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83 Cards in this Set

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Earnest money
The purchaser's initial commitment of something of value to indicate that he/she wants to buy the property according to the terms of the offer being submitted. Earnest money deposits received by the broker must be placed in his/her designated trust account; until the transaction is either closed or otherwise terminated.
Easement
A legal right to use the land of another for a specific purpose and in a specific manner. The right only constitutes an interest in the land. It does not give the easement owner an estate.
Easement appurtenant
An easement which grants a right of use to one parcel of land in and on another parcel. The land over which the easement runs is the servient estate. The land benefiting from the easement is the dominant estate.
Easement in gross
A legal right to use the land of another. It involves only one parcel of land and does not benefit any particular property. There are two types; commercial and personal.
Economic life
The period of time over which a property is estimated to be profitable/utilized; also called useful life.
Economic obsolescence
Loss in value due to adverse conditions external to the property and therefore; beyond the owner's control; also called social; locational; or environmental obsolescence.
Economic rent
The amount of rent a property could command in the open market; also called market rent.
Effective age
A property's age based upon its condition and appearance; may be more; the same; or less than its actual age.
Effective gross income
The actual gross income a property is expected to produce; determined by projecting a property's potential gross income and then making allowances for vacancies and collection losses.
Egress
An exit leading from a parcel of land.
Ejectment
The legal process to have a trespasser or tenant at sufferance removed from property.
Embedments
Crops that require annual cultivation. They are considered personal property even though attached to the land. Also called fructus industrials.
Eminent domain
The government's right to take private property for public use with or without the consent of the owner upon payment of a just compensation to the owner. The right may be with or delegated to quasi-public corporations; such as utility companies. The court suit for taking the property is called condemnation.
Enabling legislation
A law or statute enacted by any governmental body which enables (makes legal) some practice not previously authorized. A condominium law enacted by a state legislature is an example of enabling legislation.
Encroachment
The illegal intrusion of an improvement; building; or other attachment onto a neighboring land or into its airspace.
Encumbrance
Anything which affects the fee simple title or the use of land such as liens; easements; restrictions; and encroachments.
Entitlement
The amount of loan guarantee that a veteran is eligible to receive for a VA loan.
Equal dignities rule
A doctrine of law which points out that the act creating an agency shall be executed with the same formality as the law requires for the execution of the act for which the agency shall be created.
Equalization factor
A mathematical factor used to adjust assessed values of properties in different taxing jurisdictions. The equalization factor is multiplied by the assessed value. This procedure is normally used when states charge an ad valorem tax based upon local assessed values determined by using different assessment rates.
Equitable lien
See voluntary lien.
Equitable title (borrower)
The borrower's ultimate right to regain absolute ownership by paying off a mortgage loan made by a lender who holds title to the property as security.
Equitable title (buyer)
The buyer's interest in a property from the time he/she enters into a contract until legal title is conveyed at closing. The ultimate right to receive legal title.
Equity
The difference between the value of a property and the outstanding loan balance(s).
Equity of redemption
The borrower's right to redeem property at any time after default but before a foreclosure sale; by paying off the debt to the lender's satisfaction.
Erosion
The gradual wearing away of land caused by the action of water or wind.
Escalation clause
A lease provision which calls for changes in rental payments at specific intervals in the future.
Escalator lease
A lease which provides for rental increases in relation to increased operating expenses.
Escheat
A government right for land to revert to the state when the owner dies without leaving a will and without heirs.
Escrow account
See trust account.
Escrow agent
A neutral third party employed by parties to a contract to hold legal documents and money and then deliver them when certain conditions have been met by the parties.
Escrow agreement
A contract between parties to a real estate transaction which provides for the deposit of legal documents and money with a neutral third party along with instructions for finalizing the transaction. Used only in certain states.
Estate
The quality; quantity; nature; and extent of ownership interest or rights a person holds in real property. Estates are either possessors or nonpossessory.
Estate at sufferance
An interest in real property held by a tenant who holds over without the consent of the landlord after the right of possession has terminated.
Estate at will
A tenant's interest in real property (leasehold estate) for an indefinite period of time. Either party may terminate the estate upon proper notice. Also terminated by death of either party.
Estate for years
A tenant's interest in real property for any fixed period of time.
Estate from period-to-period
A tenant's interest in real property for a period of time; such as a month or a year. Without proper notice; the period is automatically renewed.
Estoppel
A doctrine of law which prevents a person from exercising rights that are not consistent with his/her prior conduct or words.
Estoppel certificate
The borrower's written acknowledgment of the loan balance. Execution of this document prevents the borrower from later asserting that the amount owed is less than was stated.
Eviction
An action which results in dispossession of a tenant from leased premises. The action may be either actual or constructive.
Exception
A deed provision which excludes from the conveyance some portion of the property granted.
Exclusive agency listing
A listing agreement in which the seller appoints only one broker to represent him/her in securing a purchaser. However; the seller reserves the right to sell the property himself/herself without being liable to the broker for commission.
Exclusive listing
A written agreement in which an owner appoints one real estate broker as exclusive agent for the sale; or lease; of property during a specified time period. There are two types of exclusive listings. One is an exclusive right-to-sell listing which provides the broker is due a commission; if the property is sold by anyone during the term of the listing. The other is an exclusive agency listing; with this type agreement; the broker is due a commission; if the property is sold during the term of the listing by anyone other than the owner.
Exclusive right to sell listing
A listing agreement which guarantees the broker a commission if the property is sold during the term of the listing; regardless of who sells it.
Exculpatory clause
Mortgage loan provision in which the lender waives the right to seek a deficiency judgment against the borrower. The borrower's personal liability on the note is eliminated; leaving the property itself as the lender's sole security for the debt.
Executed contract
A contract in which all parties have fully performed their obligations.
Executor
Person named in a will to carry out the directions and requests of the deceased.
Executor's deed
A deed executed by an executor to convey title to real property owned by a decedent who left a valid will.
Executory contract
A contract not yet fully performed. Something remains to be done by one or both of the parties.
Expense ratio
Total expenses divided by the effective gross income.
Expressed contract
A contract made orally or in writing.
Fair Housing Act of 1968
"The technical name of this legislation is Title VIII of the Federal Civil Rights Act of 1968"". Federal legislation which establishes a national policy of equal housing opportunity throughout the United States by making it illegal to discriminate based upon race; color; sex; religion; national origin; familial status; handicap; or other local or federally adopted characteristics in connection with the sale or rental of a dwelling."
Falsifying contracts
"An illegal practice where a purchase contract is executed for the true consideration price; but a fictitious price is submitted to the lending institution; because the buyer needs a larger loan. This practice; also known as ""ballooning""; ""dual contracts"" or ""kiting""; and subjects any participants to criminal charges. Contract terms may not be falsified in any way."
Fannie Mae
Federal National Mortgage Association (FNMA) was the first agency established to buy mortgage loans from local lenders in order to assure them of a continuous flow of funds for homebuyers. Fannie Mae has a federal government charter; but is owned by its stockholders (listed on the New York Stock Exchange).
Federal Equal Credit Opportunity Act
Federal law which prohibits discrimination against credit applicants on the basis of race; color; religion; sex; national origin; marital status; or age.
Federal Reserve System
Agency responsible for regulating and monitoring the lending practices of federally chartered commercial banks. The Federal Reserve controls the supply of money made available for credit by regulating the discount rate charged member banks for the money they borrow. It also influences credit activity by regulating the amount of funds that these banks must keep on reserve.
Fee simple absolute
"An inheritable estate of indefinite duration; without restrictions or conditions to satisfy in order to retain ownership. It is the most complete ownership of rights in land that one can hold. It is said to be ""potentially perpetual""."
Fee simple determinable
A fee simple estate that automatically ends and goes back to the person who granted the estate; to their heirs; or to a remainderman if named; upon the occurrence or nonoccurrence of a stated condition.
Fee simple estate
An ownership in interest in land which is freely inheritable. The estate may be absolute; determinable; or conditional.
Fee simple on a condition subsequent
A fee simple estate that may be ended by the grantor or the grantor's heirs; or a remainderman if named; upon the occurrence or nonoccurrence of a stated condition.
FHA insured loan
A loan fully insured by the Federal Housing Administration.
FHA mortgage insurance premium (MIP)
FHA mortgage insurance protects the lender against loss in the event of default.
Fiduciary
A relationship of trust and confidence between a principal and agent; a person in a position of trust and confidence; as between broker and seller.
Firm commitment
FHA's commitment to insure a specific loan amount for a particular buyer; provided the property meets FHA's construction standards.
First mortgage
One that has the earliest recording date in most instances (see Subordination Clause).
Fixture
An item that was once personal property but has become real property because of the manner in which it was attached to the land or its improvements.
Flexible loan insurance program
See pledged account mortgage.
Flexible payment mortgage
See graduated payment mortgage.
Floor-area ratio
A guideline used to regulate building density. The ratio is calculated by dividing a building's floor area by the ground (lot) area or by dividing the number of floors in a building by the portion of the lot covered by the building.
Forbear
To not act; to give up a right to which a person is entitled.
Foreclosure
A legal procedure whereby mortgaged property is either sold to a third party or transferred to the lender in order to satisfy the debt.
Foreclosure by advertisement
See foreclosure by power of sale.
Foreclosure by power of sale
A legal procedure whereby the lender is authorized by the loan agreement to sell the mortgaged property upon default and to apply the proceeds to the debt. The sale must be advertised according to state requirements and an auction sale must be held.
Foreclosure sale
A court-ordered proceeding to sell property to satisfy certain debts of the owner.
Formal will
A typed or preprinted will usually prepared by an attorney. The instrument must comply with all state requirements and be properly witnessed.
Franchise
A right to use the name; logo (trademark or service mark); and service of another business.
Fraud
Malicious (willful) or negligent misrepresentation of a material fact in a transaction on which one or more of the parties to the transaction relies and thereby suffers damages. It creates a voidable contract; possible court damages and possible sanctions for a licensee.
Fraudulent misrepresentation
See fraud.
Freddie Mac
Federal Home Loan Mortgage Corporation (FHLMC) a secondary mortgage market company; similar to RNMA; reporting to its own Board of Directors.
Freehold estate
An ownership interest in land; the duration of which is uncertain. The estate may last forever (i.e.; be inheritable); or its duration may be measured by one person's' life.
Front foot
One linear foot on a lot's boundary line along a street; highway; or body of water.
Fully amortized mortgage
A long-term repayment plan which provides for equal monthly payments of principal and interest. Each months interest is figured on the loan balance at a fixed rate. As the loan matures; the amount of interest decreases each month while the amount paid on the principal increases; also called amortized mortgage or constant mortgage plan.
Functional obsolescence
Loss in value due to improvements that are inadequate; superadequate; or improperly designed for today's needs.
Future right
The right to take possession or control of a property in the future (nonpossessory).