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84 Cards in this Set
- Front
- Back
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Immobility
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Incapable of being moved; fixed in location, such as land.
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Implied Contract
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contract formed through the acts or conduct of the parties. involved.(Ostensible)
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Income Approach
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A traditional means of appraising property based on the assumption that value is equal to the present worth of future rights to income.
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Increasing and Decreasing Returns
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This economic principle states that the addition of more factors of production will add higher amounts to new income up to a certain point, which is the point where the maximum value of the asset has been reached; any further addition of factors of production will do nothing to increase the value.
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Incurable Depreciation
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Elements of a structure which are neither physically possible nor economically feasible to correct.
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Independent Contractor
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One whose time and effort are regulated by the individual and are not under the direction or control of others.
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Index Lease
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The rental is tied to some commonly agreed to price index such as the Consumer Price Index or the Wholesale Price Index.
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Inheritable
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An interest in land which can be passed to a relative upon the death of the owner.
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Installment Land Contract
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See Land Contract.
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Interest
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(1) the sum paid for the use of money (2) the degree of rights in the ownership of land.
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Interest Rate
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The cost of using money expressed as a percent per period.
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Intestate
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Dying without a will.
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Invalid
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Without legal force.
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Irrevocable
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Not capable of being changed or terminated.
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Joint Tenancy
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A form of concurrent ownership, which occurs when two or more persons own a single estate in land, with right of survivorship. Must have equal shares, right to partition.
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Joint Venture
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An agreement by two or more individuals or entities to engage in a single project or undertaking.
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Judgment Lien
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The charge upon the land of a debtor, resulting from the decree of a court, entered in the judgment docket. Lawsuit
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Junior Lien
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An encumbrance, second in priority, to a previously recorded lien or to a lien to which the encumbrance has been subordinated.
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Land Contract
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The seller accepts a down payment on a parcel of land but title to the property does not pass until the last principal payment has been received. This is referred to as an installment sales contract or a contract for a deed.
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Landlocked
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Completely shut in by adjoining parcels of land with no access to public roads.
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Latent Defect
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A defect which cannot be discovered by ordinary inspection.
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Lease
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An agreement by which a landlord gives the right to a tenant to use, and to have exclusive possession, but not ownership of realty, for a specified period of time, in consideration for the payment of rent.
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Lease Purchase Agreement
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An arrangement whereby part of the rent payment is applied to the purchase price, and when the prearranged total amount has been paid, title is transferred.
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Leasehold
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The interest that the tenant has created by a lease.
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Legal Description
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A written description of a parcel of land which locates it precisely and will hold up in court. (Does not include address.)
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Less than Freehold Estate
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Estates in possession generally referred to as leaseholds. Considered to exist for a definite period of time, or successive periods, of time until terminated by notice; also know as non-freehold estates.
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Lessee
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Tenant.
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Lessor
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Landlord.
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Leverage
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Using borrowed capital to finance the purchase of real estate or other assets. (No money down)
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License
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A personal privilege to go upon the land of another; not considered an interest in land. Permission only to use.
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Lien
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A legally recognized right to enforce a claim or charge on the property of another for payment of some debt, duty or obligation.
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Lien Theory State
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The mortgage merely creates a lien right on the mortgagee with the mortgagor retaining the title.
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Life Estate
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An interest which only lasts for the term of a life, or lives, of one or more persons. Death terminates.
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Life Estate Pur Autre Vie
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A life estate in one person with another person serving as the measuring life.
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Life Tenant
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The holder of a life estate.
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Limited Partnership
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An entity with a general partner, and one or more passive investors, called limited partners.
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Liquidated Damages
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An agreed-to sum, which will be paid if the contract is breached.
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Liquidity
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The ease with which an asset may be converted into cash.
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Lis Pendens
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A notice filed for he purpose of serving constructive notice that title, or some matter involving particular real property, is in litigation.
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Listing Contract
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An employment agreement between an owner and broker defining the duties and rights of both parties. (Unilateral contract)
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Loan-to-Value Ratio
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The relationship between the amount borrowed and the appraised value of the property. (Purchase price 100,000-Loan 80,000-LTV 20,000)
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Lot and Block
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A method of land description frequently used after land has been subdivided into building lots; also referred to as the recorded plat method. (Must have a plat map to find the property)
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Loyalty
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The duty owed by an agent, to avoid conflicts of interest or any activity which is detrimental to a principal.
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Management Agreement
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An employment contract between the owner of real estate and a property management firm that agrees to oversee the management of the property.
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Market
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economic function of bringing buyers and sellers together through the price mechanism.
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Market Data Approach
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A means of estimating value by comparing similar properties. Used when there is an active market and where comparables can be identified. Also called comparable sales approach.
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Market Value
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The price at which a willing buyer and a willing seller will agree upon, where neither is under any undue pressure, and both are negotiating at arms length with complete knowledge of the market.
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Marketable Title
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One which is free from reasonable doubts or objections, and which the courts would compel a purchaser to accept under the terms of a sales contract.
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Master Plan
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A program for the future development of a community which serves as the guideline for capital expenditures.
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Mechanic's Lien
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A statutory lien levied on property by a person who is wrongfully not compensated after providing labor (mechanic) or material (material-man) for the improvement to land. (Only on the specific property where the work was complete.) Not on personal property.
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Metes and Bounds
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A method of land description which involves identifying distances and directions and makes use of both the physical boundaries and measurements of the land.
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Mill
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A mill is equal to one-tenth of one cent and is used to state the property tax rate. (.001)
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Millage Rate
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A tax rate stated in tenths of a cent. For example, a millage rate of 150 mills on property assessed at $100,000 would result in a property tax of$1,500 ($100,000 x .150).
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Minor
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An infant; one who has not attained majority in a state and does not have legal capacity to be bound by most contracts. (Voidable contracts)
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Misrepresentation
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An innocent or negligent mis-statement of a material fact, detrimentally relied upon by the other party.
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Month-to-Month Tenancy
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A lease which has a term of one month but renewable for successive months at the option of both parties.
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Monument
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Physical evidence of a point- of- beginning established by surveyors for use in locating parcels of land.
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Mortgage
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A legal document used to secure the performance of an obligation, in which the borrower or mortgagor agrees to pledge property to secure the debt represented by the promissory note. (A contract).
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Mortgage Banker
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A financial middleman who, in addition to bringing the borrower and the lender together, makes loans, packages them, and sells the packages to both primary and secondary investors. Also services loans.
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Mortgage Broker
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A person who brings together the user of capital (borrower) and the supplier of capital (lender). For this service, a finder's fee is usually paid by the borrower.
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Mortgagee
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A lender who receives a pledge of property to secure a debt.
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Mortgagor
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A borrower who pledges property through a mortgage to secure a debt.
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Multiple Listing
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Marketing service in which many brokers pool all of their listings and establish procedures for sharing commissions.
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Mutual Assent
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An offer and acceptance which together form the terms of a contract.
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Net Income, Net Operating Income
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Gross income less all operating expenses. Is used in the income approach to value.
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Net Listing
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The broker agrees to sell the property in order to achieve a net price to the owner, and anything which is received above the net price is the broker's commission. A net listing is prohibited by the licensing law in many states.
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Non-resident
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One whose primary residence is in another state.
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Nonconforming Use
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A pre-existing use of land which does not conform to the zoning ordinance but which may legally remain.
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Notary Public
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A person with the authority to take oaths and acknowledgments.
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Note
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A signed instrument acknowledging the existence of a debt and the promise to pay.
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Novation
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Occurs when the person in a contract, to whom the duty was owed, expressly agrees to substitute the delegate, or new obligor, for a consideration, and agrees to discharge the old obligor from the obligations under the contract. For example, loan assumptions.
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Null and Void
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Invalid and unenforceable.
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Obsolescence
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A loss in value because of a decrease in the usefulness of property due to decay, changes in technology or people's behavior patterns and taste.
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Offer and Acceptance
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The necessary elements of mutual assent; for example, an agreement of one party to buy and another party to sell.
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Open Listing
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An agreement between an owner and many brokers. If a broker produces a ready willing, and able buyer, a commission is due. However, the owner still has the right to sell his/her property and is not obligated to pay a commission to anyone.
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Open-end Mortgage
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A loan containing a clause which allows the mortgagor to borrow additional money without rewriting the mortgage.
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Option
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A right which is given for consideration to a party (optionee) by a property owner (optionor) to purchase or lease property within a specified time, at a specified price and terms. An option is irrevocable by the optionee and will not be extinguished by death or insanity of either party.
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Optionee
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The holder of the option. Buyer
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Optionor
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The seller of the option.
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Ordinance
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A statute enacted by the legislative branch of a local government.
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Outbuilding
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An accessory structure other than the main structure on land.
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Owner's Title Policy
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A policy insuring the owner of real estate against certain defects of title.
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Ownership
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The right to hold, possess, control and dispose of property.
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Ownership in Severalty
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Individual ownership.
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