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330 Cards in this Set

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Abondonment
The voluntary surrender of a right, claim, or interest in a piece of property without naming a successor as owner or tenant
Abstract of Title
a certified summary of the history of a title to a particular parcel of Real Estate (RE) that includes the original grant and all subsequent transfers, encumbrances, and releases
Abutting
sharing a common boundary; adjoining
Acceleration Clause
a clause in a note, morgage, or deed of trust that permits the lender to declare the entire ammount of principal and accrued interest due and payable immediately in the event of default
Accretion
the increae or addition of land resulting from the natural deposit of sand or soil by streams, lakes or rivers
Accrued depreciation
1) The ammount of depreciation ( Loss in Value) tat as accumulated since initial construction
2) the difference between the current appraised value and the cost to replace the building new
Acknowledgment
a formal declaration before a public official, ussualy a notary, by a person who has signed a deed, contract, or other document that the execution was a voluntary act
Acre
a measure of land equal to 43,560 square feet
Actual Eviction
the result of legal action brought by a landlord against a defaulted tenant, whereby the tenant is p hysically removed from rented or leased property by court order
Addendum
any provision added to a contract, or an addition to a contract that expands, modifies, or enhances the clarity of the agreement. To be legally enforceable, must be referenced within the contract
Adjacent
Lying near to but not necessarily in actual contact with
Adjustable-rate Mortgage (ARM)
A mortgage in which the interest changest periodically, according to corresponding fluctuations in an index. All ARMs are tied to indexes.
Ex: a 7 year ARM is a loan where the rate remains fixed for the first 7 years, then fluctuates according to index.
Adjusted basis
the original cost of a property, plus acquisition costs, plus the value of added improvements to the porperty, minus accrued depriciation
Administrator
a person appointed by a court to settle the estate of a person who has died without leaving a will
Ad Valorem tax
tax in proportion to the value of a property
Adverse Possesion
a method of acquiring title to another person's property through court action after taking actual, open, hostile, and continuous possession for a statutory period of time
Affidavit
a written statement made under oath and signed before a licensed public official, usually a notary
Agency
the legal relationship between principal and agent that arises out of a contract wherein an agent is employed to do certain acts on behalf of the principal who has retained the agent to deal with a third party
Agent
one who has been granted the authority to act on behalf of another
Agreement of sale
a written agreement between a seller and a purchaser whereby the purchaser agrees to buy a certain piece of property from the seller for a specified price
Alienation
the transfer of ownership of a property to another, either voluntary or involuntary
Alienation Clause
Clause in a mortgage or deed of trust that permits the lender to declare all unpaid principal and accrued interest due and payable if the borrower transfers title to the property
Allodial System
in the US a system of land ownership in which land is held free and clear of any rent or services due to the gov't
Amenities
features or benefits of a particular property that enhance the property's desirability and value, such as a scenic view or a pool
Amortization
the method of repaying a loan or debt by making periodic installment payments composed of both principal and interest. When all principal has been repaid, it is considered fully amortized
Amortize
to repay a loan through regular payments that are comprised of principal and interest
Annual percentage rate (APR)
the total or effective ammount of interest charged on a loan, expressed as a percentage, on a yearly basis. Created according to a gov't formula intended to reflect the true annual cost of borrowing
Anti-deficiency law
laws used in some states to limit the claim of a lender on default on payment of a purchase money mortgage on owner-occupied residential property to the value of the collateral
Anti-trust laws
laws designed to protect free enterprise and the open marketplace by prohibiting certain business practices that restrict competition.
These laws would prevent such practices as price-fixing or agreements by brokers to limit thier areas of trade
Apportionments
adjustment of income, expenses, or carrying charges related to RE, usually computed to the date of closing so that the seller pays all expenses to date, then the buyer pays all expenses beginning on the closing date
Appraisal
an estimate or opinion of the value of an adequately described property, as of a specific date
Appraised Value
an opinion of a propertys fair market value, based on an appraiser's knowledge, experience, and analysis of the property, based on comparable sales.
Appraiser
and individual qualifited by education, training, and experience to estimate the value of real property.
Appreciation
an increase in the market value of a property
Approbation
a right of gov't to set aside land for public use. It may also take something that is public and make it private, such as diverting water from a public stream or river onto private property
Appurtenance
something that transfers with the title to land even if not an actual part of the property, such as an easement
ARELLO
the Association of Real Estate License Law Officials
Assessed value
the value of a property used to calculate RE taxes
Assessor
a public official who establishes the value of a property for taxation purposes
Assessment
The process of assigning value on property for taxation purposes
Asset
items of value owned by an individual. Assets that can be quickly converted into cash are considered 'liquid assets' such as bank accounts. Other assets include RE, personal property, debts owed.
Assignment
the transfer of rights or interest from one person to another
Assumption of mortgage
the act of acquiring the title to a property that has an existing mortgage and greeing to be liable for the payment of any debt still existing. However, the lender must accept the transfer of liability for the original borrower to be relieved of the debt
Attatchment
the process whereby a court takes custody of a debtor's property until the creditor's debt is satisfied
attest
to bear witness by providing a signature
Avulsion
the removal of land from one owner to another when a stream or other body of water suddenly changes its channel
Balloon morgtgage
a loan in which the periodic payments do not fully amortize the loan, so that a final payment (balloon payment) is substantially larger than the ammount of the periodic payments that must be made to satisfy the debt
Balloon payment
the final, lump-sum payment that is due at the termination of a balloon mortgage
Bare title
aka "Naked title". This form of title lacks any ownership interests. IN a trust deed, the trustee holds bare title, but only to the extent of the foreclosing on the property for the beneficiary
Bargain and Sale deed
a deed that conveys title, but does not necessarily carry warranties against liens or encumbrances
Base Line
one of the imaginary East-West lines used as a reference point when descriving property with the rectangular or gov't survey method of property description
Basis
the cost of purchase plus any capital improvements, less depreciation. It is the number used for calculating profits and losses when selling property
Beneficiary
1) One who benefits from the acts of another
2) the lender in a deed of trust
Bequest
personal property given by provision of a will
Betterment
an improvement to property that increases its value
Bilateral contract
a contract in which each party promises to perform an act inexchange for the other party's promise also to perform an act
Bill of sale
a written instrument that transfers ownership of personal property. A bill of sale cannot be used to transfer ownership of Real property, which is passed by deed
Binder
an agreement, accompanied by an earnest money deposit, for the purchase of a piece of RE to show the purchaser's good faith intent to complete a transaction
Blanket mortgage
a morgage in which more than one parcel of RE is pledged to cover a single debt
Blockbusting
the illegal and discriminatory practice of inducing homeowners to sell thier properties by suggesting or implying the introduction of members of a protected class into the neighborhood
Bond
evidence of personal debt secured by a mortgage or other lien on RE
Breach of contract
violation of any conditions or terms in a contract without legal excuse
Broker
owner-manager of a business that brings together the parties to a RE transaction for a fee.
Broker's price opinion (BPO)
a broker's opinion of value based on a competitive market analysis, rather than a certified appraisal
Building code
local regulations that control construction, design, and materials used in construction that are based on health and safety regulationhs
Building Line
the distance from the front, rear, or sides of a building lot beyond which no structures may extend
Building restrictions
limitations listed in zoning ordinances or deed restrictions on the size and type of improvements allowed on a property
Bundle of Rights
the concept that ownership of a property includes certain rights regarding the property such as, - Possession, Enjoyment, Control of Use, and Disposition
Bylaws
rules and regulations adopted by an association---For example, a condominium
Cancellation clause
a provision in a lease that confers on one or all parties to the lease the right to terminate the parties' obligations, should the occurrence of the condition or contingency set forth in the clause happen
Canvassing
the practice of searching for prospective clients by making unsolicited phone calls and/or visiting homes door-to-door
Cap
the limit on fluctuation rates regarding ARMs. Limitations or caps, may apply to how much the laon may adjust over a six-month period, an annual period, and over the life of the loan
Capital
money used to create income, or the net owrth of a business as represented by the amount by which its assets exceed its liabilities
Capitalization
the process of estimating the present value of an income-producing piece of property by dividing anticipated future income by a capitialization rate
Capitalization rate
the rate of return a property will generate on an owner's investment
Cash flow
the net income produced by an investment property, calculated by deducting operating and fixed expenses from gross income
CC&R
covenants, conditions, and restrictions of a cooperative or condominium development
Certificate of Discharge
a document used when the security instrument is a mortgage
Certificate of Eligibility
document issued by the Veterans Administration that certifies a veteran's eligibility for a VA loan
Certificate of reasonable Value (CRV)
once the appraisal has been performed on a property being bought with a VA loan, the veterans administration issues a CRV
Certificate of sale
the document given to a purchaser of RE that is sold at a tax foreclosure sale
Certificate of title
a report stating an opinion on the status of a title, based on the examination of public records
Chain of Title
the recorded history of conbeyances and encumbrances that affect the title to a parcel of land
Chattel
personal property
Chattel mortgage
a loan in which personal property is pledged to secure the debt
Clear title
a title that is free of liens and legal questions as to ownership of a property that is a requirement for the sale of RE; sometimes referred to as just title, good title, or free and clear
Closing
The point in a RE transaction when the purchase price is paid to the seller and the deed to the property is transferred from the seller to the buyer
Closing costs
1) 'Nonrecurring closings costs'-- any items paid once as a result of buying the property or obtaining a loan.
2) 'prepaid items'.--- items that recur over times, such as property taxes and homeowners insurance.
Good Faith Estimate
A lenders attemt to estimate the amount of nonrecurring closing costs and prepaid items. This is issued to the borrower within three days of revieving a home loan application
Closing date
the date on which the buyer takes over the property
Closing statement
a written accounting of funds received and disbursed during a RE transaction. The buyer and seller receive separate closing statements
Cloud on the title
an outstanding claim or encumbrance that can affect or impair the owner's title
Clustering
the grouping of home sites within a subdivision on smaller lots than normal, with the remaining land slated for use as common areas.
Codicil
a supplement or addition to a will that modifies the original instrument
Coinsurance clause
a clause in an insurance policy that requires the insured to pay a portion of any loss experienced
Collateral
Something of value hypothecated (Real property) or pledged (personal property) by a borrower as security for a debt
Collection
when a borrower falls behind, the lender contacts the borrower in an effort to bring the loan current. The laon goes to 'collection'
Color of Title
an instrument that gives evidence of title, but may not be legally adequate to actually convey title
Commingling
the illegal act of an agent mixing a client's monies, which should be held in a separate escrow account, with the agent's personal monies
Common Law
the body of laws derived from local custom and judicial precedent
Common Areas
portions of a building, land, and amenities owned by a planned unit development or condominium projects homeowners association or a cooperative projects co-op corporation. These areas are used by all of the unit owners, who share in the common expenses of thier operation and maintenance.
Community Property
a system of property ownership in which each spouse has equal interest in property acquired during the marriage
Comparable sales
recent sales of similar properties in enarby areas that are used to help estimate the current market value of a property
Competent parties
people who are legally qualified to enter a contract, usually meaning that they are of legal age, of sound mind, and not under the influence of drugs or other mind-altering substances
Competitive market analysis (CMA)
an analysis inteded to assist a seller or buyer in determining a property's range of value
Condemnation
the judicial process by which the gov't exercises its power of eminent domain
Condominium
a form of ownership in which an individual owns a specific unit in a multiunit building and shares ownership of common areas with other unit owners
Conformity
an appraisal principle that asserts that property achieves its maximum value when a neighborhood is homogenous in its use of land
Consideration
something of value that induces parties to enter into a contracts, such as money or services
Construction Mortgage
a short-term loan used to finance the building of improvements to RE
Constructive eviction
action or inaction by a landlord that renders a property uninhabitable, forcing a tenant to move out with no further liability for rent
Constructive notice
notice of a fact given by making the fact part of the public record. All persons are responsible for knowing the information, whether or not they have actually seen the record
Contingency
a condition that must be met before a contract is legally binding. A satisfactory home inspection report from a qualified home inspector is an example of a common type of contingency
Contract
an agreement between two or more legally competent parties to do or to refrain from doing some legal act in exchange for consideration
Contract for deed
a contract for the sale of a parcel of RE in which the buyer makes periodic payments to the seller and recieves title to the property only after all, or a substantial part, of the purchase price has been paid, or regular payments have been made for one year or longer.
Conventional loan
a loan that is neither insured nor guaranteed by an agency of gov't
Conversion option
an option in an ARM to convert it to a fixed-rate mortgage
Conveyance
the transfer of title from the grantor to the grantee
Cooperative
a form of property ownership in which a corporation owns a multi-unit building and stock holders of the co. may lease and occupy individual units of the building through a proprietary lease
Correlation
or 'reconciliation' is the final step in an appraisal. The appraiser weighs the purpose of the appraisal against the estimated values.
Cost Approach
an appraisal method whereby the value of a property is calculated by estimating the cost of constructing a comparable building, subtracting depreciation, and adding land value.
Credit
an agreement in which a borrower recieves something of value in exchange for a promise to repay the lender
Decedent
a person who dies
Dedication
the donation of private property by its owner to a governmental body for public use
Deed
a written document that, when properly signed and delivered, conveys title to real property from the grantor to the grantee
Deed-in-lieu
a foreclosure instrument used to convey title to the lender when the borrower is in default and wants to avoid foreclosure
Deed of trust
a deed inwhich the title to property is transferred to a third-party trustee to secure repayment of a loan
Deed restriction
an imposed restriction for the purpose of limiting the use of land, such as the size or type of improvements to be allowed. AKA restrictive covenant.
Depreciation
a loss in value due to physical deterioration, functional, or external obsolescence
Descent
the transfer of property to an owner's heirs when th eowner dies intestate
Devise
the transfer of title to real estate by will
Devisee
one who recieves a bequest of real estate by will
Devisor
one who grants real estate by will
Discount Point
1% of the loan amount charged by a lender at closing to increase a loan's effective yield and lower the fare rate to the borrower
Discount rate
the rate that lenders oay for mortgage funds--a higher rate is passed on to the borrower
Dispossess
ro remove a tenant from property by legal process
Dominant estate (tenement)
property that includes the right to use an easement on adjoining property
Dual Agency
an agent who represents both parties in a transaction
Due-on-Sale clause
a provision in a mortgage that allows the lender to demand repayment in full if the borrower sells the property that serves as security for the mortgage
Duress
the sue of unlawful means to force a person to act or to refrain from an action against his or her will
Earnest Money
down payment made by a buyer of Real estate as evidence of good faith
Easement
the right of one party to use the land of another for a particular purpose, such as to lay utility lines
Easement appurtenant
easements created for the beneficial use of an adjoining property. They are created in the name of the property, not the property owner. Appurtenant means 'belongs to', consequently, easements appurtenant belong to or run with the land
Easement by necessity
an easement, granted by law and requiring court action, that is deemed necessary for the full enjoyment of a parcel of land.
Easement by prescription
a means of acquiring an easement by continued, open, and hostile use of someone else's property for a statutorily defined period of time
Easement in gross
a personal right granted by an owner with no requirement that the easement holder own adjoining land
Economic life
the period of time over which an improved property will generate sufficient income to justify its continued existence
Effective age
an appraister's estimate of the physical condition of a building. The actual age of a building may be different than its effective age
Emblements
Cultivated crops; generally considered to be personal property
Eminent Domain
the right of a gov't to take private property for public use upon payment of its fair market value
Encroachment
a trespass caused when a structure, such as a wall or fence, invades another person's land or air space
Encumbrance
Anything that affects or limits the title to a property such as easements, leases, mortgages, or restrictions
Equitable title
the interest in a piece of real estate held by a buyer who has agreed to purchase the property, but has not yet completed the transaction; the interest of a buyer under a contract for deed
Equity
the difference between the curent market value of a property and the outstanding indebtness due on it
Erosion
the gradual wearing away of land by wind, water, and other natural processes
Escalation clause
a caluse ina lease allowing the lessor to charge more rent based on an increase in costs; sometimes called a pass-through clause
Escheat
the claim to property by the state when the owner dies intestate and no heirs can be found
Escrow
the deposit of funds and/or documents with a disinterested third party for safekeeping until the terms of the escrow agreement have been met
Estate
an interest in real property. The sum total of all the eral property and personal property owned by an individual
Estate at sufferance
exists when a tenant, without the consent of the owner, refuses to move out of a facility after the expiration of a lease
Estate at will
exists when a tenant stays in a facility after the expiration of a lease, but with the ownter's permission. This may occur when the two parties are negotiating new lease terms
Estate for years
a leasehold estate granting possession for a definite period of time
Estoppel certificate
a document that certifies the outstanding amount owed on a mortgage loan, as well as the rate of interest
Exchange
a transaction in which property is traded for another property, rather than sold for money or other consideration
Exclusive agency listing
a contract between a property owner and one broker that only gives the broker the right to sell the property for a fee within a specified period of time but does not obligate the owner to pay the broker a fee if the owner produces his or her own buyer without the brokers's assistance. but Barred from appointing another broker within this time period.
Exclusive right to sell
a contract between a property owner and a broker that gives the broker the right to collect a commission regardless of who sells the property during the specified period of time of the agreement
Execution
the signing of a contract
Executor/Executrix
a person named in a will to administer an estate. The court will appoint an administrator if no executor is named
Executory contract
a contract in which one or more of the obligations have yet to be performed (executed)
External obsolescence
a loss in value of a property due to factors outside the property, such as a change in surrounding land use
Fair housing law
a term used to refer to federal and state laws prohibiting discrimination in the sale or rental of residential property
Fair market value
the highest price that a buyer, willing but not compelled to buy, would pay, and the lowest a seller, willing but not compelled to sell, would accept
Federal housing Administration (FHA)
an agency within the U.S. department of housing and Hurban Development (HUD) that insures mortgage loans by FHA-approved lenders to make loans available to buyers with limited cash
Federal National Mortgage Association (Fannie Mae)
a privately owned corporation that buys existing government-backed and conventional mortgages
Federal Reserve System
the central banking system of the US, which controls the monetary policy, and therefore, the money supply, interest rates, and availability of credit
Fee Simple
the most complete form of ownership of Real Estate
FHA-insured loan
a loan insured by the federal housing administration
Fiduciary relationship
a legal relationship with an obligation of trust, as that of agent and principal
First mortgage
a mortgage that has priority to be satisfied over all other mortgages
Fixed-rate loan
a loan with an interest rate that does not change during the entire term of the loan
Fixture
an article of personal property that has been permanently attatched to the real estate so as to become an integral part of the real estate
Forfeiture
the loss of money, property, rights, or privileges due to a breach of legal obligation
Franchise
in RE, an organization that lends a standardiezed trade name, operating procedures, referal services, and supplied to memeber brokerages
Freehold estate
an estate of ownership in real property
Functional obsolescence
a loss in value of a property due to causes within the property, such as outdated style, or inadequacy to funciton properly
General Agent
an agent who is authorized to act for and obligate a principal in a specific range of matters, as specified by thier mutual agreement
General lien
a claim on all property, real and personal, owned by a debtor
General warranty deed
an instrument in which the grantor guarantees the grantee that the title being conveyed is good and free of other claims or encumbrances
Government-backed mortgage
a mortgage that is insured by the FHA or guaranteed by the Dept of VA or the Rural housing Service. Mortgagest that aren't govt loans are identified as conventional loans
Government National Mortgage Association (Ginnie Mae)
a govt-owned corporation within the U.S. dept of housing and Urban Development (HUD). Ginnie Mae manages and liquidates govt-backed laons and assists HUD in special lending projects
Government survey system
a method of land description in which meridians (longitude) and base lines (latitude) are used to divide land into townships and sections
Graduated lease
a lease that calls for periodic, stated changes in rent during the term of the lease
Grant deed
a deed that includes 3 warranties: 1) that the owner has the right to convey title to the property 2) there are no encumbrances other than those noted specifically in the deed 3) the owner will convey any future interest that he or she may acquire in the property
Grantee and Grantor
Grantee--One who receives title to real property
Grantor-- One who conveys title to real property; the present owner
Gross income
the total income reveived from a property before deducting expenses
Gross income multiplier
A rough method of estimating the market value of an income property by lutiplying its gross annual rent by a multiplier discovered by dividing the sales prices of comparable properties by their annual gross rent
Gross lease
a lease in which a tenant pays only a fixed amount for rental and the landlord pays all operating expenses and taxes
Ground lease
a lease of land only, on which a tenant already owns a building or will construct improvements
Guaranteed sale plan
an agreement between a broker and a seller that the broker will buy the seller's property if it does not sell within a specified period of time
Highest and best use
the legally permitted use of a parcel of land that will yield the greatest return to the owner in terms of money or amenities
Holdover tenancy
a tenancy where a lessee retains possession of the property after the lease has expired, and the landlord, by continuing to accept rent, agrees to the tenant's continued occupancy
Holographic will
a will that is entirely handwritted, dated, and signed by the testator
Home equity conversion morgage (HECM)
aka "reverse-annuity mortgage"; instead of making payments to a lender, the lender makes payments to you. It enables older homeowners to convert the equity they have in thier homes into cash, usually in the form of monthly payments
Home equity line of credit
a mortgage loan that allows the borrower to obtain cash drawn against the equity of his or her homes, up to a predetermined amount
Home inspection
a thorough inspection by a professional that evaluates the structural and mechanical condition of a property. A satisfactory home inspection is often included as a contingency by the purchaser
Homeowner's insurance
an insurance policy specifically designed to protect residential property owners against financial loss from common risks such as fire, theft, and liability
Homeowner's warranty
an insurance policy that protects purchasers of newly constructed or pre-owned homes against certain structural and mechanical defects
Homestead
the parcel of land and improvements legally qualifying as the owner's principal residence
HUD
Department of housing and urban development, a federal agency that enforces federal fair housing laws and oversees agencies such as FHA and GinnieMae
Hypothecate
provides borrowers a way to use thier real or personal property as collateral for loans, without giving up possession of the property
Implied contract
a contract where the agreement of the parties is created by their conduct
Improvement
human-made addition to Real Estate
Income capitalization approach
a method of estimating the value of income-producing property by dividing its expected annual net operating income of the property by a capitalization rate
Income property
real estate developed or improved to produce income
Incorporeal right
intangivle, non-possessory rights in RE such as an easement or right of way
Installment loan
borrowed money that is repiad in periodic payments, known as installments
Insured Mortgage
a morgage that is protected by the Federal Housing Administration (FHA) or by private mortgage insurance (PMI). If borrower defaults on the loan, the insurer must pay the lender the insured amount
Interest
1) a fee charged by a lender for the use of the money loaned
2) a share of ownership in real estate
Intestate
to die without having authored a valid will
Investment property
a property not occupied by the owner
Joint Tenancy
co-ownership that gives each tenant equal interest and equal rights in the property, including the right of survivorship
Judgment
a decision rendered by court determining the rights and obligations of parties to an action or lawsuit
Judgment lien
a lien on the property of a debtor resulting from a court judment
Junior Mortgage
any mortgage that in inferior to a first lien and that will be satisfied only after the first morgage
Lease
a contract between a landlord and a tenant wherein the landlord grants the tenant possesion and use of the property for a specified period of time and for a consideration
Leased Fee
the landlord's interest in a parcel of leased property
Leasehold
a tenant's right to occupy a parcel of RE for the term of the lease
Lessee and Lessor
Lessee--The one who recieves that right to use and occupy the property during the term of the leasehold esate
Lessor-- the owner of the property who grants the right of possesions to lessee
Leverage
the use of borrowed funds to purchase an asset
Lien
a legal claim against a property to secure payment of a financial obligation
Life estate
a freehold esate in real property limited in duration to the lifetime of the holder of the life esate or another specified person
Lis Pendens
'suit pending'; a public notice that a lawsuit has been filed that may affect the title to a particular piece of property.
Littoral rights
landowner's claim to use water in large, navigable lakes and oceans adjacent to property; ownership rights to land bordering bodies of water up to the high-water mark
Lot and Block Description
a method of describing a particular property by referring to a lot and block number within a subdivision recorded in the public record
Market data Approach
a method of estimating the value of a property by comparing it to similar properties recently sold and making monetary adjustments for the differences between the subject property and the comparable property
Mechanics Lien
a statutory lien created to secure payment for those who supply labor or materials for the contruction of an improvement to land
Metes and bounds
a method of describing a parcel of land using direction and distance
Mortgage
a written instrument that pledges property to secure payment of a debt obligation as evidenced by a promissory note. A mortgage creates a lien against the title to a property
Multiple listing system/service (MLS)
the method of marketing a property listing to all participants in the MLS
Mutual rescission
and agreement by all parties to a contract to release one another from the obligations of the contract
Negative amortization
occurs when an ARM is allowed to fluctuate independently of a required minimum payment. A gradual increase in mortgage debts happens when the mo payment isnt large enough to cover the entire prinicipal and interest due. Shortfall is added to remaining balance to create negative amortization
Net Income
Income produced by a property calculated by deducting operating expenses from gross income
Net Lease
a lease that requires the tenant to pay maintenance and operating expenses, as well as rent
Non-Conforming use
a use of land this is permitted to continue, or grandfathered, even after a zoning ordinance is passed that prohibits the use
Novation
the subsitution of a new contract for an existing one; the new contract must reference the first and indicate that the first is being replaced and no longer has any force and effect
Obsolescence
a loss in the value of a property due tu functional or external factors
Open-end mortgage
a loan containing a clause that allows the mortgagor to borrow additional funds from the lender, up to a specified amount, without rewriting the mortgage
Open listing
a listing contract given to one or more brokers in which a commission is paid only to the broker who procures a sale. If the owner sells the house without the assisstance of one of the brokers, no commision is due
Opinion of title
an opinion, usually given by an attorney, regarding the status of a title to property
Option
an agreement that gives a prospective buyer the right to purchase a seller's property within a specified period of time for a specified prices
Obsolescence
a loss in the value of a property due tu functional or external factors
Open-end mortgage
a loan containing a clause that allows the mortgagor to borrow additional funds from the lender, up to a specified amount, without rewriting the mortgage
Open listing
a listing contract fiven to one or more brokers in which a commission is paid only to the broker who procures a sale. If the owner sells the house without the assisstance of one of the brokers, no commision is due
Opinion of title
an opinion, usually given by an attorney, regarding the status of a title to property
Option
an agreement that gives a prospective buyer the right to purchase a seller's property within a specified period of time for a specified prices
Ordinance
a muncipal regulation
Ownership
the exclusive right to use, possess, control, and dispose of property
Package Mortgage
a mortgage that pledges both real and personal property as collateral to secure repayment of a loan
Participation mortgage
a type of mortgage in which the lender receives a certain percentage of the income or resale proceeds from a property, as well as interest on the loan
Partition
the division of property held by co-owners into individual shares
Partnersihp
an agreement between two parties to conduct business for profit. In a partnership, property is owned by the partnership, not the individual partners, so partners cannot sell their interest in the property without the consent of the other partners
Percentage lease
a lease in which the rental rate is based on a percentage of the tenant's gross sales. This type of lease is most often used for retail space
Periodic estate
tenancy that automatically renews itself until either the landlord or tenant gives notice to terminate it
Physical Deterioration
a loss in the value of property due to impairment of its physical condition
PITI
Principal, interest, taxes, and insurance--- Components of a regular mortgage payment
Planned Unit Development (PUD)
a type of zoning that provides for residential and commercial uses within a specified area
PMI
private mortgage insurance
Point
a point is one percent of the loan
Police Power
the right of the government to enact laws, ordinances, and regulations to protect public health, safety, welfare, and morals
Prescription
a method of acquiring an easement to property by prolonged, unauthorized use
Principal
1) one who authorizes another to act on his or her behalf
2) one of the contracting parties to a transaction
3) the maount of money borrowed in a loan, separate from the interest charged on it
Probate
the judicial procedure of proving the validity of a will
Promissory note
details the terms of the loan and is the debt instrument
Puffing
inflated or embellished comments that are neither facts nor the comments on which prospects would normally base a purchase decision
Quitclaim deed
a conveyance where the grantor transfers without warranty or obligations whatever interest or title he or she may have
Range
an area of land six miles wide, numbered East or West from a principal meridian in the rectangular survey system
Real Estate
land, the earth below it, the air above it, and anything permanently attatched to it
Real Estate Settlement Procedures Act (RESPA)
a consumer protection law that requires lenders to give borrowers advance notice of closing costs and prohibits certain abusive practices against buyers using federally related loans to purchase their homes
REALTOR
a registered trademark for use by members of the National Association of REALTORS and affiliated state and local associations
Recording
entering documents, such as deeds and mortgages, into the public record to give constructive notice
Redlining
the illegal practice of lending institutions refusing to provide certain financial services such as mortgage loans, to property owners in certain areas
Regulation Z
a federal reserve regulation that implements the federal Truth-in-Lending act
Remainder estate
a future interest in an estate that takes effect upon the termination of a life estate
Rescission
canceling or terminating a contract by mutual consent or by the action of one party on default by the other party
Reversion
the return of interest or title to the grantor of a life estate
Right of egress (or ingress)
the right to enter or leave designated premises
Right of survivorship
in joint tenancy, the right of survivors to acquire the interest of deceased joint tenant
Riparian rights
the rights of a landowner whose property is adjacent to a flowing waterway, such as a river, to access and use the water
Salvage value
the value of a property at the end of its economic life
Section
as used in the rectangular survey system, an area of land measuring one square mile, or 640 acres
Servient tenement
a property on which an easement or right-of-way for an adjacent (dominant) property passes
Settlement statement (HUD-1)
the form used to itemize all costs related to closing of a residential transcation covered by RESPA regulations
Severalty
the ownership of a property by only one legal entity
Sheriff's sale
a court ordered sale of real property so satisfy a judgment
Specific lien
a lien, such as mortgage, that attaches to one defined parcel of real esate
Specific performance
a legal action in which a court compels a defaulted party ot a contract to perform according to the terms of the contract, rather than awarding damages
Statute of frauds
the state law that requires certain contracts to be in writing to be enforceable
Statute of limitations
the state law that requires that certain actions be brought to court within a specified period of time
Statutory lien
a lien imposed on property by statute, such as a tax lien
Steering
the illegal practice of directing prospective homebuyers to or away from particular areas
Straight-line depreciation
a method of computing depreciation by decreasing value by an equal amount each year during the useful life of the property
Subsitution
the principle in appraising that a buyer will be willing to pay no more for the property being appraised than the cost of purchasing an equally desirable property
Subrogation
the subsitution of one party into another's legal role as the creditor for a particular debt
Suit for possession
a lawsuit filed by a landlord to evict a tenant who has violated the terms of the lease or retained possession of the property after the lease expired
Tenancy at sufferance
the tenancy of a party who unlawfullt retains possession of a landlord's property after the term of the lease has expired
Tenancy at will
an indefinite tenancy that can be terminated by either the landlord or the tenant at any time by giving notice to the other party one rental period in advance of the desired termination date
Tenancy by the entirety
ownership by a married couple of property acquired during the marriage with right of survivorship; not recognized by community property states
Tenancy in common
a form of co-ownership in which two or more persons hold an undivided interest in property without the right of survivorship
Testate
to die having created a valid will directing the testator's desires with regard to the dispotition of the estate
Title
a legal document that demonstrates a person's right to, or ownership of, a property. NOT an instrument, such as a deed, that gives evidence of title or ownership
Township
a division of land, measuring 36 square miles, in the government survey system
Trade fixtures
an item of personal property installed by a commercial tenant and removable upon expiration of the lease
Truth-in-lending act
also known as regulation Z; requires to make full disclosure regarding the terms of a loan
Unilateral contract
a one-sided contract in which one party is obligated to eprform a particular act completely, before the other party has any obligation to perform
Unlawful detainer
a court action that provides one of the first steps in the eviction process. If a defaulting tenant does not leave the premises after a three-day notice to quit, he or she may suffer triple damages if an Unlawful detainer action is filed. Once filed, tenant has 5 days to vacate the property
VA guaranteed loan
a mortgage loan made to a qualified veteran that is guranteed by the Department of Veterans Affairs
Variance
permission obtained from zoning authorities to build a structure that is not in complete compliance with current zoning laws. A variance does not permit a non-conforming use of property
Writ of execution
a court order to the sheriff or other officer to sell the property of a debtor to satisfy a previously rendered judgment
Writ of possession
a court order issued if a defaulting tenant does not answer un unlawful detainer action. It gives the sheriff five days to remove the tenant from the facility
Zoning Ordinance
the ecercise of regulating and controlling the use of a property in a municipality
Tests of a Fixture
M-ethod of attachment
A-daptability
R-elationship of the parties
I-ntention of the parties
A-greement between the parties
Essentials of a Valid Deed
1.Must be in writing
2.Parties must be correctly described
3.Grantor/ee is competent
4. Have clear description
5. Must be granting clause
6. Signed by grantor
7. Delivery and acceptance
Characteristics of Joint Tenancy
Four Unities-
TIME-same hour & minute
TITLE-same document
INTEREST-same shares
POSSESION-same usage

Cannot will interest. Right of survivorship
Characteristics of Tenants in Common
No right of survivorship. OK to will. Unequal shares allowed.
Homestead Protection
$75,000= Head of household(under 65 yrs & not low$)
$50,000= Single Person (under 65 yrs & not low$)
$150,000= Head of household 65+ years and/or 55-64 yrs and low income
Creation of Real estate Agencies
1. Agreement
2. Ratification
3. Estoppel
Subdivision Map Act
2 or more lots
local control
physical aspects
No public report
Subdivided lands Act
5 or more lots
CA RE commisioner control
Sales Aspects
Public Report
Unruh Civil Rights Act
Business cannot discriminate
Housing Financial Discrimination( Holden)
lenders cannot "redline"