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Arkansas Real Estate
| Term | Definition |
|---|---|
| Abstract Of Title | The condensed history of a title to a particular parcel of real estate, consisting of a summary of the original grant and all subsequent conveyances and encumbrances affecting the property. |
| Accelerated Cost Recovery System (ACRS) | Method for claiming tax deductions for certain property purchased before 1987 in which it was possible to claim greater deductions in the early years of ownership, gradually reducing the amount deducted in each year of useful life. |
| Acceleration Clause | The clause in a mortgage or deed of trust that can be enforced to make the entire debt due immediately if the borrower defaults on an installment payment or other obligation. |
| Accession | Acquiring title to additions or improvements to real property as a result of the annexation of fixtures or the accretion of alluvial deposits along the banks of streams. |
| Accretion | The increase or addition of land by the deposit of sand or soil washed up naturally from a river, lake, or sea. |
| Accrued Depreciation | Loss in a property’s value resulting from physical deterioration, external depreciation, and functional obsolescence. |
| Accrued Items | On a closing statement, items of expense that are incurred but not yet payable, such as interest on a mortgage loan or taxes on real property. |
| Acknowledgment | A formal declaration made before a duly authorized officer, usually a notary public, by a person who has signed a document. |
| Action To Quiet Title | A court action that establishes ownership when ownership cannot be traced through an unbroken chain of title. |
| Actual Eviction | The legal process that results in a tenant’s being physically removed from leased premises. |
| Actual Notice | Express information or fact; that which is known; direct knowledge. |
| Addendum | Any provision added to an existing contract without altering the content of the original. It must be signed by all parties. |
| Adjustable-rate Mortgage (ARM) | A loan characterized by a fluctuating interest rate, usually one tied to a bank or savings and loan association cost-of-funds index. |
| Administrative Law Judge (ALJ) | The official who presides over a hearing involving a government agency and someone affected by a decision of that agency. The ALJ hears evidence, including the testimony of witnesses, and renders a decision. |
| Ad Valorem Tax | A tax levied according to value, generally used to refer to real estate tax. Also called the general tax. |
| Adverse Possession | The actual, open, notorious, hostile, and continuous possession of another's land under a claim of title. Possession for a statutory period may be a means of acquiring title. |
| Affiliated Business Arrangement (ABA) | Practice of one company offering a package of services to consumers. |
| Agency | The relationship between a principal and an agent wherein the agent is authorized to represent the principal in certain transactions. |
| Agency Representation Disclosure Form | This form is designed to comply with the disclosure requirements established by AREC regulations, but does not create an agency relationship with a client. |
| Agent | One who acts or has the power to act for another. |
| Air Rights | The right to use the open space above a property, usually allowing the surface to be used for another purpose. |
| Alienation Clause | The clause in a mortgage or deed of trust stating that the balance of the secured debt becomes immediately due and payable at the lender’s option if the property is sold by the borrower. |
| Allocation Of Customers Or Markets | Any agreement between brokers to divide their markets and refrain from competing for each other's business, with brokers agreeing to specific territories they will operate exclusively or by markets, such as by price range or category of housing. |
| Amendment | A change to the existing content of a contract (i.e., if words or provisions are added to or deleted from the body of the contract). It must be initialed by all parties. |
| Americans With Disabilities Act (ADA) | Act addresses rights of individuals with disabilities in employment and public accommodations. |
| Amortized Loan | A loan in which the principal, as well as the interest, is payable in monthly or other periodic installments over the term of the loan. |
| Annexation | Process of converting personal property into real property. |
| Anticipation | The appraisal principle holding that value can increase or decrease based on the expectation of some future benefit or detriment produced by the property. |
| Antitrust Laws | Laws designed to preserve the free enterprise of the open marketplace by making illegal certain private conspiracies and combinations formed to minimize competition. |
| Appeal | A serious request for help, support, etc. |
| Appraisal | An estimate of the quantity, quality, or value of something. The process through which conclusions of property value are obtained; also refers to the report that sets forth the process of estimation and conclusion of value. |
| Appraiser Independence Requirements (AIR) | Regulations issued by Fannie Mae that must be followed by appraisers to ensure accurate and objective appraisals. |
| Appreciation | An increase in the worth or value of a property due to economic or related causes, which may prove to be either temporary or permanent; opposite of depreciation. |
| Appurtenance | A right, privilege, or improvement belonging to, and passing with, the land; “runs with the land.” |
| Area Preference | People’s desire for one area over another, based on a number of factors such as history, reputation, convenience, scenic beauty, and location. |
| Arkansas Fair Housing Commission | A quasi-judicial, regulatory and enforcement agency working in conjunction with the U.S. Department of Housing and Urban Development to enforce federal and state fair housing and fair lending laws. |
| Arkansas Real Estate Commission (AREC) | An administrative agency of the Arkansas legislature created to protect the public interest, health, safety, and welfare involving real estate-related activities. |
| Asbestos | A mineral once used in insulation and other materials that can cause respiratory diseases. |
| Assemblage | The combining of two or more adjoining lots into one larger tract to increase their total value. |
| Assessment | The imposition of a tax, charge, or levy, usually according to established rates. |
| Assessment Equalization Factor | A factor (number) by which the assessed value of a property is multiplied to arrive at a value that is in line with statewide tax assessments. It may be applied to raise or lower assessments in a particular county. |
| Assignment | The transfer in writing of interest in a bond, mortgage, lease, or other instrument. |
| Associate Brokers | Licensees who have met the requirements to become a broker (education, testing, and experience) but are affiliated with another broker. |
| Associate Licensee | A licensed real estate salesperson who is employed by or associated with the broker to perform brokerage activities on behalf of or for the broker. |
| Assumption Of Mortgage | Acquiring title to property on which there is an existing mortgage and agreeing to be personally liable for the terms and conditions of the mortgage, including payments. |
| Attorney’s Opinion Of Title | An abstract of title that an attorney has examined and has certified to be, in the attorney's opinion, an accurate statement of the facts concerning the property’s ownership. |
| Avulsion | The sudden tearing away of land, as by earthquake, flood, volcanic action, or the sudden change in the course of a stream. |
| Balloon Payment | A final payment of a mortgage loan that is considerably larger than the required periodic payments because the loan amount was not fully amortized. |
| Bargain And Sale Deed | A deed that carries with it no warranties against liens or other encumbrances but that does imply that the grantor has the right to convey title. The grantor may add warranties to the deed. |
| Base Line | The main imaginary line running east and west and crossing a principal meridian at a definite point; used by surveyors for reference in locating and describing land under the rectangular (government) survey system of legal description. |
| Basis | The financial interest that the Internal Revenue Service attributes to an owner of an investment property for the purpose of determining annual depreciation and gain or loss on the sale of the asset. |
| Benchmarks | Permanent reference marks or points established for use by surveyors in measuring differences in elevation. |
| Beneficiary | The person for whom a trust operates or in whose behalf the income from a trust estate is drawn. |
| Beneficiary | A lender in a deed of trust loan transaction |
| Bilateral Contract | A legally enforceable promise or set of promises that must be performed by which all parties to the instrument are legally bound to act as prescribed. Promise for promise. |
| Blanket Loan | A mortgage covering more than one parcel of real estate. |
| Blind Ad | An ad that does not list the company name so that readers believe that the advertised property is offered by a private party. |
| Blockbusting | The illegal practice of inducing homeowners to sell their properties by making representations regarding the entry or prospective entry of persons of a particular race or national origin into the neighborhood. |
| Boot | Money or property given to make up any difference in value or equity between two properties in an exchange. |
| Boycott | When individuals or businesses withhold their patronage to a business as a protest or to reduce competition. |
| Branch Office | A secondary place of business apart from the principal or main office from which real estate business is conducted. A branch office usually must be run by a licensed real estate professional. |
| Breach Of Contract | Violation of any terms or conditions in a contract without legal excuse; for example, failure to make a payment when it is due. |
| Broker | One who acts as an intermediary on behalf of others for a fee or commission. |
| Brokerage | The business of bringing people together in a real estate transaction conducted by a real estate broker who is a person or company licensed to buy, sell, exchange, or lease real property for others for compensation. |
| Broker’s Price Opinion (BPO) | An opinion of real estate value commissioned by a bank or an attorney and provided by a broker. |
| Brownfields | Defunct, derelict, or abandoned commercial or industrial sites; many have toxic wastes. |
| Budget Comparison Statement | Compares actual results with the original budget, often giving either percentages or a numerical variance of actual versus projected income and expenses. |
| Buffer Zone | A strip of land, usually used as a park or designated for a similar use, separating land dedicated to one use from land dedicated to another use (e.g., residential from commercial). |
| Building Code | An ordinance that specifies minimum standards of construction for buildings to protect public safety and health. |
| Bundle Of Legal Rights | The concept of land ownership that includes ownership of all legal rights to the land |
| possession, control within the law, enjoyment, exclusion, and disposition | Bundle Of Legal Rights - PCEED |
| Buydown | A financing technique used to reduce the monthly payments for the first few years of a loan. |
| Buyer Representation Agreement | A principal-agent relationship in which the real estate professional acts on behalf of the buyer, usually as an agent, with fiduciary responsibilities to the buyer. |
| Buyer’s Agent | A real estate professional who is under contract to locate property for a buyer and represent the buyer’s interests in a transaction. |
| Capital Gain | Profit earned from the sale of an asset. |
| Capitalization Rate | The rate of return a property will produce on the owner’s investment. |
| Carbon Monoxide (CO) | A colorless, odorless gas that occurs as a by-product of fuel combustion that may result in death in poorly ventilated areas. |
| Cash Flow | The net spendable income from an investment, determined by deducting all operating and fixed expenses from the gross income. When expenses exceed income, a negative ______ ______ results |
| Cash Flow Report | A monthly statement that details the financial status of the property. |
| Certificate Of Occupancy | Permission by the municipal inspector to occupy a completed building structure after being inspected and having complied with building codes. |
| Certificate Of Reasonable Value (CRV) | A form indicating the appraised value of a property being financed with a VA loan. |
| Certificate Of Title | A statement of opinion on the status of the title to a parcel of real property based on an examination of specified public records. |
| Chain Of Title | The succession of conveyances, from some accepted starting point, whereby the present holder of real property derives title. |
| Chattel | Personal property. |
| Chlorofluorocarbons (CFCs) | Nontoxic, nonflammable chemicals containing atoms of carbon, chlorine, and fluorine, such as air conditioners and refrigerators. CFCs are safe in application but cause ozone depletion. |
| Civil Rights Act Of 1866 | An act that prohibits racial discrimination in the sale and rental of housing. |
| 1866 | Civil Rights Act Of _______ |
| Client | The principal. |
| Closing | An event where promises made in a sales contract are fulfilled and mortgage loan funds (if any) are distributed to the buyer. |
| Closing Disclosure Form | Form required by the Consumer Financial Protection Bureau in specified real estate transactions. |
| Closing Protection | A formal letter from the title insurance underwriter stating they assume all liability for loss, misplacement, theft, or mis-applied funds belonging to the client by any agent, employee, or owner of the closing company. |
| Closing Statement | A detailed cash accounting of a real estate transaction showing all cash received, all charges and credits made, and all cash paid out in the transaction. |
| Co-ownership | Title ownership held by two or more persons. |
| Code Of Ethics | A written system of standards for ethical conduct. |
| Commingling | The illegal act by a real estate broker of placing client or customer funds with personal funds. |
| Commission | Payment to a real estate professional for services rendered, such as in the sale or purchase of real property; usually a percentage of the selling price of the property. |
| Common Elements | Parts of a property that are necessary or convenient to the existence, maintenance, and safety of a condominium or are normally in common use by all the condominium residents. |
| Community Property | A system of property ownership based on the theory that each spouse has an equal interest in the property acquired by the efforts of either spouse during marriage. |
| Community Reinvestment Act Of 1977 (CRA) | Financial institutions are expected to meet the deposit & credit needs of their communities; participate & invest in local community development & rehabilitation projects; & participate in loan programs for housing, small businesses, & small farms. |
| Comparative Market Analysis (CMA) | A comparison of the prices of recently sold homes that are similar to a listing seller’s home in terms of location, style, and amenities. |
| Competent Party | A person who has the capacity to be engaged in a legal contract; being of sound mind and body. |
| Complaint | An oral or written grievance. |
| Comprehensive Environmental Response, Compensation, And Liability Act (CERCLA) | A federal law administered by the Environmental Protection Agency that establishes a process for identifying parties responsible for creating hazardous waste sites, forcing the parties to clean up toxic sites, bringing legal action against the parties |
| Comprehensive Loss Underwriting Exchange (CLUE) | A database of consumer claims history that allows insurance companies to access prior claims information in the underwriting and rating process. |
| Comprehensive Plan | Also known as master plan. |
| Conciliation | A form of alternative dispute resolution in which a conciliator meets with each of the parties separately to help them settle their differences voluntarily, without the formality of a hearing or trial. |
| Condemnation | A judicial or administrative proceeding to exercise the power of eminent domain, through which a government agency takes private property for public use and compensates the owner. |
| Conditional-use Permit | Written governmental permission allowing a use inconsistent with zoning but necessary for the common good, such as locating an emergency medical facility in a predominantly residential area. |
| Condominium | The absolute ownership of a unit in a multi-unit building, plus an undivided interest in the ownership of the common elements in the building or development, which are owned jointly with the other condominium unit owners. |
| Conformity | The appraisal principle holding that the greater the similarity among properties in an area, the better they will hold their value. |
| Consideration | (1) That received by the grantor in exchange for the deed. (2) Something of value that induces a person to enter into a contract. |
| Construction Loan | A short-term loan usually made during the construction phase of a building project; often called interim financing. |
| Constructive Eviction | A tenant’s right to vacate property and cease rental payments if the tenant can show that the landlord’s willful conduct or negligence has resulted in the property’s becoming unsafe or unfit for habitability. |
| Contingencies | Provisions in a contract that require a certain act to be done or a certain event to occur before the contract becomes binding. |
| Contract | A legally enforceable promise or set of promises that must be performed and for which, if a breach of the promise occurs, the law provides a remedy. |
| Contribution | The appraisal principle stating that the value of any component of a property is what it gives to the value of the whole or what its absence detracts from that value. |
| Conventional Loan | A loan that requires no federally sponsored insurance or guarantee. |
| Cooperative | A residential multi-unit building whose title is held by a trust or corporation that is owned by and operated by owners of the trust or shareholders of the corporation, each possessing a proprietary lease to a property unit. |
| Corporation | An entity or organization, created by operation of law, whose rights of doing business are essentially the same as those of an individual. |
| Corrective Maintenance | Correction of problems after they have occurred. |
| Cost Approach | The process of estimating the value of a property by adding to the estimated land value the appraiser’s estimate of the reproduction or replacement cost of the building, less depreciation. |
| Cost Recovery | An Internal Revenue Service term for depreciation. |
| Counteroffer | A new offer made in response to an offer received. It has the effect of rejecting the original offer, which cannot be accepted thereafter unless revived by the offeror. |
| Covenants, Conditions, And Restrictions (CC&Rs) | Private agreements that affect land use. They may be enforced by an owner of real estate that benefits from them and can be included in the seller’s deed to the buyer. |
| Credit | On a closing statement, an amount entered in a person’s favor—either an amount the party has paid or an amount for which the party must be reimbursed. |
| Curtesy | A life estate, usually a fractional interest, given by some states to the surviving husband in real estate owned by his deceased wife. |
| Customer | The third party or non-represented consumer for whom some level of service is provided. |
| Datum | A horizontal plane from which heights and depths are measured. |
| Debit | On a closing statement, an amount charged; that is, an amount that the debited party must pay. |
| Debt To Income (DTI) | Information about an applicant's gross income and total debt that lenders generally look at as a percentage to determine qualification for a loan. |
| Deed | A written instrument that, when executed and delivered, conveys title to or an interest in real estate. |
| Deed In Lieu Of Foreclosure | A deed given by the mortgagor to the mortgagee when the mortgagor is in default under the terms of the mortgage. If accepted by the mortgagee, this is a way for the mortgagor to avoid foreclosure. |
| Deed In Trust | An instrument that grants a trustee under a land trust full power to sell, mortgage, and subdivide a parcel of real estate. The beneficiary controls the trustee’s use of these powers under the provisions of the trust agreement. |
| Deed Of Reconveyance | A document that a trustee uses to transfer the title back to the trustor (borrower) when the note is repaid. |
| Deed Of Trust | An instrument used to create a mortgage lien by which the borrower conveys title to a trustee, who holds it as security for the benefit of the note holder (the lender); also called a trust deed. |
| Deed Restrictions | Clauses in a deed limiting the future uses of the property. |
| Defeasance Clause | A clause used in leases and mortgages that cancels a specified right upon the occurrence of a certain condition, such as cancellation of a mortgage upon repayment of the mortgage loan. |
| Deficiency Judgment | Court-ordered ruling that allows the lender to seek a portion of a borrower’s debt, not satisfied in the foreclosure sale, from the defaulted party’s general assets. |
| Density Zoning | Zoning ordinances that restrict the maximum average number of housing units per acre that may be built within a particular area, generally a subdivision. |
| Department Of Housing And Urban Development (HUD) | Federal agency that has established rules and regulations that further interpret the practices affected by federal law. |
| Depreciation | In appraisal, a loss of value in property due to any cause, including physical deterioration, >functional obsolescence, and external obsolescence. |
| Depreciation | In real estate investment, a deduction for tax purposes taken over the period of ownership of income property, based on the property’s acquisition cost. |
| Designated Agency | A process that accommodates an in-house sale in which two different agents are involved. The broker designates one agent to represent the seller and one agent to represent the buyer. |
| Designated Executive Broker | A person licensed as a broker responsible for supervision and instruction of executive brokers, associate brokers, and sales agents at a separate branch office location under the direction of a principal broker. |
| Developer | One who attempts to put land to its most profitable use through the construction of improvements. |
| Devise | A transfer of real property by will. The decedent is the devisor, and the recipient is the devisee. |
| Discount Point | A unit of measurement used for various loan charges; one point equals 1% of the amount of the loan. |
| Dower | The legal right or interest, recognized in some states, that a wife acquires in the property her husband held or acquired during their marriage. |
| Dual Agency | Representing both parties to a transaction. This is unethical unless both parties agree to it, and it is illegal in many states. |
| Earnest Money | Money deposited by a buyer under the terms of a contract, to be forfeited if the buyer defaults but to be applied to the purchase price if the sale is closed. |
| Easement | A right to use the land of another for a specific purpose, such as for a right-of-way or utilities; an incorporeal interest in land because it does not include a right of possession. |
| Easement Appurtenant | An easement that follows along with the land. |
| Easement By Necessity | An easement allowed by law as necessary for the full enjoyment of a parcel of real estate (e.g., a right of ingress and egress over a grantor’s land). |
| Easement By Prescription | An easement acquired by open, notorious, continuous, hostile and adverse use of the property for the period of time prescribed by state law. |
| Easement In Gross | An easement that is not for the benefit of any land owned by the owner but that attaches personally to the easement owner. For example, a right granted by a property owner to a friend to use a portion of the property for the rest of the friend’s life. |
| Economic Life | The number of years during which an improvement will add value to land. |
| Electronic Signatures In Global And National Commerce Act (E-Sign) | An act that makes contracts (including signatures) and records legally enforceable regardless of the medium in which they are created. |
| Emblements | Growing crops, such as corn, that are produced annually through labor and industry; also called fructus industriales. |
| Eminent Domain | The right of a government or municipal quasi-public body to acquire property for public use through a court action called condemnation, in which the court decides that the use is a public use and determines the compensation to be paid to the owner. |
| Enabling Acts | State legislation that confers zoning and other powers on municipal governments. |
| Encapsulation | A method of controlling environmental contamination by sealing off a dangerous substance, such as asbestos. |
| Encroachment | A building or some portion of it—a wall or fence, for instance—that extends beyond the land of the owner and illegally intrudes on the land of an adjoining owner or a public street or alley. |
| Encumbrance | Anything—such as a mortgage, tax, or judgment lien; an easement; a restriction on the use of the land; or an outstanding dower right—that may diminish the value or use and enjoyment of a property. |
| Enforceable Contract | A contract that meets all the elements of a valid contract, including compliance with any applicable statute of frauds or other law that requires it to be in writing and signed by the parties. |
| Environmental Impact Statement (EIS) | A statement that details the impact a project will have on the environment. |
| Environmental Site Assessment (ESA) | An evaluation of property to show that due care was exercised in the determination of environmental impairments. |
| Equal Credit Opportunity Act (ECOA) | The federal law that prohibits discrimination in the extension of credit because of race, color, religion, national origin, sex, age, marital status, or receipt of public assistance. |
| Equitable Right Of Redemption | Legal process that allows a defaulted borrower, before a foreclosure sale, to redeem the property by paying off the entire loan balance, including any interest, costs, and fees. |
| Equity | The interest or value that an owner has in property over and above any indebtedness. |
| Equity Buildup | That portion of the loan payment directed toward the principal rather than the interest, plus any gain in property value due to appreciation. |
| Erosion | The gradual and sometimes imperceptible wearing away of the land by natural forces, such as wind, rain, and flowing water. |
| Errors And Omissions (E&O) Insurance | A form of insurance that covers liabilities for errors, mistakes, and negligence in the usual listing and selling activities of a real estate office or escrow company. |
| Escheat | The reversion of property to the state or county, as provided by state law, in cases in which a decedent dies intestate without heirs capable of inheriting, or when the property is abandoned. |
| Escrow Account | Trust account established by an escrow agent to hold funds pending distribution at the closing of a transaction. |
| Escrow Closing | Occurs when a disinterested third party is authorized to act as escrow agent (escrow holder) and to coordinate the closing activities on behalf of the buyer and the seller. |
| Estate (tenancy) At Sufferance | The tenancy of a lessee who lawfully comes into possession of a landlord’s real estate but who continues to occupy the premises improperly after the lease rights have expired. |
| Estate (tenancy) At Will | An estate that gives the lessee the right to possession until the estate is terminated by either party; the term of this estate is indefinite. |
| Estate (tenancy) From Period To Period | An interest in leased property that continues from period to period—week to week, month to month, or year to year. |
| Estate For Years | Conveys an estate that gives the grantee the rights and powers of owners for a defined period of time (typically for a period greater than five years). |
| Estate In Land | The degree, quantity, nature, and extent of interest a person has in real property. |
| Estate Tax | Federal tax on a decedent’s real and personal property. |
| Exchange | A transaction in which all or part of the consideration is the transfer of like-kind property (e.g., real estate for real estate). |
| Exclusive-agency Listing | A listing contract that appoints a real estate prof. as an exclusive agent for a designated period of time. The owner does not pay a commission if the buyer is not introduced by the RE agent. |
| Exclusive Buyer Representation Agreement | Agreement in which the buyer works with only one broker, although the broker is free to represent other buyer clients. |
| Exclusive Right-to-sell Listing | A listing contract which appoints a RE agent as an exclusive agent, and the RE agent receives a commission when the property is sold regardless of who sold it. |
| Executed Contract | A contract in which all parties have fulfilled their promises and thus performed the contract. |
| Executive Broker | A person licensed as a broker and assigned managerial duties, including supervisory authority over agents and associate brokers as designated by the principal broker. |
| Executory Contract | A contract under which something remains to be done by one or more of the parties. |
| Express Agency | An agency relationship based on a formal agreement between the parties. |
| Express Agreement / Express Contract | An oral or written contract in which the parties state the contract’s terms and express their intentions in words. |
| External Obsolescence | Incurable depreciation caused by factors not on the subject property, such as environmental or economic factors. |
| Fair Housing Act | The federal law that prohibits discrimination in housing based on race, color, religion, sex, disability, familial status, and national origin. |
| Fair Housing Amendments Act Of 1988 | Expansion of the Fair Housing Act to include families with children and those with physical or mental disabilities. |
| Fannie Mae | A government-supervised enterprise established to purchase any kind of mortgage loans in the secondary mortgage market from the primary lenders. |
| Farmer Mac | The Federal Agricultural Mortgage Corporation—a privately owned and publicly traded company established by Congress to create a secondary market for agricultural mortgage and rural utilities loans. |
| Federal Deposit Insurance Corporation (FDIC) | An independent federal agency established by Congress to examine and supervise financial institutions, manage receiverships, and insure deposits (currently up to $250,000 per depositor per financial institution). |
| Federal Reserve System (Fed) | The country’s central banking system, which establishes the nation’s monetary policy by regulating the supply of money and interest rates. |
| Fee Simple | The highest interest in real estate recognized by the law; the holder is entitled to all rights to the property. |
| Fee Simple Absolute | The maximum possible estate or right of ownership of real property, continuing forever. |
| Fee Simple Defeasible | A conveyance of property that has conditions placed on it. If the condition is violated or not met, then the property will either go back to the original grantor or a specified third party. |
| Fee Simple Determinable | A fee simple estate qualified by a special limitation. Language used to describe the limitation includes the words so long as, while, or during. |
| Fee Simple Subject To A Condition Subsequent | An estate carrying the limitation that, if it is no longer used for the purpose conveyed, it reverts to the original grantor by the right of reentry. |
| FHA-insured Loan | A loan insured by the Federal Housing Administration and made by an approved lender in accordance with FHA regulations. |
| Fiduciary | One in whom trust and confidence is placed; a reference to a real estate professional employed under the terms of a listing contract or buyer representation agreement. |
| Fixture | An item of personal property that has been converted to real property by being permanently affixed to the realty. |
| Foreclosure | A legal procedure whereby property used as security for a debt is sold to satisfy the debt in the event of default in payment of the mortgage note or default of other terms in the mortgage document. |
| Formaldehyde | An air pollutant that is a colorless chemical used to manufacture building materials and many household products, such as particleboard, hardwood plywood paneling, and urea-formaldehyde foam insulation. |
| Fraud | Deception intended to cause a person to give up property or a lawful right. |
| Freddie Mac | A government-supervised enterprise established to purchase primarily conventional mortgage loans in the secondary mortgage market. |
| Freehold Estate | An estate in land in which ownership is for an indeterminate length of time, in contrast to a leasehold estate. |
| Functional Obsolescence | A loss of value to an improvement to real estate arising from problems of design or utility. |
| Future Interest | A person’s present right to an interest in real property that will not result in possession or enjoyment until sometime in the future, such as a reversion or right of reentry. |
| General Agent | One who is authorized by a principal to represent the principal in a specific range of matters. |
| General Lien | The right of a creditor to have all of a debtor’s property—both real and personal—sold to satisfy a debt. |
| General Warranty Deed | A deed in which the grantor fully warrants good, clear title to the premises. Used in most real estate deed transfers, offers the greatest protection of any deed. |
| Ginnie Mae | A government agency that plays an important role in the secondary mortgage market. It guarantees mortgage-backed securities using FHA-insured and VA-guaranteed loans as collateral. |
| Government-sponsored Enterprises (GSEs) | Organizations created by the federal government (Fannie Mae, Freddie Mac, Farmer Mac, Ginnie Mae) to help increase loan opportunities for homebuyers. |
| Grantee | A person who receives a transfer of real property from a grantor. |
| Granting Clause | Words in a deed of conveyance that state the grantor’s intention to convey the property at the present time. This clause is generally worded as “convey and warrant”; “grant”; “grant, bargain, and sell”; or the like. |
| Grantor | The owner transferring title to or an interest in real property to a grantee. |
| Gross Income Multiplier (GIM) | A figure used as a multiplier of the gross annual income of a property to produce an estimate of the property’s value; usually used for commercial property. |
| Gross Lease | A lease of property according to which a landlord pays all property charges regularly incurred through ownership, such as repairs, taxes, insurance, and operating expenses. Most residential leases are _________ ____________. |
| Gross Rent Multiplier (GRM) | The figure used as a multiplier of the gross monthly income of a property to produce an estimate of the property’s value; usually used for single-family residential property. |
| Ground Lease | A lease of land only, on which the tenant usually owns a building or is required to build as specified in the lease. |
| Groundwater | Water that exists under the earth’s surface within the tiny spaces or crevices in geological formations. |
| Group Boycotting | When two or more businesses conspire against another business. |
| Growing-equity Mortgage | A loan in which the monthly payments increase annually, with the increased amount being used to directly reduce the principal balance outstanding and thus shorten the overall term of the loan. |
| Habendum Clause | That part of a deed beginning with the words “to have and to hold,” following the granting clause and defining the extent of ownership the grantor is conveying. |
| Highest And Best Use | The legally permitted and physically possible use of a property that would produce the greatest net income and, thereby, develop the highest value. |
| Holdover Tenancy | A tenancy in which a lessee retains possession of leased property after the lease has expired and the landlord, by continuing to accept rent, agrees to the tenant’s continued occupancy as defined by state law. |
| Home Equity Loan (aka home equity line of credit, or HELOC) | A loan under which a property owner uses the property as collateral and can then draw funds up to a prearranged amount against the property. |
| Homeowners Insurance | Insurance that covers a residential real estate owner against financial loss from fire, theft, public liability, and other common risks. |
| Homestead | Land that is owned and occupied as the family home. In many states, a portion of the area or value of this land is protected or exempt from judgments for debts other than those secured by the property. |
| Homestead Tax Credit | A householder is entitled to hold a certain amount of real or personal property exempt from unsecured debts. |
| Housing For Older Persons Act Of 1995 (HOPA) | Amended the Fair Housing Act to provide that housing intended for persons aged 55 or older no longer needs to have significant facilities and services designed for the elderly. |
| Hydraulic Fracturing (fracking) | The process used to extract natural gas from the deep layers of rock in which it is embedded. |
| Hypothecation | To pledge property as security for an obligation or loan without giving up possession of it. |
| Implied Agency | If the actions of the parties imply that they have mutually consented to an agency relationship, an __________ ________ relationship is formed. |
| Implied Agreement | A contract under which the agreement of the parties is demonstrated by their acts and conduct. |
| Impound Accounts | An account that the mortgage lender may require a borrower to have to accumulate funds to pay future real estate taxes and insurance premiums. |
| Improvement | Any structure, usually privately owned, erected on a site to enhance the value of the property (e.g., a building, fence, or driveway). |
| Income Approach | The process of estimating the value of an income-producing property through capitalization of the annual net income expected to be produced by the property during its remaining useful life. |
| Income Property | Property held for current income as well as a potential profit upon its sale. |
| Independent Contractor | The broker-licensee relationship where at least 75% of the compensation is based on commissions earned and the broker does not withhold payroll taxes. |
| Independent Dealing | Dealing without the broker's knowledge |
| Index | An objective economic indicator to which the interest rate for an adjustable-rate mortgage is tied. |
| Inflation | The gradual reduction of the purchasing power of the dollar, usually related directly to increases in the money supply by the federal government. |
| Inheritance Taxes | State-imposed taxes on a decedent’s real and personal property. |
| Interest | A charge made by a lender for the use of money. |
| Interest-only Loan | A loan that only requires the payment of interest for a stated period of time with the principal due at the end of the term. |
| Interstate Land Sales Full Disclosure Act (ILSA) | A federal law that regulates the sale of certain real estate in interstate commerce. |
| Intestate | The condition of a property owner who dies WITHOUT leaving a valid will. |
| Intrinsic Value | An appraisal term referring to the value of a property unaffected by a person’s personal preferences. |
| Inverse Condemnation | An action brought by a property owner seeking just compensation for diminished use and value of land because of an adjacent property’s public use. |
| Involuntary Lien | A lien placed on property without the consent of the property owner. |
| Joint Tenancy | Ownership of real estate between two or more parties who have been named in one conveyance as joint tenants. Upon the death of one, the decedent's interest passes to the surviving joint tenant or tenants by the right of survivorship. |
| Judgment | The formal decision of a court upon the respective rights and claims of the parties to an action or suit. |
| Junior Lien | An obligation, such as a second mortgage, that is subordinate in right or lien priority to an existing lien on the same property. |
| Land | The earth’s surface, extending downward to the center of the earth and upward infinitely into space, including things permanently attached by nature, such as trees. |
| Land Contract | An installment sale contract where the buyer makes payments to the seller and receives the deed only after the buyer has paid the price in full. |
| Latent Defect | A hidden structural defect that could not be discovered by ordinary inspection and that threatens a property’s soundness or the safety of its inhabitants. |
| Law Of Diminishing Returns | Point at which additional property improvements do not increase the property’s income or value. |
| Law Of Increasing Returns | Applies as long as money being spent on property improvements produces an increase in the property’s income or value. |
| Lead | Used as a pigment and drying agent in alkyd oil-based paint in about 75% of housing built before 1978. |
| Lead-Based Paint Hazard Reduction Act (LBPHRA) | Federal legislation requiring disclosure of the presence of any known lead-based paint hazards to potential buyers or renters. The law does not require that anyone test for the presence of lead-based paint, however. |
| Lease | A written or oral contract between a landlord (the lessor) and a tenant (the lessee) that transfers the right to exclusive possession & use of the landlord’s real property to the lessee for a specified period of time & for a stated consideration (rent). |
| Leasehold Estate | A tenant’s right to occupy real estate during the term of a lease, generally considered a personal property interest, although a long-term lease may be eligible for treatment as real property for financing purposes. |
| Lease Purchase | The purchase of real property, the consummation of which is preceded by a lease, usually long term, that is typically done for tax or financing purposes. |
| Legal Description | A description of a specific parcel of real estate complete enough for an independent surveyor to locate and identify it. |
| Legal Life Estate | A form of life estate established by state law, rather than created voluntarily by an owner. It becomes effective when certain events occur. See dower, curtesy, and homestead. |
| Leverage | The use of borrowed money to finance an investment. |
| License | The revocable permission for a temporary use of land—a personal right that cannot be sold. |
| Lien | A right given by law to certain creditors to have their debts paid out of the property of a defaulting debtor, usually by means of a court sale. |
| Lien Theory | Some states interpret a mortgage as being purely a lien on real property. The mortgagee thus has no right of possession but must foreclose the lien and sell the property if the mortgagor defaults. |
| Life Estate | An interest in real or personal property that is limited in duration to the lifetime of its owner or some other designated person or persons. |
| Limited Liability Company (LLC) | A form of business organization that combines the most attractive features of limited partnerships and corporations. |
| Liquidated Damages | An amount predetermined by the parties to a contract as the total compensation to an injured party should the other party breach the contract. |
| Liquidity | The ability to sell an asset and convert it into cash, at a price close to its true value, in a short period of time. |
| Littoral Rights | (1) A landowner’s claim to use water in large navigable lakes and oceans adjacent to her property. (2) The ownership rights to land bordering these bodies of water up to the high-water mark. |
| Loan-to-value (LTV) Ratio | The relationship between the amount of the mortgage loan and the value of the real estate being pledged as collateral. |
| Loan Estimate | The form that must be provided to a consumer on loan application, as specified by the Consumer Financial Protection Bureau. |
| Loan Origination Fee | A fee charged to the borrower by the lender for making a mortgage loan. The fee is usually computed as a percentage of the loan amount. |
| Lot-and-block (recorded Plat) Method | A method of describing real property that identifies a parcel of land by reference to lot and block numbers within a subdivision, as specified on a recorded subdivision plat. |
| Management Agreement | A contract between the owner of income property and a management firm or individual property manager that outlines the scope of the manager’s authority. |
| Management Plan | A highly detailed plan that lays out the owner’s objectives for a property, as well as what the property manager wants to accomplish and how, including all budgetary information. |
| Managing Broker | The the real estate professional who is responsible for supervision of the real estate professionals who act on behalf of the brokerage; may also be called a supervising broker. |
| Manufactured Housing | Dwellings that are built off site and trucked to a building lot where they are installed or assembled. |
| Margin | A premium added to the index rate representing the lender’s cost of doing business. |
| Market | A place where goods can be bought and sold and a price established. |
| Marketable Title | Good or clear title, reasonably free from the risk of litigation over possible defects. |
| Market Data Approach | Also known as the sales comparison approach. An estimate of value obtained by comparing property being appraised with recently sold comparable properties. |
| Market Value | The most probable price that a property would bring in an arm’s-length transaction under normal conditions on the open market. |
| Material Adverse Fact | Conditions that may affect value or desirability of a property. |
| Mechanic's Lien | A statutory lien created in favor of contractors, laborers, material suppliers, and others who have performed work or furnished materials in the erection or repair of a building. |
| Megan's Law In Arkansas | Anyone who has been found guilty of a sexually violent offense, a sex offense, or certain offenses where the victim was a minor is required to register with the Arkansas Crime Information Center within 10 days after sentencing... |
| Metes-and-bounds Method | A method used to describe a parcel of land that begins at a well-marked point and follows the property’s boundaries, using directions and distances around the tract, back to the place of beginning. |
| Mill | One-tenth of one cent. |
| Minimum Level Of Services | The services that real estate professionals must provide to clients, as prescribed differently by certain states; for example, assisting clients in negotiation and answering questions from clients about offers, counteroffers, and contingencies. |
| Mold | A form of fungus that can be found almost anywhere and can grow on almost any organic substance, so long as moisture and oxygen are present. |
| Month-to-month Tenancy | A periodic tenancy under which the tenant rents for one month at a time. |
| Monument | A fixed natural or artificial object used to establish real estate boundaries for a metes-and-bounds description. |
| Mortgage | A conditional transfer or pledge of real estate as security for the payment of a debt. Also, the document creating a mortgage lien. |
| Mortgagee | A lender in a mortgage loan transaction. |
| Mortgage Insurance Premium (MIP) | An insurance policy premium used in FHA loans that the borrower is charged. The premium depends on the length of the loan and the loan-to-value (LTV) ratio. |
| Mortgage Lien | A lien or charge on the property of a mortgagor that secures the underlying debt obligation. |
| Mortgage Servicing Transfer Statement | Disclosure required by the lender if the lender intends to sell or assign the right to service the loan to another loan servicer. |
| Mortgagor | A borrower in a mortgage loan transaction. |
| Multiple Listing Service (MLS) | A marketing organization composed of member real estate professionals who agree to share their listing agreements with one another in the hope of procuring ready, willing, and able buyers for their properties more quickly than they could on their own. |
| Mutual Agreement | Requirement that there must be complete agreement between the parties about the purpose and terms of a contract. |
| Negative Amortization | Process by which the amount of the loan increases. The mortgagor sets a payment cap, or maximum amount for payments, but the difference between the payment made and the full payment amount is added to the remaining mortgage balance. |
| Negligence | A failure to exercise reasonable care toward others or a departure from what an ordinary reasonable member of the community would do in the same community. |
| Negligent Misrepresentation | Occurs when the real estate professional should have known that a statement about a material fact was false. |
| Negotiable Instrument | A written promise or order to pay a specific sum of money that may be transferred by endorsement or delivery. |
| Net Lease | A lease requiring the tenant to pay not only rent but also costs incurred in maintaining the property, including taxes, insurance, utilities, and repairs. |
| Net Listing | A listing based on the net price the seller will receive if the property is sold. Under a net listing, the real estate professional can offer the property for sale at the highest price obtainable to increase the commission. (Illegal) |
| Net Operating Income (NOI) | The income projected for an income-producing property after deducting anticipated vacancy and collection losses and operating expenses. |
| Nonagent | An intermediary between a buyer and a seller, or a landlord and a tenant, who assists one or both parties with a transaction without representing either. |
| Nonconforming Use | A use of property that is permitted to continue after a zoning ordinance prohibiting it has been established for the area. "Grandfather" |
| Nondisturbance Clause | A mortgage clause stating that the mortgagee agrees not to terminate the tenancies of the lessees in the event the mortgagee forecloses on the mortgagor-lessor’s building. |
| Nonhomogeneity | A lack of uniformity; dissimilarity. Because no two parcels of land are exactly alike |
| Note | A financing instrument that states the terms of the underlying obligation, is signed by its maker, and is negotiable (transferable to a third party). Also called a promissory note. |
| Novation | Substituting a new obligation for an old one or substituting new parties to an existing obligation. |
| Offer And Acceptance | Two essential components of a valid contract; a “meeting of the minds.” |
| Office Of The Comptroller Of The Currency (OCC) | Government agency which sets standards and regulations for fiduciary lenders. |
| Open-end Loan | A mortgage loan that is expandable by increments up to a maximum dollar amount, with the full loan being secured by the same original mortgage. |
| Open Listing | A listing contract under which the real estate professional’s compensation is contingent on the real estate professional producing a ready, willing, and able buyer before the property is sold by the seller or another real estate professional. |
| Operating Budget | A property’s anticipated financial performance in the present and future. It gives the owner a sense of expected profit. |
| Option | An agreement to keep open for a set period an offer to sell or purchase property. |
| Owner Financing | The seller is the primary lender, securing the property by means of a deed, note and mortgage, deed of trust, or contract for deed. In its traditional form, the buyer takes possession of the property and the seller retains legal title until paid in full. |
| Package Loan | A real estate loan used to finance the purchase of both real property and personal property, such as in the purchase of a new home that includes carpeting, window coverings, and major appliances. |
| Partition | The division of cotenants’ interests in real property when the parties do not all voluntarily agree to terminate the co-ownership; takes place through a court procedure. |
| Partnership | An association of two or more individuals who carry on a continuing business for profit as co-owners. Under the law, a partnership is regarded as a group of individuals rather than as a single entity separate from the individual owners. |
| Percentage Lease | A lease, commonly used for commercial property, whose rental is based on the tenant’s gross sales at the premises; it usually stipulates a base monthly rental plus a percentage of any gross sales above a certain amount. |
| Percolation Test | A test of the soil to determine whether it will absorb and drain water adequately to use a septic system for sewage disposal. |
| Personal Property | Items, called chattels, that do not fit into the definition of real property; movable objects. |
| PITI | The basic costs of owning a home—mortgage principal and interest, real estate taxes, and hazard insurance. |
| PITT | The four unities of tenants in a joint tenancy: possession, interest, time, and title. |
| Planned Unit Development (PUD) | A planned combination of diverse land uses, such as housing, recreation, and shopping, in one contained development or subdivision. |
| Plat Map | A map of a town, section, or subdivision indicating the location and boundaries of individual properties. |
| Plottage | The increase in value or utility resulting from the consolidation (assemblage) of two or more adjacent lots into one larger lot. |
| Point Of Beginning (POB) | In a metes-and-bounds legal description, the starting point of the survey, situated in one corner of the parcel. |
| Police Power | The government’s right to impose laws, statutes, and ordinances, including zoning ordinances and building codes, to protect the public health, safety, and welfare. |
| Polychlorinated Biphenyls (PCBs) | Used as an insulating material in dielectric oil. It can linger in the environment for long periods of time and can cause health problems. |
| Prepaid Items | On a closing statement, items that have been paid in advance by the seller, such as fuel costs and some real estate taxes, for which the seller must be reimbursed by the buyer. |
| Prepayment Penalty | A charge imposed on a borrower who pays off the loan principal early. This penalty compensates the lender for interest and other charges that would otherwise be lost. |
| Prescriptive Easement | The prescriptive acquisition of the right to a limited use of another's land |
| Preventive Maintenance | Small repairs that help prevent bigger problems and expenses. |
| Price-fixing | An agreement between competitors to set prices. |
| Prima Facie | A fact presumed to be true unless it is disproved. |
| Primary Mortgage Market | The mortgage market in which loans are originated, consisting of lenders such as commercial banks, savings associations, and mutual savings banks |
| Principal | A main party to a transaction—the person for whom the agent works. |
| Principal Broker | In a brokerage, the broker who is responsible for all the activities of both the firm and all its licensees. |
| Principal Meridian | The main imaginary line running north and south and crossing a base line at a definite point; used by surveyors for reference in locating and describing land under the rectangular (government) survey system of legal description. |
| Prior Appropriation | A concept of water ownership in which the landowner’s right to use available water is based on a government-administered permit system. |
| Priority of Liens | Generally determined by the chronological order in which the lien documents are recorded, with the exception of tax liens. |
| Private Mortgage Insurance (PMI) | Insurance provided by a private carrier that protects a lender against a loss in the event of a foreclosure and deficiency. |
| Probate | A legal process by which a court determines who will inherit a decedent’s property and what the estate’s assets are. |
| Procuring Cause | The effort that brings about the desired result. Under an open listing, the real estate professional who is the _________ _______ of the sale receives the commission. |
| Profit And Loss Statement | A general financial picture based on the monthly cash flow reports; does not include itemized information. |
| Progression | An appraisal principle that the value of a lesser-quality property is favorably affected by the presence of a better-quality property. |
| Promissory Note | A financing instrument that states the terms of the underlying obligation, is signed by its maker, and is negotiable (transferable to a third party). |
| Property Management Agreement | A written agreement between a property manager and the owner of real estate for the management of the real estate. |
| Property Manager | Someone who manages real estate for another person for compensation. Duties include collecting rents, maintaining the property, and keeping up all accounting. |
| Prorations | Expenses, either prepaid or paid in arrears, that are divided or distributed between the buyer and the seller at the closing. |
| Protection Clause | A clause in a contract that protects the rights and interests of the parties. |
| Puffing | Exaggerated or superlative comments or opinions. |
| Pur Autre Vie | “For the life of another.” |
| Purchase Money Mortgage (PMM) | A note secured by a mortgage or deed of trust given by a buyer, as borrower, to a seller, as lender, as part of the purchase price of the real estate. |
| Purchase Option | The right given by a lease to the tenant to purchase the property at a predetermined price within a certain period, possibly the lease term. |
| Pyramiding | The process of acquiring additional property by refinancing property already owned and investing the loan proceeds in additional properties. |
| Quitclaim Deed | A conveyance that transfers whatever interest the grantor has in the specified real estate, without warranties or obligations. |
| Radon | A naturally occurring gas that is suspected of causing lung cancer. |
| Range | A strip of land six miles wide, extending north and south and numbered east and west according to its distance from the principal meridian in the rectangular (government) survey system of legal description. |
| Ready, Willing, And Able Buyer | Person who is prepared to buy property on the seller’s terms and is ready to take positive steps to consummate the transaction. |
| Real Estate Investment Trust (REIT) | Trust ownership of real estate by a group of individuals who purchase certificates of ownership in the trust, which in turn invests the money in real property and distributes the profits back to the investors free of corporate income tax. |
| Real Estate Mortgage Investment Conduit (REMIC) | A tax entity that issues multiple classes of investor interests (securities) backed by a pool of mortgages. |
| Real Estate Recovery Fund | A fund established in some states from real estate license revenues to cover claims of aggrieved parties who have suffered monetary damage through the actions of a real estate professional. |
| Real Estate Settlement Procedures Act (RESPA) | The federal law that requires certain disclosures to consumers about mortgage loan settlements. The law also prohibits the payment or receipt of kickbacks and certain kinds of referral fees. |
| Real Property | The interests, benefits, and rights inherent in real estate ownership; often used as a synonym for real estate. |
| Reconveyance Deed | A deed used by a trustee under a deed of trust to return title to the trustor. |
| Recording | The act of entering or recording documents affecting or conveying interests in real estate in the recorder’s office established in each county. |
| Rectangular (government) Survey System | A system established in 1785 by the federal government, providing for surveying and describing land by reference to principal meridians and base lines. |
| Redemption | The right of a defaulted property owner to recover property by curing the default. |
| Redlining | The illegal practice by a lending institution of denying loans or restricting their number for certain areas of a community. |
| Referral Fee | Mutually agreed upon fees paid by one broker (receiving the referral) to another broker for sending a potential client to buy, rent, sell, or lease real property. |
| Regression | An appraisal principle that the value of a better-quality property is affected adversely by the presence of a lesser-quality property |
| Regulation Z | Implements the Truth in Lending Act, requiring credit institutions to inform borrowers of the true cost of obtaining credit. |
| Release Deed | A document, also known as a deed of reconveyance, that transfers all rights given a trustee under a deed of trust loan back to the grantor after the loan has been fully repaid. |
| Remainder Interest | The remnant of an estate that has been conveyed to take effect and be enjoyed after the termination of a prior estate, such as when an owner conveys a life estate to one party and the remainder to another. |
| Renewal Option | A clause in a lease that grants the lessee the privilege of renewing the lease. |
| Rent | A fixed, periodic payment made by a tenant of a property to the owner for possession and use, usually by prior agreement of the parties. |
| Rescission | The practice of one party canceling or terminating a contract, which has the effect of returning the parties to their original positions before the contract was made. |
| Restrictive Covenant | A clause in a deed that limits the way the real estate ownership may be used. |
| Reverse Mortgage | A loan by which a homeowner receives a lump sum, monthly payments, or a line of credit based on the homeowner’s equity in the property secured by the mortgage. |
| Reversionary Interest | The remnant of an estate that the grantor holds after granting a life estate to another person. |
| Reversionary Right | The return of the rights of possession and quiet enjoyment to the lessor at the expiration of a lease. |
| Right Of First Refusal | A clause allowing the tenant the opportunity to buy the property before the owner accepts an offer from another party. |
| Riparian Rights | An owner’s rights in land that borders on or includes a stream, river, or lake. These rights include access to and use of the water. |
| Routine Maintenance | Day-to-day duties such as cleaning common areas, performing minor carpentry and plumbing adjustments, and providing regularly scheduled upkeep of heating, air-conditioning, and landscaping. |
| Sale-and-leaseback | A transaction in which the owner sells improved property and, as part of the same transaction, signs a long-term lease to remain in possession of the premises. |
| Sales Comparison Approach | The process of estimating the value of a property by examining and comparing sales and listings of comparable properties. |
| Satisfaction Of Mortgage | A document acknowledging the payment of a mortgage debt. |
| Secondary Mortgage Market | A market for the purchase and sale of existing mortgages, designed to provide greater liquidity for mortgages. Mortgages are first originated in the primary mortgage market. |
| Section | A portion of a township under the rectangular (government) survey system. A township is divided into 36 of these. |
| Security Deposit | A payment by a tenant, held by the landlord during the lease term, and kept (wholly or partially) on default or on destruction of the premises by the tenant. |
| Separate Property | Under community property law, property owned solely by either spouse before the marriage, acquired by gift or inheritance during the marriage, or purchased with separate funds after the marriage. |
| Severalty | Ownership of real property by one person only; also called sole ownership. |
| Severance | Changing an item of real estate to personal property by detaching it from the land (e.g., cutting down a tree). |
| Short Sale | Sale of property in which the sales price is less than the remaining indebtedness. |
| Single Agency | An office policy that allows the broker to only represent one party to the transaction. The broker may represent the buyer or seller, but not both in the same transaction. |
| Situs | The location of land for legal purposes; the jurisdiction in which land is located. |
| Special Agent | One who is authorized by a principal to perform a single act or transaction |
| Special Assessment | A tax or levy customarily imposed against only those specific parcels of real estate that will benefit from a proposed public improvement like a street or sewer. |
| Special Warranty Deed | A deed in which the grantor warrants, or guarantees, the title only against defects arising during the period of the grantor's tenure and ownership of the property and not against defects existing before that time. "under the grantor but not otherwise.” |
| Specific Lien | A lien affecting or attaching only to a certain, identified parcel of land or piece of property. |
| Statute Of Frauds | That part of a state law that requires certain instruments, such as deeds, real estate sales contracts, and certain leases, to be in writing to be legally enforceable. |
| Statutory Lien | A lien imposed on property by statute—a tax lien, for example—in contrast to an equitable lien, which arises out of common law. |
| Statutory Right Of Redemption | The right of a defaulted property owner to recover the property after its sale by paying the appropriate fees and charges. |
| Steering | The illegal practice of channeling home seekers to particular areas based on their race, national origin, religion, or other protected classification. |
| Stigmatized Property | A property that has acquired an undesirable reputation due to an event that occurred on or near it, such as violent crime, gang-related activity, illness, or personal tragedy. |
| Straight-line Depreciation | Depreciation taken periodically in equal amounts over an asset's useful life. |
| Straight Loan | A loan in which only interest is paid during the term of the loan, with the entire principal amount due with the final interest payment. |
| Subagent | A broker working with a buyer who represents the seller and the listing broker of the real property shown to this buyer. |
| Subdivider | One who buys undeveloped land, divides it into smaller, usable lots and sells the lots to potential users. |
| Subdivision | A tract of land divided by the owner, known as the subdivider, into blocks, building lots, and streets according to a recorded subdivision plat, which must comply with local ordinances and regulations. |
| Subject To | Buyer takes title of property and makes payments on the existing loan but is not personally obligated to pay the debt in full. Original seller might continue to be liable for debt. |
| Subordination Agreement | A written agreement between holders of liens on a property that changes the priority of mortgage, judgment, and other liens under certain circumstances. |
| Subrogation | The right acquired by the title company to any remedy or damages available to the insured when a title company makes a payment to settle a claim covered by a policy. |
| Subsurface Rights | Ownership rights in a parcel of real estate to the water, minerals, gas, oil, and so forth that lie beneath the surface of the property. |
| Superfund Amendments And Reauthorization Act (SARA) | An amendatory statute that contains stronger cleanup standards for contaminated sites, increased funding for Superfund, and clarifications of lender liability and innocent landowner immunity. |
| Surety Bonds | An agreement by an insurance or bonding company to be responsible for certain possible defaults, debts, or obligations incurred by an insured party; in essence, a policy insuring one’s personal and/or financial integrity. |
| Surface Rights | Ownership rights in a parcel of real estate that are limited to the surface of the property and do not include the space above it (air rights) or the substances below the surface (subsurface rights). |
| Survey | The process by which boundaries are measured and land areas are determined; the on-site measurement of lot lines, dimensions, and position of a house on a lot, including the determination of any existing encroachments or easements. |
| Taxation | The process by which a government body raises monies to fund its operation. |
| Tax Lien | A charge against property, created by operation of law. Takes priority over all other liens. |
| Tax Sale | A court-ordered sale of real property to raise money to cover delinquent taxes. |
| Tenancy By The Entirety | The joint ownership, recognized in some states, of property acquired by spouses during marriage. Upon the death of one spouse, the survivor becomes the owner of the property. |
| Tenancy In Common | A form of co-ownership by which each owner holds an undivided interest in real property as if each were sole owner. Each individual owner has the right to partition. |
| Tenant Improvements | Alterations to the interior of a building to meet the functional demands of the tenant. Also known as build-outs. |
| Testate | Having made and left a valid will. |
| Tie-in Agreement | An agreement to sell a product only if the buyer purchases another product as well; also called a tying agreement. |
| Tiers | Strips of land that are six miles wide, extending east and west and numbered north and south according to their distance from the base line in the rectangular (government) survey system of legal description. |
| Time-share | A form of ownership interest that may include an estate interest in property and that allows use of the property for a fixed or variable time period. |
| Time Is Of The Essence | A phrase in a contract that requires the performance of a certain act within a stated period of time. |
| Title | (1) The right to ownership or the ownership of land. (2) The evidence of ownership of land. |
| Title Insurance | A policy insuring a property owner or mortgagee against loss by reason of defects in the title to a parcel of real estate, other than encumbrances, defects, and matters specifically excluded by the policy. |
| Title Search | The examination of public records relating to real estate to determine the current state of the ownership. |
| Title Theory | Principle in which the mortgagor conveys legal title to the mortgagee (or some other designated individual) and retains equitable title and the right of possession. |
| Torrens System | A method of evidencing title by registration with the proper public authority, generally called the registrar; named for its founder, Sir Robert __________ |
| Town House | A type of residential dwelling with two floors that is connected to one or more dwellings by a common wall or walls. Title to the unit and lot vest in the owner who shares a fractional interest with other owners in any common areas. |
| Township | The principal unit of the rectangular (government) survey system. A ____________ is a 6-mile square of 36 square miles. |
| Township Lines | All the lines in a rectangular survey system that run east and west, parallel to the base line and six miles apart. |
| Trade Fixture | An article installed by a tenant under the terms of a lease that is removable by the tenant before the lease expires. |
| Transaction Broker | Helps both the buyer and the seller with paperwork and formalities in transferring ownership of real property, but who is not an agent of either party. |
| Transfer Tax | A tax charged to the owner upon the conveyance of the property. |
| Trustee’s Deed | A deed executed by a trustee conveying land held in a trust. |
| Trustor | A borrower in a deed of trust loan transaction; one who places property in a trust. Also called a grantor or settler. |
| Truth In Lending Act (TILA) | Federal government regulates the lending practices of mortgage lenders through Regulation Z of this act, which requires full disclosure of all terms of credit, including the annual percentage rate (APR). |
| Underground Storage Tanks (USTs) | Commonly found on sites where petroleum products are used or where gas stations and auto repair shops are located, and subject to federal and state regulations. |
| Unenforceable Contract | A contract that has all the elements of a valid contract, yet neither party can sue the other to force performance of it. For example, an unsigned contract. |
| Unilateral Contract | A one-sided contract wherein one party makes a promise so as to induce a second party to do something. |
| Universal Agent | A person empowered to do anything the principal could do personally. |
| Usury | Charging interest at a higher rate than the maximum rate established by state law. |
| VA-guaranteed Loan | A mortgage loan on approved property made to a qualified veteran by an authorized lender and guaranteed by the U.S. Department of Veterans Affairs in order to limit the lender’s possible loss. |
| Valid Contract | A contract that complies with all the essentials of a contract and is binding and enforceable on all parties to it. |
| Value | The power of a good or service to command other goods in exchange for the present worth of future rights to its income or amenities. |
| Variance | Permission obtained from zoning authorities to build a structure or conduct a use that is expressly prohibited by the current zoning laws; an exception from the zoning ordinances. |
| Vendor’s Lien | A lien that belongs to a vendor for the unpaid purchase price of land, where the vendor has not taken any other lien or security beyond the personal obligation of the purchaser. |
| Voidable Contract | A contract that seems to be valid on the surface but may be rejected or disaffirmed by one or both of the parties. |
| Void Contract | A contract that has no legal force or effect because it does not meet the essential elements of a contract. |
| Voluntary Lien | A lien placed on property with the knowledge and consent of the property owner. |
| Water Table | The natural level at which the ground is saturated. |
| Will | A written document, properly witnessed, providing for the transfer of title to property owned by the deceased, called the testator. |
| Workers’ Compensation Acts | State laws that require an employer to obtain insurance coverage to protect employees who are injured in the course of their employment. |
| Wraparound Loan | An additional mortgage in which another lender refinances a borrower by lending an amount over the existing first mortgage amount without disturbing the existence of the first mortgage. |
| Writ Of Attachment | A document ordered by the court to have a sheriff enter a leased property to give possession back to the owner. |
| Zoning Ordinance | An exercise of police power by a municipality to regulate and control the character and use of property. |
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