| Subject | Details |
| Abandonment | The failure to occupy and use property that may result in a loss of rights |
| Abstract of Title | A summary or digest of all transfers, conveyances, legal proceedings, and any other facts relied on as evidence of title, showing continuity of ownership, together with any other elements of record which may impair title |
| Acceleration Clause | A condition in a real estate financing instrument giving the lender the power to declare all sums owing lender immediately due and payable upon the happening of an event, such as sale of the property, or a delinquency in the repayment of the note |
| Action to Quiet Title | The lawsuit filed by a person to remove or clear the claims of others against property. |
| Ad Valorem | A prefix meaning "based on value". Most local governments levy an ad valorem tax on property. |
| Agency | The relationship between principal and the principal’s agent which arises out of a contract, either expressed or implied, written or oral, wherein the agent is employed by the principal to do certain acts dealing with a third party. |
| Agent | One who acts for and in place of a principal, for the purpose of affecting the principal's legal relations with third persons. |
| Amortization | The repayment of a financial obligation over a period of time in a series of periodic installments. In a level-payment mortgage, this is the portion of the debt service that reduces the principal. |
| Amortized Loan | A financial debt that is paid off over a period of time by a series of periodic payments. A loan can be fully amortized or partially amortized or partially amortized requiring a balloon payment to satisfy the debt at the end of the term. |
| Annual Percentage Rate (APR) | The yearly cost of credit. Interest Rate plus finance charge. |
| Appraisal | An estimate of the value of property resulting from an analysis of facts about the property. An opinion of value. |
| Appreciation | An increase in value (of a property) |
| Arrears | Not on time. Late payments. Interest is paid in arrears. Taxes are paid at the end of the year, i.e., in arrears. |
| As is | A phrase to disclaim any promises or warranties. Purchasing real estate "as is" means taking it in exactly the condition in which it is found (defects still must be disclosed) |
| Assessed Value | The value of property given by tax assessor, for the purpose of determining the property tax. |
| Assignment | a means one person transfering contract rights to another person |
| Attestation | Act witnessing a person’s signing of an instrument by a notary public. |
| Attorney in Fact | A person given authority to act on behalf of another by a power of attorney. |
| Attorney's Opinion of Title | Attorny statement issued analyzing an abstract regarding the quality of title. |
| Bad Title | Title with defects making it unmarketable. |
| Balloon Payment | The remaining balance, at maturity, on a loan that has not been completely repaid through periodic payments |
| Bargain and Sale Deed | Instrument conveying title, reciting a valuable consideration |
| Bill of Sale | Document used to transfer ownership of personal property. |
| Breach of Contract | A failure to perform, as promised (in the contract), at due time |
| Bylaws | Legal documentation in a condominium regime which provides the establishment of the home-owner's association; provides the powers and authority given to the board of directors; and indicates various rights and responsibilities of the unit owners. |
| Capital Gains | The tax profit realized from the sale of property. (A "tax free" exchange is a deferment of capital gains). |
| Caveat Emptor | Means "Let the Buyer beware". |
| Certificate of Eligibility Certificate | Issued by Department of Veterans Affairs - evidence of individual’s eligibility to obtain VA loan. |
| Certificate of Reasonable Value (CPR) | The Federal VA appraisal commitment of property value. |
| Certificate of Title | A written opinion by an attorney that ownership of the particular parcel of land is as stated in the certificate. |
| Chain of Title | A history of conveyances and encumbrances affecting the title from the time the original patent was granted, or as far back as records are available, used to determine how title came to be vested in current owner. |
| Civil Rights Act of 1866 | A law which prohibits discrimination in all real estate transactions based on race - commercial and residential. |
| Closing | Process by which all the parties to a real estate transaction conclude the details of a sale or mortgage. The process includes the signing and transfer of documents and distribution of fundst to include all the tract of land. |
| Closing Costs | The miscellaneous expenses buyers and sellers normally incur in the transfer of ownership of real property over and above the cost of the property |
| Cloud on Title | A claim, encumbrance or condition which impairs the title to real property until disproved or eliminated as for example through a quitclaim deed or a quiet title legal action. |
| Collateral | Marketable real or personal property which a borrower pledges as security for a loan. In mortgage transactions, specific land is the collateral |
| Common Law | The body of law that grew from customs and practices developed and used in England “since the memory of man runneth not to the contrary.” |
| Community Property | Property acquired by husband and/or wife during a marriage when not acquired as the separate property of either spouse. Each spouse has equal rights of management, alienation and testamentary disposition of community property. |
| Comparable | Comparable property recently sold which is used in the market data approach. |
| Comparative Analysis | A method of appraising property in which the selling prices of similar properties are used as the basis for estimating the value of the subject property. |
| Consideration | Anything of value offered to induce someone to enter into a contractual agreement. For example, sale price, earnest money, a promise for a promise. |
| Contract | An agreement to do or not to do a certain thing. It must have four essential elements — parties capable of contracting, consent of the parties, a lawful object, and consideration. A contract for sale of real property must also be in writing and signed by the party or parties to be charged with performance |
| Contract for a Deed | A means by which the seller passes possession but retains title to the property until the total or a substantial portion of the purchase price is paid. Installment contract. The two parties here are the vendor (owner) and the vendee (buyer). |
| Conveyance | The transfer of title to land from one party to another. |
| Counteroffer | An implied rejection of the original offer by proposing new offer or by making conditional acceptance. |
| Covenant | Included in a deed; a guarantee. |
| Curtesy | The rights that a husband acquires in the wife's property upon her death. |
| Decree | Court order |
| Deed | A written instrument, usually under seal, which contains an agreement to transfer some property interest from a grantor to a grantee. |
| Deed in Lieu of Foreclosure | Used by the mortgagor (borrower) who is in default to convey the property to the mortgagee (lender) in order to eliminate the need for a foreclosure. |
| Deed of Release | Given by lien holders, remainder-men or mortgages to relinquish their claims on the property. |
| Deed of Trust | A deed to real property, which serves the same purpose as a mortgage, involving three parties instead of two. The third party holds naked title for the benefit of the lender. Beneficiary (Lender), Trustor (Borrower), Trustee (Third Party) |
| Defect in Title | Any lien, claim or encumbrance, on a particular piece of real estate, that has been properly recorded in the public records. Recorded defects impair clear title and may result in the title being unmarketable. |
| Depreciation | A decrease in value due to physical deterioration, functional or economic obsolescence. |
| Devise | Transferring title to real property by means of a will. |
| Discount Points | A fee charged by the lender at settlement that results in increasing the lender's effective yield on the money borrowed. One discount point equals one percent of the loan amount. |
| Down Payment | The amount paid by the purchaser, which when added to the mortgage amount, equals the total sales price. At time of closing this is referred to as equity. |
| Due-on-Sale Clause | A clause, included in many mortgages, permitting the lender to require the borrower to repay the outstanding balance when the property is sold. Prevents loan assumption. |
| Easement | A right to limited use or enjoyment by one or more persons in the land of another. |
| Economic Rent | The amount of rental which a building would receive, if set by the market, as opposed to contract rent set by the lease. |
| Effective Age | The difference between the theoretical economic life of a structure and its actual remaining economic life. Maintaining the property. |
| Eminent Domain | The right of government to acquire property, for a public purpose, after paying just compensation. |
| Encroachment | The extension of some improvement or object across the boundary of an adjoining tract. (Off sides). |
| Encumbrance | Any interest in or claim on, the land of another, which in some manner burdens or diminishes the value of the property. |
| Equal Credit Opportunity Act. (ECOA) | A federal act, which prohibits discrimination by lenders on the basis of sex or marital status in any aspect of a credit transaction. |
| Equitable Lien | Created when justice and fairness would require a court of equity to declare such a lien exists or when conduct of parties would imply that a lien was intended. |
| Equity | value of real estate less any liens against it. |
| Escalation Clause | (1) in finance, permits the lender to raise the interest rate upon the occurrence of certain stipulated condition, (2) in leasing, permits the lessor to raise lease payments upon the occurrence of certain stipulated condition. |
| Escheat | The right of government to ownership of property, which is left by a deceased property owner who leaves no will, and dies without descendants. |
| Escrow | The deposit of funds with a neutral third party who is instructed to carry out the provisions of an agreement. |
| Estate | A legally recognized interest in the use, possession, control and disposition that a person has in land, and defines the nature, degree, extent and duration of a person's ownership in land. |
| Exclusive Agency Listing | The owner employs only one broker but retains the right to personally sell the property, and thereby not pay a commission. However, if any other real estate company sells the property, the listing broker is still entitled to the commission stipulated. |
| Exclusive Right to Sell Listing | Under this listing arrangement, the broker employed is entitled to a commission no matter who sells the property during the listing period. (Even the Seller) |
| Executed Contract | One in which the obligations have been performed on both sides of the contract and nothing is left to be completed. (Closed Deal) |
| Fair Market Value | The price negotiated for a parcel of real estate in a competitive market where both buyer and seller are free to act and under no undue pressure. |
| Federal Deposit Insurance Corporation (FDIC) | A federal agency established to insure the deposits in member commercial banks. |
| Federal Fair Housing Act of 1968 | An act prohibiting discrimination in the sale or rental of housing on the basis of race, color, religion or national origin sex, handicap and familial status. |
| Federal Home Loan Bank System - FHLBB | A federal agency which oversees and regulates all federally charted savings and loan association. |
| Federal Home Loan Mortgage Corporation (FHLMC) | "Freddie Mac" is a wholly owned subsidiary of the Federal Home Loan Bank System, which serves as a secondary mortgage market for savings and loan associations, who are members of the FHLBB; also referred to as The Mortgage Corporation. |
| Federal Housing Administration- (FHA) | A federal agency established in 1943 to increase home ownership by providing an insurance program to safeguard the lender against the risk of nonpayment. Currently part of HUD. |
| Federal National Mortgage Association (FNMA) | Commonly known as "Fannie Mae", this quasi-private corporation is the largest buyer of existing mortgages in the secondary mortgage market. |
| Federal Reserve System (FRS) | A federal agency which oversees and regulates monetary policy, which in turn affects the availability of credit and interest rates. All federally chartered commercial banks must be members. |
| Fiduciary | A person who essentially holds the character of trustee. A fiduciary must carry out the duties in a manner which best serves the interest of the party for whom the fiduciary relationship is established. A real estate licensee has a fiduciary duty to his/h |
| First Lien | Claim with highest priority against property; also known as a superior to the rights of subsequent lenders. (Recorded first) |
| First Mortgage | A mortgage on real estate in which the lender's rights are superior to the rights of subsequent lenders. (Recorded first) |
| Fixture | Broadly defined as personal property which has become realty. Examples include built-in cabinets or bathtubs. |
| Foreclosure | A legal procedure to levy on pledged property used to secure a debt under a mortgage or other lien. |
| General Agent | One authorized to transact all of the principal's affairs within the context of a broad commercial or other kind of endeavor. Property manager. |
| General Lien | A lien that attaches to all property owned by an individual. Real and personal. |
| General Warranty Deed | Contains covenants in which the grantor formally guarantees that good and marketable title is being conveyed. Highest deed - 5 covenants. |
| Good Title | One which is free from encumbrances such as liens, pending litigation and other such defects. |
| Government National Mortgage Association (GNMA): | Commonly known as "Ginnie Mae," this agency of HUD operates in the secondary mortgage market. It is involved with special government financing programs. |
| Graduated Payment Mortgage (GPM): | A new financing technique for residential real estate in which monthly payments start at a lower rate and increase periodically over the life of the mortgage; FHA 245. |
| Grant | Transferring real estate by means of a deed. |
| Grantee | Purchaser or donee receiving title to property. |
| Grantor | Owner making conveyance of title or interest in property. |
| Habendum clause | a condition suitable for human beings to live in. Landlords are generally required to maintain their property in a habitable condition. If they fail to do so, tenants may terminate the rental agreement or withhold rent. In many states, builders are also held to an implied warranty of habitability in the sale of new homes. |
| Housing and Urban Development (HUD) | An agency of the federal government which oversees many federal housing programs. |
| Hypothecate | process of pledging something (house) as security, but retaining possession of it. |
| Independent Contractor | One whose time and effort are regulated by the individual and are not under the direction or control of others. |
| Interest | (1) the sum paid for the use of money (2) the degree of rights in the ownership of land. |
| Interest Rate | The cost of using money expressed as a percent per period. |
| Intestate | Dying without a will. |
| Joint Tenancy | A form of concurrent ownership, which occurs when two or more persons own a single estate in land, with right of survivorship. Must have equal shares, right to partition. |
| Judgment Lien | The charge upon the land of a debtor, resulting from the decree of a court, entered in the judgment docket. Lawsuit |
| Junior Lien | An encumbrance, second in priority, to a previously recorded lien or to a lien to which the encumbrance has been subordinated. |
| latent defect | malfunctions, flaws, or faults that are undiscovered or concealed until a problem arises that exposes the defect. Latent defects in improvements to real property are the subject of considerable litigation. See also as-is and patent defect |
| Lease | An agreement by which a landlord gives the right to a tenant to use, and to have exclusive possession, but not ownership of realty, for a specified period of time, in consideration for the payment of rent. |
| Lease Purchase Agreement | An arrangement whereby part of the rent payment is applied to the purchase price, and when the prearranged total amount has been paid, title is transferred. |
| Leasehold | The interest that the tenant has created by a lease. |
| Legal Description | A written description of a parcel of land which locates it precisely and will hold up in court. (Does not include address.) |
| Lessee | Tenant. |
| Lessor | Landlord. |
| License | A personal privilege to go upon the land of another; not considered an interest in land. Permission only to use. |
| Lien | A legally recognized right to enforce a claim or charge on the property of another for payment of some debt, duty or obligation. |
| Liquidated Damages | An agreed-to sum, which will be paid if the contract is breached. |
| Listing Contract | An employment agreement between an owner and broker defining the duties and rights of both parties. (Unilateral contract) |
| Loan-to-Value Ratio | The relationship between the amount borrowed and the appraised value of the property. (Purchase price 100,000-Loan 80,000-LTV 20,000) |
| Market Value | The price at which a willing buyer and a willing seller will agree upon, where neither is under any undue pressure, and both are negotiating at arms length with complete knowledge of the market. |
| Marketable Title | One which is free from reasonable doubts or objections, and which the courts would compel a purchaser to accept under the terms of a sales contract. |
| Mortgage | A legal document used to secure the performance of an obligation, in which the borrower or mortgagor agrees to pledge property to secure the debt represented by the promissory note. (A contract). |
| Mortgage Banker | A financial middleman who, in addition to bringing the borrower and the lender together, makes loans, packages them, and sells the packages to both primary and secondary investors. Also services loans. |
| Mortgage Broker | A person who brings together the user of capital (borrower) and the supplier of capital (lender). For this service, a finder's fee is usually paid by the borrower. |
| Mortgagee | A lender who receives a pledge of property to secure a debt. |
| Mortgagor | A borrower who pledges property through a mortgage to secure a debt. |
| Multiple Listing | Marketing service in which many brokers pool all of their listings and establish procedures for sharing commissions. |
| Mutual Assent | An offer and acceptance which together form the terms of a contract. |
| Nonconforming Use | A pre-existing use of land which does not conform to the zoning ordinance but which may legally remain. |
| Note | A signed instrument acknowledging the existence of a debt and the promise to pay. |
| Offer and Acceptance | The necessary elements of mutual assent; for example, an agreement of one party to buy and another party to sell. |
| Open Listing | An agreement between an owner and many brokers. If a broker produces a ready willing, and able buyer, a commission is due. However, the owner still has the right to sell his/her property and is not obligated to pay a commission to anyone. |
| Open-end Mortgage | A loan containing a clause which allows the mortgagor to borrow additional money without rewriting the mortgage. |
| Option | A right which is given for consideration to a party (optionee) by a property owner (optionor) to purchase or lease property within a specified time, at a specified price and terms. An option is irrevocable by the optionee and will not be extinguished by d |
| Optionee | The holder of the option. Buyer |
| Optionor | The seller of the option. |
| Ordinance | A statute enacted by the legislative branch of a local government. |
| Owner's Title Policy | A policy insuring the owner of real estate against certain defects of title. |
| Periodic Tenancy | A lease, which has the original terms automatically renewed for successive periods, until proper notice to terminate is given by either the landlord or tenant. Month to month rental. |
| Personal Property | Movables, which are not annexed to or part of, the land; also referred to as chattels. |
| PITI | An abbreviation which means "Principal, Interest, Taxes and Insurance." In residential financing, it is common for the monthly mortgage to include these four payments. |
| Planned Unit Development (PUD) | A type of exception, or special use, permitted under many modern zoning ordinances, allowing a mixture of different land uses or densities. |
| PMI | Private Mortgage Insurance. |
| Points | 1% of loan. |
| Prepayment Penalty | The charge levied by the lender for paying off a mortgage prior to its maturity date. |
| Prime Rate | The interest rate charged to a lender's AAA customer. This is normally the base from which other interest rates are derived. |
| Principal | (1) one who employs an agent, (2) money or capital. |
| Private Mortgage Insurance | A private insurance program which insures the lender for loan amounts in excess of 80% of value. |
| Probate | The process of proving a will before a duly authorized court or person. |
| Promissory Note | The primary legal financing obligation in which the borrower promises to pay back a sum of money borrowed. (A contract) |
| Pro-rata | To divide or distribute proportionately. |
| Proration | Dividing property taxes, hazard insurance and other expenses or income between the buyer and seller, as of date of settlement. |
| Real Estate | Land and all man-made improvements both on and to the land, plus all tangible interest in the real property. Surface, subsurface and air rights. |
| Real Estate Commission | The state regulatory body whose duty it is to carry out the real estate license laws in a particular state. |
| Real Estate Investment Trust (REIT) | A method of pooling investment money using the trust form of ownership if certain tax requirements are met. One advantage of the REIT is the avoidance of corporate tax (thus no double taxation) + many more. |
| Real Estate Settlement Procedures Act (RESPA) | A law which covers most mortgage loans made for one to four-unit residential property. It requires the lender to provide the loan applicant with pertinent information so that the borrower can make informed decisions as to which lender will be used to fina |
| Real Property | Refers to land and improvements both on and to the land, and also to the physical aspects of real estate, including surface, air and subsurface rights plus, bundle of rights. |
| REALTOR® | A registered trademark of the NATIONAL ASSOCIATION OF REALTORS. It is used by brokers and salespersons who hold active membership in the association. |
| Redemption Period | The right of a mortgagor (borrower) to make good on the default within a specified time and receive the property back. |
| Refinancing | A description of an extension of the existing financing either through the same lender or through a new financial arrangement. |
| Regulation Z | Issued by the Federal Reserve System to implement the Truth-In-Lending Law (National Consumer Credit Protection Act). Applies to credit and interest rates. |
| Rent | The payment made for the use of land. |
| Replacement Cost | The cost of substituting a similar structure with utility equivalent to the subject property but constructed with modern materials. |
| Reproduction Cost | The cost of exactly duplicating a structure using the same material and design. |
| Rescission | Repealing a contract either by mutual consent of the parties to the contract or by one party when the other party is in breach of the contract. |
| Resident Manager | An employee of the property management firm and its representative on the premises. |
| Restrictive Covenant | A clause in a deed which restricts use of property for a specified time. |
| Revocation | The nullification of an offer to contract by the original offeror. |
| Right of Redemption | The legal ability to buy back one's property within the time specified in each state after a judicial sale by paying the debt, interest and certain costs. |
| Right of Re-entry | The right retained when a fee simple on condition subsequent exists; also referred to as the power of termination. Back to court. |
| Right of Survivorship | Upon the death of a joint tenant or tenant by the entirety the interest does not pass to the tenant's heirs but to the other join tenant(s). |
| Sale-leaseback | A technique used by owners of property as a means of raising capital. The process involves the simultaneous selling and leasing back of the property usually through a net lease. |
| Sales Contract | An agreement in which the buyer and seller agree to the terms and conditions of the sale of property. (Bilateral Contract) |
| Salesperson | A natural person licensed to perform on behalf of any licensed real estate broker any act or acts authorized to be performed by the broker. |
| Satisfaction of Mortgage | An instrument issued by the mortgagee (Lender) when the mortgage has been paid in full. |
| Satisfaction Piece | An instrument issued by a person holding a lien to indicate lien is discharged. |
| Second Mortgage | A mortgage subordinate to a first mortgage; also referred to as a junior mortgage. (Recorded Second) |
| Seisin | The actual possession of land by one who claims rightful ownership of a freehold estate therein. |
| Severalty Ownership | Ownership by one person. |
| Site | A lot ready for development. |
| Situs | Refers to the economic location of real estate. |
| Special Agent | One limited in authority to transact a single business affair or a specific series of business affairs or to perform restricted acts for the principal. (Listing one property for sale) |
| Special Assessment | From time to time jurisdictions levy a charge on certain pieces of property for the purpose of paying for the cost of a public a improvement such as sewers or sidewalks, which particularly benefit properties being assessed as opposed to those improvements |
| Special Warranty Deed | The grantor warrants against defects that have occurred after the grantor acquired title. (No warrantee forever-only for the time the grantor owns the property) |
| Specific Lien | One that attaches to a particular property. |
| Statute | A law passed by a state legislature. |
| Statute of Frauds | Every state has some form of laws which require that certain contracts must be in writing in order to be enforceable in a court. |
| Statutory Period of Redemption | The time within which property may be redeemed after a foreclosure sale. |
| Sublease | The transfer when the original lessee retains a reversion. Primary liable. Remains with the original lessee. |
| Subordination Clause | A clause in which the holder of a mortgage permits a subsequent mortgage to take priority. Subordination is the act of yielding priority. |
| Subrogation | The substitution of a third person in place of a creditor to whose rights the third person succeeds in relation to the debt. (Title company) |
| Suit | A court action to enforce a legal claim or right. |
| Tax Base | The total tax-assessed value of all real property in a particular jurisdiction. |
| Tax Rate | The rate, normally stated in units of $100, multiplied by the assessed value of property to determine the amount of the property tax due. |
| Taxation | The right of government to require contribution from citizens to pay for government services. |
| Tenancy in Common | A form of concurrent ownership where two or more persons hold separate titles in the same estate. May have equal or unequal shares. Right of partition. |
| Term Mortgage (Straight Term) | A method of financing in which interest only is paid during the time of the loan. At maturity, generally five years or less, the entire principle is due. |
| Time Is of the Essence | A phrase included in contracts to require punctual performance of all obligation. |
| Title | The legally recognized evidence of a person's right to possess property. |
| Title Insurance | A policy that protects the insured against loss or damage due to defects in title. |
| Transferability | The ability to exchange goods and services. In real estate legal rights are transferred. |
| Trust | A legal relationship under which title to property is transferred to a person, called a trustee, who has control over the property, and must manage it for some other person -- called a beneficiary. |
| Trustee | A person who holds title and control over property and manages it for another person called a beneficiary. (Called "Naked Legal Title") |
| Trustor | The person who creates a trust and voices the instructions to the trustee. (The borrower.) |
| Truth-in-Lending Law | Common name given to the National Consumer Credit Protection Act. Requires lenders to make credit disclosures to individual borrowers for certain types of loans. (Regulation Z) |
| Universal Agent | Has the authority to do all acts that can be lawfully delegated to a representative. (Power of attorney-attorney in fact) |
| Unsecured Loan | A loan made on the signature and credit of the borrower, not secured by collateral. Credit card. (Debenture) |
| VA Mortgage | (GI Mortgage) Mortgage guaranteed by Veterans Administration. |
| Variable Interest Rate Mortgage (VRM) | The interest rate charged by the lender varies according to some index not controlled by the lender. |
| Vendee | Purchaser in a contract for deed. |
| Vendor | Seller in a contract for deed. |
| Veterans Administration (VA) | An agency of the federal government created to provide a loan guaranty program which enables qualified veterans to finance real estate purchases with a higher loan-to-value ratio than is normally possible with conventional financing. |
| Voidable Contract | An agreement in which one or more of the parties may elect to avoid or to ratify the legal obligations created by the contract. Minor, someone under duress. |
| Warranty Deed | A deed in which the grantor makes formal assurance as to quality of title. |
| Wear and Tear | The lessening in value of an asset due to ordinary and normal use. |
| Will | A legal declaration in which a person disposes of property to take effect upon his or her death. |
| Zoning | A police power device which allows for legislative division of space into districts and imposition of regulation prescribing use and intensity of use to which land within each designated district may be put. |
| Zoning Ordinance | A zoning law passed by a local government which consists of a text of regulations and a map. |
