Free Real Estate Definition Flashcards
Caveat emptor
Caveat emptor is Latin for "Let the buyer or buyers beware". The concept is that the buyer is responsible for checking the quality of a product before a purchase is made.
Principle of contribution
The principle of contribution states that the actual worth of an improvement is what contributes to the property’s market value, not the cost of the improvement.
Lease violation
A lease violation is when a landlord or tenant violates the terms of their lease agreement. Put simply, a lease violation is a breach of contract.
Master plan
A master plan is a comprehensive plan to guide the long-term physical development of a particular area.
Co-borrower
A co-borrower is also known as the co-applicant or joint applicant. They share equal responsibility for making payments on the loan as the primary borrower. They also have equal access to the funds as the primary borrower.
Partition
Partition is a legal way to dissolve the relationship when the parties don’t voluntarily agree to its termination.
Rent control
Rent control is a program that imposes a maximum limit on how much property owners can charge tenants for rent. The maximum limit, also known as a “rent ceiling,” is designed to stabilize rental prices and help tenants afford housing.
Usury
Usury is the act of lending money at unreasonably high-interest rates. This illegal practice is an example of predatory lending.
Lien
A lien is a form of security interest granted over an item to secure the payment of a debt or performance of some other obligation. A lien serves to guarantee an underlying obligation. Usually, that obligation is the repayment of a loan.
Variance
A variance is a request to deviate from current zoning requirements. If granted, it permits the owner to use his land in a way that is ordinarily not permitted by the zoning ordinance.
Exchange
Transfer of goods or services.
FHA loans
FHA Loans are a mortgage issued by an FHA-approved lender and insured by the FHA which is the Federal Housing Administration. FHA loans are sought after because they require lower minimum down payments and credit scores than many conventional loans.
Creative financing
Creative financing is a financing process that doesn’t involve conventional lending practices. In this type of financing, an individual or business uses specialized tactics to obtain funding for real estate purchases.
Abutting
Abutting means an area of land or a building has a common boundary with another.
Partnership
A partnership is composed of 2 or more persons who agree to contribute money, labor, or skill to a business. Each partner shares the profits, losses, and management of the business, and each partner is personally and equally liable for debts of the partnership.
Market value or market price
The actual selling price of the property. So if your home sells for $200,000. Its market value is $200,000.
Executed contract
When contracting parties have signed a contract, and both parties have done all they promised to do, it is called an executed contract or executed agreement.
Unsecured loan
An unsecured loan allows you to obtain a loan without using any collateral. Instead of asking for collateral, the lenders check your credit history and ability to repay the loans from your previous records.
Government National Mortgage Association
Ginnie Mae, or Government National Mortgage Association, is a government organization that provides guarantees for investors in mortgage-backed securities. The federal corporation guarantees USDA, FHA, and VA loans and improves the market’s interest in securities. It does so by ensuring timely payments on mortgage-backed securities.
Appraisal
An appraisal is an estimate of approximate worth of something.
Tax rate
The tax rate is designated rate the government taxes a person, business or entity.
Tenant
A person who occupies land or property rented from a landlord.
Active property
Active property is property that is still available for sale. The active status indicates that the seller is still accepting offers. If you or your client see a home listing with just “active” as its status, this indicates that the property is available for sale.
Principle of substitution
The principle of substitution states that a buyer will not pay more for a property than the cost of an equally desirable property.
Implied contract
An implied contract is a legally enforceable obligation that arises from one or more parties due to the party’s actions, conduct, or circumstances. It has the same legal effect as an express contract, a contract between two or more parties that is willingly entered into and agreed upon verbally or in writing. An implied contract is presumed to exist but does not require written or verbal confirmation.
Financial contingency
A financing contingency provides a way for buyers to back out of the sale of the property if their loan falls through.
Bilateral contract
Bilateral contract is the most typical form of contracts and simply refers to an agreement between at least two people or groups. Most business and personal contracts fall into this category.
Freehold estate
A freehold estate is an estate in which you have an exclusive right to enjoy the possession of a property indefinitely. Contrast to a leasehold estate, where possession is limited by time period.
Homeowner insurance
Homeowners insurance is property insurance that covers losses and damages. They cover an individual’s house and assets in the home. It may also provide liability coverage against accidents in the home or on the property.
Adverse possession
Adverse possession is the legal principle in which a person who does not have legal right to a property acquires legal ownership based on continuous occupation of the land without the permission of its real owner.
Pending property
The term pending means that the offer has been accepted, and both parties are moving forward with the sale. When a property is pending, it is in the period after the contingencies are resolved.
Leaseback
A leaseback, also known as a sale leaseback, is a financial transaction where a company sells its property and then rents it back from the new owner. The seller becomes the lessee, and the buyer becomes the lessor.
Novation
The procedure in which an original contract is terminated and replaced with a new one. The legal process of novation makes it possible to transfer all contract benefits and liabilities from previous parties to a set of new ones. In plain terms, it’s a simple way to replace an old contract with a new one while maintaining most or all of its original properties.
Variable lease
A variable lease is a rental agreement where the lessee’s payments vary throughout the term due to changing market conditions.
Home inspection
A home inspection is an examination of the condition of a real estate property. This usually takes place in connection with the property’s sale.
Percentage lease
A percentage lease is an agreement in commercial real estate where the tenant pays rent plus a percentage of their earned business revenue.
Landlord
The owner of a property (such as land, houses, or apartments) that is leased or rented to another.
Quitclaim deed
A quitclaim deed contains no title covenant and thus offers the grantee no warranty as to the status of the property title.
Steering
Steering is the illegal practice of guiding, or steering, someone to purchase or rent a home in a specific area or community based on their race, religion, gender, color, familial status, or disability.
Alienation
Alienation is the act of transferring title, ownership, an estate, or an interest in real estate from one party to another.
Corporation
Corporations may be formed for profit or nonprofit purposes. A corporation is managed and operated by a board of directors. A corporation has certain rights, privileges, and liabilities beyond those of partnerships. Doing business as a corporation has its advantages and disadvantages.
Condemnation
The procedure used by a public or private entity with the powers granted from eminent domain to take privately owned real estate.
Emblements
Emblements are annual crops produced by cultivation legally belonging to the tenant with the implied right for its harvest, and they are treated as the tenant's property.
Metes-and-Bounds
A survey method imported to the original colonies that formed the United States. The system uses physical features of the local geography, along with directions and distances, to define and describe the boundaries of a parcel of land.
Estate at sufferance
An estate in sufferance arises when the tenant holds over after the expiration of their term.
Prime rate
The prime rate determines the rates for mortgages, personal loans, and small business loans. The lenders mostly charge this rate to their most favored borrowers. This rate is used as the base for calculating rates for variable-rate mortgages.
HUD
The Department of Housing and Urban Development
Accretion
Accretion is the slow process of growth or acquisition of land, typically when soil is deposited by the natural action of water. Long term accretion can actually increase the size of a property.
Secondary market
The secondary market is the resale marketplace of loans. Specifically, in real estate, it’s where investors buy and sell mortgages and mortgage-backed securities.
Tenant Turnover
Tenant turnover is the portion of tenants who stay at a rental property versus those who vacate the property. Tenant turnover can also be used to describe the time gap between an old tenant leaving and a new tenant moving in.
Water diversion
Water diversion is the removal or transfer of water from one place to another.
VA loans
A VA loan is a mortgage loan available for military service members, veterans, and eligible surviving spouses. They often come with better terms than a traditional mortgage which is why they are commonly sought after.
Prepayment penalty clause
A prepayment penalty clause states that a lender can penalize a borrower if the borrower pays off the mortgage much sooner than usual.
Appurtenant easement
An appurtenant easement is a type of easement that “runs with the land.”
Mortgage broker
A mortgage broker is a third party who brings the borrower and the lender to one platform. They facilitate communication between the lender and the borrower. Mortgage brokers help borrowers get the best mortgage deal so that the borrowers and lenders work towards loan origination.
Receivership
Receivership in real estate is a legal solution in which a lender or a court appoints a receiver to recover the remaining funds from a defaulted borrower.
Amortization
Amortization is when payments divide into equal amounts for the duration of the loan. Amortization is an accounting process in which the book value of a loan or an intangible asset periodically reduces through regular payments.
Property manager
A property manager is someone hired to maintain and manage real estate property. They handle the day-to-day tasks of running a rental property, like screening new tenants, collecting rent, or maintaining property. In simple terms, a property manager makes a landlord’s life a lot easier.
Trust
A trust is a three-party relationship in which the first party, the trustor or settlor, transfers a property upon the second party for the benefit of the third party, the beneficiary.
Depreciation
Depreciation is any loss in the value of a property over time from any cause.
Americans with Disabilities Act of 1990
The Americans with Disabilities Act (ADA) protects people with disabilities against discrimination in housing. This federal law states that housing providers must provide equal opportunities for persons with physical or mental impairments.
Wrap-around loan
A wrap-around loan is a new loan that wraps around the seller's original loan. It is a secondary financing option in which a seller provides the loan instead of a bank or credit union. These loans can be used in owner-financing contracts and are mostly used as mortgages.
Insurance
Insurance is a contract, in which an individual receives legal protection or reimbursement for any predetermined losses.
Environmental Protection Agency (EPA)
The Environmental Protection Agency (EPA) is the federal agency responsible for dealing with environmental issues. The EPA was established in December 1970 by an executive order of United States President Richard Nixon.
Loan origination fee
A loan origination fee is a fee required by the loan originator to process the loan. Loan origination is a process that starts with the qualification and authentication of a new loan.
Escrow
Escrow is a way for money and property to be transferred from one party to another through the use of a neutral, third-party agent also known as an escrow agent. Escrow makes it a lot safer for both buyers and sellers to close the sale without worrying about getting snubbed or cheated.
Lease expiration
A lease expiration occurs at the end of the lease term when the lease is no longer valid. At this point, the contractual relationship between the landlord and tenant ceases to exist.
Sandwich lease
A sandwich lease is a rent agreement where a property owner rents their property to an investor who, in turn, rents that property to a tenant.
Adjustable-rate mortgage (ARM)
An adjustable rate mortgage has a flexible interest rate. Adjustable rate mortgages have a fixed period during which the initial interest rate remains the same, after that the interest rate adjusts at a pre-arranged frequency. The fixed-rate period can vary significantly anywhere from one month to 10 years.
Economic obsolescence
Refers to the loss of property value due to external factors, meaning things off the property affecting the properties value.
Involuntary liens
Involuntary liens aren’t created by the homeowner. It is a claim imposed against a property without the consent of its owner.
Nonhomogeneity
Nonhomogeneiety is when houses in a real estate development are different. If something is non-homogeneous, it indicates a lack of uniformity in a real estate development or multiple real estate properties.
Rezoning
The legal government-approved process of adjusting a zone.
Ad valorem
The Latin phrase ad valorem means "according to value."
Multiple listing service (MLS)
A service used by a group of real estate brokers. It connects listings together under one large umbrella.
Latent defect
A latent defect is not discoverable by normal inspection but maybe not to the regular eye. But is known of by the seller or homeowner.
Real estate broker
A real estate broker is a person who acts as an intermediary between sellers and buyers of real estate/real property. A broker can work independently or employ other agents. The biggest difference between a broker and a real estate agent is a broker can work on his own, while an agent must work under a licensed broker. Getting a broker’s license is separate from a standard license.
Inverse condemnation
The event in which the government takes private property but fails to pay compensation or just compensation.
Ownership
The act, state, or right of possessing an object, in our case, property.
Federal income tax
An annual government tax based on an individuals earnings.
Antitrust laws
Antitrust Laws are a collection of federal and state government laws that regulate the conduct and organization of business corporations, normally to promote fair competition for the benefit of consumers.
The Fair Housing Act
The law that prohibits discrimination in the buying, selling, renting or financing of housing. These laws prohibit discrimination based on race, religion, color, sex, disability, children, nationality and more.
Gap
A real estate term meaning a space or pause in a contract.
Radon
Radioactive gas dispersed from natural decay of minerals in earth; odorless, colorless, tasteless.
Net listing
A net listing is when an agent agrees to sell an owner’s property for a set minimum price. Anything over the minimum price belongs to the agent as commission.
Civil Rights Act of 1866
The Civil Rights Act of 1866 declared that all persons born in the United States are created equal by the law. Among the many benefits of the 1866 Civil Rights Act, one of the most important was that any person born in the United States could own property regardless of color or race.
Down Payment
Down payment is the amount that the borrower pays to the lender as a percentage of the purchase price. Depending on the borrower and the lender, the down payment may be between 2% to 20% or more—the larger the down payment, the lower the interest rates. The percentage or amount of down payment also depends on the type of mortgage loan.
Air rights
Air rights are the rights to use the space above the earth.
Bridge loan
A bridge loan provides short-term financing to homeowners while moving from one house to another.
Bargain and sale deed
A bargain and sale deed demonstrates that only the seller of the property holds title of ownership and legally has the right to transfer the property.
Subordinate loan
A subordinate loan is a secondary or subsequent debt that is paid after the primary or initial loans have been paid. It has the lowest ranking and usually higher interest rates than other loans. Subordinate loans are riskier because they are repaid only when the other loans are repaid.
Easement for ingress and egress
An easement used for entering and exiting a property.
Dividing territories
Dividing territories is when competing brokers agree to split territories, and divide interests accordingly. This is a clear antitrust violation.
Single-Family Home Exemption
The Single-Family Home Exemption states that any single-family dwelling sold without an agent is exempt from the FHA. This means single-family homeowners can be more discriminatory when selling their homes themselves.
Satisfaction of mortgage
A satisfaction of mortgage is a legal document that confirms that the mortgage is finished, releasing the loan’s lien on the property and transferring title to the borrower. The document includes the borrower and lender’s contact details, loan and property details, and verification of authenticity.
Pur autre vie
Pur autre vie is a term used in property law to indicate the duration of a specific form of life estate created when a life estate holder transfers his or her interest to another person. It’s a French expression that means “for another’s life,” thus a life estate pur autre vie would endure the same amount of time as another’s life.
Double net lease
"Double" means two additional costs will be added to your base rent. Usually taxes and insurance costs are added to the monthly lease payment.
Alienation clause
The alienation clause is a contract provision that comes into effect when ownership of a specified asset is transferred or sold. It ensures that if a transfer of property happens the lender is paid in full from the original borrower.
Erosion
The opposite of accretion, erosion is the wearing away of land or soil by the action of wind, water, currents, or ice. Long term erosion can decrease the size of a property.
Contract
An agreement between two or more parties by law.
Underwriting
Underwriting is a process that lenders use to know whether the borrower qualifies for a loan. An underwriter evaluates the risk and determines whether the lender should enter into a loan agreement.
Real estate
Real estate is a term used to describe property or buildings.
Open-end mortgage
An open-end mortgage allows the borrower to obtain the highest loan amount that they can qualify for. This amount can be obtained even if the borrower doesn’t need it all to purchase a home. Once the borrower has purchased the home, the unused portion of the loan remains. The borrower can use this unused portion later during the draw period for home improvement and renovations.
Underwriter
An underwriter carries out the underwriting process and determines the risk worthiness of a loan.
Special warranty deed
A deed in which the grantor warrants only against defects occurring during their ownership.
Title contingency
If the title for the property is under review the buyer can add a title contingency to the offer. During this process, a title report will be done which may reveal a conflicting ownership status, in which the buyer then can opt out of the sale.
Valid contract
A valid contract meets all legal requirements of a court of law and is legally enforceable.
Rent
Rent is the amount owed every month, term, or year that covers the cost to live or reside on the property.
Duress
Duress is the act of forcing an individual or business to do something against their will.
Modified gross lease
A modified gross lease is a rental agreement where the tenant pays rent plus a share of operating expenses. This type of lease also goes by the name of an industrial lease.
Notice of default
A notice of default is a public notice that a lender files with the court when the borrower misses payments on their mortgage. The notice indicates that the borrower is in default, and the lender can continue with the foreclosure proceedings. A notice of default is the second step in foreclosure after the borrower has missed mortgage payments.
Tenant rights for repairs
The tenant rights for repairs is the implied right that allows a tenant to make necessary repairs and deduct the cost of the repairs from the rent under certain circumstances.
Buffer zone
A buffer zone is a space of land between two use districts such as a park, playground or a highway. The point of a buffer zone is to ease the transition from zone to zone.
Contingent property
A contingent property means an offer for the property has been accepted but there is a condition or “contingency” that is written into the contract and it must be met before the sale can go through.
Property management
The overseeing of real estate and property.
Optionor
The legal term for a party that allows or gives an option.
Fee simple absolute
Fee simple absolute, or fee simple for short, is an estate in land. It is the highest form of real estate ownership that is recognized by law, in which the owner can enjoy the property to its fullest extent and is only limited by government powers.
Co-op
A co-op is a nonprofit corporation, complete with a board of directors, and each resident is a shareholder. Perhaps the largest distinction between a condominium and a co-op is that most co-op associations require that a prospective purchaser be approved by a committee composed of current co-op owners.
Debt
Something owed or promised.
Execution date
The execution date or date executed is the day the contract is signed.
Commingled real estate funds
Generally speaking, commingled funds are the funds commingled in real estate. From an agent’s perspective, those funds are best defined as personal funds mixed with client’s funds.
Servient estate
The servient estate is a parcel of land that is subject to an easement.
Special agent
A special agency occurs when a real estate agent is hired by a client, also known as the principal, to perform one specific task or duty. A real estate agent is considered a special agent because they are authorized only in that one job, such as helping someone sell their home.
Personal property
Personal property is all things removable, like clothes, lawnmowers, couches, TVs, and furniture.
Release clause
A contract provision (typically in a blanket mortgage) that allows for the freeing of all or part of a property from a claim through a proportional or full amount of the mortgage being paid off.
Fixture
A fixture in real estate is an item of personal property that has been permanently attached or affixed to real property or land. Or an item once personal property, but is considered real property either by attachment or legal addition.
Errors and omissions insurance
Some but not all states require this form of insurance. It is a type of liability insurance that protects professionals against claims of inadequate work or negligent actions.
Rent roll
A rent roll is a report that details information about a property and its tenants. The purpose of a rent roll is to provide a snapshot of how a property performs in cash flow and profitability.
Kickback
A kickback is when a real estate agent receives financial benefits or items of value for referring clients to a business or service. This practice is called a kickback because it kicks some of the profit gained from referrals back to the agent who helped them get it.
Easement in gross
An easement in gross is one that ties a specific right to a person or entity rather than to the property itself. An easement in gross differs from a regular easement because most easements run with the property, not a particular party.
The Clean Water Act (CWA)
Passed in 1972 and amended in 1977 and 1987, the Clean Water Act was originally known as the Federal Water Pollution Control Act. It is a federal law intended to regulate pollutants discharged into waterways. It’s objective is to ensure clean waters.
Community property
Community Property Laws are based on the idea that husband and wife are equal, separate, partners rather than one whole one like tenants by the entirety.
Remainder
A remainder in real estate is a future interest in ownership. It is the right to own and possess the land after the fixed interest of the current holder expires.
Arbitration
Arbitration is a way to resolve disputes. Typically real estate arbitration happens when two homeowners want to resolve an issue and do not want to directly involve the courts.
Fixed term tenancy or estate for years
The term “estate for years” refers to an estate that has a specific duration of time as defined in the lease agreement.
Tie in agreement
A tie in agreement, or a tying agreement, is when a seller requires the purchase of another product or service to sell the first. This means that if a buyer does not agree to the terms of the tie in sale, they cannot buy the item or service they wanted in the first place.
Buydown
A buydown is a financing process in which the borrower obtains a lower interest rate for a few years during the loan term by paying more upfront. By paying a bigger lump sum upfront, buy down allows the borrower to pay a lower interest rate for some years.
Commingling
In real estate, commingling refers to the act of mixing the client’s funds with the broker’s own funds. Commingling can be both legal and illegal, depending on the state and circumstance.
Habendum clause
The statement in a contract that describes the rights and interests being given.
Government power
Government power is 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.
General contractor
A general contractor is the term used to describe someone whose main responsibility is the construction, improvement, or renovation of a property or project.
Blockbusting
Blockbusting is the discriminatory practice of encouraging homeowners to sell below market value because the socioeconomics of the neighborhood is declining, specifically by the influx of minorities into that area.
Escheat
When a property owner dies and leaves no proper documented inheritance plan, the property ownership reverts to the government. Escheat ensures that property always has ownership.
Grantor
The legal term for the seller.
Constructive eviction
Constructive eviction is a term used in real estate law to describe a circumstance in which a landlord fails to uphold their legal duty towards the tenant forcing them to leave the property.
Trustee
A trustee is required to manage a trust in accordance with the trustor’s wishes and in the beneficiary’s best interests. A trustee can be an individual or a financial institution such as a bank.
Fee simple defeasible
A defeasible estate is created when a condition is added on a fee simple estate. If the condition is met, the estate may be lost.
Estate at will
Also referred to as tenancy at will, estate at will is a form of tenancy where either landlord or tenant can terminate the agreement at any time. An estate at will doesn't have a termination or expiration period. The term of this estate is indefinite. It’s also important to note that not all states recognize an estate at will and ones that do vary in laws.
Inspection contingency
If a home inspection reveals problems, the buyer can request repairs, compensation for the issue, or just cancel the offer completely.
Real estate license exam
The real estate license exam is broken up into two parts: the national portion and your specific state portion. The real estate exam is multiple choice and is a mix of problem-solving, math, and vocabulary. By far, the most substantial chunk of the real estate license exam is the vocabulary which is more than likely why you are here. Make sure you are using a real estate practice exam to prepare!
Construction loan
A construction loan is a short-term loan that provides cash to construct a residential property.
REALTOR®
A Realtor is a real estate agent who is a member of the National Association of Realtors. Realtors have a specific association, code of ethics, and rules. If you are a real estate agent, you are not automatically a Realtor. The terms Realtor and real estate agent, although commonly used interchangeably, are actually two different titles.
Executory contract
An executory contract is a contract in which the terms are set but will be fully completed later.
Lease termination
A lease termination occurs when a landlord or tenant ends a rental agreement before the end of the lease term. While breaking a rental agreement is not allowed in most cases, there are a few circumstances where it is acceptable.
DBA
Doing business as.
Endorsement
Signing paperwork normally a contract.
Commercial property
Commercial property is a property that generates an income or salary.
Investment
An investment is the legal purchase of something that is not consumed today but will be in the future to create profit. For more on investment and trading terms.
Gross national product (GNP)
The total price of all goods and services produced inside a country annually.
Cetris peribus
A Latin phrase meaning "other things equal" or in plain terms all things remaining constant.
Breach of contract
A breach of contract is the failure to complete an agreement per agreed terms.
Unenforceable contract
An unenforceable contract is one that is valid but one the court will not enforce. Any contract agreement created between two parties for illegal actions is considered an unenforceable contract.
Defeasance clause
A required contract provision that ensures that the title for the property is transferred to the buyer, once the mortgage is fully paid off.
Foreclosure
Foreclosure is the legal process in which the mortgage lender takes possession of a property if a borrower fails to make mortgage payments.
USDA loan
A USDA loan is a mortgage offered by the USDA as part of the Rural Development Guaranteed Housing Loan Program. This program is designed to improve the economy and improve the quality of life in rural areas of America.
Affinity housing
Affinity housing allows marginalized groups with shared backgrounds to live in their own communities, avoiding certain FHA guidelines. These affinity communities are commonly found in colleges; they allow students with protected characteristics to live in a familiar environment and culture.
Eminent domain
Eminent domain is described as the right of the government to take over privately owned real estate usually despite the owners’ wishes. This often happens for land that is required for infrastructure like highways, major pipelines, railroads, etc.
Loan commitment
A loan commitment is an agreement letter issued by a bank, credit union, or any financial institution to offer a loan to a borrower. It is a promising letter that states that the lender will offer a loan or credit soon, according to the rates and terms of the loan agreement.
Dual Agency
Dual agency occurs when one real estate agent represents both the buyer and seller in a transaction.
Blanket mortgage
A blanket mortgage is a single loan that allows borrowers to buy multiple real estate properties under one mortgage. Instead of having multiple mortgages for multiple properties, this type of mortgage allows borrowers to buy multiple properties with a single mortgage.
Dominant estate
The dominant estate is a parcel of real property that has an easement over another piece of property.
Color of title
The legal concept of a claim to title appearing to be legally valid, but in actuality, the claim is defective.
Property tax
Property tax is a real estate ad-valorem tax, calculated by local government, which is paid by the owner of the property. The tax is usually based on the value of the owned property.
Life estate
A life estate is an interest in real property which is held for the duration of the life of a designated person. It may be limited by the life of the person holding it or by the life of another person. This designated person is called a life tenant.
Chattels
Personal property that is movable. This type of property is not fixed and can be moved between locations.
Water rights
Water rights are the rights to use rivers, lakes, or oceans that fall adjacent to land.
Blind offer
A blind offer in real estate is a purchase contract written by a buyer without seeing the property. Blind offers are a quick and easy way for buyers to bid on a house. It saves buyers and sellers massive amounts of time by skipping inspections or appraisals.
Bundle of rights
When a person purchases property, he or she is given the rights to the property; these rights can be split up and given to different parties.
Home Equity Line of Credit (HELOC)
A Home Equity Line of Credit (HELOC) allows homeowners to draw cash against equity and repay the loan at a variable interest rate. This is a type of revolving line of credit that helps the homeowner establish credit ahead of time if needed, and the collateral is home.
Periodic tenancy
A periodic tenancy is a leasehold agreement that specifies an initial period of tenancy and the length of the agreement but does not end after the specified period. This type of leasehold agreement renews automatically.
Egress
The right to exit a property.
Mortgage lien
A mortgage lien is a voluntary, specific lien. In fact, it’s the most common type of voluntary real estate lien. When you borrow money to buy real estate, you give the lender a lien against the property. Some states call this a deed of trust lien.
Growing equity mortgage
A growing equity mortgage is a mortgage in which the interest rate remains the same throughout the term, but the payments increase yearly. The payments increase to include more principal according to the previously agreed-upon payment schedule.
General agent
An agent hired and given authority by a principal to perform all acts associated with a particular business on behalf of a principal. These relationships are typically continuous.
Planned unit development
A planned unit development or PUD is a community not limited by standard zoning regulations, allowing for more property type flexibility. The development could include residential, commercial, industrial, and common areas in one community.
Jumbo loan
A jumbo loan is a mortgage that exceeds the limits Fannie Mae and Freddie Mac set. This type of loan is not guaranteed, scrutinized, or purchased by Fannie Mae or Freddie Mac as it exceeds the limits set by these organizations. Since it exceeds the borrowing limits of these organizations, it is also known as a non-conforming loan.
The Fair Housing Amendments Act of 1988
The Fair Housing Amendments Act (FHAA) of 1988 enforces Title VIII and makes it illegal to discriminate against families with children and people with disabilities.
Agent
An agent is one who speaks for or represents someone.
Appurtenant
Appurtenant is an adjective meaning it is attached to something. If something is appurtenant, it belongs to something else, either attached to or by law.
Purchase agreement
A purchase agreement is a contract that legally binds two or more parties together, to specific obligations, that create a legally binding contract between the buyer and the seller.
Actual fraud
Actual fraud is an intentional misrepresentation of fact; or in plain terms lying.
Superfund Amendments and Reauthorization Act of 1986 (SARA)
The Superfund Amendments and Reauthorization Act of 1986 (SARA) was passed when the original act, CERCLA, expired in 1985. It amended the comprehensive environmental response, compensation, and liability act.
Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA)
Also known as The superfund. The Superfund is a United States federal government program designed to fund the cleanup of sites contaminated with hazardous substances and pollutants.
Open listing
An open listing is a real estate agreement where property owners sell their home on their own or using multiple real estate agents. In this type of non-exclusive listing agreement, the seller is not beholden to any sole agent; multiple agents can compete to find a buyer and receive a commission.
Real estate license requirements
The state specific license requirements that determine what is needed to be accomplished to become a licensed real estate agent.
Principal
A principal or client is a party who has signed an agreement with an agent or, more specifically, a broker. In other words, it is any person directly involved in a contract, such as a buyer or a seller.
Tenants by the entirety
Tenants by the entirety Is a special form of co-ownership used in some states that allow a husband or wife to inherit the other spouse’s ownership interest upon death. Couples who are tenants by the entirety automatically have the right of survivorship. The surviving spouse immediately becomes the sole owner of the property when the other spouse dies.
Principle of highest and best use
The principle of highest and best use of a property is the concept that finding the best use of real estate would create its greatest net return.
Mrs. Murphy Exemption
The Mrs. Murphy Exemption provides that owner-occupied homes with four or fewer rental units are exempt from certain aspects of the Fair Housing Act. This exemption allows property owners to discriminate against certain groups when looking for tenants.
Closing
Closing is the final step in executing a real estate transaction. It is when official ownership and payment is transferred to the rightful parties. Closing usually takes place after a purchase agreement is made and the title is now ready to be transferred.
Buyer’s agent
If someone is in the market for a new home, they enlist a buyer’s agent. A buyer’s agent represents the buyer in a transaction in return for their services they receive a fee.
Commission
A commission is a fee paid to an agent for performing a transaction.
Variable interest rate
A variable interest rate is a rate that increases or decreases according to changing market rates.
Net lease
A net lease is an agreement where the lessee pays for rent plus additional property expenses. In a net lease structure, the tenant is responsible for costs related to the property as if they were the actual owner.
Group boycotting
A group boycott is when two or more competitors agree to conspire against a third competitor by no longer working with them. A group boycott increases the market power of the competitors who teamed up and harms the boycotted business.
Loan
A loan is an amount of money that is expected to be paid back with interest used for property. Most people, in order to purchase property use some form of a loan. Some common loans are student loans, mortgages, and car loans.
Amenities
Amenities are a useful feature or add-on to a house that typically adds value to the property.
Equity
Equity in real estate is the difference between how much your property is worth and how much you owe.
FHA appraisal
The process done by an approved FHA appraiser to appraise a property for an FHA loan.
Straight note
A straight note is a note that requires interest-only payments during the mortgage term and a principal payment in the form of a balloon payment at the end. This type of note is not amortized.
Owner financing
Owner financing is a process in which the property owner provides funds to the buyer to purchase the property. This financing is helpful if the borrower can’t qualify for a traditional mortgage because of strict eligibility requirements.
Voluntary liens
Voluntary liens are created by a contract between the creditor and the debtor. The most common type is a mortgage.
Interim financing
A short-term loan.
Capital gain
Capital gain is the profit from the sale or auction of property or investment.
Reverse mortgage
A reverse mortgage is a home loan that allows the borrower to get cash against the value of their property. With this mortgage, the borrower doesn’t pay back the amount as long as they live in that property. The loan amount can be a lump sum, monthly income, or whenever the borrower needs cash.
Listing agreement
A listing agreement is a document in which a property owner contracts with a real estate agent to find a buyer for the owner’s property.
Restrictive covenants (CCR)
CCRs limit the use of a particular property, a condominium, or a subdivision. The main purpose of the CCRs is to maintain the look and feel of the community.
Involuntary alienation
Involuntary alienation is when property is transferred without the owner’s consent.
Cosigner
A cosigner promises to be responsible for making payments on the loan if the borrower misses payments or defaults on it. A cosigner usually has better credit scores and is more financially stable than the borrower. Thus, the cosigner can help the borrower qualify for the loan because of their creditworthiness.
Subsidized housing
Subsidized housing provides government-sponsored housing assistance to low-income tenants. Another popular term for subsidized housing in the United States is “affordable housing.”
Triple net lease
“Triple” means three additional costs will be added to your base rent. Usually taxes, insurance, and maintenance are all added to the monthly lease payment.
Capitalization
Capitalization is the conversion of assets or income into capital.
Sales contract
An agreement containing the entire terms of the sale between a customer and a seller.
Reversion
Reversion in real estate is the return of property or assets to their original owner after a specific action or amount of time.
Universal agent
A universal agent is an agent hired who can act on behalf of a principal with complete power. In other words, a universal agent can legally act in replacement of their principal.
Express contract
An express contract occurs when both parties legally establish an agency relationship. In other-words they sat down and wrote a contract stating their relationship. This is the most common method of creation for agency relationships.
Sole proprietorship
A sole proprietorship is one individual or married couple in business alone. Sole proprietorships are the most common form of business structure.
Leasehold estate
A less than freehold estate (also known as a leasehold estate) is an estate held by one who rents or leases property. The key difference between a leasehold estate and a freehold estate is the limitation of time. As a lease is a legal estate, a leasehold estate can be bought and sold on the open market.
Functional obsolescence
Refers to the loss of property value due to an obsolete design feature.
Void contract
A void contract is one that lacks all or one of the elements that make a contract valid. The contract is invalid at the time of its establishment and is not legally enforceable. Void contracts are not contracts because they lack an essential element of a contract and are thus unenforceable.
Heir
The person who would inherit an interest or property when the owner dies without leaving a will.
Comparables
Another word for properties sold in the same area seen on a property report.
Purchase money mortgage
A purchase money mortgage is a home loan offered by the seller to the homebuyer. In most cases, the lender issues a home loan to the buyer for purchasing the home, but with this mortgage, a seller steps in. For this reason, this mortgage is known as owner financing or seller financing.
Delinquent taxes
Overdue taxes.
Littoral rights
Littoral rights pertain to landowners whose land border large, navigable lakes and oceans.
Federal Home Loan Mortgage Corp.
Freddie Mac, or the Federal Home Loan Mortgage Corp. (FHLMC) is a government-sponsored organization established in 1970 to provide affordable financing to homebuyers. Freddie Mac purchases mortgages from lenders, pool them into mortgage-backed securities and then sells them to investors. These securities are available with a guarantee for timely interest and principal payments, even if the borrower fails to make payments.
Recovery fund
A fund set up by real estate commissions in a few states to protect the public from real estate agents committing harmful acts. Basically, an insurance policy for states, homeowners, and their agents.
The Truth in Lending Act
The Truth in Lending Act (TILA) protects consumers against unfair and predatory lending practices from credit companies. This act, passed in 1968, requires that lenders fully explain to consumers the terms and conditions of their loans.
Condominium
A condominium often shortened to condo. Is a type of living space which is similar to an apartment but which is independently sellable and therefore regarded as real estate.
Conventional loan
A conventional loan is provided by a private lender and is not a part of any government program like VA or FHA. A conventional loan is guaranteed but by the private sector. These loans are available through conventional lenders, including financial institutions, credit unions, banks, and online lending platforms.
Subletting
Subletting, sometimes called a sublease, is a contract under which a tenant rents out their apartment or portion of their apartment to another individual while their name is still on the lease.
Real estate economics
The application of economic techniques in real estate.
Real estate pre licensing
State required courses that cover a long range of real estate topics and concepts. All states require taking and completing a pre-licensing course and it can be done in person or online.
Seller’s agent
If someone wants to sell their home, they enlist a seller’s agent. A seller’s agent (also known as a listing agent) represents the seller in the transaction in return for their services, they receive a fee.
Index lease
A lease that determines the rental prices by evaluating the annual consumer index and determining fair rental price.
Datum
The set of data that equals heights and depths measured on a horizontal plane.
Blind ad
A blind ad or advertisement is one in which the advertiser does not disclose their name or license status in the advertisement. Real estate brokers and agents must identify themselves in all advertisements and include enough information to notify the public of their status as real estate professionals. Not disclosing license status is illegal in most states, so it’s crucial agents understand the ins and outs of blind advertising.
Principle of conformity
The principle of conformity states that the value of a property is maximized when it complies with the design and features of the surrounding area.
Beneficiary
A beneficiary is an individual for whom a trust works for. They "benefit" from the trust.
Discount points
Discount points are prepaid interest that the borrowers can buy to reduce their interest on the monthly payment. These points are in the form of an upfront payment or a one-time fee that is included in the closing cost.
Price fixing
Fixing is the practice of setting the price of a good or service to make a particular price a standard. Any agreement, even if it just implied with other brokerages to set a standard commission rate, is a violation of the antitrust laws.
Interest
Money paid or owed regularly at a particular rate.
Principle of progression
The principle of progression states that the value of a property increases when more valuable properties are built in the area.
Lender
A lender can be an individual or a public/private group. A financial institution like a bank can lend funds available to another person. A lender is usually where people get their loans.
Mezzanine financing
Mezzanine financing is a financing tool that combines debt and equity financing. This type of financing is also known as subordinated financing because the lenders have a second priority in these loans after the senior lenders.
Negligence
Negligence is a disregard of duty or failure to perform a required action. This omission often leads to harm or damage. In plain terms: laziness.
Voluntary alienation
Voluntary alienation is a transfer of title made with the owner’s consent. Transfers like this are initiated by either a public grant, a property owner executing a will, gifting, selling the property or by a dedication.
Mortgage
A mortgage is a loan agreement between the lender and the borrower to buy a home. This is a type of secured loan where the home is the collateral. It is a long-term debt that the borrowers can obtain from any financial institution for a term of 15, 20, or 30 years.
Conspiracy to boycott
Conspiracy to boycott occurs when two or more persons or entities conspire to restrict the ability of someone from competing. This unethical and highly illegal.
Equal Credit Opportunity Act (ECOA)
The Equal Credit Opportunity Act (ECOA) prohibits discrimination against borrowers applying for home loans. Per the ECOA, lending institutions cannot treat protected classes differently than anyone else.
Real property
Real property is all things attached to the land and all the legal rights to it. Real property is usually things that are immovable such as the home itself or the buildings within the property line.
Timeshare
A timeshare is a property with a divided form of ownership or use rights.
Corporeal property
Corporeal property refers to the ownership of a material thing. This type of property includes items that can be seen or touched and have a physical existence. So, if you have anything in your possession that you can see and touch, it’s corporeal property.
Mechanic’s lien
A mechanic’s lien, also called a construction lien is a lien placed on your property for nonpayment for work you had done on the property.
Rent stabilization
Rent stabilization is a system that protects tenants by imposing a limit on how much landlords can increase rent. Landlords cannot raise rent above a certain percentage in a rent-stabilized apartment. As a result, a rent-stabilized tenant can enjoy stable prices and the option for lease renewal at the end of the term.
Lot and block
An appraisal method particularly for areas densely populated like metropolitan areas and suburbs. It starts with a large tract of land that has already been described by another form of survey system. The overall area is then made into smaller lots and a map is created.
Economic life
Economic life is the specific amount of time in which a piece of property can be put to profitable use.
Promissory note
A promissory note in real estate is a written agreement in which the homebuyer promises to repay the home loan to the mortgage lender. It is a legal document that the borrower signs to promise repayment.
Joint tenancy
Joint tenancy occurs when two or more people own a property together. When a property is owned by joint tenants, the interest of a deceased owner automatically gets transferred to the remaining surviving owners.
General warranty deed
A deed where the grantor (seller) guarantees that he or she holds clear title to a piece of real estate and has a right to sell it to the grantee (buyer).
Ownership in severalty
Ownership in severalty means one person owns the property.
Zoning ordinances
Zoning ordinances are a written regulation and law that defines how property in specific zones can be used.
Easement
An easement is a right held by one person to use the land of another for a specific purpose, such as driving through someone else’s property.
Grantee
The legal term for the buyer.
Lessor
A lessor is a property owner who agrees to lease out their property to an individual, family, or business for a specific period of time.
Real estate lien
Real estate liens are financial claims against property. A mortgage is the most common form of real estate lien.
Deed restrictions
Deed restrictions are limitations to the use of the property imposed by a past or current owner and are usually legally binded forever.
Negative fraud
Negative fraud is the act of purposely leaving out information you legally must disclose; or in plain terms lying through omission.
Package mortgage
A package mortgage is a loan that covers the purchase of real estate and the personal property inside, using both as collateral for the loan.
Delinquent mortgage
A delinquent mortgage is a mortgage in which the borrower has missed payments as required by the mortgage contract.
Capitalization rate
Cap rate is used to indicate the rate of return that is expected to be generated on a property.
Warranty deed
A warranty deed is a type of deed where the grantor (seller) guarantees that he or she holds clear title to a piece of real estate and has a right to sell it to the grantee (buyer).
Limited partnership
A limited partnership is composed of one or more general partners and one or more limited partners. The general partners manage the business and share fully in its profits and losses. Limited partners share in the profits of the business, but their losses are limited to the extent of their investment.
Ingress
The right to enter a property.
Market data approach
The market data approach, also known as the sales comparison approach, involves comparing a property to other recently sold properties in the same area of similar size and condition.
Income approach
The income approach is a process used by appraisers to determine the market value of a property based on its income. The approach is based on the finance concept of discounted cash flow analysis. Under the income method, the property’s current worth is the present value of the future cash flows that the owner can expect to receive.
Liquidity
The net price and speed of how long it would take to sell an asset and convert it into cash.
Shared appreciation mortgage
A shared appreciation mortgage is a home loan in which the lender shares a percentage of the home's appreciated (increased) value with the home buyer. The phrase 'shared appreciation' means a share in the appreciated value of the property. The lender offers these mortgages at a lower rate than the market value, but in exchange, they request a percentage of the increase in value of the property when it is sold.
Attorney-in-fact
Someone authorized to act on behalf of another person, typically in business or for some sort of business transaction.
DVA loan
A loan for a certified veteran through the Department of Veterans Affairs.
Lease option
A lease option, commonly known as a rent-to-own deal, is available to tenants who want to acquire a rental property. A lease agreement option allows a renter to acquire a property after a defined renting period.
Encroachment
Encroachment is intrusion on a person's territory or property.
Graduated payment mortgage
A graduated payment mortgage is a home loan with monthly payments starting out at one amount and then, after a while, payments that increase gradually over time.
Appraiser
Although brokers and agents usually have some understanding of the valuation process, usually they bring in an appraiser to do the job. Appraisers must have detailed knowledge of the methods of valuation and many states require a specific license or certification to perform those duties.
Collateral
Something of worth promised to a lender as security (mortgage) for an obligation.
Participation loan
Participation loans involve more than one lender. These loans are popular because they allow borrowers to obtain large amounts of money. In these loans, different lenders come together to share the funding of the loan.
Lis pendens
A lis pendens isn’t a lien but instead is a notice of a potential future lien.
Title
The legal document proving your ownership or right to an asset or interest.
Delivery
The legal act of transferring ownership.
Buyer’s home sale contingency
This contingency allows the buyer to cancel the contract if they are unable to sell their current home in a specified amount of time.
Principle of regression
The principle of regression states that the value of a property decreases when less valuable properties are built in the area.
Title insurance
Title insurance is a type of insurance that protects home buyers and mortgage lenders from title defects. It is a one-time fee that the buyer has to pay when they purchase a property.
Mill rate
The mill rate is the amount of tax payable per dollar of the assessed value of a property. Mill rate is also known as the millage rate.
Subordination clause
The subordination clause (in real estate) establishes order of priorities of financial claims (liens).
Housing and Community Development Act
The Housing and Community Development Act of 1974 added sex as a protected class to the Fair Housing Act and funded community development for low-income families.
Power of attorney
A legal document that authorizes someone to act on behalf of another person, typically in business or for some sort of business transaction.
Mortgage servicing rights
Mortgage servicing rights is a legal arrangement in which the original lender assigns a third party to collect the mortgage payments from their borrower. With this agreement, the third party can perform daily mortgage duties for a fee. The third party is the mortgage servicer, which specializes in various mortgage duties.
Exclusive listing
An exclusive listing is a real estate agreement where a seller gives a real estate agent the exclusive right to sell their home. This type of listing is common in real estate and ensures the broker will be compensated for their time and efforts.
Government survey system
This method of appraisal is a federal system defined by identifying reference lines. The system is based on sets of two intersecting lines: principal meridians and baselines. It is sometimes referred to as the rectangular survey system.
Bill of sale
The paperwork given to pass title to an individual property.
Appreciation
Appreciation is any gain in the value of a property over time from any cause.
Limited liability company (LLC)
The structure of LLC’s vary from state to state, but an (LLC) is a hybrid legal entity that has certain characteristics of both a corporation and a partnership or sole proprietorship.
Real Estate Settlement Procedures Act
The Real Estate Settlement Procedures Act requires that lenders and mortgage brokers provide homebuyers with disclosures regarding the real estate settlement process. This act, also known as Regulation X, protects homebuyers from predatory lending agreements.
Tax lien
A tax lien is placed on real estate for unpaid real estate taxes.
Improvement
An addition or add on to a property or real estate.
Effective age
Effective age is the age of a property based upon its utility, condition, and physical wear and tear, not its actual age. The effective age is one of the many appraisal concepts appraisers use to determine fair market value for a property.
Gross lease
A gross lease is a rental agreement for the use of the property where the tenant pays a fixed amount which does not change as a result of changes in the various expenses of the property.
Balloon loan
A balloon loan is a loan that begins with fixed, regular payments for a specific term and ends with a final payment of the remaining balance. A balloon does not fully amortize over the term.
Material defect
A material defect is a problem with property or any portion of it that would have a significant impact on the value of the property or that involves a large risk to the people on land.
Appraisal contingency
Most big lenders or banks require the buyer to have an appraisal done to the property before the loan is granted. This is to ensure the house is worth somewhat close to the price of the accepted offer.
Avulsion
Avulsion is the immediate action of adding or tearing away land by violent acts from natural causes. An example of avulsion is a dam breaking or a hurricane.
Mortgage assignment
A mortgage assignment is when a mortgage lender transfers a mortgage account and its interests to another lender. Assignment of mortgage is a document that indicates the transfer of mortgage between the lenders. This type of assignment is mostly seen when a mortgage lender sells the mortgage to a new lender.
Counteroffer
A counteroffer is similar to a purchase agreement. If a counter offer is made the original offer ceases to exist because legally the seller has rejected it.
Chattel mortgage
A chattel mortgage is a loan for a mobile or manufactured home or a tangible movable asset such as business equipment, machinery, or any type of vehicle. With a chattel mortgage, the movable assets (whatever they might be), are used as collateral in the loan.
Optionee
The legal term for an individual that acquires and holds an option.
Real estate agent
A real estate agent is a professional who has passed the required real estate classes and licensing exams in the state where he/she intends to work.
Federal National Mortgage Association
Fannie Mae, or Federal National Mortgage Association (FNMA), is a government-sponsored Enterprise (GSE) that offers mortgages to moderate to low-income borrowers.
Lessee
A lessee is an individual, family, or business who rents property from a lessor. Lessees, often referred to as tenants, can live in or use the property as long as they abide by the terms of the lease agreement.
Tenancy in common
Tenancy in common is when a parcel of real estate is owned by two or more tenants. Upon the death of a tenant in common, that share is transferred to the estate or heir of the deceased tenant.
Principal payment
A principal payment is a payment towards the original amount of the loan that a borrower takes.
Cost approach
The cost approach is a real estate appraisal method that determines how much a property would cost to replace it, subtracting depreciation. The method is based on the concept that a property’s price should be determined by the value of the land plus the cost of building on it (subtracting the depreciation cost).
Closing cost
Closing costs are one-time administrative fees for finalizing the mortgage. The costs included in closing costs are all the fees required to close the loan, including the loan fees, origination fees, title fees, prepaid taxes, attorney fees, and others.
Levy
A levy is a legal seizure of property to satisfy a tax debt or obligation.
Unilateral contract
A unilateral contract is a one-sided agreement. only one party makes a promise to perform. one party pays the other party to perform a certain duty. If the first party fulfills the duty, the second party is obligated to transfer the specified funds.
Leverage
Leverage is an investment strategy of using borrowed cash to finance the bulk of an investment.
Encumbrance
Encumbrance means an involuntary lien is on the property.
Exclusive right to sell listing
One broker is appointed as the sole agent of the seller and has exclusive authorization to represent the property. The broker receives a commission no matter who sells the property while the listing agreement is in effect.
Lease
A lease is a contract by which one party conveys land, property, services, etc., to another for a specified time, usually in return for a periodic payment.
Amendments
An amendment is used to change or modify the terms of an original contract.
Voidable contract
A voidable contract is a legal agreement between two parties that may be unenforceable for any number of reasons. Voidable contracts have the necessary elements to be enforceable, so they appear to be valid, but can be rejected by one party if the contract is discovered to have any number of defects.
Net operating income
The total income of a property minus all operating expenses.
Refinancing
Refinancing a loan is the process of revising an existing loan with different rates or loan terms.
Riparian rights
Under riparian rights, all landowners whose properties adjoin a river or stream, have the right to make reasonable use of it as it flows through or over their properties.
Equitable title
The interest held by one party to purchase property before closing.
Accession
In property law, accession is the acquisition of land by its addition to already owned real estate through human or natural processes.
Co-ownership
Co-ownership is when a title to one parcel of real estate is held by two or more individuals. Those parties are called co-owners or concurrent owners. Individuals may co-own property as tenants in common, joint tenants, or tenants by the entirety, or community property.
Assignment
A contract assignment occurs when a party assigns its contractual rights to a third party. Assignments make it possible to transfer all contract benefits from previous parties to a set of new ones.
Building code
Building codes are the rules and standards of properties for the protection of public safety and welfare.
Prescriptive easement
A prescriptive easement, sometimes known as an easement by prescription, is a legal arrangement that allows someone to access someone else’s property for particular reasons. Easements by Prescriptive exist through the legal principle of Adverse Possession.
Agreement of sale
A form that states the buyer consents to purchase a property and the seller agrees to sell that propery with the terms and conditions illustrated in from both parties.
Taxation
The process of taking a portion of worth from a person or business and using that for the greater welfare of the public.
Municipality
Municipality is a city or town that is considered local government.
Acceleration clause
The acceleration clause is a contract provision that allows a lender to require a borrower to repay all of an outstanding loan if payments are not being made or there is a breach of contract.
Secured loan
A secured loan allows you to obtain a loan against your property or assets. This loan requires you to offer collateral as a security to the lender.
Grant
The transferring of title to real property.
Subleasing
A sublease is a rental agreement where a current tenant leases property to a new tenant for a portion of the initial lease term.
Appurtenance
Appurtenance is a noun; describing an item that is attached to something. In real estate, after something is installed onto a property, it can be called an appurtenance. Meaning it is passed on to a new owner if the property is sold.
Constructive fraud
Constructive fraud is best described as ignorance or lying without knowing you are lying.
Easement by necessity
An easement by necessity is a type of easement that allows you to utilize a piece of land to get to another part of the land. It is a court-created easement, similar to an implied easement. Courts will only grant this form of easement if it is a necessity – or it is necessary for the use of the land.
Deed
A deed is a written legal document by which ownership of real estate is conveyed from one party to another.
Implied grant
Implied grants are used to create an easement.
Exclusive agency listing
An exclusive agency listing is an agreement where the seller gives a real estate agent the exclusive right to sell their home, but the agent only gets a commission if they find the buyer.
Safe Drinking Water Act (SDWA)
Established in 1974, the SDW Act gave the EPA authority to control water contaminant levels, and take legal action against public water authorities for violations. Part of the water maintenance protocol mandates periodic testing of water sources and notification to state authorities and homeowners if contaminants are found.
Land trust
A land trust is a legal agreement in which a property owner transfers the title to a property to a trustee.
Gross rent multiplier
The gross rent multiplier is a calculation used by real estate professionals to determine how quickly an investment property can be paid off. Gross Rent Multiplier (GRM) = Price (Property/Purchase Price) ÷ Gross Annual Rental Income
Redlining
Redlining is the practice of denying services to eligible applicants, usually on the basis of their race. The term “redlining” comes from when banks used to highlight risky investment neighborhoods with the color red on maps.
Zoning
Zoning is the regulation of public land use and development by local government. Zoning usually refers to local government laws that dictate how real property can and cannot be used in certain areas.
Alphabetical Real Estate Terms & Definitions List
By far the most substantial chunk of the real estate license exam is the vocabulary. The key concepts and words you have to study are essential for obtaining your real estate license, so it’s crucial you learn and become familiarized with them. This is our guide for all the real estate terms that show up on the exam.
Real Estate Terms That Start With A
Abutting
Abutting means an area of land or a building that has a common boundary with another.
Acceleration clause
The acceleration clause is a contract provision that allows a lender to require a borrower to repay all of an outstanding loan if payments are not being made or there is a breach of contract.
Acceptance
A point in a real estate transaction where the seller accepts the offer made by the buyer. When an offer is accepted, it becomes a binding contract.
Accession
In property law, accession is the acquisition of land by its addition to already owned real estate through human or natural processes.
Accretion
Accretion is the slow process of growth or acquisition of land, typically when soil is deposited by the natural action of water. Long-term accretion can actually increase the size of a property.
Active property
Active property is property that is still available for sale. The active status indicatesthat the seller is still accepting offers. If you or your client see a home listing with just “active” as its status, this indicates that the property is available for sale.
Actual fraud
Actual fraud is an intentional misrepresentation of fact; or in plain terms lying.
Addendum
An addendum is used to clarify and add new terms that were not initially part of the original contract or agreement.
Ad valorem
The Latin phrase ad valorem means “according to value.”
Adjustable-rate mortgage (ARM)
An adjustable rate mortgage has a flexible interest rate. Adjustable rate mortgages have a fixed period during which the initial interest rate remains the same, after that the interest rate adjusts at a pre-arranged frequency. The fixed-rate period can vary significantly anywhere from one month to 10 years.
Adverse Possession
Adverse possession is the legal principle in which a person who does not have the legal right to a property acquires legal ownership based on the continuous occupation of the land without the permission of its real owner.
Affinity housing
Affinity housing allows marginalized groups with shared backgrounds to live in their own communities, avoiding certain FHA guidelines. These affinity communities are commonly found in colleges; they allow students with protected characteristics to live in a familiar environment and culture.
Agent
An agent is one who speaks for or represents someone.
Agreement of Sale
A form that states the buyer consents to purchase a property, and the seller agrees to sell that property with the terms and conditions illustrated by both parties.
Air Rights
Air rights are the rights to use the space above the Earth.
Alienation
Alienation is the act of transferring title, ownership, an estate, or an interest in real estate from one party to another.
Alienation clause
The provision in a mortgage or deed of trust signed with the lender that states that the borrower must pay the mortgage in full before the borrower can transfer or sell the property.
Amendments
An amendment is used to change or modify the terms of an original contract.
Amenities
Amenities are a useful feature or add-on to a house that typically adds value to the property.
Americans with Disabilities Act of 1990
The Americans with Disabilities Act (ADA) protects people with disabilities against discrimination in housing. This federal law states that housing providers must provide equal opportunities for persons with physical or mental impairments.
Amortization
Amortization is when payments are divided into equal amounts for the duration of the loan. Amortization is an accounting process in which the book value of a loan or an intangible asset periodically reduces through regular payments.
Antitrust laws
Antitrust Laws are a collection of federal and state government laws that regulate the conduct and organization of business corporations, normally to promote fair competition for the benefit of consumers.
Appraisal
An appraisal is an estimate of the approximate worth of something.
Appraisal contingency
A clause in a real estate contract that allows a buyer to back out of a deal should a property not appraise to the asking or offer price. Most big lenders or banks require the buyer to have an appraisal done to the property before the loan is granted. This is to ensure the house is worth somewhat close to the price of the accepted offer.
Appraiser
A licensed individual certified to perform appraisals.
Appreciation
Appreciation is any gain in the value of a property over time from any cause.
Appurtenance
In real estate appurtenance is a noun describing an item that is attached to real property. This means that if the property is sold, the new installation or attachment is also passed on to a new owner.
Appurtenant
Appurtenant is an adjective meaning it is attached to something. If something is appurtenant, it belongs to something else, either attached to or by law.
Appurtenant easement
An appurtenant easement is a type of easement that “runs with the land.”
Arbitration
Arbitration is a way to resolve disputes. Typically real estate arbitration happens when two homeowners want to resolve an issue and do not want to directly involve the courts.
Attorney-in-fact
Someone authorized to act on behalf of another person, typically in business or for some sort of business transaction.
Avulsion
Avulsion is the immediate action of adding or tearing away land by violent acts from natural causes. An example of avulsion is a dam breaking or a hurricane.
Real Estate Terms That Start With B
Balloon Loan
A balloon loan is a loan that begins with fixed, regular payments for a specific term and ends with a final payment of the remaining balance. A balloon does not fully amortize over the term.
Bargain and Sale Deed
A bargain and sale deed demonstrates that the seller only holds the title of ownership and legally has the right to transfer the property, but it does not guarantee that the house is free of other claims.
Beneficiary
A beneficiary is an individual for whom a trust works for. They “benefit” from the trust.
Bilateral Contract
Bilateral contract is the most typical form of contract and simply refers to an agreement between at least two people or groups. Most business and personal contracts fall into this category.
Bill of sale
The paperwork given to pass title to an individual property.
Blanket Mortgage
A blanket mortgage is a single loan that allows borrowers to buy multiple real estate properties under one mortgage. Instead of having multiple mortgages for multiple properties, this type of mortgage allows borrowers to buy multiple properties with a single mortgage.
Blind Ad
A blind ad or advertisement is one in which the advertiser does not disclose their name or license status in the advertisement. Not disclosing license status is illegal in most states, so it’s crucial agents understand the ins and outs of blind advertising.
Blind Offer
A blind offer in real estate is a purchase contract written by a buyer without seeing the property. Blind offers are a quick and easy way for buyers to bid on a house. It saves buyers and sellers massive amounts of time by skipping inspections or appraisals.
Blockbusting
Blockbusting is the discriminatory practice of encouraging homeowners to sell below market value because the socioeconomics of the neighborhood is declining, specifically by the influx of minorities into that area.
Breach of Contract
A breach of contract is the failure to complete an agreement per agreed terms.
Bridge Loan
A bridge loan provides short-term financing to homeowners while moving from one house to another.
Buffer Zone
A buffer zone is a space of land between two use districts such as a park, playground, or a highway. The point of a buffer zone is to ease the transition from zone to zone.
Building codes
Building codes are the rules and standards of properties for the protection of public safety and welfare.
Bundle of rights
When a person purchases property, he or she is given the rights to the property; these rights can be split up and given to different parties.
Buydown
A buydown is a financing process in which the borrower obtains a lower interest rate for a few years during the loan term by paying more upfront. By paying a bigger lump sum upfront, buy down allows the borrower to pay a lower interest rate for some years.
Buyer’s home sale contingency
This contingency allows the buyer to cancel the contract if they are unable to sell their current home in a specified amount of time.
Buyer’s agent
If someone is in the market for a new home, they enlist a buyer’s agent. A buyer’s agent represents the buyer in a transaction in return for their services they receive a fee.
Real Estate Terms That Start With C
Capital Gain
Capital gain is the profit from the sale or auction of property or investment.
Capitalization
Capitalization is the conversion of assets or income into capital.
Capitalization Rate
Cap rate is used to indicate the rate of return that is expected to be generated on a property.
Caveat emptor
Caveat emptor is Latin for “Let the buyer or buyers beware”. The concept is that the buyer is responsible for checking the quality of a product before a purchase is made.
Cetris peribus
A Latin phrase meaning “other things equal” or in plain terms all things remaining constant.
Chattels
Personal property that is movable. This type of property is not fixed and can be moved between locations.
Chattel mortgage
A chattel mortgage is a loan for a mobile or manufactured home or a tangible movable asset such as business equipment, machinery, or any type of vehicle. With a chattel mortgage, the movable assets (whatever they might be), are used as collateral in the loan.
Civil Rights Act of 1866
The Civil Rights Act of 1866 declared that all persons born in the United States are created equal by the law. Among the many benefits of the 1866 Civil Rights Act, one of the most important was that any person born in the United States could own property regardless of color or race.
Closing
Closing is the final step in executing a real estate transaction. It is when official ownership and payment is transferred to the rightful parties. Closing usually takes place after a purchase agreement is made and the title is now ready to be transferred.
Closing cost
Closing costs are one-time administrative fees paid for finalizing the mortgage. Closing costs are 2% to 5% of the home’s purchase price. The costs included in closing costs are all the fees required to close the loan, including the loan fees, origination fees, title fees, prepaid taxes, attorney fees, and others.
Co-borrower
A co-borrower is also known as the co-applicant or joint applicant. They share equal responsibility for making payments on the loan as the primary borrower. They also have equal access to the funds as the primary borrower.
Co-op
A co-op is a nonprofit corporation, complete with a board of directors, and each resident is a shareholder. Perhaps the largest distinction between a condominium and a co-op is that most co-op associations require that a prospective purchaser be approved by a committee composed of current co-op owners.
Co-ownership
Co-ownership is when a title to one parcel of real estate is held by two or more individuals. Those parties are called co-owners or concurrent owners. Individuals may co-own property as tenants in common, joint tenants, or tenants by the entirety, or community property.
Color of title
The legal concept of a claim to title appearing to be legally valid, but in actuality, the claim is defective.
Collateral
Something of worth promised to a lender as security (mortgage) for an obligation.
Commercial property
Commercial property is a property that generates an income or salary.
Commingling
In real estate, commingling refers to the act of mixing the client’s funds with the broker’s own funds. Commingling can be both legal and illegal, depending on the state and circumstance.
Commingled real estate funds
Generally speaking, commingled funds are the funds commingled in real estate. From an agent’s perspective, those funds are best defined as personal funds mixed with client’s funds.
Commission
A commission is a fee paid to an agent for performing a transaction.
Community property
Community Property Laws are based on the idea that husband and wife are equal, separate, partners rather than one whole one like tenants by the entirety.
Comparables
Another word for properties sold in the same area seen on a property report.
Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA)
Also known as The Superfund. The Superfund is a United States federal government program designed to fund the cleanup of sites contaminated with hazardous substances and pollutants.
Condemnation
The procedure used by a public or private entity with the powers granted from eminent domain to take privately owned real estate.
Condominium
A condominium often shortened to condo. Is a type of living space which is similar to an apartment but which is independently sellable and therefore regarded as real estate.
Consideration
Something of value given by one party to another in exchange for something else. Consideration is an essential element of a valid contract.
Conspiracy to boycott
Conspiracy to boycott occurs when two or more persons or entities conspire to restrict the ability of someone from competing. This is unethical and highly illegal.
Construction loan
A construction loan is a short-term loan that provides cash to construct a residential property.
Constructive eviction
Constructive eviction is a term used in real estate law to describe a circumstance in which a landlord fails to uphold their legal duty towards the tenant forcing them to leave the property.
Constructive fraud
Constructive fraud is best described as ignorance or lying without knowing you are lying.
Contingent Property
A contingent property means an offer for the property has been accepted, but there is a condition or “contingency” that is written into the contract, and it must be met before the sale can go through.
Contract
An agreement between two or more parties by law.
Conventional loan
A conventional loan is a type of loan provided by a private lender and is not a part of any government program like VA or FHA. A conventional loan is guaranteed but by the private sector. These loans are available through conventional lenders, including financial institutions, credit unions, banks, and online lending platforms.
Corporation
Corporations may be formed for profit or nonprofit purposes. A corporation is managed and operated by a board of directors. A corporation has certain rights, privileges, and liabilities beyond those of partnerships. Doing business as a corporation has its advantages and disadvantages.
Corporeal Property
Corporeal property refers to the ownership of a material thing. This type of property includes items that can be seen or touched and have a physical existence. So, if you have anything in your possession that you can see and touch, it’s corporeal property.
Cosigner
A cosigner promises to be responsible for making payments on the loan if the borrower misses payments or defaults on it. A cosigner usually has better credit scores and is more financially stable than the borrower. Thus, the cosigner can help the borrower qualify for the loan because of their creditworthiness.
Cost Approach
The cost approach is a real estate appraisal method that determines how much a property would cost to replace, subtracting depreciation. The method is based on the concept that a property’s price should be determined by the value of the land plus the cost of building on it (subtracting the depreciation cost).
Counteroffer
A counteroffer is a rejection response to an initial offer. If a counteroffer is made, the original offer ceases to exist because, legally, the seller has rejected it.
Creative Financing
Creative financing is a financing process that doesn’t involve conventional lending practices. In this type of financing, an individual or business uses specialized tactics to obtain funding for real estate purchases.
Real Estate Terms That Start With D
Datum
The set of data that equals heights and depths measured on a horizontal plane.
DBA
Doing business as.
Debt
Something owed or promised.
Deed
A deed is a written legal document by which ownership of real estate is conveyed from one party to another.
Deed restrictions
Deed restrictions are limitations on the use of property imposed by a past or current owner and are usually legally binding forever.
Defeasance clause
A required contract provision that ensures that the title for the property is transferred to the buyer, once the mortgage is fully paid off.
Delinquent mortgage
A delinquent mortgage is a mortgage in which the borrower has missed payments as required by the mortgage contract.
Delinquent taxes
Overdue taxes.
Delivery
The legal act of transferring ownership.
Depreciation
Depreciation is any loss in the value of a property over time from any cause.
Discount points
Discount points are prepaid interest that the borrowers can buy to reduce their interest on the monthly payment. These points are in the form of an upfront payment or a one-time fee that is included in the closing cost.
Dividing territories
Dividing territories is when competing brokers agree to split territories, and divide interests accordingly. This is a clear antitrust violation.
Dominant estate
The dominant estate is a parcel of real property that has an easement over another piece of property. It is the property that receives an easement.
Double net lease
“”Double”” means two additional costs will be added to your base rent. Usually taxes and insurance costs are added to the monthly lease payment.
Down payment
Down payment is the amount that the borrower pays to the lender as a percentage of the purchase price. Depending on the agreement between the borrower and the lender, the down payment may be between 2% to 20% or more—the larger the down payment, the lower the interest rates. The percentage or amount of down payment also depends on the type of mortgage loan.
Duress
Duress is the act of forcing an individual or business to do something against their will.
Dual Agency
Dual agency occurs when one real estate agent represents both the buyer and seller in a single transaction.
DVA loan
A loan for a certified veteran through the Department of Veterans Affairs.
Real Estate Terms That Start With E
Easement
An easement is a right held by one person to use the land of another for a specific purpose, such as driving through someone else’s property.
Easement by Necessity
An easement by necessity is a type of easement that allows you to utilize a piece of land to access another part of the land. It is a court-created easement, similar to an implied easement. Courts will only grant this form of easement if it is necessary for the use of the land.
Easement in Gross
An easement in gross is a type of easement that attaches to a person or entity rather than a property. It is a right to use land granted to an individual and expires with the sale of the property. An easement in gross differs from a regular easement because most easements run with the property, not a particular party.
Easement for ingress and egress
An easement used for entering and exiting a property.
Economic life
Economic life is the specific amount of time in which a piece of property can be put to profitable use.
Effective Age
Effective age is the age of a property based on its utility, condition, and physical wear and tear, not its actual age. The effective age is one of the many appraisal concepts appraisers use to determine fair market value for a property.
Egress
The right to exit a property.
Economic Obsolescence
Refers to the loss of property value due to external factors, meaning things off the property affecting the property’s value.
Emblements
Emblements are annual crops produced by cultivation legally belonging to the tenant with the implied right for its harvest, and they are treated as the tenant’s property.
Eminent domain
The right of the government to take over privately owned real estate for public use.
Encroachment
Encroachment is intrusion on a person’s territory or property.
Encumbrance
Encumbrance means an involuntary lien is on the property.
Endorsement
Signing paperwork normally a contract.
Environmental Protection Agency (EPA)
The Environmental Protection Agency (EPA) is the federal agency responsible for dealing with environmental issues. The EPA was established in December 1970 by the executive order of United States President Richard Nixon.
Equal Credit Opportunity Act (ECOA)
The Equal Credit Opportunity Act (ECOA) prohibits discrimination against borrowers applying for home loans. Per the ECOA, lending institutions cannot treat protected classes differently than anyone else.
Equitable title
The interest held by one party to purchase property before closing.
Equity
Equity in real estate is the difference between how much your property is worth and how much you owe.
Erosion
The opposite of accretion, erosion is the wearing away of land or soil by the action of wind, water, currents, or ice. Long term erosion can decrease the size of a property.
Errors and omissions insurance
Some but not all states require this form of insurance. It is a type of liability insurance that protects professionals against claims of inadequate work or negligent actions.
Escheat
When a property owner dies and leaves no proper documented inheritance plan, the property ownership reverts to the government. Escheat ensures that property always has ownership.
Escrow
Escrow is a way for money and property to be transferred from one party to another through the use of a neutral, third-party agent also known as an escrow agent. Escrow makes it a lot safer for both buyers and sellers to close the sale without worrying about getting snubbed or cheated.
Estate at sufferance
An estate in sufferance arises when the tenant holds over after the expiration of their term.
Estate at will
Also referred to as tenancy at will, estate at will is a form of tenancy where either landlord or tenant can terminate the agreement at any time. An estate at will doesn’t have a termination or expiration period. The term of this estate is indefinite. It’s also important to note that not all states recognize an estate at will and ones that do vary in laws.
Exchange
Transfer of goods or services.
Exclusive Right to Sell Listing
One broker is appointed as the sole agent of the seller and has exclusive authorization to represent the property. The broker receives a commission no matter who sells the property while the listing agreement is in effect.
Exclusive Agency Listing
An exclusive agency listing is an agreement where the seller gives a real estate agent the exclusive right to sell their home, but the agent only gets a commission if they find the buyer.
Exclusive Listing
An exclusive listing is a real estate agreement where a seller gives a real estate agent the exclusive right to sell their home. This type of listing is common in real estate and ensures the broker will be compensated for their time and efforts.
Executed Contract
When contracting parties have signed a contract, and both parties have done all they promised to do, it is called an executed contract or executed agreement.
Execution date
The execution date or date executed is the day the contract is signed.
Executory contract
An executory contract is a contract in which the terms are set but will be fully completed later.
Express Contract
An express contract occurs when both parties legally establish an agency relationship. In other-words they sat down and wrote a contract stating their relationship. This is the most common method of creation for agency relationships.
Real Estate Terms That Start With F
Federal income tax
An annual government tax based on an individual’s earnings.
Federal National Mortgage Association
Fannie Mae, or Federal National Mortgage Association (FNMA), is a government-sponsored Enterprise (GSE) that offers mortgages to moderate to low-income borrowers.
Fee simple absolute
Fee simple absolute, or fee simple for short, is an estate in land. It is the highest form of real estate ownership that is recognized by law, in which the owner can enjoy the property to its fullest extent and is only limited by government powers.
Fee simple defeasible
A defeasible estate is created when a condition is added on a fee simple estate. If the condition is met, the estate may be lost.
FHA appraisal
The process done by an approved FHA appraiser to appraise a property for an FHA loan.
FHA loans
FHA Loans are a mortgage issued by an FHA-approved lender and insured by the FHA which is the Federal Housing Administration. FHA loans are sought after because they require lower minimum down payments and credit scores than many conventional loans.
Foreclosure
Foreclosure is the legal process in which the mortgage lender takes possession of a property if a borrower fails to make mortgage payments.
Financial Contingency
A financing contingency provides a way for buyers to back out of the sale of the property if their loan falls through.
Fixed-term tenancy or estate for years
The term “estate for years” refers to an estate that has a specific duration of time as defined in the lease agreement.
Fixture
A fixture in real estate is an item of personal property that has been permanently attached or affixed to real property or land. It is also an item that was once personal property but is considered real property either by attachment or legal addition.
Freehold Estate
A freehold estate is a type of property ownership in which the owner has the exclusive right to enjoy possession of a property indefinitely. This is in contrast to a leasehold estate, where possession is limited by a time period.
Functional obsolescence
Refers to the loss of property value due to an obsolete design feature.
Real Estate Terms That Start With G
Gap
A real estate term meaning a space or pause in a contract.
General agent
An agent hired and given authority by a principal to perform all acts associated with a particular business on behalf of the principal. These relationships are typically continuous.
General contractor
A general contractor is the term used to describe someone whose main responsibility is the construction, improvement, or renovation of a property or project.
General warranty deed
A deed where the grantor (seller) guarantees that he or she holds clear title to a piece of real estate and has a right to sell it to the grantee (buyer).
Government National Mortgage Association
Ginnie Mae, or Government National Mortgage Association, is a government organization that provides guarantees for investors in mortgage-backed securities. The federal corporation guarantees USDA, FHA, and VA loans and improves the market’s interest in securities. It does so by ensuring timely payments on mortgage-backed securities.
Government Power
Government power is the constitutional authority and inherent power of a state to adopt and enforce laws and regulations to promote and support public health, safety, morals, and general welfare.
Government survey system
This method of appraisal is a federal system defined by identifying reference lines. The system is based on sets of two intersecting lines: principal meridians and baselines. It is sometimes referred to as the rectangular survey system.
Graduated payment mortgage
A graduated payment mortgage is a home loan with monthly payments starting out at one amount and then, after a while, payments that increase gradually over time.
Grant
The transferring of a title to real property from the seller to the buyer.
Grantee
The legal term for the buyer.
Grantor
The legal term for the seller.
Group boycotting
A group boycott is when two or more competitors agree to conspire against a third competitor by no longer working with them. A group boycott increases the market power of the competitors who teamed up and harms the boycotted business.
Gross lease
A gross lease is a rental agreement for the use of the property where the tenant pays a fixed amount which does not change as a result of changes in the various expenses of the property.
Gross national product (GNP)
The total price of all goods and services produced inside a country annually.
Gross rent multiplier
The gross rent multiplier is a calculation used by real estate professionals to determine how quickly an investment property can be paid off. Gross Rent Multiplier (GRM) = Price (Property/Purchase Price) ÷ Gross Annual Rental Income
Growing equity mortgage
A growing equity mortgage is a mortgage in which the interest rate remains the same throughout the term, but the payments increase yearly. The payments increase to include more principal according to the previously agreed-upon payment schedule.
Real Estate Terms That Start With H
Habendum clause
The statement in a contract that describes the rights and interests being given.
Heir
The person who would inherit an interest or property when the owner dies without leaving a will.
Home Equity Line of Credit (HELOC)
A Home Equity Line of Credit (HELOC) allows homeowners to draw cash against equity and repay the loan at a variable interest rate. This is a type of revolving line of credit that helps the homeowner establish credit ahead of time if needed, and the collateral is home.
Home inspection
A home inspection is an examination of the condition of a real estate property. This usually takes place in connection with the property’s sale.
Homeowner insurance
Homeowners insurance is property insurance that covers losses and damages. They cover an individual’s house and assets in the home. It may also provide liability coverage against accidents in the home or on the property.
Housing and Community Development Act
The Housing and Community Development Act of 1974 added sex as a protected class to the Fair Housing Act and funded community development for low-income families.
HUD
The Department of Housing and Urban Development
Real Estate Terms That Start With I
Income approach
The income approach is a process used by appraisers to determine the market value of a property based on its income. The approach is based on the finance concept of discounted cash flow analysis. Under the income method, the property’s current worth is the present value of the future cash flows that the owner can expect to receive.
Implied Contract
An implied contract is a legally enforceable obligation that arises from an undefined understanding due to one or more parties’ actions, conduct, or circumstances. It has the same legal effect as an express contract but does not require written or verbal confirmation.
Implied Grant
Implied grants are used to create an easement.
Improvement
An addition or add-on to a property or real estate.
Index lease
A lease that determines the rental prices by evaluating the annual consumer index and determining fair rental price.
Inspection contingency
If a home inspection reveals problems, the buyer can request repairs, compensation for the issue, or just cancel the offer completely.
Ingress
The right to enter a property.
Insurance
Insurance is a contract, in which an individual receives legal protection or reimbursement for any predetermined losses.
Interest
Money paid or owed regularly at a particular rate.
Interim financing
A short-term loan.
Inverse condemnation
The legal action a property owner can take against the government or governmental entity for using, damaginf or taking their land or property without compensation.
Investment
An investment is the legal purchase of something that is not consumed today but will be in the future to create profit. For more on investment and trading terms.
Involuntary alienation
Involuntary alienation is when property is transferred without the owner’s consent.
Involuntary liens
Involuntary liens aren’t created by the homeowner. It is a claim imposed against a property without the consent of its owner.
Real Estate Terms That Start With J
Joint tenancy
Joint tenancy occurs when two or more people own a property together. When a property is owned by joint tenants, the interest of a deceased owner automatically gets transferred to the remaining surviving owners.
Jumbo loan
A jumbo loan is a mortgage that exceeds the limits Fannie Mae and Freddie Mac set. This type of loan is not guaranteed, scrutinized, or purchased by Fannie Mae or Freddie Mac as it exceeds the limits set by these organizations. Since it exceeds the borrowing limits of these organizations, it is also known as a non-conforming loan.
Real Estate Terms That Start With K
Kickback
A kickback is when a real estate agent receives financial benefits or items of value for referring clients to a business or service. This practice is called a kickback because it kicks some of the profit gained from referrals back to the agent who helped them get it.
Real Estate Terms That Start With L
Land Trust
A land trust is a legal agreement in which a property owner transfers the title to a property to a trustee.
Landlord
The owner of a property (such as land, houses, or apartments) that is leased or rented to another.
Latent defect
A latent defect is not discoverable by normal inspection but maybe not to the regular eye. But is known of by the seller or homeowner.
Lease
A lease is a contract by which one party conveys land, property, services, etc., to another for a specified time, usually in return for a periodic payment.
Leaseback
A leaseback, also known as a sale-leaseback, is a financial transaction where a company sells its property and then rents it back from the new owner. The seller becomes the lessee, and the buyer becomes the lessor.
Lease Expiration
A lease expiration occurs at the end of the lease term when the lease is no longer valid. At this point, the contractual relationship between the landlord and tenant ceases to exist.
Lease Option
A lease option, commonly known as a rent-to-own deal, is available to tenants who want to acquire a rental property. A lease option agreement allows a renter to acquire a property after a defined renting period or at the end of the lease.
Lease Termination
A lease termination occurs when a landlord or tenant ends a rental agreement before the end of the lease term. While breaking a rental agreement is not allowed in most cases, there are a few circumstances where it is acceptable.
Lease violation
A lease violation is when a landlord or tenant violates the terms of their lease agreement. Put simply, a lease violation is a breach of contract.
Leasehold estate
A less than freehold estate (also known as a leasehold estate) is an estate held by one who rents or leases property. The key difference between a leasehold estate and a freehold estate is the limitation of time. As a lease is a legal estate, a leasehold estate can be bought and sold on the open market.
Lender
A lender can be an individual or a public/private group. A financial institution like a bank can lend funds available to another person. A lender is usually where people get their loans.
Lessee
A lessee is an individual, family, or business who rents property from a lessor. Lessees, often referred to as tenants, can live in or use the property as long as they abide by the terms of the lease agreement.
Lessor
A lessor is a property owner who agrees to lease out their property to an individual, family, or business for a specific period of time.
Leverage
Leverage is an investment strategy of using borrowed cash to finance the bulk of an investment.
Levy
A levy is a legal seizure of property to satisfy a tax debt or obligation.
Lien
A lien is a form of security interest granted over an item to secure the payment of a debt or performance of some other obligation. A lien serves to guarantee an underlying obligation. Usually, that obligation is the repayment of a loan.
Life estate
A life estate is an interest in real property which is held for the duration of the life of a designated person. It may be limited by the life of the person holding it or by the life of another person. This designated person is called a life tenant.
Limited liability company (LLC)
The structure of LLC’s vary from state to state, but an (LLC) is a hybrid legal entity that has certain characteristics of both a corporation and a partnership or sole proprietorship.
Limited partnership
A limited partnership is composed of one or more general partners and one or more limited partners. The general partners manage the business and share fully in its profits and losses. Limited partners share in the profits of the business, but their losses are limited to the extent of their investment.
Liquidity
The net speed of how long it would take to sell an asset and convert it into cash.
Lis pendens
A lis pendens isn’t a lien but instead is a notice of a potential future lien.
Listing Agreement
A listing agreement is a document in which a property owner contracts with a real estate agent to find a buyer for the owner’s property.
Littoral Rights
Littoral rights pertain to landowners whose land borders large, navigable lakes and oceans and declare that landowners own the land up to the edge of the water body. The land beneath the water body belongs to the government.
Loan
A loan is the amount of money borrowed for the purchase of property. Most people, in order to purchase property, use some form of a loan. Some common loans are student loans, mortgages, and car loans.
Loan commitment
A loan commitment is an agreement letter issued by a bank, credit union, or any financial institution to offer a loan to a borrower. It is a promising letter that states that the lender will offer a loan or credit soon, according to the rates and terms of the loan agreement.
Loan origination fee
A loan origination fee is a fee required by the loan originator to process the loan. Loan origination is a process that starts with the qualification and authentication of a new loan.
Lot and block
An appraisal method particularly for areas densely populated like metropolitan areas and suburbs. It starts with a large tract of land that has already been described by another form of survey system. The overall area is then made into smaller lots and a map is created.
Real Estate Terms That Start With M
Market data approach
The market data approach, also known as the sales comparison approach, involves comparing a property to other recently sold properties in the same area of similar size and condition.
Market value or market price
The actual selling price of the property. So if your home sells for $200,000. Its market value is $200,000.
Master plan
A master plan is a comprehensive plan to guide the long-term physical development of a particular area.
Material defect
A material defect is a problem with property or any portion of it that would have a significant impact on the value of the property or that involves a large risk to the people on land.
Mechanic’s lien
A mechanic’s lien, also called a construction lien is a lien placed on your property for nonpayment for work you had done on the property.
Metes-and-Bounds
A survey method imported to the original colonies that formed the United States. The system uses physical features of the local geography, along with directions and distances, to define and describe the boundaries of a parcel of land.
Mezzanine financing
Mezzanine financing is a financing tool that combines debt and equity financing. This type of financing is also known as subordinated financing because the lenders have a second priority in these loans after the senior lenders.
Mill rate
The mill rate is the amount of tax payable per dollar of the assessed value of a property. Mill rate is also known as the millage rate.
Modified gross lease
A modified gross lease is a rental agreement where the tenant pays rent plus a share of operating expenses. This type of lease also goes by the name of an industrial lease.
Mortgage
A mortgage is a loan agreement between the lender and the borrower to buy a home. This is a type of secured loan where the home is the collateral. It is a long-term debt that the borrowers can obtain from financial institutions for a term of 15, 20, or 30 years.
Mortgage assignment
A mortgage assignment is when a mortgage lender transfers a mortgage account and its interests to another lender. Assignment of mortgage is a document that indicates the transfer of mortgage between the lenders. This type of assignment is mostly seen when a mortgage lender sells the mortgage to a new lender.
Mortgage broker
A mortgage broker is a third party who brings the borrower and the lender to one platform. They facilitate communication between the lender and the borrower. Mortgage brokers help borrowers get the best mortgage deal so that the borrowers and lenders work towards loan origination.
Mortgage lien
A mortgage lien is a voluntary, specific lien. In fact, it’s the most common type of voluntary real estate lien. When you borrow money to buy real estate, you give the lender a lien against the property. Some states call this a deed of trust lien.
Mortgage servicing rights
Mortgage servicing rights is a legal arrangement in which the original lender assigns a third party to collect the mortgage payments from their borrower. With this agreement, the third party can perform daily mortgage duties for a fee. The third party is the mortgage servicer, which specializes in various mortgage duties.
Mrs. Murphy Exemption
The Mrs. Murphy Exemption exempts owner-occupied homes with four or fewer rental units from certain aspects of the Fair Housing Act. This exemption allows property owners to discriminate against certain groups when looking for tenants.
Multiple listing service (MLS)
A service used by a group of real estate brokers. It connects listings together under one large umbrella.
Municipality
Municipality is a city or town that is considered local government.
Mutual agreement
The meeting of the minds between the parties to a contract. It requires that the parties understand and agree on the essential terms of the contract.
Real Estate Terms That Start With N
Negative fraud
Negative fraud is the act of purposely leaving out information you legally must disclose; or in plain terms lying through omission.
Negligence
Negligence is a disregard of duty or failure to perform a required action. This omission often leads to harm or damage. In plain terms, it is laziness.
Net listing
A net listing is a listing agreement where the seller sets a minimum asking price and allows the agent to keep any amount above the asking price as a commission.
Net operating income
The total income of a property minus all operating expenses.
Net lease
A net lease is an agreement where the lessee pays for rent plus additional property expenses. In a net lease structure, the tenant is responsible for costs related to the property as if they were the actual owner.
Nonhomogeneity
Nonhomogeneity is when houses in a real estate development are different. If something is non-homogeneous, it indicates a lack of uniformity in a real estate development or multiple real estate properties.
Notice of Default
A notice of default is a public notice that a lender files with the court when the borrower misses payments on their mortgage. The notice indicates that the borrower is in default, and the lender can continue with the foreclosure proceedings. A notice of default is the second step in foreclosure after the borrower has missed mortgage payments.
Novation
The procedure in which an original contract is terminated and replaced with a new one. The legal process of novation makes it possible to transfer all contract benefits and liabilities from previous parties to a set of new ones. In plain terms, it’s a simple way to replace an old contract with a new one while maintaining most or all of its original properties.
Real Estate Terms That Start With O
Offer
A proposal made by one party to another, expressing a willingness to enter into a contract on certain terms.
Open-end mortgage
An open-end mortgage allows the borrower to obtain the highest loan amount that they can qualify for. This amount can be obtained even if the borrower doesn’t need it all to purchase a home. Once the borrower has purchased the home, the unused portion of the loan remains. The borrower can use this unused portion later during the draw period for home improvement and renovations.
Open listing
An open listing is a real estate agreement where property owners sell their home on their own or using multiple real estate agents. In this type of non-exclusive listing agreement, the seller is not beholden to any sole agent; multiple agents can compete to find a buyer and receive a commission.
Optionee
The legal term for an individual that acquires and holds an option.
Optionor
The legal term for a party that allows or gives an option.
Owner financing
Owner financing is a process in which the property owner provides funds to the buyer to purchase the property. This financing is helpful if the borrower can’t qualify for a traditional mortgage because of strict eligibility requirements.
Ownership
The right to possess an object, in our case, property.
Ownership in severalty
Ownership in severalty means a property with a sole or single person owner.
Real Estate Terms That Start With P
Package mortgage
A package mortgage is a loan that covers the purchase of real estate and the personal property inside, using both as collateral for the loan.
Partition
Partition is a legal way to dissolve the relationship when the parties don’t voluntarily agree to its termination.
Participation loan
Participation loans involve more than one lender. These loans are popular because they allow borrowers to obtain large amounts of money. In these loans, different lenders come together to share the funding of the loan.
Partnership
A partnership is composed of 2 or more persons who agree to contribute money, labor, or skill to a business. Each partner shares the profits, losses, and management of the business, and each partner is personally and equally liable for debts of the partnership.
Pending property
The term pending means that the offer has been accepted, and both parties are moving forward with the sale. When a property is pending, it is in the period after the contingencies are resolved.
Percentage lease
A percentage lease is an agreement in commercial real estate where the tenant pays rent plus a percentage of their earned business revenue.
Periodic tenancy
A periodic tenancy is a leasehold agreement that specifies an initial period of tenancy and the length of the agreement but does not end after the specified period. This type of leasehold agreement renews automatically.
Personal property
Personal property is all things removable, like clothes, lawnmowers, couches, TVs, and furniture.
Planned unit development
A planned unit development or PUD is a community not limited by standard zoning regulations, allowing for more property type flexibility. The development could include residential, commercial, industrial, and common areas in one community.
Power of attorney
A legal document that authorizes someone to act on behalf of another person, typically in business or for some sort of business transaction.
Prepayment penalty clause
A prepayment penalty clause states that a lender can penalize a borrower if the borrower pays off the mortgage much sooner than usual.
Prescriptive easement
A prescriptive easement, sometimes known as an easement by prescription, is a legal arrangement that allows someone to access someone else’s property for particular reasons. Easements by Prescriptive exist through the legal principle of Adverse Possession.
Price fixing
Fixing is the practice of setting the price of a good or service to make a particular price a standard. Any agreement, even if it just implied with other brokerages to set a standard commission rate, is a violation of the antitrust laws.
Prime rate
The prime rate is an interest rate lenders mostly charge to their most favored borrowers. It determines the rates for mortgages, personal loans, and small business loans. The rate is used as the base for calculating rates for variable-rate mortgages.
Principal payment
A principal payment is a payment directly towards the original amount of the loan that a borrower takes. The principal payment is used to reduce the loan amount owed.
Principal
A principal or client is a party who has signed an agreement with an agent or, more specifically, a broker. In other words, it is any person directly involved in a contract, such as a buyer or a seller.
Principle of conformity
The principle of conformity states that the value of a property is maximized when it complies with the design and features of the surrounding area.
Principle of contribution
The principle of contribution states that the actual worth of an improvement is what contributes to the property’s market value, not the cost of the improvement.
Principle of highest and best use
The principle of highest and best use of a property is the concept that finding the best use of real estate would create its greatest net return.
Principle of progression
The principle of progression states that the value of a property increases when more valuable properties are built in the area.
Principle of regression
The principle of regression states that the value of a property decreases when less valuable properties are built in the area.
Principle of substitution
The principle of substitution states that a buyer will not pay more for a property than the cost of an equally desirable property.
Promissory note
A promissory note in real estate is a written agreement in which the homebuyer promises to repay the home loan to the mortgage lender. It is a legal document that the borrower signs to promise repayment.
Property management
The overseeing of real estate and property.
Property Manager
A property manager is someone hired to maintain and manage real estate property. They handle the day-to-day tasks of running a rental property, like screening new tenants, collecting rent, or maintaining property. In simple terms, a property manager makes a landlord’s life a lot easier.
Property tax
Property tax is a real estate ad-valorem tax, calculated by local government, which is paid by the owner of the property. The tax is usually based on the value of the owned property.
Purchase agreement
A purchase agreement is a contract that legally binds two or more parties together, to specific obligations, that create a legally binding contract between the buyer and the seller.
Purchase money mortgage
A purchase money mortgage is a home loan offered by the seller to the homebuyer. In most cases, the lender issues a home loan to the buyer for purchasing the home, but with this mortgage, a seller steps in. For this reason, this mortgage is known as owner financing or seller financing.
Pur autre vie
Pur autre vie is a term used in property law to indicate the duration of a specific form of life estate created when a life estate holder transfers his or her interest to another person. It’s a French expression that means “for another’s life,” thus a life estate pur autre vie would endure the same amount of time as another’s life.
Real Estate Terms That Start With Q
Quitclaim deed
A quitclaim deed contains no title covenant and thus offers the grantee no warranty as to the status of the property title.
Real Estate Terms That Start With R
Radon
Radioactive gas dispersed from natural decay of minerals in earth; odorless, colorless, tasteless.
Real estate
Real estate is a term used to describe property or buildings.
Real estate agent
A real estate agent is a professional who has passed the required real estate classes and licensing exams in the state where he/she intends to work.
Real Estate Broker
A real estate broker is a person who acts as an intermediary between sellers and buyers of real estate/real property. A broker can work independently or employ other agents. The biggest difference between a broker and a real estate agent is that a broker can work on his own, while an agent must work under a licensed broker. Getting a broker’s license is separate from a standard license.
Real Estate Economics
The application of economic techniques in real estate.
Real Estate License Exam
The real estate license exam is broken up into two parts: the national portion and your specific state portion. The real estate exam is multiple choice and is a mix of problem-solving, math, and vocabulary. By far, the most substantial chunk of the real estate license exam is the vocabulary which is more than likely why you are here. Make sure you are using a real estate practice exam to prepare!
Real Estate License Requirements
The state-specific licensing demands that individuals must fulfill to become licensed real estate agents.
Real estate lien
Real estate liens are financial claims against property. A mortgage is the most common form of real estate lien.
Real estate pre licensing
State required courses that cover a long range of real estate topics and concepts. All states require taking and completing a pre-licensing course and it can be done in person or online.
Real Estate Settlement Procedures Act
The Real Estate Settlement Procedures Act requires that lenders and mortgage brokers provide homebuyers with disclosures regarding the real estate settlement process. This act, also known as Regulation X, protects homebuyers from predatory lending agreements.
Real Property
Real property is all things attached to the land and all the legal rights to it. Real property is usually things that are immovable such as the home itself or the buildings within the property line.
REALTOR®
A Realtor is a real estate agent who is a member of the National Association of Realtors. Realtors have a specific association, code of ethics, and rules they must adhere to. Although the terms Realtor and real estate agent are commonly used interchangeably, they are actually two different titles. If you are a real estate agent, you are not automatically a Realtor.
Receivership
Receivership in real estate is a legal solution in which a lender or a court appoints a receiver to recover the remaining funds from a defaulted borrower.
Recovery fund
A fund set up by real estate commissions in a few states to protect the public from real estate agents committing harmful acts. Basically, an insurance policy for states, homeowners, and their agents.
Redlining
Redlining is the practice of denying services to eligible applicants, usually on the basis of their race. The term “redlining” comes from when banks used to highlight risky investment neighborhoods with the color red on maps.
Refinancing
Refinancing a loan is the process of revising an existing loan with different rates or loan terms.
Release Clause
A contract provision (typically in a blanket mortgage) that allows for the freeing of all or part of a property from a claim through a proportional or full amount of the mortgage being paid off.
Remainder
A remainder in real estate is a future interest in ownership. It is the right to own and possess the land after the fixed interest of the current holder expires.
Rent
Rent is the amount owed every month, term, or year that covers the cost of living or residing on a property.
Rent control
Rent control is a program that imposes a maximum limit on how much property owners can charge tenants for rent. The maximum limit, also known as a “rent ceiling,” is designed to stabilize rental prices and help tenants afford housing.
Rent roll
A rent roll is a report that details information about a property and its tenants. The purpose of a rent roll is to provide a snapshot of how a property performs in cash flow and profitability.
Rent stabilization
Rent stabilization is a system that protects tenants by imposing a limit on how much landlords can increase rent. Landlords cannot raise rent above a certain percentage in a rent-stabilized apartment. As a result, a rent-stabilized tenant can enjoy stable prices and the option for lease renewal at the end of the term.
Restrictive covenants (CCR)
CCRs limit the use of a particular property, a condominium, or a subdivision. The main purpose of the CCRs is to maintain the look and feel of the community.
Reverse mortgage
A reverse mortgage is a home loan that allows the borrower to get cash against the value of their property. With this mortgage, the borrower doesn’t pay back the amount as long as they live in that property. The loan amount can be a lump sum, monthly income, or whenever the borrower needs cash.
Reversion
Reversion in real estate is the return of property or assets to their original owner after a specific action or amount of time.
Revocation
The act of withdrawing an offer before it is accepted. An offer can be revoked by the offeror at any time before acceptance.
Rezoning
The legal government-approved process of adjusting a zone.
Riparian rights
Under riparian rights, all landowners whose properties adjoin a river or stream, have the right to make reasonable use of it as it flows through or over their properties.
Real Estate Terms That Start With S
Safe Drinking Water Act (SDWA)
Established in 1974, the SDW Act gave the EPA authority to control water contaminant levels and take legal action against public water authorities for violations. Part of the water maintenance protocol mandates periodic testing of water sources and notification to state authorities and homeowners if contaminants are found.
Sales contract
An agreement containing the entire terms of the sale between a customer and a seller.
Sandwich lease
A sandwich lease is a rent agreement where a property owner rents their property to an investor who, in turn, rents that property to a tenant.
Satisfaction of mortgage
A satisfaction of mortgage is a legal document that confirms that the mortgage is finished, releasing the loan’s lien on the property and transferring title to the borrower. The document includes the borrower and lender’s contact details, loan and property details, and verification of authenticity.
Secondary market
The secondary market is the resale marketplace of loans. Specifically, in real estate, it’s where investors buy and sell mortgages and mortgage-backed securities.
Secured loan
A secured loan allows you to obtain a loan against your property or assets. This loan requires you to offer collateral as a security to the lender.
Seller’s agent
If someone wants to sell their home, they enlist a seller’s agent. A seller’s agent (also known as a listing agent) represents the seller in the transaction in return for their services, they receive a fee.
Servient estate
The servient estate is a parcel of land that is subject to an easement.
A shared appreciation mortgage is a home loan in which the lender shares a percentage of the home’s appreciated (increased) value with the home buyer. The phrase ‘shared appreciation’ means a share in the appreciated value of the property. The lender offers these mortgages at a lower rate than the market value, but in exchange, they request a percentage of the increase in value of the property when it is sold.
Single-Family Home Exemption
The Single-Family Home Exemption states that any single-family dwelling sold without an agent is exempt from the FHA. This means single-family homeowners can be more discriminatory when selling their homes themselves.
Sole proprietorship
A sole proprietorship is a business owned by an individual or a married couple. In this business structure, the owner and their business are a single entity. It is the most common business model for real estate agents.
Special warranty deed
A deed in which the grantor warrants only against defects occurring during their ownership.
Special agent
A special agency occurs when a real estate agent is hired by a client, also known as the principal, to perform one specific task or duty. A real estate agent is considered a special agent because they are authorized only in that one job, such as helping someone sell their home.
Steering
Steering is the illegal practice of guiding, or steering, someone to purchase or rent a home in a specific area or community based on their race, religion, gender, color, familial status, or disability.
Straight note
A straight note is a note that requires interest-only payments during the mortgage term and a principal payment in the form of a balloon payment at the end. This type of note is not amortized.
Subletting
Subletting is a rental agreement under which a leaving tenant finds a new tenant to take over their lease. This new renter will then enter into a leasing contract with the landlord.
Subleasing
A sublease is a rental agreement where a current tenant leases a portion of their property to a new tenant while their name remains on the lease
Subordination clause
The subordination clause (in real estate) establishes order of priorities of financial claims (liens).
Subordinate loan
A subordinate loan is a secondary or subsequent debt that is paid after the primary or initial loans have been paid. It has the lowest ranking and usually higher interest rates than other loans. Subordinate loans are riskier because they are repaid only when the other loans are repaid.
Subsidized housing
Subsidized housing provides government-sponsored housing assistance to low-income tenants. Another popular term for subsidized housing in the United States is “affordable housing.”
The Superfund Amendments and Reauthorization Act of 1986 (SARA) was passed when the original act, CERCLA, expired in 1985. It amended the comprehensive environmental response, compensation, and liability act.
Real Estate Terms That Start With T
Tax lien
A tax lien is a financial claim placed on real estate for unpaid real estate taxes.
Tax rate
The tax rate is the designated percentage the government taxes a person, business, or entity.
Taxation
The process of taking a portion of worth from a person or business and using that for the greater welfare of the public.
Tenancy in common
Tenancy in common is when a parcel of real estate is owned by two or more tenants. Upon the death of a tenant in common, that share is transferred to the estate or heir of the deceased tenant.
Tenant
A person who occupies land or property rented from a landlord.
Tenant rights for repairs
The tenant rights for repairs is the implied right that allows a tenant to make necessary repairs and deduct the cost of the repairs from the rent under certain circumstances.
Tenant turnover
Tenant turnover is the portion of tenants who stay at a rental property versus those who vacate the property. Tenant turnover can also be used to describe the time gap between an old tenant leaving and a new tenant moving in.
Tenants by the entirety
Tenants by the entirety Is a special form of co-ownership used in some states that allow a husband or wife to inherit the other spouse’s ownership interest upon death. Couples who are tenants by the entirety automatically have the right of survivorship. The surviving spouse immediately becomes the sole owner of the property when the other spouse dies.
The Clean Water Act (CWA)
Passed in 1972 and amended in 1977 and 1987, the Clean Water Act was originally known as the Federal Water Pollution Control Act. It is a federal law intended to regulate pollutants discharged into waterways. It’s objective is to ensure clean waters.
The Fair Housing Act
The law that prohibits discrimination in the buying, selling, renting or financing of housing. These laws prohibit discrimination based on race, religion, color, sex, disability, children, nationality and more.
The Fair Housing Amendments Act of 1988
The Fair Housing Amendments Act (FHAA) of 1988 enforces Title VIII and makes it illegal to discriminate against families with children and people with disabilities.
The Truth in Lending Act
The Truth in Lending Act (TILA) protects consumers against unfair and predatory lending practices from credit companies. This act, passed in 1968, requires that lenders fully explain to consumers the terms and conditions of their loans.
Tie in agreement
A tie-in agreement, or a tying agreement, is when a seller requires the purchase of another product or service to sell the first. This means that if a buyer does not agree to the terms of the tie-in sale, they cannot buy the item or service they wanted in the first place.
A timeshare is a property with a divided form of ownership or use rights.
Title
The legal document proving your ownership or right to an asset or interest.
Title contingency
If the title for the property is under review the buyer can add a title contingency to the offer. During this process, a title report will be done which may reveal a conflicting ownership status, in which the buyer then can opt out of the sale.
Title insurance
Title insurance is a type of insurance that protects home buyers and mortgage lenders from title defects. It is a one-time fee that the buyer has to pay when they purchase a property.
Triple net lease
“Triple” means three additional costs will be added to your base rent. Usually taxes, insurance, and maintenance are all added to the monthly lease payment.
Trust
A trust is a three-party relationship in which the first party, the trustor or settlor, transfers a property upon the second party for the benefit of the third party, the beneficiary.
Trustee
A trustee is a person required to manage a trust in accordance with the trustor’s wishes and in the beneficiary’s best interests. A trustee can be an individual or a financial institution such as a bank.
Real Estate Terms That Start With U
Underwriting
Underwriting is a process that lenders use to know whether the borrower qualifies for a loan. An underwriter evaluates the risk and determines whether the lender should enter into a loan agreement.
Underwriter
An underwriter carries out the underwriting process and determines the risk worthiness of a loan.
Unenforceable contract
An unenforceable contract is one that is valid but one the court will not enforce. Any contract agreement created between two parties for illegal actions is considered an unenforceable contract.
Unilateral contract
A unilateral contract is a one-sided agreement. only one party makes a promise to perform. one party pays the other party to perform a certain duty. If the first party fulfills the duty, the second party is obligated to transfer the specified funds.
Universal agent
A universal agent is an agent hired who can act on behalf of a principal with complete power. In other words, a universal agent can legally act in replacement of their principal.
Unsecured loan
An unsecured loan allows you to obtain a loan without using any collateral. Instead of asking for collateral, the lenders check your credit history and ability to repay the loans from your previous records.
USDA loan
A USDA loan is a mortgage offered by the USDA as part of the Rural Development Guaranteed Housing Loan Program. This program is designed to improve the economy and improve the quality of life in rural areas of America.
Usury
Usury is the act of lending money at unreasonably high-interest rates. This illegal practice is an example of predatory lending.
Real Estate Terms That Start With V
VA Loans
A VA loan is a mortgage loan available for military service members, veterans, and eligible surviving spouses. They often come with better terms than a traditional mortgage which is why they are commonly sought after.
Valid contract
A valid contract meets all legal requirements of a court of law and is legally enforceable.
Variance
A variance is a request to deviate from current zoning requirements. If granted, it permits the owner to use his land in a way that is ordinarily not permitted by the zoning ordinance.
Variable lease
A variable lease is a rental agreement where the lessee’s payments vary throughout the term due to changing market conditions.
Variable interest rate
A variable interest rate is a rate that increases or decreases according to changing market rates.
Void contract
A void contract is one that lacks all or one of the essential elements that make a contract valid. This contract is invalid at the time of its establishment and is not legally enforceable.
Voidable contract
A voidable contract is a legal agreement between two parties that may be unenforceable for any number of reasons. Voidable contracts have the necessary elements to be enforceable, so they appear to be valid, but can be rejected by one party if the contract is discovered to have any number of defects.
Voluntary alienation
Voluntary alienation is a transfer of title made with the owner’s consent. Transfers like this are initiated by either a public grant, a property owner executing a will, gifting, selling the property or by a dedication.
Voluntary liens
Voluntary liens are created by a contract between the creditor and the debtor. The most common type is a mortgage.
Real Estate Terms That Start With W
Warranty deed
A warranty deed is a type of deed where the grantor (seller) guarantees that he or she holds clear title to a piece of real estate and has a right to sell it to the grantee (buyer).
Water diversion
Water diversion is the removal or transfer of water from one place to another.
Water rights
Water rights are the rights to use rivers, lakes, or oceans that fall adjacent to land.
Wrap-around loan
A wrap-around loan is a new loan that wraps around the seller’s original loan. It is a secondary financing option in which a seller provides the loan instead of a bank or credit union. These loans can be used in owner-financing contracts and are mostly used as mortgages.
Real Estate Terms That Start With Z
Zoning
Zoning is the regulation of public land use and development by local government. It refers to laws that dictate how real property can and cannot be used in certain areas.
Zoning ordinances
Zoning ordinances are written regulations and laws that defines how property in specific zones can be used. Oftentimes, this property is land.
Thank you Zak for making real estate easier to understand… its a long course! I am almost there..
Best vocabulary index I have seen. Thank you!!!
Thank you so much! I’m in the process of making 255 flash cards!
Thanks for all the vocabulary words.
why are the some words in blue.
They are blue because you can click them and they’ll take you to a full article covering the real estate vocabulary term!
Reading this one by one really help to understand each term better
What are the requirements to obtain a Commercial Loan Officer license in California? Commercial, not Residential? To which agency do I apply? Can I be a Commercial Loan Officer and a Commercial Real Estate Salesperson at the same time?