interest rate, with a variable monthly rate based on outstanding balance.
home equity loan The borrower gets the entire loan balance at one time. It is a fixed-rate second mortgage with principal and interest payments remaining the same over the life of the loan.
hypothecation A process which allows a borrower to remain in possession of the property while using it to secure a loan.
installment note A note which provides for a series of periodic payments of principal and interest, until amount borrowed is paid in full. This periodic reduction of principal amortizes the loan.
interest The charge for the use of money.
interest only loan A straight loan or term loan, non-amortizing loan in which the interest rate is generally higher and the lender receives only interest during the term of the loan and principal is repaid in a lump sum at maturity.
judicial foreclosure Foreclosure by court action.
junior loan Secondary financing for a loan that has subordinate or inferior priority to another loan.
mortgagee The lender under a mortgage.
mortgagor The borrower under a mortgage.
naked legal title Title lacking the rights and privileges commonly associated with ownership may be held by trustee under a trust deed.
negative amortization A portion of the interest is not paid each month. The difference between what should be paid and what is actually paid is added to the unpaid principal balance of the loan and the principal increases instead of decreases.
negotiable instrument Is a written unconditional promise or order to pay a certain amount of money at a definite time or on demand.
nominal or named rate The interest rate stated in the note.
nontraditional mortgage product Is any loan other than a fixed-rate, 30-year, fully amortized loan.
notice of default A notice to a defaulting party that there has been a non-payment of a debt.
open-end loan Is essentially a revolving line of credit.
package loan A loan on real property secured by more than the land and structure. It includes fixtures attached to the building (appliances, carpeting, drapes, air conditioning) and other personal property.
partial amortization A large (balloon) payment will be due at the end of the loan term.
partial reconveyance A clause in a trust deed or mortgage permitting the release of a parcel or part of a parcel from the lien of that security instrument. The release usually occurs upon the payment of a specified sum of money.
partially amortized note A promissory note with a repayment schedule that is not sufficient to amortize the loan over its term.
promissory note The evidence of the debt.
purchase-money loan Money loaned to a home buyer to use to buy a residential home. Purchase money makes up part of the purchase price. Any loan made at the time of a sale, as part of that sale.
qualifying rate The initial interest rate determined by the current rate of the chosen index.
renegotiable rate mortgage Loan in which the interest rate is renegotiated periodically.
security instrument A legal document given by the borrower to hypothecate the property to the lender as collateral for a loan, creating a security interest.
seller financing disclosure statement It gives both the seller and buyer all the information needed to make an informed decision about using seller financing to complete the sale.
standby commitment A letter that promises to deliver a takeout loan in the future.
subordination clause A clause in which the holder of a trust deed permits a subsequent loan to take priority. Is used to change the priority of a financial instrument.
swing loan (1) A short-term loan used to enable the purchaser of a new property to buy that property on the strength of the equity from the property the purchaser is now selling. (2) Also known as a bridge loan.
takeout loan The permanent loan that pays off a construction loan.
trust deed Is a three party security instrument guaranteeing loan repayment and conveying naked legal title to land from a trustor (borrower) to a trustee (titleholder) to be held as security for the beneficiary (lender) for payment of a debt in case of default on t
VA loan A loan made to qualified veterans for the purchase of real property wherein the Department of Veterans Affairs guarantees the lender payment of the mortgage.
vendee The buyer under a contract of sale (land contract).
vendor The seller under a contract of sale (land contract).
wraparound mortgage Sometimes called "AITD", where a new loan is placed in a secondary position; the new loan includes the unpaid balance of 1st loan & the sums loaned by the lender of the 2nd loan.
annual percentage rate (APR) The relative cost of credit expressed as a yearly percentage rate. It is the relationship of the total amount financed, expressedas percentage.
commercial bank An all purpose institutional lender that commonly makes short-term, or interim loans to finance construction.
compensating balance A minimum credit balance that a bank requires a borrower to keep on deposit as a condition for granting a loan.
credit scoring A statistical method lenders use to assess a borrower’s credit risk.
credit union Lender whose members usually have the same type of occupation.
deregulation A process whereby regulatory restraints are gradually relaxed.
disintermediation The process of depositors removing funds from savings.
Equal Credit Opportunity Act Federal An act ensuring that all consumer have an equal chance to obtain credit.
FDIC Corporation that insures deposits in all federally chartered banks and savings institutions up to $250,000 per depositor.
finance charge The dollar amount the credit will cost the borrower.
Loan Estimate Document that lists the charges the buyer is likely to pay at settlement.
loan-to-value The percentage of appraised value to the loan.
monetary policy Actions taken by the Fed to influence the availability and cost money and credit as a means of promoting national economic goals.
mortgage broker Real estate licensee who is a third party originator.
mortgage companies Lender whose principal business is the origination, closing, funding, selling, and servicing of loans secured by real property.
Mortgage Loan Disclosure Statement California Required statement that disclosed expected maximum costs and expenses of making the loan that are to be paid by the borrower.
mortgage yield The total interest, fees, and points earned by the lender expressed as a percentage.
mortgage-backed securities Pools of mortgages used as collateral for the issuance of securities in the secondary market.
pass-through securities Mortgage backed securities that pass through the principal and interest of the underlying loans to investors.
primary mortgage market Market in which lenders make mortgage loans directly to borrowers.
real estate investment trust A company with a minimum of 100 shareholders that owns operates income-producing real estate or engages in financing real estate.
redlining A discriminatory lending practice prohibited by the Holden Act.
secondary mortgage market A resale marketplace for mortgage loans.
tight money An economic situation in which the supply of money is limited, and the demand for money is high, as evidenced by high interest rates.
Truth in Lending Act Consumer-protection law passed to promote the informed use of consumer credit by requiring disclosures about its terms and costs.
underwriting The process of evaluating a borrower’s risk factors before the lender will make a loan.
warehousing Revolving line of credit extended to a mortgage company from a warehouse lender.
actual age Real age of a building.
amenities Features that add value to a property.
appraisal An act or process of developing an opinion of value.
appraisal process An orderly systematic method to arrive at an estimate of value.
appraisal report A written statement where an appraiser gives his or her opinion of the property value, as of the date of appraisal.
assemblage The process of putting several smaller less valuable lots together under one ownership.
capitalization The process that can be employed to convert income to value.
conformity When land uses are compatible and homes are similar in design and size, the maximum value is realized.
contract rent The rent established by agreement or contract.
corner influence Commercial properties benefit from more exposure on a corner lot.
cost The expenses in money, labor, material, or sacrifices in acquiring or producing something.
cul-de-sac lot A lot found on a dead-end street with same way for ingress and egress.
depreciation Loss in value from any cause.
economic life The estimated period over which a building may be profitably used.
economic rent What a leased property would be expected to rent for under current market conditions if the property were vacant and available for rent.
effective age Age of a building determined by its condition and usefulness.
effective demand Desire coupled with purchasing power.
fair market value The price the property would bring if freely offered on the open market with both a willing buyer and a willing seller.
flag lot A lot that looks like a flag on a pole, which represents the access to the site; usually located to the rear of another lot fronting a main street.
front foot The width of a property on the side facing the street.
functional utility The ability of a property to be useful and perform the function for which it is intended according to current market tastes and standards.
improvements Any buildings or structures on a lot.
interim use Short-term and temporary use of a property until it is ready for a more productive highest and best use.
key lot Lot that is the least desirable due to the lack of privacy because it is surrounded by the back yards of other lots.
location This may be the most important factor influencing value.
market price What a property actually sold for.
market rent The rent a property should bring in the open market.
market value Sometimes called the objective value.
orientation The placement of a building on its lot in relation to exposure to sun, prevailing wind, traffic, and privacy from the street.
plottage increment The increase in the value when several smaller parcels are combined together into one larger parcel.
property Anything that may be owned and gained lawfully.
reconciliation The final step in an appraisal is to examine the values derived by the various approaches.
replacement cost The cost of replacing improvements with modern materials and techniques.
scarcity The availability or lack of availability of a commodity in the marketplace.
T-lot A lot that is fronted head-on by a street; noise and glare from headlights may be detractors from this type of lot.
Transferability Title to property must be marketable with an unclouded title.
utility The ability of a property to satisfy a need or desire, such as shelter, income, or amenities.
utility value The usefulness of the property to its owner. This is subjective value orthe value given for personal reasons.
vacancy factor Loss of income because of a vacant unit is known.
vacancy rate Is the number of vacant units expressed as a percentage.
value The power of goods or services to command other goods in exchange for the present worth of future brnefits arising from property ownership.
backfill Soil that is used to fill in holes or support a foundation-bearing wall.
bearing wall A wall that supports a vertical load as well as its own weight.
board foot Measurement of lumber equal to the volume of a board 12"x12"x1" (144 cubic inches).
BTU Measurement that calculates heat; the amount of heat needed to raise one pound of water one degree Fahrenheit.
CID Common-interest development combining the individual ownership of private dwellings with the shared ownership of common facilities of the entire project.
condemnation The proceeding to exercise the power of eminent domain.
conduit Flexible pipe in which electrical wiring is installed.
deciduous Plants and trees that lose their leaves seasonally in the fall.
drywall Gypsum panels used in place of wet plaster to finish the inside of buildings.
EER Measurement of the efficiency of energy; used to determine the effectiveness of appliances.
EIR Study of how development will affect the ecology of its surroundings.
eminent domain The right of the government to take private property from an owner, for public use, paying fair market value.
final tract map A map indicating any changes required by the planning commission and is recorded in the county where the property is located.
General Plan The long term physical development of a community that covers 7 major categories: land use, circulation, housing, conservation, open space, noise, & safety. Areas on the coast must address protection of natural resources and wetlands.
linear foot A measurement of length, rather than area (square foot) or volume (cubic foot).
parcel map Map showing a parcel of land that will be subdivided into less than five parcels or units and shows land boundaries, streets, and parcel number.
party wall Wall erected on the line between two adjoining properties, which are under different ownership, for the use of both parties.
percolating water Underground water not flowing in a defined channel.
percolation test Test used to determine the ability of the land to absorb and drain water and is frequently used when installing septic systems.
planned development (1) A planning and zoning term describing land not subject to conventional zoning to permit clustering of residences or other characteristics of the project which differ from normal zoning. (2) Sometimes called a planned unit development (PUD).
police power The power of the state to enact laws within constitutional limits to promote the order, safety, health, morals and general welfare of our society.
potable Fresh water that is safe and agreeable for drinking.
R-value Rating that measures how well insulation resists heat.
schematics Preliminary drawings and sketches by an architect, such as site plans and elevations.
setback The distance a building must be set back from the street; usually determined by local building code.
Subdivided Lands Law State law protecting purchasers of property in new subdivisions from fraud, misrepresentation, or deceit in the marketing of subdivided property.
subdivision The division of land into five or more lots for the purpose of sale, lease, or financing.
Subdivision Map Act The law that authorizes a city or county to control the orderly and proper development of the community.
tentative tract map Map of the proposed subdivision that is submitted to a planning commission for approval or disapproval.
variance Exception granted to existing zoning regulations for special reasons.
wainscoting The bottom portion of a wall that is covered with wood siding; the top part is treated with another material.
water-pressure test Water pressure can be tested by turning on all faucets and flushing all toilets at the same time.
water table The natural level at which water will be found, either above or below the surface of the ground.
wetlands Areas where water covers the soil, or is present either at or near the surface of the soil all year or for varying periods of time during the year, including during the growing season.
zoning The regulation of structures and uses of property within selected districts.
Americans with Disabilities Act Federal law passed in 1990 that prohibits discrimination against individuals with disabilities.
blockbusting The illegal practice of telling people that property values in a neighborhood will decline because minorities purchase the homes.
brokerage An activity involving the sale of something through an intermediary who negotiates the transaction for payment. A negotiator and agent of the principal, expecting a commission at the end of the negotiation.
California Fair Employment and Housing Act State law that prohibits discrimination in the sale, rental or financing of practically all types of housing.
CAN-SPAM laws Federal and state law regulating commercial e-mail messages.
cold calling Making unsolicited calls to unknown people to get new business.
commercial e-mail message Electronic mail message whose primary purpose is the commercial advertisement or promotion of a commercial product or service.
commingle The illegal practice of depositing client’s funds in a broker’s personal or general business account.602California Real Estate Principles.
commission A fee for services rendered usually based on a certain percentage of the sales price of a property.
company dollar The amount a broker has left after all commissions have been paid.
corporation A legal entity whose rights in business are similar to that of an individual.
DBA Doing business as, another name for a fictitious business or trade name.
desk cost Profitability measure calculated by dividing the total operating expenses of the firm by the number of licensed sales associates.
do-not-call Federal and state regulations regarding unsolicited phone calls.
employee Someone who is under the control and direction of a broker.
ethics A set of principles or values by which an individual guides his or her own behavior and judges that of others.
fictitious business name Business name that does not include the last name of the owner.
Housing Financial Discrimination Act of 1977. (1) A law designed primarily to eliminate discrimination in leading practices based upon the character of the neighborhood in which real property in located. (2) Also known as "Holden Act" (See redlining).
independent contractor A person who is hired to do work for another person but who is not an employee of that person.
joint and several liability A legal term used in reference to a debt or a judgment for negligence,in which each debtor or each judgment defendant is responsible for theentire amount of the debt or judgment.
Jones v. Mayer A case prohibiting racial discrimination by upholding the 1866 Civil Rights Act and the 13th Amendment to the U.S. Constitution.
limited liability company An alternative business entity that has characteristics of both corporations and limited partnerships.
partnership A form of business in which two or more persons join their money and skills in conducting the business.
prospecting The process of identifying potential customers.
redlining The illegal use of a property’s location to deny financing.
S corporation A corporation that operates like a corporation but is treated like a partnership for tax purposes.
sole proprietorship A business that is owned and operated by one person.
steering The illegal practice of only showing clients property in certain areas.
trust funds Money received by a broker to be used in a real estate transaction.
Unruh Civil Rights Act State law that prohibits discrimination by businesses.
1031 Exchange Tax-deferred exchange used to defer tax liability.
agricultural property Property zoned for use in farming.
appreciation An increase in property value with the passage of time.
boot Extra cash or non like-kind property put into an exchange.
brownfield An abandoned commercial or industrial site or under-utilized neighborhood where redevelopment is complicated by actual or perceived contamination.
building manager Person employed by a property manager or directly by an owner, and who usually manages a single, large building or office complex.
bulk sales The sale of a substantial part of the inventory of a business.
business opportunity Any type of business that is for lease or sale.
clearance of tax liability Certificate signed by the county tax collector in mobile home sales.
depreciation Tax advantage of ownership of income property.
equity buildup The gradual increase of a borrower’s equity in a property caused by amortization of loan principal.
estate tax Federal tax on the “taxable estate” of a decedent’s assets at the time of death.
financing statement The document used to record the debt; it is not actual evidence of the debt.
goodwill The expectation of the continued patronage of an existing business.
hedge against inflation Real property appreciation keeps pace or exceeds inflation rates.
houseboat A barge that is designed and equipped for use as a dwelling.
infill development The development of vacant parcels in existing urban and suburban areas.
installment sale Sale in which payments are made, by the buyer, to the seller, over a period of more than one year.
leverage The use of borrowed capital to buy real estate.
management contract Contract between the owner and the property manager.
mansionization Building larger, more extravagant homes older neighborhoods with small to medium-sized homes.
manufactured home Home built in a factory after June 15, 1976 that conforms to the federal Manufactured Home Construction and Safety Standards.
mobile home A factory-built home manufactured prior to June 15, 1976, constructed on a chassis and wheels.
mobile home park Any area or tract of land where two or more lots are rented to accommodate manufactured homes or mobile homes used for human habitation.
probate sale A court-approved sale of the property of a person who is deceased.522 California Real Estate Principles.
resident manager Person employed to manage an apartment building.
sales tax Tax collected as a percentage of the retail sales of a product, by a retailer.
security agreement The document commonly used to secure a loan on personal property.
seller’s permit Permit used to collect sales tax from customers.
straight-line method Depreciation method where the same amount is deducted every year over the depreciable life of a property.
timeshare Common ownership of a single piece of property by an association with each owner having the exclusive right to occupy a unit for a specified period each year.
turnkey project Projects that are ready for occupancy.
unearned increment The increase in value of a mortgaged property generally accrues to the benefit of the trustor.
Uniform Commercial Code Code regulating security interests in personal property of businesses.
urban sprawl The unplanned growth of an urban area into adjoining areas.
45 hours Hours needed for subsequent renewal of broker or salesperson license.
Advocacy Program CalBRE enforcement program that handles simple disputes.
conversion Misappropriating and using principal’s funds.
false promise A false statement about what someone is going to do in the future.
license law Another term for the Real Estate Law.
misrepresentation A false statement of fact.
obligors A person listed by Child Support Services as delinquent in paying child support.
REALTOR® Designation used by active member of NAR.
Real Estate Commissioner Person appointed by the governor to enforce the provisions of the Real Estate Law and the Subdivided Lands Law.
Real Estate Law Another name for the Business and Professions Code, Part 1 entitled Licensing of Persons.
Real Estate Recovery Fund A separate account funded through collection of a fixed amount from each license fee.
real estate salesperson Someone with real estate license who must be employed by a real estate broker in order to perform any of the activities that require a license.
restricted license Type of probationary license issued when a license has been suspended, revoked, or denied after a hearing.
secret profit Undisclosed profit made by a broker at his or her principal’s expense.
two-year grace period The period of time after a license that renewal is allowed, as long as all real estate activity has ceased during that time and a late fee is paid at the time of renewal.
accusation When a complaint is filed that appears to be of a serious nature and that a violation of law has occurred.
branch offices More than one place of business.
panic peddling illegal practice of inducing people in a neighborhood to sell their homes, by making them believe that members of a minority group are likely to buy property in and around their residential area
real estate broker Someone who holds a broker license issued by the Bureau of Real Estate.
Created by: julietmongia
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