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Real Estate Vocab

TermDefinition
Appurtenance A right, privilege, or improvement belonging to and passing with the principal property. It is not necessarily a part of the property.
Assemblage The combining of adjoining separate parcels of land into a single tract.
Bill of Sale An instrument that transfers title to personal property (Chattels).
Bundle of Rights Legal rights that go with the ownership of property.
Chattel Personal property.
Datum Any point, line, or surface from which a distance, vertical height, or depth is measured.
Fixture Personal property that is permanently attached to real property and goes with the property when it is sold.
Fructus Industriales (Emblements) Annual plantings that require cultivation. Considered personal property.
Fructus Naturales Trees, perennial plants, and uncultivated vegetation. Considered real property.
Government Survey Method A method of land description that utilizes imaginary grid lines.
Improvements
Littoral Rights The lawful claim of a landowner to use and enjoy the water of a lake or sea bordering his land.
Lot, Block, and Subdivision Method A method of land description utilizing recorded plats.
Meridian Lines North-South lines in the Government Survey Method.
Metes and Bounds Method A method of land description utilizing measurements and boundaries.
Monument (P.M.-Permanent Reference Marker) A boundary marker in a fixed a identifiable position. May be man-made or natural. Used most commonly in the Metes and Bounds land description.
Parallel Lines East-West lines in the Government Survey Method.
Plottage The appraisal principle that holds that merging separately owned pieces of property into one large single lot will increase the value of the separate pieces.
Property That which is legally owned by an individual.
Real Estate Land, realty, real property.
Riparian Rights Legal rights possessed by owners of property that borders a river, stream, or other natural watercourse.
Situs Location preference of a parcel of land from an economic standpoint.
Trade Fixtures Personal property affixed to real property that is essential to a business and that is removable by a lessee.
Acknowledgement Formal certification of a signature.
Actual Notice Knowledge that one has gained based on what he has seen, heard, read, or observed.
Adverse Possession A means by which title may be acquired, through the actual, hostile, open and notorious, exclusive and continuous occupancy by one who does not have title.
Allodial System System of possession of land based on individual ownership, as opposed to the Feudal System.
Attachment Seizure of property by court order, to insure payment of a debt or to have it available to satisfy a possible judgment.
Common Element Those parts of a condominium in which each unit owner holds an undivided interest.
Condemnation The process of taking a property by the state under the right of eminent domain.
Condominium Ownership A system of individual fee ownership of portions of a building that has other similar units.
Consideration Something of value given in return for the act or promise of another. An essential element of a contract.
Constructive Notice The recording of documents in the public records.
Cooperative Ownership A system of ownership in which individuals have shares of stock in a corporation that has title to the property.
Deed in Lieu of Foreclosure Voluntary act by borrower and lender. Sometimes called a "friendly foreclosure."
Deed of Trust Used instead of a mortgage in some states.
Deed Restriction (Restrictive Covenant) A clause in a deed limiting or controlling the future use of the property.
Descent and Distribution (Intestate Succession) A method for distributing the assets of a deceased person's estate in the absence of a will.
Dominant Estate The interest of the owner of the land who has the right to use an appurtenant easement.
Dower and Curtesy The legal right or interest that one spouse has in the property of the other spouse.
Downzoning A change in zoning from a higher, more active category to a lower, less active (and perhaps less profitable) category.
Easement A specified and limited right or privilege to use another's property.
Eminent Domain The right of the government to acquire private property for public use.
Encroachment An unauthorized invasion or intrusion upon another's property.
Equitable Lien Arises out of an agreement that some particular property shall be used as security for a debt or obligation.
Equitable Title Interest held by vendee under sales contact wen legal title is vested in another's name.
Escheat Reversion of property to the state when a person dies intestate with no known heirs or when the property is abandoned.
Estoppel A legal bar to a person alleging or denying a fact when his own previous actions have conclusively indicated the contrary.
Fee Simple Estate The complete ownership of property, without condition. The largest and highest interest one can possess in real estate.
Foreclosure The legal procedure whereby mortgaged property is taken to satisfy a debt that is in default. . Can be judicial or nonjudicial.
Freehold An interest in real property of a life estate or greater.
Homestead Exemption Statutory provision that protects a person's homestead from the claims of creditors.
Joint Tenancy Tenancy with the right of survivorship and various other characteristics.
Laches Similar to Statute of Limitations. An equitable doctrine used by courts to bar a plaintiff from asserting a claim or right because of undue delay on his part.
Land-Use Control A broad term describing any legal description that regulates how a parcel of land may be used.
Leasehold Estate An interest less than a freehold, held by a lessee.
Lien A claim against the property of another as security for a debt or charge.
Life Estate An estate or interest in real estate held during the term of a specified person's life.
Lis Pendens "Pending Suit"; a notice of pending legal action that clouds title to real estate.
Mechanic's Lien A lien levied against specific property by those who furnish materials and/or labor for its construction, improvement, or repair.
Nonconforming Use (Grandfathered) A land use that does not comply with current zoning, but is allowed to remain as it was before the zoning ordinance was passed. Generally such properties can not be remodeled or enlarged.
Planned Unit Developments (PUD) Individually owned houses coupled with membership in the Owners Association that holds title to the common areas.
Police Power The right of a government to enact legislation to protect its citizens.
Quitclaim Deed A form of deed without covenants or warrants of any type.
Remainder Estate A present right to future title; title is taken upon the termination of a life estate.
Reversion (Reversionary) Estate An estate in which title returns (reverts) to the original grantor or his heirs upon termination of a life estate.
Servient Estate The estate of the owner whose land is burdened by an appurtenant easement.
Special Warranty Deed A deed in which the grantor warrants only against claims that arise from his ownership.
Statutory Created by law.
Tacking Adding successive periods of continuous occupation to qualify for title by adverse possession.
Tenancy-In-Common A form of joint ownership without right of survivorship.
Tenancy by the Entireties A form of joint ownership between husband and wife.
Agent One authorized to represent and to act on behalf of another person.
Assignment The transfer of the right, title, and interest in the property of one person (the assignor) to another (the assignee).
Attorney-In-Fact A competent and disinterested person authorized by another person to act in his place.
Bilateral Contract A contract in which each party promises to perform an act in exchange for the other party's promise to perform.
Blockbusting An illegal/discriminatory practice whereby one person induces another to enter into a real estate transaction from which the first person may benefit financially by inferring that lowered property values may result from a change in the neighborhood due
Caveat Emptor Latin for "let the buyer beware." Buyers should inspect the goods or realty before purchase because they buy "as is" and at their own risk.
Commingle To mingle or mix; for example, to deposit client funds in the broker's personal or general account.
Covenant An agreement or promise between two or more parties in which they pledge to perform (or not perform) specified acts on a property; or a written agreement that specifies certain uses or nonuses of the property.
Covenant of Quiet Enjoyment The grantor warrants that the grantee and the heirs and assigns of the grantee will have the right to a property free of interference from the acts or claims third parties.
Dual Agency (Limited Agency) A situation in which an agent (or agency in some states) represents both principals to a transaction.
Duress Unlawful force or action by one person against another in an attempt to coerce the person to perform some act against his will; the threat of the force is called menace.
Earnest Money The cash deposit (including initial and additional deposits) paid by the prospective buyer of real property as evidence of good-faith intention to complete the transaction.
Escalation Clause A contract provision permitting an adjustment of certain payments, not controlled by either part, to move up or down to cover certain contingencies.
Escrow The process, in some parts of the country in which a disinterested third person (a stakeholder) holds money and/or documents until satisfaction of the terms and conditions of the escrow instructions (as prepared by the escrow parties) have been achieved.
Eviction 1) The legal process of removing a tenant from the premises for some breach of the lease. 2) The disturbance of a tenant's enjoyment of any of the material part of the premises by act of the landlord or by claim of a superior title by a third party.
Exclusive Listing A written listing of real property in which the seller agrees to appoint only one broker to sell the property for a specified period of time.
Executory Contract A contract in which one or both parties has not yet performed , such as a contract for sale.
Express Contract A contract where the terms are at least discussed.
Fiduciary A relationship that implies a position of trust and confidence wherein one person is usually entrusted to hold or manage property or money for another.
Fraud Any form of deceit, trickery, breach of confidence, or misrepresentation by which one party attempts to gain some unfair or dishonest advantage over another.
Gross Lease (Fixed or Flat Lease) A lease of property under which the lessee pays a fixed rent and the lessor pays the taxes, insurance, and other charges regularly incurred through ownership.
Implied Contract An unwritten contract inferred from the actions of the parties. Such an agreement is created by neither word nor writing; it is inferred from the conduct of the parties.
Installment Sales Contract A contract whereby the seller finances the purchase and retains legal title until the full balance is paid.
Misrepresentation A false statement or concealment of a material fact made with the intention of inducing some action by another party.
Mistake An error or misunderstanding. A contract is voidable if there is such a mistake that is mutual, material, unintentional, and free from negligence.
Net Lease A lease, usually commercial, in which the lessee not only pays the rent for occupancy, but also pays maintenance and operating expenses such as taxes, insurance, utilities, and repairs.
Net Listing An employment contract in which the broker receives as commission all excess monies over and above the minimum sales price agreed on by broker and seller. Discouraged in most states if not actually illegal.
Novation The substitution of a new obligation for an old one; substitution of new parties to an existing obligation, as when the parties to an agreement accept a new debtor in place of an old one.
Open Listing A listing given to any number of brokers who can work simultaneously to sell the owner's property. The first broker to secure a qualifying buyer earns the commission.
Option An agreement to keep open, for a set period, an offer to sell or lease real property.
Percentage Lease A lease whose rental is based on a percentage of the monthly or annual gross sales made on the premises.
Power of Attorney A written instrument authorizing a person, the attorney-in-fact, to act as the agent on behalf of another to the extent indicated in the instrument.
Proprietary Lease A written lease in a cooperative apartment building, between the owner/corporation and the tenant/stockholder, in which the tenant receives the right to occupy a particular unit.
Puffing Exaggerated or superlative comments or opinions not made as representations of fact and thus not grounds for misrepresentation.
Redlining A practice by some lending institutions that restricts the number of loans, or the loan-to-value ratio in certain areas of a community.
Sale-Leaseback A real estate financing technique whereby a property owner sells the property to an investor or lender and, at the same time, leases it back.
Statute of Frauds State law that requires certain contracts to be in writing and signed by the party to be charged (or held) to the agreement in order to be legally enforceable.
Statute of Limitations That law pertaining to the period of time within which certain actions must be brought to court.
Steering The illegal practice of channeling home seekers interested in equivalent properties to particular areas, either to maintain homogeneity of an area or to change the character of an area to create a speculative situation.
Subordination The act of yielding property.
Undue Influence Strong enough persuasion to completely overpower the free will of another and prevent that person from acting intelligently and voluntarily.
Unilateral Contract A contract in which one party makes an obligation to perform without receiving in return any express promise of performance from the other party.
Universal Agent A general agent; one authorized to act on behalf of another.
Void Having no legal force or binding effect; a nullity; not enforceable.
Voidable A contract that appears valid and enforceable on its face but is subject to rescission by one of the parties who acted under a disability.
Acceleration Clause A provision in a mortgage, trust deed, promissory note, or contract for deed (agreement of sale) that, upon occurrence of a specified event, gives the lender the right to call all sums due and payable in advance of the fixed payment date.
Ad Valorem Tax Latin for "according to valuation" usually referring to a type of tax or assessment. Real property tax is an ad valorem tax based on the assessed valuation of the property.
Adjustable Rate Mortgage (ARM) A mortgage with rates and terms that can change.
Adjusted Basis The original cost basis of a property reduced by certain deductions and increased by certain improvement costs.
Alienation The act of transferring ownership, title, or an interest or estate in real property from one person to another.
Appreciation A temporary or permanent increase in the worth or value of property due to due to economic causes.
Assessed Value The value of real property established for the purpose of computing real property taxes.
Assumption of Mortgage The acts of acquiring title to property that has an existing mortgage and agreeing to be personally liable for the terms and conditions of the mortgage, including payments.
Balloon Mortgages A mortgage in which the final payment is substantially larger than the previous installment payments and repays the debt in full; the remaining balance that is due at the maturity of a note or obligation.
Basis The dollar amount that the IRS attributes to an asset for purposes of determining annual depreciation or cost recovery, and gain or loss on the sale of the asset.
Blanket Mortgage A mortgage secured by several properties or a number of lots.
Buydown A financing technique used to reduced the monthly payments for the home-buying borrower during the initial years.
Capitalization A mathematical process for converting net income into an indication of value, commonly used in the income approach to value. The net income of the property is divided by an appropriate (capitalization) rate of return to give the indicated value.
Deed in Lieu of Foreclosure A deed to a lender given by an owner conveying mortgaged property in which the mortgage is in default. It is an alternative to a foreclosure action.
Deed of Trust (Trust Deed) A legal document in which title to property is transferred to a third-party trustee as security for an obligation owed by the trustor (borrower) to the beneficiary (lender).
Defeasance Clause A clause used in leases and mortgages to defeat or cancel a certain right upon the happening of a specified condition.
Deficiency Judgment A judgment against a borrower, endorser, or guarantor for the balance of a debt owed when the security for a loan is insufficient to satisfy the debt. Occurs when a foreclosure sale produces less than the amount to satisfy the debt.
Depreciation A loss in value due to any cause; any condition that adversely affects the value of an improvement. For appraisal purposes it's divided into three classes: physical deterioration, functional obsolescence, and external obsolescence.
Economic Life The estimated period over which an improved property may be profitably utilized so that it yields a return over and above the economic rent attributable to the land itself; the period during which an improvement has value in excess of its salvage value.
Equity That interest or value remaining in property after payment of all liens or other charges on the property.
Escalation Clause A contract provision permitting an adjustment of certain payments, not controlled by either part, to move up or down to cover certain contingencies.
Escrow Closing
Functional Obsolescence A loss in value of an improvement due to functional inadequacies, often caused by age or poor design.
Graduated Payment Mortgage (GPM) A mortgage in which the monthly payment for principal and interest increases by a certain percentage each year for a specific number of years and then levels off for the remaining term of the mortgage.
Hypothecate To pledge specific real or personal property as security for an obligation without surrendering possession of it.
Junior Lien
Like-Kind Exchange
Mill One-tenth of one cent. Some states use a mill rate to compute property taxes and sales taxes.
Millage Rate
Negative Amortization A financing arrangement in which the monthly payments are less than the true amortized amounts and the loan balance increases over the term of the loan rather than decreases; an interest shortage that is added to the unpaid principal.
Net Operating Income (NOI) The balance remaining after deductions from gross receipts all fixed expenses, operating expenses, replacement reserves, and allowance for vacancy and bad debts, but before deducting any debt service, income taxes, or depreciation.
Package Mortgage A method of financing in which the loan that finances the purchase of a home is also secured by personal items such as appliances.
Partial-Release Clause A mortgage provision under which the mortgagee agrees to release certain parcels from the lien of the blanket mortgage upon payment by the mortgagor of a certain sum of money.
PITI Abbreviation for principal, interest, taxes, and insurance, originally found in an all-inclusive mortgage payment.
Point A generic term for a percentage of the principal conventional loan amount; a rate adjustment factor.
Power of Sale A clause in a mortgage authorizing the holder of the mortgage to sell the property at public auction without a judicial action in the event of the borrower's default.
Private Mortgage Insurance (PMI) A special form of insurance designed to permit lenders to increase their loan-to-market-value ratio, often up to 97 percent of the market value of the property.
Purchase-Money Mortgage (PMM) A mortgage given as part of the buyer's consideration for the purchase of real property, and delivered at the same time that the real property is transferred as a simultaneous part of the transaction.
Real Estate Settlement Procedures Act (RESPA) A federal law that ensures that the buyer and the seller in a real estate transaction receive information of all settlement costs when the purchase of a 1-4 family residential dwelling is financed by a federally backed loan
Regulation Z (Truth in Lending Act) The main purpose is to ensure that borrowers and customers in need of consumer credit are given meaningful information with respect to the cost of credit so they can compare the terms available to them. Part of the Consumer Credit Protection Act
Renegotiable Rate Mortgage (RRM) A short-term loan secured by a long-term adjustable rate mortgage, with interest renegotiated at the time of established automatic renewal periods.
Reverse Annuity Mortgage (RAM) A form of mortgage that enables elderly homeowners to borrow against the equity in their homes so they can receive monthly payments needed to help meet living costs.
Secondary Mortgage Market The marketplace where mortgage loans are bought and sold.
Special Assessment A tax or levy customarily imposed against only those specific parcels of realty that will benefit from a proposed public improvement, as opposed to an ad valorem tax.
Subordination Agreement An agreement whereby a holder of a prior superior mortgage agrees to subordinate or give up his priority position to an existing or anticipated future lien.
Subordination
Tax Sale The sale of real property by a governmental unit to satisfy unpaid real property tax liens, frequently followed by a statutory period of redemption.
Usury The act of charging a rate of interest in excess of that permitted by law.
Wraparound Mortgage A method of financing in which the new mortgage is placed in a secondary or subordinate position; the new mortgage includes the first mortgage and whatever additional sums are advanced by the lender.
Created by: medct