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1031 Exchange - An exchange which is officially called an Internal Revenue Code 1031 Exchange which allows an owner to trade one
like property for another under very specific guidelines and defer paying income tax. |
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Abandonment - The voluntary , relinquishment, disclaimer or cession of property claims or rights. Or a process in bankruptcy wherein
the court releases a property from its control when it is deemed to have no value to the estate.
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Absentee Owner - An owner who does not live or mange his or her own property but uses the services of a property manager
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| Absolute Auction -
A form of sale where the property is offered without a reserve price and will be sold to the highest bidder.
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| Abstract Of Title - A summary or digest of all of the conveyances,
transfers, legal proceedings and other facts relied on as evidence of title, showing continuity of ownership, together with any other elements
of record which may impair the title.
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| Access Right - A right that an owner has over the adjoining
owner's property to ingress and egress his or her real property.
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| Accusation - A written statement delivered by a Real Estate
Commissioner to a licensee prior to a disciplinary action hearing regarding the possible revocation or suspension of his or her license
setting forth the acts or omissions for which the licensee is being charged with.
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| Acre - A unit of land measure equaling 43,560 square feet or
a tract about 208.71 feet square or 160 square rods or 4,840 square yards.
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| Act Of God - An unpreventable destructive event resulting from
natural world forces.
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| Affidavit Of Title - A written statement made by a grantor under
oath and acknowledged before a notary public which identifies the grantor and his or her marital status and certifies that since the date of the
title examination there have been no known judgments, bankruptcy.
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| Agreement Of Sale - A written agreement or contract between a buyer
and a seller in which they reach a "meeting of minds" whereby the purchaser agrees to buy specific real estate and the seller agrees to
sell upon specific terms and conditions set forth in the contract.
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| All-Inclusive Mortgage - A purchase money mortgage that is subordinate
to, but also including, the original loan.
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| Amortization Table - A table showing the required payments to
amortize loans at various interest rates over various periods of time
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| Annuity - A sum of money received at regular fixed intervals in
certain equal or nearly equal payments such as the installment rent payments due to a landlord under a lease or the installment payments due to a
lender over a period of time or paid at times.
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| Appraisal - A ''defensible'' and carefully documented opinion of
value most commonly derived using recent sales of comparable properties by a licensed, professional appraiser. Or a statement of value or estimation
of the value of a property as of a certain date conducted by a disinterested person with suitable qualifications. Generally, value for single
family properties is based upon a review of recent market activity using sales of comparable properties as a basis and then making value
adjustments based upon the comparison of comparable property to the subject property.
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| Balloon Payment - An installment payment on a promissory note,
usually the final one, for discharging the debt which is significantly larger than the other installment payments provided under the terms
of the promissory note.
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| Banker's Rule - The belief used when doing prorations and some
other calculations that a month consists of 30 days and a year of 360 days.
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| Bankruptcy - The inability of a debtor to pay one's financial
debts when due and where relief has been sought and has been granted through a special court action that makes it possible to resolve or
eliminate the debtor's debts. Or a proceeding in U.S. District Court wherein debtors who can not meet the claims of their creditors may
be adjudged bankrupt by the court. See Chapter 7 Bankruptcy and Chapter 13 Bankruptcy. Bankruptcy is the last resort to for anyone and before
declaring bankruptcy one should seek to modify their loans with a real estate attorney first.
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| Breach Of Contract - The violation of any terms or
conditions in a contract without having a legal excuse such as the failure to make a loan payment when due.
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| Building Inspection - A physical review of property as construction
progresses to insure that each major component - foundation, plumbing, electrical wiring, roofing, materials meets the building codes.
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| Buy-Back Agreement - A contractual provision in which the seller
agrees to repurchase the property at a named price upon the occurrence of a specified event within a certain period of time.
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| By-Laws - The generally, self-imposed rules for conducting of the
internal affairs of a corporation or other organization such as a homeowner association to regulate the day-to-day operations and which usually
are appendixed to a master deed and recorded.
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| Capital Appreciation - The appreciation accruing to the benefit
of the capital improvement to real estate.
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| Cease And Desist Order - An order by a court or administrative
agency prohibiting a person or business from continuing an activity. Used in real estate brokerage to prevent antitrust behavior among firms or
in illegal discrimination.
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| Chapter 13 Bankruptcy - Under a reorganization bankruptcy,
you file a plan with the bankruptcy court proposing how you will repay your creditors. You must use your income to pay some or all of what you
owe to your creditors over time - from three to five years, depending on the size of your debts and income.
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| Chapter 7 Bankruptcy - Under a liquidation bankruptcy,
you ask the bankruptcy court to wipe out (discharge) the debts you owe. In exchange for this discharge, the bankruptcy trustee can take
any property you own that is not exempt from collection, sell it, and distribute the proceeds to your creditors.
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| Close Of Escrow - The date the documents are recorded and
title passes from grantor to grantee, grantee becomes the legal owner and when the title insurance becomes effective.
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Closing Costs - The miscellaneous expenses buyers and sellers normally
incur at settlement in the transfer of ownership of real property over and above the cost of the property such as recording fees, attorney fees,
title insurance premium, etc.
Processing a mortgage application can be time consuming and costly. Typically this process takes anywhere from two to eight weeks. Avoid any
mortgage closing delays by paying off unnecessary debt and checking your own credit file a few months before shopping for your mortgage.
Once you've shopped, compared and closed on your mortgage, expect to accrue additional lender fees. Closing costs, which may consist of title
insurance costs, lender attorney fees, appraisal fees and more, can add thousands of dollars to your borrowing costs. When shopping for your lender,
work with your mortgage broker to collect good faith estimates (GFE) of lender closing costs and fees. Though lenders aren't required to provide a
GFE of settlement charges before the borrower applies for the loan, federal law does require them to provide it three days after. Work closely with
your broker, and take the time to scrutinize each estimate and define each closing cost fee so that you can make an informed decision.
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| Code Of Ethics - A writing of a professional group setting forth a
standard of acceptable conduct about the relationship of its members to each other, to the general public and to the organization which the
members agree to abide by.
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| Collateral - Any real or personal property having marketable value
that a borrower pledges as security in order to obtain a loan. In mortgage transactions, specific land is the collateral.
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| Commercial Acre - A term applied to the remainder of an acre of
newly subdivided land after the area devoted to streets, sidewalks and curbs, etc. has been deducted from the original acre.
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| Commercial Broker - A party who lists and sells commercial
property such as shopping centers, office buildings, industrial complexes and apartment projects. See Residential Broker.
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| Commercial Property - The land or real property improvements
intended for use in a business area.
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Common Law - 1. The body of law that grew out of the customs and
practices and court decisions developed and used in England from as long ago as people can remember.
2. The rules developed by usage and often thought of as judge-made law.
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| Community Property - In eight western states, the property
acquired by husband and/or wife during a marriage when not acquired with the intent of being the separate property of either spouse and where
each spouse has equal rights similar to property owned by a partnership.
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| Commission - The compensation or fee for services that a
licensee receives for performing the agreed-upon terms under a brokerage contract which in the practice of real estate this is usually a
percentage of the selling price of a property and/or a percentage of rentals.
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Commission Split - A previously agreed upon sharing of funds
by a listing broker with one or more cooperating brokers when a commission or funds have been received as a result of a sale.
2. A previously agreed upon sharing of funds between a broker and a sales associate.
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| Consumer Credit Counseling Service - A national non-profit
agency that helps debtors plan budgets and repay their debts. The goal of a Consumer Credit Counseling Service is still to insure that
consumers repay the debts that they owe. Agreeing to a payment plan and following it to the letter may not stop creditors from reporting
delinquent repayment information to credit bureaus for each month the payment falls short of the previous minimum amount.
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| Contract for Exchange of Real Estate - A contract for the sale of
real estate in which the consideration (in part or whole) is paid by other real property instead of cash.
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| Current Index - In an adjustable rate mortgage, it is the
current value of an easily-recognized index that is calculated and published nationally or regionally. The current index value changes periodically
and is used in calculating the new note rate.
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| Date Of Closing - The date on which the buyer pays for the
property and the seller delivers the deed.
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| Days on Market - The period of time a property is listed for
sale until it is sold or taken off the market.
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| Debt-To-Equity Ratio - The relationship of the loan and equity
components which for example if the debt is $80,000 and the equity is $20,000 there would be a debt to equity ratio of 4:1 or the equivalent
to a 80% loan to value ratio.
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| Decree Of Foreclosure - A Decree of a Foreclosure is a Decree by a court
ordering the sale of mortgaged property to pay an obligation found to be due and owing to the lender out of the proceeds.
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| Deed Of Trust - A document which transfers title in a
property to a trustee, whose obligations and powers are stipulated; often used in mortgage transactions.
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| Default - The failure to fulfill a duty or promise or to
discharge an obligation or the failure or omission to perform an act.
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| Deferred Charges - The non-tangible costs which are
anticipated to provide value over a number of years and for accounting or tax purposes are amortized over the life to which they are
expected to provide value.
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| Delinquency - The state in which a borrower has failed to
meet payment obligations on time.
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| Depreciable Real Property - In taxation, real estate that is
subject to deductions for depreciation which includes income-producing property as well as property used in a trade or business.
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| Direct Capitalization - A process of dividing the net operating
income by an overall capitalization rate to establish value.
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| Disclosure Statement - A statement required by law in which the sellers of
specific types of real property under certain circumstances must reveal specified information to potential buyers.
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| Duplex - A single-building improvement which is divided and
provides two units which serve as homes to two families.
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| Earnest Money - A sum of money or other consideration
tendered by a prospective purchaser as evidence of good faith in conjunction with an offer to purchase rights in real property.
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| Easement - A right, privilege or interest limited to a
specific use or control purpose which one party has in the land of another party and which run with the land and are not a personal
right of an individual.
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| Emcumbered real estate - Real estate burdened with a debt or
obligation.
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| Equitable Mortgage - A legal document that encumbers
property but is not technically a mortgage because of the existent some legal error. Example: Although there was an error in the property's
description that was attached to the documents, the parties in the transaction
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| Erosion - The gradual wearing away of the ground surface by
the act of water, wind or glacial ice.
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| Errors and Omissions - Errors and Omissions Insurance (E&O)
is an insurance policy taken out by appraisers to cover their liability for any mistakes made during the appraisal process.
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Escrow - An arrangement for the deposit of instruments and/or
the handling of funds with instructions with a neutral third party to carry out the provisions of the agreement or contract when the specified
conditions have been met.
,br>
Informally, short form to describe Escrow Agent, Escrow Account or Escrow Period. E.g., Escrow (Agent) works closely with agents to
close a transaction. The buyer deposits funds into Escrow (Account). Escrow (Period) is 30 days.
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| Estate - In real estate, the degree, quantity, nature and duration of interest,
share, right, equity of which riches or fortune may consist and which a person holds in real property.
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Estimate - 1. A preliminary opinion of value.
2. To set a value or appraise.
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| Exchange Brokerage - A real estate activity bringing two or more
parties involving in trading real properties together in a real estate transaction.
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| Exclusive Listing - A general term applied to a listed property
which usually refers to an "exclusive right to sell" or "exclusive agency" contract.
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| Executed Contract - A contract in which all parties have
fulfilled their promises and whose terms have been performed and completed. At the closing, all parties sign the contract and make it an
executed contract.
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| Existing Mortgage - The debt contract which is to be assumed
by the purchaser in which the seller of real estate is the mortgagor.
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