A clause in a loan that gives the lender the right to accelerate the debt upon the occurrence of a specific event which is normally an attempt to sell. See Acceleration clause and Alienation clause.

A loan that is due and payable at the demand of the lender usually as a result of an acceleration or alienation clause becoming effective. See Acceleration clause and Alienation clause.

A provision in a contract that gives a party the right to terminate his or her obligations upon the occurrence of specified conditions or events.

A limit placed on the adjustments in an adjustable rate mortgage to protect the borrower from large increases in the interest rate or the payment level. See Annual cap and Payment cap.

See Capitalization rate.

The legal ability of a person or entity to enter into a contract that is legally binding and to perform certain other civil acts such as making a will.

A requirement for having a valid contract. Parties having less than full capacity include minors, persons adjudged mentally incompetent and those who are intoxicated.

1. A sum of money used to purchase long-term assets.
2. Stocks, bonds, or mortgages that were sold to raise money to purchase assets, as well as retained earnings.
3. Assets, other than land, used to generate income.

The appreciation accruing to the benefit of the capital improvement to real estate.

Any asset of a permanent nature used for the production of income (land, buildings, machinery, equipment, etc.) which under income tax law, is normally distinguishable from “inventory” which are assets held for sale to customers in the ordinary course of the taxpayer's trade or business.

Example: Oliver paid $25,000 cash as original equity and borrowed $75,000 to purchase a $100,000 vacation home. His laborious efforts to remodel added $20,000 through sweat equity, and inflation raised the value by another $10,000.

The cost of a capital improvement such as investments in land, buildings, machinery, and equipment.

Income of a capital item that results from the sale of an asset and not from the usual course of business, the amount by which, the net sale proceeds exceeds the adjusted cost basis (book value). Gains are used for income tax computations and are taxed at a lower rate than ordinary income and are termed long or short term based upon length of time it was held.

See Capital loss.

Any structure erected as a permanent improvement to real estate, usually extending the useful life and value of a property such as the replacement of a roof.

A tax-deductible loss on real property that has been held for more than six months. See Capital gain.

The portion of the market funds where equities, mortgages, and bonds are traded. Contrasted with Money market

The manner in which the investment in a property is to be returned to investors, normally stated as a rate or dollar amount per unit of time.

A process of reflecting future income in present value and used to determine the value of property by considering its net income and a percentage of reasonable return on the investment. The value of an income property can be determined by dividing annual net operating income by its capitalization rate.

The rate of interest, made up of the interest rate (return on the investment) plus the recapture rate (return of the original investment), which is considered a reasonable return on the investment and used in the process of determining value based upon net income. It may also be described as the yield rate that is necessary to attract the money of the average investor to a particular kind of investment. In the case of land improvements which depreciate, to this yield rate is added a factor to take into consideration the annual amortization factor necessary to recapture the initial investment in improvements. This amortization factor can be determined in various ways (a) See straight-line depreciation method, (b) See Inwood Tables and (c) See Hoskold Tables.

An estimation of the present lump sum value of an income stream. See Capitalization rate.

Financing in which the seller takes back a note for part of the purchase price secured by a junior mortgage, a wraparound mortgage or a land contract..

Charges for holding property such as the expense of property tax on vacant land or on property under construction.

In a tax-deferred exchange, the adjusted tax basis of the property surrendered that is used to determine the tax basis of the property acquired. See Basis.

The conversion of the price a piece of property sold for with either favorable or unfavorable financing into the price the property would have sold for had the seller accepted all cash in the transaction.

The net income generated by a property before depreciation and other non-cash expenses.

An accounting method that calls for income and expenses to be booked when the amount is received or the obligation is paid. See Accrual method.

In an agricultural lease, the amount of money given to the landowner as rent at the beginning of the lease as opposed to sharecropping

A type of insurance that protects a property owner from claims arising from damage to his or her own property such as fire or theft. See Liability insurance.

A common law concept which from the Latin means “let the buyer beware” which expresses the general concept that in the absence of any misrepresentation, the buyer must examine the goods or property and purchase at his or her risk and that neither express nor implied warranties are made by the seller.

An order by a court or administrative agency prohibiting a person or business from continuing an activity. Used in real estate brokerage to prevent antitrust behavior among firms or in illegal discrimination

A certificate obtained from the state showing that no sales tax is due from the seller of a business which protects a buyer from successor's liability. Also called a Clearance receipt.

Issued by the Department of Veterans Affairs as evidence of a veteran's eligibility to obtain VA loan.

A document issued by an insurance company to verify the existence of coverage.

A document issued by a local government to a developer which permits a structure to be occupied by the general public and generally indicates that the building is in compliance with public health and building codes.

(CRV) The Federal VA appraiser's opinion as to the value of a property.(CRV) The Federal VA appraiser's opinion as to the value of a property.

A document issued to the highest bidder at a tax foreclosure sale to indicating ownership but which does not convey actual title indicating that all past due taxes have been paid and that title will pass upon the expiration of the redemption period.

A written statement or guaranty of the condition of the taxes on a certain property made by the County Treasurer of the county where the property is located and any loss sustained due to an error in the tax certificate will be paid by the county reporting.

A written document issued by an attorney or a qualified person who has examined the record of the real estate title reporting the state of that title.

A written document that identifies an owners shares in a business, trust or mutual fund

One who has the right to receive the profits and benefits of the lands or tenements, the legal title and possession of which are held by another person as trustee

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

Goods or every type of personal property that are movable or immovable and which are not real property. See Personal property or Chattel real.

A claim on personal property rather than on real property used to secure or guarantee a promissory note to acquire personal property.

In property taxation, a method for granting property tax relief to the elderly and disadvantaged qualified taxpayers by rebate, tax credits or cash payments which is usually limited to homeowners and renters.

A type of fireplace which is built around a metal form, containing air ducts to distribute heat by convection.

The distance around the exterior boundary of a circle.

An aspect of adverse possession or easement by prescription whereby a person occupies property even though having no legal right to title, but nevertheless claiming such a right under a claim of right-when the adverse user or possessor treats the land as his or her own, or under a color of title - when they have some reason to believe that they have title.

An attractive and efficient building of high quality that is sought by investors and prestigious tenants and is well designed and constructed with above-average material, workmanship and finishs and is excellently maintained and managed especially and are the most desirable in their markets

An building that offers useful space without special features and has a functional layout and design although not unique and maintenance and management average to good which is usually from 10 to 50 years old..

A typically older building that offers space without amenities with average to below-average maintenance and management and having average to poor mechanical, electrical, ventilation systems that attracts moderate- to low-income tenants who need affordable space.

A subjective division of buildings as to their desirability to tenants and investors which is based on age, location, construction quality, attractiveness of style, level of maintenance, etc.

A title free of any encumbrances or defects.

A party to a transaction with whom the broker has entered into a specific written agency agreement to provide services.

A parcel of land enclosed by a fence, hedge or visual enclosure. In surveying it has several meanings and could easily be confused with “closing.” Close also refers to completing a transaction; when real estate formally changes ownership.

A mortgage that does not principal payment amounts to be increased during the payment period. See Open-end loan..

Per the TAR Purchase and Sale Agreement, the transaction is closed when these two things have occurred:

1. Delivery of warranty deed; and
2. payment of the purchase price

NOTE: It is  known generally as a meeting at which all the parties to a real estate transaction conclude their details and deliver the title to real estate and the disbursal of funds pursuant to the sales contract.

The miscellaneous expenses buyers and sellers normally incur at settlement in the transfer of ownership of real property over and above the cost of the property such as recording fees, attorney fees, title insurance premium, etc.

A separate accounting of funds to the buyer and seller as required by law at the completion of every real estate transaction.

Any outstanding claim, lien, encumbrance, document or condition usually revealed by a title search which impairs the title and the marketability of a property until it is removed by a quitclaim deed or quiet title court action.

A housing arrangement in which units are placed close together to allow for large recreational or common areas..

The ownership of the same property by two or more persons.

Any real or personal property having marketable value that a borrower pledges as security in order to obtain a loan. In mortgage transactions, specific land is the collateral..

An additional separate obligation attached to a contract to guarantee its performance such as by agreeing to transfer certain property or valuables to insure the performance of the contractual agreement..

The traditional design, usually using the characteristics of New England homes that is usually a two-story house with balanced openings along the main facade, with windows constructed of small panes, shutters and dormer windows on the third floor with attention to small detail.

A written document that appears to be good title but which in fact is not title usually because the grantor either did not hold title or the document given was a defective mode of conveyance..

The compensation or fee for services that a licensee receives for performing the agreed-upon terms under a brokerage contract which iIn the practice of real estate this is usually a percentage of the selling price of a property, a percentage of rentals, a flat fee, etc..

1. A previously-agreed upon sharing of funds by a listing broker with one or more cooperating brokers when a commission or funds have been received as a result of a sale. 2. A previously-agreed upon sharing of funds between a broker and a sales-associate when the brokerage office receives a commission or funds as a result of a sale made by an sales-associate..

A charge made by a lender at the time of a loan application to lock in or guaranty specific terms.

An official notification to a borrower which generally specifies the terms of the loan and a date for the closing by a lender of the intent to grant a loan.

1. Land considered to be public property.
2. A legal term denoting an incorporeal hereditament consisting of a right of one person in the land of another such as a right to fish

Multiple ownership of an unincorporated apartment building in which each owner is a tenant in common and has the right to occupy one of the apartments..

In eight western states, the property acquired by husband and/or wife during a marriage when not acquired with the intent of being the separate property of either spouse and where each spouse has equal rights similar to property owned by a partnership of management, alienation and testamentary disposition.

(CMA) A comparison of recently-sold homes that are substantially equivalent to another home in terms of selling price, location, style and amenities. Also know as a Competitive Market Analysis.(CMA) A comparison of recently-sold homes that are substantially equivalent to another home in terms of selling price, location, style and amenities. Also know as a Competitive Market Analysis..

A method of real estate comparison also called “market comparison” that compares a particular property with similar or comparable surrounding properties.

A requirement of a commercial bank for the borrower to keep a specified amount of funds on deposit in the institution as a condition of the loan or line of credit.

Money or equivalent of money received for services rendered

(CMA) See Comparative Market Analysis

The party who instigates or starts a legal action.

A professional opinion of value without invoking the departure provision of USPAP because all relevant appraisal approaches have been included and is different than a “limited appraisal.” A complete appraisal may be a Self-contained appraisal report, a Summary appraisal report or a Restricted appraisal report.

A bond guaranteeing the proposed construction of an improvement for which a lender advances money to the owner will be completed according to specifications and free and clear of all mechanics liens.

The interest paid on original principal and on the accrued and unpaid interest that has accumulated as the debt matures until the time it becomes due.

(CERCLA) An act which established the “Superfund” to clean up uncontrolled hazardous waste sites.

1. The act by which property of a private owner is taken for public use by a political subdivision without the owner's consent but with the owner's awareness and with the payment of just compensation. 2. A declaration that a structure is unfit for use

1. In contracts, a future and uncertain event that must happen to create an obligation or which extinguishes an existing obligation. 2. In conveyances of real property, those conditions in the conveyance that may cause an interest to be vested or defeated.

A qualification of a contract or transfer of property, providing that unless and until a given event occurs, the full effect of a contract or transfer will not take place..

A condition attached to an already-vested estate or to a contract whereby the estate is defeated or the contract extinguished through the failure or non-performance of the condition.

A commitment of a definite loan amount for some future unknown purchaser of satisfactory credit standing.

Often called a “fee simple defeasible estate” that is granted subject to a condition subsequent or after transfer of title. The estate is terminates upon the happening of the condition.

A written statement by a lender that funds will be provided if certain terms and conditions are met and therefore permits an owner or developer to begin construction.

A purchase contract that is presented to a seller that demands that one or more items be satisfied before the buyer is obligated to buy.

A term most frequently applied to a sale where-in the seller reserves the title to the goods, though the possession is delivered to the buyer, until the purchase price is paid in full..

See Land contract.

The written governmental permission that allows a use that is inconsistent with current zoning but is necessary for the common good. such as locating an medical facility in a predominantly residential area.

A short name for a condominium.

An estate in real property where there is an undivided interest in common in a portion of real property coupled with a separate interest in space called a unit, the boundaries of which are described on a recorded final map, parcel map or condominium plan. The areas within the boundaries may be filled with air, earth or water or any combination and need not be attached to land except by easements for access and support.

A process by which rental units are turned into individually owned units..

A legal document used to create and establishe a condominium that includes a description of the property and the uses to which it is restricted, a description of individual ownership units, common elements and procedures for amending the declaration and describes the property rights of the unit owners

A court approval of the sale of property by an executor, administrator, guardian or conservator of an estate..

Refers to the term “consanguine”, which means being from the same lineage as another person. In that respect, consanguinity is the quality of being descended from the same ancestor as another person.

Consanguinity is an important legal concept in that the laws of many jurisdictions consider consanguinity as a factor in deciding whether two individuals may be married or whether a given person receives property when a deceased person does not leave a will.

Consideration is a benefit or right for which the parties to a contract must bargain; the contract is founded on an exchange of one form of consideration for another. Consideration may be a promise to perform a certain act -- for example, a promise to fix a leaky roof -- or a promise not to do something, such as build a second story on a house that will block the neighbor's view. Whatever its particulars, consideration must be something of value to the people who are making the contract.

A new loan that pays off more than one existing loan and usually provides better repayment terms..

A loan reduction plan whereby the borrower pays a fixed amount each month, a part of which is applied to the payment of interest and the remainder to the repayment of the principal..

A loan that is made to finance the actual construction of improvements on land and the funds are usually dispersed in three payments as the construction progresses..

A breach of a covenant of warranty or quiet enjoyment such as the inability of a lessee to obtain possession because of a major defect in title or a condition making occupancy hazardous or unfit for its intended use..

1. A fact, imputed or knowable to a person by law, which should have been discovered because of the person's actual notice of circumstances or the inquiry that a prudent person would have been expected to make. 2. Notice of the condition of title to real property given by governmental official records and which does not require actual knowledge of the recorded information

A substance, element. or compound such as asbestos, benzene, radon, PCBs, perchloroethylene, and lead-based paint above acceptable levels and/or are in locations where they should not he found that may be harmful to humans or other forms of life if released into the environment.

Modern design differentiated from traditional functional design.

Ownership of an interest in a particular parcel of land by more than one person such as with tenancy in common or joint tenancy.

Adjacent; touching, adjoining or in close proximity.

An event that may or may not occur. Dependent upon conditions or events specified but not yet accomplished. A condition that must be met in order for a contract to be legally binding.

Property may be sold contingent upon the seller or buyer meeting specific predetermined conditions. For example, financing is the most frequent contingency. A buyer who cannot arrange an appropriate loan need not complete the transaction and should receive a refund of the earnest money.

Definition goes hereA requirement frequently included in a shopping center lease requiring a retail store to remain open.

A written or oral agreement to do or not to do certain obligations which has four essential elements 1. Parties who have the capacity or legal ability to contract, 2. Consent of the parties, 3. Consideration and 4. A lawful object. A contract for the sale of real property must also be in writing and signed by the party or parties who have agreed to perform to be enforceable.

See Land contract.

The amount of rent called for in a lease agreement.

One who has the responsibility for and supervises the improvement of land.

An intent to be bound by an agreement therefore preventing jokes from becoming valid contracts.

A payment by each or any of several entities having a common interest or liability for his or her share in the loss suffered or in the money necessarily paid by one of the parties in behalf of the others.

A deed issued by the state, usually when property is sold due to tax delinquency.

A home that is constructed totally at the site. It is the opposite of a factory-built, manufactured or mobile home.

A mortgage loan that is not insured, guaranteed or funded by the Veterans Administration (VA), the Federal Housing Administration (FHA) or Rural Economic Community Development (RECD) (formerly Farmers Home Administration).

An adjustable rate mortgage that allows the borrower the option to convert at a specified point in time to a fixed-rate schedule for a nominal fee and at a rate that is determined according to the loan documents.

To transfer title to property from one person to another..

A written instrument transferring the title to land or an interest therein from one person to another such as with a deed or a trust deed.

See Listing broker.

Any building but usually an apartment building where the property is owned in severalty by a corporation often called a “stock cooperative” in which ownership of a specific apartment unit is acquired by purchasing shares of the stock of the corporation and occupancy is permitted by entering into a proprietary lease with the corporation. A cooperative places substantial restraints on the alienation (sale) of the units as well as their use.

The rights to possess and alter visible or tangible real or personal property.

A written instrument which corrects an error in a recorded deed.

A second party who signs a promissory note together with the primary borrower.

That which must be given up to obtain property.

A value estimate of a property by one of three appraisal methods which is arrived at by estimating the replacement cost of the improvements and then deducting the estimated accrued depreciation from it and then adding back the market value of the land.

The cost of a parcel of real estate can expressed in terms of front foot units where the total sales price of the parcel is divided by its number of front feet to state the cost per front foot.

An agreement on a construction project in which the contractor is paid a named fixed fee over and above the actual costs of construction as profit.

An agreement on a construction project in which the contractor is paid a named percentage over and above the actual costs of construction as profit. These contracts are considered poor business practice because the contractor has little incentive to hold down costs. See Cost-plus-fixed-fee contract.

Ownership of an interest in a particular parcel of land by more than one person such as with tenancy in common or joint tenancy.

A response to an offer to enter into a contract which acts as a rejection of the original offer and introduces a new offer or one with different terms and conditions.

A contractual promise that may be positive by agreeing to do or negative by agreeing not to do a particular act such as a promising to build a house of a particular size or to not use property in a certain way.

An undertaking in the form of a covenant on the part of the vendor of real estate to perform such further acts for the purpose of perfecting the purchaser's title as the latter may reasonably require.

A covenant implied by law by which a landlord guarantees that a tenant may take possession and use of leased premises and that the landlord will not interfere in the tenant's enjoyment of the property.

(CC&Rs) The basic rules establishing the rights and obligations of owners (and their successors in interest) of real property within a subdivision or other tract of land in relation to other owners within the same subdivision or tract and in relation to an association of owners organized for the purpose of operating and maintaining property commonly owned by the individual owners

Any financing arrangement other than a traditional mortgage from a third-parry lending institution. Creative financing devices include: loans from the seller; Balloon payment loans; Wraparound mortgage Mortgage assumption; Sale-leaseback; Land contract; Alternative mortgage instrument.

1. In lending, the power of an individual to secure money or obtain goods on time, in consequence of the favorable opinion held by the community or by the particular lender, as to his or her solvency and reliability; a debt considered from the creditor's standpoint or that which is to be incoming or due to one. 2. In accounting, a bookkeeping entry on the right side of a bookkeeping account that records the reduction or the elimination of an asset or an expense or the creation of or addition to a liability or item of equity or revenue.

An evaluation of a person's history or capacity of debt repayment which is generally available for individuals from a retail credit associations and to which individuals have access and for businesses by companies such as Dunn & Bradstreet and for publicly held bonds by Moody's, Standard & Poors.

In mortgages, the process of evaluating and rating a loan applicant according to the quality of his or her credit worthiness based on past use of credit, current indebtedness and frequency of application for credit and where a person's score may determine whether he or she is eligible for conventional loan standard terms or must obtain a sub-prime loan with less favorable terms

An item of physical deterioration or functional obsolescence which customarily gets corrected by repair or replacement by a prudent property owner and is thus considered to be “cured.”

An asset such as cash, accounts receivable and merchandise inventories that are liquid or can easily be sold.

In an adjustable rate mortgage, it is the current value of an easily-recognized index that is calculated and published nationally or regionally. The current index value changes periodically and is used in calculating the new note rate as of each rate adjustment date.

A short-term debt that is generally a debt due within one year.

A measurement of investment returns based on the percentage relationship of annual cash income to the investment cost whose formula is current income divided by investment cost equals current yield.

A third party for whom an agent provides some level of informational service.