land, improvements attached to the land, and the rights to...
TRANSCRIPT
Cards in this set:
Term real property
Definition land, improvements attached to the land, and the
rights to use them.
Term
personal property
Definition a right or interest in things of a temporary or moveable nature; anything not classed as real
property- Chattel, Personal ownership is transferred by Bill of Sale.
Term
fixture
Definition personal property that has been attached in such
a way as to make it real property.
Term
trade fixtures
Definition required to carry out a business, they must be
removed from leased property prior to termination of lease.
Term
nonhomogeneity
Definition no two pieces are exactly alike
Term
nonhomogeneity
Definition no two pieces are exactly alike
Term
immobility
Definition land cannot be moved.
Term
indestructibility
Definition durability- it will always be there
Term
scarcity
Definition in short supply where demand is great
Term
modification
Definition land use and value are greatly influenced by improvements made by man to land and to
surrounding parcels of land.
Term
fixity
Definition land and buildings and other improvements to
land are considered fixed or permanent
investments
Term
situs
Definition location preference
Term
metes and bounds
Definition terminal points and angles (always has a
p.o.b.)might use street names. oldest and most common
Term
lot, block and subdivision
Definition recorded map
Term
monuments
Definition permanent surveyor markers
Term
rectangular survey system
Definition (Government Survey System) townships/sections
Term
encumbrance
Definition limitation on your rights.(liens, claims,
judgments, encroachments, leases, easements, deed restrictions)
Term
lien
Definition charge against property as security for a debt.
Term
voluntary lien
Definition taking out mortgage or home improvement loan.
not effective or enforceable until recorded.
Term
involuntary lien
Definition created by law. can be statutory or equitable. tax
and judgment liens.
Term
reservation
Definition withholds title to a part of the land described in
the deed.
Term
encroachment
Definition when a structure or improvement overlaps onto
another's property
Term Definition
easement
can be created by express or implied grant, agreement, reservation, limitation
Term
easement in gross
Definition belongs to a person or corporation.
Term
license
Definition permission to do a particular act upon the land or property of another (theater ticket, sports event
ticket)
Term
adverse possession (squatters rights)
Definition occurs when property is acquired from the
rightful owner through the Statute of Limitations.
Term
estate
Definition interest in real property
Term
freehold estate
Definition ownership; indeterminate length
Term
fee simple/ fee simple absolute
Definition the owner has all the available rights to the property and can always pass it to his heirs.
Term
life estate
Definition ownership for the duration of someone's life
Term
defeasible fee/ conditional fee
Definition ownership with condition or terms which if
violated could cause the ownership interest to be defeated or terminated.
Term
estate in severalty/ sole ownership
Definition ownership by one person
(corporations/partnerships use this
Term
tenancy in common
Definition ownership by two or more without rights of
survivorship. most common type of joint ownership.
Term Definition
joint ownership
ownership by two or more with rights of survivorship. 4 unities required for this: time,
title, interest and possession
Term
trust
Definition when a property is held by one party for the
benefit of another
Term
syndicate
Definition when two or more properties join together to create and operate a real estate investment
Term
leasehold estate
Definition possession without ownership.
Term
estate for years
Definition lease with a specific starting and ending date
Term
periodic tenancy
Definition lease with a fixed period that is automatically renewed unless the tenant or landlord acts to
terminate it.
Term
estate at will
Definition lease that can be terminated by either party at
will w/o notice.
Term
tenancy at sufferance
Definition lease expires and the tenant refuses to move out.
Term
statutory estate
Definition community property, homestead- created by law
Term
police power
Definition power given to a municipality to regulate and
control the character and use of property for the health, safety and general welfare of the public
Term
non-conforming use in zoning
Definition use was permissible under former rules, but new
rules prohibit it.
Term Definition
variance
can be requested if your property violates zoning
Term
buffer zone
Definition an area of land separating one land use from another, such as residential from commercial
Term
eminent domain
Definition the right of government to take private property
for public use through the action of condemnation.
Term
taxation
Definition property taxes are the highest priority lien on real
property.
Term
ad valorem
Definition according to value
Term
assessed value
Definition value of your property for tax purposes
Term
escheat
Definition property reverts to the state when someone dies
leaving no will and no heirs or no kindred.
Term
riparian rights
Definition right to use water from a river or stream that
borders property.
Term
market value
Definition the price a willing seller will sell for, and the price
a willing buyer will pay. (no pressure). most probable price.
Term
value
Definition estimate of the future benefits to be derived from
the property.
Term
price
Definition generally what one must pay for a property.
Term
cost
Definition an estimate of past expenditures.
Term
4 basic characteristics of value (dust)
Definition demand, utility, scarcity, transferability
Term
comparative market analysis CMA
Definition helps sellers determine a realistic price for their
property
Term
appraisal
Definition opinion of an estimate of present value
Term
market data approach
Definition primarily in residential. comparison with known sales in area. should use 3-5 sales no more than 6
months old.
Term
income approach
Definition income producing properties
Term
cost approach
Definition used for unique properties, such as churches or government buildings. it is used when there are no comparables for a particular property. most
accurate for new construction.
Term
3 types of depreciation in cost approach
Definition physical deterioration (ordinary wear and tear)
functional obsolescence (inferior materials) economic obsolescence (incurable, zoning)
Term
highest and best use
Definition the legal use that gives the greatest return in
money and/or amenities.
Term
principle of substitution
Definition sets an upper limit on price.
Term
principle of conformity
Definition states that maximum value is found when there is a reasonable degree of similarity or homogeneity.
Term
principle of increasing and decreasing returns
Definition invest in property whenever each dollar invested
will return a dollar or more of increased value
and stop when each dollar invested returns less than a dollar in value.
Term
principle of contribution
Definition the value of a part is determined by its
contribution to the total value of the property rather than by its cost.
Term
principle of regression
Definition the presence of lower valued properties in the neighborhood leads to a decline in the value of
your property.
Term
principle of competition
Definition an increase in competition will result in decreased
profits for current providers.
Term
principle of change
Definition change is constant and reflected in values.
Term
principle of anticipation
Definition purchase price is affected by the expectation of
future appeal and benefits.
Term
assemblage/ plottage
Definition combining several parcels of land into one.
Term
mortgage
Definition pledge of real property as security for a
promissory note.
Term
deed of trust
Definition used in Texas - allows for non-judicial
foreclosure.
Term
trustor (mortgagor)
Definition borrower-buyer
Term
beneficiary
Definition lender
Term
trustee
Definition 3rd party, selected by beneficiary; in a fiduciary
relationship with beneficiary. they can release the lien when note is paid or foreclose in the event of
default.
Term
acceleration clause
Definition a provision in a written mortgage, or note, stating that in the event of default the whole amount of
the principal becomes due and payable.
Term
alienation clause
Definition "due on sale" clause states that the balance of the secured debt becomes due if the property is sold
by the mortgager without the mortgagee's approval.
Term
defeasance clause
Definition states that the lien is defeated when the debt is
repaid.
Term
escalation clause
Definition allows the lender to raise the existing interest
rate.
Term
prepayment clause
Definition a statement in mortgage that the mortgagor can
pay the entire amount or the stated amount prior to the due date in the note.
Term
subordination clause
Definition allows a lender to move to or take a lower lien
position.
Term
assumption clause
Definition states that in the event a loan is assumed by new owners, those buyers are obligating themselves to
pay off that loan.
Term
straight assumption
Definition the new buyer is approved and takes over
payments and liability.
Term
FHA (federal housing administration)
Definition government loan program. insures loans which
protects the lender.
Term
MIP (mortgage insurance premium)
Definition the insurance on the FHA loan.
Term
VA (Veterans Administration)
Definition guarantees repayment of the loan. 100% finance.
Term
amortized
Definition repaid
Term
conventional loan
Definition neither federally insured or guaranteed.
Term
fixed rate amortized loan
Definition equal regular payments of principal and interest
until the loan is repaid. Interest is paid in arrears.
Term
term loan
Definition interest only until the end of the term, when the
entire principal is repaid.
Term
blanket loan
Definition covers more than one piece of property. (several
lots on one note.)
Term
package loan
Definition includes real property plus personal property.
Term
budget loan
Definition includes principal, interest, taxes, and insurance
in the monthly payment. known as PITI.
Term
balloon loan
Definition partially amortized loan with a final payment
substantially larger than the others.
Term
participation loan
Definition two or more lenders own a share.
Term
open-end mortgage
Definition permits additional borrowing on the same note.
Term
adjustable rate mortgage (ARM)
Definition loan with an interest rate subject to change as
conditions in the market change.
Term
construction loan
Definition short term loan with funds advanced periodically
during the stages of construction.
Term
wraparound loan
Definition a new mortgage on a property is placed in a
secondary lien position.
Term
GPM- graduated payment mortgage
Definition payments rise over a period of years, and then usually level off for the remaining term of the
loan.
Term
reverse annuity mortgage
Definition allows elderly homeowners to borrow against
their equity.
Term
sub-prime loans
Definition loans with risk based pricing- the rates are not
published.
Term
primary market
Definition where consumers go to borrow money (mortgage
companies, banks, etc.)
Term
secondary market
Definition where lenders go for money
Term
Absorption
Definition
rate at which properties are expected to lease up to prevailing rates.
Term
Access
Definition entry to a property via public street or easement
across another's property
Term
Acceleration
Definition The outcome of a default whereby a loan becomes
due prior to its contractual due date due to a default.
Term Definition
Acre
43,560 square feet.
Term
Agency
Definition The arrangement regarding representation of one person by another (such as a broker or attorney)
to buy, sell or lease real estate. A real estate “agent” as the term is commonly used works for a
“broker” who is licensed to provide 3rd party services.
Term
Anchor
Definition A major tenant that generates significant traffic. Generally used in describing a department store
or supermarket in a retail center.
Term
Asset/Property Management
Definition Asset management deals with capital
expenditures and financing issues that relate to maximizing property value. Property
management deals with the physical maintenance of property.
Term
Basis
Definition Original investment + additions - depreciation. Basis is used for the calculation of gain on sale.
Net sales price less “adjusted basis” equals taxable gain upon which capital gains tax is
applied.
Term
BATNA
Definition (Best Alternative To a Negotiated Agreement)
used by negotiators to determine ultimate fallback position in negotiations fail.
Term
BOMA
Definition (Building and Owners Management Association) – the trade association of professional building
managers. Determines standards.
Term
Broker
Definition A licensed, paid professional who represents
others as agent in buying, selling or leasing real estate. Agents work for brokers and are not state licensed. Realtors are members of the National
Association of Realtors (and may be brokers or agents).
Term
Buy-sell Agreement
Definition (tripartite agreement) – Contract between buyer,
seller and lender covering various rights, obligations on a transfer of property.
Term
Cap Rates
Definition The initial before-tax rate of return sought by a
buyer of real property based on expected Net Operating Income. The “capitalization” of pre-
tax cash flows, used to estimate a value of a property.
Term
Capital Accounts
Definition A partner’s basis in a property as measured by
original capital invested plus additional contributions, plus profits, less losses, less
distributions.
Term
Cash-on-cash Return
Definition The first year pre-tax yield on capital invested
(equal to the cap rate.)
Term
CC&R's
Definition Covenants and restrictions placed on a property regarding its use generally involving such things
as building heights, density, signage, etc.
Term
CERCLA
Definition (Comprehensive Environmental Response, Compensation and Liability Act) – This act,
passed in 1980, was what authorized the original Super-fund legislation aimed at environmental
clean-up.
Term
Certificate of Occupancy (C.O.)
Definition Building approval by local officials (zoning board or building department) certifying that it meets
code and is ready for occupancy. Generally marks the end of the construction phase of a
project.
Term Chain of Title
Definition The recorded history of conveyances and
encumbrances affecting the title of a specific parcel of land. The various owners of a particular
property are considered to be “in the chain of title.” Particularly significant when determining liability for environmental clean-up and liability.
Term
Chattel
Definition Physical property that is movable, not real estate.
Term
CPI Escalator
Definition is used to adjust rent based on figures issued by the US Dept of Labor gathered to estimate the
change in price levels.
Term
Condemnation
Definition The taking of property by use of “eminent
domain” (a power of government to take private property for public use, requiring “just
compensation” to owner.)
Term
Common Area
Definition Land or building areas used by all tenants or
owners (halls, elevators, landscaping, parking.)
Term
Comps
Definition Sales prices (or lease rates) of similar properties
used to estimate value for another property taking into account similarities/differences. Used
as one method of determining value.
Term
Cost Method
Definition One of 3 standard appraisal methods
(comparables, cost and income) to assess the value of a property. The cost method assumes the
value of the underlying land at its “highest and best” use, then “reconstructs” all buildings and
amenities at current market costs and adjusts for wear-and-tear and obsolescence.
Term
Costs (Hard/Soft)
Definition Hard costs are those related to “bricks and
mortar” or construction costs. Soft costs are all
development costs except for hard costs (including A&E fees, interest, taxes, insurance,
marketing expenses, development fees, etc.)
Term
Condo/Co-op
Definition Forms of R/E ownership relating to a partial interest in a property, associated with specific space. A condominium ownership is a form of
joint ownership in which a property owner owns his “demised premises” as well as a percentage of common areas. A co-op differs in that its owners own shares in a corporation that owns the R/E
and have rights to a specific unit.
Term
Deed Restriction
Definition A limit on the use of a property placed on it in
perpetuity by an owner prior to sale.
Term
Deed of Trust
Definition A 3-party agreement (buyer, lender, trustee) that
secures an obligation by making real estate a security. (In some states, done by mortgage.)
Term
Deed-in-lieu
Definition A deed offered voluntarily instead of requiring a secured party to foreclose to perfect its security
interest. (Deed-in-lieu of foreclosure.)
Term
Demised Premises
Definition The exclusive space leased by a tenant (not
including common areas.)
Term
Depreciation
Definition The allowable annual deduction on real property
improvements. Land may not be depreciated. Property used for personal use may not be
depreciated. Income producing property may be depreciated according to schedules provided by the Internal Revenue Service as updated from
time to time.
Term
Dry Gains
Definition Gains for which no cash is received. So-called dry
gains occur when depreciation is recaptured.
Term
ERISA
Definition The Employee Retirement Income Security Act
governing, among other things, pension fund investment in real estate. (Also known as Every
Rotten Idea Since Adam.)
Term
Earnest Money
Definition Funds deposited in escrow to show a good faith
offer.
Term
Easement
Definition A non-possessory right of one owner to use a part
of the land of another. Generally created by writing and fairly permanent; however, can be
implied (called “prescriptive”) and gained simply by repeated use over time.
Term
Encumbrance
Definition Any restriction that limits the use of property.
Term
Escrow
Definition An account governed by a third-party until terms
of a contract are met.
Term
Fee Simple
Definition The most extensive interest in land recognized by
law (subject only to police seizure, taxation, eminent domain, escheat and/or deed
restrictions.)
Term
Financial Leverage
Definition The impact on returns of adding debt to the
capital structure of property financing. (If the cost of debt > overall return on assets, the
financial leverage is “negative,” if overall ROA > cost of debt, it is “positive.” Also called
“gearing.”)
Term
Floor-Area-Ration (FAR)
Definition The relationship of the total floor area of a building and the total land area of its site.
Typically used to limit the permitted density of development.
Term Foreclosure
Definition A legal process whereby a lender forces the sale of
a property in order to pay off a loan.
Term
"Highest and Best Use"
Definition the term used for maximizing the rental income
(and hence value) available from a particular property.
Term
HVAC
Definition (Heating, Ventilating and Air Conditioning)
Term
Joint Venture (JV)
Definition a special purpose association of individuals (or
firms) to carry out a for-profit effort. (Also may be defined as an arrangement where someone
with money joins up with someone with experience, resulting in the party with experience ending up with the money and the party with the
money ending up with experience.)
Term
Leasehold/freehold
Definition forms of property interest. A leasehold interest is
subject to a lease and is for a limited time. A freehold interest is subject to title and lasts until a
conveyance of that title.
Term
Lessee
Definition The tenant. (A tenant may have various kinds of
leases such as “at sufferance” [occupying a property after expiration of lease], “at will”
[terminable by either lessee or lessor at any time], or “for a term” [use for a period of time, also
called “estate for years.”])
Term
Lessor
Definition The landlord.
Term
Leverage
Definition Financial leverage has to do with the use of
borrowed funds to magnify the returns on equity. (Negative leverage occurs when total project yield is inferior to the cost of borrowed funds; positive
leverage when project yield exceeds the cost of
borrowed funds.) Operating leverage occurs when a change in expenses has a magnified effect
on net income.
Term
Liens
Definition a claim on real property. A “mechanic’s lien” is one created by a laborer who’s added value to a
property and has not been paid. A “materialman’s lien” is one created by a supplier of goods to a property who has not been paid. A
“tax lien” is owed to the government. A “judgment lien” is created by a court granting a
creditor an interest Liens are also created by lenders who secure their interests by a deed of
trust or a mortgage lien.
Term
Metes and Bounds
Definition The dominant method of land description used by surveyors in the US, based on starting at a
point (an iron pin deep in the ground), and describing a parcel of land by use of distances
(metes) and directions (bounds) from that reference point.
Term
Multiple Listing Service (MLS)
Definition A listing of all properties in a given area by
brokers who distribute information to all members of the service. Provides broader
exposure to a property.
Term
NOI
Definition Income after operating expenses (before
deductions for debt service or income taxes). The key number used in establishing
property value.
Term
Operating Leverage
Definition The expense-to-revenue ratio. If expenses are
significant (such as with hotels), a property has high operating leverage (i.e., a small decrease in
expenses will have a significant impact on NOI). If expenses are insignificant (such as industrial leases), a property has low (or no)
operating leverage.
Term Definition
Parking ratios
usually expressed in terms of number of “car parks” to rentable square footage. (For
example, office buildings and shopping centers usually require something on the order of 4 parking places for every 1,000 feet of leased
space; industrial might be 1 space per 1,000 s.f.)
Term
Plat
Definition a survey that shows location of streets, blocks
and lots in a given area. Usually part of the public record. Used to identify particular
parcels. Subdivisions require “plat approval” prior to putting in streets, utilities.
Term
Purchase and sale agreement
Definition A contract between the buyer and seller that
specifies sales price and terms of sale.
Term
Purchase money
Definition Seller financing for all or part of the financing
requirements upon sale of a property.
Term
Quiet enjoyment
Definition
• An exclusive right of possession a tenant is extended by the landlord.
Term
Rail spur
Definition
An auxiliary track branching off a more significant railroad track to allow for delivery
and loading of goods to a warehouse.
Term
Recapitalization
Definition Exchanging existing financing for new
financing. Sometimes includes bringing in new equity and/or debt, or restructuring current
obligations with new terms.
Term
REIT (Real Estate Investment Trust)
Definition An ownership entity created by congress in 1960 that provides limited liability, no tax at the entity
level, and liquidity (required net income distribution.) Beneficial interest has certain
limitations and is evidenced by shares of stock traded.
Term
Remedies
Definition What is available by law or contract to recover
one’s rights or interests. Contracts provide remedies for breaches.
Term
Return on Equity
Definition The yield on capital invested above
debt. (Return of equity is sometimes applied to recover outstanding funds prior to sale or
refinancing.)
Term
RTC (Resolution Trust Company)
Definition Established by the government to manage loans
and liquidate properties acquired in the S&L collapse of the late 1980’s.
Term
Sale-Leaseback
Definition A transaction in which a seller immediately
leases back a property from its buyer.
Term
Situs
Definition The total environment impacting on a specific
urban land parcel, capturing how a property interacts with its environs and all surrounding
parcels.
Term
Statue of Frauds
Definition The legal doctrine that requires that all real
estate contracts be in writing to be enforceable.
Term
Standby Fee
Definition A fee charged by a lender to a borrower to remain available to provide a loan on pre-
arranged terms and conditions for a period of time.
Term
"Sweat Equity"
Definition An economic interest earned by work rather than
capital invested.
Term Definition
Tax Avoidance/Tax Fraud
Avoidance is simply using available code provisions to minimize taxes; fraud will get you
time in the “iron house.”
Term
Tax-free exchange
Definition Should be called tax-deferred; often called a Section 1031 Exchange, whereby a like-kind
swap of properties occurs that meets IRC tests and allows seller(s) to defer payment of taxes on
the appreciation of property.
Term
Title
Definition
• The evidence of ownership of real property. Title is made a part of the public record, can be insured and is passed from
owner to owner by conveyance.
Term
Triple Net (Net3)Lease
Definition the tenant pays taxes, insurance and operating
expenses in addition to rent. (Typical of industrial leases)
Term
Value
Definition Real estate is valued according to i) the income method (“capitalizing NOI at a cap rate intended
to capture in a simple calculation a value that will provide investors with a required rate of return over time), ii) the cost method (valuing
land at highest and best use value and all improvements at replacement cost), and iii) the
comparable method (assessing like-property sales over the recent past and making
adjustments for differences.)
Term
Variance
Definition Unlike in statistics, where variance refers to the
square of the standard deviation, or in accounting, where variance refers to the
difference between actual and expected results, in real estate, one is granted a variance, which
allows for building something otherwise not allowed by zoning, or setbacks or other
restrictions.
Term
Workouts
Definition
• Negotiations between borrowers and lenders to restructure obligations.
Term
Zoning (Down/Up)
Definition Zoning is governed by municipalities according
to a master plan which can change the classification of a property to a lower use (down-
zoning) or a higher use (up-zoning). Zoning typically covers not only use but lot size,
building heights, setbacks, etc.
Term
Accession
Definition acquiring title to a fixture left behind by a tenant
Term
Air Rights
Definition the rights to use airspace above a lot
Term
Attorney
Definition Licensed to practice law
Term
Bundle of Legal Rights
Definition Ownership of All legal rights, including
possession control disposition and enjoyment
Term
Chattel
Definition Personal Property
Term
Fixture
Definition Item of personal property that is attached and
becomes a part of the real estate
Term
Improvement
Definition Any man made addition to the property
Term
Land
Definition Is the Earth's surface underneath and to the
center of the Earth and above to infinity
Term
Personal Property
Definition Anything that does not fit the definition of Real
Estate
Term
Real Estate
Definition Land plus man made additions
Term
Real Estate License Law
Definition Statutes that govern Real Estate brokers and
sales people
Term
Real Property
Definition Interest benefits and rights in the ownership of
???
Term
Severance
Definition Turning real property into personal property
Term
Subsurface Rights
Definition Ownership of minerals below surface
Term
Surface Rights
Definition
Term
Trade Fixture
Definition An article installed by business tenant that can be
removed
Term
Air Lot
Definition Designated airspace over a lot
Term
Base Line
Definition Imaginary line running East and West
perpendicular to Principal Meridian (NS)
Term
Benchmark
Definition Permanent reference point for elevation
Term
Correction lines
Definition Every 4th township line there is a correction for
North and South
Term Definition
Datum
Term
Guide Meridians
Definition Guider spaced every 24 miles North South
Term
Government Check
Definition Area bounded by two guide meridian and two
correction lines
Term
Government Lots
Definition Fractional Sections in rectangular survey system
that are than regular lot
Term
Legal Description
Definition Description of (?survey) of parcel, complete
enough for a surveyor
Term
Lot and Block system
Definition Describing property by a plat that describes a
location
Term
Metes and Bounds
Definition Legal description that describes boundaries
around property and starts and ends at same point
Term
Monument
Definition Fixed natural or manmade points to describe
boundary in metes and bounds system
Term
Plat Map
Definition A map of a subdivision indicating the location
and boundaries of individual properties
Term
Point of Beginning
Definition The starting and stopping point
Term
Principal Meridian
Definition One of 35 survey lines running North and South
in government survey system
Term
Range
Definition Strip of land six miles wide (NS)
Term
Rectangular (government) Survey System
Definition A system start in 1785 by government based on
Principal Meridians and Base Lines
Term
Section
Definition One of 36 one mile squares that make up a
township; in rectangular survey system
Term
Township Line
Definition lines running at six-mile intervals parallel to the
base lines in the rectangular survey system.
Term
Township Square
Definition The principal unit of the rectangular survey system; a square with six mile sides and is 36
square miles.
Term
Appurtenant Easement
Definition Easement on 2 adjoining lots where there is
dominant and servient Tenement
Term
Curtsey
Definition The rights that a husband acquires in the
wife's property upon her death.
Term
deed restriction
Definition a limitation to the future use of property
Term
dower
Definition legal right or interest in life estate left by deceased
husband to widow
Term
easement
Definition authorized use for someone else's property
Term
easement by condemnation
Definition acquired by the public body, after just
compensation
Term
easement by necessity
Definition allowed by law for ingress and egress to your
property
Term
easement by prescription
Definition acquired by continuous open, uninterrupted
exclusive and adverse uses of the property for the period required by law
Term
easement in gross
Definition easement over number of properties not
necessary for the use
Term
eminent domain
Definition acquiring property for public use after
condemnation
Term
encroachment
Definition unauthorized wall of fence on your property
Term
encumbrance
Definition a claim or liability that attaches to property that
affect value
Term
escheat
Definition die without will and heirs, property reverts back
to the state
Term
estate in land
Definition degree and quantity in which you have real estate
property
Term
Fee Simple Absolute
Definition Maximum possible estate, continuing forever
Term
Fee Simple defeasible
Definition And estate in land which ???
Term
Freehold Estate
Definition Ownership for an indeterminable length of time
Term
Future Interest
Definition A persons present right that will result in
ownership in the future
Term
Homestead
Definition Land that is acquired as your primary residence
and is protected by non secured debts and judgments
Term
Leasehold Estate
Definition A tenants right to occupy during the lease
Term
License
Definition Revocable permission to use someone's property
Term
Lien
Definition A right given to a creditor to have your debt paid
from sale of property
Term
Life Estate
Definition Interest in Real Estate that is land to your lifetime
Term
Littoral Rights
Definition Non Moving body of Water
Term
Party Driveway
Definition Shared driveway where each party has easement
Term
Party Wall
Definition One Wall supporting two structures (think zero
lot line)
Term
Police Power
Definition Government right to impose laws that affect your
property
Term
Prior Appropriation
Definition Water belongs to the state; you must have prior
permit to use it.
Term
Remainder interest
Definition Part of property life tenant gets to use; reverts
back to landowner after death
Term
Reversionary interest
Definition Remnant of property after giving life estate
Term
Riparian Rights
Definition Moving body of water
Term
Taxation
Definition Process to raise money for government operation
Term
Beneficiary
Definition
A person whom a trust is set up for.
Term
Common Elements
Definition Anything makes property valuable
Term
Community Property
Definition Any property acquired during marriage
Term
Condominium
Definition Absolute ownership of unit and undivided
interest in covenant of home
Term
Cooperative
Definition A multi unit building owned by a cooperation
tenant has shares and proprietary lease in property
Term
Co-ownership
Definition Ownership by more than one party
Term
Corporation
Definition Business that can own in severalty
Term
General Partnership
Definition Association of two or more with full liability
Term
Joint Tenancy
Definition Ownership must be taken at the same time in equal percentages with right of survivorship
Term
Limited Partnership
Definition Business arrangement with partners who can lose
just their investment
Term
Partition
Definition Court suit to divide partners by
Term Definition
Partnership
An association of two or more business partners
Term
Right of Survivorship
Definition Distinguishes joint tenancy, ownership by
deceased tenant
Term
Separate Property
Definition Property that brought into a marriage or a gift of
inheritance
Term
Severalty
Definition Ownership by one party
Term
Syndicate
Definition A combo of people or firms to buy a larger
property
Term
Tenancy by the entirety
Definition Joint ownership by husband and wife
Term
Tenancy in common
Definition Joint ownership that can be taken by anytime in
any percentage with right of inheritance
Term
Time-sharing
Definition Ownership for a certain period each year
Term
Trust
Definition Fiduciary arrangement whereby property is conveyed by trustor to a person or institution
called trustee on behalf of a beneficiary
Term
Acceptance
Definition Act by which the grantee received title
Term
Adverse Possession
Definition Actual visible hostile notorious exclusive and
continuous possession of another's land under a claim of title
Term
Bargain and sale deed
Definition carries no warranties against liens but does imply
grantor has title
Term
Deed
Definition Written instrument that when executed and
delivered transfers title
Term
Deed in trust
Definition Used to convey title to a trustee
Term
Delivery
Definition Before a transfer can take affect
Term
Descent
Definition Inheritance acquisition of an estate
Term
Escheat
Definition To die without will and without heirs; property
reverts back to the state
Term
General Warranty Deed
Definition Fully warrants and clear title with five covenants
Term
Grantee
Definition Person receiving title
Term
Granting Clause
Definition Words in conveyance telling type of deed being
used
Term
Grantor
Definition Person who transfers title
Term
Habendum clause
Definition Words in the deed to have and to hold
Term
Intestate
Definition Dying without a will
Term
Involuntary alienation
Definition Transfer of title without your permission
Term
Marketable title
Definition Property is owned by seller who has right to sell it
Term Definition
Minor
Someone who has not reached the age of majority who can sign contracts
Term
Probate
Definition Legal process to determine your heirs
Term
Quitclaim Deed
Definition Transfers title with no warranties
Term
Reconveyance Deed
Definition Transfer title back to trustor after payoff
Term
Recording
Definition Making a document a public record
Term
Special Warranty Deed
Definition Warrantees only against title defects only during
title ownership
Term
Testate
Definition Having made and left a valid will
Term
Title
Definition
Right to and evidence of ownership of property
Term
Transfer tax
Definition Tax stamps required by state or local law
Term
Trust deed
Definition Creates a mortgage like lien on a property
Term
Trustee's deed
Definition Executed by a trustee conveying land held in trust
Term
Voluntary Alienation
Definition Transfer of property with your permission
Term
Will
Definition Written document property witnessed providing
for your property after death
Term Definition
Abstract of Title
Condensed history of all the conveyances
Term
Actual Notice
Definition Expressed information of the facts
Term
ALTA Policy
Definition Title policy that conforms to the uniform standards set by the American Land Title
Association
Term
Attorney's opinion of title
Definition Abstract examined by lawyer and deemed valid
Term
Bulk Transfer
Definition Sale of a major part of business in its entirety
Term
Caveat Emptor
Definition Let the buyer beware
Term
Certificate of Title
Definition Statement of Opinion of the status of title
Term
Chain of Title
Definition Succession of title conveyances
Term
Constructive Notice
Definition Notice given to the world of interest in real estate
Term
Evidence of Title
Definition Proof of ownership in 4 ways: Cert of title, title
ins. policy
Term
Financing Statement
Definition Required by UCC security
Term
Marketable Title
Definition Seller has clear title or can make the title clear
upon conveyance
Term
Recording
Definition Legal public and constructive notice to the world
of parties interest in real estate
Term Security Agreement
Definition Creates a security interest in chattels with
complete description read by UCC
Term
Subrogation
Definition Substitute one creditor for another
Term
Suit to quiet title
Definition A court action intended to remove a cloud on title
Term
Title Insurance
Definition A policy that protects a loss due to defect in title
Term
Torrens System
Definition Evidencing title by registering title, liens are only
valid if ...?
Term
Uniform Commercial Code
Definition UCC: Codification that makes laws similar
throughout the US
Term
Ad Valorem Tax
Definition Real Estate tax for added value; a general tax
Term
Assessment Roll
Definition Spreading taxes over area
Term
Attachment
Definition Taking a person's property in legal custody after
winning lawsuit
Term
Bail Bond
Definition Specific lien placed against a court appearance
Term
Corporation Franchise Tax
Definition Tax on a corporation to operate in State
Term
Equalization Factor
Definition Figure set by local taxing that equalizes
Term
Equitable lien
Definition Lien imposed by court action in fairness
Term Definition
Estate Taxes
Federal Taxes on a deceased persons assets
Term
General Lien
Definition A lien against all your property real and personal
Term
Inheritance Tax
Definition State Taxes on a deceased persons assets
Term
Internal Revenue Service Tax Lien
Definition A general lien imposed for nonpayment of IRS
taxes
Term
Involuntary Lien
Definition Lien imposed without owner's permission
Term
Judgment Lien
Definition A lien placed after a formal decision in court
Term
Lien
Definition Right given to creditor from sale of property
Term
Mill
Definition One tenth of a cent
Term
Mortgage Lien
Definition Lien created for security of a debt
Term
Priority
Definition Order of payoff of liens, by recording date
Term
Redemption
Definition Buying back property sold at foreclosure
Term
Redemption Period
Definition Time state laws allow for redemption
Term
Special Assessment
Definition A levy against property for public improvement
Term
Specific Lien
Definition Lien attached to one property
Term Definition
Statutory Lien
Lien imposed by law
Term
Subordination Agreement
Definition Written agreement between lenders to change
order of payoff
Term
Surety bail bond
Definition Insurance policy guarantees court appearance
Term
Tax foreclosure
Definition Court sale for nonpayment of taxes
Term
Tax lien
Definition Lien imposed for nonpayment of taxes
Term
Tax Sale
Definition Court ordered sale of non payment of taxes
Term
Voluntary Lien
Definition Lien placed with you permission
Term
Mechanic Lien
Definition Lien in favor of contractor for material or labor
Term
Three Approaches to Value
Definition Sales Comparison, Income Capitalization, Cost
Approach
Term
Higher percent of Debt means?
Definition Larger financial burden to perform and create
revenue to sustain operation and make debt payments
Term
What Happens if REE Development goes bankrupts?
Definition 1st recorded mortgage gets paid, then 2nd, etc
Term
Risk due to debt financing
Definition leverage risk
Term
Risk from uncertainty of rents, vacancies, or operating expense
Definition market risk
Term
interest or value owner has after liens
Definition equity
Term affect of sales price due to change in interest rates
are
Definition slow and gradual
Term
if IR do change, 1st sign appraisers will see is in value coming from using
Definition income capitalization approach
Term
approach used most freely in REE
Definition sales comparison
Term
money market
Definition short term financing instruments
Term
capital market
Definition long term financing
Term
perfect market
Definition not a lot of government control, homogeneous
products, small inexpensive items
Term
deed of trust/land contract/conditional sales contract/installment sales
Definition 3rd party holds deed when mortgage taken out
until paid off or sale of REE with seller financing and retaining deed until paid off
Term
money market
Definition reserve requirements, discount rate instruments: CDs, fed funds, t-bills
Term
capital market
Definition bonds, stocks, mortgages
Term
commercial paper
Definition corporations short term notes
Term
secondary mtg market
Definition fannie mae + freddie mac, buy and sell mortgage
loans
Term mortgage
Definition pledge of collateral for REE loan
Term
federal reserve system
Definition established by congress, now independent
Term
life estates
Definition represent full bundle of rights limited by life of
person
Term
Son given life estate, upon turning 18
Definition mortgage in interest, rent property out, sell, rent
Term
lease
Definition conveys right of occupancy to another
Term
air rights
Definition rights to use and control space above specific
parcel
Term
easements
Definition give a party right to access property and perform
specific task
Term
condominium
Definition project w/ units that are limited vertically and
horizontally, and have a % ownership in common elements
Term
leasehold estate
Definition real property interest held by a lessee and
conveying right of use + occupancy for stated term
Term
3 ways to hold a title
Definition joint tenancy, tenancy in common, tenancy by
entirety
NOT: TENANCY AT WILL
Term
highest and fullest estate in land
Definition fee simple
Term Definition
tenancy in common
ownership of real property by 2 or more parties w/ undivided interest
Term
TDR
Definition transferable development rights
Term
5th amendment
Definition require government to compensate for taken land
Term
you buy land, lease it to John
Definition you have leased fee, john has leasehold
Term
leased fee interest
Definition ownership interest of the landlord when a lease is
in effect
Term
you have land for 25 years, only paid 20 years of taxes, what happens
Definition state has right to sell estate to pay off taxes
Term
1pt on mortgage =
Definition 1% of mortgage value
Term
escheat
Definition you own land, die, no heirs, state takes property
and sells it
Term
fee simple interest limit
Definition eminent domain, police power, taxation and
escheat
Term
deed should be recorder because
Definition gives public notice of transaction + sets priority
Term
police power
Definition zoning + environmental protection regulations
Term
bundle of rights
Definition common reference for ownership of REE
Term
bundle of rights includes rights to
Definition sell an interest, lease and interest, occupy
property, mortgage on interest, give interest away
Term
Public and private restrictions
Definition taxation, eminent domain, police power, escheat
private: easements
Term
most efficient market
Definition one unit residences
Term
residential vs. nonresidential markets
Definition residential is much more efficient b/c more buyers
and sellers, MLS organize data
Term
market analysis is included to
Definition show support for H+B use + existence of a market
Term
real estate market is
Definition group of individuals or firms that are in contact
w/ one another for the purpose of conducting REE transactions
Term
retail space demand affected by
Definition changes in employment opportunities, changes in traffic patterns, fluctuations in disposable income
Term
economic base
Definition economic activity that enables it to attract income
from outside its borders
Term
site definition
Definition land that is improved so that it is ready to be used
for a specific purpose
Term
sites vs. land
Definition sites can be created land is fixed
Term
rectangular survey legal description
Definition part of NW quarter of section 25, township 17N,
range 3e
Term
zoning
Definition controls land use, development standards
Term Definition
plottage
incremental increase in value that results when 2 or more sites are combined to produce greater
utility
Term
assemblage
Definition act of combining
Term
excess land
Definition land not needed to support H+B use or not needed to support existing improvements
Term
raw land
Definition no improvements, natural state, untouched
Term
1 acre
Definition 43,500 sq. ft
Term
full section
Definition 27,878,400 ft = 1 x 1 miles = 1/36th of township
Term
township
Definition 6 x 6 miles
Term
excess vs. surplus land
Definition excess can be sold off, surplus cannot
Term
gross area
Definition total area
Term
net area
Definition gross area - public right of way
Term
flood maps
Definition published by federal emergency management
association
Term
legal description of land
Definition lot + block system, metes + bounds system,
rectangular survey system
Term
size vs. price
Definition inversely related
Term zoning
Definition minimum lot size, utility availability, minimum
building size, minimum road frontage
Term
lot + block system
Definition commonly used in urban setting where lots are
small
Term
metes + bounds (distance + direction)
Definition uses point of beginning, used by first colonies
Term
rectangular survey
Definition hard to describe small parcels, used in rough
terrain
Term
gross leasable area
Definition commonly used in retail centers
Term
GLA
Definition gross leasable area, used in commercial
properties
Term
superstructure
Definition are of building above grade
Term
functional in-utility vs. obsolescence
Definition 1st. designed for certain people 2. used to work, now outdated
Term
items in need of immediate repair
Definition item is in need of repair on day of appraisal
Term
interim use
Definition H+B use until change occurs
Term
H+B use required in
Definition market value appraisals
Term
H+B use as though vacant
Definition required in all appraisals, may require change in
zoning, assumes site is or could be vacant
Term Definition
criteria for H+B use
legally permissible, physically possible, financially feasible
Term
test of legally permissible
Definition deed + plat restrictions, zoning requirements,
building codes, historic district controls, compliance w. lease provision
Term
common interim use
Definition small office w/ short lease
Term
USPAP
Definition uniform standards of professional appraisal
practice
Term
factors of value
Definition utility, scarcity, desire, EPP
Term
agents of production
Definition land, labor, capital, entrepreneurial coordination
Term
district
Definition area with one predominate land use type of
neighborhood
Term
1st step in market value
Definition H+B use
Term
appraisal may be liable for all but
Definition low value
Term
concepts of land
Definition Legal, geographic and environmental, economic,
and social
Term
market value
Definition most probable selling price
Term
price
Definition amount buyer and seller agree upon
Term
factors of value do not include
Definition effective marketing power
Term
utility
Definition ability to satisfy human want or need
Term
change
Definition result of cause and effect relationship that affect
value of land
Term
anticipation
Definition result of value that could be achieved in future
Term
agent of production don't include
Definition enterpenuial agency
Term
market area life cycle
Definition Growth, stability, decline, and revitalization
Term
land valuation includes
Definition sales comparison, allocation, extraction
Term
sales comparison
Definition most reliable way to value land
Term
1st step in appraisal process
Definition formulate a plan
Term
land value
Definition can't be calculated with cost method
Term
date of value
Definition stipulated by client
Term
metes-and-bounds description
Definition
legal method for describing the exact boundaries of a property. must result in an enclosed figure
Term
metes
Definition distances
Term
bounds
Definition directions
Term
plat
Definition detailed land survey drawing, prepared by pro, that
shows features of property and its legal description
Term
principal meridian
Definition north-south lines used as ref points in rectangular
survey system
Term
township
Definition a 36-square mile area formed by township and
range lines in Rectangular Survey System
Term
township lines
Definition east west lines that run parallel to base lines in
RSS
Term
Rectangular Survey description
Definition a unit of land approximately 24 miles square,
bounded by base lines running east and west, and meridians running north and south. This 24 mile
square is divided into areas six miles square called townships. Townships are further divided
into 36 sections, each one mile square.
Term
section
Definition 1 square mile rectangles that divide townships
into 36 equal areas of 640 acres each
Term
baselines
Definition east west lines used as reference points in RSS
Term
GNMA
Definition Government National Mortgage Association- a
gov. org. that provides subsidized loans for certain mortgage borrowers (Ginnie Mae)
Term
FNMA
Definition Federal National Mortgage Association- agency that was created by the federal government in
1938 to buy mortgages from lenders and to serve as a clearing-house for secondary mortgage
brokers (fannie mae)
Term
MBS
Definition mortgage backed securities- securities issued by mortgage holders to investors who wish to invest
indirectly in the mortgage market
Term
easement appurtenant
Definition an easement with clearly identifiable dominant
and servient estates
Term
encroachments
Definition an unauthorized invasion or intrusion of a
fixture, building, or another improvement onto another person's property
Term
encumbrances
Definition restrictions or limitation on ownership rights
Term
easement in gross
Definition an easement with only a servient estate
Term
express grant
Definition method of expressly creating an easement on a
grantor's property
Term
servient (burdened) estate
Definition the property burdened by the existence of an easement appurtenant or easement in gross
Term
express reservation
Definition method of expressly creating an easement on a
grantee's property
Term
dominant (benefited) estate
Definition the property benefited by the existence of an
easement appurtenant
Term
prescriptive easement
Definition an easement created when someone other than the owner uses the land "openly, hostilely, and
continuously" for a statutory time period
Term
adverse possession
Definition the acquisition of property as a result of "actual and exclusive, open and notorious, hostile and
continuous" possession under a claim of right for a statutory period of time. i.e. build a fence on someone else's property that they don't dispute
for 10 years in Arizona, the property becomes yours
Term
real estate
Definition the land and things attached to the land
Term
real property
Definition consists of legal interests in land and things
permanently attached to the land
Term
intent of the parties
Definition best way to indicate intent is by written
agreement
Term
test of attachment
Definition if damage is caused to land or building by
removing it becomes a fixture
Term
test of adaptability
Definition specifically adapted to real estate removal would
reduce usefulness of property ex: kitchen cabinets
Term
fixture
Definition personal property that becomes part of the real property when attached to the land or building
Term
riparian rights doctrine
Definition people whose property borders water all have
equal rights to the water
Term
prior appropriation doctrine
Definition whoever first uses water for economic benefit has
rights to the water
Term
fee simple absolute
Definition fullest and most complete set of ownership rights
Term
CC&Rs
Definition covenants, conditions and restrictions are private encumbrances that limit the way property owner
can use a property
Term Definition
listing agreement
a contract by which a broker is employed by the seller to find a buyer for the seller's real estate, according to the seller's terms, and for which
service, the broker is paid a commission
Term
prequalified
Definition you potentially could get a loan for the amount
stated to you, assuming that all of the information given was accurate and true
Term
preapproved
Definition it means that you have undergone the extensive
financial background check, which includes looking at your credit history, previous tax
returns, and verifying your employment. and the lender is willing to give you a loan
Term
principal
Definition authorizes the agent to act on his or her behalf
Term
agent
Definition employee of principal
Term
fiduciary
Definition means agent is in position of confidence and must perform his duties in best interest of the principal
Term
subagent
Definition sales associate is an agent of the broker and a
subagent of the brokers principal
Term
fraud
Definition present if broker 1. intention to mislead 2. false
statement material to a transaction that 3. justifiably relied on by a client 4. resulting in
injury to client
Term
dual agent
Definition represent both buyer and seller
Term
misrepresentation
Definition same as fraud, doesn't need intention to mislead
Term Definition
MLS
multiple listing service- group of brokers provide accurate and structured data about properties for sale. It also is a mechanism for listing brokers to offer compensation to buyer brokers who bring a buyer for their listed property. listing broker still
receives commission very helpful to seller
Term
open listing
Definition a property that is simultaneously marketed by
multiple real estate agents. only receive commission if broker finds a buyer
Term
exclusive agency
Definition Contract in real estate giving only one broker, for
a specific time, the right to sell a property and also allowing the owner to sell the property
without paying a commission.
Term
exclusive right-to-sell
Definition A Listing Agreement which gives the listing agent the right to sell the property for a specified time,
with the right to collect a commission if the property is sold by anyone, including the owner,
during the listing period
Term
buyer representation agreement
Definition An agreement that specifies the duties and the
scope of services a buyer’s representative agrees to provide to the buyer as well as specifying the
buyer’s responsibilities.
Term
market value
Definition most probable price property should be in a
competitive market
Term
insurable value
Definition the amount of insurance that should be carried on
the destructible portion of the real estate to compensate the owner adequately in case of loss
Term
price
Definition amount actually paid for property
Term Definition
investment value
the worth of a property to a particular investor
Term
principle of substitution
Definition a buyer will not pay more than an equally
desirable substitute in the open market
Term
principle of anticipation
Definition An appraisal principle that holds that value can increase or decrease based on the expectation of some future positive or negative impact on the
property.
Term
principle of contribution
Definition the value of a component of property depends upon its contribution to the value of the whole property. The cost of an improvement does not
necessarily equal the value the component adds to the property.
Term
most probable selling price
Definition The property's most likely selling price when not
all the conditions required for a Market Value estimate are relevant.
Term
principle of change
Definition An appraisal principle holds that no physical or economic condition remains constant and that
change is largely the result of cause and effect and that existence occurs in three states: integration,
equilibrium and degeneration.
Term
sales comparison approach
Definition An appraisal practice which estimates the value
of a property by comparing it to comparable properties which have sold recently.
Term
replacement cost
Definition The cost to build something that is substantially
similar to the original but is constructed with modern materials and according to current
standards, design and layout and having equal utility.
Term Definition
economic obsolescence
A loss in value due to factors outside the property lines of the subject property that adversely affect the usability and value of the subject property or
its actual or potential income.
Term
sales comparable
Definition term referring to properties with characteristics
that are similar to a subject property whose value is being sought.
Term
functional obsolescence
Definition A loss of value due to adverse factors from inside the property lines such as defects in the plan or
design which affect how well the property can be used, function or perform which affects its value
and marketability.
Term
physical deterioration
Definition An impairment of condition and a loss in value
inherent in property brought about by wear and tear, disintegration, use and actions of the
elements which is either curable or incurable.
Term
highest and best use
Definition The most profitable and likely use of a property
selected from reasonably probable and legal alternative uses, which are found to be physically possible, appropriately supported and financially
feasible to result in the highest possible land value.
Term
accrued depreciation
Definition The actual monetary difference between the cost to replace a property as of the date of the original appraisal and the present appraised depreciated
value.
Term
cost approach
Definition appraisal method by estimating the replacement cost of the improvements and then deducting the estimated accrued depreciation from it and then
adding back the market value of the land.
Term Definition
FHLMC
Federal Home Loan Mortgage Corporation (Freddie Mac)- Freddie Mac was created in 1970 so that Fannie Mae wouldn't have a monopoly on
government-backed mortgages.
Term
FHA insured loan
Definition FHA loans are designed for low to moderate income borrowers who are unable to make a
large down payment. FHA loans allow the borrower to borrow up to 97% of the value of the home. The 3% down payment requirement can come from a gift or a grant, which makes FHA loans popular with first-time buyers. only up to
$346,250
Term
VA guaranteed loan
Definition a loan in which the lender is protected from the borrower's default by a guarantee of repayment
from the Department of Veteran Affairs
Term
mortgage banker
Definition firms that borrow money from commercial banks
to originate new loans to mortgage borrowers
Term
mortgage broker
Definition firm that acts as an intermediary between loan
applications and lenders
Term
PMI
Definition Private Mortgage Insurance- non government
insurance that provides the lender with protection against the borrower default. PMI is required if the loan value is over 80% of home
value
Term
mortgage debt ratio
Definition principal, interest, taxes and insurance (PITI) include PMI + HOA if needed. Traditionally, a
maximum of 28% of the borrower's gross monthly income
Term
total debt ratio
Definition the percentage of a borrower's gross monthly income required to meet monthly contractual
expenses. max 36%
Term
freehold estate
Definition An estate, such as a fee simple or life estate, of a duration that runs forever and its end cannot be
determined.
Term
estate
Definition In real estate, the degree, quantity, nature and
duration of interest, share, right, equity of which riches or fortune may consist and which a person
holds in real property.
Term
conventional (conforming) home loan
Definition adheres to the standards of fannies mea and
freddie mac, no more than 75% of the home value can be financed, usually has a fixed rate
Term
Fannie May
Definition an agency that was created by the federal govt in 1938to buy mortgage from lenders and to serve as a clearing-house for secondary mortgage brokers
Term
Freddie Mac
Definition not backed by U.S government
Term
Easement
Definition A right given to one party by a land owner to use
the land in a specified manner
Term
subprime mortgage
Definition NOT a type of mortgage, refers to borrowers with
poor credit..
Term
PITI
Definition principal, interest, taxes, and insurance
Term
exam question: As a result of the exercise of police powers (zoning), property owners receive
what?
Definition none of the above (no compensation)
Term
exam question: The comprehensive or general Definition
the justification for assigning individual parcels
plan is what?
in their zoning classifications
Term
exam question: Suppose chuck and Barbara agree to purchase a vacant lot from steve, the
legal owner. Two days later, Steve's father calls and informs them that steve has changed his
mind, as many precocious 16 year olds are apt to do. At the time the contract was signed, Steve did not reveal his age. What are chuck and Barbara's
options?
Definition accept Steve's decision and look for another
property (capacity of parties [minor])
Term
exam question: required elements for a sales contract to be valid include what?
Definition Lawful purpose
Term
exam question: when an installment contract is signed by the buyer and seller what happens?
Definition equitable title transfers to the buyer
Term
exam question: a listing agreement whereby the seller reserves the right to sell the property
without having to pay a commission but also allows a real estate agent to sell the property and
earn a commission is what type of listing?
Definition exclusive agency
Term
exam question: the commission paid in the real estate brokerage industry is traditionally what?
Definition a percentage of the contract price
Term exam question: one important difference between a real estate broker and a real estate salesperson
is what?
Definition real estate salesperson must be affiliated with a
licensed real estate broker
Term
exam question: the definition of market value in appraisal includes what?
Definition typically motivated parties
Term exam question: which of the following statements is true regarding the sales comparison approach?
Definition adjustments are made to the sales prices of
comparable properties to make them representative of the subject property's
characteristics
Term
exam question: what is the basic distinction between mortgage bankers and mortgage
brokers?
Definition mortgage brokers typically do not service the
loans they are involved in originating
Term
exam question: PMI provides protection for who in the event of a mortgage default?
Definition lender
Term
conforming loan amount
Definition up to $417,000
Term
non conforming "jumbo" loan amount
Definition over $417,000
Term
subprime mortgage loans
Definition borrowers unable to obtain favorable loans (bad
credit history etc.). higher interest rates
Term
option ARM
Definition Adjustable Rate Mortgage- low initial interest
rate and monthly payment
Term
Alt A loans
Definition Alternative documentation- "no doc" loan, high loan to value loan, borrowers with lower credit
scores, borrowers with high debt to income ratios
Term
do applicants need to qualify under mortgage debt ratio or total debt ratio?
Definition applicants must qualify under both ratios
Term
reasons for price increases 2003-2006
Definition 1. affordable housing
2. low interest rates, loan money available 3. unqualified borrowers getting loans, subprime
mortgage is not a real mortgage, refers to creditworthiness of borrower
Term
current conditions of the phx market
Definition prices down 48% from the 2006 peak, prices
down 35% from april 2008 to 2009
Term
magnitude of the foreclosure problem
Definition 1. 5150 phx foreclosures in june
2. over 45000 pending foreclosures 3. about 128,000 ARMs set to reset in 2010
Term
What is the FED doing?
Definition 1. $75 billion making homes affordable plan
2. 10% tax rebate for first time home buyers up to maximum of $8000
Term
where is ASU?
Definition N 1/2 of s22 T1N R4E from Salt/Gila Base and
Meridian
Term
is licensing required of all agents?
Definition yes
Term
how do you obtain a broker's license?
Definition 3 years experience plus exam
Term
who does the listing agent work for?
Definition seller
Term
how long does an exclusive right to sell listing typically last?
Definition 90 days
Term
when is the best time to use the sales comparison approach?
Definition single family residential
Term
income approach
Definition The process of estimating the value of property by considering the present value of a stream of
income generated by the property. 2 steps: estimating future income and converting the
estimate into present value estimate
Term
best time to use income approach
Definition apartment, retail, office, etc.
Term
what is a tax advantage of home ownership
Definition tax deductibility of mortgage interest and
property taxes
Term
Injunction
Definition
A writ or order issued under the seal of a court to restrain one or more parties from performing an act which is deemed to be inequitable or unjust in
regard to the rights of some other party.
Term
Installment Contract
Definition A contract that provides for payment of a
purchase price in installments; an agreement of sale. Also called installment land contract or
installment sale.
Term
Institute of Real Estate Management (IREM)
Definition An organization acting as an exchange for
management ideas, and recognizing achievement in the field. Has a Code of Ethics for real estate
managers.
Term
Instrument
Definition A written legal document
Term
Inter Vivos
Definition During one's life, between living persons; from
one living person to another.
Term
Interim Financing
Definition A short term loan obtained to cover financing of
the construction of a building.
Term
Intestate
Definition Incapable of being recalled or revoked;
unchangeable.
Term
Involuntary Lien
Definition A lien imposed against property without consent
of an owner; e.g., taxes, special assessments, federal income tax liens, etc.
Term
Irrevocable
Definition Incapable of being recalled or revoked;
unchangeable.
Term Definition
Joint Tenancy
Ownership by two or more persons with rights of survivorship, all joint tenants own equal interests and have equal rights in the property; each owner
is possessed of an undivided part of the whole.
Term
Joint Venture
Definition A joining of two or more people in a specific
business enterprise; similar to a partnership, and generally with no intention of a continuing relationship beyond the original purpose.
Term
Judgment
Definition The final determination of the rights and
liabilities of the parties by a court in an action before it.
Term
Junior Lien
Definition A subordinate lien
Term
Junior Mortgage
Definition A mortgage that is subordinate to prior existing
mortgage on the same realty.
Term
Laches
Definition Delay or negligence in asserting one's legal rights.
Term
Land Contract
Definition See Agreement of Sale
Term
Land Court
Definition A court designated to preside over the
registration of land under the Torrens system; the court which is used to verify title.
Term
Land Patent
Definition An instrument conveying government owned
lands to individuals.
Term
Land Trust
Definition A device to hold title to land in a trust with the
beneficial ownership held by the landowner.
Term
Land Use Ordinance
Definition County code which sets forth zoning regulations
for the county.
Term
Landlord Tenant Code (LTC)
Definition A Hawaii state law outlining the rights,
obligations and remedies of a residential landlord and a tenant.
Term
Landmark
Definition A monument or object used to establish the
boundary line of a property.
Term
Latent Defect
Definition A hidden structural defect in real estate; known
to the seller but not the buyer and not discoverable by mere observation.
Term
Lateral Support
Definition The support that the soil of an adjoining owner
gives to his neighbor's land.
Term
Lease
Definition A contract whereby the lawful owner of the
property transfers his rights of use and possession to another for a specified term.
Term
Leased Fee
Definition The landlord-owners interest in the demised
premises; valued as the rent plus the reversionary interest.
Term
Leasehold
Definition An estate or right in real property held under a
lease by the lessee.
Term
Legacy
Definition A gift of personal property, usually money in a
will.
Term
Legal Description
Definition A description, recognized by law that will
definitely locate and identify property.
Term
Lessee
Definition One who rents property under a lease contract.
Term
Lessor
Definition An owner who enters into a lease with a tenant.
Term
Less Than Freehold
Definition A lease; a leasehold estate.
Term
Leverage
Definition The use of borrowed funds in financing, with the
anticipation that the property acquired will increase in return so that the investor will realize a profit, not only on his own investment, but on
the borrowed funds as well.
Term
Liber
Definition Books that contain public records such as copies
of deeds.
Term
License
Definition A personal privilege to perform some act on the
land of another.
Term
Lien
Definition A right, given by law, whereby a creditor may satisfy a debt out of the proceeds of the sale of
real or personal property belonging to the debtor; an encumbrance, usually naming property as
security for payment of a debt or for the discharge of an obligation.
Term
Lien Letter
Definition A limited title search issued to cover Land Court
property in Hawaii.
Term
Life Estate
Definition An estate or interest in real property held for the duration of the life of a certain person. Upon the
expiration of that life, the estate will automatically be vested in a remainderman or
reversioner.
Term
Limited Common Element
Definition In a condominium, those common elements
reserved for the use of a certain apartment, or
certain apartments, to the exclusion of other apartments.
Term
Limited Liability Company
Definition A newer form of ownership besides
proprietorship, partnership, corporation, etc.: Similar to a corporation, but no perpetual
existence and single taxation.
Term
Limited Partnership
Definition A partnership composed of general and limited partners whose contribution and liability are
limited and specifically defined.
Term
Liquidated Damages
Definition An amount of pre-determined by the parties to an agreement that will be forfeited as compensation
for breach of contract.
Term
Lis Pendens
Definition A legal document giving constructive notice that an action at law is pending; a notice of pending
litigation.
Term
Listing
Definition A written employment agreement between a property owner and a broker authorizing the
listing broker to sell, lease or exchange the realty.
Term
Loan Commitment
Definition A commitment by a lender as to the amount he will loan to a qualified borrower on a particular
piece of real estate.
Term
Lock-in
Definition An agreement between a borrower and a lender, whereby the lender agrees to lock in an interest
rate, or points for a period of time, when the rate is in a state of flux and might change.
Term
M.A.I.
Definition Designates a person who is a member of a
professional appraisal organization.
Term Marginal Land
Definition Land which barely pays the cost of working or
using.
Term
Marketable Title
Definition Title free and clear of objectionable liens or
encumbrances; title which is free from reasonable doubts or defects, which can be readily sold or
mortgaged.
Term
Market Value
Definition The highest price a ready, willing and able buyer, not forced to buy, will pay to a ready, willing and able seller not forced to sell, allowing a reasonable
time for exposure in the open market.
Term
Material Fact
Definition A fact is material if it is one which the agent should realize would be likely to affect the
judgment of the principal in giving his or her consent to the agent to enter into the particular
transaction on the specified terms.
Term
Mechanic's Lien
Definition A lien which exists against real property in favor
of persons who have performed work or furnished materials for the improvement of real
estate.
Term
Merger of Title
Definition The absorption of one estate into another.
Term
Metes and Bounds
Definition A method of describing or locating real property;
metes are measures of length and bounds and boundaries; a description starting with a well-marked point or beginning and following the
boundaries of the land until it returns once more to the point or beginning.
Term
Mile
Definition A linear measurement of distance equal to 1,760
yards, 5,280 feet, or 1,608 meters.
Term Definition
Military Clause
A clause inserted in some leases to allow the military tenant to terminate the lease in case of
transfer, discharge or other circumstances.
Term
Mill
Definition One tenth of one cent. Used in some states to
compute property taxes.
Term
Minor
Definition A person under the legal age of consent, one
under 18 years of age.
Term
Misrepresentation
Definition A false statement of a material fact made with the intent to induce some action from another party.
Term
Monument
Definition A fixed object and point established by surveyors
to establish land locations; includes not only artificial objects such as posts and fences, but also
natural objects such as trees, mountains and water courses.
Term
Mortgage
Definition An instrument in writing which, when recorded, created a lien upon property pledged as security
for the repayment of a debt or obligation.
Term
Mortgage Banker
Definition A corporation or firm which makes, delivers and
services mortgage loans.
Term
Mortgage Broker
Definition A person or firm that acts as an intermediary
between borrower and lender.
Term
Mortgagee
Definition The party who lends money and accepts a
mortgage to secure the payment of the debt.
Term
Mortgagor
Definition The party who borrows money and gives a
mortgage on the property as security for his obligation to repay the debt.
Term
Mud Tunnel
Definition Passageway for subterranean termites.
Term
Multiple Listing Service (M.L.S.)
Definition An arrangement among brokers whereby they
share their listings.
Term
National Association of Realtors (N.A.R.)
Definition A professional organization of real estate
professionals; only brokers who are members of local real estate boards are entitles to use the trademark name "Realtor", salespeople are
called "Realtor-Associates."
Term
Navigable Waters
Definition Those bodies of water that are capable of being
used for public transportation.
Term
Negotiable Instrument
Definition A written instrument signed by its maker or
drawer, containing an unconditional promise to pay a certain sum of money; can be passed freely
from one person to another.
Term
Negotiate
Definition To transact business; to arrange terms of a
contract.
Term
Net Income
Definition With reference to property, the sum derived after
a vacancy allowance and expenses have been deducted from the gross income; generally
described as net income before depreciation, and usually defining the income a property will earn
in a normal year's operation (net operating income).
Term
Net Lease
Definition A lease in which the tenant pays rent for
occupancy, plus maintenance and operation expenses, and usually including taxes and
insurance.
Term Definition
Net Listing
A listing which provides that the agent may retain all sums received over and above a net price to
the owner as compensation for his services.
Term
Nominal Consideration
Definition One bearing no relation to the real value of the contract. An example is a property deeded for
$10,000.
Term
Nonconforming Use
Definition A use which is contrary to zoning laws, but which is permitted because the use was allowed before the zoning law came into effect; a grandfather
clause.
Term
Nonconforming Use
Definition A use which is contrary to zoning laws, but which is permitted because the use was allowed before the zoning law came into effect; a grandfather
clause.
Term
Note
Definition A written instrument acknowledging a debt and
promising payment.
Term
Notice of Nonresponsibility
Definition A notice provided by law designed to relieve a
property owner from responsibility for the cost of work done on the property or materials furnished
therein; usually applicable when a leasee contracts to have work performed. Not applicable
in Hawaii.
Term
Notice to Quit
Definition Notice to a tenant to vacate.
Term
Novation
Definition The substituting of a new obligation for an old
one (as in a Va substitution).
Term
Obsolescence
Definition Functional obsolescence or lack of desirability in
terms of layout, style and design as compared with that of a new property serving the same
function; economic obsolescence or a loss in value from causes in the neighborhood, but outside the
property itself.
Term
Offer
Definition A promise by one party to act in a certain manner
provided the other party will act in the manner requested. In a real estate sales contract, the offer to purchase realty according to certain stipulated
terms and conditions.
Term
Ohana Zoning
Definition Amends the Comprehensive Zoning Code by permitting a second dwelling unit on certain
residentially zoned lots, thus providing immediate and less expensive housing alternatives.
Term
Open-End Mortgage
Definition A mortgage containing a clause which permits the mortgagor to borrow additional money up to the
original amount of the loan after the loan has been reduced, without rewriting the mortgage.
Not to confuse with open mortgage, which is any mortgage with no pay
Term
Open-End Mortgage
Definition A mortgage containing a clause which permits the mortgagor to borrow additional money up to the
original amount of the loan after the loan has been reduced, without rewriting the mortgage.
Not to confuse with open mortgage, which is any mortgage with no payment penalty.
Term
Open Listing
Definition A listing given to any number of agents without liability to compensate any except the one who
first procures a buyer ready, willing and able to meet the terms of the listing.
Term
Option
Definition A right given for consideration to purchase or lease a property upon specified terms within a
specified times. Purchaser is the optionee.
Term Definition
Ordinance
A legislative enactment of a city or county, such as zoning.
Term
Over Improvement
Definition An improvement which is not the highest and best
use for the site on which it is placed, usually by reason by excess size or cost.
Term
Package Mortgage
Definition A mortgage commonly used in subdivision
developments whereby chattels such as appliances are "packaged" into the mortgage along with the
real property.
Term
Panic Peddling
Definition Creating an atmosphere of fear in persuading
owners to sell; a discriminatory act.
Term
Parol
Definition oral; verbal
Term
Parol Evidence
Definition Verbal or written testimony which precedes a
written contract.
Term
Partial Taking
Definition The taking of a portion of a piece or property
through condemnation.
Term
Parties (Party)
Definition Those entities taking part in a transaction as a principal, e.g.; seller, buyer, or lender in a real
estate transaction.
Term
Partition
Definition Court proceedings by which co-owners of
commonly owned property seek to sever their common ownership; not with tenancy by entirety.
Term
Partnership
Definition A contract between two or more persons to carry
on as co-owners of a business, and to share the profits in certain proportions.
Term Party Wall
Definition A wall erected on the line between adjoining
properties that are under separate ownership, for the use of both owners.
Term
Patent
Definition A conveyance for the transfer of title to land
owned by the government; land patent.
Term
Payment Bond
Definition The part of a performance bond that assures the owner that material and labor furnished in the
construction of the building will be fully paid for and no mechanic's liens will be filed.
Term
Percentage Lease
Definition A lease of property in which the rental is based
upon the volume of gross sales made on the leased premises.
Term
Performance Bond
Definition A bond that provides assurance of the completion
of an undertaking in accordance with an agreement, such as that supplied by a contractor
guaranteeing the completion of a building project.
Term
Periodic Tenancy
Definition A lease running from period to period, such as
week-to-week, or month-to-month.
Term
Personal Property
Definition Any property not real property; personality.
Term
Pertinent
Definition Relevant; applicable
Term
Piggy-Back Loan
Definition One lender originates loan, another joins in as co-
operating lender, with neither junior; one property, two lenders.
Term
Plain Language
Definition Hawaii law requiring certain contracts (under 25,
000) and leases to be written in ordinary,
everyday, non-legal language.
Term
Plan Manager
Definition A person who undertakes the duties,
responsibilities and obligations of managing a timeshare plan.
Term
Planned Unit Development
Definition A development and zoning concept that is
designed to produce a high density of dwelling units with maximum utilization of open spaces.
Also called Planned Development Housing (PDH).
Term
Plat
Definition A plan or map of certain piece or pieces of land.
Term
Plat Field Book
Definition A public record containing facts pertaining to
land.
Term
Plottage
Definition The land increment produced by combining
smaller individually owned plots into a large tract under a single ownership; see assemblage.
Term
Points
Definition See Discount Points
Term
Police Power
Definition The inherent right of a government to enact such legislation as may be deemed necessary to protect
and promote the health, safety and general welfare of the public, such as zoning.
Term
Power of Attorney
Definition A written instrument authorizing a person (an attorney in fact) to act as the agent on behalf of
another to the extent indicated in the instrument.
Term
Power of Sale
Definition A provision in a mortgage permitting the lender,
upon borrower's default, to sell the secured property at public auction without need to have a
court foreclose.
Term
Prepayment Clause
Definition The clause in a mortgage or note stating the
penalty, if any, for payment before it actually becomes due.
Term
Prescription
Definition An easement or title obtained by possession for a
prescribed period; prescriptive rights.
Term
Prima Facie Evidence
Definition Evidence which is good and sufficient on its face ("at first view") to establish a given fact or case,
unless rebutted or contradicted.
Term
Primary Money market
Definition The source of loan funds available directly to
borrowers, whether for first or second mortgages; loan originations.
Term
Prime Rate
Definition The minimum interest rate charged by a bank on
short term loans to its best clients.
Term
Principal
Definition The employer of an agent or broker; a sum of money owed as a debt upon which interest is
calculated, not spelled Principle.
Term
Probate
Definition An action of the court to determine the validity
and legality of a last will and testament.
Term
Procuring Cause
Definition The cause of a series of events that leads to the
consummation of a sale.
Term
Promulgate
Definition To publish, announce or declare.
Term
Proprietary Lease
Definition A lease in a cooperative apartment between the owner-corporation and the tenant-stockholder.
Term Proprietorship
Definition A business held by a person who has legal title or
exclusive right thereto.
Term
Prorate
Definition To divide or distribute proportionately; to divide monies, usually at time of closing, proportionately
between the seller and buyer.
Term
Prospectus
Definition A printed statement distributed to describe and advertise a new business venture, a real estate
project or stock issue.
Term
Purchase Contract
Definition The Hawaii Association of Realtors standard
form purchase agreement.
Term
Purchase Money Mortgage
Definition A mortgage on property given by a buyer, either to the seller or to a third party in order to secure
a portion of the purchase price.
Term
Qualified Fee
Definition An estate in fee simple bound by limitations
imposed by the grantor.
Term
Quiet Enjoyment
Definition The right of an owner or tenant legally in possession to the use of property without
interference from the landlord, or grantor, or anyone claiming through him.
Term
Quiet Title
Definition A court action brought to establish title or to
remove a cloud on the title; an action clearing tax titles or titles based upon adverse possession.
Term
Quitclaim Deed
Definition A deed containing no warranties or covenants,
which relinquished any interest, title or claim in property the grantor may have, if any.
Term Definition
Quorum
A majority of the entire body; minimum needed to legally conduct a meeting.
Term
Ratification
Definition The approval or confirmation by one person, of an act or contract performed or entered into on
his behalf by another, who at the time lacked authority to act as his agent.
Term
Ready, Willing & Able
Definition A person who is prepared, financially able, and
willing to enter into a binding contract.
Term
Reality of Consent
Definition A contract in which the parties enter knowingly,
voluntarily, with no representation, duress or mistake.
Term
Realtor
Definition A broker who belongs to NAR.
Term
Realtor-Associate
Definition A salesperson that works for a Realtor and
belongs to the local Board of Realtors.
Term
Recapture Rate
Definition A factor used in the capitalization approach to value to estimate the return of the investment.
Term
Receiver
Definition A court appointed custodian who holds property
for the court, pending final disposition of the matter before the Court.
Term
Receiver
Definition A court appointed custodian who holds property
for the court, pending final disposition of the matter before the Court.
Term
Reciprocal Beneficiaries
Definition Where by following strict rules, people who
couldn't otherwise marry are given certain rights of those who can.
Term Reconveyance
Definition A conveyance to the landowner of the title held by
a trustee under a deed of trust.
Term
Recording
Definition The act of writing or entering an instrument into a book of public records, which constitutes notice to all persons of the rights or claims contained in the instrument; often called constructive notice.
Term
Redemption
Definition The right of an owner to redeem or reclaim property by paying the debt after default,
together with interest and costs, and before sale at foreclosure. Statutory right of redemption refers
to the right in some states (but not Hawaii), to redeem the property after foreclosure or other enforcement action, during a certain period of
time specified by statute.
Term
Redlining
Definition A practice by lending institutions restricting the number of loans that will be underwritten in a
given community. The practice is illegal if based on the racial composition of a community.
Term
Reduction Certificate
Definition A certificate showing the unpaid balance of a mortgage, the interest, and the maturity date. Used when a prospective purchaser is going to assume a mortgage to take title subject to an
existing mortgage. It is given by the mortgagee to the assignee.
Term
Refinance
Definition To obtain a new loan to pay off an existing
mortgage or agreement of sale.
Term
Reformation
Definition An action to correct a mistake in a deed or other
document.
Term
Release
Definition The relinquishment or surrender of a right,
claim, or interest.
Term
Release of Mortgage
Definition The instrument given by the mortgagee to the
mortgagor indicating discharge of the mortgage, stating that the obligation has been fulfilled and
the debt paid off.
Term
Reliction
Definition Gradual recession of water from the usual
watermark.
Term
Remainder Estate
Definition An estate created by single grant simultaneously with another which vests with a third party after
termination of the prior estate; such as a life estate.
Term
Remainderman
Definition The one in whom an estate vests after termination
of a prior estate.
Term
Rendered
Definition Furnished, presented; performed; made.
Term
Rescind
Definition To annul; cancel.
Term
Rescission
Definition The annulling. revocation, or repealing of a
contract by mutual consent of the parties, or for cause by either party to the contract, and
returning the parties to their original position (the "status quo").
Term
Rescission Clause
Definition A clause occasionally found in an agreement of sale which requires the seller to return all of the
buyer's payments less costs and a fair rental value in the event the buyer defaults.
Term
Reservation
Definition A right retained by a grantor in conveying
property.
Term
Reserve Account
Definition See Customer Trust Fund, or Impound Account.
Term
Restriction
Definition A clause in a deed or other written instrument
limiting the use to which the property may be put.
Term
Restrictive Covenant
Definition A limitation on the use of a property placed in a
deed; a private restriction.
Term
Reverse Annuity Mortgage
Definition A mortgage whereby the lender makes a monthly
payment to the mortgagor, thereby giving him extra money for living expenses, but reducing his
equity.
Term
Reversion
Definition The residue of an estate left to the grantor or his
heirs after termination of all prior estates and interests; the right of a lessor to recover possession of leased property upon the
termination of the lease, with all subsequent rights to use and enjoy the property.
Term
Reversionary Interest
Definition A present right to future possession of an estate.
Term
Revocation
Definition The act of recalling some agreement. power or
interest previously given.
Term
Rider
Definition An addition, addendum or endorsement annexed
to a document; it should be signed or initialed.
Term
Right of Elections
Definition The right of a surviving spouse to 1/3 of the net
probate estate of the deceased spouse.
Term
Right of Way
Definition An easement or rite of passage over another's
land.
Term
Riparian Rights
Definition The right of a landowner to the use of water on or
adjacent to his land.
Term
Royal Patent
Definition The instrument of original grant of sovereign
lands in Hawaii to individuals.
Term
Running with the Land
Definition A covenant that extends beyond the original
parties to an agreement and binds all subsequent parties.
Term
Sale & Leaseback
Definition The sale & subsequent leasing back by the seller-
lessee.
Term
Sandwich Lease
Definition A leasehold interest of a sublessor that lies between the primary lease (owner) and the
operating lease (user).
Term
Satisfaction of Mortgage
Definition An instrument used when a lien is paid off and satisfied on the records; also called satisfaction
piece.
Term
Second Mortgage
Definition One that is recorded after a first mortgage, thus
secondary in priority.
Term
Secondary Mortgage Market
Definition The marketplace for the sale and purchase of
existing mortgages.
Term
Section
Definition A section of land established by government
survey containing 640 acres, or 1 square mile. Also, a portion of a taz map description.
Term
Security Deposit
Definition A deposit made to assure performance of an
obligation, usually by a lessee.
Term
Seisin
Definition Possession of real property by one entitled
thereto; a warranty that at the time of delivery of a deed, the grantor actually has the right and capacity to convey good legal title; also seizen.
Term
Septic Tank
Definition An underground tank in which sewage from the house is reduced to liquid by bacterial action and
drained off.
Term
Servient Estate
Definition An estate of land over which an easement exists in favor of the dominant estate; servient tenement.
Term
Setback
Definition An ordinance prohibiting the erection of a
building or structure between the curb and other established line and the setback line; the distance
a house must be set back from the street in accordance with local zoning rules.
Term
Severalty
Definition Sole or independent ownership.
Term
Severange Damages
Definition Damages paid to an owner when his property has
been partially taken by condemnation, thus reducing the highest and best use of the
remaining land.
Term
Short Sale
Definition A sale where the seller's net proceeds do not bring
in an amount substantial enough to cover the amount owed on the mortgage.
Term
Simple Interest
Definition Interest computed upon the declining balance of a particular amount; as principal declines so does
the interest payment.
Term
Single Agency
Definition The brokerage practice of representing only one
party to a real estate transaction, either the buyer or the seller, never both.
Term
Sky Lease
Definition A lease of space above a piece of real estate.
Term
Special Agent
Definition One authorized to perform limited specific
functions.
Term
Special Assessment
Definition An assessment generally made against only those specific parcels of realty directly benefiting from
the improvement.
Term
Special Warranty Deed
Definition A deed in which the grantor warrants or
guarantees the title only against defects arising during his ownership and not against defects
before the time of his ownership.
Term
Specific Performance
Definition A remedy that the court will grant in certain
cases, compelling the defendant to perform or carry out the terms of a valid, existing agreement
or contract.
Term
Spot Zoning
Definition Allows one property in an area to be zoned
differently than the rest.
Term
Statute
Definition A law established by an act of the legislature.
Term
Statute of Frauds
Definition State law requires among other things that
certain contracts relating to real estate must be in writing to be enforceable at law.
Term
Statute of Limitations
Definition Laws setting forth the period of time in which suit
can be brought for a particular act.
Term Definition
Steering
Directing prospective buyers or tenants into or away from certain areas on discrimination
grounds.
Term
Step-Up Lease
Definition A lease with fixed increases at stated intervals, or increases based upon periodic appraisals at stated
times; graduated lease, graded lease.
Term
Straw Man
Definition One who purchases property for another to conceal the identity of the real purchaser; a
dummy purchaser; a nominee.
Term
Sub-agent
Definition An agent working under the main agent, such as
a salesperson for a listing broker.
Term
Sublease
Definition A lease given by a lessee for a portion of the
unexpired balance of his term.
Term
Subordination Clause
Definition A clause in a mortgage or lease stating that the
rights of the holder shall be secondary or subordinate to a subsequent encumbrance.
Term
Subrogation
Definition The substitution of one person in place of another with reference to a lawful claim, demand or right,
so that he succeeds to such rights of the other.
Term
Summary Possession
Definition When for good reason a landlord may terminate
a lease and the tenant must appeal and show cause why he should not be evicted. Also called Dispossess Proceeding or Unlawful Detainer.
Term
Surrender
Definition The cancellation of a lease by an act of mutual
consent of lessor and lessee.
Term
Surrender
Definition The cancellation of a lease by an act of mutual
consent of lessor and lessee.
Term
Survey
Definition The process by which a parcel of land is
measured and its area ascertained.
Term
Syndication
Definition Multiple ownership of an investment, usually in
the form of a limited partnership.
Term
Tacking
Definition To attach on to another adverse possessor's time.
Term
Take-Out Financing
Definition Permanent of long-term financing of individual condominium units for their respective buyers.
Term
Tax Deed
Definition A deed for property sold by a government unit
for non-payment of taxes.
Term
Tax Sale
Definition A sale of property, usually at auction, for non-
payment of assessed taxes.
Term
Tenancy At Sufferance
Definition A tenancy arising when the tenant wrongfully holds over after the expiration of his term. The landlord has the choice of evicting the tenant or accepting him for a similar term and under the
conditions of the previous holding.
Term
Tenancy At Will
Definition Possession and occupancy of land terminate at the
will of either party.
Term
Tenancy By The Entirety
Definition A tenancy held by husband and wife giving each
the equal right to possession and enjoyment during their joint lives, along with the right to
sole ownership upon the death of either partner.
Term
Tenancy For Years
Definition Leasing of a property for a fixed period of time.
Term
Tenancy in Common
Definition Ownership by two or more persons who hold
undivided interest, without right of survivorship. Upon the death or one tenant, his interest goes to his heirs. Interests need not be equal, and each owner is possessed of the whole of an undivided
part.
Term
Tenant's Fixture
Definition See Trade Fixture
Term
Tender
Definition To offer; to present
Term
Tenements
Definition All rights in land that pass with a conveyance of
the land.
Term
Testament
Definition The written declaration of one's last will.
Term
Trespass
Definition A wrongful invasion of land by one having no
lawful right to enter.
Term
Testate
Definition To die with a will.
Term
Testator
Definition One who leaves a will in force at his death.
Term
Time is of the Essence
Definition The requirement of punctual performance; a time
period that may not be extended.
Term
Time Sharing
Definition A form of multiple ownership in which
purchasers buy specific time periods for use of the property represented by tenancy in common
interest.
Term
Title
Definition Evidence that an owner of land is in lawful
possession thereof; Ownership.
Term
Title Insurance
Definition A policy of insurance that indemnifies the holder for loss sustained by reason of a defect in the title,
provided the loss does not result from a defect excluded by the policy provisions.
Term
Topography
Definition The nature of the surface of land.
Term
Torrens System
Definition A system for the registration of land under state
law indicating the status of the title, including ownership and encumbrances, without the necessity of additional search of the public
records; Land Court.
Term
Tort
Definition A negligent or intentional wrong; a wrongful act;
violation of a legal act.
Term
Trade Fixture
Definition Articles of personal property annexed to real
property, but which are necessary to the carrying on of a trade and are removable by the owner or
tenant when he leaves; Also, tenant's fixture.
Term
Transact
Definition To conduct business affairs; to carry out, perform
or manage.
Term
Transfer Certificate of Title (TCT)
Definition The Land Court registration document assigned
to a property.
Term
Trust Deed
Definition A deed given by borrower to trustee to be held
pending fulfillment of an obligation.
Term
Trustee
Definition One who holds property in trust for another to
secure the performance of an obligation.
Term Truth-In-Lending
Definition A federal law that lets borrowers know the exact
cost of obtaining credit; a disclosure devise.
Term
Undivided Interest
Definition Title to property owned by two or more persons, none of whom are entitled to claim or possess any
specific part.
Term
Uniform Standards of Professional Appraisal Practice
Definition A self regulated organization of professional
appraisers, promoting high standards in appraisal practices.
Term
Unilateral Contract
Definition A contract whereby only one party is obligated to
perform his obligation to another.
Term
United States Government Survey System
Definition A method of describing or locating real property
by reference to the governmental survey; rectangular survey system.
Term
Unmarketable Title
Definition A title containing substantial defects that might
cause a prospective purchaser to suffer title litigation and possible loss.
Term
Upset Price
Definition The minimum price at a foreclosure sale below
which the property cannot be sold.
Term
Usury
Definition Charging a rate of interest on a loan greater than
that permitted by law. It is presently 12% on personal loans.
Term
Valid
Definition Having binding force; legally sufficient,
authorized by law.
Term
Valuation
Definition The estimated value of property.
Term Variable Rate Mortgage
Definition Mortgage in which interest rate will fluctuate
depending on terms of mortgage.
Term
Variance
Definition Permission obtained from zoning authorities permitting the construction of a building or
structure that is forbidden by present zoning ordinances; a departure from the current zoning
regulation.
Term
Vendee
Definition The purchaser; buyer
Term
Vendor
Definition The seller
Term
Venue
Definition The geographic area in which a court has legal
jurisdiction.
Term
Verify
Definition To confirm or substantiate by oath.
Term
Vested Interest
Definition A present right or title to realty, but with
possession delayed to some uncertain time in the future.
Term
Veterans Administration (VA) Also, Dept. of Veterans Affairs (DVA)
Definition An agency of the Federal Government, whose
activities include guaranteed repayment of certain loans in the event of default.
Term
Void
Definition To have no force or effect; that which is
unenforceable.
Term
Voidable
Definition That which is capable of being adjudged void, but
is not void unless action is taken to make it so; able to be voided.
Term Definition
Voluntary Lien
Any lien placed on property with consent of, or as a result of, the voluntary act of the owner, e.g., a
mortgage.
Term
Waive
Definition To relinquish, or abandon; the abandonment of
some claim or right.
Term
Warranty Deed
Definition A deed in which the grantor fully warrants a good
clear title to the property; a deed that contains covenants of title.
Term
Waste
Definition Improper use or damage by one in possession
such as tenant or vendee.
Term
Wraparound Mortgage
Definition Method of financing in which a new mortgage is
wrapped around an existing first mortgage, placed in a secondary position; an all-inclusive
mortgage.
Term
Writ of Execution
Definition A writ or court order authorizing and directing an officer of the court to carry out the judgment
or decree of the court.
Term
Yield
Definition The return on an investment; the amount of profit made as a percentage of the amount
invested.
Term
Zone
Definition An area set aside for specific use, subject to
certain restrictions or restraints; also part of tax map description.
Term
Zoning
Definition An act of the city or county authorities by
exercise of police power in regulating, controlling or specifying the type of use to which the property
may be put in specific areas.