3-Way Switch: A light switch that allows a person to turn the light on or off from either end of a hallway or stai
30-Day Notice: Notice to vacate a premises under a periodic tenancy. Notice must be for the rent period, but not mo
Abatement: A reduction, decrease, or the removal of a nuisance.
ABCD Paper: Mortage loans are rated as A, B, C, or D paper. A paper loans are the highest quality, lowest risk l
Absorption Rate: The total number of vacant square feet of office space divided by the square footage leased per year
Abstract Of Judgment: A full summary by the court of a judgment. It becomes a general lien on all of a debtors property in
Abstract Of Title: A full summary of all consecutive grants, conveyances, wills, records and judicial proceedings affec
Abstracter: The person preparing the abstract of title. The abstracter searches the title as recorded or registe
Acceleration Clause: A provision in a mortgage, trust deed, promissory note or contract for deed (agreement of sale) that
Acceptance: An acceptance is a promise by the offeree to be bound by the exact terms proposed by the offeror. Th
Accession: Acquiring title to additions or improvements to real property as a result of the annexation of fixtu
Accord And Satisfaction: The settlement of an obligation. An accord is an agreement by a creditor to accept less than bargain
Accounting: The agent must be able to report the status of all funds received from or on behalf of the principal
Accretion: The increase or addition of land by the deposit of sand or soil washed up naturally from a river, la
Accrued Depreciation: 1. In accounting, a bookkeeping account that shows the total amount of depreciation taken on an asse
Accrued Items: In a closing statement, items of expense that are incurred but not yet payable, such as interest on
Accusation: The first step in a disciplinary action against a licensee.
Acknowledgment: A formal declaration made before a duly authorized officer, usually a notary public, by a person who
Acquisition Cost: The amount of money or other valuable consideration expended to obtain title to a property. It inclu
Acre: A measure of land equal to 43.560 square feet, 4,840 square yards, 4,047 square meters, 160 square r
Actual Damages: Real, substantial and just damages, or the amount awarded to a complainant in compensation for his a
Actual Eviction: The legal process that results in the tenants being physically removed from the leased premises.
Actual Notice: Express information or fact, that which is known, direct knowledge.
Ad Valorem: The Latin word for according to value.
Ad Valorem Tax: A tax levied according to value, generally used to refer to real estate tax. Also called the general
Add-On Rate: Interest charged on a principal amount for specified term, regardless of any repayments of principal
Addendum: Additional material attached to and made part of a document. If there is space insufficient to write
Ademption: Disposal by a testator in his or her lifetime of a specific property bequeathed in his or her will s
Adjustable Rate Mortgage (ARM): A broad term for a loan (mortgage or deed of trust) with rates and terms that can change. The adjust
Adjusted Basis: The original cost basis of a property reduced by certain deductions and increased by certain improve
Adjustment: Decrease or increase in the sales price of a comparable property to account for a feature that the p
Adjustment Period: In an adjustable rate mortgage (ARM), the adjustment period, is the period of time (i.e., one month,
Administered Price System: Federal National Mortgage Association securities purchasing procedure where required yields are adju
Administrative Agency: A government agency that makes rules and regulations to carry out the law. A states real estate comm
Administrative Order: A legal document signed by the EPA directing an individual, business, or other entity to take correc
Administrator: A male person appointed by the court to settle the estate of a person who has died intestate (leavin
Administratrix: A female person appointed by the court to settle the estate of a person who has died intestate (leav
Advance Fee: A fee paid before any services are rendered. Specifically, it is a practice of some brokers to obtai
Advance Fee Addendum: An agreement specifying services for which an agent or broker will be compensated including a provis
Adverse Action: A denial or revocation of credit, a change in the terms of an existing credit arrangement, or a refu
Adverse Possession: The acquiring of title to real property owned by someone else by means of open, notorious, hostile a
Aesthetic Zoning: Zoning for beauty. May regulate architectural styles, colors or signage.
Affidavit: A sworn written statement made under oath before a notary public or other official authorized by law
Affidavit Of Title: A written statement, made under oath by a seller or grantor of real property and acknowledged by a n
Affirmation: A formal declaration that an affidavit is true.
Affirmative Easement: Gives the owner of the dominant tenement the right to use the servient tenement.
After-Acquired Title: Title or interest acquired by the grantor after a property has been conveyed.
Agency: A relationship created when one person, the principal, delegates to another, the agent, the right to
Agency Coupled With An Interest: An agency relationship in which the agent is given an estate or interest in the subject of the agenc
Agent: One authorized to represent and to act on behalf of another person (called the principal). Unlike an
Agent Property Evaluation: A questionnaire filled out by real estate agents while reviewing a listed property. Often completed
Aggrieved Party: One whose legal right is invaded by an act(s) of another. The word aggrieved refers to a substantial
Agricultural Lease: Agricultural landowners often lease their land to tenant farmers, who provide the labor to produce a
Aida: Attention, Interest, Desire, Action. In real estate advertising, creating ads that get the Attention
Aids: Persons with acquired immunodeficiency syndrome are protected under most federal and state discrimin
Air Lot: A designated airspace over a piece of land. An air lot, like surface property, may be transferred.
Air Quality Standards: The level of selected pollutants set by law that may not be exceeded in outside air. Used to determi
Air Rights: Rights to the use of the open space or vertical plane above a property. Ownership of land includes t
Alienation: The act of transferring ownership, title, interest, or estate in real property from one person to an
Alienation Clause: A provision sometimes found in a promissory note or mortgage that provides that the balance of the s
Allodial System: A system of land ownership in which land is held free and clear of any rent or service due to the go
Alquist-Priolo Special Study Zone: A California law requiring a real estate agent or owner to disclose to prospective buyers that a pro
Ambient: Any unconfined portion of the atmosphere, open air, outside surrounding air.
Amendment To The Escrow Instructions: A change to escrow instructions requiring the agreement of both buyer and seller.
Amendments: An amendment is a change to the existing content of a contract. Any time words or provisions are add
Amenity Or Amenities: The qualities and state of being pleasant and agreeable. In residential appraising, those peculiar a
American Institute Of Real Estate Appraisers (AIREA): A professional organization formerly affiliated with the National Association of REALTORS. AIREA pro
American Land Title Association (ALTA) Policy: A title insurance policy that protects the interest in a collateral property of a mortgage lender wh
American Society Of Appraisers (ASA): A professional organization of appraisers engaged in the appraisal of both real and personal propert
American Society Of Real Estate Counselors (ASREC): A professional organization, affiliated with the National Association of REALTORS, composed of indiv
Americans With Disabilities Act (ADA): On July 26, 1990, President Bush signed into law the Americans with Disabilities Act of 1990 (ADA),
Amortization: The gradual repayment of a debt by means of systematic payments of principal and/or interest over a
Annexation: An addition to property by the act of joining or uniting one thing to another, as in attaching perso
Annual Debt Service: Monthly loan payments (principal and interest, if any) times 12 months.
Annual Operating Expenses: The actual costs it takes to run the property, such as property tax, insurance, maintenance, repairs
Annual Percentage Rate (APR): An expression of the relationship of the total finance charge to the total amount to be financed as
Annuity: A sum of money recieved by an annuitant in a series of fixed periodic payments.
Anticipation: The appraisal principle which holds that value can increase or decrease based on the expectation of
Antimerger Clause: A clause in a mortgage or deed of trust specifying that the senior lienholder will retain lien prior
Antitrust Laws: State and federal laws designed to maintain and preserve business competition. The Sherman Antitrust
Apartment Building: A building having separate units for permanent tenants who rent or lease them. The owner of the buil
Appraisal: An estimate of the monetary value of a property on the open market, an estimate of a propertys type
Appraiser: An independent person trained to provide an unbiased estimate of value, such as a professional servi
Appreciation: An increase in the worth or value of a property due to economic or related causes, which may prove t
Appropriation: Appropriation is the way a taxing body authorizes the expenditure of funds and provides for the sour
Appropriative Water Rights: A water right favored in some states where an owner has the exclusive rights to take all the water f
Appurtenant: Belonging to, adjunctive, appended or annexed to. For example, the garage is appurtenant to the hous
Appurtenant Easement: An easement that is annexed to the ownership of one parcel and allows the owner the use of the neigh
Aquifer: An underground water-bearing layer of rock, including gravel and sand, that will yield water in usab
Arbitrage: Borrowing at one interest rate and investing at a higher rate.
Arbitration: A nonjudicial method of resolving disputes by selecting a neutral party to make a final determinatio
Arranger Of Credit: As defined under the federal Truth-in-Lending Law, a person who regularly arranges for the extension
Arrears: 1. The state of being delinquent in paying a debt. 2. At or after the end of the period for which ex
Article 5: The part of the Business and Professions Code governing transactions in real property sale contracts
Article 6: The part of the Business and Professions Code governing real property securities dealers.
Article 7: The part of the Business and Professions Code governing commissions, loan costs, and payment require
As-Is: Words in a contract intended to signify that no guarantees, whatsoever, are given regarding the subj
Asbestos: A mineral once used in insulation and other materials that can cause respiratory diseases. Asbestos
Asbestos Containing Material (ACM): The EPA defines asbestos containing material as any material or product that contains more than one
Asbestosis: A disease associated with inhalation of asbestos fibers. The disease makes breathing progressively m
Assemblage: The combining of two or more adjoining lots into one larger tract to increase their total value.
Assessment: The imposition of a tax, charge or lein, usually according to established rates.
Asset: An asset is something of value, encumbered or not, owned by a person, corporation or other entity. A
Asset Management: The assembly, management and disposition of a portfolio of investment properties.
Assignment: The transfer of the right, title and interest in the property of one person (the assignor) to anothe
Associate Broker: A real estate license classification used in some states to describe a person who has qualified as a
Assumption Of Mortgage: The acts of acquiring title to property that has an existing mortgage and agreeing to be personally
Assumption Subject To: When a loan is taken subject to, the seller agrees to remain liable and the buyer accepts no liabili
Attachment: The legal process of seizing the real or personal property of a defendant in a lawsuit by levy or ju
Attorney General: The chief law officer of the federal or state government, who appears for the people in criminal cou
Attorney-In-Fact: A competent and disinterested person who is authorized by another person to act in his or her place.
Attorneys Opinion Of Title: An abstract of title that an attorney has examined and has certified to be, in his or her opinion, a
Attractive Nuisance Doctrine: An owner has a duty to reasonably protect children from injury when his or her property is likely to
Auction: Selling property to the highest bidder.
Automated Underwriting: Computer systems that permit lenders to expedite the loan approval process and reduce lending costs.
Automatic Extension: A clause in a listing agreement that states that the agreement will continue automatically for a cer
Avulsion: The sudden tearing away of land, as by earthquake, flood, volcanic action or the sudden change in th
Back-End Qualification: When qualifying a prospective buyer for financing, the ratio of the borrowers income to monthly debt
Back-End Ratio: The ratio of monthly housing costs (PITI) plus long-term debt service to total monthly income.
Backup Offer: An offer to buy, submitted to a seller, with the understanding that the seller has already accepted
Bail Bond Lien: A real estate owner who is charged with a crime for which he or she must face trial, and may post ba
Balance: The appraisal principle that states that the greatest value in a property will occur when the type a
Balanced Trust: A combination trust is referred to as a balanced trust in California.
Balloon Payment: Under an installment loan agreement, a final payment that is substantially larger than the previous
Baluster: Any of the vertical supports for a stair, balcony or railing.
Bankers Rule: Using a 360-day year for prorations.
Bankruptcy: A condition of financial insolvency in which a persons liabilities exceed assets and the person is u
Bankruptcy Score: A scoring system to indicate risk of borrower default.
Bargain And Sale Deed: A deed that carries with it no warranties against liens or other encumbrances but that does imply th
Base Line: One of a set of imaginary lines running east and west used by surveyors for reference in locating an
Basic Form Homeowners Policy: The most common homeowners policy is called a basic form. It provides property coverage against fire
Basis: The dollar amount that the Internal Revenue Service attributes to an asset for purposes of determini
Before-Tax Cash Flow: The result when the annual debt service is subtracted from the net operating income.
Benchmark: A permanent reference mark or point established for use by surveyors in measuring differences in ele
Beneficiary: A person who receives benefits from the gifts or acts of another, as in the case of one designated t
Beneficiary Statement: When an existing loan is to be paid or assumed by a buyer, the escrow agent will obtain a statement
Best-Faith Estimate: The acquisition cost is the purchase price plus a best-faith estimate of all settlement costs.
Bilateral Contract-Agreement: A contract in which each party promises to perform an act in exchange for the other partys promise t
Bill Of Sale: A written agreement by which one person sells, assigns or transfers to another his or her right to,
Binder: An agreement that may accompany an earnest money deposit for the purchase of real property as eviden
Binder Policy: A type of title insurance policy offered by some title companies which allows for a refund of the ba
Biweekly Loan: A loan with twice-monthly payments to match a borrowers payroll schedule.
Blanket Loan: A mortgage covering more than one parcel of real estate, providing for each parcels partial release
Blanket Trust Deed: A trust deed secured by several properties or a number of lots. A blanket mortgage is often used to
Blended Rate: An interest rate for a newly financed loan that is higher than the existing rate but lower than the
Blind Ad: An advertisement that does not include the name and address of the person placing the ad, only a pho
Blockbusting: An illegal and discriminatory practice whereby one person induces another to enter into a real estat
Blue-Sky Provision: Requiring full disclosure of all risks in a limited partnership solicitation under the Uniform Partn
Bona Fide: In good faith, honestly, openly, and sincerely and without deceit or fraud. In an attitude of trust
Bond: 1. A debt instrument, an obligation to pay, a security issued by a corporation. 2. A written promise
Boot: Money or other property that is not like-kind, which is given to make up any difference in value or
Branch Office: A secondary place of business apart from the principal or main office from which real estate busines
Breach Of Contract: Violation of any of the terms or conditions of a contract without legal excuse, default, nonperforma
Break-Even Point: In income property, the figure at which rental income is equal to expenses and debt service.
Breaker: A switch-like device in electrical panel boxes used to keep the electrical current from exceeding th
Breaker Panel: A large rectangular shaped electrical box used to distribute electricity throughout a house after pa
Bridge Loan: A short-term loan made to cover the period between the termination of one loan, such as an interim c
Broad-Form Homeowners Policy: Covers falling objects, damage due to the weight of ice, snow or sleet, collapse of all or part of t
Broker: One who acts as an intermediary on behalf of others for a fee or commission.
Broker Cooperation: Working with outside licensed real estate brokers who have prospective tenants in exchange for a fin
Brokerage: The bringing together of parties interested in making a real estate transaction. The business of a b
Brownfields: Economically depressed urban areas suffering from real or perceived hazardous material contamination
Budget Loan: A loan with payments set up to cover taxes and insurance in addition to interest and principal reduc
Build-Up Rate: The discount or interest rate used in the selection of the capitalization rate for an investment pro
Building Code: An ordinance that specifies minimum standards of construction for buildings to protect public safety
Building Inspection: An overall inspection of a home or building performed by a qualified contractor or inspector. The in
Building Owners And Managers Association (BOMA): A national organization of more than 4,000 professionals in the highrise/office building industry, w
Building Permit: Written governmental permission for the construction, alteration or demolition of an improvement, sh
Bulk Sales Act: An act that requires the recording and publication of a sale that is not in the normal course of bus
Bulk Sales Transfer: Any transfer in bulk (and not a transfer in the ordinary course of the sellers business) of a major
Bulk Transfer Of Goods: Any transfer in bulk of a substantial part of the materials, supplies, merchandise, equipment or oth
Bulk Zoning: Zoning for density. Regulates height restrictions, open-space requirements, parking and setback.
Bullet Loan: A loan that includes a call date earlier than its normal amortization period, also called a renegoti
Bundle Of Legal Rights: The concept of land ownership that includes ownership of all legal rights to the land. For example,
Burden Of Proof: The obligation to prove the truth or falsity of a fact.
Business Cycle: The wavelike movement of increasing and decreasing economic prosperity consisting of four phases: ex
Business Opportunity: Any type of business that is for sale (also called business brokerage). The sale or lease of the bus
Buydown: A financing technique used to reduce the monthly payments for the first few years ofa loan. Funds in
Buyer Listing: An agreement where a buyer agrees to pay a commission if a broker locates a property that the buyer
Buyer-Agency Agreement: A principal-agent relationship in which the broker is the agent for the buyer, with fiduciary respon
Buyers Agent: A residential real estate broker or salesperson who represents the prospective purchaser in a transa
Buyers Broker: A broker who represents the buyer in a fiduciary capacity. Some buyers brokers practice single agenc
Buyers Remorse: Buyers of expensive items, like a home or automobile, sometimes regret their decision. They wonder i
Buying Motives: Ownership of real estate satisfies certain basic human needs. These needs are what motivate a person
Buying On Contract: A type of contract used in connection with the sale of real property where the seller retains legal
Buying Signals: Words, actions or facial expressions that signal a prospects readiness to buy.
Cal-Firpta: Californias version of the federal FIRPTA. It is a tax act which became effective in 1988 and was su
Cal-Vet: A program to help eligible California Veterans finance the purchase of farms and ranches within the
California Environmental Quality Act: The Act allows local governments to require environmental impact reports for private or government p
California Housing Financial Discrimination Act Of 1977: Also known as the Holden Act. A California act prohibiting discrimination by a lender for any reason
California Residential Mortgage Lending Act: An act administered by the Commissioner of Corporations which provides licensing authorizing mortgag
Canceling Escrow: Providing written notification that an escrow is to be terminated, must be done by mutual consent of
Capacity Of Parties: The legal ability of people or organizations to enter into a valid contract. A person entering into
Capital Gain: Profit earned from the sale of an asset, where the sales price was greater than the adjusted basis.
Capital Loss: Loss sustained from the sale of an asset, where the sales price is less than the adjusted book basis
Capitalization: A mathematical process for converting net income into an indication of value, commonly used in the i
Capitalization Rate: The rate of return a property will produce on the owners investment.
Capping: The process at of laying two to four feet of soil over the top of a landfill site and then planting
Caps: Yearly and/or life-of-loan limitations on the amount of variation allowed when adjusting interest on
Caravan: A group tour by a real estate offices sales agents to view listed properties.
Carbon Monoxide (Co): A colorless, odorless gas that occurs as a byproduct of burning such fuels as wood, oil and natural
Carcinogen: A cancer producing substance.
Care: The agent must exercise a reasonable degree of care while transacting the business entrusted to him
Carry-Back: Financing where the seller takes back a note for part of the purchase price secured by a junior mort
Carryover Clause: A carryover clause (often referred to as a safety clause) may be contained in a listing. It provides
Cash Flow Analysis: A cash flow analysis shows the effect an investment property has on an owners income in terms of tax
Cash Now: The net spendable income from an investment, determined by deducting all operating and fixed expense
Cash Rent: In an agricultural lease, the amount of money given as rent to the landowner at the outset of the le
Cash-Out: When a seller of a property wants to receive the entire sales price in cash with no carry-back finan
Cash-Out Scheme: Where a buyer offers a large cash downpayment and asks the seller to carry-back the balance as a sub
Casualty: Casualty insurance policies include coverage against theft, burglary, vandalism and machinery damage
Caveat Emptor: Latin for let the buyer beware. A buyer should inspect the goods or realty before purchase.
CC and Rs: Covenants, conditions and restrictions are limitations on land use, which are imposed by deeds, usua
Centers Of Influence: Influential people in a community. Real estate agents cultivate relationships with these centers of
Certificate Of Eligibility: A certificate issued by a Veterans Administration regional office to veterans who qualify for a VA l
Certificate Of Occupancy (CO): A certificate issued by a governmental authority indicating that a building is ready and fit for occ
Certificate Of Reasonable Value (CRV): A certificate insured by the Veterans Administration setting forth a propertys current market value
Certificate Of Sale: The document generally given to the purchaser at a tax foreclosure sale. A certificate of sale does
Certificate Of Title: A statement of opinion prepared by a title company, licensed abstracter or an attorney on the status
Cessation Of Work: A period of 60 days where no work is being conducted.
Chain Of Title: The succession of conveyances, from some accepted starting point, whereby the present holder of real
Change: The appraisal principle that holds that no physical or economic condition remains constant.
Civil Action: An action where an issue, formed by some kind of complaint, is presented for trial. Proceedings are
Civil Law: A system of law codified by statutes.
Civil Rights Act Of 1866: The Civil Rights Act of 1866 prohibits racial discrimination in the sale and rental of housing.
Civil Rights Act Of 1870: The Voting Rights Act of 1870 (aka, Civil Rights Act of 1870) includes a clause reaffirming the reme
Civil Rights Act Of 1964: The first modern civil rights act made into law by President John F. Kennedys Executive Order 11063
Civil Rights Act Of 1968: In 1968, Congress enacted Title VIII of the Civil Rights Act, called the federal Fair Housing Act, w
Classified Ads: Advertisements purchased by the line and placed in the classified ad section of newspapers or real e
Client: The person who employs an agent to perform a service for a fee. In traditional real estate brokerage
Close-Of-Escrow-Closing: The consummation of a real estate transaction, when the seller delivers title to the buyer in exchan
Closing Costs: Expenses of the sale (or loan refinancing) that must be paid in addition to the purchase price (in t
Closing Statement: A detailed cash accounting of a real estate transaction showing all cash received, all charges and c
Cloud On Title: Any document, claim, unreleased lien or encumbrance that may impair the title to real property or ma
Clta Policy: A standard coverage title insurance policy protects real estate buyers in matters of record and spec
Clustering: The grouping of homesites within a subdivision on smaller lots than normal, with the remaining land
Cmo: Securities (a series of bonds) issued backed by mortgages.
Co-Ownership: Title ownership held by two or more persons.
Code Of Ethics: A written system of standards of ethical conduct. Because of the nature of the relationship between
Codicil: A supplement or an addition to a will, executed with the same formalities as a will, that normally d
Coinsurance Clause: A clause in insurance policies covering real property that requires the policyholder to maintain fir
Collateral: Something of value given or pledged as security for a debt or obligation. The collateral for a real
Combination Trust: A trust that participates in real estate investments as both financier and investor.
Combustion Gases: The gasses that are emitted from a flame upon the combustion of a flammable material.
Commercial Acre: A commercial acre is that portion of an acre of newly subdivided land remaining after dedication for
Commercial Bank: A financial institution designed to act as a safe depository and lender for many commercial activiti
Commercial Investment Real Estate Institute (Cirei): A professional organization of real estate practitioners specializing in commercial real estate. CIR
Commercial Leasehold Insurance: Insurance that covers payment of rent in the event the insured (tenant) cannot pay it.
Commercial Real Estate-Property: A classification of real estate that includes income-producing property such as office buildings, ga
Commercial Waste: All solid waste from businesses. This category includes but is not limited to, solid waste originati
Commingling: The illegal act of mixing deposits or monies belonging to a client (trust funds) with ones personal
Commission: Payment to a broker for services rendered, such as in the sale or purchase of real property, usually
Commitment: 1. A pledge to do a certain act, such as a promise by a lender to loan a certain amount of money at
Common Areas: Land or improvements in a condominium development designated for the use and benefit of all resident
Common Elements: Parts of a property that are necessary or convenient to the existence, maintenance and safety of a c
Common Interest: The percentage of undivided ownership in the common elements belonging to each condominium apartment
Common Interest Subdivision: A subdivision in which the owners own or lease a separate lot or unit together with an undivided int
Common Law: The body of law based on custom, usage and court decisions.
Community Property: A system of property ownership based on the theory that each spouse has an equal interest in the pro
Community Reinvestment Act Of 1977 (CRA): Community reinvestment refers to the responsibility of financial institutions to help meet their com
Company Dollar: The term company dollar is the amount left over after all commissions have been paid out.
Comparables: Properties that are substantially equivalent to the subject property.
Comparative Market Analysis (CMA): This is a term often used by real estate brokers in preparing a report for prospective sellers and b
Compensating Factors: Positive factors in an individuals credit history which offset negative factors. Compensating factor
Compensation: The source of compensation does not determine agency. An agent does not necessarily represent the pe
Compensatory Damages: Monetary damages paid to compensate an injured party for a loss.
Competition: The appraisal principle that states that excess profits generate competition.
Completion Bond: A surety bond posted by a landowner or developer that guarantees a proposed development will be comp
Compound Interest: Interest computed on the principal sum plus accrued interest. At the beginning of the new interest p
Comprehensive Environmental Response, Compensation And Liability Act (CERCLA): A federal law administered by the Environmental Protection Agency that establishes a process for ide
Comprehensive Zoning: A broad zoning plan over a large area.
Computerized Loan Origination (CLO) System: An electronic network for handling loan applications through remote computer terminals linked to var
Concession: Discount given to prospective tenants by landlords to induce them to sign a lease. Concessions are f
Concurrent Ownership: Ownership by two or more persons at the same time, such as joint tenants, tenants by the entirety, t
Concurrent Performance: Occurring simultaneously, real estate exchanges often must be recorded concurrently.
Condemnation: A judicial or administrative proceeding to exercise the power of eminent domain, through which a gov
Condition Precedent: A condition that requires a certain action or a specified event to take place before an estate grant
Condition Subsequent: A fee simple estate, may be qualified by a condition subsequent. This means that the new owner must
Conditional Public Report: An interim report that allows a subdivider to enter into a binding contract with a buyer prior to th
Conditional-Use Permit: Written governmental permission allowing a use inconsistent with zoning but necessary for the common
Condominium: A subdivision providing an exclusive ownership interest in the airspace of a particular portion of r
Condominium Ownership: An estate in real property consisting of an individual interest in an apartment or commercial unit a
Conduits: A party that purchases loans from one lender and resells the loans to investors.
Confession Of Judgment Clause: Permits judgment to be entered against a debtor without the creditors needing to institute legal pro
Conforming Loan: A mortgage loan that meets all Fannie Mae and Freddie Mac underwriting guidelines.
Conformity: The appraisal principle that holds that the greater the similarity among properties in an area, the
Conservator: A guardian, protector, preserver or receiver appointed by a court to administer the person and prope
Consideration: An act or the promise thereof, which is offered by one party to induce another to enter into a contr
Constitutional Law: Law set forth in federal or state constitutions.
Constructive Eviction: Actions of a landlord that so materially disturb or impair a tenants enjoyment of the leased premise
Constructive Fraud: Breach of a legal or equitable duty that the law declares fraudulent because of its tendency to dece
Constructive Notice: Notice given to the world by recorded documents. All people are charged with knowledge of such docum
Constructive Receipt: Control of the cash proceeds in a delayed exchange without actual physical possession by the exchang
Contingency: A provision in a contract that requires a certain act to be done or a certain event to occur before
Continuing Education: A requirement in most states that real estate and appraiser licensees complete a specified number of
Contract: A legally enforceable promise or set of promises that must be performed and for which, if a breach o
Contract For Deed: The contract for deed is used extensively in many areas, where it may be called a land contract, agr
Contract Of Sale: A contract for the purchase and sale of real property in which the buyer agrees to purchase for a ce
Contract Rent: The rental income as stipulated by the parties in a lease.
Contribution: The appraisal principle that states that the value of any component of a property is what it gives t
Controlled Business Arrangements: As defined under the Real Estate Settlement Procedures Act (RESPA), an arrangement or combination in
Conventional Life Estate: A conventional life estate is created intentionally by the owner. It may be established either by de
Conventional Loan: A loan made with real estate as security and not involving government participation in the form of i
Conversion: The appropriation of property belonging to another. The conversion may be illegal (as when a broker
Converted-Use Properties: Factories, warehouses, office buildings, hotels, schools, churches and other structures that have be
Convertible Loan: An adjustable-rate loan that the borrower can convert to fixed-rate at any time during the life of t
Conveyance: A term used to refer to any document that transfers title to real property. The term is also used in
Cooperating Broker: A broker who assists another broker in the sale of real property. Usually the cooperating broker is
Cooperating Broker Fee Agreement: An agreement between brokers specifying the commission split should the cooperating broker sell a pr
Cooperative: A residential multiunit building whose title is held by a trust or corporation that is owned by and
Coping: 1. The tile around the outer edge of a swimming pool at the water line. 2. The flat portion at the t
Corporation: An entity or organization, created by operation of law, whose rights of doing business are essential
Corporation Franchise Tax Lien: State governments generally levy a corporation franchise tax on corporations as a condition of allow
Correction Lines: Provisions in the rectangular survey (government survey) system made to compensate for the curvature
Correlative Water Rights: A modern law in some states that holds that a riparian owner who has rights in a common water source
Correspondent: A mortgage banker.
Corrosion: The dissolving and wearing away of metal caused by a chemical reaction such as between water and the
Corrosive: A substance that eats or wears away materials gradually by chemical action.
Cosigners: Additional signers of a financial agreement that add their personal guarantees to that of the borrow
Cost Approach: The process of estimating the value of a property by adding to the estimated land value. The apprais
Cost Basis: A cost basis of real property is usually based on the purchase price of the property plus the buyers
Cost Recovery: An Internal Revenue Service term for depreciation.
Cost-Plus: A method of paying construction contractors when the contractor is paid the actual costs of the job
Counteroffer: A new offer made in response to an offer received. It has the effect of rejecting the original offer
Covenant: A written agreement between two or more parties in which a party or parties pledge to perform or not
Covenant Against Encumbrances: The grantor warrants that the property is free from liens or encumbrances, except for any specifical
Covenant Of Further Assurance: The grantor promises to obtain and deliver any instrument needed to make the title good. For example
Covenant Of Quiet Enjoyment: The covenant implied by law by which a landlord guarantees that a tenant may take possession of leas
Covenant Of Seisin: The grantor warrants that he or she owns the property and has the right to convey title to it (seise
Covenant Of Warranty Forever: The grantor promises to compensate the grantee for the loss sustained if the title fails at any time
Covenants That Run With The Land: Convenants that become part of the property rights and benefit or bind successive owners of the prop
Crawl Space: 1. The space between the ground and the first floor, often found in homes with no basement. 2. The s
Creative Financing: Structuring the financing of a real estate transaction based on the cash positions of the buyer and
Credit: 1. Obligations that are due or are to become due to a person. 2. In closing statements, that which i
Credit Loan: A mortgage issued upon the financial strength of a borrower, without regard for collateral.
Credit Rating: The Dun & Bradstreet credit rating system. Rating the financial strength of commercial and industria
Credit Report: A document, obtained from a credit repository, indicating an individuals credit circumstances. Used
Credit Repository: Organizations that maintain and make available public credit history records, lenders use informatio
Credit Score: A snapshot of a borrowers credit worthiness, a numerical score based on statistics showing the risk
Credit Unions: Credit unions are cooperative organizations whose members place money in savings accounts. In the pa
Creditor: The person to whom a debtor owes a debt or obligation, a lender.
Creosote: A potentially flammable oily byproduct of wood burning. Often builds up in the chimney of wood burni
Cross-Default: A provision of many junior mortgages stipulating that a default in one mortgage also triggers a defa
Crunch Down: A form of recasting where the lender rewrites an existing mortgage loan to a lower balance to avoid
Cumulative Zoning: Zoning that allows more restrictive uses. For example, a lot zoned for a multi-family dwelling would
Curtesy: A life estate, usually a fractional interest, given by some states to the surviving husband in real
Customer: A prospective buyer of real estate. Not to be confused with a property seller, who is the listing br
Damages: The indemnity recoverable by a person who has sustained an injury, either in his/her person, propert
Datum: A horizontal plane from which heights and depths are measured.
Debenture: A type of long-term bond or note given as evidence of debt. Unlike a mortgage note, a debenture is n
Debit: A charge on an accounting statement or balance sheet (appearing on the left-hand column), the opposi
Debt Ratio: The relationship between a persons long term debt payments and their monthly income.
Debt-To-Income Ratio: A borrowers monthly long term debt payments divided by the borrowers gross monthly income and expres
Debtor: One who owes money, a borrower, a maker of a note, a mortgagor.
Decedent: A deceased person, especially one who has died recently.
Declaration Of Condominium: The declaration includes: 1. A legal description of the condominium units and the common elements (i
Declaration Of Restrictions: A statement of all the covenants, conditions and restrictions (CC&Rs) that affect a parcel of land.
Declaratory Relief Action: An action to have a court determine the rights of parties before a violation of rights has occurred.
Declining-Balance Method: An accounting method of depreciation for income-tax purposes designed to provide larger-than-straigh
Dedication: The voluntary transfer of private property by its owner to the public for some public use, such as f
Deed: A written instrument, when executed and delivered, conveys title to or an interest in real estate.
Deed Executed Pursuant To Court Order: Executors and administrator deeds, masters deeds, sheriffs deeds and many other types are all deeds
Deed In Lieu Of Foreclosure: Voluntarily signing over to a lender the property pledged as collateral on a defaulted loan. It is a
Deed In Trust: An instrument that grants a trustee under a land trust full power to sell, mortgage and subdivide a
Deed Of Reconveyance: A document used to transfer legal title from the trustee back to the borrower (trustor) after a debt
Deed Of Trust And Assignment Of Rents: The first page of a lending instrument, identifies the parties to the agreement, conveys title to th
Deed Restrictions: Provisions placed in deeds to control future uses of the property.
Default: The nonperformance of a duty or obligation that is part of a contract. The most common occurrence of
Defeasance Clause: A clause used in leases and mortgages that cancels a specified right upon the occurrence of a certai
Defeasible Fee Estate: An estate in which the holder has a fee simple title that may be divested upon the occurrence or non
Defect: A condition that materially affects the value or use of residential property in an adverse manner.
Defect Of Record: Any encumbrance on a title that is made a part of the public record. Recorded defects include judgme
Deferred Capital Gain: The part of the realized gain that is tax deferred.
Deferred Maintenance: Physical deterioration of a building resulting from postponed maintenance.
Deficiency Judgment: A personal judgment levied against the borrower when a foreclosure sale does not produce sufficient
Delayed Exchange: A three way exchange in which the properties close at different times.
Delinquent: The status of a financial obligation, such as a mortgage loan, when it is past-due.
Demand: The amount of goods people are willing and able to buy at a given price, often coupled with supply.
Density Zoning: Zoning ordinances that restrict the maximum average number of houses per acre that may be built with
Deposit: Money offered by a prospective buyer as an indication of good faith in entering into a contract to p
Depreciable Basis: In investment real estate only structures can be depreciated. The depreciable basis is the original
Depreciation: The decrease in the value of an asset allowed when computing property value for tax purposes. It can
Descent: Acquisition of an estate by inheritance in which an heir succeeds to the property by operation of la
Designated Agent: A licensee authorized by a broker to act as the agent for a specific principal in a particular trans
Destruction Of Premises: In many states, once the sales contract is signed by both parties, the buyer bears the risk of any d
Detached Garage: A garage that is not attached to a home. Usually found in older homes.
Deviation: The measure of how widely the individual varies from the general population.
Devise: A transfer of real property under a will. The donor is the devisor, and the recipient is the devisee
Devisible Contract: A contract that consists of separate agreements that are not dependent on each other. The illegality
Direct Endorsement: The ability of an FHA-approved lender to secure FHA single- and multifamily mortgage insurance by fo
Direct Management Costs: Expenses that can be attributed to the operation of a management firm or department.
Disability: A physical or mental impairment that substantially limits one or more major life activities, such as
Discharge: The release of any waste into the environment from a point source. Usually refers to the release of
Discharge Of Contract: A contract is discharged when the agreement is terminated. Obviously, the most desirable case is whe
Disclaimer: A statement denying legal responsibility, frequently found in the form of the statement, There are n
Disclosed Dual Agency: Real estate licensing laws may permit dual agency only if the buyer and seller are informed and cons
Disclosure: It is the agents duty to keep the principal informed of all facts or information that could affect a
Discount: To sell at a reduced value, the difference between face value and cash value.
Discount Points: An added loan fee charged by a lender to make the yield on a lower-than-market-interest VA or FHA lo
Discount Rate: 1. An annual competitive rate of return on total invested capital necessary to compensate the invest
Discounted Cash Flow: Used in measuring the return from a real estate investment, the present value of a future income str
Discounting: To sell at a reduced value, the difference between face value and cash value. Some companies special
Discretionary Income: Income left over for investment after allocations for bills and savings.
Disintermediation: The process of individuals investing their funds directly instead of placing their savings with bank
Display Ads: Newspaper and magazine advertisements sold by the column inch. More elaborate than classified ads, d
Disposal: The discharge, deposit, injection, dumping, spilling, leaking, or placing of any solid waste or haza
Divided Agency: Acting for more than one party in a transaction without the knowledge and consent of all parties the
Doctrine Of Prior Appropriation: In states where water is scarce, ownership and use of water are often determined by the doctrine of
Documentary Transfer Tax: Tax applicable to property transfers and affixed to the grant deed, varies from county to county, ci
Domicile: From domus, Latin for house. The state where an individual has his or her true, fixed permanent home
Dominant Tenement: The estate that is said to attach to and derive benefit from the servient estate in reference to an
Double Taxation: One of the main disadvantages of corporate ownership of income property is that the profits are subj
Dower: The legal right or interest, recognized in some states, that a wife acquires in the property her hus
Down Drain: A drain pipe or similar conduit to allow water to flow from the rain gutter at the edge of the roof
Downzoning: A change in zoning from a higher to a lower classification or from a more active to less active clas
Draws: 1. An advancement of money against future earnings. 2. Periodic advances of funds under a constructi
Drywall: A construction material used as a basis for interior walls in a home. Drywall is composed of an inne
Dual Agency: An agency relationship in which the agent acts concurrently for both principals in a real estate tra
Due-On-Sale-Clause: A form of acceleration clause found in some mortgages, especially savings and loan mortgages, requir
Dump: A land site where wastes are discarded in a disorderly or haphazard fashion without regard to protec
Duplex: A structure that provides housing accommodations for two families and supplies each with separate en
Duress: Unlawful constraint or action exercised upon a person whereby the person is forced to perform an act
Dwelling: Any building, structure or part thereof used and occupied for human habitation or intended to be so
Earnest Money: Money deposited by a buyer under the terms of a contract, to be forfeited if the buyer defaults but
Earthquake Safety Disclosure: By California law, real estate agents or owners are required to prepare a Residential Earthquake Haz
Easement: The right to a specific use of or right to travel over land owned by another. The land being used or
Easement By Condemnation: An easement created by the government or government agency that has exercised its right under eminen
Easement By Estoppel: An easement created when a persons words or actions lead another to believe that an easement exists.
Easement By Necessity: An easement allowed by law as necessary for the full enjoyment of a parcel of real estate, for examp
Easement By Prescription: An easement acquired by continuous, open and hostile use of property for the period of time prescrib
Easement In Gross: An easement that is not created for the benefit of any land owned by the owner of the easement but t
Easton V. Strassburger: The duty of the licensee to make a reasonable investigation of the property evolved from the case of
Economic Life: 1. The estimated period over which an improved property may be profitably used so that it will yield
Economic Rent: Currently referred to as market rent, it is the rental income that real estate can command in an ope
Effective Interest Rate: The actual rate or yield of a loan, regardless of the amount stated on the debt instrument.
Egress: A way to exit from a property, the opposite of ingress.
Electromagnetic Fields (EMFS): Fields generated by the movement of electrical currents.
Elevations: Just as surface rights must be identified, surveyed and described, so must rights to the property ab
Embezzlement: The fraudulent appropriation for ones own use or benefit of property or money, by a clerk, agent, tr
Emblements: 1. Growing crops producted by the labor of the cultivator. 2. The right to the profits from such cro
Eminent Domain: The right of the government to acquire title to property for public use by condemnation, the propert
Employee: Someone who works as a direct employee of an employer and has employee status.
Employer: An individual or company that pays people to work for them. Employers are obligated to withhold inco
Employment Contract: A document evidencing formal employment between employer and employee or between principal and agent
Enabling Acts: State legislation that confers zoning powers on municipal governments.
Encapsulation: A method of controlling environmental contamination by sealing off a dangerous substance (such as as
Encroachment: An unauthorized invasion or intrusion of an improvement or other real property onto anothers propert
Encumbrance: Any claim, lien, charge or liability attached to and binding on real property that may lessen its va
Endangered Species Act: Passed by the United States Congress in 1973. The Act was originally intended to protect endangered
Endless Chain: A method of prospecting where agents asks each prospect to recommend other prospects.
Endorsement: A method of transferring title to a negotiable instrument, such as a check or promissory note, by si
Endowment Funds: Many commercial banks and mortgage bankers handle investments for endowment funds. The endowments of
Energy Audit: An inventory and description of all the features and products in a home or building that effect the
Energy Efficient Mortgage (EEM): A home mortgage in which the qualifying debt-to-income and housing expense-to-income ratios have bee
Energy Improvement Mortgage (EIM): A loan secured by real property that is made to an owner for the specific purpose of making energy e
Enjoin: 1. to direct or order (someone) to do something. 2. to prescribe (a course of action) with authority
Entitlement: 1. to be owed something under the law. 2. The portion of a VA-guaranteed loan that protects a lender
Entity Rule: Three entities can hold property: individuals, partnerships and corporations. In the case of a prope
Environmental Hazards Disclosure: By California law (AB 983) a real estate agent or owner is required to inform prospective buyers of
Environmental Impact Report: A report required by the California Environmental Quality Act that projects the impact a project may
Environmental Impact Statement: Required by the National Environmental Policy Act and applies to federal government actions or legis
Environmental Protection Agency (EPA): A federal agency created in 1970 by bringing together various federal pollution control activities t
Environmental Site Assessment: An independent investigation and assessment of a property to determine if any existing or potential
Equal Credit Opportunity Act (ECOA): Federal legislation passed in 1974 to ensure that the various financial institutions and other firms
Equal Dignities Rule: A rule of agency law that stipulates that when a contract is required by law to be in writing, the a
Equalization: In some jurisdictions, when it is necessary to correct inequalities in state wide tax assessments, a
Equalization Factor: A factor (number) by which the assessed value of a property is multiplied to arrive at a value for t
Equitable Lien: A lien arising out of common law—in contrast to a statutory lien, which is imposed on property by
Equitable Redemption: A defaulted property owner recovering his or her property prior to its sale by curing the default.
Equitable Right Of Redemption: The right of a defaulted property owner to recover the property prior to its sale by paying the appr
Equitable Title: The interest held by a vendee under a contract for deed or an installment contract, the equitable ri
Equity: The interest or value that an owner has in property over and above any indebtedness.
Equity Loans: A loan based on a percentage of the equity a borrower holds in a collateral property.
Equity Trust: An investment trust dealing with ownership rather than financing.
Erosion: The gradual loss of soil due to the operation of currents, tides or winds.
Escape Clause: 1. A contract provision relieving a party of liability for failure to perform, as where a stated con
Escheat: The reversion of property to the state or county, as provided by state law, in cases where a deceden
Escrow: The process by which money and/or documents are held by a disinterested third person (a stakeholder)
Escrow Account: The trust account established by a broker under the provisions of the license law for the purpose of
Escrow Agent-Officer: An individual qualified to perform all the steps necessary to prepare and carry out escrow instructi
Escrow Fee: A fee covering all the usual escrow services except for title insurance. The fee is normally determi
Escrow Instructions: In a sales transaction, a writing signed by buyer and seller that details the procedures necessary t
Estate (Tenancy) At Sufferance: The tenancy of a lessee who lawfully comes into possession of a landlords real estate but who contin
Estate (Tenancy) At Will: An estate (or tenancy ) in which a person holds or occupies real estate with the permission of the o
Estate (Tenancy) For Years: An interest for a certain, exact period of time in property leased for a specified consideration.
Estate (Tenancy) From Period To Period: An interest in leased property that continues from period to period--week to week, month to month or
Estate In Land: The degree, quantity, nature and extent of interest a person has in real property.
Estate Taxes: Federal estate taxes and state inheritance taxes (as well as the debts of decedents) are general, st
Estimated Buyers Costs: An estimate of the buyers total cash requirements to purchase real property. A realistic estimate of
Estimated Sellers Proceeds: An estimate of the net amount an owner will receive from the sale of his or her property. An Estimat
Estoppel: Method of enforcing an agency relationship in which someone stated incorrectly that another person i
Estoppel Certificate: A document in which a borrower certifies the amount owed on a mortgage loan and the rate of interest
Ethics: The system of moral principles and rules that become standards for conduct.
Evaporative Coolers (Swamp Cooler): An economical method of cooling a home in a dry climate. An evaporative cooler is a large box-like u
Eviction: 1. The legal process of removing a tenant from the premises as a result of a breach of a lease. 2. T
Evidence Of Title: Proof of ownership of property, commonly a certificate of title, an abstract of title with lawyers o
Exchange: A transaction in which all or part of the consideration for the purchase of real property is the tra
Exchange Period: The period during which the exchanger must acquire replacement property in the exchange. The exchang
Exchanger: The property owner seeking to defer capital gain tax by utilizing an IRS 1031 tax deferred exchange.
Excluded Capital Gain: The part of the realized gain that is excluded from taxes.
Exclusionary Zoning: Zoning that excludes stated uses.
Exclusive Agency Listing: A written listing agreement giving a sole agent the right to sell a property for a specified time, b
Exclusive Authorization To Acquire Real Property: A contract providing for the exclusive representation of a buyer by a broker. It authorizes a broker
Exclusive-Agency-Buyer-Agency-Agreement: Similar to the exclusive buyer agency agreement, this is an exclusive contract between the buyer and
Exclusive-Authorization-And-Right-To-Sell Listing: A written listing agreement appointing a broker as the exclusive agent for the sale of property for
Exclusive-Buyer-Agency-Agreement: This is a completely exclusive agency agreement. The buyer is legally bound to compensate the agent
Exculpatory Clause: A clause in an agreement that relieves a party from all obligation for his or her acts or failure to
Execute: The act of making a document legally valid, such as formalizing a contract by signing or acknowledgi
Executor: A male person appointed by a testator to carry out the directions and requests in his or her last wi
Executory Contract: A contract under which something remains to be done by one or more of the parties.
Executrix: A female person appointed by a testator to carry out the directions and requests in his or her last
Exemplary Damages: Monetary damages that go beyond the actual compensatory damages. They are awarded to punish a wrongd
Express Agency: A stated (written or verbal) agency agreement.
Express Agreement-Contract: An oral or written contract in which the parties state the contracts terms and express their intenti
Express Authority: The stated (written or verbal) authority of an agent.
Extended Coverage Policy: A title insurance policy that covers risks normally excluded by most standard coverage policies. The
Extender Clause: 1. A condition, once found in most listing forms, providing that the listing would continue for a se
External Depreciation: Reduction in a propertys value caused by outside factors (those that are off the property).
External Obsolescence: A type of incurable depreciation caused by negative factors not on the subject property, such as env
Fair Credit Reporting Act: The Fair Credit Reporting Act gave consumers the right of access to, and correction of, credit repor
Fair Employment And Housing Act: Californias Fair Employment and Housing Act (FEHA) (Sections 13100-13196 of the Government Code) pro
Fair Housing Act: Pursuant to the federal Fair Housing Act, any offer to sell, rent, buy, or exchange property shall n
Fair Housing Amendment Act Of 1988: Extends the Civil Rights Act of 1968 to cover handicapped persons and families with children.
Familial Status: Familial status is defined as one or more individuals who have not obtained the age of eighteen (18)
Farm Service Agency (FSA): Formerly the Federal Agricultural Mortgage Corporation (FAMC or Farmer MAC), the FSA is a federal ag
Federal Deposit Insurance Corporation (FDIC): An independent federal agency that insures the deposits in commercial banks.
Federal Fair Housing Law: In 1968, Congress enacted Title VIII of the Civil Rights Act, called the Federal Fair Housing Act, w
Federal Funds Rate: The interest rate the Federal Reserve charges its member banks on uncollateralized loans.
Federal Home Loan Bank System (FHLB): Regulates the nations savings and loan associations, much like the Federal Reserve governs the comme
Federal Home Loan Mortgage Corporation (FHLMC): Commonly known as Freddie Mac, a federally chartered corporation established in 1970 for the purpose
Federal Housing Administration (FHA): A federal agency established in 1934 under the National Housing Act to encourage improvement in hous
Federal National Mortgage Association (FNMA): Popularly known as Fannie Mae, an active participant in the secondary mortgage market. Fannie Mae wa
Federal Reserve System (The Fed): The nations central bank created by the Federal Reserve Act of 1913. Its purpose is to help stabiliz
Federal Water Pollution Control Act: Enacted by Congress in 1972, this federal law administered by the EPA regulates the release of pollu
Fee Appraiser: A non-salaried appraiser who is paid a fee for the appraisal assignments performed.
Fee Simple: The maximum possible estate one can possess in real property. A fee simple estate is the least limit
Fee Simple Absolute: The maximum possible estate or right of ownership of real property, continuing forever.
Fee Simple Defeasible: An estate in land in which the holder has a fee simple title subject to being divested upon the happ
Fee Simple Determinable: A fee simple determinable is an estate in real property that exists so long as, while or during the
Fee Simple Subject To A Condition Subsequent: A fee simple subject to a condition subsequent is an estate conveyed provided that, on the condition
Fee Title: The maximum possible estate one can possess in real property. A fee title estate is the least limite
Feudal System: A system of ownership usually associated with precolonial England, in which the king or other sovere
Fico: Acronym for Fair, Isaac & Company. FICO is the most commonly used scoring system used by lenders to
Fictitious Business (Company) Name: A business name other than that of the person under whom the business is registered. Most state lice
Fictitious Deed Of Trust: Comprehensive master deeds of trust are established by lenders to cover all areas of trust deed fina
Fiduciary: A relationship that implies a position of trust or confidence wherein one person is usually entruste
Filled Land: An area of a property where the grade has been raised by depositing dirt, gravel or rock. Under most
Final Escrow Instructions: Statements prepared by the escrow agent which reflect the final figures and instructions required to
Financial Institutions Reform, Recovery And Enforcement Act (FIRREA): Legislation that abolished the FSLIC and established a new deposit insurance fund, SAIF, for savings
Financial Intermediaries: A financial institution that accepts deposits and makes loans.
Financial Management Rate Of Return (FMRR): A multi-year analysis of rate of return. Used by investors in medium and large properties (occasiona
Financial Statement: A brief summary of a persons assets, liabilities and earnings records.
Financing Statement: Security interests in chattels (personal property) are created by an instrument known as a security
Finders Fee: A fee paid to someone for finding either the buyer to purchase or the seller to list a property.
Fire Insurance Requirement Form: A statement signed by the borrower agreeing to comply with the lenders requirements for fire insuran
Fire Rating: A rating of the length of time it takes a fire to penetrate a barrier. Designates the ability of a m
Fiscal Policy: The governments policy in regarding to taxation and spending programs. The difference between these
Fixed Expenses: Those recurring expenses that have to be paid regardless of whether the property is occupied, for ex
Fixed-Fee: A contractor submits a bid proposing a fixed amount to do a job. Most construction bids are made on
Fixed-Rate Loan: A loan with the same rate of interest for the life of the loan.
Fixtures: An article that was once personal property but has been so affixed to real estate that it has become
Flashing: Sheet metal or other impervious material used in roof and wall construction as a barrier to water se
Flat Fee: A property management fee expressed as a dollor amount per year or month.
Flood Hazard Areas: Locations specified on Federal Emergency Management Agency (FEMA) maps indicating areas that are sub
Flue: The pipe or conduit that allows combustion gasses to exit the house.
Flush: To open a cold-water tap to clear out all the water that may have been sitting for a long time in th
For Sale By Owner (FSBO): Some owners choose to sell their own property without the aid of a real estate broker. For Sale By O
Forbearance: The act of refraining from taking legal action despite the fact that payment of a promissory note in
Foreclosure: A legal procedure whereby property used as security for a debt is sold to satisfy the debt in the ev
Foreign Investment In Real Property Tax Act (FIRPTA): Enacted by the United States Congress in 1985, the act requires buyers to withhold estimated taxes e
Formaldehyde: A colorless, pungent, and irritating gas, used chiefly as a disinfectant and preservative and in syn
Four Zero One 401(K) Retirement Plan: 401(k) retirement plans allow an individual to contribute part of their pre-tax income to an investm
Fractional Basis: Each property in the improvement district is charged a prorated share of the total amount of the spe
Fractional Section: A parcel of land less than 160 acres, usually found at the edge of a rectangular survey. Undersized
Franchise: 1. A privilege granted to conduct certain service businesses, such as a franchise real estate broker
Franchise Investment Law: Administered by the California corporations commissioner, the law requires disclosure from the franc
Franchise Tax: An income tax, California corporations pay.
Fraud: Any form of deceit, trickery, breach of confidence or misrepresentation by which one party attempts
Freehold Estate: An estate in land in which ownership is for an indeterminate length of time, in contrast to a leaseh
Friable: The breaking down of a substance into tiny filaments and particles. Asbestos is harmful only if it i
Friable Asbestos: Any material containing more than one-percent asbestos, and that can be crumbled or reduced to powde
Frivolous: Void of significance or reason, of little or no worth, or importance, not worthy of serious notice,
Front Footage: The measurement of a parcel of land by the number of feet of street or road frontage.
Front-End Qualification: When qualifying a prospective buyer for financing, the ratio of the borrowers income to monthly debt
Front-End Ratio: The ratio of monthly housing cost (PITI) to gross monthly income.
Front-End Zero: Under a conventional loan, a borrower may elect to finance all of the mortgage insurance premium, th
Fructus Industriales: Corn, wheat and other crops that are produced annually by labor and industry, and not spontaneously.
Fully Amortized: Fully amortized mortgages are paid in equal monthly installments, which include interest and amortiz
Functional Obsolescence: A loss of value to an improvement to real estate arising from functional problems, often caused by a
Funding Fee: A percentage of the loan amount charged on VA loans to provide for administrative costs. The fee has
Funding Letter: Cover letter prepared by the escrow agent to the lender detailing the documents being forwarded to t
Future Interest: A persons present right to an interest in real property that will not result in possession or enjoym
Future Worth: The compounding increase in the value of money over time.
Gap: A defect in the chain of title of a particular parcel of real estate, a missing document or conveyan
General Agent: One authorized by a principal to perform any and all acts associated with the continued operation of
General Contractor: A licensed construction specialist who enters into a construction contract with a developer or prope
General Index: A county recorders office index used by title company examiners when searching the chain of title of
General Lien: The right of a creditor to have all of a debtors property—both real and personal—sold to satisfy
General Partner: In a limited partnership, the individual or company aquiring, organizing and managing the investment
General Partnership: In a general partnership, all the partners participate in the operation and management of the busine
General Plan: Every city and county is required to develop a general plan of comprehensive zoning.
General Real Estate Tax: General real estate taxes are levied to fund the operation of the governmental agency that imposes t
General Warranty Deed: A deed in which the grantor fully warrants good clear title to the premises. Used in most real estat
Geographic Farming: Farming/prospecting an area defined by specific geographic boundaries. The best geographic farms are
Gift Deed: A deed in which the consideration is love and affection. Because the deed is not supported by valuab
Goal Setting: A planning tool where agents establish, in writing, exact short-term, intermediate-term and long-ter
Good Funds: Cash, cashiers checks and personal checks that have cleared the bank.
Good-Faith Estimate: A preliminary accounting of expected closing costs. The Real Estate Settlement Procedures Act (RESPA
Goodwill: An intangible, salable asset arising from the reputation of a business, the expectation of continued
Government Check: The 24-mile-square parcels composed of 16 townships in the rectangular (government) survey system of
Government Lot: Fractional sections in the rectangular (government) survey system that are less than one quarter-sec
Government National Mortgage Association (GNMA): A federal agency created in 1968 when the Federal National Mortgage association (FNMA) was partition
Government Survey System: A system of land description that applies to much of the land in the United States, particularly in
Grace Period: An agreed upon time after an obligation is past due when a party can perform without being considere
Graduated Commission Splits: Other companies have graduated commission splits based on a salespersons achieving specified product
Graduated-Payment Mortgage (GPM): A loan in which the monthly principal and interest payments increase by a certain percentage each ye
Grandfather Clause: An expression that conveys the concept that something that was once permissible continues to be so,
Grant Deed: A type of deed in which the grantor warrants to the grantee, that he has not previously conveyed the
Grantee: The person who receives a conveyance of real property from a grantor. The grantee must be a person,
Granting Clause: Words in a deed of conveyance that state the grantors intention to convey the property at the presen
Grantor: The person transferring title, or an interest in real property. A grantor must be competent to conve
Gross Income Multiplier: A figure used as a multiplier of the gross annual income of a property to produce an estimate of the
Gross Lease: A lease of property according to which a landlord pays all property charges regularly incurred throu
Gross Operating Income: The result when other income is added to rental income.
Gross Rent Multiplier (GRM): The figure used as a multiplier of the gross monthly income of a property to produce an estimate of
Gross Rental Income: Gross receipts for the rental of income property.
Gross Scheduled Income: The maximum amount of rent if the property were 100 percent occupied.
Ground Lease: A lease of land alone, sometimes secured by improvements placed on the land. Also called a land leas
Ground Rents: A perpetual lease where the landowner retains title and the lessee recieves the right of possession
Groundwater: Water under the earths surface, regardless of the geological structure in which the water is standin
Growing-Equity Mortgage (GEM): A loan in which the monthly payments increase annually, with the increased amount being used to redu
Guardian: A person, appointed by court or by will, given the lawful custody and care of the person or property
Habendum Clause: That part of a deed beginning with the words to have and to hold, following the grantor is conveying
Habitability: Fit for human habitation.
Handicap: As defined in the fair housing act, a physical or mental impairment that substantially limits one or
Hard Money Loan: A loan made in cash by a non-institutional lender.
Hazardous Waste: A subset of solid wastes that pose substantial or potential threats to public health or the environm
Hazardous Waste Disclosure: California Health and Safety Code (§ 25359.7(a)) requires owners of nonresidential properties to di
Heat Absorbing Glazings: A technology that uses heat-absorbing glazing with tinted coatings to absorb solar heat gain through
Heat Exchanger: Heat exchange is the method by which the unwanted heat is removed from a system. A heat exchanger is
Heir: A person who inherits under a will or a person who succeeds to property by the state laws of descent
Hereditaments: Property capable of being inherited.
Hers Score: A number between 0-100 that is used to designate the energy efficiency of a home compared to guideli
Heterogeneity: The quality or state of being heterogeneous, different in kind, unlike, incongruous.
Highest And Best Use: The possible use of a property that would produce the greatest net income and thereby develop the hi
Highrise Developments: Sometimes called mixed-use developments (MUDs), these combine office space, stores, theaters and apa
Hold-Harmless Clause: A contract provision whereby one party agrees to indemnify and protect the other party from any inju
Holdback: Funds not released under a construction loan agreement due to a failure to lease to the required min
Holder In Due Course: The holder of a negotiable instrument (check or note) purchased for value when the instrument appear
Holdover Tenancy: A tenancy whereby a lessee retains possession of leased property after the lease has expired and the
Holographic Will: A will that is written, dated and signed in the testators handwriting, but not witnessed. Some state
Home Energy Rating System (HERS): A standardized system for rating the energy efficiency of residential buildings.
Home Equity Loan: A loan (sometimes called a line of credit) under which a property owner uses his or her residence as
Home Expense-To-Income Ratio: A ratio expressed as a percentage that is used by the mortgage industry to determine a borrowers qua
Home Mortgage Disclosure Act (HMDA): Enacted by Congress in 1975 and implemented by the Federal Reserve Boards Regulation C, a federal la
Home Warranty Insurance Policy: An insurance policy that insures against plumbing, electrical, heating, and major appliance problems
Homeowner Instructions: Instructions given to a property owner by a listing broker that advise the owner of cleaning and rep
Homeowners Association: A nonprofit association of homeowners organized pursuant to a declaration of restrictions or protect
Homeowners Guide To Earthquake Safety: A document produced by the State of California Seismic Safety Commission intended to help inform hom
Homeowners Insurance Policy: A standardized package insurance policy that covers a residential real estate owner against financia
Homestead: A statutory exemption of real property used as a home from the claims of certain creditors and judgm
Homestead Exemption: The amount of homestead protection from unsecured creditors—$50,000 for single persons, $75,000 fo
Homogeneous: Composed of parts all of the same kind or of the same kind or nature, essentially alike.
Household Waste (Domestic Waste): Solid waste, composed of garbage and rubbish, which normally originates from residential, private ho
Housing Accommodation: Housing accommodations are any improved or unimproved real property, or portion thereof, used as the
Housing Affordability Index: A measure of the percentage of the United States population who can afford to purchase a home, based
Housing Financial Discrimination Act Of 1977 (Holden Act): The Act prohibits financial institutions (banks, savings & loans, or other financial institutions, i
Hud: A federal cabinet department officially known as the U.S. Department of Housing and Urban Developmen
Hud-1 Settlement Statement: At closing, in conformance with Real Estate Settlement Procedures Act (RESPA) regulations, a HUD-1 s
Hvac: The acronym for Heating, Ventilation, and Air Conditioning.
Hybrid Financing: Mixing forms of conventional financing to create a new approach.
Hypothecate: To pledge real or personal property as security for a loan or other obligation without surrendering
Identification Period: The period during which the exchanger must identify replacement property in a 1031 tax deferred exch
Illusory Contract: An apparent contract that is not a contract because the parties have not agreed to be bound.
Implied Agency: An agency agreement created by the actions of the parties, and not a stated (written or verbal) agre
Implied Agreement-Contract: A contract under which the agreement of the parties is demonstrated by their acts and conduct.
Implied Authority: The authority of an agent to perform acts which are reasonably necessary to accomplish the purpose o
Implied Easement: When the owner of two or more adjacent properties sells a part thereof, he or she grants by implicat
Implied Warranty: A theory in landlord/tenant law in which the landlord renting residential property implies quiet enj
Impound Account: A trust account established to set aside funds for future needs relating to a parcel of real propert
Improvement: 1) Any structure, usually privately owned, erected on a site to enhance the value of the property--f
In-House Sale: A sale in which the listing broker is the only broker in the transaction, there is no outside broker
Incentive Zoning: Zoning that offers incentives to developers, such as retail shops on the first floor of multistory o
Income And Expense Report: A financial report generated by a property manager that details the income and expenses from a prope
Income Approach: The process of estimating the value of an income-producing property through capitalization of the an
Income Ratio: The relationship between a persons total income and the amount needed to make one months mortgage pa
Incorporeal Right: A nonpossessory right in real estate, for example, an easement or a right of-way.
Increasing And Diminishing Returns: The addition of more improvements to land and structures which increases value only to the assets ma
Independent: A brokerage firm operating on-its-own without an affiliation with a regional or national franchise.
Independent Contractor: One who is retained to perform a certain act, but who is subject to the control and direction of ano
Index: Used to set interest rates, such as the six month Treasury bill rate.
Index Lease: A lease containing an escalation clause that is tied to an index.
Indirect Management Costs: Expenses in a budget of a real estate agency or parent company the are partially attributable to the
Individual Retirement Account (IRA): An Individual Retirement Account (IRA) is an IRS-approved way for any working individual to set asid
Indoor Air: Breathing air inside a habitable structure, often highly polluted because of lack of exchange with f
Industrial Broker: A real estate broker who specializes in brokering industrial real estate.
Industrial Development Bonds: A bond that allows private investors to finance apartment and commercial development by using tax-ex
Industrial Property-Parks: A property primarily used for the production or manufacture of goods or products.
Industrial Revenue Bonds: Bonds issued for the development of an industrial park or the construction of a building for lease t
Inflation: The gradual reduction of the purchasing power of the dollar, usually related directly to the increas
Ingress: A way to enter a property - access. The opposite of egress.
Inheritance Taxes: An estate tax imposed by the state on heirs for their right to inherit property. The tax is not levi
Initial Rate: The inital rate charged to a borrower for the first adjustment period of an adjustable rate mortgage
Injunction: A legal action whereby a court issues a writ that forbids a party defendant from doing some act or c
Installment Contract: A contract for the sale of real estate whereby the purchase price is paid in periodic installments b
Installment Note: A promissory note with payments of principal and interest made at designated intervals.
Installment Sale: An income tax method of reporting gain received from the sale of real estate when the sales price is
Institute Of Real Estate Management (IREM): A national organization concerned with professional management of real estate. The professional desi
Institutional Lenders: Savings and loan associations, banks, life insurance companies and mutual savings banks.
Insurance Companies: Insurance companies accumulate large sums of money from the premiums paid by their policyholders. Wh
Interest: A charge made by a lender for the use of money.
Interest Factor: In a table, numbers derived from formulas used to determine the present or future value of money. In
Interest-Only: A term loan calling for payments of interest only, not to include any amount for principal.
Interim Financing: A short-term loan usually made during the construction phase of a building project (in this case oft
Interim Occupancy Agreement: An agreement allowing a buyer to take possession of a property as a tenant prior to close of escrow.
Intermediate Theory: Some states have adopted an intermediate theory of mortgage based on the principles of title theory,
Internal Rate Of Return (IRR): A multi-year analysis of rate of return similar to Financial Management Rate of Return (FMRR). Used
Interplead: A judicial proceeding by which, when two parties make the same claim against a third party, the righ
Interpleader: A judicial proceeding where an innocent third party, such as an escrow agent or broker, can deposit
Interstate Land Sales Full Disclosure Act: A federal law, enacted in 1968, that regulates interstate land sales by requiring registration of re
Intestate Succession: A succession of a property to the heirs when a person dies without a will.
Intrinsic Value: An appraisal term referring to the value created by a persons personal preferences for a particular
Inure: 1. to come into use, take or have effect. 2. to become beneficial or advantageous.
Inverse Condemnation: A property owner forcing a government to take a property by eminent domain when that governments act
Investment: Money directed toward the purchase, improvement and development of an asset in expectation of income
Investment Group Financing: Large real estate projects, such as highrise apartment buildings, office complexes and shopping cent
Investment Property Rule: The Internal Revenue Code specifies that no gain or loss should be recognized on the exchange of pro
Involuntary Lien: A lien placed on property without the consent of the property owner.
Irs Tax Lien: A federal tax lien, or Internal Revenue Service (IRS) tax lien, results from a persons failure to pa
Joint And Several Liability: A situation when more than one party is liable for repayment of a debt or obligation. A creditor can
Joint Protection Policy: A title insurance policy insuring the interest of both owner and lender.
Joint Tenancy: An estate or unit of interest in real estate that is owned by two or more natural persons with right
Joint Venture: The joining of two or more people to conduct a specific business enterprise. A joint venture is simi
Judgment: The formal decision of a court on the respective rights and claims of the parties to an action or su
Judgment Decree: Specifiies the award made by the court in a civil case.
Judgment Lien: A general lien on the property of a judgment debtor, giving the holder of the judgment a right to le
Judicial Foreclosure: A method of foreclosing on real property by means of a court-supervised sale. In a judicial foreclos
Judicial Precedent: In law, the requirements established by prior court decisions.
Jumbo Loan: A jumbo loan is any loan that exceeds the underwriting guidelines for Fannie Mae/Freddie Mac maximum
Junction Box: A rectangular metal or plastic box that provides a nexis (junction) for a homes electrical wiring sy
Junior Lien-Mortgage: An obligation, such as a second mortgage, that is subordinate in right or lien priority to an existi
Kickback: Payment made to someone for referral of a customer or business. Unlike a commission, a kickback is m
Kiosk: A kiosk is a freestanding structure (open sides, usually multi sided) located in a shopping center o
Laches: An equitable doctrine used by courts to bar a legal claim or prevent the assertion of a right becaus
Land: The earths surface, extending downward to the center of the earth and upward infinitely into space,
Land Contract: A land contract is a real property sales contract.
Land Trusts: A few states permit the creation of land trusts, in which real estate is the only asset. As in all t
Landfill: A landfill is an enormous hole, either excavated for the purpose of waste disposal or left over from
Landlord: The lessor or the owner of leased premises. The landlord retains a reversionary interest in the prop
Latent Defect: A hidden structural defect that would not be discovered by ordinary inspection and that threatens th
Lateral Support: The right to have land supported by the adjoining land or soil beneath.
Latitude: Distance on the earths surface, measured northward or southward from the equator measured in degrees
Law Of Agency: A fiduciary relationship is created under the law of agency when a property owner, as the principal,
Leach: Water that collects contaminants as it trickles through wastes, pesticides, or fertilizers. Leaching
Lead: Lead is an element that was once used as a pigment and drying agent in paint. An elevated level of l
Lease: An agreement, written or unwritten, transferring the right to exclusive possession and use of real e
Lease Option: A lease under which the tenant has the right to purchase the property either during the lease term o
Lease Purchase: The purchase of real property, the consummation of which is preceded by a lease, usually long-term.
Leasehold Estate: A tenants right to occupy real estate during the term of a lease, a personal property interest.
Leasehold Lending: Loans on a leased property with satisfaction dates usually 10 to 20 years prior to the expiration of
Leasing Agent: Real estate salespeople who specialize in leasing rental properties. Skilled at telephone techniques
Legacy: A disposition of money or personal property by will.
Legal Description: A description of a specific parcel of real estate complete enough for an independent surveyor to loc
Legal Life Estate: A legal life estate is not created voluntarily by an owner. Rather, it is a form of life estate esta
Legally Competent Parties: People who are recognized by law as being able to contract with others, those of legal age and sound
Legatee: A person who receives money or personal property under a will.
Lenders Escrow Instructions: A lenders written instructions to the escrow company stating the conditions which must be met before
Lessee: The person to whom property is rented or leased, called a tenant in most residential leases.
Lessor: The person who rents or leases property to another. In residential leasing, he or she is often refer
Leverage: Using someone elses money to purchase a property. Refers to the ability to use the investment as col
Levy: To assess, seize or collect. To levy a tax is to assess a property and set the rate of taxation. To
Liability: 1. Legal responsibility for an act. 2. A debt.
Liability Coverage: Insurance coverage for injuries or losses sustained by the public when on an individuals property.
License: 1. A privilege or right granted to a person by a state to operate as a real estate broker or salespe
Lien: A charge or claim that one person (lienor) has on the property of another (lienee) as security for a
Lien Theory: Some states interpret a mortgage as being purely a lien on real property. The mortgagee thus has no
Lien Waiver: Documents signed by subcontractors and suppliers, indicating they have received payment in full.
Life Cycle Costing: In property management, comparing one type of equipment to another based on both purchase cost and o
Life Estate: Any estate in real or personal property that is limited in duration to the life of its owner or the
Life Tenant: A person in possession of a life estate.
Lifting Clause: A provision in a junior mortgage that allows the underlying senior loan to be replaced or refinanced
Like Kind: A term relating to the nature of a property rather than its quality or quantity. Only like kind prop
Limited Liability Company (LLC): LLCs are a relatively recent form of business organization. An LLC combines the most attractive feat
Limited Partnership: Consists of one or more general partners as well as limited partners. The business is administered b
Line Of Credit: An amount of money stipulated by a commercial bank to an active customer on an annual basis. The bal
Liquefaction: A phenomenon which occurs during an earthquake whereby the ground/soil turns into a highly unstable,
Liquidated Damages: An amount predetermined and agreed by the parties to an agreement as the total amount of compensatio
Liquidity: Refers to the time it takes to convert an asset to cash that is a reflection of its market value.
Lis Pendens: A recorded legal document that gives constructive notice that an action affecting a particular piece
Listing Agreement: A written employment agreement between a property owner and a real estate broker authorizing the bro
Listing Broker: The broker in a multiple-listing situation from whose office a listing agreement is initiated, as op
Listing Presentation Manual: Used by real estate brokerages to make presentations to listing prospects. A visual aid used in comb
Littoral Rights: The rights of a landowner whose land borders a pond, lake or ocean shore-line where the body of wate
Living Trust: An arrangement in which a property owner (trustor) transfers assets to a trustee who assumes specifi
Loan Application: A lenders initial sourse of information on a borrower/applicant and the collateral involved, stipula
Loan Broker Listing: A mortgage loan brokers contract with a buyer to obtain a loan.
Loan Commitment: A lenders agreement to lend a specified amount of money which must be exercised within a set time li
Loan Constant: The annual payment required per dollar of a mortgage loan, including principal and interest.
Loan Correspondent: A person or entity that acts for a lender in arranging loans or the sale of loans.
Loan Documents: Documents prepared by a lender in conjunction with granting the loan to the borrower, may include a
Loan Fees: Also called loan origination fees. Costs charged by a lender for giving out a loan, may include poin
Loan Origination Fee: The processing of a mortgage application is known as loan origination. When a mortgage loan is origi
Loan-To-Value Ratio: The relationship between the amount of the mortgage loan and the value of the real estate being pled
Lock-In Clause: A condition in a promissory note that prohibits prepayment of the note.
Longitude: Distance measured east or west on the earths surface, measured by the angle which the meridian throu
Lot-And-Block (Recorded Plat) System: A method of describing real property that identifies a parcel of land by reference to lot and block
Low-Doc Or No-Doc Loan: Loans that require little or no documentation regarding the borrowers income, assets or liabilities.
Low-E Glazings: Low-e glazings have special coatings that reduce heat transfer through windows. This type of window
Loyalty: The duty of loyalty requires the agent to place the principals interests above those of all others,
M1, M2, M3: Three measurements of the United States money supply. M1, or the basic money supply, consists of cas
Maintenance Charges: Monthly or annual charges assessed in a condominium, planned united development, or cooperative deve
Maker: The maker of a check is known as the drawer.
Management: Refers to the amount of personal or hired time, it takes to run the investment.
Management Agreement: A contract between the owner of income property and a management firm or individual property manager
Management Plan: The financial and operational strategy for the ongoing management of a property. It is based on mark
Manifest System: Tracking of hazardous waste from cradle to grave (generation through disposal), with accompanying do
Manufactured Home: A structure (transportable in one or more sections) when in the traveling mode, is eight body feet o
Margin: In an adjustable-rate loan, the amount added to the index rate that represents the lenders cost of d
Market: A place where goods can be bought and sold and a price established.
Market Analysis: A regional and neighborhood study of economic, demographic and other factors made to determine suppl
Market Approach: A method of pricing single-family rental homes and condos using comparable market data. When pricing
Market Value: The most probable price a property should bring in a competitive and open market under all condition
Market-Data Approach: Estimating a propertys value based on a comparison of the property with similar properties in the sa
Marketable Title: Good or clear title, reasonably free from the risk of litigation over possible defects.
Masonry: Any construction material involving bricks/blocks and mortar or related materials.
Master Deed: The principal conveyance document used by the owners of land on which condominiums are located.
Master Plan: A comprehensive plan to guide the long-term physical development of a particular area.
Material Fact: Any fact that is relevant to a person making a decision. Agents must also disclose to buyers materia
Mean: The average of all items included within a group, calculated by dividing the sum of the individual i
Mechanics Lien: A statutory lien in favor of a building contractor (architects and designers in some states) to secu
Median: The middle figure in a set of numbers.
Mediation: A process where a neutral third party intervenes between the disputing parties to reach a satisfacto
Mello-Roos Bonds: Based on passage of the Mello-Roos Community Facilities Act of 1982, certain housing tracts may be w
Mentor Program: A training program in a real estate office wherein newly-hired agents assist successful, knowledgeab
Merger: The joining of a lesser right with a greater right so that the lesser right is lost.
Meridian: One of a set of imaginary lines running north and south used by surveyors for reference in locating
Metes-And-Bounds Description: A legal description of a parcel of land that begins at a well marked point and follows the boundarie
Military Ordinance Location: Certain military bases contain live ammunition for various reasons. A seller of residential property
Mill: One-tenth of one cent. Some states use a mill rate to compute real estate taxes, for example, a rate
Mineral Rights: Rights to subsurface land and profits. Nornally, when real property is conveyed, it includes everyth
Minor: Someone who has not reached the age of majority and therefore does not have legal capacity to transf
Misdemeanor: Offenses less serious than felonies and generally punishable by a fine or imprisonment less than one
Misrepresentation: A false statement or concealment of a material fact made with the intention of inducing some action
Mistake: An error or misunderstanding. A contract is voidable if there is a mistake that is mutual, material,
Mitigation: Measures taken to reduce adverse impacts on the environment. To make less severe, as in the mitigati
Mixed-Use Developments (MUDS): MUDs combine office space, stores, theaters and apartment units in a single community. MUDs usually
Mobile-Home: Prefabricated trailer-type housing units that are semipermanently attached to land, which is either
Mobile-Home Loan: A mortgage loan on a large mobile-home, usually drawn for a shorter term than conventional mortgages
Mobile-Home Park: An area zoned and set up to accommodate mobile homes by providing water hookups and sewage disposal
Mode: The most frequently occurring variate.
Modular Housing: A relatively recent concept in home construction, aimed at producing housing more economically and f
Molds: Molds are simple, microscopic organisms that are present virtually everywhere both indoors and outdo
Monetary Policy: Governmental regulation of the amount of money in circulation through such institutions as the Feder
Month-To-Month Tenancy: A periodic tenancy under which the tenant rents for one month at a time. In the absence of a rental
Monument: A fixed natural or artificial object used to establish real estate boundaries for a metes-and-bounds
Moratorium: 1.A temporary suspension of payments due under a financial obligation in order to help a distressed
Mortgage: A legal document used to secure the performance of an obligation. The term mortgage, which is derive
Mortgage Banker: A person, corporation or firm (not otherwise in banking and finance) that normally provides its own
Mortgage Broker-Company: A person or firm that acts as an intermediary between borrower and lender, one who, for compensation
Mortgage Insurance: A kind of insurance policy that will pay off the mortgage balance in the event of death, and in some
Mortgage Insurance Premiums (MIP): Most FHA loans require the borrower to pay two mortgage insurance premiums: one upfront paid at clos
Mortgage Lien: A lien or charge on the property of a mortgagor that secures the underlying debt obligations.
Mortgage Loan Disclosure Statement: Borrower disclosure mandated by Article 7 of the Real Estate Law.
Mortgage Revenue Bonds: A type of tax-exempt industrial development bond offered by state and local governments through thei
Mortgage-Backed Security (MBS): A security guaranteed by pools of mortgages and used to channel funds from securities markets to hou
Mortgagee: In a mortgage transaction, the party who receives and holds a mortgage as security for a debt, the l
Mortgagees Title Insurance: An insurance policy protecting the lender for the amount of the loan in the event of a future title
Mortgagor: In a mortgage transaction, the buyer/borrower is the mortgagor. The mortgagor is required to sign a
Mrs. Murphys Exemption: The common description of the exemption that applies to an owner-occupied building with four or fewe
Multi-Lender Rule Loans: Loans involving 10 or fewer investors regulated by the Corporation Commissioner.
Multiclass Mortgage Securities: Short- and long-term mortgage securities, with or without pass-through privileges.
Multiperil Policies: Many insurance companies offer multiperil policies for apartment and commercial buildings. Such a po
Multiple-Listing Clause: A provision in an exclusive listing for the authority and obligation on the part of the listing brok
Multiple-Listing Service (MLS): A marketing organization composed of member brokers who agree to share their listing agreements with
Municipal Bonds: Bonds issued to finance public improvements such as parks, schools and urban renewal projects.
Must-Buy Buyers: Buyers looking for properties that meet specific needs.
Must-Sell Sellers: A highly motivated or desperate seller.
Mutual Consent: A meeting of the minds, a mutual assent of the parties to the formation of the contract.
Mutual Mortgage Insurance: Insurance premiums and other specified FHA revenues are paid into one of four FHA funds. Losses due
Naked Title: Bare title to the property, lacking the usual rights and privileges of ownership. A trustee in a dee
National Association Of Independent Fee Appraisers (NAIFA): A professional association of appraisers with more than 2,000 members nationally. NAIFA offers the s
National Bank Act Of 1863: In 1863, President Abraham Lincoln, at the urging of Salmon Chase, the Secretary of the Treasury, si
National Environmental Policy Act: The Act requires an environmental impact statement for federal actions that significantly affect the
Negative Amortization: A financing arrangement in which the monthly payments are less than the true amortized amounts and t
Negative Declaration: A declaration by a developer that a project will not have a negative impact on the environment.
Negative Easement: An easement where the owner of a servient estate is prohibited from doing something on his or her es
Negligence: The failure to use ordinary or reasonable care under the circumstances.
Negligent Misrepresentation: A negligent misrepresentation occurs when the broker should have known that a statement about a mate
Negotiable Instrument: A written promise or order to pay a specific sum of money that may be transferred by endorsement or
Neighborhood Information Request: A questionnaire used by brokers to obtain information about the neighborhood where a listed property
Net Income Approach: A method of pricing multiple unit rental properties where the desire to buy is driven by the propert
Net Lease: A lease requiring the tenant to pay not only rent but also costs incurred in maintaining the propert
Net Listing: An employment contract in which the broker receives as commission all excess monies over and above t
Net Operating Income (NOI): The income projected for an income-producing property after deducting losses for vacancy, collection
Net Proceeds: The cash received after paying all liens and expenses.
Net Worth: Assets less liabilities
Networking: Generating prospects through a real estate professionals communications with friends and professiona
No Capacity To Contract: The inability of a person to enter into a valid contract under any circumstances. Such inability can
No Loan, No Commission: A listing agreement requiring that escrow be closed and title transferred before an agent is entitle
No-Choice Rule: If a real estate transaction qualifies as an exchange, it must be treated as an exchange. An exchang
No-Loss Rule: If a real estate transaction qualifiies as an exchange, no loss can be recognized.
Nominal Damages: Monetary damages of a token amount awarded for a wrongful act where no loss occurred.
Nominal Interest Rate: The stated interest rate in a note or contract, which may differ from the true or effective interest
Non-Agent: An intermediary between a buyer and seller, or landlord and tenant, who assists both parties with a
Non-Conforming Loan: A mortgage loan that does not meet Fannie Mae and Freddie Mac underwriting guidelines. Non-conformin
Nonconforming Use: A use of property, legally permitted to continue as such, in spite of the orignial zoning ordinance
Noncumulative Zoning: Zoning that allows only the stated use and not more restrictive uses.
Nondisturbance Clause: An agreement where the mortgagee agrees to honor a tenants lease in the event that the mortgage is f
Nongeographic Farming: Farming/prospecting a particular segment of the market such as an ethinic group or nationality, as o
Nonhomogeneity: A lack of uniformity, dissimilarity. Because no two parcels of land are exactly alike, real estate i
Noninstitutional Lenders: Credit unions, pension funds, private individuals and real estate investment trusts.
Nonjudicial Foreclosure: The process of selling real property under a power of sale in a mortgage or deed of trust that is in
Notary Public: A person who acknowledges oaths, such as the signing of a grant deed or deed of trust, must be duly
Note (Original Note): A document signed by the borrower of a loan and stating the loan amount, the interest rate, the time
Notice Of Cessation: A notice that gives subcontractors 30 days and gives prime contractors 60 days to file liens from th
Notice Of Completion: A document recorded to give constructive notice that a building job has been completed.
Notice Of Default: A notice to a defaulting party announcing that a default has occurred. The defaulting party is usual
Notice Of Deliquency: In junior financing, where the borrower gives the senior lender permission to notify the junior lend
Notice Of Nonresponsibility: A legal notice designed to relieve a property owner of responsibility for the cost of improvements o
Novation: Substituting a new obligation for an old one or substituting new parties to an existing obligation.
Nuisance: That which annoys and disturbs one in possession of his or her property, rendering its ordinary use
Nuncupative Will: An oral will declared by the testator in his or her final illness, made before witnesses and then cr
Obedience: The fiduciary relationship obligates the agent to act in good faith at all times, obeying the princi
Obligatory Advance: Any advance which, under the terms of the credit line deed of trust or other agreement, the secured
Obligor: A promisor, one who incurs a lawful obligation to another (the obligee). The maker of a promissory n
Obsolescence: The loss of value due to factors that are outmoded or less useful. Obsolescence may be functional or
Occupancy Permit: A permit issued by the appropriate local governing body to establish that the property is suitable f
Occupational Safety And Health Act (OSHA): Congress created OSHA under the Occupational Safety and Health Act, which was signed by President Ri
Offer: An offer is a promise made by one party, requesting something in exchange for that promise. The offe
Offer And Acceptance: Two essential components of a valid contract, a meeting of the minds.
Offeree: The person to whom an offer is made - usually the owner.
Offeror: The party who makes an offer - usually the buyer.
Office Of Thrift Supervision (OTS): Monitors and regulates the savings and loan industry. OTS was created by FIRREA.
Office Property: Income-producing commercial property from which a particular service is rendered.
Offsite Improvements: Improvements made outside of a propertys boundaries, such as sidewalks and streets.
Oil And Gas Lease: A grant of the sole and exclusive right to extract oil and/or gas from beneath the surface of land.
One Stop Shopping: An arrangement where settlement and service providers are all available through the broker.
One-Hundred-Percent Commission Plan: Some firms have adopted a 100 percent commission plan. Salespersons in these offices pay a monthly s
Open House: The common real estate practice of showing listed homes to the public during established hours.
Open Listing: A listing given to any number of brokers who can work simultaneously to sell the owners property. Th
Open-Buyer-Agency-Agreement: This agreement is a nonexclusive agency contract between a broker and a buyer. It permits the buyer
Open-End Loan: A mortgage loan that is expandable by increments up to a maximum dollar amount, the full loan being
Open-End Trust Deed: An expandable loan in which the borrower is given a limit up to which he or she may borrow, with eac
Open-Market Operations: The buying and selling of government securities by the Federal Reserve to control the amount of mone
Operating Budget: A projection of income and expenses for the operation of a property over a one year period.
Operating Expenses: Those recurring expenses that are essential to the continuous operation and maintenance of a propert
Opinion Of Title: An opinion of the marketability of a title given by an attorney based on the abstract of title.
Opportunity Cost: Earnings that may be available on alternative investments.
Option: An agreement to keep open, for a set period, an offer to sell or lease real property.
Option Listing: A listing in which the broker also retains an option to purchase the property for the brokers own ac
Ordinance: A military weapon or item of destruction (e.g. bullets).
Original Basis: The sum of the purchase price of a property plus buying expenses on acquisition.
Ostensible Agency: A form of implied agency relationship created by the actions of the parties involved rather than by
Other Income: Refers to income other than rent, such as vending and laundry machines, storage or parking space inc
Owner-Occupied: A property where the owner physically occupies the property.
Owners Title Insurance: An insurance policy protecting the buyer for the amount of the purchase price in the event of a futu
Ownership: The right to use, possess, enjoy, transfer, and dispose of a thing to the exclusion of all others.
P Trap: A drainage plumbing pipe in the approximate shape of a p laid on its face, providing a trap that pre
Package Loan: A real estate loan used to finance the purchase of both real property and personal property, such as
Par: The face value of a bond or security.
Parol Evidence Rule: A rule of evidence providing that a written agreement is the final expression of the agreement of th
Partial Release Clause: A mortgage provision under which the mortgagee agrees to release certain parcels from the lien of th
Partial Zoning: Zoning that does not consider its effect on other areas.
Participation Certificates: Certificates issued by Freddie Mac backed by pools of mortgages.
Participation Financing: Where a lender becomes a partner in a development.
Participation Mortgage: A mortgage loan wherein the lender has a partial equity interest in the property or receives a porti
Partition: Co-tenants who wish to terminate their co-ownership may file an action in court to partition the pro
Partnership: An association of two or more individuals who carry on a continuing business for profit as co-owners
Parts Per Billion (PPB): Units commonly used to express contamination ratios, as in establishing the maximum permissible amou
Parts Per Million (PPM): Units commonly used to express contamination ratios, as in establishing the maximum permissible amou
Party Wall: A wall that is located on or at a boundary line between two adjoining parcels of land and is used or
Party Wall Easement: A party wall can be an exterior wall on a building that straddles the boundary line between two lots
Pass-Through Security: A security issued by the Government National Mortgage Association (Ginnie Mae) to mortgage investors
Pass-Throughs: Payments on securities sold in the secondary market that are sent directly to investors.
Passive Income: Income generated when a person is not active in a business or occupation. Examples of situations whe
Passive Losses: Losses left over when deductions for annual operating expenses, loan interest, and depreciation exce
Patent: The instrument that conveys real property from the state or federal government to an individual.
Patent Defect: A defect that is obvious from a reasonable inspection of a property.
Payee: The person to whom a debt instrument, such as a check or promissory note, is made payable, obligee,
Payment Cap: The limit on the amount the monthly payment can be increased on an adjustable-rate mortgage when the
Payor: The debtor on a promissory note or the party who makes payment to another.
Pension Funds: Pension funds usually have large amounts of money available for investment. Because of the comparati
Percentage Fee: A property management fee expressed as a percentage of the gross collectable income from a property.
Percentage Lease: A lease, commonly used for commercial property, whose rental is based on the tenants gross sales at
Percolation: 1) The movement of water downward in a circular direction through subsurface soil layers, usually co
Percolation Test: A test of the soil to determine if it will absorb and drain water adequately to use a septic system
Periodic Tenancy: A leasehold interest from period to period that renews automatically unless a notice of termination
Personal Income: A persons gross income from wages, salaries, commissions, interest and profits from businesses or in
Personal Property: Things that are tangible and movable, property that is not classified as real property, such as chat
Physical Deterioration: A reduction in a propertys value resulting from a decline in physical condition, can be caused by ac
Piggyback Loans: A loan divided into two parts with one lender taking a secondary security position.
Piti: Acronym for Principal, Interest, Taxes & Insurance.
Plaintiff: A person who brings an action, the party who complains or sues in a personal action and is so named
Planned Unit Development (PUD): A relatively modern concept in housing designed to produce a high density of dwellings and maximum u
Plat Map: A map of a town, section or subdivision indicating the location and boundaries of individual propert
Plottage: The increase in value or utility resulting from the consolidation (assemblage) of two or more adjace
Pmi: Acronym for Private Mortgage Insurance.
Point Of Beginning (POB): In a metes-and bounds legal description, the starting point of the survey, situated in one corner of
Point Source: A stationary location or fixed facility such as an industry or municipality that discharges pollutan
Points: A percentage of the principal conventional loan amount. A lender often charges a borrower service-ch
Police Power: The inherent right of the state to regulate for the purpose of promoting health, safety, welfare, an
Pollution: Any substances in water, soil, or air that degrades the natural quality of the environment, offends
Pollution Prevention: Actively identifying equipment, processes, and activities which generate excessive wastes or use tox
Portfolio Loan: A loan originated and maintained by the lender and not sold in the secondary mortgage market.
Potentially Responsible Party (PRP): Any individual or company that is potentially responsible for or has contributed to a spill or other
Power-Of-Attorney: A written instrument authorizing a person, the attorney-in-fact, to act as the agent on behalf of an
Power-Of-Sale Clause: A clause in a mortgage authorizing the holder of the mortgage to sell the property in the event of t
Preliminary Notice: Notifies a customer that work to be completed is subject to the lien rights of the contractor. Preli
Preliminary Public Report: Under the Subdivided Land Law the preliminary public report can be issued before the public report,
Preliminary Report: A title report that is made before a title insurance policy is issued or when escrow is opened. A pr
Premium: A fee paid to an insurance company.
Premium (In Excess Of Par): A price paid for a security in excess of its face value.
Prepaid Items: On a closing statement, items that have been paid in advance by the seller, such as insurance premiu
Prepayment Penalty: The amount set by the creditor as a penalty to the debtor for paying off the debt before it matures,
Prequalify: Determine the maximum loan amount a prospective buyer qualifies for prior to showing them properties
Prescription: Acquiring a right in property, usually in the form of an intangible property right such as an easeme
Present Worth: The discounted present-day value of money to be collected in the future.
Press Release: A news announcement written by a property manager or advertising specialist highlighting a propertys
Pressed Wood Products: Materials used in building and furniture construction that are made from wood veneers, particles, or
Pressure Relief Valve: A valve used on hot water heating appliances to help keep the pressure in the heated tank or boiler
Preventive Maintenance: Includes regularly scheduled activities such as painting and seasonal servicing of appliances and sy
Price Fixing: The practice of conspiring to establish fixed fees or prices for services rendered or goods sold. In
Prima Facie: At first sight, on the first appearance, on the face of it, so far as can be judged from the first d
Primary Lenders: Originators of real estate loans including commercial banks, savings and loan associations and mutua
Primary Mortgage Market: The mortgage market in which loans are originated and consisting of lenders such as commercial banks
Primary Personal Residence: The dwelling in which a taxpayer lives and occupies most of the time.
Prime Rate: The minimum interest rate a commerical bank will charge to its largest clients. Prime rates are dete
Principal: 1. One of the main parties to a transaction. For example, the buyer and seller are principals in the
Principal Meridian: The main imaginary line running north and south and crossing a base line at a definite point, used b
Prior Appropriation: A concept of water ownership in which the landowners right to use available water is based on a gove
Priority: The order of position, time or place. The priority of liens is generally determined by the chronolog
Private Mortgage Insurance (PMI): Insurance provided by private carrier that protects a lender against a loss in the event of a forecl
Private Offering: An offering of securities to no more than 25 persons and sale to no more than 10 persons.
Privity Of Contract: The relationship between contracting parties (mortgagor-mortgagee or assignee-assignor).
Probate: The formal judicial proceeding to prove or confirm the validity of a will, to collect the assets of
Procuring Cause: That effort which brings about the desired results. Also called predominant efficient cause or the c
Profit And Loss Statement: A detailed statement of income and expenses of a business that reveals the operating position of the
Progression: An appraisal principle that states that, between dissimilar properties, the value of the lesser-qual
Promissory Note: An unconditional written promise of one person to pay a certain sum of money to another person, orde
Property Analysis: A study made to familiarize a property manager with the nature and condition of a building, its rela
Property Brief: Produced by the listing agent, a property brief is simply a one-page flier about the property pointi
Property Management: That aspect of the real estate industry devoted to marketing, leasing, managing, and the maintenance
Property Manager: Someone who manages real estate for another person for compensation. Duties include collecting rents
Property Reports: The mandatory federal and state documents compiled by subdividers and developers to provide potentia
Property Taxes: Assessment made by county or city assessors office for real property taxes. Payment dates may vary a
Proprietary Lease: A lease given by the corporation, which owns a cooperative apartment building to the shareholder for
Prorations: Expenses, either prepaid or paid in arrears, that are divided or distributed between buyer and selle
Prospecting: Locating owners of properties who are interested in selling, or buyers who are interested in purchas
Protected Class: Any group of people designated as such by the Department of Housing and Urban Development (HUD) in c
Public Records: Records which by law give constructive notice of matters relating to property.
Public Report: A disclosure statement required by the Subdivided Land Law stating that a buyer is not obligated unt
Public Water System: A system that provides piped water for human consumption to at least 15 service connections or regul
Puffing: Exaggerated or superlative comments or opinions not made as representations of fact and thus are not
Punitive Damages: Damages awarded to one party to punish another party for dishonest conduct. Meant to deter others fr
Pur Antre Vie: For the life of another. A life estate pur autre vie is a life estate that is measured by the life o
Purchase-Money Mortgage: A mortgage given as part of the buyers consideration for the purchase of real property, and delivere
Pyramiding: The process of acquiring properties by refinancing properties already owned and investing the loan p
Qualified Intermediary: Corporation or entity who facilitates a 1031 tax deferred exchange (also known as an accommodator).
Quantity-Survey Method: The appraisal method of estimating building costs by calculating the cost of all of the physical com
Quasi Contract: A contract implied by law, as a matter of equity, when no actual contract exists.
Quiet Enjoyment: An implied warranty that the landlord will not interfere with the tenants reasonable use and enjoyme
Quiet Title: A court action to remove a cloud on the title.
Quitclaim Deed: A conveyance by which the grantor transfers whatever interest he or she has in the real estate, with
R-Value: A term used to describe the effectiveness of various kinds of insulation to indicate their resistanc
Radon: A naturally occurring gas that is suspected of causing lung cancer.
Rafter: A roof structural support system using 2 by wood components that are nailed together (as opposed to
Range: 1. A measure of the difference between the highest and lowest variates. 2. A strip of land six miles
Rate Cap: The limit on the amount the interest rate can be increased at each adjustment period in an adjustabl
Rate Factor: The number of dollars required to pay off each $1,000 of a mortgage loan.
Ratification: Method of creating an agency relationship in which the principal accepts the conduct of someone who
Ready, Willing And Able Buyer: One who is prepared to buy property on the sellers terms and is ready to take positive steps to cons
Real Estate: The physical land at, above and below the earths surface with all appurtenances, including any struc
Real Estate Advisory Commission: A ten member panel appointed by the Real Estate Commissioner, who preside over meetings. Six commiss
Real Estate Assistant: A real estate assistant (also known as a personal assistant or professional assistant) is a combinat
Real Estate Brokerage: A Real Estate Brokerage is a business in which real estate license-related activities are performed
Real Estate Commissioner: The Real Estate Commissioner is appointed by the governor and serves at the governors discretion. Th
Real Estate Dealer: A real estate dealer holds property primarily for resale to customers in the course of business, in
Real Estate Educators Association (REEA): A professional organization established by and for real estate educators, including individuals and
Real Estate Investment Trust (REIT): A method of pooling investment money using the trust form of ownership. In the 1960s Congress provid
Real Estate Investor: A real estate investor holds property for personal investment reasons, in contrast to a real estate
Real Estate License Law: State law enacted to protect the public from fraud, dishonesty and incompetence in the purchase and
Real Estate Mortgage Investment Conduit (REMIC): A tax entity that issues multiple classes of investor interests (securities) backed by a pool of mor
Real Estate Owned (REO): A term used by lenders to refer to properties acquired through foreclosure.
Real Estate Recovery Fund: A fund established in some states from real estate license revenues to cover claims of aggrieved par
Real Estate Settlement Procedures Act (RESPA): A federal law, enacted in 1974 and later revised, that ensures that the buyer and seller in a real e
Real Estate Transfer Disclosure Statement: As required by California Civil Code Sections 1102-1102.14, a transferee (buyer) of residential real
Real Property: The earths surface, the air above and the ground below, as well as all appurtenances to the land inc
Real Property Securities Dealer: A real property securities dealer is a broker who sells an existing trust deed and guarantees a retu
Real Property Security: A guaranteed loan or a loan where the broker will assume payments.
Reality Of Consent: Although a contract may meet all of the basic requirements, it may still be void or voidable, accord
Realized Capital Gain: When a property is sold, a capital gain or loss is realized.
Realtist: A member of a national organization, generally composed of African-American real estate brokers, kno
Rebate Law: Law that prohibits escrow and title insurance companies from giving rebates or favorable treatment a
Recapture Clause: A clause in some percentage leases where the lessor has the right to terminate a lease if a tenant d
Recapture Rate: A periodic allowance for the recovery of investment capital from the propertys income stream.
Recasting: The process of rewriting existing loans, especially when there is a default. The term and interest r
Receiver: An independent party appointed by a court to impartially receive, preserve and manage property that
Recission: An option in the discharge of a contract. If both parites agree, they may rescind a contract in a pr
Recognition Clause: A clause found in some blanket mortgages used to purchase a tract of land for subdivision developmen
Recognized Capital Gains: The recognized capital gain from the sale of an asset subject to income taxes.
Reconciliation: 1. The final step in an appraisal process, in which the appraiser reconciles the estimates of value
Reconstructed Cash Flow Analysis: An estimated cash flow analysis for a rental property, prepared by an agent using accurate property
Reconveyance Deed: A deed used by a trustee under a deed of trust to return title to the truster.
Reconveys: In satisfying a deed of trust, the trustee reconveys full title to the borrower.
Recording: The act of entering into the book of public records the written instruments affecting the title to r
Recreant: 1. cowardly or craven. 2. unfaithful, disloyal, or traitorous.
Rectangular (Government) Survey System: A system established in 1785 by the federal government, providing for surveying and describing land
Red Flag: A visual sign or indication of a defect. Something that warns a reasonably observant person of a pot
Redemption: The right of a defaulted property owner to recover his or her property by curing the default.
Redemption Period: A period of time established by state law during which a property owner has a right to redeem real e
Redlining: A practice by some lending institutions that restricts the number of loans or the loan-to-value rati
Reduction Certificate (Payoff Statement): The document signed by a lender indicating the amount required to pay a loan balance in full and sat
Refinance: To obtain a new loan to pay off an existing loan, or to pay off one loan with the proceeds from anot
Reflective Coatings: A black tinted window coating. Reflective coatings greatly reduce the transmission of daylight throu
Reformation: An action by a court to revise a contract to read as it was intended by the parties to read rather t
Regression: An appraisal principle that states that between dissimilar properties the value of the better-qualit
Regulation Z: Implements the Truth-in-Lending Act requiring credit institutions to inform borrowers of the true co
Reinstatement: To bring something back to its prior position, as in restoring a defaulted loan to current status.
Rejection: Proposing any deviation from the terms of the offer constitutes a rejection of the original offer an
Release: Any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leach
Release Clause: A provision found in many blanket mortgages enabling the mortgagor, upon payment of a specific sum o
Release Deed: A document, also known as a deed of reconveyance, that transfers all rights given a trustee under a
Release Of Liability: The release of an old borrower from further responsibility for repayment of an assumed loan.
Reliction: An increase of the land by the permanent withdrawal of the ocean or a river.
Relinquished Property: The property given up in the exchange.
Remainder: The right of future possession and use that goes to someone other than the grantor upon termination
Remainder Estate: A future interest in real estate created at the time and by the same instrument of the original esta
Remainder Interest: The remnant of an estate that has been conveyed to take effect and be enjoyed after the termination
Rent: A fixed, periodic payment made by a tenant of a property to the owner for possession and use, usuall
Rent Control: Ordinances that limit the rent a landlord can charge for a property.
Rent Factor: A multiplier used to establish the rental rate for industrial properties based on the owners desired
Rent Schedule: A statement of proposed rental rates, determined by the owner or the property manager or both, and b
Rent Skimming: In no down-payment sales where the buyer of a property collects rents and deposits on the property w
Rent Up: A requirement of a lender that a developer lease a stated amount of space in a building as a prerequ
Rental Center: A special leasing office located in an apartment complex. Usually includes a furnished model and a c
Rental Income: The result when vacancies (uncollected rent) is subtracted from gross scheduled income.
Rental Statement: A summary of rental amounts paid and security deposits collected on a property used for rental purpo
Renunciation: An act or instance of relinquishing, abandoning, repudiating or sacrificing something, as a right, t
Repair Or Corrective Maintenance: Involves the actual repairs that keep the buildings equipment, utilities and amenities functioning.
Replacement Cost: The construction cost at current prices of a property that is not necessarily an exact duplicate of
Replacement Property: The property acquired in the exchange.
Rescission: The legal remedy of canceling, terminating or annulling a contract and restoring the parties to thei
Reserve Fund: Monies a lender will often require a borrower to set aside as a cushion of capital for future paymen
Reserve Funds: An expense category in the operating budget. Monies that are set aside for replacement expenditures
Reserve Requirements: A flat percentage of deposits, required by the Federal Reserve, to be set aside by member banks as a
Residential Purchase Agreement: A model purchase agreement form, initially developed in 1985 by the California Association of Realto
Resolution Trust Corporation: The organization created by FIRREA to liquidate the assets of failed savings and loan associations.
Resource Conservation And Recovery Act: Federal law administered by the EPA which regulates the generation, processing and transportation of
Respondent: 1. The party who makes an answer to a bill or other proceeding. 2. The party who contends against an
Restraining Order: An order that may issue from filing for an injunction. Though the term is sometimes used as a synony
Restricted License: A probationary real estate license granted after a license was revoked, suspended or denied.
Restrictive Covenants: A clause in a deed that limits the way the real estate ownership can be used.
Retail Property: Income-producing property from which various types of retail products are sold.
Retainer: Retainer is a professional relationship between an advisor and a client in which a client engages th
Retaining Wall: A wall built to hold back or support a bank of earth.
Retaliatory Eviction: An eviction due to a tenants complaints to the landlord, a public agency or tenant association. It i
Retirement Communities: Many of them in temperate climates, are often structured as PUDs. They may provide shopping, recreat
Retroactive Liability: A liability is not limited to the current owner of a property, but includes people who have previous
Return On Investment: The net annual income divided by the original cash investment equals a percentage return on investme
Reverse-Annuity Mortgage (RAM): A loan under which the homeowner receives monthly payments based on his or her accumulated equity ra
Reversion: The right of future possession and use by the grantor of a life estate.
Reversionary Interest: The remnant of an estate that the grantor holds after granting a life estate to another person.
Reversionary Right: The return of the rights of possession and quiet enjoyment to the lessor at the expiration of a leas
Revocation: An offeree may fail to accept the offer before it expires. The offeror may revoke the offer at any t
Right Of Correlative User: The right of a landowner to the reasonable use of underground percolating water.
Right Of First Refusal: The right to the first opportunity to lease or purchase real property. For example, apartment tenant
Right Of Prior Appropriation: A water rights concept in California and other states that the first user of riparian water obtains
Right Of Survivorship: The distinctive characteristics of a joint tenancy (also tenancy by entirety) by which the surviving
Right-Of-Way: The right given by one landowner to another to pass over the land, construct a roadway or use as a p
Riparian Rights: The rights of a landowner whose land borders on a stream or watercourse to use and enjoy the water w
Risk: The probability of getting your money back. High risk means low probability, low risk means high pro
Risk Assessment: Qualitative and quantitative evaluation of the risk posed to human health and/or the environment by
Risk Management: Evaluation and selection of appropriate property and other Insurance.
Risk-Based Financing: When the lender sets loan terms based on potential risk. Borrowers that show little risk of default
Rolled Roofing: An asphalt roofing material that is manufactured in rolls with granules on one side. Asphalt roofing
Rollover Loan: A loan that includes a call date earlier than its normal amortization period, also called a renegoti
Roman Civil Law: Roman private property ownership codes enforced by Spain on early California land owners.
Roof Decking: The undersupport material which is typically wood for attaching shingles and other materials to the
Root Of The Title: The original grant (or root) of the title.
Routine Maintenance: Includes such day-to-day duties as cleaning common areas, performing minor carpentry and plumbing ad
Rules And Regulations: Real estate licensing authority orders that govern licensees activities, they usually have the same
Run With The Land: A phrase describing rights or covenants that bind or benefit successive owners of a property. An exa
Safe Drinking Water Act: Enacted by Congress in 1974, this federal law administered by the EPA and equivalent state regulator
Safety Clause: A safety clause may be contained in a listing. It provides that a broker is still entitled to a comm
Sale-Leaseback: A transaction in which an owner sells his or her improved property and, as part of the same transact
Sales Comparison Approach: The process of estimating the value of a property by examining and comparing actual sales of compara
Sales Contract: A real estate sales contract contains the complete agreement between a buyer of a parcel of real est
Salesperson: A person employed directly or indirectly by a licensed real estate broker to perform various tasks a
Sandwich Lease: Another term used is sublease. This is when a tenant has a current lease with the owner of a propert
Satisfaction Of Mortgage: When all mortgage loan payments have been made and the note has been paid in full, a satisfaction of
Savings And Loan Association (S and L): A financial institution whose principal function is to promote thrift and home ownership. Depositors
Second Mortgage: A mortgage (or trust deed) that is junior or subordinate to a first mortgage, typically, an addition
Secondary Financing: A loan taken out in addition to a first loan, usually obtained from an individual lender.
Secondary Mortgage Market: A market for the purchase and sale of existing mortgages, designed to provide greater liquidity for
Secret Profit: Refers to a broker making an undisclosed profit at the sellers expense, for example, when the broker
Section 202: Government program that provides capital for the construction, rehabilitation or acquisition of nonp
Section 8: Federally subsidized housing administered by HUD where the tenant pays up to thirty percent of his o
Section(S): As used in the government survey method, a land area of one square mile, or 640 acres. A section is
Securitization: The pooling of real estate mortgages and trust deeds to act as collateral for the sale of securities
Security: Evidence of obligations to pay money or of rights to participate in earnings and distribution of cor
Security Agreement: Security interests in chattels (personal property) are created by an instrument known as a security
Security Deposit: Money deposited by or for the tenant with the landlord, to be held by the landlord for the following
Seller Carryback Financing: A sale of real property where the seller receives a portion of the sales price in the form of a prom
Seller Financing Disclosure Statement: There are specific additional duties imposed upon the licensee who negotiates a sale of real propert
Sellers Agent: An agent who represents the seller of real property.
Sellers Real Property Disclosure Form: As required by Nevada Real Estate Division Code NRS 113. 100-113.150, a transferee (buyer) of reside
Senior Loan: A real estate loan in the first priority position.
Separate Property: Under community property law, property owned solely by either spouse before the marriage, acquired b
Septic System: A system for collecting, treating and eliminating waste from a home waste drainage system.
Servicing Agreement: Signed documentation as to who will service the loan.
Servient Tenement: Land on which an easement exists in favor of an adjacent property (called a dominant tenement or est
Set-Up Sheet: Also know as an Annual Property Cash Flow Statement. Includes cash flow information about a listed r
Setback: The amount of space local zoning regulations require between a lot line and a building line.
Severalty: Sole ownership of real property.
Severance: Changing an item of real estate to personal property by detaching it from the land, for example, cut
Sharecropping: In an agricultural lease, the agreement between the landowner and the tenant farmer to split the cro
Shared-Appreciation Mortgage (SAM): A mortgage loan in which the lender, in exchange for a loan with a favorable interest rate, particip
Sheriffs Deed: The deed given after a sheriffs sale.
Shingles: Roofing material characterized by short, rectangular sections, nailed to the roof decking in an over
Short Term Rate: A reduced rate for title insurance applicable in cases where the owner of a property has been insure
Shower Pan: A waterproof pan placed beneath the floor tiles or concrete base of a shower that prevents leaking.
Sick Building Syndrome: The term sick building syndrome (SBS) is used to describe situations in which building occupants exp
Signatory: 1. having signed or joined in signing a document. 2. a signer, or one of the signers, of a document.
Simple Interest: Interest computed on the principal balance, and disregards previously accumulated (upaid) interest.
Single Agency: The practice of representing either the buyer or the seller but never both in the same transaction.
Single-Family, Owner-Occupied Dwellings: A dwelling which will be owned and occupied by a signatory to the mortgage or deed of trust secured
Situs: The personal preference of people for one area over another, not necessarily based on objective fact
Slab: A flat piece of concrete, typically used as a walking surface, but may also serve as a load bearing
Soft Money Loan: A loan where credit not cash is extended, usually by the seller carrying all or part of the financin
Soldiers And Sailors Civil Relief Act: A law prohibiting foreclosures while a person is serving in the military and within three months the
Sole Proprietorship: A method of owning a business in which one person owns the entire business and reports all profits a
Solid Core Door: A door where the inner material (core) is made of solid wood. This type door is usually used for doo
Solid Waste: As defined under Resource Conservation and Recovery Act, any solid, semi-solid, liquid, or contained
Source Reduction: The design, manufacture, purchase, or use of materials (such as packaging) that reduce the amount or
Special Agent: One authorized by a principal to perform a particular act or transaction without contemplation of co
Special Assessment: A tax or levy customarily imposed against only those specific parcels of realty that will benefit fr
Special Limitation: A fee simple estate may also be qualified by a special limitation. The estate ends automatically upo
Special Studies Zone: A specific area where an investigation is taking place regarding seismic or geologic considerations.
Special Warranty Deed: A deed in which the grantor warrants or guarantees the title only against defects arising during the
Special-Purpose Property: Hotels, resorts, nursing homes, theaters, schools, places of worship and other organizations whose s
Specific Lien: A lien affecting or attaching only to a certain, specific parcel of land or piece of property.
Specific Performance: An action brought in a court of equity in special cases to compel a party to carry out the terms of
Splash Block: A small, specially designed portable concrete pad. Oriented downhill, splash blocks direct water fro
Split-Fee Financing: A form of joint venture participation where the lender purchases the fee land under the proposed dev
Spot Zoning: Zoning of parcels not in conformance with the general zoning of an area.
Square-Foot Method: A method of estimating a buildings construction, reproduction or replacement costs, whereby the stru
Standard Coverage Policy: A standard coverage policy normally insures the title as it is known from the public records. In add
Standby Takeout Commitment: An agreement by an interim lender to advance funds to take out a construction lender.
Stare Decisis: The reliance of courts on previous decisions when judging disputes.
Statement Of Information: Also called a Statement of Identity. Statements provided to the escrow agent verifying pertinent dat
Statement Of Reasons: The Federal Equal Credit Opportunity Act (ECOA) (Title VII of the Consumer Protection Act) requires
Statute Of Frauds: State law that requires certain contracts to be in writing and signed by the party to be charged (or
Statute Of Limitations: That law pertaining to the period of time within which certain actions must be brought to court. The
Statutory Law: The laws, rules and regulations enacted by legislatures and other governing bodies.
Statutory Lien: A lien imposed on property by statute—a tax lien, for example—in contrast to an equitable lien,
Statutory Redemption: The right of a defaulted property owner to recover the property after its sale by paying the appropr
Steering: The illegal practice of channeling homeseekers interested in equivalent properties to particular are
Stigmatized Property: A property that has acquired an undesirable reputation due to an event that occurred on or near it,
Stock Cooperative: Ownership of real property by a corporation where each stockholder is entitled to occupancy of a uni
Stop Date: Date on a term loan when the balloon payment is due.
Stop Notice: A notice given to a lender that a subcontractor has not been paid. Unless bond is posted, the lender
Straight (Term) Loan: A loan in which only interest is paid during the term of the loan, with the entire principal amount
Straight Note: A promissory note evidencing a loan in which payments of interest only are made periodically during
Straight-Line Method: A method of depreciation, also called the age-life method, that is computed by dividing the adjusted
Stratified Marketplace: The real estate market is a marketplace that is stratified based on price.
Strict Foreclosure: In a strict foreclosure procedure, after a delinquent borrower has been notified and the proper pape
Strict Liability: An owner of a property is responsible to an injured party without excuse.
Subagent: An agent of a person who is already acting as an agent for a principal. The original agent can deleg
Subdivided Land Law: A disclosure law enacted to protect buyers of subdivided parcels. A public report is required for su
Subdivider: One who buys undeveloped land, divides it into smaller, usable lots and sells the lots to potential
Subdivision: Any land that is divided or is proposed to be divided for the purpose of disposition into two or mor
Subdivision And Development Ordinances: Municipal ordinances that establish requirements for subdivisions and development.
Subdivision Map Act: An act providing for local control of subdivisions. Cities and counties are required to adopt an ord
Subjacent Support: The right of land to be supported by land which lies beneath it.
Subject Property: A reference to the real property under discussion, or the real property under appraisal.
Subject To: The recognition by a buyer of conditions (such as a prior loan), which are not the buyers legal resp
Sublease: A lease given by a lessee for a portion of the leasehold interest, while the lessee retains some rev
Sublet: The partial transfer of a tenants right in a rental property to a third party.
Subordination Agreement: A written agreement between lienholders to change the priority of mortgage, judgment and other liens
Subordination Clause: A clause in which the holder of a mortgage permits a subsequent mortgage to take priority. Subordina
Subprime Lenders: Lenders who specialize in B, C, or D catagory paper.
Subrogation: The substitution of one creditor for another, with the substituted person succeeding to the legal ri
Subscribe: 1) to give, pay, or pledge (a sum of money) as a contribution, investment, etc. 2) to append ones si
Substitution: An appraisal principle that states that the maximum value of a property tends to be set by the cost
Substitution Of Entitlement: Replaces one eligible veteran with another on an existing Veterans Administration loan. The entitlem
Subsurface Rights: Ownership rights in a parcel of real estate to the water, minerals, gas, oil and so forth that lie b
Subterfuge: A clever trick or strategy used to evade a rule, escape a consequence, hide something, etc.
Subterranean Termites: A type of termite that nests underground.
Successors: Those who succeed to or to whom the corporations rights in the property are transferred.
Suit For Possession: A court suit initiated by a landlord to evict a tenant from leased premises after the tenant has bre
Suit For Specific Performance: If a seller breaches a real estate contract, the buyer may sue for specific performance. The buyer a
Suit To Quiet Title: A court action intended to establish or settle the title to a particular property, especially when t
Sump: A reservoir that collects and holds water or some other liquid, which is subsequently disposed of by
Superfund: Popular name of the hazardous waste cleanup fund established by the Comprehensive Environmental Resp
Superfund Amendments And Reauthorization Act (SARA): An amendatory statute that contains stronger cleanup standards for contaminated sites, increased fun
Supply: The amount of goods available in the market to be sold at a given price. The term is often coupled w
Surety Bond: An agreement by an insurance or bonding company to be responsible for certain possible defaults, deb
Surface Rights: Ownership rights in a parcel of real estate that are limited to the surface of the property and do n
Surrender: Giving up leasehold rights by a tenant in exchange for a release from future obligations under a lea
Survey: The process by which boundaries are measured and land areas are determined, the on-site measurement
Survivorship: The right of surviving joint tenants to the ownership interest of another joint tenant upon the latt
Swap Program: A Freddie Mac program where lower yield mortgages are exchanged for Participation Certificates.
Syndicate: A combination of people or firms formed to accomplish a business venture of mutual interest by pooli
Syndication: A descriptive term for a group of two or more people united for the purpose of making and operating
Table Funding: Simultaneous conveyance of purchase price and title as well as all loan papers at a closing.
Tacking: Adding or combining successive periods of continuous occupation of real property by adverse possesso
Take-Out Financing: Long-term permanent financing. In the usual large construction project, the developer obtains two ty
Taking: The concept of taking comes from the Takings clause of the fifth amendment of the United States Cons
Talking Sign: A radio transmitter with a range of up to 250 feet that broadcasts a description of a property to pr
Tandem Plan: A mortgage subsidy program offered from time to time by the United States Congress. The Government N
Tax Bill: A property owners tax bill is computed by applying the tax rate to the assessed valuation of the pro
Tax Credit: An amount by which tax owed is reduced directly.
Tax Deed: An instrument, similar to a certificate of sale, given to a purchaser at a tax sale.
Tax Deferred Exchange (1031 Exchange): Under Section 1031 of the Internal Revenue Code, some or all of the realized gain from the exchange
Tax Levy: The amount to be raised from the general real estate tax is then imposed on property owners through
Tax Lien: A charge against property, created by operation of law. Tax liens and assessments take priority over
Tax Rate: The tax rate for each taxing body is computed separately. To arrive at a tax rate, the total monies
Tax Reform Act Of 1986 (TRA 86): Sweeping revisions to the income tax laws, enacted by the United State Congress in 1986, that lowere
Tax Sale: A court-ordered sale of real property to raise money to cover delinquent taxes.
Tax Shelter: A phrase often used to describe some of the tax advantages of real estate or other investments, such
Tax-Free Gifts: Gifts that are free from federal gift taxes.
Taxation: 1. The process by which a government or municipal quasi-public body raises monies to fund its operat
Taxpayer Relief Act Of 1997 (TRA 97): Enacted by the United State Congress and effective May 7, 1997, TRA 97 provides for broader exemptio
Tenancy At Sufferance: A tenancy (or estate) in which a person wrongfully holds or occupies a property after the expiration
Tenancy At Will: A tenancy (or estate) in which a person holds or occupies real estate with the permission of the own
Tenancy By The Entirety: Some states allow husbands and wives to use a special form of co-ownership called tenancy by the ent
Tenancy For Years: A tenancy for a definite period of time. The tenant must vacate the property at the end of the lease
Tenancy In Severalty: Ownership of a property by one person, rather than held jointly with others. Also called sole tenanc
Tenant: In general, one who exclusively holds or possesses property, such as a life tenant or a tenant for y
Tenant Emergency Procedures Manual: A printed manual outlining emergency procedures, including evacuation plans and contact information
Tenant Improvements: A commercial or an industrial property manager often is called on to make tenant improvements. These
Tenants In Common: A form of concurrent ownership of property between two or more persons, in which each has an undivid
Tenement: A common law real estate term that describes those real property rights of a permanent nature. These
Term Loan: A short-term loan requiring interest-only payments until maturity, at which time the entire principa
Termite Inspection: A visable check of a property for the presence of termites. Usually performed by a licensed extermin
Testamentary Trust: A trust established by will.
Testate: Having made and left a valid will.
Testator: A person who has made a valid will. A woman often is referred to as a testatrix, although testator c
Thermal Mass: Thermal mass is a property that enables building materials to absorb, store, and later release signi
Third Party Originator: Third-party originators prepare loan applications for borrowers and submit the applications to lende
Thirteenth Amendment To The United States Constitution (1868): Section 1. Neither slavery nor involuntary servitude, except as a punishment for crime whereof the p
Three-Day Notice: Notice to quit, quit or cure, or quit or pay rent. Three-day notice must be given before an unlawful
Threshold Notification: Notification by brokers that they have met the threshold requirements for filing status and fiscal y
Thrift: Another name for a savings and loan association, a financial institution established to promote thri
Tier (Township Strip): A strip of land six miles wide, extending east and west and numbered north and south according to it
Time Is Of The Essence: A contract clause that emphasizes punctual performance as an essential requirement of the contract.
Time-Sharing: A modern approach to communal ownership and use of real estate that permits multiple purchasers to b
Timing: Refers to the length of time one must wait to receive cash flow from an investment.
Title: 1. The right to or ownership of land. 2. The evidence of ownership of land.
Title Defects: An unresolved claim against the ownership of property, which prevents presentation of a marketable t
Title Insurance: A comprehensive indemnity contract under which a title insurance company warrants to make good a los
Title Insurance Fees: The costs involved in purchasing title insurance. May include title insurance policy and search fees
Title Search: The examination of public records relating to real estate to determine the current state of the owne
Title Theory: Some states interpret a mortgage to mean that the lender is the owner of mortgaged land. Upon full p
Torrens System: A method of evidencing title by registration with the proper public authority, generally called the
Tort: A wrongful act, a violation of a legal right.
Town House: A type of dwelling unit normally having two floors, with the living area and kitchen on the base flo
Township: A division of territory, used in the government (rectangular survey system of land description, whic
Township Line: Lines running east and west, parallel to the base line and six miles apart.
Township Squares: When the horizontal township lines and the vertical range lines intersect, they form squares. These
Township Tiers: Township lines form strips of land called township tiers. These township tiers are designated by con
Toxic Substance Control Act: Enacted by Congress in 1976, the act authorizes EPA to secure information on all new and existing ch
Trade Fixture: An article of personal property annexed or affixed to leased premises by the tenant as a necessary p
Trading On The Equity: The practice of agreeing to buy real estate and then assigning the purchase agreement to another buy
Tranche: A series of bonds issued for a CMO.
Transaction Broker: A transaction broker (also referred to as a nonagent, facilitator, coordinator or contract broker) i
Transfer Tax: A state tax imposed on the transfer or conveyance of realty or any realty interest by means of deed,
Treasury Bill, Note, Bond: Treasury bill issued for less than a year, Treasury note issued from one to five years, Treasury bon
Trespass: Unlawful entry or injury to the property of another.
Trigger Terms: Terms in an advertisement which trigger additional disclosure of all credit terms.
Trip Hazard: Any situation where there is an increased likelihood of tripping (e.g. stairs that do not have a uni
Triple-Net Lease: A net-net-net lease where, in addition to the stipulated rent, the lessee assumes payment of all exp
Triplex: A building comprised of three dwelling units, each having a front and rear (or side) door and yard,
Truss: A roof structural support system made up from 2 by wood components that are attached using press-on
Trust: An arrangement whereby legal title to property is transferred by the grantor (or trustor) to a perso
Trust Deed: Also called a deed of trust. A legal document in which title to property is transferred to a third-p
Trust Deed Lien: A lien on the property of a truster that secures a deed of trust loan.
Trust Fund Bank Account: An account set up by a broker, attorney or other agent at a bank or other recognized depository, int
Trust Funds: Money or other things of value that are received by a broker or salesperson on behalf of a principal
Trust Ledger: Ledger where a property manager records monies paid out on behalf of an owner.
Trustee: 1) One who holds property in trust for another as a fiduciary and is charged with the duty to protec
Trustees Deed: A deed executed by a trustee conveying land held in a trust.
Trustor: The person who creates a trust and gives the instructions to the trustee.
Truth-In-Lending Law: A body of federal law effective July 1969 as part of the Consumer Credit Protection Act, and impleme
Two-Step Mortgage: A hybrid loan between a fixed-rate and adjustable-rate loan where a lower rate remains in effect for
U-Value: A measure used to indicate the insulating value of a window. The U-value measures the heat flow. The
Uncollected Rent: Uncollected rent or vacancy is subtracted from gross scheduled income. Uncollected rent is an estima
Unconscionable Contracts: An agreement that is so unfair and one-sided that the courts will refuse to honor it.
Underground Storage Tanks (USTS): USTs are commonly used for storing petroleum products, chemicals or process wastes. Sites which use
Underwriter: A person who evaluates the risk of default by a mortgage loan applicant, and grants approval or deni
Underwriting: The process of evaluating a mortgage loan applicants credit, collateral value and the risks in makin
Undisclosed Dual Agency: A broker may not intend to create a dual agency. However, like any other agency, it may occur uninte
Undue Influence: Strong enough persuasion to completely overpower the free will of another and prevent him or her fro
Unenforceable Contract: A contract which is considered unenforceable either because it cannot be proven or will not be enfor
Unequivocal: Unambiguous, clear, having only one possible meaning or interpretation.
Uniform Building Code: A national building code published by the International Conference of Building Officials. It has bee
Uniform Commercial Code: A codification of commercial law, adopted in most states, that attempts to make uniform all laws rel
Uniform Condominium Act (UCA): Many states have adopted the Uniform Condominium Act (UCA). Under its provisions, a condominium is c
Uniform Partnership Act (UPA): Most states have adopted the Uniform Partnership Act (UPA), which permits real estate to be held in
Uniform Residential Landlord And Tenant Act (URLTA): A uniform act intended to provide some consistency in regulating the relationship of landlord and te
Uniform Residential Loan Application: A loan application form required by Freddie Mac and Fannie Mae.
Uniform Settlement Statement: The standard HUD Form 1 required to be given to the borrower, lender and seller at the time or befor
Unilateral Contract: A one-sided contract wherein one party makes a promise so as to induce a second party to do somethin
Unit-In-Place Method: The appraisal method of estimating building costs by calculating the costs of all of the physical co
Unity Of Ownership: The four unities that are traditionally needed to create a joint tenancy-unity of title, time, inter
Unity Of Possession: One of the four unities required to create a joint tenancy. All joint tenants hold an undivided righ
Universal Agent: A person empowered to do anything the principal could do personally. The universal agents authority
Unlawful Detainer Action: A legal action that provides a method of evicting a tenant who is in default under the terms of the
Unruh Civil Rights Act: Forbids discrimination as to sex, race, color, religion, ancestry or national origin in accommodatio
Unsecured: Describes a debt instrument, such as a debenture, that is backed only by the debtors promise to pay.
Urea-Formaldehyde: First used in building materials, particularly insulation, in the 1970s. Gases leak out of the urea-
Usury: Charging interest at a higher rate than the maximum rate established by state law.
Utility Liens: Municipalities often have the right to impose a specific, equitable, involuntary lien on the propert
Utility Value: The value in use to an owner-user, which includes a value of amenities attaching to a property, also
Va Loan: A government-sponsored mortgage assistance program administered by the Department of Veterans Affair
Valid Contract: A contract that complies with all the essentials of a contract and is binding and enforceable with a
Value: The measure of the monetary equivalent of a property. The four essential elements of value are utili
Value In Exchange: The market value of a property.
Value In Use: The value of a property as used for a specific purpose.
Vapor Retarders: Special materials used in the installation of thermal insulation to reduce the passage of water vapo
Variable Costs: Operating expenses that fluctuate with occupancy, such as utilities and maintenance costs.
Variable Lease: Allows for increases in the rental charges during the lease period. One of the more common is the gr
Variance: Permission obtained from governmental zoning authorities to build a structure or conduct a use that
Variate: A single item in a group.
Vendee: The purchaser of realty, the buyer. The buyer under a land contract.
Vendor: The seller of realty. The seller under a land contract. In some cases, the vendor may not be the own
Verification: Confirmation under oath of the truthfulness of a statement.
Veterans Administration (VA): Federal agency providing assistance to veterans, including the guarantee of VA mortgage loans.
Veterans Exemption: California war veterans may receive a $4,000 exemption on the full cash value of their homes.
Void: Having no legal force or binding effect, a nullity, not enforceable. A void agreement is no contract
Voidable Contract: A contract that seems to be valid on the surface but may be rejected or disaffirmed by one or both o
Volatile Organic Compounds: Carbon compounds that tend to be emitted as gases into the air. Organic chemicals are widely used as
Voluntary Conveyance: Voluntarily signing over to a lender the property pledged as collateral on a defaulted loan.
Voluntary Lien: A lien placed on property with the knowledge and consent of the property owner.
Waiver: To give up a right voluntarily.
Walk-Through: A final inspection of a property just before closing. This assures the buyer that the property has b
Warehousing: Warehousing is the assembly of mortgage loans into pools. Securities that represent shares in these
Warranty: A promise that certain stated facts are true. A guaranty by the seller, covering the title as well a
Warranty Deed: A deed in which the grantor fully warrants good clear title to the premises, also called a general w
Waste: An improper use or an abuse of a property by a possessor who holds less than fee ownership, such as
Water Table: The natural level at which water is located in a particular area, be it above or below the surface o
Water Well: An excavation where the intended use is for location, acquisition, development, or artificial rechar
Weekly Activity Report: A weekly written report given to an owner by a listing broker reviewing the sales activities conduct
Weighted Average Technique: When reconciling appraisal approaches, the application of a weight to each approach for averaging.
Wetlands: Areas that are inundated or saturated by surface or ground water at a frequency and duration suffici
Wholesale Agreements: An agreement of a loan originator to work exclusively with a single lender.
Will: A written document, properly witnessed, providing for the transfer of title to property owned by the
Will-Buy Buyers: Will-buy buyers are bargain-hunters looking for motivated must-sell sellers.
Will-Sell Sellers: Unmotivated sellers who put their property on the market at an above-market price. Sellers who do no
Window Well: The dugout area just outside of a basement window that can be used to escape in the event of a fire.
Workers Compensation Acts: Laws that require an employer to obtain insurance coverage to protect his or her employees who are i
Working Level (WL): A unit of measurement for documenting exposure to radon decay products. One working level is equal t
Workout: The various ways to offset a foreclosure.
Wraparound Mortgage: A method of financing in which the new mortgage is placed in a secondary or subordinate position, th
Writ Of Execution: A court order authorizing and directing an officer of the court (sheriff, police officer) to levy an
Yield: The return on an investment or the amount of profit, stated as a percentage of the amount invested,
Zero Coupon Bonds: A single-payment bond that grows to its face value over a prescribed time period at a specific inter
Zoning: The regulation of structures and uses of property within designated districts or zones. Zoning regul
Zoning Ordinance: An exercise of police power by a municipality to regulate and control the character and use of prope
Zoning Variance: A zoning variance permits a change in the specifications required by the zoning ordinance.