Real Estate Practice

Front 1

§1031 cooperation provision

Back 1

A statement in purchase agreements putting the seller and buyer on notice they are able to avoid profit reporting on the transaction and provides cooperation when a §1031 exemption is intended on the sale or purchase of a property.

Front 2

§1031 transaction

Back 2

A sales transaction in which sales proceeds are reinvested in a replacement like-kind property, the profits of which are untaxed.

Front 3

abstract of title

Back 3

A representation issued by a title company as a guarantee to the named person, not an insurance policy, listing all recorded conveyances and encumbrances affecting title to the described real estate.

Front 4

acceptance

Back 4

The act of agreeing or consenting to the terms of an offer thereby establishing the meeting of the minds that is an essential element of a contract.

Front 5

advance cost sheet

Back 5

An itemization of the costs incurred to properly market a property for sale which are to be paid by the owner

Front 6

advance costs

Back 6

Deposits handed to a broker to cover out-of-pocket costs incurred on behalf of the depositor while performing brokerage services.

Front 7

affiliated business arrangement (ABA)

Back 7

Referral of a client to a financially controlled business whose earnings are shared with the broker which requires a written disclosure.

Front 8

affirmative duty

Back 8

An agent's obligation to voluntarily undertake an advisory activity when in a fiduciary relationship.

Front 9

affirmative fraud

Back 9

Intentionally and knowingly misrepresenting information to someone.

Front 10

agency confirmation provision

Back 10

A provision in all purchase agreements and counteroffers disclosing the agency of each broker in the transaction.

Front 11

agency disputes

Back 11

Disputes between an agent and their client which arise during the marketing period, in escrow or after closing.

Front 12

agency duty

Back 12

The fiduciary duty a broker owes a client to use diligence in attaining the client's real estate goals.

Front 13

Agency Law Disclosure

Back 13

Restatement of agency codes and cases which establish the conduct of real estate licensees. It is delivered to all parties in targeted sales and leasing transactions.

Front 14

agency relationship

Back 14

The scope of activities imposed on the broker by law as arising out of the representation authorized by the employment.

Front 15

agent turnover rate

Back 15

The rate at which a broker loses and replaces agents.

Front 16

Alquist-Priolo Maps

Back 16

Maps which identify earthquake fault areas available from the State Mining and Geology Board and the city or county planning department.

Front 17

Annual Property Operating Data sheet (APOD)

Back 17

A worksheet used when gathering income and expenses on the operation of an income producing property, to analyze its suitability for investment.

Front 18

arbitration

Back 18

A form of dispute resolution voluntarily agreed to in contracts authorizing a third-party arbitrator to issue a binding award which cannot be reviewed and corrected by a court of law.

Front 19

arbitrator

Back 19

A neutral third-party appointed to hear a dispute who is authorized to make a final decision awarding judgment in favor of one of the parties.

Front 20

as-is clause

Back 20

An unenforceable provision stating the buyer accepts the property without a full disclosure of known conditions. Properties are sold "as-disclosed," never "as-is."

Front 21

attorney fee provision

Back 21

A provision in an agreement permitting the prevailing party to a dispute to receive attorney fees when litigation arises due to the agreement.

Front 22

authorization-to-extend provision

Back 22

A purchase agreement provision granting authority to extend performance dates before the transaction may be cancelled.

Front 23

best effort obligation

Back 23

Obligations under an open listing requiring the agent to take reasonable steps to achieve the objective of the client but requiring no affirmative action until a match is located at which point due diligence is required.

Front 24

bilateral employment agreement

Back 24

A written exclusive employment agreement obligating the broker to exercise due diligence to fulfill the client's real estate objectives in exchange for the promise to pay a fee under various circumstances.

Front 25

bilateral rescission

Back 25

An agreement by a buyer and a seller mutually agreeing to terminate their purchase agreement.

Front 26

bona fide purchaser (BFP)

Back 26

A buyer who purchases a property for valuable consideration in good faith without notice or knowledge of pre-existing encumbrances or conditions affecting their right to full ownership.

Front 27

broker cooperation provision

Back 27

A clause in employment agreements entered into by brokers and their clients enabling brokers, when acting on behalf of their clients in a transaction, to share fees between themselves at the brokers' discretion.

Front 28

broker fee provision

Back 28

A provision contained in a listing agreement in which an owner agrees to pay the broker a fee if their property is sold, exchanged or optioned during the listing period.

Front 29

buyer's agent

Back 29

An agent representing the buyer. Also known as a selling agent.

Front 30

buyer's cost sheet

Back 30

A worksheet used when estimating the total expenditures for acquiring a property and the amount of funds needed to close, including the source of the funds.

Front 31

California Home Energy Rating System (HERS)

Back 31

California state system used to create a standard rating for energy efficiency and certify professional raters.

Front 32

carcinogen

Back 32

A substance which causes cancer in human beings.

Front 33

carryback financing

Back 33

A form of credit extended to a buyer by a seller for payment of a portion of the purchase price, evidenced by an installment note secured by a trust deed lien on the property sold.

Front 34

certificate of clearance

Back 34

A document certifying a property has been cleared of all infestations and all repairs necessary to prevent infestations have been completed.

Front 35

chain of title

Back 35

A history of conveyances and encumbrances affecting the title from the time the original patent was granted, or as far back as records are available, used to determine how title came to be vested in the current owner.

Front 36

clients

Back 36

Members of the public who retain brokers and agents to perform real estate related services.

Front 37

community property

Back 37

All property acquired by husband or wife during a marriage when not acquired as the separate property of either spouse.

Front 38

condition concurrent

Back 38

A provision in an agreement calling for the performance of an activity by a buyer or seller without concern for the performance of the other person.

Front 39

condition precedent

Back 39

A provision in an agreement calling for the occurrence of an event or performance of an act by another person before the buyer or seller is required to further perform.

Front 40

conflict of interest

Back 40

When a broker or agent has a positive or negative bias toward a party in a transaction which is incompatible with the duties owed to their client.

Front 41

consideration

Back 41

Anything given or promised by a party to induce another to enter into a contract. It may be a benefit conferred upon one party or a detriment suffered by the other.

Front 42

contingency fee provision

Back 42

A provision in purchase agreements and escrow instructions calling for a specific event to occur or act to be performed before the broker's fee is payable.

Front 43

conveyance

Back 43

A transfer of an interest in title to property from one person to another, such as is effected by a deed or a trust deed.

Front 44

cooperating broker

Back 44

A broker or their agent acting as a subagent of the seller's broker with specific affirmative duties of care owed the seller, but not the buyer.

Front 45

counteroffer

Back 45

An alternative response to an offer received consisting of terms different from those of the offer rejected

Front 46

covenants, conditions and restrictions (CC&Rs)

Back 46

Recorded restrictions against the title to real estate prohibiting or limiting specified uses of the property.

Front 47

date-down search

Back 47

A further search of the public records performed by a title insurer after preparing a preliminary title report and immediately prior to issuance of a policy of title insurance.

Front 48

defacing

Back 48

When a document is modified on its face, usually by striking copy and interlineation, after it is signed by one or both parties.

Front 49

double-end

Back 49

When the seller's agent receives the entire fee in the real estate transaction, there being no buyer's agent for fee splitting.

Front 50

dual agency

Back 50

The agency relationship that results when a broker represents both the buyer and the seller in a real estate transaction.

Front 51

dual agent

Back 51

A broker who represents both parties in a real estate transaction.

Front 52

due diligence

Back 52

The concerted and continuing efforts of an agent employed to meet the objectives of their client, the agent's promise given in exchange for the client's promise to pay a fee.

Front 53

employment relationship

Back 53

The scope of activities the broker and the broker's agents are to undertake in the employment of a client.

Front 54

encumbrance

Back 54

A claim or lien on title to a parcel of real estate, such as property taxes, assessment bonds, trust deeds, easements and covenants, conditions and restrictions (CC&Rs).

Front 55

environmental hazards

Back 55

Noxious or annoying man-made conditions which are injurious to health or interfere with an individual's sensitivities.

Front 56

equitable indemnity

Back 56

When one party takes on the obligation to pay for a loss incurred by another party.

Front 57

equity

Back 57

1) The interest or value an owner has in real estate over and above the liens against it. 2) Branch of remedial justice providing relief to litigants in courts of equity.

Front 58

equity purchase (EP)

Back 58

The acquisition of an owner-occupied, one-to-four unit residential property in foreclosure for rental, investment or dealer purposes.

Front 59

equity purchase (EP) agreement

Back 59

The document used to negotiate the sale of an owner-occupied residence-in-foreclosure to an investor.

Front 60

equity purchase (EP) investor

Back 60

A person who acquires title to a seller-occupied, one-to-four unit residential property in foreclosure for dealer, investment or security purposes.

Front 61

escrow

Back 61

The depository process employed to facilitate the gathering of instruments and funds for use to transfer real estate interests between two persons.

Front 62

escrow instructions

Back 62

Directives an escrow officer undertakes, as given by buyer and seller, or lender and borrower to coordinate the closing on a purchase agreement or mortgage origination.

Front 63

escrow officer

Back 63

An individual licensed and employed as an agent of an escrow company or other escrow service provider to perform escrow services.

Front 64

estimate

Back 64

Prediction of future amounts which have not yet actually occurred.

Front 65

event-occurence contingency provision

Back 65

A purchase agreement provision requiring an event or activity to take place which is not subject tothe approval of the buyer or seller.

Front 66

exception

Back 66

Any encumbrances affecting title and any observable on-site activities which are listed as risks assumed by the insured and not covered by a policy of title insurance under Schedule B.

Front 67

exchange

Back 67

A trading between two or more owners of their equities in different properties.

Front 68

exclusion

Back 68

Risks of loss not covered under a policy of title insurance, comprised of encumbrances arising after the transfer or known to or brought about by the insured.

Front 69

exclusive agency listing

Back 69

An agreement employing a broker as the sole agent for the seller of real property in which the seller promises to pay the broker a fee if the property is sold unless the sale is by the owner acting without the services of any agent.

Front 70

exclusive agent

Back 70

An agent who is acting exclusively on behalf of only one party in a transaction.

Front 71

exclusive right-to-buy listing agreement

Back 71

A written employment agreement by a broker and a prospective buyer of real estate employing and entitling the broker to a fee when property is purchased during the listing period.

Front 72

exclusive right-to-sell listing

Back 72

An agreement employing a broker to act as agent for the seller of real property in which the seller promises to pay the broker a fee if the property is sold during the period of the employment, whether by the broker, through another broker or by the efforts of the owner.

Front 73

extraordinary expense

Back 73

An emergency situation lifting the limits placed on the amount an HOA may charge for regular and special assessments.

Front 74

fact

Back 74

An existing condition which is presently known or readily knowable by the agent.

Front 75

fee-sharing agreement

Back 75

An agreement, written or oral, between different brokerage operations to share fees earned on a transaction which are typically paid by the property owner.

Front 76

fee-splitting

Back 76

When fees made to a broker are split vertically with employed agents or split horizontally among other brokers.

Front 77

fiduciary duty

Back 77

That duty owed by an agent to act in the highest good faith toward the principal and not to obtain any advantage over their principal by the slightest misrepresentation, concealment, duress or undue influence.

Front 78

financial services representatives (FSRs)

Back 78

Bona fide employees of brokers who generate business for their employing broker.

Front 79

finder

Back 79

An unlicensed individual who solicits, identifies and refers potential clients to brokers, agents or principals in exchange for the promise of a fee.

Front 80

finder's fee

Back 80

The fee paid to an individual who solicited, identified or referred a client to a broker, agent or principal.

Front 81

forecast

Back 81

Analysis of anticipated changes in circumstances influencing the future income, expenses and use of a property.

Front 82

forfeiture

Back 82

1) The termination of an easement when the easement holder exceeds their authorized use of the easement by placing an excessive burden on the property encumbered by the easement. 2) Loss of money, rights or anything of value due to failure to perform, a remedy abhorred by the courts.

Front 83

full listing offer

Back 83

A buyer's or tenant's offer to buy or lease on terms substantially identical to the employment terms in the owner's listing agreement with the broker

Front 84

further-approval contingency provision

Back 84

A provision in an agreement calling for the further approval of an event or activity by the seller, buyer or third party as a condition for further performance or the cancellation of the transaction by a person benefitting from the provision.

Front 85

general damages

Back 85

Money losses by a buyer or seller due to their expenditures and loss of value directly related to a failed property sales transaction.

Front 86

general duty

Back 86

The duty a licensee owes to non-client individuals to act honestly and in good faith with up-front disclosures of known conditions which adversely affect a property's value.

Front 87

good faith deposit

Back 87

A money deposit made by a buyer to evidence their good faith intent to buy when making an offer to acquire property. Also known as earnest money.

Front 88

guarantee

Back 88

An assurance that events and conditions will occur as presented by the agent.

Front 89

guaranteed sale listing

Back 89

A variation of the exclusive right-to-sell listing in which the broker agrees to buy the property if the property does not sell during the listing period.

Front 90

hazardous waste

Back 90

Any products, materials or substances which are toxic, corrosive, ignitable or reactive.

Front 91

home energy audit

Back 91

An audit conducted by a Home Energy Rater evaluating the energy efficiency of the home.

Front 92

home inspection report (HIR)

Back 92

A report prepared by a home inspector disclosing defects in improvements on a property and used by the seller's agent to complete a TDS and assure prospective buyers about a property's condition.

Front 93

home inspector

Back 93

A professional employed by a home inspection company to inspect and advise on the physical condition of property improvements in a home inspection report for reliance by the seller, the seller's agents and the buyer as a warranty of the condition of improvements.

Front 94

homeowners' association (HOA)

Back 94

An organization made up of owners of units within a common interest development (CID) which manages and operates the project through enforcement of conditions, covenants and restrictions (CC&Rs).

Front 95

implicit rent

Back 95

The dollar value of the use of a property by the owner.

Front 96

implied covenant of good faith and fair dealing

Back 96

A legal presumption that parties to an agreement will deal equitably with one another by abiding by the terms of the agreement and timely performing their obligations.

Front 97

implied promise

Back 97

The presumption that a buyer or seller entering into an agreement will in good faith fulfill their obligation to close the transaction.

Front 98

improvement bonds

Back 98

Obligations of the seller which may be assumed by the buyer in lieu of their payoff by the seller.

Front 99

inaccessible areas

Back 99

Areas of a structure which cannot be inspected without opening the structure or removing the objects blocking the opening, such as attics or areas without adequate crawl space.

Front 100

income approach

Back 100

One of three methods of the appraisal process applied to income producing property to develop the appraiser's opinion of value.

Front 101

independent contractor

Back 101

A salesperson employed by a broker under an employment arrangement which avoids income tax withholding and unemployment benefit payments by the broker.

Front 102

installment sale

Back 102

Financing provided by a seller who extends credit to the buyer for future periodic payments of a portion of the price paid for real estate, also known as carryback financing.

Front 103

interlineation

Back 103

The process of modifying boilerplate wording in a form by inserting additional language between the printed lines.

Front 104

kickback

Back 104

A fee improperly paid to a transaction agent who renders no service beyond the act of referring in exchange for a referral fee when the agent is already providing another service in the transaction for a fee.

Front 105

lead-based paint

Back 105

Any surface coating containing at least 1.0 milligram per square centimeter of lead, or 0.5% lead by weight.

Front 106

lead-based paint hazard

Back 106

Any condition that causes exposure to lead from lead-contaminated dust, soil or paint which has deteriorated to the point of causing adverse human health effects.

Front 107

licensed activities

Back 107

Dealing with members of the public to offer, contract for and render brokerage services for compensation.

Front 108

liquidated damages provision

Back 108

A provision in a purchase agreement specifying the amount of money the seller will receive from the buyer if the buyer breaches the agreement.

Front 109

listing agreement

Back 109

A written employment agreement used by brokers and agents when an owner, buyer, tenant or lender retains a broker to render real estate transactional services as the agent of the client.

Front 110

loan-to-value ratio (LTV)

Back 110

A ratio stating the outstanding mortgage balance as a percentage of the mortgaged property's fair market value. The degree of leverage.

Front 111

marketing package

Back 111

A property information package handed to prospective buyers containing disclosures compiled on the listed property by the seller's agent.

Front 112

masked security device

Back 112

Alternative documentation for a carryback sale, substituted for a note and trust deed in a deceptive attempt to avoid due-on enforcement, Regulation Z, reassessment for property taxes, profit reporting and the buyer's right of reinstatement or redemption on default.

Front 113

material defect

Back 113

Information about a property which might affect the price and terms a prudent buyer is willing to pay for a property.

Front 114

material fact

Back 114

A fact that, if known, might cause a prudent buyer or seller of real estate to make a different decision regarding what price to offer or demand for a property or whether to remain in a contract or cancel it.

Front 115

mediation

Back 115

An informal, non-binding dispute resolution voluntarily agreed to in which a third-party mediator works to bring the disputing parties to their own decision to resolve their dispute.

Front 116

multiple listing service (MLS)

Back 116

An association of real estate agents pooling and publishing the availability of their listing properties.

Front 117

Natural Hazard Disclosure Statement (NHD)

Back 117

A report provided by a local agency or NHD vendor and used by sellers and seller's agents to disclose natural hazards which exist on a property held out for sale.

Front 118

natural hazards

Back 118

Risks to life and property which exist in nature due to a property's location.

Front 119

negative fraud

Back 119

Deceitfully withholding or failing to disclose information to someone.

Front 120

net listing

Back 120

A type of listing in which the agent's fee is set as all sums received exceeding a net price established by the owner.

Front 121

net operating income (NOI)

Back 121

1) The net revenue generated by an investment property before mortgage payments. It is calculated as the sum of a property’s gross operating income less the property’s total operating expenses. 2) The net revenue generated by an agent's employment, calculated by subtracting business operating costs from the expected income from fees generated from sales, leasing or financing transactions.

Front 122

net sales proceeds

Back 122

The seller's receipts on closing a sale of their property after all costs of the sale and mortgage payoffs have been deducted from the gross proceeds.

Front 123

Notice of Cancellation

Back 123

A notice from either the buyer or seller given to the other party cancelling the transaction.

Front 124

offer to purchase

Back 124

A proposal made by a potential buyer to acquire property on the stated terms, which the property owner may accept or reject.

Front 125

open listing

Back 125

An employment entered into by a broker to render real estate services on a best-efforts basis under which a fee is due to the broker if they achieve the client's objective of the employment before the client or another broker separately first meet the objective, such as the sale or locating of a property.

Front 126

operating expenses

Back 126

The total annual cost incurred to maintain and operate a property for one year.

Front 127

opinion

Back 127

A statement by an agent concerning an event or condition which has not yet occurred based on readily available facts.

Front 128

option

Back 128

A right given for a consideration to another by a property owner, to purchase or lease a property as agreed within a specified time without obligating the person who receives the right to exercise the right.

Front 129

option listing

Back 129

A variation of the exclusive right-to-sell listing in which the seller grants the broker an option to buy the property at a predetermined price, if the property does not sell during the listing period.

Front 130

option money

Back 130

Consideration given by a buyer to a seller for granting the buyer an option to purchase the property.

Front 131

option period

Back 131

The time period during which an optionee/buyer may exercise their right to buy under an option agreement.

Front 132

option to buy

Back 132

An agreement granting an irrevocable right to buy property within a specific time period.

Front 133

ownership

Back 133

The right of one or more persons to possess and use property to the exclusion of all others. A collection of rights to the use and enjoyment of property.

Front 134

personal-satisfaction contingency provision

Back 134

A provision in an agreement requiring the personal approval of an aspect of a transaction by the seller or buyer, not a third party, as a condition for further performance or cancellation of the transaction.

Front 135

Pest Control Certification

Back 135

A certificate of clearance by the Structural Pest Control company indicating the property is free of pest infestation or infection in the visible and accessible areas, commonly called a termite clearance.

Front 136

preliminary title report (prelim)

Back 136

A report constituting a revocable offer by a title insurer to issue a policy of title insurance, used by a buyer and escrow for an initial review of the vesting and encumbrances recorded and affecting title to a property.

Front 137

price adjustment provision

Back 137

A provision contained in a purchase agreement calling for an adjustment in the price paid for a property to cover the costs necessary to bring the property into the condition as disclosed at the time of acceptance.

Front 138

price fixing

Back 138

An arrangement among providers of the same service to sell their services only at a predetermined price.

Front 139

price-to-value difference

Back 139

The difference between the price agreed to in a purchase agreement and the value of the property on the date the agreement is breached.

Front 140

principal disputes

Back 140

Disputes between a buyer and seller.

Front 141

pro forma operating budget

Back 141

A budget which discloses the amount of assessments collected by an HOA, its cash reserves and whether special assessments are anticipated to occur.

Front 142

procuring cause

Back 142

That cause originating from a series of events that, without break in continuity, results in an agent producing a final buyer under an agency employment; the real estate agent who first procures a ready, willing, and able buyer for the agreed upon price and terms entitling them to a fee.

Front 143

projection

Back 143

An opinion about an income property's future performance based on its performance during the preceding 12-month period, adjusted for presently known trends.

Front 144

proof-of-loss statement

Back 144

A statement submitted to the title insurance company by the insured referencing the encumbrance discovered after they were issued the policy, the amount of the loss and the basis for calculating the loss.

Front 145

property profile

Back 145

A report from a title company providing information about a property's ownership, encumbrances, use restrictions and comparable sales data.

Front 146

proration

Back 146

Provisions entitling the seller to a credit for the portion of prepaid sums which have not accrued on obligations a buyer assumes on the day escrow closes, or entitling the buyer to a credit for amounts assumed which accrued unpaid through the day prior to the close of escrow.

Front 147

purchase agreement

Back 147

The primary document used as a checklist to negotiate a real estate sales transaction between a buyer and seller.

Front 148

purchase-assist funding

Back 148

The use by a buyer of proceeds from a mortgage to fund a portion of the price paid to acquire real estate.

Front 149

quantum meruit

Back 149

Compensation paid to a broker on termination of a listing agreement set as the value of the time, effort and money the broker expended acting on the employment, not based on the lost opportunity of the employment.

Front 150

Real Estate Settlement Procedures Act (RESPA)

Back 150

Legislation prohibiting brokers from giving or accepting referral fees if the broker or their agent is already acting as a transaction agent in the sale of a one-to-four unit residential property which is being funded by a purchase-assist, federally-related consumer mortgage.

Front 151

referral fee

Back 151

A fee paid by one service provider to another for referring a client to them. Prohibited by the Real Estate Settlement Procedures Act when consumer financing funds the purchase of one-to-four unit residential property.

Front 152

regular assessments

Back 152

Recurring HOA assessments which fund the operating budget to pay for the cost of maintaining the common areas.

Front 153

Release and Cancellation of Employment Agreement

Back 153

A form used by a broker when employed by a client under an existing listing agreement that is terminated by mutual agreement, to document the agreed-to termination of the employment, cancel the listing agreement and liquidate any claims that may have arisen due to the employment.

Front 154

restoration

Back 154

The return of funds and documents on a rescission of a purchase agreement or transaction sufficient to place all the parties in the position they held before entering into the agreement or closing the transaction.

Front 155

restraint on alienation

Back 155

A limit placed on a property owner's ability to sell, lease for a period exceeding three years or further encumber a property, as permitted by federal mortgage policy.

Front 156

right of first refusal

Back 156

A pre-emptive right held by another person to buy a property if the owner decides to sell.

Front 157

right of rescission

Back 157

The right to cancel a completed transaction such as a sale or letting of property, including restoration, after the transaction has been closed.

Front 158

risk reduction program

Back 158

Office procedures implemented and actively overseen by a broker to mitigate risk of liability by ensuring the broker's employees conduct themselves as the broker expects.

Front 159

safety clause

Back 159

A provision in an exclusive listing agreement earning the broker a fee during an agreed safety period after expiration of the employment for marketing efforts with identified buyers, tenants or property, if the client sells the listed property to an identified buyer or purchases or leases an identified property during the safety period.

Front 160

safety conditions

Back 160

Property conditions which do not meet current building codes and might affect property value.

Front 161

safety period

Back 161

An agreed period commencing on expiration of a broker's employment during which a broker earns a fee under safety clause conditions

Front 162

sales goal

Back 162

The amount of after-tax income agents and brokers intend to earn as a result of their real estate licensing activities.

Front 163

Schedule A

Back 163

Identification of the property interest insured, the legal description of the insured property, the date and time coverage began, the premium paid for the policy and the total dollar amount to be paid for all claims settled.

Front 164

Schedule B

Back 164

Exceptions from coverage, both standard and itemized, by the title insurance policy.

Front 165

seller-may-cancel provision

Back 165

A purchase agreement provision authorizing the seller to cancel if a specified condition or event does not occur, whether or not the agreement contains a time-essence provision.

Front 166

seller's agent

Back 166

An agent representing the seller. Also known as a listing agent.

Front 167

seller's net sheet

Back 167

A document prepared by a seller's agent to disclose the financial consequences of a sale when setting the listing price and on acceptance of a buyer's price in a purchase offer.

Front 168

separate fee agreement

Back 168

An agreement between the seller and the seller's broker in a sales transaction, separate from the buyer's purchase agreement offer, that obligates the seller to pay a broker fee to their agent.

Front 169

separated report

Back 169

A report issued by a structural pest control company which is divided into Section I items, noting active infestations, and Section II items, noting adverse conditions which may lead to an infestation.

Front 170

special assessment

Back 170

A lien against real estate by a public authority to pay the cost of public improvements such as street lights, sidewalks, street improvements. In a common interest subdivision, an additional charge levied by the association for unanticipated repairs.

Front 171

special damages

Back 171

Money losses not incurred directly from another's breach of a real estate agreement, but which are naturally incurred as a result of the breach. Also known as consequential damages.

Front 172

Statute of Frauds

Back 172

California state law requiring specific types of contracts to be in writing and signed by the person to be charged with performance before they will be enforceable by a court, e.g., purchase agreements and lease agreements for a term of more than one year.

Front 173

stepped-up basis

Back 173

The setting of an asset's cost basis to fair market value for income tax purposes when transferred by death of the owner.

Front 174

straight note

Back 174

A note calling for the entire amount of its principal to be paid together with accrued interest in a single lump sum when the principal is due.

Front 175

Structural Pest Control report (SPC)

Back 175

A report disclosing any active infestations, damage from infestations or conditions which may lead to infestations.

Front 176

subagent

Back 176

An individual who has been delegated agency duties by the primary agent of the client, not the client themselves.

Front 177

supra-competitive

Back 177

A market condition where prices are unfairly set by collusion, preventing others from entering the market and hurting consumers.

Front 178

termination

Back 178

The cancellation of a transaction before escrow has closed or a lease has ended.

Front 179

termination-of-agency clause

Back 179

A provision in an exclusive listing agreement which calls for a broker fee to be earned and payable when the client cancels the employment without cause.

Front 180

third party beneficiary

Back 180

A person for whose benefit two other persons place a provision in an agreement, such as a provision for payment of broker fees.

Front 181

time-essence provision

Back 181

A purchase agreement provision declaring that dates for performance of any activity or occurrence of an event are to be strictly enforced as essential to the continuation of the transaction.

Front 182

title conditions

Back 182

Encumbrances such as liens, conditions, covenants and restrictions and easements which affect title to property.

Front 183

title insurance

Back 183

A form of indemnity insurance issued by a title insurance company which holds harmless the named insureds against monetary loss caused by an encumbrance not listed in Schedule B of the policy and not known by the insured when the policy was issued.

Front 184

Transfer Disclosure Statement (TDS)

Back 184

A mandatory disclosure prepared by a seller and given to prospective buyers setting forth any property defects known or suspected to exist by the seller, generically called a condition of property disclosure.

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trust funds

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Items which have or evidence monetary value held by a broker for a client when acting in a real estate transaction.

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unconscionable advantage

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When an equity purchase investor or a mortgage holder exploits an element of oppression, helplessness or surprise to exact unreasonably favorable terms from a property owner or tenant.

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unilateral cancellation

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A situation under a purchase agreement when one party acting alone terminates the agreement, eliminating the requirement for the buyer and seller to perform on the terms stated.

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unilateral employment agreement

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An oral or written employment agreement obligating the broker to use their best-efforts to fulfill the client's real estate goals without imposing a due diligence duty on the broker until a match is located, commonly called an open listing.

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unilateral fee instructions

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Instructions signed only by the seller which authorize escrow to pay the broker fee from their net proceeds of the sale.

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unknown and unsuspected claims

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Claims unknown to the parties which are later established and pursued after entering into a general release.

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vesting

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A method of holding title to real estate, including tenancy in common, joint tenancy, community property and community property with the right of survivorship.

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visual inspection

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An inspection of a listed property performed by the seller's agent and undertaken to observe defects to be noted on a condition of property disclosure, called the Transfer Disclosure Statement (TDS).

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withdrawal-from-sale clause

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A provision in an exclusive listing agreement which calls for a broker fee to be earned and payable when the seller withdraws the property from sale, makes the property unmarketable, transfers ownership or, without the broker's consent, further leases the property.