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111 Cards in this Set
- Front
- Back
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Capitalization
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The process of converting future income into present value; the income approach to value; considering net income and percentage of reasonable yield on the investment.
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Capitalization rate
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The rate of return an investor will demand from the investment in a property; increases with risk involved in a property.
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Caveat emptor
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Let the buyer beware.
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Censure
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Disciplinary power of the Commission whereby it reprimands a licensee; usually for technical violations occurring for the first time.
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Certificate of eligibility
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The VA's official statement regarding the exact amount of a mortgage loan it will guarantee for a particular veteran.
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Certificate of no defense
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See estoppel certificate.
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Certificate of occupancy
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Authorization from a building inspector that construction has been completed in compliance with building codes and is ready for occupancy.
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Certificate of Reasonable Value (CRV)
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An official VA appraisal of a specific property.
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Certificate of sale
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Issued to the successful bidder at a foreclosure sale if the state provides a statutory period of redemption to the defaulting owner.
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Certificate of title
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A title examiner's written opinion of the current condition of a property title based on a search of the public records dating back for a specified number of years.
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Certified Property Manager (CPM)
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A professional designation for one who has met all of the educational and experience requirements of the Institute of Real Estate Management.
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Chain of title
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The recorded history of conveyances affecting a property's title beginning with the original patent or grant from the government and continuing to the current owner.
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Chapel
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Personal property.
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Chattel mortgage
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See security agreement.
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Civil Rights Act of 1866
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The first federal legislation intended to prohibit racial discrimination in the sale or rental of all types of property.
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Client
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The person who authorizes the agent (broker) to act on his/her behalf. In real estate transactions; the client may be the seller. Also called the principal.
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Client BRRETA
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"Under ""BRRETA;"" the client is the person or entity who has entered into a contractual relationship (brokerage engagement) with the broker."
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Closed mortgage
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One which does not allow the borrower to pay off the loan before maturity.
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Closing
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The act of finalizing a transaction; in which title is conveyed to the purchaser. Also called settlement.
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Closing Costs
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Prorated charges by the lender including costs of making the loan and a service charge can be paid by buyer or seller.
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Cloud on the title
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Any claim; lien; or encumbrance that impairs title to real estate.
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Co-broker
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A broker who assists the listing broker in securing a buyer. Subagent.
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Co-brokering
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Participation of more than one broker in a real estate transaction.
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Codicil
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A written instrument executed for the purpose of amending an existing will.
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Collateral
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Property pledged to a lender as security for a loan.
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Color of title
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A title condition which appears to be good but in fact is not valid due to a certain defect; such as a forged deed.
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Commercial easement in gross
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A right to use the land of another. It does not benefit any particular property. The right is transferable and freely inheritable. Typical examples include utility easements; railroad rights-of-way; and billboard easements.
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Commingling
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An illegal practice whereby a broker mixes trust funds with his/her own or uses any part of those funds; before the sale is closed or otherwise terminated.
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Commission
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A broker's compensation for rendering a service to the principal as negotiated with the principal.
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Commission (GREC)
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The Georgia Real Estate Commission; the state licensing authority charged with the enforcement of the Real Estate License Law.
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Comparables
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Properties with similar characteristics to the subject property used for analysis in the market date approach.
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Competency
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See legal capacity.
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Condemnation
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A legal proceeding to exercise the power of eminent domain to take private property for public use.
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Condemnation clause
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A lease provision which specifies that proceeds be paid to the landlord in the event the leased premises are acquired by the government through condemnation.
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Condition
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A provision in a deed which subjects the ownership of land to certain restrictions. The party creating the condition (the grantor) reserves a future right in the property. Upon the occurrence or nonoccurrence of a stated condition; either the title automatically reverts to the grantor; or the grantor has the right to sue for possession and terminate the estate.
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Conditional commitment
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An official FHA appraisal of a specific property. Referred to as cost of acquisition. It is used to determine the amount of loan the FHA will insure.
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Consideration
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Anything of monetary value to induce another to enter into a contract.
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Constant mortgage plan
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See fully amortized mortgage.
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Construction loan
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A short-term interim loan to finance the cost of labor and materials necessary to complete construction of a building or other project.
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Constructive communication
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Communication by operation of law. When an offer is made through a courier; such as the mail; the offeree's acceptance is effectively communicated to the offeror when the acceptance is sent; not when it is received by the offeror.
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Constructive eviction
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Occurs when the landlord's actions or omissions allow the leased premises to become uninhabitable for its intended use; usually a violation of the implied warranty of habitability or the implied covenant of quiet enjoyment.
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Constructive fraud
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The misrepresentation of material facts; without intending to deceive or mislead but involving a breach of duty; such as negligence or carelessness. The broker is also liable for damages and license sanction. For example; a broker is negligent in the duty to discover the truth about zoning and unintentionally misleads a prospective purchaser.
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Constructive notice
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Knowledge that one is presumed by law to have; even though there is no actual knowledge of the fact. Constructive notice may be given by recording an instrument in the public records or by taking possession.
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Constructive severance
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The transfer to someone other than the owner of the land the rights to remove attachments such as timber; or buildings; or the right to remove minerals.
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Consummate dower
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A wife's right in her husband's estate after his death.
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Contiguous
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Adjoining; next to; in actual contact with.
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Contingent remainder
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A nonpossessory estate created when a fee simple owner grants a lesser estate and designates another person to take possession of the fee simple estate upon termination of the lesser estate and the occurrence of a stated condition.
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Contour
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The shape of the earth's surface.
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Contour map
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See topography map.
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Contract
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An agreement to do or not to do a particular act or thing which is enforceable by law. For the agreement to be valid and enforceable it must contain the following elements: legally competent parties; mutual assent; genuine assent; consideration; lawful purpose; and be in writing when required by law.
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Contract for deed
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See land contract.
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Contract for sale
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See sales contract.
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Contract rent
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The amount of rent stated in a lease agreement.
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Conventional life estate
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See life estate.
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Conventional loan
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One that is neither insured nor guaranteed by the government.
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Conveyance
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The document used to transfer interest in real property. Such as deeds; leases; mortgages; etc.
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Corporation
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A legal entity created under authority of the state. It offers limited liability to its owners. A resolution of the board of directors authorizing certain officers to sign a contract is required in order to bind a corporation.
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Correction deed
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See deed of reformation.
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Correlation
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See reconciliation.
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Correlative rights
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A doctrine of law which allows riparian owners in certain states to use only a reasonable share of water during periods of drought.
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Cost
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A historical record of past expenditures necessary to bring a property into being.
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Cost approach
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One of the three approaches to value; it involves estimating the current cost of replacing all improvements; from which the amount of estimated accrued depreciation is deducted; and an estimated value of the land is added.
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Cost-to-cure
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A method of estimating accrued depreciation by calculating the cost to correct all curable depreciation; also called observed condition.
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Counter-offer
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A proposal by an offeree to an offeror made in response to an offer; a counter offer terminates the original offer. Sometimes called qualified acceptance.
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Covenant
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A restriction in a lease or deed which specifies that the property will or will not be used in a certain manner. An example of a covenant is a subdivision restriction. Covenants must be enforced by seeking an injunction or damages. Covenants have a time limit after which they are no longer effective.
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Covenant against encumbrances
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A deed provision which assures the grantee that title to the property is free from any and all encumbrances not excepted in the deed or visible on the premises; or recorded in the public records.
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Covenant of further assurances
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A deed provision in which the grantor promises to perform any acts necessary to produce whatever documents are required to perfect title in the grantee.
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Covenant of quiet enjoyment
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A deed provision in which the grantor promises that the grantee shall be free of interference from the acts or claims of others having a superior title to the property.
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Covenant of seizin
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A deed provision in which the grantor promises that at the time of conveyance; he/she owns the property and has the right to convey title to it.
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Covenant of warranty forever
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A deed provision in which the grantor promises to compensate the grantee for any loss suffered while defending the title against persons asserting a genuine claim to the property from any time in the past.
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Covenants of title
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Either expressed or implied deed provisions in which the grantor promises that certain conditions of title exist. If it is later proven that those conditions do not exist; the grantor is obligated to compensate the grantee for any actual damages which result.
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Credit report
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A written report detailing the credit history of a prospective borrower; used by a lender to help determine credit worthiness.
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Curable depreciation
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Items of physical deterioration and functional obsolescence within the owner's control; which are economically feasible to repair or replace.
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Curtesy
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A husband's life estate in the real property owned by his wife and conveyed to him by law upon her death.
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Customer
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A third party; usually the buyer; with whom an agent deals on behalf of the principal.
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"Customer under ""BRRETA"" "
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"A customer is someone who is working with a broker concerning real estate matters but has not entered into a brokerage engagement with the broker. In a situation where the broker works with a ""customer;"" this law allows the broker to perform ""Ministerial Acts"" for the customer while working with them in a specific real estate transaction."
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Damages
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Loss or injury to a person or property caused by breach of contract. Also; the compensation paid for such loss.
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Datum
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A point of surface of known location from which heights and depths are measured. The basic point from which vertical land (air rights and mineral rights) is described.
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Debt service
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Mortgage payments including principal and interest.
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Decedent
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A deceased person.
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Declaration of restrictions
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An instrument which contains all the restrictive covenants affecting the lots in a subdivision. By recording the instrument; the subdivision restrictions are incorporated by reference into the deeds to each individual lot.
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Declaratory ruling
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An official statement from the Commission which is intended to clarify the position and intent relating to a particular rule or part of the License Law.
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Dedication
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The act of giving to a government real property which is designated for public use.
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Deed
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A written instrument which; when properly executed and delivered by the grantor during the grantor's lifetime; conveys the grantor's interest to the person who accepts it; known as a grantee.
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Deed in foreclosure
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See sheriff's deed.
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Deed in lieu of foreclosure
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A deed given to a lender by a defaulting borrower who wishes to avoid foreclosure proceedings. The lender may or may not accept the deed.
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Deed in partition
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A deed issued by the court when property is sold at a partition sale for the purpose of dividing a joint tenancy or tenancy in common ownership.
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Deed of reformation
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A deed which corrects an error in another deed.
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Deed of trust
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A deed used in many states in lieu of a mortgage. Title is held by a trustee on behalf of a lender (beneficiary) until the borrower (trustor) repays the loan.
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Deed to secure debt
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See security deed.
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Default
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See breach of contract.
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Defeasance clause
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A mortgage provision which allows the borrower to defeat the mortgage by repaying the loan according to the terms of the note. When the debt is paid; this provision causes the mortgage to become null and void; allowing the borrower to regain full rights of ownership.
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Deficiency judgment
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A judgment ordered by the court against the borrower when the proceeds from a foreclosure sale are insufficient to satisfy the debt. The defaulting borrower's other assets may be sold to satisfy the judgment.
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Demand deposits
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A bank's deposits which are available to the depositor with no advance withdrawal notice required.
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Depreciation
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Loss in value due to physical deterioration; functional obsolescence; or economic obsolescence.
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Depth tables
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Method of estimating the value of the added depth of a lot; as compared to a standard size lot.
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Dereliction
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A process of accretion whereby usable land is gradually exposed when a body of water recedes and remains below its normal waterline.
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Deterioration
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See physical deterioration.
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Devise
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A gift of real property by will.
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Deviser
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A person who disposes of real property by will.
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Devises
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A person named to receive real property by will.
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Discount points
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The percentage of a loan which determines the amount paid to the lender to increase the yield. One discount point is equal to one percent of the loan amount. See loan discount.
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Discount rate
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The rate of interest the Federal Reserve System charges member banks to borrow money. By controlling the discount rate; the Federal Reserve controls the money available for credit.
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Disintermediation
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Occurs when withdrawals exceed deposits from savings and loan associations or other similar institutions because alternative investments offer a more attractive return.
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Dominant estate
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The land parcel which benefits from an easement appurtenant. When title to the land is conveyed; the easement is automatically transferred to the new owner.
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Dower
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A wife's life estate in the real property owned by her husband and conveyed to her by law upon his death.
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Dual agency
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Representation by the same agent of more than one party in the same transaction. This practice constitutes a violation of the License Law; unless both parties give their written consent.
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"Dual agent under ""BRRETA"" "
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A dual agent is a broker who has entered into a brokerage engagement with both seller and buyer or landlord and tenant in the same transaction.
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Dual contracts
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See falsifying contracts.
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Due-on-sale clause
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See alienation clause.
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Duress
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The use of force to compel a person to enter into a contract.
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