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Modern Real Estate

NC Real Estate License

3 events in closing 1)the promises made in the sales contract are fulfilled 2)the mortgage loans funds are distributed to the buyer for use 3)other settlement costs or funds are dispersed
10 reasons for terminating an easement 1)no longer exist 2)easement holder becomes owner 3)release right 4) abandonment 5)non-use of prescription 6) adverse possession 7)demolition of a party wall 8)nonrecordation 9)lawsuit(quiet title) 10)residential easement converted to commercial purposes
3 physical characteristics of real property Immobility, indestructibility, uniqueness
4 economic characteristics of real property Scarcity, Location, Improvements, & Permanence of investment. aka SLIP
5 categories of real property Residential, Commercial, Industrial, Agricultural, Special purpose.
5 characteristics of ownership in severalty 1) One owner only 2) interest 100% 3) one signature only when sold unless a married person - spouse signs to extinguish elective share rights 4) marriage of an owner does not automatically change to tenancy by entireties 5) heir ship rights
a lease is said to have ___ ___ ____ because it is a contract and it conveys an interest in real property. dual legal personality
Abstract of Title A condensed history of a title.
acceleration clause the clause in a mortgage or deed of trust that can be enforced to make the entire debt due immediately if the borrower defaults on an installment payment or another covenant.
acceptance occurs when the offeree signs the offer without making any changes to it, thereby evidencing his acceptance and willingness to be bound by and perform all terms of the offer.
Accretion Acquiring title to additions or improvements to real property as a result of the annexation of fixtures or the accretion of alluvial deposits along the banks of streams.
accrued items unpaid items to be prorated such as unpaid current real estate taxes or interest on an assumed mortgage that are owed by the seller but will be paid later by the buyer.
Ad valorem taxes General real estate taxes that are levied for the general support of the government agency authorized to impose the levy.
adjustable-rate mortgage (ARM) a type of mortgage that generally originates at one rate of interest, with the rate fluctuating up or down during the loan term based on the movement of a published index.
adjusted basis cost of any physical capital improvements that add value to the property or prolong its life (added to the cost basis)
Adverse Possession The Open, Continuous, Exclusive, Adverse, Notorious possession of another's land under a claim of title. Possession for a statutory period of 20 years in North Carolina may be a means of acquiring title.
Aesthetic Zoning An area zoned strictly for aesthetic or appearance considerations
Age Life Method of Depreciation The easiest but least precise way to measure depreciation that uses the effective age of a building & its economic life.
Agency the fiduciary relationship between the principal and the agent.
Agent one who represents the interest of another person.
Agricultural farms, timberland, ranches, and orchards.
Agricultural Fixtures In North Carolina, a fixture attached to leased property by a tenant farmer is considered the landowner's real property rather than the tenant's personal property.
Air Rights The right to use the open space above a property, usually allowing the surface to be used for another purpose.
Alienation Transfer of title, act of transferring property to another.
Alienation Clause Prevents the borrower from letting someone assume the debt without the lender's approval.
ALTA Policy Owner's title insurance policy that protects the owner against title defects not found in public records.
Americans with Disabilities Act (ADA) A Federal Act that facilitates accessibility and mobility by ramp construction, safety rails, wider doors, and other accommodations.
Amortized Loans A loan in which principal as well as interest is payable in periodic installments over the term of the loan.
annual percentage rate (APR) the relationship of all finance charges to the loan amount; must be disclosed to borrowers the Truth-in Lending Act.
Anticipation When value could increase or decrease based on anticipation of some future benefit or detriment affecting the property.
Antitrust laws laws that prohibit monopolies and contracts, combinations, and conspiracies that unreasonable restrain trade.
Appraisal Estimate of the quantity, quality or value of something.
Appurtenance A right, a privilege, or an improvement belonging to , and passing with, the land.
Arms length transaction When the property does NOT sell for an unusually high or low price because of a special relationship between a buyer & a seller; parties are dealing from equal bargaining positions
asbestos Mineral used extensively in insulation; inhaling fibers can cause sever respiratory diseases; particularly dangerous if friable, i.e., easily crumbled
Assessment An official valuation of property for the purpose of establishing assessed value for tax purpose.
assignment Refers to a transfer of rights or duties under a contract to a third party.
Avulsion The sudden tearing away of land, as by earthquake, flood, volcanic action, or the sudden change in the course of a stream. The loss of land may not result in loss of title to the property.
backup offer an offer submitted to the property owner with knowledge that the owner is already under contract; a secondary offer.
balloon payment loan a mortgage loan that includes a final payment that is larger than the required periodic payments because the loan amount was not fully amortized.
baseboards a board around the bottom of a wall perpendicular to the floor; covers gap b/w the floor and wall; decorative
basement story-high space below the first floor; floor is usually concrete slab
basis determines the amount of the gain realized from a sale of real property
beneficiary A lender in a deed of trust loan transaction; the recipient of personal property in a will
bilateral contract A type of contract in which both parties promise to do or refrain from doing something; one promise is exchanged for another. "I will do this and you will do that"
blanket mortgage covers more than one parcel of land and usually is used to finance subdivision developments, though it can be used to finance the purchase of improved properties as well
blockbusting or Panic Peddling The act of encouraging people to sell or rent their homes by claiming that the entry of a protected class will have a negative impact on property values.
boot money or property given to make up any difference in value or equity between two properties in a 1031 exchange
Breach of Contract The violation of any terms or conditions in a contract without legal excuse; for example, failure to make a payment when it is due.
British Thermal Unit (BTU) A measure of heat used in rating the capacity of heating and cooling systems. (BTU)
Broad Form (HO-2) An insurance policy covering buildings and personal property against loss or damage from fire, lighting, removal, windstorm, hail, explosion, riot, smoke, vandalism and theft.
Broker One who acts as an intermediary on behalf of others for a fee or commission; licensed to list, lease, buy, exchange, auction, negotiate or sell interest in real estate for others for a fee
Brokerage the business of bringing buyers and sellers together
Broker-in-charge Required for each brokerage firm and branch office, the full broker responsible for displaying all licenses properly, ensuring advertising is done properly, maintaining the trust account
Buffer Zones Areas such as landscaped parks and playgrounds used to separate and screen residential areas from nonresidential areas
Building Codes NC requirements as to construction standards, with the primary purpose being safety.
Building Permit Written governmental permission for the construction, alteration, or demolition of an improvement, showing compliance with building codes and zoning ordinances.
Bundle of Legal Rights The concept of land ownership that includes ownership of all legal rights to the land, i.e.. Disposition, exclusion, enjoyment, possession and control.
Business Cycle The upward and downward fluctuations in business activities generally characterized by four stages: expansion, recession, depression, and revival
buy down a way to lower the initial interest rate on a mortgage or deed of trust loan; common type is called a 3-2-1
Buyer-agency agreement A principal-agent relationship in which the broker is the agent for the buyer, with fiduciary responsibilities to the buyer. The broker represents the buyer under the law of agency.
Calls Reference to linear measurements and compass directions.
capital gain the taxable profit earned from the sale of real property
capital loss a loss derived from the sale of real property that may be deductible from ordinary taxable income.
Capitalization rate The yield that an investor will demand for the investment of capital. This is the rate of return.
carbon monoxide Colorless, odorless poisonous gas produced as a by-product of incomplete combustion; can be dangerous if not properly ventilate
Caveat emptor let the buyer beware
celling joists attached to the top plate of a wall and carry the weight of the roof
CERCLA Passed in 1980, established Superfund to clean up uncontrolled hazardous waste site and to respond to spills
Certificate of Occupancy Issued upon the satisfactory inspection of a structure; building is fit for occupancy and there are no building code violations
certificate of reasonable value (CRV) a form indicating the appraised value of a property being financed with a VA loan.
Chain of Title The record of ownership of property over a period of time.
Change The fact that no physical or economic condition remains constant. Real estate is subject to natural disasters, changing demands in the market etc.
Civil Rights Act of 1866 Federal Act that prohibited any type of discrimination based on race in the sale or rental of real property.
Client or Principal the person who hires and delegates to the agent through a brokerage contract the responsibility of representing that person best interest.
closing the consummation of the real estate transaction; the point at which ownership of a property is transferred in exchange for the selling price; also called settlement
closing agent the one who usually conducts the proceedings at a closing and calculates the division of income and expenses between the parties.
closing statement A detailed cash accounting of a real estate transaction showing all cash received, all charges and credits made, and all cash paid out in the transaction.
Cloud on the Title A defect on a deed that is frequently cured by a quitclaim deed.
Coinsurance Clause A clause in insurance policies covering real property that requires that the policyholder maintain fire insurance coverage generally equal to at least 80 percent of the property's actual replacement cost.
Commercial Business property, including offices, shopping centers, stores, theaters, hotels and parking facilities.
Commingling when trust funds and the firm/broker's personal/business funds are placed in the same account
Commission compensation provided by the principal to the firm, contingent on the firm successfully performing the service
Comparable (COMP) Property used in an appraisal report that is substantially equivalent to the subject property.
Comparative market analysis (CMA) A comparison of the prices of recently sold homes that are similar to a listing seller's home in terms of location, style, and amenities; an estimate of market value.
compensatory damages Money damages awarded to the injured party to compensate them for the breach of contract, but not to punish the breaching party.
Competition The principle that states that excess profits generate competition.
components of an ARM loan 1)Note rate 2)Index 3)Margin 4)Interest rate caps 5)Payment Cap 6)Adjustment Period 7)Conversion option
Condemnation The process by which the power of eminent domain is exercised.
Condition It limits coverage of a specified property in an insurance policy.
Conditional-use Permit Granted to a property owner who wishes to use property in a special way that is in the public interest such as a church or hospital.
Condominium Ownership Do not own land underneath unit; can stack vertically; 7 days to cancel; own "paint to paint" or enclosed airspace; common areas owned by all members as tenants in common
conforming loan a standardized conventional loan that meets Fannie Mae or Freddie Mac's requirements; made by for-profit lenders and are not insured by the federal gov't to the most creditworthy borrowers.
Conformity the appraisal principle that holds that the greater the similarity among properties in an area, the better they will hold their value.
Conner Act NC law that requires many types of real estate documents to be recorded for protection against claims from third parties.
consequential damages Special damages that might be obtained if the damages upon breach were reasonably foreseeable to the breaching party at the time of making the contract.
Consideration That received by the grantor in exchange for a deed. Something of value that induces a person to enter into a legally enforceable contract.
construction loan a loan made to finance the construction of improvements on real estate--homes, apartments, office buildings
constructive eviction the doctrine that gives the tenant the right to cancel the remainder of the lease and vacate the premises w/o penalty if the landlord fails to keep the premises fit.
Constructive Notice Notice given by way of making ownership part of public record (by recording conveyances of real property).
Contingency A provision in a contract that requires a certain act to be done or a certain event to occur before the contract becomes building; a condition of the contract.
Contract A legally enforceable promise or set of promises between legally competent parties.
Contribution The principle that affirms that the value of any component of a property is defined by what its addition contributes to the value of the whole or what its absence detracts from that value.
conventional loan a loan that is not backed by a gov't agency.; lender bears all the risk in the event of default
Cooperation brokers those who act as subagents of the principal
Cooperative Owns a share of stock in the corporation and has a proprietary lease to the unit
Cost Approach the process of estimating the value of a property by adding the appraiser's estimate of the reproduction or replacement cost of the building, less depreciation to the estimated land value.
cost basis the owner's initial cost for the real estate including closing expenses
counteroffer An attempt by the offeree to change any of the terms proposed by the offeror
Covenant Warranties
covenant of quiet enjoyment Under this covenant, the lessor guarantees that the lessee may take possession of the leased premises and that no one, including the landlord, will interfere with the tenant's possession or use of the property.
crawl space the space between the ground surface and the first floor; frequently found in homes w/o basements that are not built on a slab foundation
curable physical deterioration a reduction in a property's value resulting from a decline in physical condition; repairs that are physically possible and economically feasible and will result in an increase in appraised value. Ex: Roof replacement, painting
Customer the third party for whom some level of service is provided by an agent of another party, but who is not represented by the agent
debt service payment principal and interest loan payment
Declaration of Restrictive Covenants A declaration of limitations established by a developer.
Deductible Loss not covered by the insurer.
Deed A written instrument by which an owner of real estate intentionally conveys right, title, or interest in the parcel of real estate to another.
Deed in lieu of Foreclosure Deed that is used when a borrower has defaulted on the mortgage loan and wants to avoid a foreclosure action.
Deed of gift Deed used when a grantor conveys property as a gift; must be recorded within two years or it becomes void.
Deed of Release a deed used to release a parcel of property from a mortgage or deed of trust lien when the real estate loan has been paid in full.
deed of trust the document that pledges the property to the lender as security or collateral for a debt; also called mortgage.
Deed restrictions Encumbrances on real property. AKA: covenants, conditions, restrictions. A private agreement placed in public record that affect the use of the land.
deficiency judgment a personal judgment levied against the borrower when a foreclosure sale does not produce sufficient funds to pay the mortgage debt in full; a general lien
Delivery and Acceptance Actual delivery of the deed by the grantor and either actual or implied acceptance by the grantee.
Demand The need or desire for possession or ownership backed by the financial means to satisfy that need.
Department of Housing and Urban Development (HUD) A federal cabinet dept. active in national housing programs; offers programs such h as urban renewal, public housing, model cities, rehabilitation loans, FHA subsidies, fair housing enforcement
depreciation a loss of value in property due to any cause; an expense deduction for tax purposes taken over the period of ownership of income property
Designated duel agency used when a transaction is an in-house sale (when one agent from firm X represents the buyer and another agent from firm X represents the seller)
direct reduction loan a loan that requires a fixed amount of principal to be paid in each payment with the amount applied to interest varying as the balance is reduced
discount point interest paid in advance; one point equals 1% of the loan amount for the borrower and increases the yield for the investor approximately 1/8%.
Dominant tenement The tract that benefits from an easement.
Dual agency when the broker/firm represents the buyer and the seller in the same transaction
due diligence period The time a buyer has to have property inspected, title examined, and review any leases to determine if the property meets his or her needs.
due-on-sale clause provides that on sale of the property by the borrower to a buyer who wants to assume the loan, the lender has the choice of either declaring the entire debt to be due and payable immediately or permitting the buyer to assume the loan
Earned money deposit Money deposited by a buyer under the terms of a contract, to be forfeited if the buyer defaults but applied to the purchase price if the sale is closed.
Easement The right to use the land of another for a particular purpose.
Easement appurtenant An easement that is annexed to the ownership of one parcel of land and used for the benefit of another parcel of land. The easement "runs with the land"
Easement by condemnation An easement acquired for a public purpose through the power of eminent domain.
Easement by necessity AKA easement by implication of law, because all owners must have rights of ingress to and egress from their land.
Easement by prescription When a claimant has made use of another's land for a certain period of time. Use must be continuous, exclusive, and without the owners approval. (20 years in NC)
Easement in gross A personal interest in or right to use the land of another. The right to use is not attached to any ownership. (personal or commercial)
eave the overhand of a sloping roof that extends beyond the walls of the house.
Economic Life The period during which property is expected to remain useful for its original intended purpose.
Economic obsolescence (incurable) Caused by factors outside the subject property & is not curable. ex: proximity to a polluting plant
electromagnetic fields Generated by movement of electrical currents; prolonged exposure may cause cancer; major concern for property owners near high voltage line
Emblements or Fructus Industriales Growing crops, such as grapes and corn, that are produced annually through labor and industry; also called fructus industriales. Usually considered to be personal property,
Eminent Domain Power of certain agencies to take private property for public use through a suit for condemnation.
employment contract In real estate, generally a listing agreement, a buyer agency agreement or a management agreement (a document evidencing formal employment between principal and agent).
encapsulation Sealing off of disintegrating asbestos or chipping and peeling lead based paint; may be preferable to removal; still leaves hazard behind
Encroachment When an improvement or any portion of an improvement, such as a building, a fence, or a driveway illegally extends beyond the land of its owner and covers some land of an adjoining owner/street/alley.
Encumbrance A claim, charge, or liability that attaches to and is binding on real estate.
Endorsement In an insurance policy, coverage added to general policy; a rider.
Equal Credit Opportunity Act Prohibits creditors from discrimination on the basis of race, color, religion, national origin, sex, marital status, age, and receipt of public assistance.
equilibrium The point where supply and demand is balanced.
equitable title the right to use and possess the property as if one owns it and to demand the return of the legal title when the debt is repaid.
Equity The interest or value that an owner has in property over and above any indebtedness.
equity of redemption the right of a borrower in default on a mortgage loan to reclaim the forfeited property prior to the foreclosure sale through payment in full of all debt and associated costs.
Erosion The gradual wearing away of land by water, wind, or other natural forces; the diminishing of property by the elements may cause loss of ownership.
Escheat The reversion of property to the state in cases where a person dies intestate.
essential elements of a note 1)term 2)promise to pay 3)signature of the borrower(s)
essentials of a valid lease 1. Mutual agreement 2. Consideration 3. Capacity to Contract 4. Legal objectives
estate at sufferance an estate that arises when a tenant who lawfully came into possession of real property continues, after the tenant's rights have expired, to hold possession of the premises without the consent of the landlord; lowest estate in real estate.
estate at will an estate that gives the tenant the right to posses property with the consent of the landlord of a term of unspecified or uncertain duration.
estate for years a leasehold estate that continues for a definite period of time, whether for years, months, weeks, or days; automatically terminates at the end of the lease period.
estate from period to period created when the landlord and tenant enter into an agreement that continues for a specific period, being automatically renewed for an indefinite time without a specific ending date; automatically renews.
Estover A necessity allowed by law; for example, the right of a life tenant to use some of the property's resources to provide for needed repairs.
Every real estate transaction must be reported to the ___ by the closing agent. IRS
Excise Tax A tax that is based on the sales price of the property.
Exclusion Something that is not covered for loss in an insurance policy.
exclusive-agency listing One broker is specifically authorized to act as the exclusive agent of the principal; broker receives a commission if any broker is procuring cause; seller can sell w/o obligation.
exclusive-right-to-sell listing One broker is appointed as sole agent of the seller and is given the exclusive right, or authorization, to represent the property in question
executed contract A contract in which all parties have fulfilled their promises.
Executory Contract A contract under which something remains to be done by one or more of the parties.
Exemptions to the Federal Fair Housing Act (1) The home is owned by an individual (not 3 or more/not sell more than 1 every 2 years.
Exemptions to the Federal Fair Housing Act (2) The rental of rooms or units is exempt in an owner-occupied one-family to four-family dwelling.
Exemptions to the Federal Fair Housing Act (3) Dwelling units owned by religious organizations may be restricted to people of the same religion if membership in the organization is not restricted on the basis of protected class.
Express Agreement/Contract An oral or written contract in which the parties state the contract's terms and express their intentions in words.
extender clause or Override Clause A clause in a listing contract that says the listing broker is entitled to commission for a time period after the listing expires if the property is sold to a prospect that the broker initially introduced to the client during the listing term.
Extra-territorial Jurisdictions (ETJs) Areas outside incorporated limits that are subject to the zoning restrictions of a municipality
Fair Credit Reporting Act federal law giving consumers the right to view and correct their credit information
Familial Status refers to the presence of one or more individuals who have not reached the age of 18 and who live with either a parent or legal guardian. The term also includes a woman who is pregnant.
Fannie Mae a quasi-government agency established to purchase any kind of mortgage loans in the secondary mortgage market from the primary lenders.
fascia board a flat strip of wood or metal that encloses the ends of the rafters; gutters are usually attached to it.
Federal Emergency Management Agency (FEMA) Agency responsible for designating flood hazard areas bordering rivers and streams.
Federal Fair Housing Act Federal law that prohibits discrimination based on familial status, race, sex, handicap, color, religion, national origin. (FRESH CORN)
Federal Reserve System The country's central banking system, which controls the nation's monetary policy by regulating the supply of money and interest rates
Fee Simple Absolute The maximum possible estate in real property; most complete and absolute ownership; indefinite in duration, freely transferable and inheritable.
Fee Simple Defeasible or defeasible fee estate An estate in which the holder has a fee simple title that may be terminated upon the occurrence or nonoccurrence of a specified event. Two categories of defeasible fee estates exist: fee simple determinable and fee simple on condition subsequent.
Fee Simple Determinable An estate in real estate that continues "so long as" a prescribed land use continues. Estate ends automatically upon the termination of the prescribed use; no lawsuit is necessary for reversion.
Fee Simple with Condition Subsequent An estate in real estate that prohibits a specific condition on the property. Grantor has the right to re-enter the property and reclaim ownership through legal proceedings.
Fee-for-service Arrangement where consumer asks licensee to perform specific real estate services for a set fee; unbundling of services; limited service firms.
FHA-insured loan a loan insured by the FHA and made by an approved private lender according to FHA's regulations
Fiduciary a relationship in which the agent is placed in the position of trust and confidence to the principal.
First Substantial Contact A flexible moment in time when conversation between a licensee an a consumer begins to address confidential needs, desires and abilities; latest moment to legally disclose agency choices to a consumer.
fixed rate-level payment mortgage The most popular repayment plan; both the interest rate and the debt service amount are set for the duration of the loan
fixed rental lease the tenant's obligation to pay a fixed rental amount, and the landlord pays all taxes, insurance premiums, mortgage payments, repair costs; also called a gross lease.
Fixture An item of personal property that has been converted to real property by being permanently affixed to the realty.
Flood Hazard Area Areas designated by FEMA as being prone to flooding.
floor joists a horizontal board laid on edge, resting on the beams that provide the main support for the floor.
footings a concrete support under a foundation, chimney. or column that usually rests on solid ground and is wider than the structure being supported
Foreclosure Process in which property is taken by a creditor for nonpayment of debt secured by real property.
Foreshore Land at the coast between average high tide and average low tide this is owned by the state of North Carolina.
foundation wall the masonry or concrete wall below ground level that serves as the main support for the frame structure; form the side walls of the basement or crawlspace.
frame the wooden skeleton of the house consisting of the floors, walls, ceilings, and roof
Freddie Mac a corporation established to purchase primarily conventional mortgage loans in the secondary market
Freehold Estates An estate in land in which ownership is for an indeterminate length of time, in contrast to a leasehold estate.
frieze board a wooden board fastened at the top of the exterior wall under the eave soffit to prevent penetration of weather elements
Fructus Naturales Plants that do not require annual cultivation and are considered real property.
fully amortized fixed-rate mortgage a mortgage that requires the mortgagor to pay a constant amount, usually monthly, that will completely pay off the loan amount with the last equal payment.
Functional obsolescence curable Physical or design features that are no longer considered desirable by property buyers but can be replaced or redesigned at low cost. ex: changing fixtures
Functional obsolescence incurable Undesirable physical or design features that can't be remedied easily are considered functionally obsolete. ex: home w/ 5 bedrooms & 1 bath
Future Interests A person's present right to an interest in real property that will not result in possession or enjoyment until someone in the future, such as a reversion or right or reentry.
General agent one who represents the principal in a broad range of matters related to a particular business or activity
General lien This type of lien affects all the property of a debtor, both real and personal, rather than a specific parcel of real property
General Warranty Deed This deed offers greater protection than any other deed, is the best deed for the grantee, but gives the grantor the greatest degree of liability.
Ginnie Mae a gov't agency under HUD that sells mortgage-backed securities that are backed by pools of FHA and VA loans
girder a heavy wooden or steel beam supporting the floor joists and providing the main horizontal support for the floor
Good Faith Estimate (GFE) gives an estimate of your settlement charges and loan terms if you are approved for your loan.
graduate lease a lease that provides for increases in rent to occur at set future dates; often used in the rental of office space for multiple-year terms. Also called a step-up lease.
graduated payment mortgage (GPM) a flexible payment plan that allows a mortgagor to make lower monthly payments for the first few years of the loan and larger payments for the remainder of the term.
Grantee The one who receives title
Grantor The owner
Grating Clause Words of conveyance
Gross Lease A lease of property under which a landlord pays all property charges regularly incurred through ownership, such as repairs, taxes, insurance, and operating expenses. Most residential leases are gross leases; also called fixed rental lease.
gross rent multiplier (GRM) a figure used as a multiplier of the gross monthly income of a property to produce an estimate of the property's value
ground lease when a land owner leases land to a tenant who agrees to erect a building on the land.
groundwater Water that exists under earth's surface in tiny spaces or crevices in geological formations; if contaminated, threatens source of clean drinking water
growing-equity mortgage (GEM) a loan in which the monthly payments increase annually, with the increased amount being used to reduce directly the principal balance outstanding and thus shorten the overall term of the loan.
header the extra thick framing over doors and windows to bear the weight of the building above the opening
heterogeneity The quality or state of being heterogeneous.
Highest and best use The possible use of a property that would produce the greatest net income and thereby develop the highest value
Historic Preservation Zoning A zone created to preserve historic buildings and sites that are irreplaceable.
holdover tenant a person who retains possession of leased property after the lease has expired; the landlord may continue to accept rent or start eviction procedures.
home equity loan a source of funds for homeowners who wish to finance the purchase of expensive items; consolidate existing installment loans on credit card debt; or pay for medical, educational, home improvement, or other expenses
Homeowner's Protection Act states that a borrower with good payment history will have PMI canceled when he or she has built up equity equal to 20% of purchase price or appraised value.
Housing for older persons Certain properties can be restricted to occupancy by elderly persons. HOPA--Housing for Older Persons Act of 1995. 62 or older or housing occupied by at least one person 55 or older per unit.
HUD Department of Housing and Urban Development. Enforces the Federal Fair Housing Act.
HUD-1 Uniform Settlement Statement; the standard closing statement form required to be given to the borrower, lender, and seller at or before settlement by the closing agent in a transaction covered under RESPA.
hypothecation the act of pledging real property as security for payment of a loan without giving up possession of the property.
Implied agreement when principal and agent, without formally agreeing to the agency, act as if one exists.
implied contract A type of contract in which the agreement of the parties is demonstrated by their actions or conduct.
implied warranty of habitability the primary duty of the land lord to supply fit and habitable premises to the tenant.
Income capitalization approach to value Estimate based on the present worth of the future rights to income.
Incurable physical deterioration repairs to major structural components of a building, which deteriorate at different rates, may not be economically feasible. Ex: load-bearing walls and foundations
index lease a lease that allows rent to be increased or decreased periodically, based on changes in a stipulated index, such as the government cost-of living index or some other named index.
Industrial warehouses, factories, land in industrial districts, and power plants.
Informal description Use of a street address to describe property.
In-house sale a sale in which both the selling agent and the listing agent are from the same firm.
installment land contract also known as a "contract for deed", it is seller financing whereby the purchase price is paid in periodic installments by purchaser. The seller retains legal ownership, while the buyer secures possession of and an equitable interest in the property.
installment sale A transaction in which the sales price is paid in two or more installments over two or more years. If the sale meets certain requirements, a taxpayer can postpone reporting such income until future years.
Instead of using contingencies in an offer to purchase and contract, NC uses _______. due diligence
insulation pieces of plasterboard, asbestos sheeting, compressed wood-wool, fiberboard, or other material placed between walls and ceilings to protect the interior from heat loss.
interest a charge for the use of borrowed money
interest-only mortgage also called a "term loan", it only calls for periodic payments of interest.
Interstate When a person dies without having left a will.
Interstate Land Sales Full Disclosure Act Law that requires those engaged in the interstate sale or leasing of subdivision lots to file a statement of record and register the details of the land with HUD
Joint Tenancy A concurrent form of ownership of real estate between two or more parties who have been named in one conveyance as joint tenants. Ownership interest may be unequal. Right of survivorship is not automatic in NC but can be added by an attorney.
Judgments A decree issued by a court.
judicial foreclosure the form of foreclosure used in lien theory states; court process
jumbo loan a residential mortgage loan in excess of acceptable loan amounts for purchase by Fannie Mae or Freddie Mac; also called nonconforming loans
Laches Loss of a right through undue delay or failure to assert it.
Land The earth's surface, extending downward o the center of the earth and upward infinitely into space, including things permanently attached by nature, such as trees and water
landfill An enormous hole to store hazardous materials, lined to prevent leakage of waste materials; includes underground drainage pipes to monitor for leaks and leaching
Lateral Support The support a parcel of land receives from adjacent land; a neighbor's duty to support adjoining land in its natural state.
law of negligence holds that the landlord is liable for injuries that occur in common areas (hallways, stairways, elevators, sidewalks, and parking lots) when the landlord negligently failed to maintain safe conditions in those areas.
Lead Based Paint hazard Reduction Act a federal law that requires sellers/landlords to disclose the known presence of lead-based paint in residential property to potential buyers/tenants via the required disclosure addendum to sales contracts or leases
lead poisoning poisoning caused by an elevated level of lead in the human body that can result in damage to the brain, nervous system, kidneys, and blood.
lease a conveyance from a landlord (an owner of real estate), to a tenant that transfers the right of possession and use of the owner's property for a specified period of time.
leasehold estate an estate in land that is generally considered personal property, because no ownership of the real property has changed hands.
Legal description the exact way of describing real estate in a contract, deed, mortgage or another document.
Legally Competent Parties People who are recognized by law as being able to contract with others; those of legal age and sound mind; a requirement of a legal enforceable contract.
Legally of Object The purpose of a legally enforceable contract cannot be for illegal actions or acts against public policy.
Lien A charge against property that provides security for a debt or an obligation of the property owner.
lien theory an older, traditional approach in mortgaging property where a two-party mortgage instrument is used as security for the debt; the borrower retains both legal and equitable title to the property.
Life Estate An interest in real or personal property that is limited in duration to the lifetime of its owner or some other designated person or persons.
Life Tenant A person in possession of a life estate.
like-kind properties a tax term used in exchanges; property may be exchanged for life in kind property and the tax postponed (does not refer to the physical similarity of the properties).
liquidated damages The amount of money that will compensate the injured party for breach, which the parties agree to at the time they enter into the contract.
Lis Pendens A notice that there is and action or lawsuit pending that may adversely affect the title.
listing agreement An employment contract between a property owner and a real estate firm/broker by which the broker is employed to find a ready, willing and able buyer for the owner's real estate on the owner's terms, for which service the owner agrees to pay a commission.
Littoral Rights A landowner's claim to use water in large navigable lakes and oceans adjacent to the property. The ownership rights to land bordering these bodies of water up to the average high-water mark.
LOADS the specific duties of the principal: loyalty, obedience, accounting, disclosure of information, and skill, care, and diligence
loan origination fee an administrative fee charged to the borrower by the lender for making a mortgage loan; usually computed as a % of the loan amount.
loan-to-value ratio (LTV) ratio of debt to value of the property
long-term capital gain profits from assets owned longer than 12 months; taxed at a lower rate than ordinary income
Machinery Act Regulates standards for real property taxation, standards for tax assessment and appraisal.
mailbox rule A rule of law stating that once written acceptance is placed in control of the mailing service, it is considered accepted--not when the acceptance is actually received by the offeror.
Manufactured Home A dwelling(mobile home) built under HUD regulations with a permanent chassis. Considered personal property until moving hitch, wheels and axles are removed, the unit is attached to a permanent foundation on land, and an affidavit is filed with the DMV.
Market A place where goods can be bought and sold and establish value
Marketable Title A title that is free of liens and encumbrances, defects, and protects purchaser from hazard of litigation and is convincible legally significant.
Marketable Title Act Provides that if a chain of title can be traced back for 30 years and no other claim has been recorded during that time the title become a marketable title.
Mass appraisal An appraisal technique that determines assessed value for all lands in a given area by applying an overall percentage increase of decrease.
Master Plan The primary method by which local governments recognize development goals.
Material fact any fact that is important or relevant to the issue at hand; mandatory disclosure by all agents in a transaction to all parties of the transaction
Mechanics lien A specific, involuntary lien filed when property owner has not paid for work of contractors, laborers, and others.
Metes-and-bounds description Uses boundaries and measurements of the land.
mitigation systems to limit the source of environmental hazards and reduce their effect on humans and the surrounding environment
MLS Multiple listing services
Modular Home A dwelling consisting of a series of rooms or units built off-site according to the NC State Building Code; is considered real property as soon as it assembled on the land. May be multi-storied
Monuments Fixed objects used to establish real estate boundaries. Ex.: stones, trees, lakes, streets, markers placed by surveyors.
Mortgage A conditional transfer or pledge of real estate as security for the payment of a debt. Also the document creating a mortgage lien in a lien theory state.
mortgage servicing disclosure statement a statement that tells the borrower whether the lender intends to service the loan or to transfer it to another lender.
Ms. Murphy's Law states that if the dwelling has four or less units and the owner lives in one of the units, it is exempt from the Fair Housing Act.
Mutual assent A deliberate agreement between parties offer and acceptance; "meeting of the minds." A requirement of a legally enforceable contract.
NC Coastal Area Management Act law designed to protect, preserve, and give management guidelines in coastal areas of the state and places a severe limitation on developments
NC Dredge and Fill Act requires property owners to obtain a permit from the Coastal Resources Commission before participating in any dredging or filling that may affect vegetation or aquatic conditions in NC waters or marshlands
NC Interstate Succession Act The State law of descent that dictates distribution of the real and personal property of the deceased that died without a will.
NC Leaking Petroleum Underground Storage Tank Cleanup Act law used to regulate underground storage tanks' discharge of any hazardous substance, including gas and oil.
NC Sediment Pollution Control Act created to handle problems that occur as a result of sedimentation in state waters
negative amortization an increase in the loan balance.
Negligent misrepresentation when agents unintentionally misinform a buyer, seller, tenant, or landlord concerning a material fact because they do not have actual knowledge of the fact, b/c they have incorrect information, or b/c of a mistake by the agent.
Negligent omission takes place when agents do not have actual knowledge of a material fact but should reasonably have known of such a fact.
negotiable instrument a written promise or order to pay a specific sum of money that may be transferred by endorsement or delivery. The transferee then has the original payee's right to payment.
net lease provides that in addition to the rent, the tenant pays all or some of the property charges such as maintenance, property taxes, and insurance; sometimes called a triple net lease.
net listing A listing based on the net price the seller will receive if the property is sold; broker can offer property at highest price to increase the commission.
Net operating income When you deduct the annual operating expenses of the real estate from the effective gross income.
Nonconforming Use Real property uses that were legally established before adoption of current zoning plan, but have been "grandfathered".
Nonfreehold (leasehold) Estates A tenant's right to occupy real estate during the term of a lease, generally considered a personal property interest; nonfreehold estate.
Nonhomogeneity A lack of uniformity; dissimilarity; heterogeneity. Because no two parcels of land are exactly alike, real estate is said to be nonhomogenity
nonjudicial foreclosure a foreclosure under power of sale in which the deed of trust does not have to be foreclosed through a court action.
North Carolina Condominium Act of 1986 Specifies that a condo is created and established when the developer executes and records a declaration of its creation in the county where the property is located
North Carolina human Relations Commission The first place to file a complaint by those who have been injured by discriminatory housing acts.
North Carolina Vacation Rental Act modeled after the Residential Agreements Act, it establishes uniform rules for landlords, tenants, and their agents involved in the handling of short-term rentals under 90 days in length where tenant has primary residence elsewhere.
Novation Substituting a new contract for an old one or substituting new parties to an existing contract.
Octennial reappraisal The reappraisal process based on a statutory schedule of every eight years.
Offer to Purchase and Contract In NC, the most common title for a real estate sales contract
Office of Fair Housing and Equal Opportunity (OFHEO) Administers the Federal Fair Housing Act under the direction of the Secretary of HUD.
one and a half month's rent maximum amount of security deposit if tenancy is from month to month.
open listing A listing agreement under which the broker's commission is contingent on the broker personally producing a ready, willing, and able buyer before the property is sold by the seller or another broker.
open-end mortgage a line of credit allowing the mortgagee to make additional future advances of funds to the mortgagor, and are generally set up as home equity loans.
option to purchase an agreement b/w property owner and possible buyer, secured by the payment of an option fee, to buy or not to buy property within a specific time period at negotiated terms.
Oral buyer agency an agency option a firm may use when the consumer is willing to commit to an exclusive written buyer agency relationship.
Overlay District A type of zoning that is superimposed over another type of zoning.
package loan a loan that includes not only the real estate, but also all fixtures and appliances installed on the premises; has been used extensively in financing furnished condo units
Parol evidence rule A rule of evidence providing that a written agreement is the final expression of the agreement of the parties, not to be varied or contradicted by prior or contemporaneous oral or written negotiations.
partially amortized fixed-rate mortgage a loan in which the monthly principal and interest payments are a constant amount, but that payment amount is not sufficient to completely pay off the loan within the loan term; balloon payment due at maturity
percentage lease a lease in which the rent is based on a percentage of the gross or net income received by a tenant doing business on the leased property.
Personal Property or Personality Items, called chattels, that do not fit into the definition of real property; movable objects like; furniture, clothing, jewelry, money, vehicles, etc.
pier a column, usually of masonry block or steel-reinforced concrete; bears wall weight.
pitch the slope of a roof measured as the vertical distance in inches (rise) divided by the horizontal distance in feet (run)
PITI Principal, Interest, Taxes, and Insurance
Planned Unit Development (PUD) A planned combination of diverse land uses, such as housing, recreation, and shopping, in one contained development or subdivision.
Plat Map A map of a subdivision indicating the location and boundaries of individual properties. Generally shows lots, blocks, easements, streets, floodplains, etc. Usually requires official approval before recordation.
Point of beginning (POB) The point at which a metes and bounds description begins.
Police Power The state's inherent authority to create and adopt regulations necessary to protect the public health, safety and general welfare of the citizenry.
power of sale foreclosure The form of foreclosure used in a title theory state; also called a nonjudicial foreclosure.
Predatory Lending Act imposes restrictions and limitations on high-cost loans; revises permissible fees and charges on certain loans; prohibits unfair or deceptive practices by lenders
Premium The consideration for an insurance policy.
prepaid items expenses that have already been paid by the seller prior to closing and the buyer needs to rebate that portion to the seller; generally real estate taxes or HOA dues.
prepayment penalty clause included in a promissory note requiring the borrower to pay a penalty against the unearned portion of the interest for any payments made ahead of schedule.
Price-fixing the practice of setting prices for products or services rather than letting competition on the open market establish them.
primary mortgage market made up of lenders that originate mortgage loans
principal money borrowed
Priority of liens Property taxes and special assessments, then in order of time and date files (pure race), except mechanics lien, which dates to date labor began or materials were first provided.
private mortgage insurance (PMI) insurance provided by a private carrier that protects a lender against a loss in the event of a foreclosure and deficiency
privity of contract rights arising from the contract itself
privity of estate rights arising from traditional property law
procuring cause The effort that began a chain of events that brings about the desired result. Under an open listing, the broker who is the procuring cause of the sale receives the commission.
promissory note written promise to repay a debt in definite installments with interest.
Property Insurance or Casualty Insurance A policy that provides property owner coverage for the basic structure on that property.
property management agreement An agency contract between the owner of income property and a management firm or an individual property manager that outlines the scope of the manager's authority.
property manager someone who preserves the value of an investment property while generating income as an agent for the owner.
Property Report A report furnished to prospective buyers contain essential information about a development contain 25 or more lots.
Proprietary Lease A lease given by the corporation that owns a cooperative apartment building to the shareholder for the shareholder's right as a tenant to an individual apartment.
prorations divisions of financial responsibility between the buyer and seller for such items as loan interest, taxes, rents, and fuel or utility bills.
Protected Classes Race, Color, Religion, National Origin, Sex, Handicapped, Familial Status
protection agreement Used to guarantee a broker a commission if that particular property is sold to a specific buyer.
Provisional Broker A real estate licensee who performs real estate activities under the supervision of a licensed real estate broker-in-charge. Must complete post-licensing courses to remove the provisional license status
puffing exaggerated comments or opinions; "This house has the best view in town!"
Pur Autre Vie For the life of another. A life estate pur autre vie is a life estate that is measured by the life of a person other than the grantee.
purchase-money mortgage a note secured by a mortgage or deed of trust given by a buyer as a borrower, to a seller, as lender, as part of the purchase price of the real estate.
Quantity survey method Estimate based on the quantities of raw materials needed to replace the subject structure as well as of the current price of such materials & their installation costs.
Quick Take A method of condemnation in which title and possession of private property can immediately be transferred to a public authority.
Quitclaim Deed A non-warranty deed that provides the grantee with the least protection of any deed. It carries no covenant or warranties and conveys only such interest, if any, that the grantor my have when the deed is delivered.
radon Radioactive odorless, tasteless gas; with long term exposure may cause lung cancer
rafter one of a series of sloping beams that extends from the center ridge board to an exterior wall and provides the main support for the roof.
Ratification establishing an agency relationship by performing any act that accepts the conduct of the agent as that of an agent.
ready, willing, and able buyer A buyer who is financially qualified, prepared to buy on seller's terms, and ready to take positive steps toward consummation of the transaction by showing willingness to enter into an enforceable contract.
Real Estate Land; a portion of the earth's surface extending downward to the center of the earth and upward infinitely into space, including all things permanently attached to it, whether naturally or artificially
Real estate agents are obligated by licensing law and Commission rules to disclose all offers to sellers immediately, but no later than ___ days from the date of the offer five
Real Estate Procedures Act Federal law that requires federally chartered or insured lenders or provide buyers and sellers of 1-4 family homes, coops, condos with info on all settlement costs
Real Estate Settlement Procedures Act (RESPA) federal law that ensures that residential buyers and sellers receive full disclosure of all settlement charges; mandates HUD booklet about closing costs, a good-faith estimate of closing costs, and hUD-1 closing statement.
Real Property defined as the land, everything that is permanently attached to the land (or goes with) the land
reality of consent If misrepresentation, fraud, mistake of fact, undue influence or duress are absent in contract formation, good contract is formed.
reconciliation the final step in the appraisal process, in which the appraiser combines the estimates of value received from the sales comparison, cost, and income capitalization approaches to arrive at a final estimate of market value for the subject property.
Recording Making documents that affect property ownership readily available as matters of public record.
Redlining Illegal practice by lending institutions to deny or discourage loan application in an area based on its racial composition or deterioration.
Reference to a recorded deed A reference to a publicly recorded document, usually an earlier deed. The referenced document typically contains a legal description of the property.
Reference to a recorded plat A method of land description that uses lot and block numbers.
Regulation Z implements the Truth in Lending Act requiring credit institutions to inform borrowers of the true cost of obtaining credit
Reliction Gradual recession of water which uncovers land that usually belongs to the riparian owner.
Remainder Interest A future interest in real estate created by the grantor for some third party that will be enjoyed after the termination of a prior estate, such as when an owner conveys a life estate to one party and the remainder to another.
Remainderman One entitled to receive a remainder interest in some estate sometime in the future.
Replacement cost The construction cost, at current prices and using modern materials & methodology, of a property that is not necessarily an exact duplicate but serves the same purpose or function as the original property.
Reproduction cost The dollar amount required to construct an exact duplicate of the subject building at current prices. This is mostly used when appraising historical homes.
rescission The legal remedy of canceling, terminating, or annulling a contract and restoring the parties to their original positions.
Residential all property used for housing, from acreage to small city lots. both single family & multifamily, in urban, suburban, and rural areas.
Residential Rentals Agreements Act this act governs residential leases and landlord-tenant relationships; its purpose is to ensure that only habitable residential unties are rented. Does not apply to hotels, motels, rent-free or commercial properties.
Restrictive Covenant or Protective Covenant Private agreements usually imposed by the owner when property is sold that limits the way the real estate ownership may be used; frequently used by owner/developer to maintain specific standards in a subdivision. The covenants are appurtenant.
retainer fee Typically a small amount of compensation, usually paid up front by the buyer/client when the buyer-agency agreement is established.
retaliatory eviction illegal eviction of a tenant that has exercised protected rights under the law.
reverse-annuity mortgage (RAM) allows senior citizens on fixed incomes to utilize the equity buildup in their homes by receiving regular monthly payments from the bank
Reversionary Interest A future estate that the grantor holds while granting a life estate to another person.
ridge board a heavy horizontal board, set on edge at the apex of the roof, to which the rafters are attached
right of first refusal created when a property owner promises to give the contracting party the first chance to buy the property or to match the bona fide offer of a third party, should the owner decide to sell.
Right of Survivorship or Tenancy by the Entirety A concurrent form of ownership reserved for property owned by husband and wife. Right of survivorship is mandatory; making the surviving spouse owner in severalty immediately upon the death of a spouse.
Riparian Rights An owner's rights in land that borders on or includes a steam, river, or lake. These rights include access to and use of the water.
roofing felt sheets of flat, heavy material place on top of the roof boards to insulate and water proof the roof
R-value the insulation value of materials
sale-and-leaseback used as a means of financing large commercial or industrial plants; a transaction in which an owner sells improved property and, as part of the same transaction, signs a long-term lease to remain in possession of the premises.
Sales comparison approach AKA the market data approach. When an estimate of value is obtained by comparing the subject property with recently sold comparable properties.
satisfaction of mortgage a document acknowledging the full repayment of a mortgage debt
Scarcity A finite supply
secondary mortgage market a market for the purchase and sale of existing mortgages
Self-help eviction Illegal eviction practices used by landlords instead of lawful use of summary ejectment.
Servient tenement The tract over which an easement runs.
Severalty The ownership of real property by only one person or entity; referred to as closing.
shared-appreciation mortgage (SAM) a mortgage loan in which the lender, in exchange for a loan with a lower interest rate, participates in the profits (if any) the borrower receives when the property is eventually sold.
sheathing insulating material that is applied to the wall framing; then siding is applied on top of it
shingles exterior roofing material frequently made of fiberglass, asphalt, or wood
Short sale A lender allows a borrower in default to sell the mortgage property for less money than necessary to satisfy the load to avoid the delay and expense of a foreclosure sale, the IRS frequently consider the forgiven amount taxable income for the borrower.
short-term capital gain profits from assets owned for 12 months or less
siding boards nailed horizontally to the vertical studs, with or without intervening sheathing, to form the exposed surface of the outside walls of the building; can be made of wood, metal, or masonry sheets.
sill the lowest horizontal member of the house frame; also on a window or door
Situs The personal preference of people for one location over another, not necessarily based on objective facts and knowledge
slab a flat, horizontal reinforced concrete area, usually the interior floor of a building but also an exterior or a roof area
soffit the external underside of the eave; usually contains ventilation for the attic/roof
soil suitability test a test that measures the soil's ability to absorb and drain water; usually paid for by the buyer.
sole plate the bottom of the wall frame that connects the studs to the flooring
Special agent one who is authorized to represent the principal in only one specific act or business transaction
Special assessments Special taxes levied on real estate for public improvements made to that real estate, such as sidewalks, street lighting.
special promissory note provisions 1)acceleration clause 2)prepayment penalty clause 3)due-on-sale clause
Special purpose churches, schools, cemeteries, and government held lands.
Special Warranty Deed A conveyance that carries the warranty that the property was unencumbered by the grantor.
Specific lien A lien that is secured by a specific parcel of property and affects only that particular property
specific performance A legal action to compel a party to carry out the terms of a contract.
Spot Zoning When a particular property or group of properties is rezoned to permit a use different form the neighboring properties use.
Square foot method Cost per square foot of a recently built comparable structure multiplied by the number of square feet in the subject property.
Statute of Frauds A state law that requires that certain instruments that convey interest in real estate be in writing to be legally enforceable, such as deeds, real estate sales contracts, and certain leases.
statute of limitations The law pertaining to the period of time within which certain actions must be brought to court or be lost.
statutory redemption period 10 day period after the auction in which the borrower can try to raise the necessary funds to redeem the property.
statutory right of redemption the right of a defaulted property owner to recover the property after its sale by paying the appropriate fees and charges
Steering The channeling of homeowners to particular neighborhoods based on the presence or absence of a protected class.
Stigmatized Properties Property regarded as undesirable because of events that occurred there; also called psychologically impacted property. Some conditions; gang-related activity, proximity to a nuclear plant, and even the alleged presence of ghost.
Straight Line Depreciation When the cost of an asset is depreciated evenly over its useful life.
straight-line amortized mortgage A loan in which the mortgagor may pay a different amount for each installment, each payment consisting of a fixed amount credited toward the principal plus an additional amount for the interest due since the last payment was made.
strict foreclosure not used in NC; after appropriate notice has been given to the delinquent borrower and proper papers prepared, the court establishes a specific time period during which the balance of the defaulted debt must be paid in full
stud the vertical members in the wall framing; usually placed 16-24 inches apart and serve as main support for the roof and/or the story above
Subagency the fiduciary relationship between the subagent ant the principal
Subagent one who is employed by a person already acting as an agent (and agent of the agent).
Subdivision All divisions of a tract or parcel of land into two or more lots, building sites, or other divisions for the purpose of sale or building development
subfloor boards or plywood sheets nailed directly to the floor joists; made of rough boards
Subjacent Support The support of the surface of land by the land's subsurface; duty of the owned of subsurface rights to support the surface of the land.
sublease the leasing of premises by a tenant to a third party for part of the lessee's remaining term
subordination agreement a written agreement between holders of liens on a property that changes the priority of mortgage, judgment, and other liens under certain circumstances.
subprime mortgage A loan made to a borrower with a credit rating below what is required for regular loans creating greater liability for the lender that is countered by higher interest rates and fees; called B, C, or D paper.
Subrogation Clause Any rights the insured had to sue the person who caused the damage are assigned to the insurance company that has already paid the insured for the damages.
Substitution An appraisal principle that states that the maximum value of a property tends to be set by the cost of purchasing an equally desirable and valuable substitute property, assuming that no costly delay is encountered in making the substitution.
Subsurface Rights Ownership rights in a parcel of real estate to the water, minerals, gas, oil, and so forth that lie beneath the surface of the property.
success fee Due and payable by the buyer/principal on the signing and acceptance of an offer to purchase property found by the buyer's agent.
summary ejectment the only legal way a landlord can evict a tenant; through a hearing before a magistrate in small claims court.
Supply The amount of goods available in the market to be sold at a given price. The term is often coupled with demand'
Surface Rights Ownership rights in a parcel of real estate that are limited to the surface of the property and do not include the air above it (air rights) or the minerals below the surface (subsurface rights).
survey gives the purchaser information about the exact location and size of the property
Tax lien Lien that is attached to real property as of the listing date.
tax-deferred exchange an IRS sanctioned method for real estate investors to defer taxation of capital gains by making a property exchange rather than by selling the investment property
Tenancy in Common Owned by two or more parties usually not husband and wife; undivided equal interest unless stated; each owner receives share when sold can transfer without other signing; can acquire at different times; if not stated, tenants in common; never survivorship
Tenancy by Entireties 1) Owned by Husband and Wife ONLY 2)each own 100% 3) Both must sign when sold 4)a) Divorce changes to tenants in common automatically but legal separation does not b)if not stated, the law presumes, tenants by entire 5) right of survivorship (automatic)
Tenant Security Deposit Act regulates the amount of money that be required as a security deposit and what the landlord can do with that deposit
Term loan A loan in which only interest is paid during the term of the loan, with the entire principal due with the final interest payment; also called a straight loan.
the four characteristics of value Demand, Utility, Scarcity & Transferability (DUST)
The request for a preclosing walk-through should be in the _____ ___ _____. offer to purchase
There is no federal exemption to the Fair Housing act if a _____ is involved. Broker
TICAM acronym used by commercial agents in a net lease that frequently refer to these charges: taxes, insurance, and common area maintenance
time is of the essence This means that the contract must be performed within the time limit specified, and any party who has not performed on time is liable for breach of contract.
Time-share Ownership Any right to occupy a unit of real property during five or more separated time periods over a period of at least five years. 5 day cancellation (without penalty) 10 days developer keeps money in trust; 30 days to refund; $500 fine to developer
Title The right to or ownership of the land.
Title Insurance A contract by which the insured is compensated against any losses sustained as a result of defects in a title.
Title Search The examination of all public records that might affect a title
title theory uses the three-party deed of trust instrument as security for the mortgage debt; the borrower conveys legal title to a trustee to hold for the lender until the debt is paid off. NC uses this theory.
To form a valid real estate sales contract there must be an _____ made, a(n)___________, and ________. offer acceptance communication
top plate the top part of the wall framing that connects the stud to the ceiling framing
Topographic survey A survey that shows the lay of the land.
Total Circumstances Test A legal test applied by the courts to determine whether an item is a fixture (and. therefore, part of the real property) or personal property.
Townhouse Ownership Do own land underneath unit (footprint) can not stack units vertically; no cancellation period; own entire unit (and half of party wall); Common areas owned by Homeowners association
Trade Fixture An article installed by a tenant under the terms of a lease and removable by the tenant before the lease expires.
Transferability The relative ease of transfer of ownership rights from one person to another; often relates to clear title and satisfactory physical condition.
Trustee's Deed A deed of conveyance executed by a trustee and generally used to transfer title after a foreclosure action.
two months' rent maximum amount of security deposit if tenancy is longer than month to month.
two weeks' rent maximum amount of security deposit if tenancy is from week to week
underground storage tank Often used to store petroleum, if leaking can contaminate groundwater, only 10% of tank needs to be underground to require monitoring
unenforceable contract Has all of the elements of a valid contract; however, neither party can sue the other to force performance; valid as between the parties.
Uniform Commercial Code (UCC) A codification of commercial law, adopted in most states, attempts to make uniform all laws relating to commercial transactions, financing statement must be recorded, Article 6 regulates bulk transfers the sale of a business as a whole.
Uniform Electronic Transactions Act (UETA) NC version of the federal E-sign legislations that allows contracts to be created by electronic means such as e-mails and faxes; the electronic signature is binding.
unilateral contract A type of contract in which one party makes a promise to induce a second party to do something. "I will give you a reward if you find my dog"
Unit in place method Estimating the replacement cost of a structure based on the construction cost per unit of measure of individual building components, including material, labor, overhead & builders profit.
Universal agent one who is empowered to do anything the principal could do personally
urea-formaldehyde foam insulation a 1970s foam insulation that released gases that can cause respiratory problems such as skin irritations or asthma attacks
usury charging interest in excess than the maximum rate established by state law.
Utility The capacity to satisfy future owners needs and desires; how future owners can make good use of the property.
VA-guaranteed loan a mortgage loan on approved property made to a qualified veteran by an authorized lender and guaranteed by the Dept. of Veterans Affairs to limit the lender's possible loss.
valid contract A contract that complies with all the essential elements of a contract.
Value The power of a good or service to command other goods or services in exchange. Also, the present worth of future benefits arising from the ownership of real property.
Variance Permission obtained from zoning authorities to build a structure or conduct a use that is expressly prohibited by the current zoning laws.
void contract A contract that has no legal force or effect. It is unenforceable in a court of law b/c it does not meet the essential elements of a contract.
Voidable Contract A contract that seems to be valid on the surface but may be rejected or disaffirmed by one or both of the parties.
walk-through the final inspection of the property by the buyer prior to closing to assure that the seller has vacated, made required repairs, and delivered the property in the condition it was in at contact.
Waste An improper use or abuse of a property by a possessor who holds less than fee ownership, such as a tenant, life tenant, mortgagor, or vendee. Such waste ordinarily impairs the value of the land.
water table natural water level whether it is above or below ground level
when a lease is sublet, the original tenant retains primary liability for paying the rent; this interest in the real estate is known as _____ _______. sandwich lease
Will Instrument made by a property owner to convey title to real and personal property on the owner's death
Willful misrepresentation when agents who have actual knowledge of a material fact deliberately misinform a buyer, seller, tenant, or landlord concerning such fact.
Willful omission takes place when agents have actual knowledge of a material fact and a duty to disclose such fact to a buyer, seller, tenant, or landlord, but deliberately fail to disclose such fact.
Working with Real Estate Agents A mandatory agency information brochure that a licensee must give to and review with consumers in all real estate sales transactions no later than first substantial contact; it does not create agency.
wraparound loan enables a borrower who is paying off an existing mortgage to obtain additional financing from a second lender or the seller.
yield the return or profit on a loan
Zoning Ordinances Laws imposed by local government authorities that regulate and control the use of land and structures within a designated district or zone.
Zoning powers are conferred on municipal government's by NC's_______________ _____________ through the General Assembly. Enabling Act
Created by: ahendrix1977
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