Dictionary

ABANDONMENT - The voluntary surrender or relinquishment of possession of real property with the intention of terminating one's possession or interest, but without vesting this interest in any other person.

ABATEMENT - A reduction or decrease in amount, degree, intensity or worth.

ABET – To urge or help commit a crime.

ABEYANCE – Temporary suspension of an activity or ruling, as with a settlement of an estate.

ABSOLUTE CONVEYANCE – An instrument by which a property is transferred free of any condition.

ABSORPTION RATE - An estimate of the rate at which a particular classification of space - such as new office space, new housing, new condominium units and the like - will be sold or occupied each year.

ABSTRACT OF TITLE - A concise, summarized history of the title to a specific parcel of real property, together with a statement of all liens and encumbrances affecting the property. The abstract of title does not guarantee or assure the validity of the title of the property. It merely discloses those items about the property which are of public record, and thus does not reveal such things as encroachments, forgeries, and the like.

ABSTRACTER (Title Examiner) – A specialist in title search and abstract preparation.

ACCELERATE - An option given to lenders through an "acceleration" clause in the mortgage or deed of trust requiring the borrower to pay the entire balance of the loan all at once if their loan is in default.

ACCELERATION CLAUSE – Clause used in promissory notes or mortgages which gives the lender the right to declare payment in full upon the occurrence of a certain event, such as default or failure to pay a certain due date or transfer of title to the property.  Also known as the “Due on Sale Clause” or “Non-Assumption Clause”.

ACCELERATED DEPRECIATION - A method of calculating the depreciation of certain property (that property which is used in a trade or business, or which is held for the production of income) at a faster rate (during the early years) than would be achieved from using the straight line (slower rate) method of depreciation.

ACCELERATION CLAUSE - A clause in a promissory note, agreement of sale, or mortgage which gives the lender the right to call all sums due and payable in advance of the fixed payment date upon the occurrence of a specified event, such as a sale, default, assignment or further encumbrance of the property.

ACCEPTANCE - The expression of the intention of the person receiving an offer (offeree, usually the seller) to be bound by the terms of the offer.

ACCEPTANCE – The act of accepting an offer which results in a binding contract.

ACCEPTANCE - A legally binding contract component that involves an act of accepting an offer to enter into a contract. A contract cannot exist without both an offer and acceptance. Acceptance is binding and legal when both parties agree to the initial terms or after both parties have accepted all counter offers.

ACCESS - A general or specific right of ingress and egress to a particular property.

ACCRETION - The gradual and imperceptible addition to land by alluvial deposits of soil through natural causes, such as shoreline movement caused by streams or rivers.

ACCRETION – The slow build up of lands by natural forces such as wind, wave, or water.

ACCRUED - That which has accumulated over a period of time such as accrued depreciation, accrued interest or accrued expenses.

ACKNOWLEDGMENT - A formal declaration made before a duly authorized officer, usually a Notary Public, by a person who has signed a document.

ACRE - A unit of measure used in real estate for land equaling 43,560 square feet; 4,840 square yards; 160 square rods.

ADDITIONAL PRINCIPAL PAYMENT - A payment by a borrower of more than the scheduled principal amount due in order to reduce the remaining balance on the loan and amortize the loan at a faster rate.

ADHESION CONTRACT - A contract which is very one-sided and favors the party who drafted the document.

ADJUSTABLE RATE - An interest rate that is adjusted or floats periodically on the basis of changes in a specified index and in relation to a specified margin.

ADJUSTABLE RATE MORTGAGE (ARM) - A mortgage that permits the lender to adjust its interest rate periodically on the basis of changes in a specified index and in relation to a specified margin.

ADJUSTABLE RATE MORTGAGE (ARM) - A mortgage with an interest rate that rises or falls periodically in response to prevailing rates.  Also called a variable-rate mortgage (VRM).

ADJUSTED BASIS - A tax basis calculation referring to the original cost of a property plus the cost of any improvements or other step-ups less depreciation.

ADMINISTRATOR - A person appointed by a probate court to settle the affairs of an individual dying intestate (dying without a will).

AD VALOREM - Latin for "according to valuation," usually referring to a type of tax or assessment.

ADVERSE POSSESSION - The acquisition of real estate through a prolonged and unauthorized occupation.  Acquiring of title to real property owned by someone else, by means of open, notorious and continuous possession for a statutory period of time (20 years in Massachusetts).

AFFIDAVIT - A sworn statement reduced to writing and made under oath before a Notary Public or other official authorized by law to administer an oath.

AGENCY - A relationship created when one person, the "principal," delegates to another, the "agent," the right to act on the principal's behalf in business transactions and to exercise some degree of discretion while so acting. An agency gives rise to a fiduciary relationship and imposes on the agent, as the fiduciary of the principal, certain duties, obligations and high standards of good faith and loyalty.

AGENT - One who is authorized to represent and to act on behalf of another person (called the principal). A real estate broker is the agent of his client, be it the seller or buyer, to whom he owes a fiduciary obligation. A salesman is the agent of his broker and does not have a direct personal contractual relationship with either the seller or buyer.

AGREEMENT OF SALE - A written document or contract between a seller (vendor) and a buyer (vendee) for the purchase of real property.

AIR RIGHTS - The rights to the use of the open space or vertical plane above a property. Ownership of the land includes the right to all air above the property.

AIREA - The American Institute of Real Estate Appraisers.

AIR DUCT - A rectangular or round metal pipe used to direct warm or cold air through a house and then back to the forced-air furnace, or to an air conditioning unit.

ALIENATION CLAUSE - A clause in a promissory note or mortgage which provides that the balance of the secured debt becomes immediately due and payable at the option of the mortgagee upon the alienation of the property by the mortgagor.

ALLIGATORING - Open cracks in the surface of a paint coating.  This is generally caused by expansion and/or contraction of a new topcoat of paint over a glossy undercoat.

ALLODIAL SYSTEM - The free ownership of land by individuals.

AMENITIES - Features, both tangible and intangible, which enhance and add to the desirability of real estate.

AMORTIZATION - The gradual repayment of a debt by means of systematic payments of principal and interest requiring periodic installments over a set number of years, where at the end of the set time there is a zero balance.

AMORTIZATION SCHEDULE - A table showing how a loan is systematically repaid during its term.

AMPERE - The practical unit of electric current that is equivalent to the steady flow of current produced by one volt applied across a resistance of one ohm.

ANCHOR BOLT - A threaded steel bolt used to secure a wood sill plate to a foundation wall.

ANCHOR TENANT - Major department or chain stores which are strategically located at shopping centers so as to give maximum exposure to smaller satellite stores.

ANNUAL PERCENTAGE RATE (A.P.R.) - The relationship of the total Finance Charge to the total amount to be finance as required under the Federal Truth-in-Lending Law.

ANNUAL PERCENTAGE RATE (APR) - The annual interest rate charged over a full year, including interest, discount points, and loan fees.

ANNUITY - A sum of money received yearly or at other fixed intervals normally generated from an investment.

APPRAISAL - The process of estimating, fixing, or setting the market value of real property. An appraisal may take the form of a lengthy report, a completed form, a simple letter, or even an oral report.

APPRAISAL - The process in which a licensed or authorized person gives an estimate of property value.

APPRAISER - A person who is trained and certified in the methods of determining the market value of a property.

APPRECIATION - The difference between the increased value of the property and the original value of property.  This is due to economic or related causes, which may prove to be either temporary or permanent.

APPURTENANCE - Anything so annexed, either attached or not, such as a shed to a house or an easement to land, that it will pass as part of the property upon sale.

APPURTENANT - Belonging to; adjunct; appended or annexed.

ARBITRATION - The non-judicial submission of a controversy to selected third parties for their determination in the manner provided by agreement or by law.

ASPHALT - A black bituminous coating used for blacktop driveways, wall shingles, and roof coverings.

ASSESSED VALUATION - The value of real property as established by the state government for purposes of computing real property taxes.

ASSESSMENT - A specific levy for a definite purpose, such as adding curbs or sewers in a neighborhood. Individual condominium owners are subject to special assessments benefiting the project as a whole and not funded through regular maintenance charges.

ASSESSMENT - A specific tax for street maintenance or trash removal, etc.

ASSESSOR - A person who estimates property value for tax purposes

ASSIGN - The transfer of one's rights under contract to another person.

ASSIGNEE -The person to who rights are assigned or transferred.

ASSIGNMENT - The transfer of the right, title and interest in the property of one person, the assignor, to another, the assignee. In real estate, there are assignments of mortgages, contracts, agreements of sale, leases, and options, among others.

ASSIGNMENT - The transfer of property to be held in trust or to be used for the benefit of the creditors (lenders).

ASSUME A LOAN - A buyer assumes the responsibility to repay an existing loan as a condition of sale.

ASSUMPTION FEE - A lender's charge for processing records and paperwork, when an existing loan is being assumed.

ASSUMPTION OF MORTGAGE - The act of acquiring title to property which has an existing mortgage on it and agreeing to be personally liable for the terms and conditions of the mortgage, including payments.

ATTACHMENT - The legal process of seizing the real or personal property of a defendant in a lawsuit, by levy or judicial order, and holding it in the custody of the courts as security for satisfaction of the judgment which the plaintiff may recover in any action upon a contract, express or implied.

ATTORNEY-IN-FACT - One who is authorized by another to act in his place under a power of attorney.

ATTORNMENT - The act of a tenant formally agreeing to become the tenant of a successor landlord; as in attorning to a mortgagee who has foreclosed on the leased premises.

BACKFILL - Dirt that is replaced around foundation walls after repair work around a foundation has been completed.

BALANCE SHEET - A financial statement of an entity such as a corporation or limited liability company that shows assets, liabilities, and net worth as of a specific date. This is generally required to underwrite alternate documentation borrowers who are self-employed.

BALLOON-FRAMING - An old type of framing that uses long wall studs which are secured to the sill plate before the floor joists are secured to them.

BALLOON MORTGAGE - A mortgage in which the final payment is larger than any of the preceding payments.

BALLOON MORTGAGE - A mortgage with a fixed payoff date that has level monthly payments of principal and interest that do not fully amortize the loan as of the payoff date. The balance is due in a lump sum payment at a specified date, usually at the end of the term.

BALLOON PAYMENT - The final lump sum payment plus any accrued interest that is made at the maturity date of a balloon mortgage.

BALLOON PAYMENT - The final payment of a note or obligation, which is substantially larger than the previous installment payments, and which repays the debt in full; the remaining balance which is due at the maturity of a note or obligation.

BALUSTERS - Upright members, such as spindles, that attach to a handrail and stair treads.

BALUSTRADE - A row of balusters topped by a rail.

BANKRUPT - A person, firm, or corporation (debtor) that, through a court proceeding of Bankruptcy Law Chapter 7, 11 or 13, is relieved from the payment of some or all debts, usually after the surrender of all assets to a court-appointed trustee or after the reorganization of the debtor's assets and liabilities. Usually, at least two (2) years must elapse from the discharge of the bankruptcy before lenders will consider making a loan to someone who has declared bankruptcy.

BANKRUPTCY - A legal proceeding in a Federal court under Chapter 7, 11, 13 in which a debtor who owes more than his or her assets can seek and possibly receive debt relief by transferring his or her assets to a trustee or agreeing to reorganization of assets and liabilities. Usually, at least two (2) years must elapse from the discharge of an individual bankruptcy before lenders will consider making a loan to someone who had declared bankruptcy.

BANKRUPTCY - A court action relieving a person from most, if not all, debt, due to the inability to repay.

BARGAIN AND SALE DEED - A deed in which the grantor makes no warranties about the title quality, but does imply that the grantor owns the property being conveyed.

BARGAIN AND SALE DEED - A deed which recites a consideration and conveys all of the grantor's interest in the property to the grantee.

BASE LINE AND MERIDIAN - An imaginary set of lines used by surveyors to locate and describe land under the Rectangular Survey Method of property description used in most mainland states.

BASIS - The financial interest which IRS attributes to the owner of an asset for purposes of determining annual depreciation and gain or loss on sale of the asset.

BEAM - A horizontal wood or steel structure used to support floor joists and partitions.

BEARING WALL - A wall that supports a roof or floor load, depending upon its placement.

BENCH MARK - A mark affixed to a permanent reference or monument, such as an iron post or a brass marker (usually embedded in a cement sidewalk), used to establish elevations and altitudes over a surveyed area.

BENEFICIARY - A person who receives the benefits from the gifts or acts of another, such as one who is designated to receive the proceeds from a will, insurance policy or trust.

BEQUEST - Personal property received under a will.

BID - The offered amount for a property for sale at auction.

BILATERAL CONTRACT - A contract in which each party promises to perform an act in exchange for the other party's promise to perform.

BILL OF SALE - A written agreement by which one person sells, assigns or transfers his right to, or interest in, personal property to another.

BINDER - A legal contract secured by the payment of earnest money, between a buyer and seller as an offer to purchase real estate.

BLANKET MORTGAGE - A single mortgage covering more then one parcel of real estate.

BLANKET MORTGAGE - A mortgage which is secured by several structures or a number of lots. A blanket mortgage is often used to finance proposed subdivisions or development projects, especially cooperatives.

BLIND POOL - An investment pool where property is purchased after investors have already put in their money.

BLISTERING - Puffed spots appearing on siding where paint was improperly applied.

BLUE SKY LAWS - State securities laws designed to protect the public from fraudulent practices in the promotion and sale of securities, e.g., through limited partnerships, syndications, bonds.

BOOT - Money or other property given to make up any difference in value or equity between two exchanged properties.

BOUNDARIES - The perimeters or limits of a parcel of land as fixed by legal description which is usually a metes and bounds description.

BRACE - A piece of wood framing installed at an angle to support other structural members.

BREACH OF CONTRACT - Violation of any of the terms or conditions of a contract without legal excuse; default, non-performance, such as failure to make payment when due.

BREAK EVEN POINT - When the cash flow from an income property, less expenses, equals zero.

BRICK VENEER - A brick facing applied to a wood-framed house.

BRIDGING - Wood or metal members used between floor joists in a diagonal position to brace joists and to more evenly distribute the load.

BROKER - A person licensed by the state to represent either a seller or buyer of real estate.

BROKER - One who acts as an intermediary between parties to a transaction. A real estate broker is a properly licensed person who, for a valuable consideration, serves as an agent to others to facilitate the sale or lease of real property.

BROKERAGE - That aspect of the real estate business which is concerned with bringing together the parties and completing a real estate transaction. Brokerage involves exchanges, rentals, trade-ins and management of property, as well as sales.

BUDGET MORTGAGE - A mortgage with payments set up to cover more than interest and principal reductions.

BUFFER ZONE - A strip of land separating one parcel from another.

BUILDING CODES - Local safety codes regulating the construction of buildings, including design, materials, and other related aspects of building.

BUILDING PERMIT - A written permission granted by the County Building Department and required prior to beginning the construction of a new building or other improvement (including fences, fence walls, retaining walls and swimming pools).

BUILDING RESIDUAL TECHNIQUE - A method of determining the value of an improvement normally used in appraising income property.

BULK TRANSFERS - Any transfer in bulk, and not in the ordinary course of the seller's business, of a major part of the materials, inventory or supplies of an enterprise.

BUNDLE OF RIGHTS - An ownership concept describing all those legal rights which attach to the ownership of real property, including the right to sell, lease, encumber, use, enjoy, exclude, will, etc.

BUSINESS DAYS - Days of the week excluding Saturdays, Sundays, and holidays; normal working days.

BUSINESS OPPORTUNITIES - Any type of business which is for sale.

BUY-DOWN - When a cash payment is given to a lender to reduce the interest rate.

BUYER'S MARKET - A market with many sellers and few buyers.

CALL OPTION - A provision in the mortgage or note that gives the lender the right to "call" or request that the mortgage due and payable in full at the end of a specified time period.

CANTILEVER - A projecting beam or overhanging portion supported at one end only.

CAP - Also known as a "Rate Cap," provision of an adjustable-rate mortgage (ARM) that limits the maximum interest rate on mortgage payments or how they may increase. See lifetime payment cap, lifetime rate cap, periodic payment cap, and periodic rate cap.

CAPITAL - Investment or other money: (1) used to create income, either as an investment in a business or an income property; (2) the money or property comprising the wealth owned or used by a person or business enterprise; (3) the accumulated wealth of a person or business; (4) the net worth of a business represented by the amount by which its assets exceed liabilities.

CAPITAL EXPENDITURE - The expense classification of an improvement (capital improvement) made to extend the useful life of real property or to add to its value.

CAPITAL GAINS - The taxable profit derived from the sale of a capital asset such as real estate.

CAPITAL GAINS TAX - Federal tax paid on the gain realized upon the sale of an asset. Said tax is determined by the holding period of the asset and determined by the rate associated with the holding period.

CAPITAL IMPROVEMENT - Any structure which is erected as a permanent improvement to real property; any improvement which is made to extend the useful life of a property, or to add to the value of the property.

CAPITAL LOSS - The loss derived from the sale of a capital asset.

CAPITALIZATION - A mathematical process for converting net income into an indication of value, commonly used in the income approach to appraisal.

CAPITALIZATION RATE - Also known as/see “Cap Rate”

CAP RATE (CAPITALIZATION RATE) - The percentage selected for use in the income approach to valuation of improved property. The cap rate is designed to reflect the recapture of the original investment over the economic life of the improvement, to give the investor an acceptable rate of return (yield) on the original investment, and to provide for the return on borrowed capital.

CASEMENT - A window sash supported by hinges that open and close the sash.

CASING - Door and window framing.

CASH FLOW - In an investment property, the money left over each year after deducting all operating expenses and debt service from the gross income.

CAVITY WALL - A hollow wall section created by wood or metal framing members that will usually be insulated.

CERTIFICATE OF REASONABLE VALUE (CRV) - A certificate issued by the Veterans Administration setting forth a property's current market value estimate, based upon a VA approved appraisal.

CERTIFICATE OF SALE - A document given to the winning bidder at a foreclosure sale stating their rights to the property once the borrowers redemption period has expired.

CERTIFIED CHECK - A check which the bank guarantees to be good, and against which a stop payment is ineffective.

CERTIFIED PROPERTY MANAGER - A professional property manager who has qualified for membership in and is a member of the Institute of Real Estate Management, and is designated a CPM.

CHAIN OF TITLE - The recorded history of matters which affect the title to a specific parcel of real property, such as ownership, encumbrances and liens, usually beginning with the original recorded source of the title.

CHATTEL - Personal property which is tangible and movable.

CHIMNEY CAP - A concrete cover at the top of a brick chimney.

CIRCUIT BREAKER - An electrical safety device located in an electrical box, which breaks an electric circuit automatically when it becomes overloaded.

CLAPBOARD - Wood that is used on the exterior of a home that is thicker on one edge than the other and is overlapped and nailed into sheathing.

CLEAR TITLE - Title to property that is free from liens, defects or other encumbrances, except those which the buyer has agreed to accept, such as mortgage to be assumed, the ground lease of record, and the like; established title; title without clouds.

CLIENT TRUST ACCOUNT - An account set up by a broker to keep client's monies segregated from the broker's general fund

CLOSING - The final stage of consummating a real estate transaction when the seller delivers title to the buyer, in exchange for the purchase price.

CLOSING - When a sale and purchase of a property is being finalized.

CLOSING COSTS - Expenses of the sale which must be paid in addition to the purchase price (in the case of the buyer's expenses), or be deducted from the proceeds of the sale (in the case of the seller's expenses).

CLOSING COSTS - The numerous miscellaneous expenses incurred by buyers and sellers in closing a real estate transaction.

CLOSING STATEMENT - A detailed cash accounting of a real estate transaction prepared by an escrow officer or other person designated to process the mechanics of the sale, showing all cash that was received, all charges and credits which were made, and all cash that was paid out in the transaction; also called a settlement statement.

CLOSING STATEMENT - The statement, which lists the financial settlement between buyer and seller and all, related closing costs each party must pay.

CLOUD ON TITLE - An adverse condition affecting the marketability of title.

CLOUD ON TITLE - Any document, claim, unreleased lien or encumbrance which many impair or injure the title to property or make the title doubtful because of its apparent or possible validity.

CLUSTER DEVELOPMENT - The grouping of housing units on less than normal size homesites, with the remaining land being devoted to common areas.

CODE OF ETHICS - A written system of standards of ethical conduct. The Code of Ethics of the National Association of REALTORS®, first written in 1913, establishes the high standards of conduct for members of the REALTOR® community.

COLLATERAL - Something of value given or pledged as security for a debt or obligation. The collateral for a real estate mortgage loan is the mortgaged property itself, which has been hypothecated.

COLLATERAL - The property pledged by a borrower to secure a loan.

COLLER BEAM - A wood beam that connects two inclined roof rafters that serve to support and stiffen the framing of a pitched roof structure.

COLOR OF TITLE - A condition which has the appearance of good title, but which in fact is not valid title, as where title is founded on some written document which on its face appears valid and effective, but which is actually invalid.

COLUMN - A solid vertical member such as a lally column that is generally used as a main support beam.

COMMERCIAL LOANS - Loans intended to be used for commerce, usually retail stores, offices, motels, and hotels.

COMMERCIAL PROPERTY - A classification of real estate which includes income producing property such as office buildings, gasoline stations, restaurants, shopping centers, hotels and motels, parking lots and stores, and other similar uses.

COMMUNITY PROPERTY - Property acquired and jointly owned by husband and wife in which each has equal interest.

COMMINGLING - To mingle or mix; for example, to deposit client funds in the broker's personal or general account. A licensee found guilty of commingling can have the license suspended or revoked by the Real Estate Commission.

COMMISSION - The compensation paid to a real estate broker(usually by the seller) for services rendered in connection with the sale or exchange of real property.

COMMITMENT - A pledge or promise to do a certain act, such as the promise of a lending institution to loan a certain amount of money at a fixed rate of interest to a qualified buyer, provided the loan is obtained on or before a certain date.

COMMON AREAS - Land or improvements designated for the use and benefit of all residents, property owners and tenants.

COMMON ELEMENTS - Parts of the property which are necessary or convenient to the existence, maintenance and safety of the condominium, or are normally in common use by all of the condominium residents.

COMMON LAW - That body of law which is based on usage, general acceptance, and custom, as manifested in decrees and judgments of the courts; judge-made law, as opposed to codified or statutory law.

COMMON WALL - A wall separating two living units.

COMMUNITY PROPERTY - Property acquired and jointly owned by husband and wife in which each has equal interest.

COMMUNITY PROPERTY - A system of property ownership based on the theory that each spouse has an equal interest in property acquired by the efforts of either spouse during marriage.

COMPARABLES - Recently sold properties which are similar to a particular property being evaluated, and which are used to indicate a reasonable fair market value for the subject property.

COMPARABLES - Recently sold properties that are similar in size and location to the property being purchased.

COMPOUND INTEREST - Interest paid on the principal and the accrued unpaid interest.

COMPOUND INTEREST - Interest which is computed upon the principal sum plus accrued interest.

CONCESSIONS - Discounts given by landlords to prospective tenants to induce them to sign a lease.

CONCRETE - A mixture of Portland cement, sand, gravel, and water that is used in building foundation walls, footings, and floor stabs, etc.

CONDEMNATION - The taking of private property by a government agency when a particular building is declared unsafe or unfit.

CONDEMNATION - Either a judicial or administrative proceeding to exercise the power of eminent domain, i.e., the power of the government to take private property for public use.

CONDENSATION - Drops of water or moisture that forms when warm humid air comes in contact with an area that is lower in temperature.

CONDOMINIUM OWNERSHIP - An estate in real property consisting of an individual interest in an apartment or commercial unit, and an undivided common interest in the common areas such as the land, parking areas, elevators, stairways, and the like.

CONDOMINIUM- Individual ownership of portion or a unit in a building, plus joint ownership of all common areas.

CONDUCTOR - Usually a copper wire used to transmit an electrical current.

CONDUIT - A metal pipe used to carry electrical wire throughout the inside and outside of a house.

CONSIDERATION - An act or forbearance, or the promise thereof, which is offered by one party to induce another to enter into a contract; that which is given in exchange for something from another.

CONSTRUCTION LOAN - A loan intended to be used to pay construction costs as they occur.

CONSTRUCTIVE EVICTION - Acts done by a landlord which so materially disturb or impair the tenant's enjoyment of the leased premises that a tenant is effectively forced to move out and terminate the lease without liability for any further rent.

CONSTRUCTIVE NOTICE - Notice of certain facts which are implied bylaw to a person because he could have discovered the fact by reasonable diligence or by inquiry into public records.

CONTINGENCY - A provision placed in contract which requires the completion of a certain act or the happening of a particular event before a contract is binding.

CONTINGENCY - A condition that must occur before a contract becomes legally binding.

CONTRACT - A legal and binding agreement make between to or more parties.

CONTRACT - A legal agreement between competent parties who agree to perform or refrain from performing certain acts for a consideration. In real estate, there are many different types of contracts, including listings, contracts of sale, options, mortgages, assignments, leases, deeds, escrow agreements, and loan commitments, among others.

CONTRACT FOR DEED - A method where a buyer can obtain possession and financing of a property and the seller still retains title.

CONVENTIONAL LOANS - A mortgage loan secured by real estate but not insured by HUD or the Veteran's Administration.  The loan is subject to conditions established by a conventional lending institution.

CONVEY - To transfer property or title from one person to another.

CONVEYANCE - The transfer of title to real property by means of a written instrument such as a deed or an assignment of lease.

COOPERATING BROKER - A broker who joins with another broker in the sale of real property.

COOPERATIVE OWNERSHIP - Cooperative ownership of an apartment unit means that the apartment owner has purchased shares in a corporation which holds title to the entire apartment building.

COPING - A tile cap used to cover the top of any regular masonry wall.

CO-SIGNER - A person who signs a note and becomes liable for repayment of same with the borrower.

CO-TENANCY - A form of concurrent property ownership in which two or more persons own an undivided interest in the same property.

COUNTER-OFFER - A new offer made as a reply to an offer received from another; this has the effect of rejecting the original offer, which cannot thereafter be accepted unless revived by the offeror's repeating it.

COUNTER FLASHING - Sheet metal place at the base of a parapet wall or at the base of a chimney to prevent water leaks.

COURTESY TO BROKERS - The practice of sharing commissions with cooperating brokers.

COVENANT - A written agreement or promise of two or more parties by which either pledges to perform or not to perform specified acts on a property, or which specifies certain uses or non-uses of the property.

COVENANTS AND CONDITIONS - Covenants are promises contained in contracts, the breach of which would entitle a person to damages. Conditions, on the other hand, are contingencies, qualifications or occurrences upon which an estate or property right would be gained or lost.

COVENANTS RUNNING WITH THE LAND - Covenants which become part of the property and benefit or bind successive owners of the property.

CRAWL SPACE - A small unfinished area located in the basement.

CREDIT BID - A bid on behalf of the lender at a foreclosure sale. The bid amount must be less than or equal to the balance of the loan in default.

CUL DE SAC - A street which is open at one end only, and which usually has a circular turnaround; a blind alley.

CUSTOMER TRUST FUND (CTF) - An impound account maintained for the purpose of setting up a reserve to pay certain periodic obligations such as real property taxes, insurance premiums, lease rent, and maintenance fees.

DEALER - An IRS designation for a person who regularly buys and sells real property.

DEBT - An amount of money owed to another. See installment loan and revolving liability.

DEBT SERVICE - The amount of money needed to meet the periodic payments of principal and interest when a debt is amortized.

DEBT-TO-INCOME RATIO - The percentage of gross monthly income that goes toward paying all long term debts, such as mortgage loans, car loans, student loans, credit cards, etc. If monthly gross income is $4,500 and the total of debt payments is $1,620, the debt-to-income ratio is 36 percent ($1,620 divided by $4,500).

DECLARATION OF RESTRICTIONS - A statement of all the covenants, conditions and restrictions ("CC&R's") which affect a parcel of land.

DECREE - A judicial decision.

DEDICATION - The application of privately owned land to the public for no consideration, with the intent that the land will be accepted and used for public purposes.

DEED - A written instrument by which a property owner "grantor" transfers to a "grantee" an ownership in real property.

DEED -  Document indicating the legal transfer of title to real property. There are many versions of deeds based on how title is warranted and special deeds – such as sheriff’s deeds or trustee deeds – that are issued to certain successful purchasers at foreclosure sales.

DEED - A signed document that transfers ownership of property from one party to another.

DEED-IN-LIEU OF FORECLOSURE - A process typically used in a judicial foreclosure jurisdiction in which the underlying defaulted borrower directly transfers title of the mortgaged property to the lender to avoid the foreclosure process and to satisfy the underlying loan obligation.

DEED-IN-LIEU OF FORECLOSURE - An instance where borrowers voluntarily convey their rights in a property to the lender.

DEED OF TRUST - In a title theory state, the document that transfers legal title to the property to the lender pending full repayment of the loan obligation. The document gives a lender the right to foreclose on the property if the borrower defaults on the loan.

DEED OF TRUST - A legal document that conveys title to a neutral third party for a particular piece of real estate.

DEED OF TRUST - A three party security instrument conveying the legal title to real property as security for the repayment of a loan. The three parties included in a deed of trust are the borrower, lender and trustee.

DEED OF TRUST - A legal document in which title to property is transferred to a third party trustee as security for an obligation owed by the trustor (borrower) to the beneficiary(lender).

DEED RESTRICTION - A limitation on the use or property placed in a deed that binds all future owners.

DEFAULT - Failure to make mortgage payments as agreed by the terms set forth in a mortgage or deed of trust.

DEFAULT - A mortgage or deed of trust is said to be in default when the borrower fails to make the payments as agreed to in the original promissory note.

DEFAULT - Failure to fulfill a duty or promise or failure to perform any obligation or required act. The most common occurrence of default on the part of a buyer or lessee is non-payment of money.

DEFERRED COMMISSIONS - Commissions which are earned but not yet fully paid.

DEFICIENCY JUDGMENT - A personal judgment against the borrower for the remaining balance on the loan after a foreclosure sale.

DEFICIENCY JUDGEMENT - A judgment against a borrower, endorser, or guarantor for the balance of the debt issued when the security for a loan is insufficient to satisfy the debt.

DELINQUENT LOAN - A loan with payments that are past due.

DENSITY - A term, frequently used in connection with zoning requirements, which means the maximum number of building units per acre or the number of occupants or families per unit of land area (acre, square mile, etc.); usually the ratio of land area to improvement area.

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD) - A federal agency that helps homeowners and community development by sponsoring a variety of federally funded programs.

DEPOSIT - Money offered by a prospective buyer as an indication of good faith in entering into a contract to purchase; earnest money; security for the buyer's performance of a contract.

DEPRECIATION (APPRAISAL) - A loss in value due to any cause; any condition which adversely affects the value of an improvement.

DEPRECIATION - A gradual decline in value of a house due to wear and tear, or an adverse change in the neighborhood.

DEPRECIATION (TAX) - For tax purposes, depreciation is an expense deduction taken for an investment in depreciable property.

DEPTH TABLE - Tables of percentage designed to provide a uniform system of measuring the additional value to lots which accrues because of added depth, with the extra depth valued according to the added utility which it creates.

DESCENT - The acquisition of an estate by inheritance, where an heir succeeds to the property by operation of law. Descent literally means the hereditary succession of an heir to property of an ancestor who dies intestate.

DESCRIPTION - The portion of a conveyance document which defines the property being transferred.

DEVELOPER - One who attempts to put land to its most profitable use by the construction of improvements.

DEVISE - A transfer of real property under a will.

DISCHARGE IN BANKRUPTCY - A court ordered discharge of all claims against a debtor.

DISCLAIMER - A statement denying legal responsibility, frequently found in the form of, "There are no promises, representations, oral understandings or agreements except as contained herein."

DISCOUNT POINTS - A fee paid to the lender to adjust the interest rate on a loan.

DISCOUNT POINTS - An added loan fee charged by a lender to make the yield on a lower-than-market interest VA or FHA loan competitive with higher interest conventional loans.

DISCOUNT RATE - The percentage rate used to compute the present values of future cash flows.

DISCRIMINATION - The act of making a distinction against or in favor of a person on the basis of the group or class to which the person belongs; the failure to treat people equally.

DISTRAINT - The right of a landlord, pursuant to a court order, to seize a tenants belongings for rents in arrears.

DOMICILE - The state where an individual has his true, fixed, permanent home and principal business establishment and to which place he has the intention of returning whenever he is absent.

DOORJAMB - The wood casing surrounding a door.

DOUBLE ESCROW - An escrow set up to handle the concurrent sale of one property and purchase of another property by same party.

DOUBLE-GLAZED - Insulating glass that has two panes of glass with a sealed air space between them.

DOUBLE-HUNG WINDOW - A window that has a top and bottom sash that can be raised and lowered.

DOWER - The legal right or interest a wife acquires in property her husband held or acquired anytime during marriage.

DRYWALL - An interior wall construction that usually is supplied in 4'x 8' sheets and is often referred to as sheetrock.

DUAL AGENCY - Representing both principals (buyer and seller) to a transaction.

DUE ON SALE CLAUSE - A clause in a mortgage note demanding payment in full when there is a transfer of title.

DUE ON SALE CLAUSE - A form of acceleration clause found in some mortgages, requiring the mortgagor to pay off the mortgage debt when selling the secured property, thus resulting in automatic maturity of the note at the lender's option.

DUPLEX - A structure that provides housing accommodations for two families by having separate entrances, kitchens, bedrooms, lanais, living rooms and bathrooms. A two-family dwelling.

DURESS - Unlawful constraint or action exercised upon a person whereby he is forced to perform some act against his will. A contract entered into under duress is void.

EARNEST MONEY - A deposit given by the buyer to the seller, upon signing an agreement for sale, to demonstrate he is serious about purchasing the property.

EARNEST MONEY DEPOSIT - A deposit made by the potential homebuyer to show they are serious about buying the house.

EASEMENT - A right of way, access or other grant, giving persons other than the owner access to or over a property.

EASEMENT - A right or privilege granted to a person or company authorizing a right of way to or over the owner's land.

EASEMENT - A property interest which one person has in land owned by another entitling the holder of the interest to limited use or enjoyment of the other's land.

EASEMENT IN GROSS - The limited right of one person to use another's land (servient estate), which right is not created for the benefit of any land owned by the owner of the easement; that is, there is no dominant estate, as the easement attaches personally to the owner, not to the land.

EAVES - The over-hang of the roof beyond the walls of a house.

ECONOMIC FEASIBILITY STUDY - An in-depth economic analysis of the potential or a particular real estate investment.

EFFECTIVE AGE - An appraiser's estimate of the current physical condition of a building. The actual age of a building may be different than its effective age.

EFFECTIVE GROSS INCOME - Normal annual income including overtime that is regular or guaranteed. The income may be from more than one source. Salary is generally the principal source, but other income such as rent income or commissions may qualify if it is significant and stable.

EFFECTIVE PERCENTAGE RATE (EPR) - Similar to the Annual Percentage Rate (APR), the Effective Percentage Rate (EPR) measures the cost of a mortgage stated as a yearly rate and includes such items as interest, mortgage insurance, and loan origination fees (points). The difference between the EPR and the APR is that the APR calculates the cost of a loan over the entire term of the loan (30 year, for example). The EPR calculates the cost of the loan over the time you expect to keep the loan or other specified period. This changes the relative costs of different loans because it spreads your closing costs over what is usually a shorter time.

EMBLEMENTS - Growing crops (called "fructus industriales"),such as rice and taro, which are produced annually through labor and industry.

EMINENT DOMAIN - The right of government, both state and federal, to take private property for a necessary public use, with just compensation paid to the owner.

EMINENT DOMAIN - A governmental right to acquire private property for public use provided the owner is justly compensated.

ENCROACHMENT - An unauthorized intrusion of a building or other improvement onto another person's property.

ENCROACHMENT - An unauthorized invasion or intrusion of a fixture or other real property wholly or partly upon another's property, thus reducing the size and value of the invaded property.

ENCUMBRANCE - Any legal claims or interest that limits the ability to convey clear title such as lien, easements, unpaid taxes etc.

ENCUMBRANCE - Any claim, lien, charge or liability attached to and binding upon real property which may lessen the value of the property but will not necessarily prevent transfer of title.

ENTIRETY, TENANCY BY - A form of joint ownership of property between husband and wife with the right of survivorship.

ENVIRONMENTAL IMPACT STATEMENT - A report which includes a detailed description of a proposed development project with emphasis on the existing environment setting, viewed from both a local and regional perspective, and a discussion of the probable impact of the project on the environment during all phases.

EQUITABLE TITLE -The present right to possession with the right to acquire legal title once a preceding condition has been met.

EQUITY - The market value of a property less any and all debts against the property.

EQUITY - That interest or value remaining in property after payment of all liens or other charges on the property. A owner's equity is normally the monetary interest over and above the mortgage indebtedness.

ERRORS AND OMISSIONS INSURANCE - A form of insurance which covers liabilities for errors, mistakes and negligence in the usual listing and selling activities of a real estate office or escrow company.

ESCHEAT - The reversion of property to the state when a decedent dies intestate and there are no heirs capable of inheriting, or when the property is abandoned.

ESCROW - Money held by a third party (usually an attorney until the conditions of an agreement are fulfilled.

ESCROW - The process by which money and/or documents are held by a disinterested third person (a "stakeholder") until the satisfaction of the terms and conditions of the escrow instructions (as prepared by the parties to the escrow).

ESCROW AGENT - A neutral third party used by the buyer and seller to facilitate a transaction.

ESTOPPEL - A legal doctrine by which a person is prevented from asserting rights or facts which are inconsistent with a previous position or representation he had made by his act, conduct or silence.

ETHICS - A system of moral principles, rules and standards of conduct.

EVICTION - The legal process of removing a tenant from possession of the premises for some breach of the lease contract.

EXCHANGE - A transaction in which all or part of the consideration for the purchase of real property is the transfer of property of a like kind.

EXCLUSIVE AGENCY - A written listing agreement giving one agent the right to sell property for a specified time, but reserving to the owner the right to sell the property himself without payment of any commission.

EXCLUSIVE AGENCY - Either exclusive representation of the Buyer or Seller by one particular Broker in a transaction.

EXCLUSIVE LISTING - A contract a seller gives a real estate guaranteeing the sole right to sell his property.

EXCLUSIVE LISTING - A written listing of real property in which the seller agrees to appoint only one broker to sell the property for a specified period of time. The two types of exclusive listings are the exclusive agency and the exclusive right to sell.

EXCLUSIVE RIGHT TO SELL - A listing agreement that gives the broker the right to collect a commission regardless of who is responsible for affecting the sale.

EXECUTIVE - The act of making a document legally valid, such as formalizing a contract by signing, or acknowledging and delivering a deed.

EXECUTOR - A person appointed by a testator to carry out the directions and requests in the last will and testament, and to dispose of property according to the provisions of the will.

EXECUTORY CONTRACT - A contract in which one or both of the parties has not yet performed.

EXPANSION JOINT - A bituminous fiber strip used to divide sections in a concrete sidewalk or blocks to prevent the likelihood of cracking due to expansion.

EXTENDER CLAUSE - A "carry over" clause (referred to as a safety clause) contained in a listing which provides that a broker is still entitled to a commission for a set of period of time after the listing has expired if the property is sold to a former prospect of the broker.

EXTENSION - An agreement to continue the period of performance beyond the specified period.

F. S. (Abbreviation for Florida Statutes) - Most state statues have requirements for proper legal reference in abbreviations. These are referred to as statutory citations.

FAIR CREDIT REPORTING ACT - A consumer protection law that regulates the disclosure of consumer credit reports by consumer credit reporting agencies and establishes procedures for correcting mistakes on a credit record. Referenced as FCRA.

FAIR MARKET VALUE - The value of real property based on the prospective sale price the property would yield if sold in an arms length transaction under current market conditions.

FAIR MARKET VALUE - The highest monetary price which a property would bring, if offered for sale for a reasonable period of time in a competitive market, to a seller who is willing but not compelled to sell, from a buyer, willing but not compelled to buy, both parties being fully informed of all the purposes to which the property is best adapted and is capable of being used.

FANNIE MAE - Congressionally chartered, shareholder-owned company that supports the secondary market in mortgages on residential property with mortgage purchase and securitization programs. Referenced as FNMA.

FANNIE MAE - Federal National Mortgage Association - Federal National Mortgage Association.

FARM AREA - A selected geographical area or one specific building to which a real estate salesperson devotes special attention and study.

FARMERS HOME ADMINISTRATION (FMHA) - A government agency established in 1946 to assist and insure loans to farmers and to property buyers in rural areas who are unable to secure conventional loans.

FASCIA - The wood covering a section of the eaves that will support the roof gutters.

FEASIBILITY STUDY - An analysis of a proposed project with emphasis on the attainable income, probable expenses, and most advantageous use and design.

FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC) - Also known as Freddie Mac.  Is a federal agency that buys and sells mortgages from commercial banks and savings and loan associations.

FEDERAL HOUSING ADMINISTRATION (FHA) - A federal agency that insures residential mortgages against loss due to default.

FEDERAL HOUSING ADMINISTRATION (F. H. A.) - An agency of the U.S. Department of Housing and Urban Development (HUD). Its main activity is the insuring of residential mortgage loans made by private lenders. The FHA sets standards for construction and underwriting but does not itself lend money or plan or construct housing.

FEDERAL HOUSING ADMINISTRATION (FHA) - The FHA was set up in1934 under the National Housing Act to encourage improvement in housing standards and conditions, to provide an adequate home financing system by insurance of housing mortgages and credit, and to exert a stabilizing influence on the mortgage market.

FEDERAL TAX LIEN - A federal lien which attaches to real property, either if the federal estate tax is not paid, or if the taxpayer has violated the federal income tax or payroll tax laws.

FEDERAL TRADE COMMISSION (FTC) - A federal agency created to investigate and eliminate unfair and deceptive trade practices in business.

FEE SIMPLE - The largest estate one can possess in real property. A fee simple estate is the least limited interest and the most complete and absolute ownership in land: it is of indefinite duration, freely transferable and inheritable. Fee simple title is sometimes referred to as "the fee."

FEE SIMPLE ESTATE - Absolute ownership of land with unrestricted rights of disposition.

FIDUCIARY - A relationship which implies a position of trust or confidence wherein one is usually entrusted to hold or manage property or money for another. Among the obligations a fiduciary owes to the principal are duties of loyalty; obedience; full disclosure; the duty to use skill, care and diligence; and the duty to account for all monies.

FILLED LAND - An area where the grade has been raised by depositing or dumping dirt, gravel or lava rock.

FINANCE CHARGE - The total of all costs imposed directly or indirectly by the creditor and payable either directly or indirectly by the customer, as defined under the federal Truth-in-Lending Law.

FINANCE FEE - A mortgage brokerage fee to cover the expenses incurred in placing the mortgage with a lending institution; a mortgage service charge or origination fee.

FINANCIAL STATEMENT - A formal statement of the financial status and net worth of a person or company, setting forth and classifying assets and liabilities as of a specified date.

FINDER'S FEE - A fee paid to someone for producing a buyer to purchase or a seller to list property; also called a referral fee.

FIRE BOX - An area of combustion in the boiler.

FIREBRICK - The bricks used to line the interior of the fire box chamber.

FIRE-STOP - Usually a 2x4 piece of wood placed between studs in a partition wall that will help prevent the spread of fire and smoke.

FIRM COMMITMENT - A definite undertaking by a lender to loan a set amount of money at a specified interest rate for a certain term.

FIRST MORTGAGE - The first recorded mortgage on a property.

FIRST REFUSAL, RIGHT OF - The right of a person to have the first opportunity either to purchase or lease real property.

FISCAL YEAR - A business year used for tax, corporate or accounting purposes, as opposed to a calendar year.

FIVE - The air channel in a chimney which allows the smoke and fumes to escape.

FIXED RATE MORTGAGE - A mortgage interest rate that remains constant or fixed throughout the term of the loan.

FIXTURE - Personal property that is attached to real property and legally treated as real property.

FIXTURE - An article which was once personal property but has been so affixed to the real estate that it has become real property (e.g. stoves, bookcases, plumbing, etc.). If determined to be a fixture, then the article passes with the property even though it is not mentioned in the deed.

FLAG LOT - A land parcel having the configuration of an extended flag and pole. The pole represents access to the site which is usually located to the rear of another lot fronting a main street.

FLASHING - Sheet metal used around junctions of a roof or chimney to prevent water entry.

FLOATING RATE MORTGAGE - A mortgage with an interest rate that fluctuates with the prime rate.

FLOOR AREA RATIO - The ratio of floor area to land area expressed as a percent or decimal, which is determined by dividing the total floor area on a zoning lot by the lot area.

FLOOR DUTY - A frequent practice in real estate brokerage offices of assigning one sales agent the responsibility for handling all telephone calls and office visitors for a specified period of time.

FLOOR JOISTS - Large support framing members, which generally span from one foundation wall to another.

FOOTING - A section of concrete that will support the foundation walls of a house.

FORECLOSURE - When the right to possess a property is taken from an owner who failed to maintain regular mortgage payments.

FORECLOSURE - A legal procedure whereby property used as security for debt is sold to satisfy the debt in the event of default in payment of the mortgage note or default of other terms in the mortgage document.

FORECLOSURE SALE - The sale of a foreclosed property to satisfy debts.

FOUNDATION - A brick, block, stone, or concrete wall on which the framing of a house is built.

FRAMING - The lumber or steel used to form a structure such as floor joists, floor rafters, wall studs, etc.

FRAUD - Any form of deceit, trickery, breach of confidence or misrepresentation by which one party attempts to gain some unfair or dishonest advantage over another.

FREDDIE MAC - See Federal Home Loan Mortgage Corporation.

FREE AND CLEAR - Ownership of property free of all indebtedness.

FREE AND CLEAR TITLE - Title to real property which is absolute and unencumbered by any liens, mortgages, clouds or other encumbrances.

FRONTAGE - The length of a property abutting a street or body of water; that is, the number of feet that "front" the street or water.

FROST LINE - The depth at which frost can penetrate the soil in a given area.

FULL DISCLOSURE - Revealing all the known facts that may affect the decision of a buyer. The seller and broker must disclose and known property defects.

FUNCTIONAL OBSOLESCENCE - A loss in value of an improvement due to functional inadequacies, often caused by age or poor design.

GABLE - A steep triangular roof shape attaching the ridge board to the double top plate.

GARNISHMENT - A legal process designed to provide a means for creditors to safeguard for themselves the personal property of a debtor which is in the hands of a third party ("garnishee").

GENERAL AGENT - One who is authorized to perform any and all acts associated with the continued operation of a particular job or a certain business.

GENERAL CONTRACTOR - A construction specialist who enters into a formal construction contract with a land owner or master lessee to construct a real estate building or project.

GENERAL CONTRACTOR -A contractor who takes full responsibility for a construction project and hires workers and sub-contractors to complete a job.

GENERAL PARTNER - A co-owner in a business endeavor who is liable for all debts created by the partnership.

GENERAL PARTNER - A co-owner of a partnership who is empowered to enter into contracts on behalf of the partnership and who is fully liable for all partnership debts.

GIFT TAX - A graduated federal tax paid by a donor upon making a gift.

GINNIE MAE - See Government National Mortgage Association.

GOOD FAITH - Bona fide. An act is done in good faith if it is in fact done honestly, whether it be done negligently or not.

GOOD FAITH ESTIMATE (G. F. E.) - A written estimate provided by a mortgage lender of the closing costs a borrower can expect to pay at or before settlement. This estimate must be mailed or delivered to all loan applicants within three (3) business days after a loan application is received.

GOOD WILL - An intangible, salable asset arising from the reputation of a business.

GOVERNMENT MORTGAGE - Mortgage that is insured by the Federal Housing Administration (FHA) or which is guaranteed by the Department of Veterans Affairs (VA) or the Rural Housing Service (RHS). Contrast with conventional mortgage.

GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (G. N. M. A.) - A government-owned corporation within the U.S. Department of Housing and Urban Development (HUD) that guarantees securities backed by mortgages that are insured or guaranteed by other government agencies and that serves as a secondary market source. Also known as Ginnie Mae.

GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA) - Also known as Ginnie Mae, a government agency that is associated with HUD and sponsors mortgage-backed securities programs and provides subsidies for residential loans.

GOVERNMENT SURVEY - A system of land description in which large blocks of land are divided into tracts bounded by imaginary lines conforming to the true meridian.

GRACE PERIOD - A period of time, after the mortgage payment due date, that is not subject to late penalties.

GRADE LINE - The location where the soil rests against the foundation wall of a building.

GRADUATED PAYMENT MORTGAGE - A fixed interest rate mortgage where the monthly payments slowly increase over the term of the loan.

GRADUATED RENTAL LEASE - A lease in which the rent payments commence at a fixed, often low rate, but "step up" or increase at set intervals as the lease term matures.

GRANDFATHER CLAUSE - Common expression used to convey the idea that something which was once permissible continues to be permissible despite changes in the controlling law.

GRANTEE - The person who receives from the grantor a grant of real property.

GRANTEE - The person who receives title.

GRANTEE - The person who is the recipient of an interest in real property from the Grantor.

GRANTOR - The person or party who transfers an interest in real property to another person.

GRANTOR - The person transferring title to, or an interest in, real property. A grantor must be competent to convey; thus, for example, an insane person cannot convey title to real property.

GROSS AREA - The total floor area of a building measured from the exterior of the walls (excluding those unenclosed).

GROSS INCOME MULTIPLIER - A useful rule of thumb to estimate market value of income producing residential property. The multiplier is derived by using comparable sales divided by the actual or estimated monthly rentals and arriving at an acceptable average.

GROSS LEASE - A lease of property under which the lessee pays a fixed rent, and the lessor pays the taxes, insurance, and other charges regularly incurred through ownership.

GUARDIAN - One who is given the lawful custody and care of another(called a ward).

GUTTER - A metal or wood channel that is secured to the eaves and catches and carries rainwater away from a structure.

HABITABLE - Being fit to live in. The residential landlord has an obligation to keep the leased premises in a habitable condition.

HAZARD INSURANCE - Insurance coverage that provides coverage for physical damage to a property from fire, wind, vandalism or other hazards.

HAZARD INSURANCE - Insures against damage caused by fire, rain, windstorms, etc.

HEADER - A framing member that rests on the sill plate and to which floor joists are attached.

HEIR - A person who inherits under a will or a person who succeeds to property by the laws of descent if the decedent dies without a will (intestate).

HIGHEST AND BEST USE - That use which, at the time of appraising the property, is most likely to produce the greatest net return to the land and/or the building over a given period of time.

HIGH RISE - A popular expression for a condominium or apartment building generally higher than six stories.

HOLD HARMLESS CLAUSE - A clause inserted in a contract whereby one party agrees to indemnify and protect the other party from any injuries or lawsuits arising out of the particular transaction.

HOLD OVER - To retain possession as a tenant of leased property after the lease has expired.

HOLDOVER TENANT - One who stays on the leased premises after his lease has expired. The landlord normally has the choice of evicting the holdover tenant or permitting him to remain and continue to pay rent.

HOME EQUITY CONVERSION MORTGAGE (H. E. C. M.) - A type of mortgage that enables older homeowners to convert the equity they have in their homes into cash, using a variety of payment options to address their specific financial needs. Unlike traditional home equity loans, a borrower does not qualify on the basis of income but on the value of his or her home. In addition, the loan does not have to be repaid until the borrower no longer occupies the property. Sometimes called a reverse mortgage or a negative amortization mortgage.

HOME EQUITY LINE OF CREDIT- Mortgage loan – usually in a subordinate position – that allows the borrower to obtain multiple advances of the loan proceeds up to an amount that represents a specified percentage of the borrower's equity in a property.

HOME INSPECTION - A thorough inspection that evaluates the structural and mechanical condition of a particular property. A satisfactory home inspection is often included as a contingency by the purchaser. Contrast with appraisal.

HOMEOWNER’S ASSOCIATION (H. O. A.) - A nonprofit association that manages the common areas of a planned unit development (PUD) or condominium project. In a condominium project, it has no ownership interest in the common elements. In a PUD project, it usually holds title to the common elements.

HOMEOWNER'S ASSOCIATION - A non-profit association of homeowners organized pursuant to a declaration of restrictions or protective covenants for a subdivision, a PUD, or a condominium.

HOMESTEAD - The house and land where the head of the family lives, owns and occupies which is exempt from seizure by creditors.

HOMESTEAD - A home which is used as a personal residence.

HOMESTEAD PROTECTION - State law that protects the homeowner against a forced sale of his/her property.

HOTEL - A building or group of attached or detached buildings containing dwelling or lodging units in which 50 percent or more of the units are lodging units, usually distinguished by a front desk, dining and other common facilities.

HOUSE RULES - Rules of conduct adopted by a board of directors of a condominium and designed to promote harmonious living among the owners and occupants.

HUD - A federal cabinet department officially known as the Department of Housing and Urban Development.

HYPOTHECATE - To pledge specific real or personal property as security for an obligation, without surrendering possession of it.

IMPLIED WARRANTY OF HABITABILITY - A legal doctrine imposing on the landlord a duty to make the leased premises acceptable to live in and ready for occupancy and to continue to maintain them in a state of repair throughout the entire term of the lease.

IMPOUND ACCOUNT - See escrow account.

IMPOUND ACCOUNT - A trust account established to set aside funds for future needs.

IMPROVED LAND - Real property whose value has been enhanced by the addition of on-site and off-site improvements such as roads, sewers, utilities, buildings, etc.; as distinguished from raw land.

IMPROVEMENTS - Valuable additions made to property, amounting to more than repairs, costing labor and capital and intended to enhance the value of the property. Improvements of land would include grading, sidewalks, sewers, streets, utilities, etc. Improvements on land would include buildings, fences, and the like.

IMPUTED INTEREST - Interest implied by the federal tax law.

INCOME APPROACH - An approach to the valuation or appraisal of real property as determined by the amount of net income the property will produce over its remaining economic life.

INCOME APPROACH - A method of estimating the value of a property based upon the amount of income the property generates.

INCOME MULTIPLE - A number multiplied by the annual income of a property to determine an estimated value.

INCOME PROPERTY - Any property developed or improved to produce income as opposed to serving as a residence.

INCOME PROPERTY - Property purchased primarily for the income to be derived plus certain tax benefits, such as accelerated depreciation. Income property can be commercial, industrial or residential.

INCORPOREAL RIGHTS - Intangible or non-possessory rights in real property such as easements, licenses, profits and the like.

INCUMBRANCE - A legal claim or lien upon a property, such as a judgment or mortgage.

INDEMNIFY - To reimburse for a loss or damages suffered.

INDEPENDENT CONTRACTOR - One who is retained to perform a certain act, but who is subject to the control and direction of another only as to the end result and not as how he performs the act. The critical feature, and what distinguishes an independent contractor and an employee or agent, is the right to control.

INDEX - A published rate, such as the average interest rate or yield on Treasury bills or COFI. A margin is added to the index to determine the interest rate that will be charged on an adjustable-rate mortgage (ARM).

INDUSTRIAL PARK - An area zoned industrial and containing sites for many separate industries and developed and managed as a unit, usually with provisions for common services for the users.

INFLATION - An increase in the amount of money or credit available in relation to the amount of goods or services available, which causes an increase in the general price level of goods and services. Over time, inflation reduces the purchasing power of a dollar, reducing its value.

INJUNCTION - A legal action which forbids a party defendant from doing some act; it requires a person to whom it is directed to refrain from doing a particular thing.

INITIAL INTEREST RATE - The original interest rate of the mortgage at the time of closing. This rate changes for an adjustable-rate mortgage (ARM). Sometimes known as "start rate" or "teaser rate."

INNOCENT PURCHASER FOR VALUE - One who purchases real property without notice, actual or constructive, of any superior rights or interests in the real property.

INSPECTION - A visit to and review of the premises. A prudent purchaser of property always inspects the premises before closing.

INSOLVENCY - When a person's assets are not enough to pay all debts.

INSTALLMENT SALES CONTRACT - The selling and financing of a property where the seller's name remains on the title while the buyer takes possession and makes payments.

INSTITUTIONAL LENDER - Financial institutions such as banks, insurance companies, savings and loans or any lending institution whose loans are regulated by law.

INSULATION - Generally a fiber material used to reduce heat loss and reduce the transfer of sound.

INTEREST - The sum paid or accrued in return for the use of money.

INTEREST - The fee a lender charges for the use of money.

INTEREST ONLY LOAN - A loan that requires the borrower to pay interest only until the end of the term when the principal balance becomes due.

INTERIM FINANCING - A short-term loan usually made during the construction phase of a building project; often referred to as the "construction loan."

INTERIM LOAN - A short term loan, which is normally replaced with long term permanent financing.

INTESTATE - To die without a valid will.

INVENTORY - An itemized list of property. Many brokers recommend that their clients attach to the sales contract an inventory of property to be included in the sale of a residential property,including a condominium dwelling.

INVERSE CONDEMNATION - An action for "just compensation "brought by one whose property has been effectively "taken" or substantially interfered with or taken without just compensation.

JAMB - Wood or metal casing surrounding a door or window.

JOINT AND SEVERAL LIABILITY - A situation in which more than one party is liable to repay a debt or obligation and a creditor can obtain compensation from one or more parties, either individually or jointly, whichever he chooses.

JOINT TENANCY - A form of property ownership by two or more persons in which the joint tenants have one and the same interest, arising by one and the same conveyance, commencing atone and the same time and held by one and the same possession(the concept of "four unities").

JOINT TENANCY - A holding or interest in real estate held by two or more individuals equally.

JOINT TENANCY - A form of co-ownership of real property that gives each tenant an equal undivided ownership in the property, including the right of survivorship.

JOINT VENTURE - The joining of two or more people in a specific business enterprise such as the development of a condominium project or a shopping center.

JOINT VENTURE - When two or more people combine resources for a specific business purpose.

JOIST - A series of wooden beams used to support the weight of a floor or ceiling.

JUDGEMENT - A legal decision made by a court of law. In judgments that require the repayment of a debt, the court may place a lien against the debtor's real property as collateral for the judgment's creditor.

JUDGEMENT - The final ruling of a court as a result of an action or claim presented in that court.

JUDGEMENT LIEN - A lien on debtor's property resulting from the decree of a court and the entry of a judgment. See judgment.

JUDGEMENT LIEN - A lien or claim against a property as a result of a court order.

JUDGMENT LIEN - A lien binding on all the real estate of a judgment-debtor and giving the holder of the judgment a right to levy (i.e. to seize) the land for satisfaction of the judgment.

JUDICAL - A process through which involves the courts and the judicial process often in a litigation. A foreclosure action in court involves judicial action.

JUDICAL FORECLOSURE - A type of foreclosure proceeding that is handled as a civil lawsuit and conducted entirely under the supervision of a court. Used only in lien theory states.

JUDICIAL FORECLOSURE - A method of foreclosing upon real property by means of a court supervised sale. After an appraisal, the court determines an upset price below which no bids to purchase will be accepted.

JUDICIAL FORECLOSURE - A foreclosure that is processed by a court action.

JUNIOR LIEN - A second mortgage.

JUNIOR MORTGAGE - A mortgage that is subordinate or lower in priority to a first mortgage.

JUNIOR MORTGAGE - A mortgage which is subordinate in right or lien priority to an existing mortgage on the same realty, such as a second mortgage.

JURISDICTION - The authority or power to act, such as the authority of a court to hear and render a decision that binds both parties.

JUST COMPENSATION - An amount of compensation to be received by a party for the taking of property under the power of eminent domain.

KEY LOT - A lot that has added value because of its strategic location, especially where it is needed for the highest and best use of contiguous property.

KICKERS - Different types of equity participation a lender may seek as a condition for lending money, such as participation in rentals, profits, or extra interest.

KILN-DRY - Lumber that has been heat-dried in a kiln.

KIOSK - A small structure usually constructed of wood with one or more sides open and typically used as a newsstand, photo film center or ice cream stand.

LALLY COLUMN - A round steel pillar used to support the main beam or joist that holds the weight load of a structure.

LAND - The surface of the earth extending down to the center and upward to the sky, including all natural things thereon such as trees, crops, or water; plus the minerals below the surface and the air rights above.

LAND CONTRACT - Another name for an installment purchase contract, by which the buyer obtains equitable title (the right to use the property) while the seller retains legal title (recorded title)as security for payment of the balance of the purchase price.

LAND DESCRIPTION - A description of a particular piece of real property.

LAND LEASEBACK - A creative financing device often used with raw land which a developer wants to improve, in which the developer sells the land to an investor who leases the land back to the developer under a long-term net lease and subordinates his fee ownership to the lender providing development financing.

LAND SURVEY - A detailed mapping and drawing of a parcel of property. See survey.

LAND, TENEMENTS AND HEREDITAMENTS - A feudal phrase used to describe all types of immovable realty including the land, buildings and all appurtenant rights thereto.

LAND TRUST - An association organized by common owners of real property, which holds title to the real property in the name of one or more trustees for the benefit of the owners, whose beneficial interests may be represented by trust certificates.

LANDLOCKED - Real property having no access to a public road or way.

LANDLORD - The lessor or the owner of leased premises. The landlord retains a reversion interest in the property so that when the lease ends the property will revert to the landlord.

LANDMARK - A stake, stream, cliff, monument or other object or feature which is used to fix or define land boundaries; also a prominent feature of a landscape or property that is the symbol for the place.

LANDSCAPING - Shrubs, bushes, trees and the like, on the grounds surrounding a structure.

LATE CHARGE - The penalty a borrower must pay when a mortgage payment is made a stated number of days (usually 15) after the due date.

LATERAL AND SUBJACENT SUPPORT - The support received by a parcel of real property from the land adjoining it is called lateral support. Subjacent support is that support which the surface of the earth receives from its underlying strata.

LAW DAY - Reference to a maturity date or sale date with respect to a foreclosure sale or some other statutory or related timeframe. In Connecticut, it is the cutoff date for redemption related to a strict foreclosure.

LAW DAY - The date an obligation becomes due; sometimes refers to the closing date.

LEASE - A lease is both a contract between lessor (landlord)and lessee (tenant) and a conveyance or demise of the premises by the lessor to the lessee. A lease is a contract in that item bodies the agreement between the parties.

LEASE - A written agreement between the property owner and a tenant that stipulates the conditions under which the tenant may occupy and use the real estate for a specified period of time and rent.

LEASE - An agreement that gives a party the use and possession of property for a specific time period and for a consideration.

LEASE-BACK - When a company sells a property and simultaneously obtains a long-term lease from the buyer for the continued use of the property.

LEASEHOLD - A less-than-freehold estate which a tenant possesses in real property.

LEASEHOLD ESTATE - A way of holding title to a property wherein the mortgagor does not actually own the property but rather has a recorded long-term lease on it. A ground lease is an example of such an arrangement.

LEGAL DESCRIPTION - A description which is complete enough that an independent surveyor could locate and identify a specific piece of real property.

LEGAL DESCRIPTION - A formal description of real property sufficient to locate it by reference to government surveys or approved recorded maps.

LEGAL NOTICE - That notice which is either implied or required by law. Constructive notice under the recording laws is also referred to as legal notice.

LEGAL RATE OF INTEREST - The maximum interest rate permitted bylaw, with anything above that rate being usury.

LENDER - A person who lends money for temporary use on condition of repayment with interest (i.e., the bank, mortgage company, etc.).

LESSEE - The tenant.

LESSEE - The person to whom property is rented or leased; called a "tenant" in most residential leases.

LESSOR - The person who rents or leases property to another. In residential leasing, the lessor is often referred to as a landlord.

LESS-THAN-FREEHOLD ESTATE - An estate held by one who rents or leases property. This classification includes an estate for years, periodic tenancy, estate at will, and estate at sufferance.

LETTER OF CREDIT - An agreement or commitment by a bank("issuer") made at the request of a customer ("account party")that the bank will honor drafts or other demands of payment from third parties ("beneficiaries") upon compliance with the conditions specified in the letter of credit.

LETTER OF CREDIT - A written assurance by an investor or bank that any demands for payment will be honored.

LETTER OF INTENT - An expression of intent to invest, develop or purchase without creating any firm legal obligation to do so.

LEVEL PAYMENT MORTGAGE - A mortgage which is scheduled to be repaid in equal periodic payments which include both principal and interest.

LEVERAGE - The use of borrowed funds to purchase investment property with the anticipation that the property acquired will increase in return so that the investor will realize a profit not only on his own investment, but also on the borrowed funds; the employment of a smaller investment to generate a larger rate of return through borrowing.

LEVERAGE - The use of borrowed money for the purpose of increasing the return on an investment.  The investment return should be higher than interest paid on the money borrowed.

LIABILITY - A debt.

LICENSEE - A person who has a valid license. A real estate licensee can be a salesperson or a broker, active or inactive, an individual, a corporation, or a partnership.

LIEN - A charge or claim which one person (lienor) has upon the property of another (lienee) as security for a debt or obligation. Liens can be created by agreement of the parties(mortgage) or by operation of law (tax liens).

LIEN - A charge upon real or personal property for the satisfaction of a debt.

LIEN THEORY - The legal position that a mortgagee does not have title to the mortgaged property buy only a lien.

LIFE ESTATE - An estate in real property granted for the life of an individual, the estate will then revert back to the grantor.

LIFE ESTATE - Any estate in real or personal property which is limited in duration to the life of its owner or the life of some other designated person.

LIMITED COMMON ELEMENTS - That special class of common elements in a condominium reserved for the use of a certain apartment(s) to the exclusion of other apartments.

LIMITED PARTNER - A partner who provides capital but whose losses are limited to the amount invested.  The limited partner normally exercises no influence in management decisions.

LIMITED PARTNERSHIP - A partnership formed by two or more persons having as members one or more general partners and one or more limited partners.

LIMITED PARTNERSHIP - A partnership in a business venture composed of limited partners who supply the financial support while the general partners manage the operation of the venture.

LINE OF CREDIT - Money that a lender makes available to a borrower.  Very often, the credit is secured by real estate.

LINE OF CREDIT - A maximum amount of money a bank will lend one of its more reliable and credit worthy customers without need for any formal loan submission.

LIQUID ASSETS - An asset that can be converted to cash quickly.

LIQUIDATED DAMAGES - An amount predetermined by the parties to an agreement as the total amount of compensation an injured party should receive in the event the other party breaches a specified part of the contract.

LIQUIDITY - The ability to sell an asset and convert it into cash at a price close to its true value.

LIS PENDENS - A legal document recorded in the Bureau of Conveyances, which gives constructive notice that an action has been filed in either a state or federal court affecting a particular piece of property. "Lis Pendens" is a Latin term which means "action pending" and is in the nature of a quasi-lien.

LIS PENDENS -A recorded notice of pending lawsuit.

LISTING - A written employment agreement between a property owner and a broker authorizing the broker to find a buyer or a tenant for a certain real property.

LISTING AGREEMENT - An agreement between property owner and broker to sell or manage the property.

LITTORAL LAND - Land bordering on the shore of a sea or ocean and thus affected by the tide currents.

LOAD-BEARING WALL - A wall that supports the roof or floor load.

LOAN BROKER - A person who negotiates loans between lender and borrower.

LOAN COMMITMENT - A commitment by a lender of the amount he will loan to a qualified borrower on a particular piece of real estate for a specified amount of time under specific terms.

LOAN-TO-VALUE RATIO - The ratio that the amount of the loan bears to the appraised value of the property or the sales price, whichever is lower.

LOAN TO VALUE RATIO - The amount of money a lender will loan based on a percentage of the appraised property value.

LOCK IN CLAUSE - A condition in a mortgage that prevents a borrower from satisfying the loan in full before a specified time.

LOCUS SIGILLI - Latin for "under seal", used in the abbreviated form, "L.S.," at the end of signature line in some formal legal documents; used instead of the actual seal.

LOSS PAYEE - The person designated on an insurance policy to be paid in case the insured property is damaged or destroyed.

MAINTENANCE - The care and work put into a building to keep it in operation and productive use; the general repair and upkeep of a building. If maintenance is deferred, the building will suffer a loss in value.

MALL - A landscaped public area set aside for pedestrian traffic.

MAKER - A person who signs a promissory note.

MARGIN - For an adjustable-rate mortgage (ARM), the amount that is added to the index to establish the interest rate on the adjustment date, subject to any limitations on the interest rate change.

MARGINAL LAND - Land which is of little value because of some deficiency, such as poor access, lack of adequate rainfall, or steep terrain.

MARKETABLE TITLE - Good or clear title reasonably free from risk of litigation over possible defects; also referred to as merchantable title. Marketable title need not, however, be perfect title.

MARKETABLE TITLE - A title that is clear and free of any liens or defects.

MARKET APPROACH - A method of determining a property value based on recent sales of similar properties.

MARKET VALUE - The most likely price a seller can expect to realize from the sale of his/her property.

MARKET VALUE - The highest price, estimated in terms of money, which a property will bring if exposed for sale in the open market, allowing a reasonable time to find a purchaser who buys with knowledge of all the uses to which the property is adapted and for which it is capable of being used.

MASONRY - Any wall constructed of block, brick, or stone.

MASTER ASSOCIATION - A homeowners' association in a large condominium or planned unit development (PUD) project that is made up of representatives from sub-associations covering specific areas within the project. In effect, it is a "second-level" association that handles matters affecting the entire development, while the "first-level" associations handle matters affecting their particular portions of individual projects.

MASTER PLAN - A comprehensive plan to guide the long-term physical development of a particular area.

MATURITY - The date on which the principal balance of a loan, bond or other financial instrument becomes fully due and payable.

MEANDER LINE - An artificial line used by the surveyors to measure the natural, uneven, winding property line formed by rivers, streams and other watercourses bordering a property.

MECHANIC'S LIEN - A statutory lien created in favor of materialmen and mechanics to secure payment for materials supplied and services rendered in the improvement, repair or maintenance of real property.

MECHANIC'S LIEN - A claim placed against a property by a contractor or supply house for unpaid services or supplies.

MERGED CREDIT REPORT - A credit report that contains information from the three (3) major nationwide credit repositories. When the report is created, the information is compared for duplicate entries. Any duplicates are combined to provide a summary of credit. Also known as a "tri-merge" report.

METES AND BOUNDS - The boundary lines of land with their lengths, directions and angles.

METES AND BOUNDS - A common method of land description that identifies a property by specifying the shape and boundary dimensions of the parcel, using terminal points and angles.

MILITARY CLAUSE - A clause inserted in some residential leases to allow the military tenant to terminate the lease in case of transfer, discharge or other circumstances making termination appropriate.

MINERAL RIGHTS - Rights to subsurface land and profits. Normally, when real property is conveyed, the grantee receives all right and title to the land including everything above and below the surface, unless excepted by the grantor.

MISREPRESENTATION - A false statement or concealment of a material fact made with the intent to induce some action by another party.

MODIFICATION - The act of changing any of the terms of the mortgage. Also referred to as a mortgage recast.

MOISTURE BARRIER - Treated paper or foil used to reduce moisture from entering an area.

MONEY - The cash deposit (including initial and additional deposits) paid by the prospective buyer of real property as evidence of his good faith intention to complete the transaction; called hand money or a binder in some states.

MONTH-TO-MONTH TENANCY - A periodic tenancy where the tenant rents for one month at a time. In the absence of rental agreement (oral or written), a tenancy is deemed to be month-to-month, or in the case of boarders, week-to-week.

MONUMENTS - Visible markers, both natural and artificial objects, which are used to establish the lines and boundaries of a survey.

MORATORIUM - The suspension period of a particular activity or legal right, such as a construction project or the issuance of new buildings permits etc.

MORTGAGE - A written pledge of property that is used as security for the repayment of a loan.

MORTGAGE - A legal document used to secure the performance of an obligation. In effect, the mortgage states that the lender can look to the property in the event the borrower defaults in payment of the note.

MORTGAGE BANKER - A corporation or firm which normally provides its own funds for mortgage financing.

MORTGAGE BANKER - A company that created mortgage loans then sells same to other financial institutions.

MORTGAGE BROKER - A person bringing borrower and lender together.

MORTGAGE BROKER - A person or firm which acts as an intermediary between borrower and lender; one who, for compensation or gain, negotiates, sells or arranges loans and sometimes continues to service the loans.

MORTGAGE COMPANY - A company that initiates real estate loans then sells them to other investors or financial institutions.

MORTGAGE GUARANTY INSURANCE CORPORATION (MGIC) - A private corporation that sells private mortgage insurance.

MORTGAGE INSURANCE - Insurance that will satisfy a mortgage in the event of a borrower's death.

MORTGAGE PORTFOLIO - The number of mortgage loans held by an investor.

MORTGAGEE - The lender under a mortgage loan.

MORTGAGEE - The one who receives and holds a mortgage as security for a debt; the lender; a lender or creditor who holds a mortgage as security for payment of an obligation.

MORTGAGOR - The borrower under a mortgage loan.

MORTGAGOR - The one who gives a mortgage as security for a debt; the borrower; usually the landowner; the borrower or debtor who hypothecates or puts up his property as security for an obligation.

MULTIPLE LISTING SERVICE (MLS) - An organization created by REALTORS® to facilitate the sharing of listings among member brokers.

MULTIPLE LISTING SERVICE - A company that provides real estate listing information to brokers.

NATIONAL ASSOCIATION OF REALTORS (NAR) - The largest Realtor association in the United States.

NATIONAL ASSOCIATION OF REALTORS - Formerly known as the National Association of Real Estate Boards (NAREB), it is the largest and most prestigious real estate organization in the world.

NEBRASKA TRUST DEEDS ACT - The statutory law of the state of Nebraska that addresses the form of trust deeds and foreclosure of the same.

NEGATIVE AMORTIZATION - A gradual increase in mortgage debt that occurs when the monthly payment is not large enough to cover the full amount of principal or interest due. The amount of the shortfall is added to the remaining principal balance to create "negative" amortization for which the principal amount increases.

NEGATIVE AMORTIZATION - When the principal amount of a loan increases because the interest rate is higher than what is currently being paid.

NEGATIVE CASH FLOW - The investment situation where cash expenditures to maintain an investment (taxes, mortgage payments, maintenance, etc.) exceed the cash income received from the investment.

NEGATIVE CASH FLOW - When the amount of cash brought in from an investment is less than the amount paid out to support the investment debt service.

NEGOTIABLE INSTRUMENT - Any written instrument which may be transferred by endorsement or delivery so as to vest legal title in the transferee.

NEGOTIATION - The transaction of business aimed at reaching a meeting of minds among the parties; bargaining.

NET CASH FLOW - The remaining income from an investment property after the monthly operating income is reduced by the monthly housing expense that includes principal, interest, taxes, and insurance (PITI) for the mortgage, homeowners' association dues, leasehold payments, and/or subordinate financing payments.

NET INCOME - The sum arrived at after deducting from gross income the expenses of a business or investment, including taxes and insurance, and allowances for vacancy and bad debts; what the property will earn in a given year's operation.

NET INCOME - The difference between the gross income of an investment and operating expenses.

NET LEASE - A lease where a tenant is responsible for paying rent plus a percentage of the landlord's operating expenses such as taxes or improvements.

NET LEASE - A lease, usually commercial, whereby the lessee pays not only the rent for occupancy, but also pays maintenance and operating expenses such as tax, insurance, utilities and repairs. Thus the rent paid is "net" to the lessor.

NET LISTING - A real estate listing that specifies the net proceeds a seller requires.  The broker's commission is the amount of money above the minimum set by the seller.

NET WORTH - The value of all of a person's assets, including real estate and cash, minus all liabilities.

NET WORTH - The value remaining after deducting liabilities from assets.

NOMINAL CONSIDERATION - A consideration bearing no relation to the real value of the contract. A deed often recites a nominal consideration, such as "ten dollars and other valuable consideration."

NON-ASSUMPTION CLAUSE - A condition in a mortgage giving the lender the right to call the loan balance due if title is passed without satisfying the mortgage in full.

NON-BEARING WALL - A wall that does not support a load from the floor or roof.

NON-COMPETITION CLAUSE - A provision in a contract or lease prohibiting a person from operating or controlling a nearby business which would compete with one of the parties to the contract.

NONCONFORMING USE - A permitted use which was lawfully established and maintained but which no longer conforms to the current use regulations because of a change in the zoning.

NONDISTURBANCE CLAUSE - A clause inserted in a mortgage whereby the mortgagee agrees not to terminate the tenancies of lessees who pay their rent if the mortgagee forecloses on the mortgagor-lessor's building.

NON-JUDICAL FORECLOSURE - A foreclosure process that does not involve court action. This method is typically used in title theory states in which a trustee or other party effectuates a foreclosure sale.

NON-JUDICAL FORECLOSURE - The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of their default.

NORMAL WEAR AND TEAR - That physical deterioration which occurs in the normal course of the use for which a property is intended, without negligence, carelessness, accident or abuse of the premises (or equipment or chattels) by the occupant, members of household, or their invitees or guests.

NOTARY - A public official authorized by law to attest and certify certain documents and the validity of signatures of others under oath and official seal; Often referred to as a notary public.

NOTE - A signed document promising to pay a debt.

NOTE - A document signed by the borrower of a loan, stating the loan amount, the interest rate, the time and method of repayment and the obligation to repay. The note is the evidence of the debt. When secured by a mortgage, it is called a mortgage note.

NOTICE - (1) Legal notice is notice which is required to be made by law, or notice which is imparted by operation of law as a result of the possession of property or the recording of documents. (2) Notice which is required by contract, for example, when the parties agree to terminate a contract by the written notice of either party 30 days prior to termination.

NOTICE OF COMPLETION - Document filed to give public notice that a construction job has been completed and that mechanics' liens must be filed within 45 days to be valid.

NOTICE OF DEFAULT - A notice to a defaulting party that there has been a default, usually providing a grace period in which to cure the default.

NOTICE OF LIS PENDENS - A legal notice informing of a pending lawsuit that is delivered to the county recorder's office.

NOTICE OF NONRESPONSIBILITY - A legal notice designed to relieve a property owner from responsibility for the cost of improvements ordered by another person.

NOTICE TO QUIT - A written notice given by a landlord to his tenant, stating that the landlord intends to regain possession of the leased premises and that the tenant is required to quit and remove himself from the premises either at the end of the lease term or immediately if there is a breach of lease or if the tenancy is at will or by sufferance; sometimes refers to the notice given by the tenant to the landlord that he intends to give up possession on a stated day.

NOTICE OF SALE - A notice giving specific information about the loan in default and the proceedings about to take place. This notice must be recorded with the county where property is located and advertised as stated in the security document or as dictated by state law.

NOVATION - The substitution of a new obligation for an old one; substitution of new parties to an existing obligation, as where the parties to an agreement accept a new debtor in place of an old one.

NUISANCE - Conduct or activity which results in an actual physical interference with another person's reasonable use or enjoyment of his property for any lawful purpose.

NULL & VOID - Having no legal force or effect; of no worth; unenforceable; not binding.

OBSOLESCENCE - A type of depreciation of property.

OFFER - A promise by one party to act or perform in a specified manner provided the other party will act or perform in the manner requested.

OFFER AND ACCEPTANCE - The two components of a valid contract; a "meeting of the minds."

OFFER TO PURCHASE - A written document submitted by the buyer to the seller containing the price and conditions under which the property is offered to be purchased.

OFFICE EXCLUSIVE - A listing in which the seller refuses to submit the listing to Multiple Listing Service, even after being informed of the advantages of MLS, and signs a certification to that effect.

OFFICE OF PUBLIC TRUSTEE - A governmental agency that acts as a trustee for purposes of effectuating a foreclosure sale. In most states, the trustee is a private entity acting on behalf of the lender as an agent.

OFFSITE COSTS - Costs such as for sewers, streets, utilities, etc., which are incurred in the development of raw land, but are not connected with the actual construction of the buildings (on site costs).

ON CENTER - A measurement determined from the center of a stud of joist.

ONE-ACTION RULE - A legal requirement used primarily in California that indicates that a lender may only file and pursue one legal action in the event of a loan default. This may be an action on the note or a foreclosure of the property – but not both. This is designed to prevent deficiency actions on a note contemporaneously with the foreclosure of the property. If the foreclosure is the route taken and the property is sold for less than the amount of the loan, there can be no deficiency.

ONE-PRICE BIDS - A single bid at a foreclosure sale based on a fixed written submission.

OPEN END MORTGAGE - A mortgage with a provision which allows the borrower to raw additional money on the mortgage at any time, up to an agreed upon maximum, without paying ordinary finance charges.

OPEN-END MORTGAGE - A mortgage in which the borrower is given a limit up to which he may borrow, with any incremental advances of money up to but not exceeding the original borrowing limit to be secured by the same mortgage.

OPEN HOUSE - The common real estate practice of showing a listed home to the public during established hours, frequently on Sunday afternoons.

OPEN LISTING - A listing given to any number of brokers. The first broker who secures a buyer ready, willing and able to purchase at the terms of the listing is the one who earns the commission.

OPEN LISTING - A listing that gives a broker a nonexclusive right to sell a property.

OPEN SPACE - Certain portion of the landscape which has not been built upon and which is sought either to be reserved in its natural state or used for agricultural or recreational purposes (such as parks, squares, and the like).

OPERATING EXPENSES - Those periodic and necessary expenses which are essential to the continuous operation and maintenance of a property.

OPINION OF TITLE - An opinion by a person competent in examining titles, usually a title attorney, as to the status of the title of a property.

OPTION - An agreement to keep open, over a set period, an offer to sell or purchase property.

OPTION - A buyer's right to purchase or lease a property at a predetermined price within a specified time period.

OPTION FEE - The payment received by a property owner in return for granting an option.

OPTIONEE - (Buyer) One who for giving consideration, receives an option.

OPTIONOR - (Seller) One who for accepting consideration, gives an option.

ORDINARY PROCESS - A reference to a legal foreclosure action conducted through the courts in Louisiana.

ORIGINATION FEE - A fee charged by a lender to prepare a loan package and make the loan.

ORIGINATION FEE - The finance fee charged by a lender for placing a mortgage, which covers initial costs such as preparation of documents and credit, inspection and appraisal fees.

OVER-ENCUMBERED PROPERTY - When the market value of a property is less than all the claims against it.

OVER-IMPROVEMENT - An improvement which by reason of excess size or cost is not the highest and best use for the site on which it is placed.

OVERRIDE - A commission paid to managerial personnel (e.g. principal broker) on sales made by their subordinates, usually calculated as a percentage of the gross sales commissions earned by the salesperson.

PACKAGE MORTGAGE - A method of financing in which the loan that finances the purchase of a home also finances the purchase of personal items such as a washer and dryer, refrigerator, stove and other specified appliances.

PARCEL - A specific portion of a larger tract; a lot.

PARTIAL PAYMENT - A payment that is not sufficient to cover the scheduled monthly payment of principal and interest on a mortgage loan.

PARTIAL RELEASE - A clause found in a mortgage which directs the mortgagee to release certain parcels from the lien of the blanket mortgage upon the payment of a certain sum of money.

PARTICIPATION MORTGAGE - A mortgage in which the lender participates in the income of the mortgaged venture beyond a fixed return, or receives a yield on the loan in addition to the straight interest rate.

PARTITION - The dividing of common interests in real property owned jointly by two or more persons.

PARTITION - Division of land, usually by a legal proceeding among co-owners. Also, the interior walls that separates one room from another.

PARTNERSHIP - An association of two or more persons for the purpose of conducting business.

PARTNERSHIP - "An association of two or more persons to carry on as co-owners a business for profit," as defined in the Uniform Partnership Act, which is in force in a majority of the states.

PARTY - A term referring to a person involved in a business or legal proceeding.

PARTY WALL - A wall which is located on or at a boundary line between two adjoining parcels and is used or is intended to be used by the owners of both properties in the construction or maintenance of improvements on their respective lots.

PAYMENT CHANGE DATE - The date when a new monthly payment amount takes effect on an adjustable-rate mortgage (ARM) or a graduated-payment adjustable-rate mortgage (GPARM). Generally, the payment change date occurs in the next month immediately after the adjustment date.

PENTHOUSE - An apartment located on the roof of a building, or more commonly, an apartment on the top floor of a building.

PERCENTAGE LEASE - A lease whose rental is based on a percentage of the monthly or annual gross sales made on the premises.

PERCOLATION TEST - A hydraulic engineer's test of soil to determine the ability of the ground to absorb and drain water.

PERFORMANCE BOND - A bond, usually posted by one who is to perform work for another, which assures that a project or undertaking will be completed as per agreement or contract.

PERIODIC PAYMENT CAP - For an adjustable-rate mortgage (ARM), a limit on the maximum amount that payments can increase or decrease during any one adjustment period. See rate cap.

PERIODIC RATE CAP - For an adjustable-rate mortgage (ARM), a limit on the amount that the interest rate can increase or decrease during any one adjustment period, regardless of how high or low the index might be. See rate cap.

PERIODIC TENANCY - A leasehold estate which continues from period to period, such as month to month, year to year. All conditions and terms of the tenancy are carried over from period to period, and continue for an uncertain time until proper notice of termination is given.

PERMANENT FINANCING - A long-term loan, as opposed to an interim loan.

PERSONAL PROPERTY - Property that is not classified as – or affixed to – real estate.

PERSONAL PROPERTY - Things which are tangible and moveable; property which is not classified as real property; chattels; personalty.

PERSONAL PROPERTY - Property other than real property consisting of things temporary or movable.

PIGGYBACK LOAN - A joint loan with two lenders sharing a single mortgage.

PITCH - The slope of incline of a roof.

PITI - A loan that combines Principal, Interest, Taxes and Insurance.

PLANNED UNIT DEVELOPMENT (PUD) - A modern concept in housing designed to produce a high density of dwellings and maximum utilization of open spaces.

PLASTER - A mixture of lime, sand and water used to cover the surface of an interior wall or ceiling.

PLAT - A map showing property locations.

PLAT - A map or a town, section, or subdivision indicating the location and boundaries of individual properties.

PLOTTAGE - The merging or consolidating of adjacent lots into one larger lot, with the consequent result of improved usability and increased value; also called assemblage.

POCKET LISTING - A listing which is retained by the listing broker or salesperson, who does not make it available to other brokers in the office or to other Multiple Listing Service members.

POINT OF BEGINNING - The starting point in a metes and bounds description of property, which is usually a street intersection or a specific monument.

POINTS - A generic term for a percentage of the principal loan amount which the lender charges for making the loan; each point is equal to one percent of the loan amount.

POINTS - A percentage of a loan amount paid to a lender for the use of money. One point equals one percent of the loan amount.

POINTING - Repair of joints in block or brick done by refilling the joints with mortar.

POLICE POWER - The constitutional authority and inherent power of a state to adopt and enforce laws and regulations to promote and support the public health, safety, morals and general welfare.

PORTE COCHERE - A roofed structure extending from the entrance of a building over an adjacent driveway to shelter those getting into or out of vehicles.

POSSESSION - The act of either actually or constructively possessing or occupying property.

POSTING - To publish, announce or advertise by physically attaching a notice to an object.

POSTPONEMENT - To put off to a later time. In the case of a foreclosure sale, this is generally done by announcement at the original sale or by posting notices establishing the new date and time the foreclosure sale will take place.

POWER OF ATTORNEY - Written document giving authorization to one person to act on behalf of another.

POWER OF ATTORNEY - A written instrument authorizing a person(the attorney-in-fact) to act as the agent on behalf of another to the extent indicated in the instrument.

POWER OF SALE - A mortgage clause authorizing the lender to conduct a foreclosure sale without having to go to court.

POWER OF SALE - A clause written into a mortgage authorizing the mortgagee to sell the property in the event of default.

PREMISES - The subject property, such as the property which is deeded or the unit that is leased.

PREPAID INTEREST - The paying of interest before it is due.

PREPAYMENT PENALTY - A penalty a lender charges if a mortgage or note is paid in full before maturity.

PREPAYMENT PENALTY - The amount set by the creditor as a penalty to the debtor for paying off the debt prior to its maturity. The prepayment penalty is charged by the lender to recoup a portion of interest that he had planned to earn when he made the loan.

PREPAYMENT PRIVILEGE - The right of the debtor to pay off part or all of the debt without penalty prior to maturity, such as in a mortgage or agreement of sale.

PRE-SALE - A pre-construction sale program by a condominium developer who is required to sell a certain percentage of units before a lender will commit to finance construction of the project.

PRESCRIPTION - The acquiring of a right in property, usually in the form of an intangible property right such as an easement or right-of-way, by means of adverse use of property that is continuous and uninterrupted for the prescriptive period.

PRESENT VALUE OF ONE DOLLAR - A doctrine which is based on the fact that money has a time value. The present worth of a payment to be received at some time in the future is the amount of the payment less the loss of interest.

PRIME RATE - The minimum interest rate charged by a commercial bank on short-term loans to its largest and strongest clients(those with the highest credit standings).

PRIME RATE - The interest rate banks charge their best borrowers at any particular time.

PRINCIPAL - The amount of money borrowed before any finance charges.

PRINCIPAL - The capital sum; interest is paid on the principal. NOT spelled principle.

PRINCIPAL BROKER - The licensed broker directly in charge of and responsible for the real estate operations conducted by a brokerage company.

PRIVATE MORTGAGE INSURANCE - A special form of insurance designed to permit lenders to increase their loan-to-market-value ratio, often up to 95 percent of the market value of the property.

PROBATE - The formal judicial proceeding to prove or confirm the validity of a will. The will is presented to the probate court, and creditors and interested parties are notified to present their claims or to show cause why the provisions of the will should not be enforced by the court.

PROCURING CAUSE - That effort which brings about the desired result, as in producing the buyer for the listed property.

PRO FORMA STATEMENT - A projection of future income and expenses.

PROMISSORY NOTE - A written agreement promising to repay a loan.

PROMISSORY NOTE - An unconditional written promise of one person to pay a certain sum of money to another, or order, or bearer, at a future specified time.

PROPERTY - The rights or interests a person has in the thing owned; not, in the technical sense, the thing itself. These rights include the right to possess, to use, to encumber, to transfer and to exclude, commonly called the "bundle of rights."

PROPERTY MANAGEMENT - That aspect of real estate devoted to the leasing, managing, marketing and overall maintenance of the property of others.

PROPERTY REPORT - A disclosure document required under the federal interstate land sales act where applicable to the interstate sale of subdivided lots.

PROPRIETARY LEASE - A written lease in a cooperative apartment building, between the owner-corporation and the tenant-stockholder, in which the tenant is given the right to occupy a particular unit.

PRORATE - To divide or distribute proportionately.

PROSPECT - A person or corporation who may be interested in buying or selling real property. The prospect does not become a client until the parties establish a fiduciary relationship, such as upon signing a listing contract or upon executing a DROA.

PROSPECTUS - A printed statement distributed to describe, advertise and give advance information on a business, venture, project or stock issue.

PROSPECTUS - A written statement disclosing all of the pertinent details of an investment offering.

PUBLIC RECORDS - Courthouse records providing real estate and judgment related information.

PUFFING - Exaggerated or superlative comments or opinions not made as representations of fact and thus not a grounds for misrepresentation. A statement such as "the apartment has a fantastic view," is puffing because the prospective buyer can clearly assess the view in each case.

PUNCH LIST - A discrepancy list showing defects in construction which need some corrective work to bring the building up to standards set by the plans and specifications.

PURCHASE MONEY MORTGAGE - A mortgage given to the seller as part of the buyer's consideration for the purchase of real property, and delivered at the same time that the real property is transferred as a simultaneous part of the transaction.

QUALIFIED FEE - An estate in fee which is subject to certain limitations imposed by the owner.

QUALIFYING RATIOS - Debt and income calculations that are used to determine whether a borrower can qualify for a mortgage. They comprise two separate calculations: a housing expense ratio and total expense ratio.

QUANTITY SURVEY - A method of estimating construction cost or reproduction cost; a highly technical process used in arriving at the cost estimate of new construction and sometimes referred to in the building trade as the price take-off method.

QUIET ENJOYMENT - The right of a new owner or a lessee legally in possession to uninterrupted use of the property without interference from the former owner, lessor or any third party claiming superior title.

QUIET TITLE ACTION - A circuit court action intended to establish or settle the title to a particular property, especially where there is a cloud on the title.

QUITCLAIM DEED - A deed that transfers – without any warranty – whatever interest or title a grantor may have at the time the conveyance is made.

QUITCLAIM DEED - A deed that is passed from the grantor to another party without warranty of title condition.

QUITCLAIM DEED - A deed of conveyance which operates, in effect, as a release of whatever interest the grantor has in the property; sometimes called a release deed.

R VALUE - The resistance to heat transfer of a certain material.

RADON - An invisible, odorless radioactive gas found in some homes that in sufficient concentrations may cause health problems.

RAFTER - A structural member used to frame and support a roof.

RANGE - A measurement, used in the government survey system, consisting of a strip of land six miles wide, running in a north-south direction.

RATE-IMPROVEMENT MORTGAGE - A fixed-rate mortgage that includes a rate reduction provision that gives the borrower a one-time option to reduce the interest rate (without refinancing) during the early years of the mortgage term.

RATE LOCK - A commitment issued by a lender to a borrower or other mortgage originator guaranteeing a specified interest rate for a specified period of time. A rate lock guarantees the rate will not change between the time the lock is initiated and when the loan closes. See lock-in.

RATE OF RETURN - The annual percentage of return on investment of income property.

RATE OF RETURN - The relationship (expressed as a percentage)between the annual net income generated by a business and the invested capital, or the appraised value, or the gross income, etc., of the business.

RAW LAND - Unimproved land; land in its unused natural state prior to the construction of improvements such as streets, lighting, sewers, and the like.

REAL ESTATE - Land and anything permanently attached to the land, such as buildings, fences, etc.

REAL ESTATE - The physical land and appurtenances, including any structures; for all practical purposes synonymous with real property.

REAL ESTATE AGENT/BROKER - A person licensed to list, advertise and aid in the sale of real estate on behalf of the property owner.

REAL ESTATE BROKER - An agent who receives a commission by bringing a buyer and a seller of real estate together.

REAL ESTATE OWNED (REO) - Real estate owned by a lending institution as a result of default by borrowers and subsequent foreclosure by the institution. This is property that the lender has directly taken title to, usually as the result of being the successful bidder at the foreclosure sale by bidding up to the loan amount and there being no higher bids.

REAL PROPERTY - All land and appurtenances to land, including buildings, structures, fixtures, fences, and improvements erected upon or affixed to the same; excluding, however, growing crops.

REALTOR - A registered word which may only be used by an active real estate broker who is a member of the state and local real estate board affiliated with the National Association of REALTORS®. The use of the name REALTOR and the distinctive seal in advertising is strictly governed by the rules and regulations of the National Association.

REALTOR - A real estate broker who is a member of the National Association of Realtors.

REALTY - Land and everything permanently affixed thereto.

REBATE - A reduction or kickback of a stipulated charge.

RECAPTURE CLAUSE - A clause usually found in percentage leases, especially in shopping center leases, giving the landlord the right to terminate the lease (and thus "recapture" the premises)if the tenant does not maintain a specified minimum amount of business.

RECEIVER - An independent party appointed by a court to impartially receive, preserve and manage property which is involved in litigation, pending final disposition of the matter before the court.

RECORDING - The act of entering into the book of public records the written instruments affecting the title to real property, such as deeds, mortgages, contracts of sale, options, assignments, and the like. Proper recordation imparts constructive notice to all the world of the existence of the recorded document and its contents.

REDEMPTION - The right to reclaim title in a property by paying any and all previous claims and debts associated with the property within a stipulated time.

REDEMPTION, EQUITABLE RIGHT OF - The right of a mortgagor who has defaulted on the mortgage note to redeem or get back his title to the property by paying off the entire mortgage note prior to the foreclosure sale.

REDUCTION CERTIFICATE - An instrument which shows the amount of the unpaid balance of a mortgage, the rate of interest and the date of maturity.

REFINANCE - To satisfy an existing mortgage with the proceeds of another.

REFINANCE - The act of obtaining a new loan to pay off an existing loan; the process of paying off one loan with the proceeds from another.

REFORMATION - A legal action to correct or modify a contract or deed which has not accurately reflected the intentions of the parties due to some mechanical error, such as a typo graphical error in the legal description.

REINFORCED CONCRETE - Concrete with steel rods or wire embedded to help add strength and prevent cracking.

RELEASE - The discharge or relinquishment of a right, claim or privilege. Releases involving real property transactions should be acknowledged and recorded.

RELEASE CLAUSE - A provision found in many blanket mortgages enabling the mortgagor to obtain partial releases of specific parcels from the mortgage upon the payment of, typically, a larger-than-pro-rata portion of the loan.

RELEASE OF LIEN - A legal instrument discharging the lien from the property.

RELEASE OF MORTGAGE - A certificate from the lender stating that the mortgage has been paid in full.

REMAINDER ESTATE - A future interest in real estate created at the same time and by the same instrument as another estate, and limited to arise immediately upon the termination of the prior estate.

RENEWAL OPTION - A covenant in some leases which gives the lessee the right to extend the lease term for a certain period, on specified terms.

RENT - Fixed periodic payment made by a tenant or occupant of property to the owner for the possession and use thereof, usually by prior agreement of the parties.

RENT CONTROL - Regulation by state or local governmental agencies restricting the amount of rent landlords can charge their tenants; such regulation is a valid exercise of the state's police power.

RENT CONTROL - A restriction imposed by local government limiting the amount a landlord can increase rent.

RENTAL AGREEMENT - An agreement, written or oral, which establishes or modifies the terms, conditions, rules, regulations, or any other provisions concerning the use and occupancy of a dwelling unit and premises; a lease on residential property.

RENTAL POOL - A rental arrangement whereby participating owners of rental apartments agree to have their apartment units available for rental as determined by the rental agent, and then share in the profits and losses of all the rental apartments in the pool according to an agreed formula.

REPOSSESSION - When a lender takes possession of a property for non-payment of debts.

REPRODUCTION COST - The cost, on the basis of current prices, of reproducing a new replica property with the same or fairly similar material.

REQUEST FOR NOTICE - A recorded document requiring a trustee send a copy of a Notice of Default or Notice of Sale concerning a specific deed of trust in foreclosure to the person who filed the document.

RESCISSION - The legal remedy of canceling, terminating or annulling a contract and restoring the parties to their original positions; a return to the status quo.

RESERVE FUND - Monies set aside as a cushion of capital for future payment of items such as taxes, insurance, furniture replacement, deferred maintenance, etc.; sometimes referred to as an impound account.

RESIDUAL PROCESS - An appraisal process used in the income approach to estimate the value of the land and/or the building, as indicated by the capitalization of the residual net income attributable to it.

RESTRICTIONS - Limitations on the use of property. Private restrictions are created by means of restrictive covenants written into real property instruments, such as deeds and leases.

RESTRICTIVE COVENANTS - A restriction clause in a deed limiting what a landowner can do with the property.  The restriction may run with the property and remain binding to all subsequent owners.

RESTRICTIVE COVENANT - A private agreement, usually contained in a deed, which restricts the use and occupancy of real property.

RETALIATORY EVICTION - An act whereby a landlord evicts the tenant in response to a complaint made by the tenant.

REVERSION - A future estate in real property created by operation of law when a grantor conveys a lesser estate than he has. The residue left in the grantor is called a reversion which commences in possession in the future upon the end of a particular estate granted or devised, whether it be freehold or less-than-freehold.

RIGHT OF SURVIVORSHIP - The distinctive characteristic of a joint tenancy (also tenancy by entirety) by which the surviving joint tenant(s) succeeds to all right, title and interest of the deceased joint tenant without the need for probate proceedings.

RIDGE BOARD - Board placed at the peak of a roof to support the rafters.

RIGHT OF REDEMPTION - A borrowers right to reacquire property lost due to a foreclosure.

RIGHT OF WAY - A strip of land set aside as an easement and used as a road or street.

RIGHT-OF-WAY - The right or privilege, acquired through accepted usage or by contract, to pass over a designated portion of the property of another.

RIPARIAN - Those rights and obligations which are incidental to ownership of land adjacent to or abutting on watercourses such as streams and lakes.

RISER - The vertical section of a step in a staircase.

RISK OF LOSS - Responsibility for damages caused to improvements. The risk of loss passes to the vendee when either title or possession passes, and he should protect himself by securing proper insurance.

ROLL ROOFING PAPER - Roofing material made with asphalt fibers used on top of roof sheathing.

ROOF SHEATHING - Plywood which is fastened to the roof rafters.

RUNNING WITH THE LAND - Rights or covenants which bind or benefit successive owners of a property are said to run with the land, such as restrictive building covenants in a recorded deed which would affect all future owners of the property.

SAG - A dip in a joist.

SALE OF TRUST PROPERTY BY PUBLIC AUCTION - Alternate reference to a foreclosure under a deed of trust that occurs through power of sale. Procedurally, such foreclosures require public advertisement before sale.

SALE-LEASEBACK - A technique in which a seller sells a property to a buyer for a consideration, and the buyer simultaneously leases the property back to the seller at a pre-arranged rate.

SALE-LEASEBACK - The sale of a property subject to the new owner agreeing to lease the same property back to the sellers.

SALE AND LEASEBACK - A transaction in which, typically, an owner sells his improved property and as part of the same transaction signs a long-term lease and remains in possession.

SASH - The window frame that holds the glass pane.

SCHEMATICS - Preliminary architectural drawings and sketches; basic layouts not containing the final details of design.

SCIRE FACIAS - A legal theory which upon action initiated by the lender, requires a defaulting borrower to prove the loan is not in default as opposed to the lender being required to prove the loan is in default, which would occur in a standard mortgage foreclosure action.

SECOND MORTGAGE - A mortgage that has a lien position subordinate to that of the first mortgage. Referred to as a junior lien.

SECOND MORTGAGE - A mortgage placed on a property that is subordinate to a first mortgage.

SECOND MORTGAGE - A mortgage which is junior or subordinate to a first mortgage; typically, an additional loan imposed on top of the first mortgage, which is taken out when the borrower needs more money.

SECONDARY MORTGAGE MARKET - The buying and selling of existing mortgages after they are originated and closed.

SECONDARY MORTGAGE MARKET - A market for the purchase and sale of existing mortgages, designed to provide greater liquidity for mortgages; also called secondary money market.

SECURITY AGREEMENT - A security document which creates a lien upon chattels, including chattels intended to be affixed to land as fixtures; known as a chattel mortgage prior to the adoption of the Uniform Commercial Code.

SECURITY DEPOSIT - Money deposited by or for the tenant with the landlord, to be held by the landlord for the following purposes: to remedy tenant defaults for damage to the premises (be it accidental or intentional), for failure to pay rent due, or for failure to return all keys at the end of the tenancy.

SELLER'S MARKET - A market with many buyers and few sellers.

SEPTIC TANK - A tank in which sewage settles to the bottom and is either destroyed by bacteria or discharged to a leaching field.

SEPTIC TANK - A sewage settling tank in which part of the sewage is converted into gas and liquids before the remaining waste is discharged by gravity into a leaching bed underground.

SETBACK - Zoning restrictions on the amount of land required surrounding improvements; the amount of space required between the lot line and the building line.

SETTLEMENT - The act of adjusting and prorating the various credits, charges and settlement costs to conclude a real estate transaction.

SEVERALTY - Sole ownership of real property.

SHAKES - Wood shingles.

SHEATHING - Plywood which is nailed to exterior studs and rafters.

SHELL LEASE - A lease wherein a tenant leases the unfinished shell of a building, as in a new shopping center, and agrees to complete construction himself by installing ceilings, plumbing, heating and air conditioning systems, and electrical wiring.

SHERIFF'S DEED - A court ordered foreclosure sale that conveys title of a property to the buyer.

SHINGLES - Siding or roofing covering applied in overlapping layers.

SHOPPING CENTER - A modern classification of retail stores, characterized by off-street parking and clusters of stores, subject to a uniform development plan, and usually with careful analysis given to the proper merchant mix.

SHORELINE - The dividing line between private land and public beach on beachfront property.

SIDING - Wood boards nailed vertically or horizontally to the sheathing.

SILL PLATE - Wood member that rests on top of the foundation wall.

SIMPLE INTEREST - Interest computed on the principal balance only.

SLAB - A concrete floor poured directly onto soil.

SOFFIT - Underside of an eave or cornice.

SOLE PLATE - The bottom wood member of a framed stud wall.

SPECIAL ASSESSMENT - A tax or levy customarily imposed against only those specific parcels of realty which will benefit from a proposed public improvement, as opposed to a general tax on the entire community.

SPECIAL WARRANTY DEED - A deed stating that the grantor has not encumbered the property.

SPECIAL WARRANTY DEED - A deed in which the grantor warrants or guarantees the title only against defects arising during the period of his tenure and ownership of the property and not against defects existing before the time of his ownership.

SPECIFIC PERFORMANCE - A legal action brought in a court of equity to compel a party to carry out the terms of a contract.

SPOT LOAN - A loan on a particular property, usually a condominium unit, by a lender who has not previously financed that particular condominium building.

STANDING LOAN - A commitment by the interim or construction lender to keep the money already funded in the project for a specified period of time after the expiration of the interim loan, usually until permanent take-out financing is secured.

STATUTE OF FRAUDS - That law which requires certain contracts to be in writing and signed by the party to be charged therewith in order to be legally enforceable.

STATUTE OF LIMITATIONS - That law pertaining to the period of time within which certain actions must be brought to court.

STEP-UP LEASE - A lease with fixed rent for an initial term and provision for pre-determined rent increases at specified intervals and/or increases based upon periodic appraisals; sometimes called a graduated lease.

STRAIGHT-LINE DEPRECIATION - A method of depreciating a set amount each year over the economic life of an investment property for tax purposes.

STRAIGHT NOTE - A promissory note evidencing a loan in which "interest only" payments are made periodically during the term of the note, with the principal payment due in one lump sum upon maturity.

STRINGER - A long piece of wood placed at an incline as a sidewall to support a staircase.

STUD - Wood member used for wall framing.

SUBFLOOR - Plywood sheets nailed to floor joists.

SUBJECT TO - The purchase of a property with an existing lien or liens against the title assuming personal liability for the lien(s) payments.

SUBJECT TO CLAUSE - A clause that invalidates an agreement until certain conditions have been satisfied.

SUBJECT TO MORTGAGE - A grantee taking title to real property "subject to mortgage" is not personally liable to the mortgagee for payment of the mortgage note. In the event the grantor-mortgagor defaults in paying the note, the grantee could, however, lose property, and thus his equity, in a foreclosure sale.

SUBDIVISION - A division of a single parcel of land into smaller parcels after first obtaining local government approval.

SUBORDINATION AGREEMENT - An agreement whereby a prior mortgagee agrees to subordinate or give up their priority position to an existing or anticipated future lien.

SUMMARY POSSESSION - A legal process used by a landlord to regain possession of the leased premises if the tenant has breached the lease or is holding over after the termination of tenancy.

SURRENDER - A premature conveyance of a possessory estate to a person having a future interest, as when a lessee surrenders the leasehold interest to the owner of the reversion interest, the lessor, before the normal expiration of the lease.

SURVEY - A map of plat made by a licensed surveyor showing properties boundary and the dimension and location of any improvements.

SURVEY - The process by which boundaries are measured and land areas are determined; the on-site measurement of lot lines, dimensions, and position of houses in a lot including the determination of any existing encroachments or easements.

SURVIVORSHIP - The right of survivorship is that special feature of a joint tenancy whereby all title, right and interest of a decedent joint tenant in certain property passes to the surviving joint tenants by operation of law, free from claims of heirs and creditors of the decedent.

SUSPENDED CEILING - Tiles that are supported by a metal grid and hang from the old ceiling.

SUMP - A pit in the basement where a sump-pump is installed to pump out any water that collects in the pit.

TAKE-OUT FINANCING - Long-term permanent financing.

TAKE OVER - The purchase of a property with an existing lien or liens against the title without assuming any personal liability for the liens payment.

TAX DEDUCTION - Expenses such as mortgage interest that may be deducted from gross taxable income before taxes are computed.

TAX LIEN - A general statutory lien imposed against real property for failure to pay taxes. There are federal tax liens and state tax liens.

TAX LIEN - A lien placed on a property for non-payment of taxes.

TAX SHELTER - An income tax savings realized from an investment.

TAX SHELTER - A phrase often used to describe some of the tax advantages of real estate investment, such as deductions for depreciation, interest, taxes, etc., which may offset the investor's other ordinary income to reduce the investor's overall tax payment.

TENANCY AT SUFFERANCE - A tenancy which exists when a tenant wrongfully holds over after the expiration of a lease, without the landlord's consent, as where the tenant fails to surrender possession after termination of the lease.

TENANCY AT WILL - A tenancy in which a person is in possession of real estate with the permission of the owner, for a term of unspecified or uncertain duration, as when an owner permits a tenant to occupy a property until it is sold.

TENANCY BY THE ENTIRETY - A marital type of joint tenancy of property that provides right of survivorship and is available only to a husband and wife. Contrast with tenancy in common.

TENANCY BY THE ENTIRETY - A special joint tenancy between a lawfully married husband and wife, which places all title to the property into the marital unit, with both spouses having an equal, undivided interest in the whole property.

TENANCY FOR YEARS - A less-than-freehold estate in which the property is leased for a definite, fixed period of time, be it for 60 days or any fraction of a year, a year, ten years, etc.

TENANCY IN COMMON - A non-marital type of joint tenancy in a property without right of survivorship. Contrast with tenancy by the entirety and with joint tenancy.

TENANCY IN COMMON - A form of concurrent ownership of property between two or more persons, in which each has an undivided interest in the whole property; frequently found when the parties acquire title by descent or by will.

TENANCY IN SEVERALTY - Ownership of property vested in one person alone, and not held jointly with another; also called Several Tenancy or Sole Tenancy.

TENANT - In general, one who holds or possesses property, such as a life tenant or a tenant for years; commonly used to refer to a lessee under a lease.

TENANT-STOCKHOLDER - The obligee for a cooperative share loan that is the equivalent of a mortgage loan, who is both a stockholder in a cooperative corporation and a tenant of the unit under a proprietary lease or occupancy agreement.

TERM - The length of time a loan will last if all scheduled payments are made when due. Also known as amortization period.

TERM - The length of time it takes to repay a loan in full.

TERMITES - Insects that live in the ground and destroy wood.

TERMITE SHIELD - A piece of metal attached to a foundation wall to serve as a termite barrier.

TIME IS OF THE ESSENCE - The clause in a contract which emphasizes that punctual performance is an essential requirement of the contract.

TIME-SHARING - A shared ownership where the owner is entitled to use the property a certain number of days a year.

TIME SHARING - A modern approach to communal ownership and use of real estate which permits multiple purchasers to buy undivided interests in real property (which is usually in a resort condominium or hotel) with a right to use the facility for a fixed or variable time period.

TITLE - The instrument that is evidence of a persons right in real property (i.e., a deed).

TITLE DEFECT - A legal claim against a property to make demands upon the owner.

TITLE EXAMINER (Abstracter) – A specialist in title search and abstract preparation.

TITLE INSURANCE - An insurance policy to protect the lender and homeowner against past legal defects in title.

TITLE INSURANCE - A comprehensive contract of indemnity under which the title company agrees to reimburse the insured for any loss if title is not as represented in the policy.

TITLE SEARCH - An examination of public records to determine the legal ownership and the extent of any encumbrances.

TITLE SEARCH - An examination of the public records to determine what, if any, defects there are in the chain of title.

TITLE THEORY - The legal position that a mortgagee holds title (Trustee) until the loan has been repaid on the property.

TOWNHOUSE - A building with multiple individually owned dwelling.

TOWNHOUSE - A type of dwelling unit normally having two floors, with the living area and kitchen on the base floor and the bedrooms located on the second floor.

TOWNSHIP - A piece of property, used in the government survey system of land description, which is 6 miles square, and contains36 sections, each 1 mile square; and consists of 23,040 acres.

TRADE FIXTURES - Articles of personal property annexed to leased premises by the tenant, as a necessary part of the tenant's trade or business.

TREAD - The horizontal part of the staircase at which a person steps.

TRIPLE NET LEASE - A net, net, net lease, where in addition to the stipulated rent, the lessee assumes payment of all expenses associated with the operation of the property.

TRUSS - Pre-assembled roof rafters and horizontal joists.

TRUST DEED - A real property security device (also called a deed of trust) very similar to a mortgage, except that there are three parties, the trustor, the trustee, and the beneficiary the lender).

TRUST DEED - See deed of trust.

TRUST FUND ACCOUNT - An account set up by a broker at a bank or other recognized depository, into which the broker deposits all funds entrusted to him by his principal or others.

TRUSTEE - A neutral party who advertises the foreclosure property for sale and conducts the auction to sell said property to the highest bidder.

TRUSTEE SALE - An auction of real property conducted by a trustee. Also known as a Sheriffs Sale.

TURNKEY PROJECT - A development term meaning the complete construction package from ground breaking to the completion of the building. All that is left undone is to turn over the keys to the buyer.

UNDERWRITER - The individual(s) employed by the lender or a third-party service provider who evaluates a loan application to determine the risk involved for the lender.

UNDERWRITING - The process of evaluating a loan application to determine the risk involved for the lender. Underwriting involves an analysis of the borrower's creditworthiness and the quality of the asset to be lent against.

UNDISCLOSED BANKRUPTCY - A bankruptcy case that was pending during the foreclosure period that involved debtors who were party to the foreclosure. Because the automatic stay may have been in effect during the time, this may invalidate certain foreclosure proceedings and cause a delay in the foreclosure sale process.

UNENCUMBERED PROPERTY - A property free and clear of title defects.

UNILATERAL CONTRACT - A contract in which one party makes an obligation to perform without receiving in return any express promise of performance from the other party, such as an open listing contract, where the seller agrees to pay a commission to the first broker who brings in a ready, willing and able buyer.

UNSECURED LOAN - A loan that is not backed or secured by collateral.

UNSECURED NOTE - A loan that is not secured by personal property or real estate given on the basis of borrower's credit worthiness and signature.

UPSET PRICE - A minimum price set by a court in a judicial foreclosure, below which the property may not be sold by a court appointed commissioner at public auction; the minimum price which can be accepted for the property after the court has had the property appraised.

USEFUL LIFE - That period of time over which an asset, such as a building, is expected to remain economically feasible to the owner.

USURY - Charging a rate of interest in excess of that permitted by law.

VA (DEPARTMENT OF VETERANS AFFAIRS) - An agency of the federal government that guarantees residential mortgages for eligible veterans of the armed forces. The guarantee protects the lender against loss and thus encourages lenders to make mortgages to veterans with very low down payments.

VA MORTGAGE - A mortgage loan that is guaranteed by the Department of Veterans Affairs (VA). Also known as a government mortgage.

VA MORTGAGE - A mortgage given by a private lender and guaranteed by the Veteran's Administration.

VACANCY FACTOR - An allowance or discount for estimated vacancies(unrented units) in a rental project. The vacancy rate is the ratio between the number of vacant units and the total number of units in a specified project or area.

VALUE - The power of a good or service to command other goods in exchange for the present worth of future rights to income or amenities; the present worth to typical users and investors of future benefits arising out of ownership of a property.

VAPOR BARRIER - Much like a moisture barrier, it is used to prevent movement of vapor or moisture from one area to another.

VARIANCE - Permission obtained from governmental zoning authorities to build a structure or conduct a use which is expressly prohibited by the current zoning laws; an exception from the zoning laws.

VENDEE - The purchaser of realty; the buyer. The buyer under an agreement of sale.

VENDOR - The seller of realty. The seller under an agreement of sale.

VENT STACK - A pipe that extends through the roof to the outside air, allowing sewer gases to escape from the plumbing system.

VESTED - Having the right to use or borrow against a portion of a fund such as an individual retirement fund. For example, individuals who are 100 percent vested can withdraw all of the funds that are set aside for them in a retirement fund. However, taxes may be due on any funds that are actually withdrawn.

VOID - Having no legal force or binding effect; a nullity; not enforceable. A contract for an illegal purpose (i.e. gambling) is void.

VOIDABLE - A contract which appears valid and enforceable on its face, but is subject to rescission by one of the parties who acted under a disability, such as being a minor or being under duress or undue influence; that which may be avoided or adjudged void but which is not, in itself, void.

VOLT - A unit of electrical force.

WAIVER - To voluntarily give up or surrender a right.

WAREHOUSE - A building used to store merchandise and other materials or equipment.

WAREHOUSING - A term used in financing to describe the process which loan correspondents employ, assembling into one package a number of mortgage loans which the correspondent has originated and selling them in the secondary mortgage market.

WARRANTY - A guaranty by the seller, covering the title as well as the physical condition of the property.

WARRANTY DEED - A deed in which the grantor fully warrants good clear title to the premises. Also called a general warranty deed.

WASTE - An improper use or abuse of property by one in possession of land, who holds less than the fee ownership, such as a tenant, life tenant, mortgagor, or vendee.

WEAR AND TEAR - The gradual physical deterioration of property, resulting from use, passage of time and weather. Only property subject to wear and tear is depreciable.

WRAPAROUND MORTGAGE - A combined mortgage that includes the remaining balance on an existing first mortgage plus an additional amount requested by the mortgagor. Full payments on both mortgages are made to the wraparound mortgagee, who then forwards the payments on the first mortgage to the underlying first mortgagee.

WRAP-AROUND MORTGAGE - A method of refinancing in which the new mortgage is placed in a secondary or subordinate position. In essence, it is an additional mortgage in which another lender refinances a borrower by lending an amount over the existing first mortgage amount, without cashing out or distributing the existence of the first mortgage.

WRIT - An order or mandatory process in writing issued in the name of a court or judicial officer commanding the person to whom it is directed to perform or refrain from performing a specified act.

WRIT OF EXECUTION - An order of the court evidencing debt of one party to another and commanding the court officer or sheriff to take property or "execute" upon it for purposes of a subsequent sale. The proceeds of the sale are subsequently used to satisfy the debt or judgment.

YEAR-TO-YEAR TENANCY - A periodic tenancy in which the rent is reserved from year to year.

YIELD - The return on an investment or the amount of profit, stated as a percentage of the amount invested.

ZONING - The regulation of structures and uses of property within designated districts or zones. Zoning regulates and affects such things as use of the land, types of structure permitted, building heights, setbacks, and density (the ratio of land area to improvement area).

© Copyright 2007 Alan D Kosinski, LLC