Real Estate National Exam

Front 1

Reduce, decrease. in reference to decrease in assessed value of ad valorem tax

Back 1

abate

Front 2

a summary in chronological order of the essential provision of every recorded document pertaining to a particular parcel of lend(liens, encumbrances, chain of tittle, transfers)

Back 2

abstract of title

Front 3

what does an abstract of title not include and not guarantee?

Back 3

Encroachments, forgeries and does not guarantee clear title

Front 4

a term that includes any method of depreciation that is GREATER than straight-line depreciation

Back 4

accelerated depreciation

Front 5

a provision of a promissory note or mortgage where, upon the happening of a certain event the ENTIRE amount of the unpaid loan balance becomes due

Back 5

acceleration clause

Front 6

addition of soil(alluvium) to property by the gradual operation of natural causes(river,ocean frontage), the added land becomes the property of the owner on whose land it is deposited

Back 6

Accretion

Front 7

a written declaration by a person executing an instrument, given before an officer authorized to give an oath(notary public), stating that the execution of of his own volition(grantor of a deed)

Back 7

Acknowledgement

Front 8

an acre measures______________ square fee

Back 8

43,560 sq feet

Front 9

things you know because of your own sense: eyes, ears, etc

Back 9

actual notice

Front 10

type of financing available for real estate mortgages on property through which the APR charged will differ from year to year according to terms specified by the lender and authorized by the Federal Reserve banking system

Back 10

Adjustable Rate Mortgage(arm)

Front 11

a latin phrase meaning "according to vauation"-a tax to be paid based upon a value set by the authorities

Back 11

ad valorem tax

Front 12

the open, notorious, hostile, and uniterrupted possession of the propterty of another under a claim or color of title of 21 years after which time the adverse possessor may obtain title to the property

Back 12

adverse possession

Front 13

a sworn statement that title is good

Back 13

affidavit of title

Front 14

the name of the relationship between one person(principal) and another(agent) where the agent is given the right to act on behalf of the prinicpal in business dealings-creates a fiduciary duton the part of the agent to act in GOOD faith and loyalty toward the principal

Back 14

agency

Front 15

the disclosure of the relationship in which one party(agent) acts for or represents another(principal) under the authority of the latter

Back 15

agency disclosure

Front 16

Latin,”let the buyer beware " The buyer must examine the goods or property and buy at his or her own risk

Back 16

CAVEATOR EMPTOR

Front 17

A legal instrument used by a mortgagee to stop the mortgage on a certain date where the mortgagor agrees that the mortgage balance is correct, after which date the mortgagee has no defense

Back 17

CERTIFICATE OF NO DEFENSE

Front 18

A certificate issued to a buyer at a judicial sale (foreclosure action) that entitles the buyer to a deed upon confirmation of the sale by the court if the land is not redeemed during the redemption period

Back 18

CERTIFICATE OF SALE

Front 19

Also known in some states as an “opinion letter” by a lawyer who has examined an abstract, giving an opinion stating that title is vested in a particular individual.

Back 19

CERTIFICATE OF TITLE

Front 20

Successive conveyances affecting a particular parcel of land, arranged consecutively, from the government or original source of title down to the present holder.

Back 20

CHAIN OF TITLE

Front 21

Personal property that is tangible. Goods or other items of property, moveable or immovable, which are not real property, e.g., showcase firmly attached in a store. With rented property, such as a store, chattels are personal property of the renter and as such are also considered trade fixtures that may be removed when the lease expires. (Personal property remains as chattel unless annexed to the real property in such a way so that the item becomes personal property; e.g., a fence. Compare Trade Fixtures.)

Back 21

CHATTELS

Front 22

A mortgage deed that creates a lien on personal property

Back 22

CHATTEL MORTGAGE

Front 23

A valid encumbrance, e.g., mortgage or judgment, affecting title to realty.

Back 23

CLOUD ON TITLE

Front 24

A broker in a commercial transaction has an automatic lien against a property that’s the subject of a contract, for the contracted commission amount, when the contract is fulfilled and the broker files a lien affidavit in the recorder’s office in the county where the property is located. (Residential real estate brokers must sue in court to enforce a commission payment.)

Back 24

COMMERCIAL BROKER LIEN LAW

Front 25

To mix funds held in trust with other funds. For example: A broker mixes deposits with his funds by putting the deposits in his general account

Back 25

COMMINGLING

Front 26

The broker’s professional fee. Usually a percentage of the sales price. The fee is an amount agreed upon between the principal and the broker.

Back 26

COMMISSION

Front 27

The area owned together by all the owners of a condominium project. A condominium owner will own their own particular unit in fee simple and the common area jointly with the other owners. The common area usually has liability insurance paid by the Condominium Owners Association

Back 27

COMMON AREA

Front 28

Property accumulated by husband and wife by the efforts of either during their marriage. Community property laws provide that each spouse has an equal interest in the property so acquired. Community property is not recognized in all states.

Back 28

COMMUNITY PROPERTY

Front 29

A judicial or administrative procedure to exercise the right of eminent domain to take private property for public use and justly compensate the owner

Back 29

CONDEMNATION

Front 30

The system of ownership in fee simple title to designated areas of air space plus a percentage of ownership of common elements in the property. The air space consists of the area between the walls, floor, and ceiling area.

Back 30

CONDOMINIUM

Front 31

Something of value given to another to compensate them for entering into a contract

Back 31

CONSIDERATION

Front 32

Interim financing used during construction of a building followed by long-term financing called a “takeout loan.” Loan proceeds are made in installment payments as completion of the improvements occurs

Back 32

CONSTRUCTION LOAN

Front 33

Notice given by publication in a newspaper, recording or other method. There need not be actual notice by such publication

Back 33

CONSTRUCTIVE NOTICE

Front 34

An agreement that the law will enforce. The elements of a contract are mutual assent (offer and acceptance), consideration, competent parties, legal subject matter, and sometimes that the contract be in writing if required by the Statute of Frauds.

Back 34

CONTRACT

Front 35

A real estate installment sales contract commonly referred to as a land contract

Back 35

CONTRACT FOR DEED

Front 36

A loan that is not guaranteed or insured by a government agency

Back 36

CONVENTIONAL LOAN

Front 37

Transfer of title to land. Includes most instruments by which an interest in real estate is created, mortgaged, or assigned

Back 37

CONVEYANCE

Front 38

A state tax imposed on the transfer or conveyance of realty or any realty interest by means of a deed, lease, sublease, assignment, contract for deed or similar instrument

Back 38

CONVERYANCE TAX

Front 39

The right to occupy property is obtained through a proprietary lease by purchasing stock in a corporation that owns the property. Owner has interest in the entire building.

Back 39

COOPERATIVE

Front 40

A method of appraisal based on replacement cost minus depreciation plus land value.

Back 40

COST APPROACH

Front 41

A new and contrary offer made as a reply to an offer received from another

Back 41

COUNTEROFFER

Front 42

A promise or agreement of possession under a legal right. One of the five warranties in a general warranty deed

Back 42

COVENANT OF SEISIN

Front 43

The express promises of two or more parties in writing, the breach of which would entitle a person to damages

Back 43

COVENANTS

Front 44

The fractional interest of a husband in the estate of his wife at the time of her death.This term not used in all states.

Back 44

COURTESTY

Front 45

The amount of money owing on a note or a promise to pay

Back 45

DEBT

Front 46

The amount of money paid in regular intervals to reduce down the balance owed on a debt. The payment normally has to do with an amortized loan. Thus, it covers principal and interest

Back 46

DEBT SERVICE

Front 47

The transferring of real property by a private owner to a public agency (usually occurs from a builder to a city for construction of new streets in a subdivision).

Back 47

DEDICATION

Front 48

A written instrument transferring the grantor’s ownership of or interest in real property, if any

Back 48

DEED

Front 49

When the deed to a property is given by a borrower to the lender to satisfy the debt and avoid foreclosure

Back 49

DEED IN LIEU OF FORECLOSURE

Front 50

An instrument used to transfer title from a trustee to the equitable owner of real estate when title is held as collateral security for a debt, most commonly used upon payment in full of a deed of trust

Back 50

DEED OF RECONVERYANCE

Front 51

Limitations upon the use of property contained in the deed as a means of controlling the quality or character of a subdivision or specific piece of property.

Back 51

DEED RESTRICITIONS

Front 52

An instrument used in many states in place of a mortgage. Property is transferred to a trustee by the borrower (trustor) in favor of the lender (beneficiary) and reconveyed upon payment in full. (NOT used in all states, but still may appear on the test.)

Back 52

DEED OF TRUST

Front 53

A clause used to defeat or cancel a certain right upon the happening of a specific event (e.g., upon final payment, words of grant in a mortgage are void and the mortgage is thereby cancelled and title is re-vested to mortgagor).

Back 53

DEFESANCE CLAUSE

Front 54

The mortgage debt that remains due and payable by the borrower after a sheriff’s sale of property. The judgment is actually for the full amount of the unpaid mortgage debt, but the foreclosure sale proceeds are deducted from the amount due.

Back 54

DEFICIENCY JUDGMENT

Front 55

Act of transferring ownership in real property by documents recognized by law. Grantor delivers a deed to the grantee with the intention of giving up all rights to the property

Back 55

DELIVERY

Front 56

1. The decrease in value to real property improvements caused by deterioration or obsolescence; 2. A loss in value as an accounting procedure for use as a tax deduction for income tax purposes

Back 56

DEPRECIATION

Front 57

Administrative process where civil rights complaints are heard immediately by the Real Estate Commission, instead of using a hearing examiner.

Back 57

DIRECT COMPLAINT PROCEDURES

Front 58

The document commonly referred to under the truth and lending laws (Regulation Z) required to be given to a loan applicant to disclose all of the terms of his loan

Back 58

DISCLOSURE STATEMENT

Front 59

An added loan fee charged by a lender to make the yield on a lower-than- market interest rate loan competitive with other higher interest conventional loans.

Back 59

DISCOUNT POINTS

Front 60

Treating persons differently

Back 60

DISCRIMINATION

Front 61

The movement of money out of savings accounts into higher yield investments such as corporate and government instruments.

Back 61

DISINTERMEDIATION

Front 62

In some states, a life estate that is a one-third estate in real property which the spouse is entitled to claim upon the death of the other spouse on land which the late spouse sold during their marriage.

Back 62

DOWER

Front 63

Representing both parties to a transaction.

Back 63

DUAL AGENCY

Front 64

Money given by a buyer upon signing a sale contract showing the buyer’s intention to carry out the terms

Back 64

EARNEST MONEY DEPOSIT

Front 65

Right acquired by one person to use the land of another for a specific purpose

Back 65

EASEMENT

Front 66

The right acquired by the owner of one parcel of land to use the adjacent land of another for a specific purpose.There must be two tracts of land. One tract is called the dominant tenant (the tract that benefits from the easement). The other tract is called the servient tenant (the tract that is burdened by the easement).

Back 66

EASEMENT APPURTENANT

Front 67

An easement created by operation of law (not express grant or reservation) when land is divided, if there is a long-standing, apparent use that is reasonably necessary for enjoyment of dominant tenement

Back 67

EASEMENT BY IMPLICATION

Front 68

An easement given to a landlocked owner by the court system to provide a way of ingress and egress for the landlocked land. Remember: Ingress vs. Egress, and also landlocked land example

Back 68

EASEMENT BY NECESSITY

Front 69

A means of acquiring title by long-continued use

Back 69

EASEMENT BY PRESCRIPTION

Front 70

An easement created by law for the good of the public, i.e., utility easement. Remember there is no dominant tenement in an easement in gross.

Back 70

EASEMENT IN GROSS

Front 71

A loss of value due to a change in external factors of a piece of real property, e.g., a steel mill is being built next to your home

Back 71

ECONOMIC OBSOLESCENCE

Front 72

Farm Crops. Tenant farmers’ crops may be removed if owner sells the land.

Back 72

EMBLEMENTS

Front 73

The power or right of governmental bodies to take private real estate for public use upon payment of an equitable compensation

Back 73

EMINENT DOMAIN

Front 74

The unauthorized intrusion of a fixture or real property improvement onto the property of another, e.g., the roof of a building that extends over the property line into a neighbor’s property

Back 74

ENCROACHMENT

Front 75

Any claim, lien, charge or liability that affects or limits the fee simple title to real property, i.e., easement, liens, etc

Back 75

ENCUMBRANCE

Front 76

Any interest in real property other than legal title, that a court will enforce and protect, e.g., the interest held by a vendee under a land contract, a lease, an easement, etc.

Back 76

EQUITABLE TITLE

Front 77

The amount of an owner’s interest in a parcel of real estate which is the fair market value of the real estate in excess of the mortgaged indebtedness.

Back 77

EQUITY

Front 78

Mortgage or lease clause allowing a holder to vary the interest rate.

Back 78

ESCALATION CLAUSE

Front 79

Where real property passes to the state when the owner of such property dies without a will and with no heirs

Back 79

ESCHEAT

Front 80

The process by which mo legal documents are deposited with a third, disinterested party for future delivery so that several acts can occur at the same time and so that all parties to a transaction will have their interests protected.

Back 80

ESCROW

Front 81

An estate or interest in land for a definite number of years, months, etc., or expiring on a certain date

Back 81

ESTATE FOR YEARS

Front 82

A statement that prevents its issuer from later asserting different facts.

Back 82

ESTOPPEL CERTIFICATE

Front 83

A court action where a tenant loses possession of leased premises by act of a landlord because of a wrongful act by the tenant

Back 83

EVICTION

Front 84

A listing agreement where the broker is given the exclusive right to sell property but reserves to the owner the right to sell the property himself without payment of any commission.

Back 84

EXCLUSIVE AGENCY LISTING

Front 85

A listing agreement where the broker is entitled to collect a sales commission regardless of who sells the property including the owner of the property himself

Back 85

EXCLUSIVE RIGHT TO SELL LISTING

Front 86

A contract that has been performed by the parties. In the vernacular, people use “executed” to mean “signed:’ but this is not the legal definition

Back 86

EXECUTED

Front 87

A person appointed by a person in his will to carry out the terms of the will and to dispose of his property pursuant to the will provisions

Back 87

EXECUTOR

Front 88

A valid contract which has not been fully performed. Most real estate contracts are good examples.

Back 88

EXECUTORY CONTRACT

Front 89

an agency of the federal government created in 1934 to improve housing standards, provide a home, financing system to insure home mortgage and credit, and stabilize the mortgage market

Back 89

FHA

Front 90

Loans insured by an agency of the federal government

Back 90

FHA LOAN

Front 91

An entity that provides its own funds for mortgage financing

Back 91

MORTGAGE BANKER

Front 92

The lender who receives and holds a mortgage as security for a debt

Back 92

MORTGAGEE

Front 93

The document, promising to pay back money according to specific terms. The note may not be recorded, but the mortgage deed is recorded, The note is the promise to pay; the mortgage deed is the security for that promise.

Back 93

MORTGAGE NOTE

Front 94

One who gives a mortgage on his property to a lender, or mortgagee, as security for a loan or performance of an obligation; a borrower.

Back 94

MORTGAGOR

Front 95

A method of marketing real estate whereby other brokers in an organization are permitted to show and sell property listed with another broker

Back 95

MULTIPLE LISTING

Front 96

A service provided by a local board of REALTORS’ that puts homes for sale into a listing book where all members can show the property.

Back 96

MULTIPLE LISTING SERVICE(MLS)

Front 97

Also known as”aiternative MLs

Back 97

MLS PLUS

Front 98

A lease agreement that requires the lessee (tenant) to pay taxes, insurance, repairs, operating expenses, and other costs of property

Back 98

NET LEASE

Front 99

A listing contract where the seller receives a sum he specifies from the full proceeds of the sale. The broker receives the amount remaining as her commission

Back 99

NET LISTING

Front 100

The use of a structure that, while once lawful, no longer complies with zoning limitations.

Back 100

NONCONFORMING USES

Front 101

An executed document acknowledging debt by the person(s) signing it. In real estate, a mortgage deed is usually executed at the same time as security for the note

Back 101

NOTE

Front 102

Substituting a new obligation for an old one or substituting a new contract for an existing contract, thus relieving the original obligor from any further liabilities.

Back 102

NOVATION

Front 103

A loss of value due to a decrease in the usefulness of property caused by decay, changes in technology,people’s behavior patterns and tastes, or environmental changes, e.g., economic (external) obsolescence, functional obsolescence.

Back 103

OBSOLESCENCE

Front 104

A mortgage that serves the dual purpose of being security for both the original loan and other future loans. Most mortgages are open-ended today

Back 104

OPEN-ENDED MORTGAGE

Front 105

The prevention or elimination of discrimination in housing based upon race, sex, color, religion, national origin, handicap, or familial status.

Back 105

OPEN HOUSING

Front 106

A listing agreement where one or more brokers are permitted to show a listed property. Only the broker who sells the property is entitled to a commission.

Back 106

OPEN LISTING

Front 107

An agreement for which payment is made granting the exclusive right to buy or lease property at a given price within a stated period of time and binding the seller to hold an offer open for a stated period of time. A Unilateral Contract

Back 107

OPTION(CONTRACT)

Front 108

Payment made after it is due. Interest is said to be paid in arrears since it is paid the day of payment rather than in advance, as is rent. Property taxes are also usually paid in arrears.

Back 108

PAID IN ARREARS

Front 109

See BLOCKBUSTING

Back 109

PANIC PEDDLING

Front 110

See BLOCKBUSTING

Back 110

PANIC SELLING

Front 111

A rule of law that
limits the terms of a contract to those that are written within it. No oral evidence is permitted at time of trial concerning terms not in the written agreement

Back 111

PAROLE EVIDENCE RULE

Front 112

The Part Performance Doctrine states that if one of the parties substantially performs his part of the agreement, then the other party may not avoid the contract just because it was not in writing.

Back 112

PARTIAL PERFORMANCE

Front 113

A lawsuit in which unlawful discrimination is sought to be proven by evidence of patterns of racial discrimination and the practices of individuals charged with violations. Suits are investigated by the Justice Department

Back 113

PATTERN AND PRACTICE SUIT

Front 114

The person to whom a debt instrument (e.g., check or promissory note) is made payable to; also known as the receiver

Back 114

PAYEE

Front 115

The payment-in-full of an existing loan or other lien

Back 115

PAYOFF

Front 116

The sender of the payment

Back 116

PAYOR

Front 117

“by heads One who inherits property under a will, or pursuant to law, does so as an individual, as opposed to inheriting a divided share as one of several representatives of one in whose stead they take.

Back 117

PER CAPITA

Front 118

,”by lineage.”A distribution under a will, or pursuant to law, where children share what their deceased parent would have inherited if the parent had lived

Back 118

PER STIRPES

Front 119

A lease where the tenant’s rent is based upon the monthly or yearly gross receipts made on the premises, e.g., retail lease.

Back 119

PERCENTAGE LEASE

Front 120

A leasehold interest that continues from period to period, e.g., month to month, year to year.

Back 120

PERIODIC TENANCY

Front 121

Property that is not real property, but is tangible and moveable; personal chattels, e.g., clothes, furniture, portable dishwashers, microwave ovens, light bulbs.

Back 121

PERSONAL PROPERTY

Front 122

A map recorded at the county recorder’s office showing how a parcel of land is divided into lots. A map used to show a new subdivision

Back 122

PLAT (PLAT MAP)

Front 123

A term for a percentage of the loan amount that the lender charges as a fee for making the loan, lowering the interest rate, or other reason. One point is equal to one percent of the principal loan amount.

Back 123

POINT

Front 124

Right of the government to pass legislation protecting the safety and welfare of the public.

Back 124

POLICE POWER

Front 125

A legal instrument giving a person the authority to act for another, as attorney-in-fact, not necessarily an attorney-at-law

Back 125

POWER OF ATTORNEY

Front 126

An easement created by statute or court action because someone used another’s property openly and continuously over a period of time. Thus, even though not a written easement, one was created. Do not confuse with adverse possession.

Back 126

PRESCRIPTION EASEMENT

Front 127

Two or more brokers agreeing to set commission rates. This is illegal and is in violation of the Sherman Antitrust Act.

Back 127

PRICE FIXING

Front 128

. The person who gives authority to an agent or attorney, thereby creating afiduciary relationship; 2.The amount of a debt, excluding interest due

Back 128

PRINCIPAL

Front 129

The effort that brings about the desired result. An unbroken chain of events that results in the sale of property. Under an open listing, the broker who is the procuring cause of the sale receives the commission.

Back 129

PROCURING CAUSE

Front 130

The division of ongoing expenses and income items between the buyer and seller proportionately to the time of use, or the date of closing

Back 130

PRORATION

Front 131

Exaggerated or superlative comments or opinions, e.g.,”This is the most beautiful home in the neighborhood!”

Back 131

PUFFING

Front 132

A mortgage given by the buyer to the seller as a portion of, or the entire purchase price, of the property. Here the seller is acting as the lender.

Back 132

PURCHASE MONEY MORTGAGE

Front 133

A deed that grants any interest in property which the grantor may have. The grantee takes the property “as is” because the deed contains the operative words “release, remiss, or forever quit” and does not warrant title or possession.”l will quit claiming all interest in the property, if I have any.” Used to release dower or clear clouds on title.

Back 133

QUITCLAIM DEED

Front 134

Action by a court to remove a cloud or claim that has been placed on title to property.

Back 134

QUIET TITLE ACTION

Front 135

See STEERING

Back 135

RACIAL STEERING

Front 136

Land and anything permanently affixed to the land. Synonymous with “real property:’

Back 136

REAL ESTATE

Front 137

Established in lieu of a security bond covering each licensee. In Ohio, the maximum amount an injured claimant may recover is $40,000 per licensee involved in a transaction.

Back 137

REAL ESTATE RECOVERY SPEACIAL ACCOUNT

Front 138

The land and anything permanently attached, such as buildings, fences, and fixtures, including wall-to-wall carpeting, dishwasher, sump pump.

Back 138

REAL PROPERTY

Front 139

” A trade name for a member of the National Association of REALTORS” and its state and local affiliates. All brokers and salespersons are not REALTORS” any more than all copiers are Xerox”.

Back 139

REALTOR

Front 140

The return of monies invested in property, through reduction of the loan
amount and/or appreciation. Recapture rate is equal to the rate of depreciation that is allowed for one year.

Back 140

RECAPTURE

Front 141

Filing or entering a legal instrument into the county recorder’s office, which causes it to become a public record giving constructive notice of its existence to the world.

Back 141

RECORDING

Front 142

Federal government system of accurate land survey and description using base lines and principal meridians. There are 36 Sections in a township

Back 142

RECTANGULAR SURVEY

Front 143

The right of a landowner to reclaim property after foreclosure.

Back 143

REDEMPTION,RIGHT OF

Front 144

A right of a borrower who has defaulted on a mortgage note to redeem his title by paying entire debt before the foreclosure sale.

Back 144

REDEMPTION,EQUITABLE RIGHT OF

Front 145

A certificate used to reclaim a piece of real estate by paying off the debt owed on the property along with any court fees, This procedure is done after a foreclosure sale has been conducted and during the redemption period.

Back 145

REDEMPTION CERTIFICATE

Front 146

right of a borrower who has defaulted on a mortgage note to redeem his title by paying entire debt after the foreclosure sale. Statutory period can be as long as 1 year. Not used in all states.

Back 146

REDEMPTION,STATUTORY RIGHT OF

Front 147

Joint ventures, usually in the form of a limited partnership, through which real estate is purchased. A person must have a securities license to sell REITS. REITs avoid double taxation as they are taxed to the beneficiary.

Back 147

REITs(RE,EST,INV,TRS)

Front 148

A federal statute requiring disclosure of certain costs and prohibits certain acts in the sale of residential (one- to four-family) improved property which is to be financed by a federally insured lender.

Back 148

RESPA(RE,EST,ST,PRD,AC)

Front 149

The illegal process of a lender denying loans in certain areas of a community because of race, color, creed, etc. An analogous situation exists whenever insurance companies refuse to sell insurance to someone for reasons based on race. Any decision made that is not based on buyers’ qualifications.

Back 149

REDLINING

Front 150

The implementing provision of the Consumer Sales Practices Act enacted in 1969, which requires disclosure of the cost of credit and various terms available for credit to borrowers and consumers seeking credit. This is a Federal Statute, regulated by HUD, which is not part of any other sections of HUD. Requires disclosure of interest rates as an annual percentage rate (APR) for all consumer loans.

Back 150

REGULATION Z

Front 151

The discharge or relinquishment of a right, claim, or privilege.

Back 151

RELEASE

Front 152

A document signed(and usually recorded) by a lending institution when a mortgage has been satisfied in full.

Back 152

RELEASE OF MORTGAGE

Front 153

An interest in land whereby a person receives an interest in real estate upon the death of another, e.g., dad conveys a life estate to son “A7 and states that upon the son’s death, the estate will go to daughter”B Daughter “B” has received a remainder.

Back 153

REMAINDER

Front 154

The one entitled to the remainder.

Back 154

REMAINDERMAN

Front 155

The annulment of a contract so that the parties to it are put in a position as though the contract never existed, i.e., earnest money is returned to buyer.

Back 155

RESCISSION

Front 156

The interest in a life estate that reverts to a grantor or grantor’s heirs if no remainderman is named.

Back 156

REVERSIONARY INTEREST

Front 157

The characteristic of a joint tenancy by which the surviving joint tenant (owner) automatically takes all rights, title, and interest of the deceased joint tenant.

Back 157

RIGHT OF SURVIVORSHIP

Front 158

A method for a seller to free capital for his business expansion by selling his property to a buyer who has agreed to lease it back to him.

Back 158

SALE AND LEASEBACK

Front 159

A measure of land equal to one square mile, 640 acres, 1 of a township.

Back 159

SECTION

Front 160

The federal agency that regulates the sale of interstate real estate securities.

Back 160

SECURITIES and EXCHANGE COMMISSION

Front 161

The taking of custody of one’s personal or real property to compel compliance with a court order.

Back 161

SEQUESTRATION

Front 162

A term used in local zoning ordinances that represents the distance between lot lines and improvements.

Back 162

SETBACK

Front 163

The individual, normally working for the title company, who closes real estate loans. The settlement agent is required by FHA guidelines to sign the closing documents along with the seller and the buyer.

Back 163

SETTLEMENT AGENT

Front 164

Property held by one person or entity (corporation). Also called sole ownership.

Back 164

SEVERALTY

Front 165

Name of the federal antitrust law that makes it illegal for brokers to set uniform commission rates (price fixing), and prohibits other acts of collusion.

Back 165

SHERMAN ANTITRUST ACT

Front 166

Place where something exists; the personal preference of persons for one area over another, not necessarily based on objective facts of knowledge. Refers to the economic attributes (value, area of preference, etc.) that location gives to a particular parcel of land.

Back 166

SITUS

Front 167

A special agency authorizes the agent to represent the principal in a specific activity or transaction, e.g., a real estate broker acting as an agent for a seller.

Back 167

SPECIAL AGENCY

Front 168

A deed by which the grantor covenants or guarantees the title from the time he received it until it is conveyed to the grantee. The operative words of such a deed are “by, through, or under the grantor, but not otherwise.”This deed does not have all of the five warranties of a general warranty deed.

Back 168

SPECIAL WARRANTY DEED

Front 169

A lien affecting or attaching only to a certain specific parcel of land or piece of property, e.g., mortgage, mechanic’s, and ad valorem taxes.

Back 169

SPECIFIC LIEN

Front 170

A legal action available to a buyer to compel the performance of the terms of an agreement, such as the sale of a home.

Back 170

SPECIFIC PERFORMANCE

Front 171

A law requiring that certain instruments be in writing to be enforceable, e.g., deed, lease, option, but not a listing agreement. A listing agreement must be in writing according to another statute.

Back 171

STATUTE OF FRAUDS

Front 172

See REDEMPTION

Back 172

STATUTORY REDEMPTION

Front 173

The illegal practice of trying to influence a buyer’s choice of housing by racial, religious, ethnic, national origin, ancestry factors, etc. This includes showing only certain neighborhoods, “slanting”

property descriptions, and downgrading non-integrated neighborhoods in an effort to influence minority buyers. This may also include a sales associate steering prospective clients to a broker or sales associate of their race, color, or national origin.

Back 173

STEERING

Front 174

A loan where each payment is different, consisting of a fixed amount plus interest on the remaining balance.

Back 174

STRAIGHT LINE AMORTIZED LOAN

Front 175

A method of replacing the capital investment of income property, by reducing the value of the property by a set amount annually from the income, over the economic life of the property.

Back 175

STRAIGHT-LINE DEPRECIATION

Front 176

An agent of an agent; a person that an agent has delegated authority to, so that the subagent can assist in carrying out the principal’s order.

Back 176

SUBAGENT

Front 177

A written agreement between holders of liens on
mortgages, judgments, and other liens.

Back 177

SUBORDINATION AGREEMENT

Front 178

The substitution of one creditor for another, with the substituted person succeeding to the legal rights and claims of the original claimant.

Back 178

SUBROGATION

Front 179

The transfer of real property by will or the law of descent and distribution, as compared to transfer by a grant of the deed or any other form of purchase or transfer.

Back 179

SUCCESSION

Front 180

The procedure that determines the shape, area, and position of a parcel of land by locating its boundaries, and by which a buyer may be sure a property has no encroachment.

Back 180

SURVEY

Front 181

One of the four powers of the government, used as a means to collect revenue and implement policies. The power of government to tax, among other things, real property.

Back 181

TAXATION

Front 182

Joint tenancy with right of survivorship between a husband and wife.

Back 182

TENANCY BY THE ENTIRETY

Front 183

The interest in real property held by a tenant or mortgagor who remains in possession of leased premises after his right of possession has expired and the landlord has declared he does not want the tenant to remain.

Back 183

TENANCY AT SUFFERANCE

Front 184

The interest in real property held by a tenant or mortgagor in possession with the permission of the owner for a term that is not specified.

Back 184

TENANCY AT WILL

Front 185

The interest held by two or more persons in property who hold an undivided interest and whose interests need not be equaL There’s no right of survivorship between tenants in common.

Back 185

TENANTS IN COMMON

Front 186

A loan whereby interest only is paid in each installment and, at the end of the loan period, the principal is due in full.

Back 186

TERM LOAN

Front 187

One who makes a will; one who dies leaving a will.

Back 187

TESTATOR

Front 188

Legal phrase meaning that the amount of time stated in a con-tract must be strictly adhered to in order not to breach the contract. The parties specifically contemplate a punctual performance and precise time for completion of the contract.

Back 188

TIME IS OF THE ESSENCE

Front 189

An undivided interest in real estate for a period of time. A relatively new type ofownership of real estate used in resort areas. Purchasers buy the use of a property for a certain period of time in each year. Expenses are shared equally among the owners.

Back 189

TIMESHARE

Front 190

Evidence of legal ownership in real estate. Title is a concept, not a document.

Back 190

TITLE

Front 191

A contract whereby a title insurance company indemnifies the owner that title is free of defects and hidden risks such as forgeries. This does not guarantee you will not lose ownership, only that you would be compensated under terms of the policy.

Back 191

TITLE INSURANCE

Front 192

A legal system of land registration, using signature cards, to verify land ownership and determine title status, instead of being recorded (not used in all states).

Back 192

TORRENS SYSTEM

Front 193

Items of personal property annexed to leased property, which are necessary to the carrying on of a trade or business and which are removable by the tenant prior to expiration of the lease, e.g., pizza ovens, bowling lanes.

Back 193

TRADE FIXTURE

Front 194

A non-interest bearing bank account, separate from a real estate broker’s personal and business accounts, used to segregate trust funds from the broker’s own funds.

Back 194

TRUST ACCOUNT

Front 195

An instrument that conveys title to a trustee who holds it.

Back 195

TRUST DEED

Front 196

A deed executed by a trustee conveying land held in a trust to anyone other than the trustor.

Back 196

TRUSTEE'S DEED

Front 197

Federal law requires disclosure of the terms of credit by a creditor to a prospective debtor. Regulation Z implements Truth-In-Lending.

Back 197

TRUTH-IN-LENDING

Front 198

A contract (e.g., Open listing, Option) under which one party makes an express promise or undertakes performance without receiving in return any ex-press promise or performance from other party. No contract occurs until someone performs.

Back 198

UNILATERAL CONTRACT

Front 199

1. In appraisal for sale purposes, the true economic value of a building in terms of years of use to the owner; 2. For tax purposes, the life set for depreciation. At any time during that period, a new life could begin for a new owner.

Back 199

USEFUL LIFE

Front 200

Charging an illegal rate or amount of interest on a loan. In Ohio, the maximum allowable rate is 8% above the Federal Reserve discount rate. Ohio usury law does not regulate all government-affected mortgage corporations. Non-exempted loans have a ceiling of 3% above the Federal Reserve discount rate.

Back 200

USURY

Front 201

A mortgage loan secured through an approved lending institution and guaranteed by the Veteran’s Administration.

Back 201

VA LOAN

Front 202

Binding and enforceable contract; one party can legally force the other party to perform.

Back 202

VALID CONTRACT

Front 203

Allows lender to increase or decrease the interest rate within parameters set down in mortgage note. See a/so ADJUSTABLE RATE MORTGAGE.

Back 203

VARIABLE RATE MORTGAGE

Front 204

A change in part of a zoning requirement without actually changing the zoning.

Back 204

VARIANCE

Front 205

A purchaser in a land contract; the purchaser of real estate.

Back 205

VENDEE

Front 206

The seller in a land contract; the seller of real estate.

Back 206

VENDOR

Front 207

A contract lacking the essential elements necessary for formation; a contract of no legal force and effect, e.g., a contract for an i/Jega/ purpose.

Back 207

VOID CONTRACT

Front 208

A contract that can be terminated even though it appears valid; e.g., a contract with a minor can be rescinded by the minor and thus is a voidable contract.

Back 208

VOIDABLE CONTRACT

Front 209

A deed in which the grantor fully warrants good and clear title to the property and agrees to defend the premises against the lawful claims of third persons. See a/so GENERAL WARRANTY DEED.

Back 209

WARRANTY DEED

Front 210

Improper use of property, which hurts its value by a possessor who holds less than fee ownership, such as a life tenant, tenant, etc.

Back 210

WASTE

Front 211

A deed clause stating a grantor’s intent to transfer an interest in real property. Also called a
GRANTING CLAUSE.

Back 211

WORDS OF CONVEYANCE

Front 212

A form ofjunior mortgage that may be used when it is not feasible to retire the first mortgage, land contract, or lease-purchase agreement. Title to the real estate does not pass until subsequent payments occur.

Back 212

WRAPAROUND LOAN

Front 213

A court order directing an official to sell property to satisfy a judgment against the owner of the property.

Back 213

WRIT OF EXECUTION

Front 214

Rate of return on an investment, generally shown as a percentage. The yearly income divided by the value of the building equals the percentage of return. IRV— income, rate, value.

Back 214

YEILD

Front 215

The regulation over the use of land within a specific municipality.

Back 215

ZONING

Front 216

Under the common law, this relationship is defined as:
1. Agency is the fiduciary relation that results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act.
2. The one for whom action is taken is the principal.
3.The one who is to act is the agent. In a real estate transaction, the agency relationship is formed between the brokerage firm (including all their licensees) and the principal.

Back 216

AGENCY RELATIONSHIP

Front 217

See MIS PLUS.

Back 217

ALTERNATIVE MLS

Front 218

An automatic offer that is made by a listing agent to all other members of the Multiple Listing Service (MLS) when the agent submits the seller’s listing to a traditional MLS; the offer is accepted whenever an agent shows the listed property without rejecting the offer.

Back 218

BLANKET UNILATERAL OFFER OF SUBAGENCY

Front 219

The agency relationship that exists between a buyer principal and the buyer’s agent.

Back 219

BUYER AGENCY

Front 220

The practice of representing only the buyer and never the seller in a transaction.

Back 220

BUYER AGENCY EXCLUSIVELY

Front 221

A real estate agent who is employed by and represents only the buyer in a real estate transaction, regardless of whether the commission is paid by the buyer or by the seller, or through a commission split with the listing agent.

Back 221

BUYER'S AGENT

Front 222

A buyer or seller represented by an agent who is subject to that buyer’s or seller’s control; also called a principal.

Back 222

CLIENT

Front 223

Any fee that is conditional upon some event occurring, usually a closing.

Back 223

CONTINGENT FEE

Front 224

See SELLING AGENT

Back 224

COOPERATING AGENT

Front 225

A buyer who is working with an agent who represents the seller; also the seller of unlisted property that is being sold to a buyer represented by a buyer’s agent.

Back 225

CUSTOMER

Front 226

A dual agency relationship where the brokerage firm, by written or oral means, discloses and receives informed consent from both the buyer and the seller to act in a dual agency capacity.

Back 226

DISCLOSED DUAL AGENCY

Front 227

A real estate agent who has received informed consent from both a buyer and seller in the same transaction to act in a dual agency capacity.

Back 227

DISCLOSED DUAL AGENT

Front 228

An agency relationship where the brokerage firm represents both the buyer and the seller in the same transaction to act in a dual agency capacity.

Back 228

DUAL AGENCY

Front 229

A person who assists the parties to a potential real estate transaction in communication, interposition, and negotiation, to reach agreement between or among them, without being an advocate for the interests of any party except the mutual interest of all parties to reach agreement. Also known as an intermediary. (Not recognized in all states.)

Back 229

FACILITATOR

Front 230

Duties owed by an agent to his principal (ACCOLD):1. Duty of Accountability 2. Duty of confidentiality 3. Duty of Care (Reasonable Care and Skill4. Duty of obedience 5. Duty of Loyalty 6. Duty of Disclosure

Back 230

FIDUCIARY DUTIES

Front 231

Any agency relationship that is indicated by the words and/or actions of the agent rather than by written agreement; also called accidental or undisclosed agency.

Back 231

IMPLIED AGENCY

Front 232

A person’s agreement to allow something to happen that is based on a full disclosure of facts needed to make the decision intelligently, e.g., knowledge of liability involved, alternatives, etc.

Back 232

INFORMED CONSENT

Front 233

A sale in which one real estate brokerage company acts as both the listing and selling agent.

Back 233

IN-COMPANY SALE

Front 234

See FACILITATOR

Back 234

INTERMEDIARY

Front 235

An agent of the seller who markets that seller’s property, usually exclusively, and represents the seller during the sale and closing of the property. Also known as “seller’s agent:’

Back 235

LISTING AGENT

Front 236

An
organized system created to disseminate information about listed properties and through which members offer cooperation and compensation to their participants; usually a committee of a Board or a corporation owned by a Board.

Back 236

MULTIPLE LISTING SERVICE(MLS)

Front 237

policy that allows listing agents to indicate the fee they will pay a buyer’s agent as well as the fee they will pay to a subagent upon a successful closing. An offer of subagency is mandatory. Also known as “alternative MLS7 but is not in all markets.

Back 237

MLS PLUS

Front 238

See SELLING AGENT

Back 238

PARTICIPATING AGENT

Front 239

The proximate cause originating a series of events that, without break in their continuity, results in the accomplishment of the objective. A real estate broker will be regarded as the “procuring cause” of a sale, so as to be entitled to commission, if the broker’s efforts are the foundation on which the negotiations resulting in a sale are begun.

Back 239

PROCURING CAUSE

Front 240

A real estate agent who is employed by and represents only the seller in a real estate transaction. Also known as “listing agent:’

Back 240

SELLER'S AGENT

Front 241

The agency relationship that exists between a seller principal and the seller’s agent.

Back 241

SELLER AGENCY

Front 242

The practice of representing the party you are working with (either buyer or seller) and becoming a disclosed dual agent for in-company sales.

Back 242

SELLER AGENCY AND BUYER AGENCY WITH DISCLOSED DUAL AGENCY FOR IN -COMANY SALES

Front 243

The practice of representing only the seller and never the buyer in a transaction.

Back 243

SELLER AGENCY EXCLUSIVELY

Front 244

Any agent who sells a property; she may be the subagent or listing agent of the seller, or a buyer’s agent, or a dual agent. Also called a cooperating agent, or participating agent.

Back 244

SELLING AGENT

Front 245

The practice of representing either the buyer or the seller, but never both, in the same transaction.

Back 245

SINGLE AGENCY

Front 246

A situation in which one agent represents the buyer and another agent from the same real estate brokerage represents the seller. The broker and all management- level employees are dual agents of both buyer and seller. The broker may also appoint a specific agent to represent the seller and another specific agent (from the same firm) to represent the buyer. Also termed an “in- company transaction:’

Back 246

SPLIT AGENCY

Front 247

An agent employed to act for another agent in performing functions undertaken for a principal, who owes the same duties and responsibilities to the principal as the principal’s agent. Correspondingly, the subagent can create the same liabilities for the agent and principal that the agent can create for the principal himself or herself.

Back 247

SUBAGENT

Front 248

MLS in which listing agents must offer cooperation but don’t automatically offer subagency; the offer of compensation may be to buyer’s agents, subagents and/or listing agents; subagency may be offered.

Back 248

SUBAGENCY OPTIONAL MLS

Front 249

A dual agency relationship that occurs when a listing agent or subagent acts or speaks as though he also represents the buyer but without either written or oral disclosure. Conversely, dual agency also occurs when an agent of the buyer acts or speaks as if he also represents the seller.

Back 249

UNDISCLOSED DUAL AGENCY

Front 250

A measure of land that is 43,560 square feet.

Back 250

ACRE

Front 251

A general term including any method of depreciation that is greater than straight-line depreciation.

Back 251

ACCELERATED DEPRECIATION

Front 252

Payment of debt in regular, periodic installments of principal and interest (as opposed to interest-only payments).

Back 252

AMORTIZATION

Front 253

A loan that is paid back in regular installment amounts of principal and interest over a specified period of time.

Back 253

AMORTIZED LOAN

Front 254

The income from a property after operating expenses have been deducted, but before taxes and debt service are counted:
Net Income = Gross Income Operating Expenses
This is a capitalization method that derives a value indication by using annual net income.

Back 254

ANNUAL NET OPERATING INCOME(NOI)

Front 255

An increase in the value of property due to either a positive
improvement of the area or the elimination of negative factors. Commonly, and incorrectly, used to describe an increase in value through inflation.

Back 255

APPRECIATION

Front 256

An agreement by a buyer to assume the liability under an
existing note secured by a mortgage. The lender usually must approve the new debtor (the buyer) in order to release the existing debtor (usually the seller) from liability.

Back 256

ASSUMPTION OF MORTGAGE

Front 257

The value of real property fixed for purposes of computing taxes:
Assessed Value x Tax Rate Real Estate Tax

Back 257

ASSESSED VALUATION

Front 258

Value placed on property for property tax purposes by a tax assessor.

Back 258

ASSESSED VALUE

Front 259

A method of determining the present value of income property by
discounting the annual net income by a commonly used rate of return.
Income ÷ Rate Value (Remember: IRV)

Back 259

CAPITALIZATION

Front 260

The percentage (acceptable to an average buyer) used to determine the value of income property through capitalization.

Back 260

CAPITALIZATION RATE

Front 261

In investment property, the actual cash the investor will receive after deducting operating expenses and debt service (loan payments) from the gross income.

Back 261

CASH FLOW

Front 262

A real estate loan, mortgage, or deed of trust not obtained under a government-insured program.

Back 262

CONVENTIONAL LOAN

Front 263

Transfer of title to land. Includes most instruments by which an interest in real estate is created, mortgaged, or assigned.

Back 263

CONVEYANCE

Front 264

A tax imposed on the transfer or conveyance of realty or any realty interest by means of a deed, lease, sublease, assignment, contract for deed, or similar instrument. Tax can be at the state or county level.

Back 264

CONVEYANCE TAX(OR TRANSFER TAX OR CONVEYANCE FEE)

Front 265

The amount of money paid in regular intervals to reduce the balance owed on a debt. The payment normally amortizes a loan, thus it typically includes principal and interest.

Back 265

DEBT SERVICE

Front 266

1. The decrease in value to real property improvements caused by deterioration or obsolescence; 2. A loss in value as an accounting procedure for use as a tax deduction for income tax purposes. Investors use depreciation as a tax shelter.

Back 266

DEPRECIATION

Front 267

An added loan fee charged by a lender to increase the yield on a lower-than-market interest rate loan, making it competitive with other higher interest loans.

Back 267

DISCOUNT POINTS

Front 268

Money given by a buyer upon signing a sales contract, showing the buyer’s intention to carry out the terms of the contract. Earnest money is an inducement and a show of good faith (not consideration), and is not necessary for a valid contract to exist.

Back 268

EARNEST MONEY DEPOSIT

Front 269

The result obtained by dividing the value of a property by the gross annual income, or the sales price divided by gross rents.

Back 269

GROSS MONTHLY RENT MULTIPLIER(GMRM

Front 270

A method of determining the value of income producing residential properties:
Gross Rent x Multiplier = Sales Price

Back 270

GROSS RENT MULTIPLIER

Front 271

A one-time set up fee charged by the lender.

Back 271

LOAN ORIGINATION FEE

Front 272

The price that a piece of real estate actually sold for. (Commonly used interchangeably with market value, but not truly the same. Compare: Market Value.)

Back 272

MARKET PRICE

Front 273

The theoretical price that a piece of real estate is most likely to bring in a typical transaction. The highest price a willing buyer would pay and a willing seller would accept, both being reasonably informed, with the property being exposed for a reasonable period of time. The market value may be different from the market price a property can actually be sold for at a given time. Market value may be different from market price at a given point in time.

Back 273

MARKET VALUE

Front 274

Equal to one-tenth of a cent, used in expressing tax rates. For example, ten mills would be the same as $10 per thousand dollars of value. (1 mill 0.001 11100 of $1.00)

Back 274

MILL

Front 275

Payment made after it is due. Interest is said to be paid in arrears since it is paid the day of payment (after a person has had use of the money) rather than paid in advance (which is how rent is typically paid). Property taxes are also usually paid in arrears.

Back 275

PAID IN ARREARS

Front 276

The person to whom a debt instrument (e.g., check or promissory note) is made payable; also known as the receiver. (“Pay to the order of: the payee..:’)

Back 276

PAYEE

Front 277

The payment in full of an existing loan or other lien.

Back 277

PAY OFF

Front 278

The sender of the payment.

Back 278

PAYOR

Front 279

A term for a percentage of the loan amount that the lender charges as a fee for making the loan, lowering the interest rate, or other reason. One point is equal to one percent of the principa/loan amount (notthe purchase price of a property).

Back 279

POINT

Front 280

1.The person who gives authority
to an agent or attorney, thereby creating a
fiduciary relationship; 2.The amount of a
debt, excluding interest due.

Back 280

PRINCIPAL

Front 281

The division of expenses and income items between the buyer and seller, proportionately, based on the time of use, or the date of closing.

Back 281

PRORATION

Front 282

The return of money invested in property, via reduction of the loan amount and/or appreciation. Recapture rate is equal to the rate of depreciation that’s allowed for one year.

Back 282

RECAPTURE

Front 283

A measure of land equal to one square mile, 640 acres, 1136 of a township.

Back 283

SECTION

Front 284

A loan with each payment being different, consisting of a fixed amount plus interest on the remaining balance.

Back 284

STRAIGHT LINE AMORTIZED LOAN

Front 285

A method of replacing the capital investment of income property, by reducing the value of the property by a set amount annually from the income, over the economic life of the property.

Back 285

STRAIGHT-LINE DEPRECIATION

Front 286

A loan whereby interest only is paid in each installment, with the principal due in full at the end of the loan period.

Back 286

TERM LOAN

Front 287

1. In appraisal, for sale purposes, the true economic value of a building in terms of years of use to the owner; 2. For tax purposes, the life set for depreciation. At any time during that period, a new life could begin for a new owner.

Back 287

USEFUL LIFE

Front 288

Charging an illegal rate or amount of interest on a loan.The rate that constitutes usury varies by state.

Back 288

USURY

Front 289

Rate of return on an investment, generally shown as a percentage. The yearly income divided by the value of the building equals the percentage of return. (Remember:
I RV)

Back 289

YIELD

Front 290

One who acts, or has the power to act, for another

Back 290

agent

Front 291

An English term referring to transfer of property from one person to another.

Back 291

alienation

Front 292

A clause used in a mortgage allowing the lender to call for the full payment of the mortgage (foreclosure) because the owner transferred ownership of the property. This is a type of acceleration clause because it accelerates the time when the entire loan amount is due. Very often referred to as a “Due-on-Sale” clause.

Back 292

alienation clause

Front 293

Features, both tangible and intangible, that enhance the desirability of real estate. For example, a marble fireplace, desirable location, soaking tub, historicity of the location, preferred floor plan, or anything with sentimental value to the buyer may be considered an amenity.

Back 293

amenities

Front 294

Payment of debt in regular, periodic installments of principal and interest (as opposed to interest-only payments)

Back 294

amortization

Front 295

A loan that is paid back in regular installment amounts of principal and interest over a specified period of time.

Back 295

amortized loan

Front 296

Net income is income from a property after operating expenses have been deducted, but before taxes and debt service are counted Net Income = Gross Income — Operating Expenses. This is a capitalization method that derives a value indication by using annual net income

Back 296

annual net operating income(NOI)

Front 297

A defensible opinion or estimate of value of real property as of a certain date

Back 297

appraisal

Front 298

An increase in the value of property due either to a positive improvement in the area or the elimination of negative factors. Commonly, and incorrectly, used to describe an increase in value through inflation.

Back 298

appreciation

Front 299

“Runs with the land:’ Something that belongs to property and passes with it, but need not be attached to it, e.g., outbuildings, easements

Back 299

appurtenance

Front 300

The method by which disputes between REALTOR’ brokers may be resolved. Disputes are heard by the Arbitration Committee of the local Board of REALTORS’, e.g., a commission dispute.

Back 300

arbitration

Front 301

The value of real property fixed for purposes of computing taxes. Assessed value x tax rate = real estate tax.

Back 301

assessed valuation

Front 302

A valuation placed upon real property as a basis to set the amount of tax to be levied. Also, the levy or rate to be paid to the government for services provided or constructed by it, e.g., curbs, sewers, sidewalks

Back 302

assessment

Front 303

Transfer of any property, real or personal, or any rights therein to another. In real estate, it does not release the transferor from the obligations stated in the contract.

Back 303

assignment

Front 304

An obligation and promise to be personally liable for conditions in a cpntract.

Back 304

assumption

Front 305

An agreement by a buyer to assume the liability under an existing note secured by a mortgage. The lender usually must approve the new debtor (the buyer) in order to release the existing debtor (usually the seller) from liability

Back 305

assumption of mortgage

Front 306

The seizing of property by court order usually, to furnish security for a debt or judgment

Back 306

attachment

Front 307

A person specifically designated in an instrument, e.g., power of attorney, to do something legally for another in his stead. An attorney-in-fact has a fiduciary relationship with his principal. An attorney-in- fact need not be an attorney-at-law.

Back 307

attorney-in-fact

Front 308

partly amortized note where part of the principal is reduced bythe time the final payment is due.Thus, a lump sum payment of the principal is due at the end of the loan. Very often called “A partially amortized mortgage

Back 308

balloon payment(balloon note)

Front 309

Bilateral or reciprocal contracts are those by which the parties expressly enter into mutual engagements, e.g., real estate sales contract. Each party promises to perform some act

Back 309

bilateral(reciprocal) contract

Front 310

An instrument in writing that transfers ownership of tangible personal property, e.g., furniture.

Back 310

bill of sale

Front 311

A single mortgage loan where two or more different parcels of property are offered as security for the loan

Back 311

blanket mortgage

Front 312

An illegal act whereby owners are encouraged to sell their properties because minorities are moving into their neighborhood. (Also known as “panic selling” or”panic peddling:’

Back 312

blockbusting

Front 313

The bringing together of persons desiring to make transactions in real estate.

Back 313

brokerage

Front 314

A parcel of land that separates two other parcels, e.g., a parcel between a residential and a commercial strip of land

Back 314

buffer zone

Front 315

Legal rights conferred to owners of real property, including rights to mortgage, sell, make improvements, enjoyment, lease, and use property

Back 315

bundle of rights

Front 316

Government regulations specifying minimum construction and building standards to safeguard the health, safety, and welfare of the public. Building codes are a valid exercise of the government’s police power and can restrict an owner’s use and enjoyment of his property.

Back 316

building codes

Front 317

A method of determining the present value of income property by discounting the annual net income by a commonly used rate of return.

Back 317

capitalization

Front 318

The percentage used to determine the value of income property through capitalization

Back 318

capitalization rate

Front 319

In Investment property, the ACTUAL cash the investor will receive after deduction of operating expenses and debt service(loan payments) from the gross income

Back 319

cash flow

Front 320

an association created underTitle Ill of the National Housing Act to buy Title V loans to keep the market sound. Part of the secondary market (along with Freddie Mac and Ginnie Mae) that purchases first mortgages

Back 320

FNMA

Front 321

Pertaining to real estate: inaccurate advertising of the terms of a loan, under Regulation Z (Truth in Lending Federal Statute) the intent of which is to protect residential buyers

Back 321

FALSE ADVERTISING

Front 322

Title VIII of the Civil Rights Act of 1968 that declared a national policy of providing fair housing in the United States. The law makes it illegal to discriminate in the sale or rental of housing based upon race, color, sex, religion, national origin, handicap, or familial status.

Back 322

FEDERAL FAIR HOUSING LAW

Front 323

An estate where the owner has the highest possible estate: absolute control of a parcel of real estate

Back 323

FEE SIMPLE ESTATE

Front 324

A relationship of trust and confidence between a principal and an agent

Back 324

FICUCIARY

Front 325

tHE DUTIES OWED BY AN AGENT ACTING AS A fIUCIARY ARE

Back 325

ACCOUNTABLILITY, CONFIDENTIALITY, CARE(REASONABLE CARE AND SKILL), OBEDIENCE, LOYALTY, DISCLOSURE

Front 326

A commonly used term to describe legal documents, such as mortgages and notes, which are used for borrowing money in real estate

Back 326

FINANCING INSTRUMENTS

Front 327

Personal property attached to the land or improvements that cannot be removed without agreement since they attach to and become real property (e.g., mailbox, chandelier

Back 327

FIXTURES

Front 328

A legal process by which property serving as security for an obligation is sold when a default occurs. The debtor can be the successful bidder and be awarded the title

Back 328

FORECLOSURE SALE

Front 329

An intentional perversion of the truth for the purpose of inducing another in reliance upon it to part with something of value belonging to him or to surrender a legal right.

Back 329

FRAUD

Front 330

An estate in fee or for life

Back 330

FREEHOLD

Front 331

A loss of value due to a decrease in the design usefulness of the property.

Back 331

FUNCTIONAL OBSOLESCENCE

Front 332

A type of principal agent relationship where the agent is empowered to represent the principal in a narrow area of activities. A general agent has the legal right to bind the principal in any contract within the scope of her responsibility, e.g., a Property Manager

Back 332

GENERAL AGENCY

Front 333

The right of a creditor to claim all of a debtor’s property, both real and personal, seized and sold at public auction, e.g., judgments and IRS taxes.

Back 333

GENERAL LIEN

Front 334

ELEMENTS OF FRAUD

Back 334

(a) intentional misstatement of fact; (b) the misstatement of fact must be material; and (c) the defrauded party must have been entitled to rely on the statement.

Front 335

A partnership in which each member has an equal right to manage the business and share in the profits, as well as equal responsibility for the partnership’s debts

Back 335

GENERAL PARTNERSHIP

Front 336

A deed that includes five warranties, two of which are: 1. Grantor (seller) warrants he has the right and title to convey to the new buyer; 2. Grantor warrants that all previous owners in the chain of title had the right to convey

Back 336

GENERAL WARRANTY DEED

Front 337

A document conveying or transferring real property

Back 337

GRANT DEED

Front 338

One to whom a grant is made, generally the buyer

Back 338

GRANTEE

Front 339

A person who conveys his or her interest in real property, generally the seller.

Back 339

GRANTOR

Front 340

A lease of property where the lessee pays a fixed rent and the lessor pays taxes, insurance, and other charges incident to ownership

Back 340

GROSS LEASE

Front 341

The result obtained by dividing the value by the Gross Annual Income, or the Sales price divided by Gross Rent

Back 341

GROSS MONTHLY RENT MULTIPLIER

Front 342

A method of determining the value of income producing residential properties.

Back 342

GROSS RENT MULTIPLIER

Front 343

Clause induced after granting clause in many deeds (begins”to have and to hold”), describing the type of estate granted

Back 343

HABENDUM CLAUSE

Front 344

An expression describing the use of land that, at the time the property is appraised, results in the highest net income attributable to the land

Back 344

HIGHEST AND BEST USE

Front 345

A real estate tax reduction on a homestead owned by a person 65 years of age or older or permanently disabled

Back 345

HOMESTEAD HOMESTEAD EXEMPTION LAW

Front 346

A person’s land used as their residence that is usually exempt from attachment by creditors to a statutorily preset amount, i.e., in some states, one can exempt up to $5,000 per owner from attachment by unsecured creditors upon foreclosure.

Back 346

HOMESTEAD

Front 347

Some agency relationships can be implied because of the circumstances surrounding a relationship. Implied agencies do not normally occur in real estate transactions

Back 347

IMPLIED AGENCY

Front 348

A guaranty where the law derives it by implication or inference from the nature of the transaction or the relative situation, or circumstances of the parties

Back 348

IMPLIED WARRANTY

Front 349

Incomplete, such as an interest in the real property during the spouse’s life, as in dower rights.

Back 349

ICHOATE

Front 350

A person retained by another to accomplish a particular result by methods completely up to the independent contractor, e.g., real estate salesperson.

Back 350

INDEPENDENT CONTRATOR

Front 351

Entering and exiting; usually refers to a road or other means of access to a piece of property

Back 351

INGESS AND EGRESS

Front 352

A person who dies without making a will, thus his estate is passed on by the laws of descent and distribution

Back 352

INTESTATE

Front 353

An interest held by two or more persons in property where each person holds an equal share of interest in the undivided whole and shares equal liability for payment.

Back 353

JOINT TENANCY

Front 354

A recorded claim against another for a wrongful act ordered by a court

Back 354

JUDGMENT LIEN

Front 355

A method of selling real estate by which the purchaser takes possession and pays for property in regular installments, while the seller retains legal title until the property is paid for in full. Also known as an installment contract or contract for deed.

Back 355

LAND CONTRACT

Front 356

A system whereby title to property passes by operation of law to the heirs of one who dies owning property without a will

Back 356

LAW OF DESCENT AND DISTRIBUTION

Front 357

A written contract between the owner, lessor of property, and a tenant, lessee, where the possession of land and/or building(s) is granted by the owner to the tenant for a specified period of time for a specified amount of rent

Back 357

LEASE

Front 358

The interest of a lessee to use and enjoy real estate for a specified period of time and upon certain conditions, e.g., the payment of rent, THE FOUR TYPICAL ONES ARE ESTATE FOR YEARS, PERIODIC TENANCY, TENANCY AT WILL AND TENANCY AT SUFFERANCE

Back 358

LEASEHOLD ESTATE

Front 359

A permission, either express or implied, that can be revoked at any time and cannot be assigned, e.g., permission to hunt

Back 359

LICENSE

Front 360

A claim against title that one party has upon the property of another as security for payment of a debt or obligation, e.g., mortgage.

Back 360

LIEN

Front 361

A state in which real estate mortgages are regarded as a lien; title remains with the mortgagor absent default; and foreclosure proceedings can be commenced upon default.

Back 361

LIEN THEORY STATE

Front 362

An interest in real or personal property, the duration of which is limited by the life of its owner or the life of another designated person

Back 362

LIFE ESTATE

Front 363

An asset, either cash, stocks, or bonds, that can be quickly (within a 24—48 hour period) converted to cash.

Back 363

LIQUID ASSET

Front 364

The cash position of an individual or business measured by cash on hand or securities that can quickly be converted to cash

Back 364

LIQUIDITY

Front 365

That portion in a condominium project owned by all the owners but can only be used by one of the owners, i.e., a designated parking space, the manager’s apartment, the balcony off of a particular unit

Back 365

LIMITED COMMON ELEMENT

Front 366

A partnership made up of one or more general partners and one or more limited partners

Back 366

LIMITED PARTNERSHIP

Front 367

A notice filed in the public records for the purpose of serving constructive notice that title or some matter involving a particular parcel of real property is in litigation

Back 367

LIS PENDENS

Front 368

A contract whereby a real estate broker has the right to sell someone’s property.

Back 368

LISTING AGREEMENT

Front 369

A one-time set up fee charged by the lender

Back 369

LOAN ORIGINATION FEE

Front 370

A method of describing real property that identifies a parcel of land by reference to lot and blocknumbers within a subdivision, as specified on a recorded subdivision plat, must include county and state.

Back 370

LOT AND BLOCK DESCRIPTION

Front 371

Latin, “we command A writ --- issued by a court ordering someone to do something or refrain from doing something

Back 371

MANDAMUS

Front 372

A method of appraising property where factors considered are neighborhood economic standards, cost of comparable properties, and demand

Back 372

MARKET DATA COMPARISON APPROACH TO VALUATION

Front 373

The price that a piece of real estate actually sold for. Commonly used interchangeably with market value, but not truly the same

Back 373

MARKET PRICE

Front 374

The theoretical price that a piece of real estate is most likely to bring in a typical transaction. The highest price a willing buyer would pay and a willing seller would accept, both being fully informed, with the property being exposed for a reasonable period of time

Back 374

MARKET VAUE

Front 375

A title to real estate that is reasonably free of defects and encumbrances so there is no reasonable doubt as to its validity or reasonable apprehension of danger or litigation with respect to it, and the owners are insured peaceful enjoyment.

Back 375

MARKETABLE TITLE

Front 376

A statutory lien to secure priority of payment for the value of work performed and material provided for improvements to land. The lien attaches to the land and its improvements.

Back 376

MECHANIC'S LIEN

Front 377

Description of land by boundary lines, terminal points, and angles. The description must begin and end at the same point, POB— Point of Beginning

Back 377

METES AND BOUNDS

Front 378

Equal to one-tenth of a cent. Used in expressing tax rates.

Back 378

MILL

Front 379

A statement or conduct by a person that represents to another a fact that is not true. A seller, broker, or builder may have a duty to disclose certain defects in property to a buyer or tenant

Back 379

MISREPRESENTATION

Front 380

Authorized to do everything that can be lawfully delegated to a representative.

Back 380

Universal Agent

Front 381

Authorized to handle all of the principal's affairs in one area or in specified areas.

Back 381

General agent

Front 382

Has limited authority to do a specific thing or conduct a specific transaction.

Back 382

Special agent

Front 383

Authority intentionally given to an agent by the principal, either expressly or by implication.

Back 383

Actual authority

Front 384

Authority expressly communicated by the principal to the agent.

Back 384

Express authority

Front 385

authority to do everything reasonably necessary to carry out the principal's express orders.

Back 385

Implied authority