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175 Cards in this Set
- Front
- Back
yield
|
Investment return expressed as a dollar amount or
a percent of the original investment amount. |
|
will
|
Last will and testament; a written or verbal
statement by a testator instructing how to distribute the testator's estate to heirs. |
|
water rights
|
Rights of a property that abuts a body of water to own or use the water. See littoral rights,
riparian rights, and prior appropriation. |
|
voidable contract
|
An agreement that is subject to being nullified because a party to the agreement acted under some legal disability. Only the disadvantaged party
can take action to void the contract. |
|
void contract
|
An agreement that is null and cannot be enforced.
|
|
Void
|
Without legal force or effect; unenforceable and
null, such as an illegal contract |
|
vvariance
|
A land use that conflicts with current zoning but is authorized for certain reasons, including undue hardship to comply and minimal negative impact to leave it alone.
|
|
value
|
In general, the worth of an item as determined by
its utility, desirability, scarcity, affordability, and othercomponents and quantified as price. |
|
validity
|
Legal status of a contract that meets requirements of: competence of parties, mutual
consent, valuable consideration, legal purpose, and voluntary good faith. A prerequisite for enforceability. |
|
usury
|
Excessive or illegal interest charged on a loan
|
|
universal agency
|
A fiduciary relationship which
empowers an agent to perform any and all actions for a principal that may be legally delegated. |
|
unilateral contract
|
An agreement in which only one
party promises to perform, contingent on the other party's performance of an optional action. |
|
unequal services
|
Services that differ in nature or
quality from those normally rendered, with the alteration based on race, color, sex, national origin, or religion. |
|
trust
|
A fiduciary relationship between a trustor and
trustee. The trustor conveys legal title to property to the trustee, who holds and manages the estate for the benefit of another party, the beneficiary ( in a land trust, trustor and beneficiary are the same person). |
|
township
|
An area six miles square, bounded by two
consecutive parallels and two consecutive meridians in the rectangular survey system. Contains 36 sections. |
|
Torrens System
|
A title recording system that registers
title to property, as well as liens and encumbrances, on a title certificate. The certificate is the title and reflects everything there is to be known about the condition of the title. |
|
title theory state
|
A state whose laws give legal title of a
mortgaged property to the mortgagee until the mortgagor satisfies the terms and obligations of the loan. See lien theory state. |
|
title records
|
Public records of real property
documenting the history of ownership, claims, ownership, conveyances, legal descriptions, and surveys. |
|
title insurance
|
A policy that protects the holder against
loss arising from defects in title or documents conveying title. |
|
tier
|
An area between consecutive parallels, as defined in
the rectangular survey system. |
|
testate
|
The legal condition of a person who dies leaving
a valid will |
|
tenancy in severalty
|
An estate in real property owned by a single party
|
|
tenancy in common
|
An estate where each co-owner
owns an electable share of the property and can transfer this share to any other party. Does not include right of survivorship; interests of deceased owners pass to heirs. |
|
tenancy
|
A freehold or leasehold estate held by a tenant
|
|
taxable value
|
The assessed value of a property net of all
exemptions. |
|
syndication
|
A real estate investment structure in which
investors provide capital and organizers provide management expertise to develop or acquire and manage investment real estate for profit. |
|
survivorship, right of
|
A surviving joint tenant's right
to receive all rights and interests in the property enjoyed by another joint tenant in the event of the latter's death. |
|
superior lien
|
1. One of a class of liens that by law have
a higher priority than any junior lien; all are tax liens. 2. A junior lien whose priority is higher than that of another lien. |
|
suit for possession
|
A landlord's formal legal avenue for
evicting a tenant. |
|
substitution
|
An appraisal principle that holds that a
buyer will pay no more for a property than the buyer would pay for an equally desirable and available substitute property. Forms the foundation for the sales comparison approach to value. |
|
Subtative contract
|
Contact between an agent and
others that is deemed relevant to a transaction; used as a benchmark to define when an agent should disclose agency status to a prospective client or customer . If a contact is substantive, the agent must disclose agency status at the time of the contact. |
|
subordination
|
A voluntary or involuntary placing of a
lien's priority below that of another. A mortgage lien, for example automatically subordinates to a real estate tax lien. |
|
sublease
|
A transfer by a tenant of portions of the rights
and obligations of a lease to another party, the sublessee. The original tenant, who is sublessor in the sublease, is still lessee in the original lease and remains primarily liable to the landlord for fulfilling lease obligations. |
|
subagency
|
An agency relationship between the client of
a listing broker and other brokers and salespeople who have agreed to assist the broker in procuring a customer for the client. The assisting brokers are agents of the listing broker and subagents of the listing broker's client. |
|
strict foreclosure
|
A court proceeding which gives a
creditor legal title to a liened property rather than cash proceeds from a court-ordered sale |
|
straight-line cost recovery
|
An accounting method for
deducting depreciation expense from income. Periodic Glossary 401 cost-recovery charges are made in equal amounts over a depreciation period. For example, the straight-line cost recovery of a $5,000 item over 5 years would be $1,000 per year. |
|
stock sale
|
A conveyance of an incorporated business
through the purchase of the stock. Entails the purchase of all liabilities as well as assets. See also asset sale. |
|
Steering
|
The prohibited practice of channeling
prospective buyers and tenants toward or away from a particular area.. |
|
Statute of frsuds
|
A law requiring certain contracts to be
in writing in order to be enforceable. Examples are real property conveyances, listing agreements, and long-term leases. |
|
specific performance
|
Forced performance of one's
obligations in an agreement, to the letter of the agreement. A legal remedy for a damaged party to take against a defaulting party |
|
specific lien
|
A lien placed against a specific item of
property rather than against all of an owner's property |
|
special exception
|
A land use in conflict with current
zoning that is nevertheless authorized because of its perceived benefit to the public welfare |
|
specil assessment lien
|
A lien against property to
secure a tax levy for a specific public improvement, such as a new road or sewer. Only properties benefitting from the improvement are taxed and liened. |
|
severance
|
A conversion of real property to personal
property through detachment of the item from the land. |
|
severalty
|
same as tenancy in severalty An estate in real property owned by a single party.
|
|
servient tenement
|
A property containing an easement
that must "serve" the easement use belonging to a dominant tenement. |
|
seller's market
|
A market condition characterized by an
excess of buyers over sellers. |
|
securities license
|
An authorization to broker securities.
The Series 39 and 22 securities licenses authorize licensees to broker real estate securities |
|
section
|
An area defined by the rectangular survey
system and consisting of 1/36th of a township, or one square mile. |
|
secondary mortage market
|
Lenders, investors, and
government agencies who buy, sell, insure, or guarantee existing mortgages, mortgage pools, and mortgage-backed securities. |
|
second mortgage
|
A mortgage loan whose lien priority
is subordinate to a senior, or first, mortgage |
|
scarcity
|
The degree of unavailability of a product or
service in relation to demand for the product or service. A critical element of value. |
|
sales comparison approach
|
A method of appraising
property that relies on the principle that a property is generally worth what other, similar properties are worth. See substitution. |
|
sale leaseback
|
A sale of a property executed
simultaneously with a lease on the property from the buyer back to the seller as tenant. |
|
riparian rights
|
Water rights of a property that abuts a watercourse (stream, river).
|
|
right of redemption
|
same as equity of redemption A mortgagor's right to pay off a
defaulted mortgage and reclaim the property, provided the redemption occurs before the completion of the foreclosure sale. |
|
revocation
|
1. Cancellation of a contract. 2.
Cancellation of a real estate license |
|
reversion
|
1. A transfer of title from a life estate tenant
back to the grantor. 2. Proceeds from the sale of a property at the end of a holding period in a cash flow analysis |
|
restriction
|
A limitation on the use of a property
imposed by deed, zoning, state statute, or public regulation. |
|
replecement cost
|
The cost of constructing a functional
equivalent of a property at current labor and materials costs using current construction methods |
|
remainder
|
A future freehold interest in a life estate
held by a third party remainderman named by the grantor. When the life tenant dies, the estate passes to the remainderman. See also reversion. |
|
Regulation Z
|
A fair financing law applying to
residential loans; lenders must disclose financing costs and relevant terms of the loan to the borrower. |
|
redlining
|
The illegal lending practice of restricting
loans by geographical area. |
|
redemption period
|
A statutory period after a
foreclosure sale during which the foreclosed owner may buy back the property by paying all sums due the lender. See also equity of redemption. |
|
recording
|
An act of entering into public title records
any document or transaction affecting title to real estate. Recording gives constructive notice of one's rights and interests in a property and establishes the priority of inferior liens. |
|
reconcilliation
|
An appraiser's weighted blending of the
results of different approaches to value into a final value estimate. |
|
real property
|
Real estate and the bundle of rights
associated with ownership of real estate |
|
real estate investment trust (REIT)
|
An investment in
which owners purchase shares in a trust which owns or acquires real property. Investors receive income and gain on a per-share basis. |
|
quit claim deed
|
A deed which conveys one's possible
ownership interests to another party. The grantor does not claim to own any interest and makes no warrants |
|
quit title suit
|
A court proceeding to clear a property's
title of defects, claims, and encumbrances. |
|
Pur autre vie
|
pur autre vie A life estate where the grantee's interest
endures over the lifetime of another party named by the grantor. |
|
prorartion
|
proration Apportionment of expense and income items
at closing. Examples of items prorated between buyer and seller include interest, insurance, taxes, and rent. |
|
proprietary lease
|
A cooperative owner's lease on a unit
in the cooperative building. The lease runs concurrently with the owner's ownership interest in the cooperative. |
|
procuring cause
|
A party who was first to obtain a
ready, willing, and able customer, or a party who expended the effort to induce the customer to complete the transaction. |
|
prior appropraition
|
A legal doctrine granting a state
the power to control and regulate the use of water resources within state boundaries. |
|
price fixing
|
An act of collusion where competitors agree to establish prices at certain levels to the
detriment of customers or other competitors. |
|
power of attorney
|
An authorization granting a
fiduciary the power to perform specified acts on the principal's behalf. Used to establish a universal agency relationship. |
|
police power
|
police power A state's or local government's legal
authority to create, regulate, tax, and condemn real property in the interest of the public's health, safety, and welfare. |
|
point of beginning(POB)
|
point of beginning (POB) The origination and
termination point in a metes and bounds legal description. |
|
plat
|
A map of one or more properties indicating each
parcel's lot and block number, boundaries, and dimensions. |
|
physical deterioration
|
physical deterioration A loss of value to property
because of decay or natural wear and tear. Exacerbated by deferred maintenance, or the failure to repair or maintain property on a regular basis |
|
periodic tenancy
|
periodic tenancy A leasehold interest for a lease term
where, in the absence of default, the term automatically renews itself until proper notice of termination is provided by either party. |
|
option
|
option A unilateral contract in which an owner, or
optionor, grants a buyer or tenant, the optionee, a future right to be exercised before a deadline, in exchange for valuable consideration. The terms of the right, such as a right to purchase or lease, must be clearly stated and cannot be changed during the option period. |
|
offer and acceptance
|
offer and acceptance A process that creates a contract.
Acceptance is the offeree's unequivocal, manifest agreement to the terms of an offer. The offer becomes a contract when the acceptance has been communicated to the offeror. |
|
offer
|
A proposal to enter into a binding contract under
certain terms, submitted by an offeror to an offeree. If accepted without amendment, an offer becomes a contract. |
|
obsolescence
|
obsolescence A loss of property value because of
functional or economic (external) factors. See functional obsolescence and economic obsolescence |
|
notice of title
|
notice of title Actual or recorded public evidence of real
property ownership. See actual notice and constructive notice. |
|
note
|
An agreement to repay a loan of an indicated amount under certain terms
|
|
non-prorated expense
|
non-prorated expense An expense incurred by buyer or
seller in closing a real estate transaction that is not shared with the other party. Examples include attorney fees, documentary tax stamps, and lender fees. |
|
non-confirming use
|
non-conforming use A land use that is not consistent
with the current zoning ordinance. May be legal or illegal. |
|
net operating income
|
net operating income The amount of pre-tax revenue
generated from an income property after accounting for operating expenses and before accounting for any debt service. |
|
net listing
|
net listing A listing which states a minimum sale or
lease price the owner will accept, with any excess going to the broker as a commission. Professionally discouraged, if not illegal. |
|
net lease
|
net lease A lease which requires a tenant to pay rent as
well as a share of the property's operating expenses to the extent provided for in the lease contract |
|
negotiable instrument
|
negotiable instrument A legal instrument that can be
sold, traded, assigned, or otherwise transferred to another party, such as a promissory note. |
|
negative amortization
|
negative amortization A situation in which the loan
balance of an amortizing loan increases because 398 Principles of Real Estate Practice periodic payments are insufficient to pay all interest owed for the period. Unpaid interest is added to the principal balance. |
|
millage rate
|
millage rate The ad valorem tax rate of a taxing
district, derived by dividing revenues required from taxpayers by the district's tax base. If the millage rate is 30, the tax rate is 3%, or $3.00 per $100 of assessed valuation (net of exemptions) |
|
metes and bounds
|
metes and bounds A method of legally describing
property which utilizes physical boundary markers and compass directions for describing the perimeter boundaries of a parcel. |
|
mechanic's lien
|
mechanic's lien A junior lien enabling property
builders, suppliers, and contractors to secure debt arising from labor and materials expended on a property. Distinguished by its order or priority, which is based on when the work was performed rather than when the lien was recorded |
|
master plan
|
master plan An amalgamated land use plan for a
municipality, county, or region which incorporates community opinion, the results of intensive research, and the various land use guidelines and regulations of the state. Acts as a blueprint for subsequent zoning ordinances and rulings. |
|
lot and block system
|
lot and block system A method for legally describing
property in a subdivision where lots are identified by block and number. A recorded metes and bounds or rectangular survey description of the subdivision underlies the lot and block system. |
|
living trust
|
living trust A trust established during one's lifetime in
which the trustor conveys legal title to property to a trustee and names another party as beneficiary. The trustee discharges management duties and the beneficiary receives all profit and gain net of the trustee's fees. |
|
littoral rights
|
littoral rights A set of water rights defined by state law
relating to properties abutting navigable bodies of water such as lakes and bays. Generally, a property owner enjoys usage rights but owns land only to the high water mark. See riparian rights and prior appropriation |
|
listing
|
listing A legal contract that establishes and controls the
dynamics of the agency relationship between principal and agent. The principal to the listing may be buyer, seller, landlord, or tenant. |
|
lis pendens
|
lis pendens A public notice in a foreclosure proceeding
that the mortgaged property may soon have a judgment issued against it. Enables other investors to join in the proceeding if they wish to collect their debts. |
|
liquidity
|
liquidity The degree to which an investment is readily
marketable, or convertible to another form of asset. If immediately salable, an investment is liquid; the longer it takes to sell, the more illiquid the investment. Real property is relatively illiquid in comparison with other types of investment. |
|
limited partnership
|
limited partnership A business enterprise consisting of
general and limited partners: general partners manage the affairs of the business while limited partners are silent investors. |
|
limited agency
|
limited agency An agency relationship which restricts
the agent's authorizations to a specific set of duties. The relationship usually terminates on performance of these duties, as in a real estate broker's listing agreement. Also called special agency |
|
life estate
|
life estate A freehold estate that is limited in duration to
the life of the owner or other named person. On the death of this person, legal title passes to the grantor or other named party |
|
lien theory state
|
lien theory state A state whose laws give a lender on a
mortgaged property equitable title rather than legal title. The mortgagor in a lien theory state retains legal title. See title theory state |
|
lien priority
|
lien priority The order in which liens against a
property are satisfied; the highest priority lien receives sale proceeds from a foreclosure before any other lien. |
|
legal description
|
legal description A description of a parcel of property
which accurately locates and identifies the boundaries of the subject parcel to a degree acceptable by local courts of law. |
|
leasehold estate
|
leasehold estate An estate that entails temporary rights
of use, possession, and to an extent, exclusion, but not legal ownership. Compare freehold estate. |
|
legal life estate
|
legal life estate A life estate established by operation of
law rather than by the actions or wishes of the property owners. Examples are homestead law, dower, curtesy, and elective share. |
|
land use control
|
land use control Regulation of how individual owners
use property in a municipality or planning district. Control patterns are generally in accordance with a master plan. |
|
land
|
land The surface area of the earth, all natural things
permanently attached to the earth, and everything beneath the surface to the earth's center and above the surface extending upward to infinity. |
|
joint tenancy
|
joint tenancy A form of real property ownership in
which co-owners share all rights and interests equally and indivisibly; entails right of survivorship. Parties must establish tenancy at the same time and with a single deed. |
|
involuntary lien
|
involuntary lien A lien imposed by legal process
irrespective of the owner's wishes or consent. |
|
involuntary alienanation
|
involuntary alienation A transfer of title to real
property without the consent or against the will of the owner, for example, eminent domain, foreclosure, and adverse possession |
|
intestate
|
intestate Legal condition of a person who dies without
leaving a will. |
|
inferior lien
|
inferior lien A lien whose priority is subordinate to that
of a superior (tax) lien. Priority among inferior liens is established according to the time of recordation, with the exception of the mechanic's lien. Also called junior lien. |
|
income capitalization
|
A method of appraising the value of a property by applying a rate of return to the
property's net income. |
|
implied agency
|
An agency relationship that arises by
implication from the actions and representations of either agent or principal. |
|
hypothecation
|
Use of real property as collateral for a
mortgage loan. |
|
homestead tax exemption
|
An exemption of a portion of
the assessed value of a homeowner's principal residence from ad valorem taxation |
|
homestead laws
|
Laws that protect a homeowner against
loss of the homeowner's principle residence to a sale forced by creditors to collect debts. Homestead laws also protect the interests of individual spouses by requiring both spouses to sign any conveyance of the homestead property. |
|
gross rent multiplier
|
A shortcut method for estimating
the value of an income property. The procedure involves multiplying the property's gross monthly rent times a multiplier that reflects the ratio between gross monthly rent and sale price that is typical for similar properties in the area |
|
gross income multiplier
|
A shortcut method for
estimating the value of an income property. The procedure involves multiplying the property's gross annual income times a multiplier that reflects the ratio between gross annual income and sale price that is typical for similar properties in the area. |
|
grantee
|
A party who receives a right, interest, or title to
real property from another. |
|
grantor
|
A party who transfers a right, interest, or title
to real property to another. |
|
Government National Mortgage Association (Ginnie
Mae) |
A division of HUD which guarantees FNMA
mortgages and securities backed by pools of VAguaranteed and FHA-insured mortgages. |
|
goodwill
|
An intangible business asset valued at the
difference between the sale price and the value of all other assets of the business. |
|
general warranty deed
|
A bargain and sale deed
containing the assurance that the grantor will defend against any and all claims to the title. |
|
functional obsolescence
|
A loss of value in an improved
property because of design flaws or failure of the property to meet current standards. May be curable or incurable |
|
freehold estate
|
An ownership estate of indeterminable
duration; contrasts with a leasehold estate. |
|
fixture
|
An item permanently attached to land so as to be
defined as real property. |
|
fiduciary duties
|
fiduciary duties Duties of an agent to the principal in
an agency relationship, including skill, care, diligence, loyalty, obedience, confidentiality, disclosure, and accounting. |
|
fiduciary
|
fiduciary The agent in an agency relationship; receives
the trust and confidence of the principal and owes fiduciary duties to the principal. |
|
fee simple
|
An estate representing the highest form of legal ownership of real property, particularly the fee
simple absolute estate. |
|
Federal National Mortgage Association (Fannie Mae)
|
A government-sponsored agency in the secondary
mortgage market which buys conventional, FHA, and VA loans, sells mortgage-backed securities, and guarantees payment of principal and interest on the securities |
|
Federal Housing Administration
|
Federal Housing Administration An agency of the
Department of Housing and Urban Development which insures permanent long-term loans that meet certain qualifications. |
|
Federal Home Loan Mortgage Corporation (Freddie
Mac) |
A major secondary mortgage market
organization which buys conventional, FHA, and VA loans and sells mortgage-backed securities |
|
Federal Deposit Insurance Corporation
|
A quasigovernmental
agency that insures deposits of depository institutions and otherwise develops regulations for the banking industry. |
|
fair housing laws
|
Anti-discrimination legislation
designed to ensure equal opportunity in housing to all home buyers. |
|
fair financing laws
|
fair financing laws Anti-discrimination legislation
designed to ensure that all parties have equal access to mortgage financing. |
|
facilitator
|
A transaction broker who assists principal
parties in completing a transaction without acting as a fiduciary agent of either party. |
|
executory contract
|
A completed agreement which
enjoins one or both principal parties to perform certain actions in order for the contract to become fully executed. |
|
exclusive right to sell
|
A listing agreement which pays the listing broker a customer if anyone at all procures
a customer |
|
exclusive agency
|
A listing agreement which pays the listing broker a commission if anyone other than the property owner procures a customer
|
|
estoppel
|
A legal restraint to prevent a person from claiming a right or interest that is inconsistent with
the person's previous statements or acts. An estoppel certificate documents the party's initial position or act, which cannot be contradicted later. |
|
escheat
|
A reversionary transfer of real property to the state or county when the legal owner dies without a will and without heirs.
|
|
escalator clause
|
A lease clause providing for an
increase in rent. |
|
equity of redemption
|
A mortgagor's right to pay off a
defaulted mortgage and reclaim the property, provided the redemption occurs before the completion of the foreclosure sale. |
|
enforceability
|
Legal status of a valid contract or other
document that a court of law will force to be performed. |
|
encumbrance
|
An interest, right or intrusion that limits the freehold interest of an owner of real property or
otherwise adversely effects the marketability of title. |
|
eminent domain
|
eminent domain A power of a government entity to
force the sale of private property for subsequent public use. |
|
emblements
|
emblements Plants and crops considered personal
property, since human labor is required for planting, growing and harvesting. |
|
elective share
|
A right of a surviving spouse to claim a
prescribed portion of the decedent's real and personal property in place of the provisions of the decedent's will. |
|
economic obsolescence
|
economic obsolescence A loss of value in a property
because of external factors generally beyond the control of the owner, for example, a municipality's lack of funds to improve deteriorated roadways. Also called external obsolescence. |
|
easement
|
easement An interest in real property giving the interest
holder the right to use defined portions of another's property. May or may not attach to the estate |
|
dual agency
|
dual agency Representing both principal parties to a
transaction. |
|
dower
|
A widow's life estate interest in portions of her
deceased spouse's real property |
|
dominant tenement
|
dominant tenement The property that benefits from the
existence of an easement appurtenant. The holder of the easement is the dominant tenant. See servient tenement. |
|
documentary stamp
|
A tax stamp affixed to a property document or record as evidence that the owner has
paid taxes related to the financing or transfer of real property. |
|
devise
|
A transfer of real or personal property from the
devisor to the devisee(s) by means of a will. |
|
descent and distribution laws of
|
A body of state-level
laws that stipulates how an estate will be passed on to heirs in the absence of a valid will. |
|
depreciation
|
depreciation 1. A non-cash expense taken against the
income of investment property that allows the owner to recover the cost of the investment through tax savings. 2. A loss of value to improved property. |
|
depreciable basis
|
depreciable basis The portion of a property's total basis
that may be depreciated, generally the basis of the improvements, since land cannot be depreciated. |
|
deficiency judgment
|
deficiency judgment A court order enabling a damaged
lender to attach a lien on the defaulted borrower's property for an amount equal to the difference between the debt and the proceeds of a foreclosure sale. |
|
defeasible fee
|
A fee estate where ownership is perpetual, provided that usage restrictions or other
conditions stated in the deed are upheld. If not, the fee reverts to the grantor either automatically (determinable fee) or by the grantor's actions (condition subsequent). |
|
deed of trust
|
An instrument used by a borrower to convey title to mortgaged property to a trustee to be held as security for the lender, who is the beneficiary
of the trust. |
|
deed in lieu of foreclosure
|
An instrument used to
convey mortgaged property back to the lender rather than have the lender foreclose on the property. |
|
datum
|
A standard elevation reference point used by
surveyors to measure elevations of property in an area. |
|
covenant
|
A written warrant or promise set forth in a
contract or other legal document by one or both of the parties to the contract. |
|
counteroffer .
|
Any new offer or amended offer made in response to an offer. See offer.
|
|
cost approach
|
A method for determining value that
takes into account the cost of the land and the replacement or reproduction cost of the improvements net of estimated depreciation |