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Glossary of real estate terms and real estate
definitions, Know and understand the words, definitions, terms, phrases,
and meaning of legal jargon used in real estate buying, selling transactions,
before buying or selling real estate.
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ABANDONMENT - The voluntary
surrender or relinquishment of possession of real property with the
intention of terminating one's possession or interest, but without vesting
this interest in any other person.
ABATEMENT - A reduction or decrease in amount, degree, intensity
or worth.
ABSORPTION RATE - An estimate of the rate at which a particular
classification of space - such as new office space, new housing, new
condominium units and the like - will be sold or occupied each year.
ABSTRACT OF TITLE - A concise, summarized history of the title
to a specific parcel of real property, together with a statement of
all liens and encumbrances affecting the property. The abstract of title
does not guarantee or assure the validity of the title of the property.
It merely discloses those items about the property which are of public
record, and thus does not reveal such things as encroachments, forgeries,
and the like.
ACCELERATED DEPRECIATION - A method of calculating the depreciation
of certain property (that property which is used in a trade or business,
or which is held for the production of income) at a faster rate than
would be achieved from using the straight line method of depreciation.
ACCELERATION CLAUSE - A clause in a promissory note, agreement
of sale, or mortgage which gives the lender the right to call all sums
due and payable in advance of the fixed payment date upon the occurrence
of a specified event, such as a sale, default, assignment or further
encumbrance of the property.
ACCEPTANCE - The expression of the intention of the person receiving
an offer (offeree, usually the seller) to be bound by the terms of the
offer.
ACCESS - A general or specific right of ingress and egress to
a particular property.
ACCRETION - The gradual and imperceptible addition to land by
alluvial deposits of soil through natural causes, such as shoreline
movement caused by streams or rivers.
ACCRUED - That which has accumulated over a period of time such
as accrued depreciation, accrued interest or accrued expenses.
ACKNOWLEDGEMENT - A formal declaration made before a duly authorized
officer, usually a Notary Public, by a person who has signed a document.
ACRE - A measure of land equaling 43,560 square feet; 4,840 square
yards; 160 square rods.
ADHESION CONTRACT - A contract which is very one-sided and favors
the party who drafted the document.
AD VALOREM - Latin for "according to valuation," usually
referring to a type of tax or assessment.
ADVERSE POSSESSION - The acquiring of title to real property
owned by someone else, by means of open, notorious and continuous possession
for the statutory period of time.
AFFIDAVIT - A sworn statement reduced to writing and made under
oath before a Notary Public or other official authorized by law to administer
an oath.
AGENCY - A relationship created when one person, the "principal,"
delegates to another, the "agent," the right to act on the
principal's behalf in business transactions and to exercise some degree
of discretion while so acting. An agency gives rise to a fiduciary relationship
and imposes on the agent, as the fiduciary of the principal, certain
duties, obligations and high standards of good faith and loyalty.
AGENT - One who is authorized to represent and to act on behalf
of another person (called the principal). A real estate broker is the
agent of his client, be it the seller or buyer, to whom he owes a fiduciary
obligation. A salesman is the agent of his broker and does not have
a direct personal contractual relationship with either the seller or
buyer.
AGREEMENT OF SALE - An agreement between the seller (vendor)
and buyer (vendee) for the purchase of real property.
AIR RIGHTS - The rights to the use of the open space or vertical
plane above a property. Ownership of the land includes the right to
all air above the property.
ALIENATION CLAUSE - A clause in a promissory note or mortgage
which provides that the balance of the secured debt becomes immediately
due and payable at the option of the mortgagee upon the alienation of
the property by the mortgagor.
AMENITIES - Features, both tangible and intangible, which enhance
and add to the desirability of real estate.
AMORTIZATION - The gradual repayment of a debt by means of systematic
payments of principal and interest over a set period, where at the end
of the period there is a zero balance.
ANNUAL PERCENTAGE RATE - The relationship of the total Finance
Charge to the total amount to be finance as required under the Federal
Truth-in-Lending Law.
APPRAISAL - The process of estimating, fixing, or setting the
market value of real property. An appraisal may take the form of a lengthy
report, a completed form, a simple letter, or even an oral report.
APPRECIATION - An increase in the worth or value of property
due to economic or related causes, which may prove to be either temporary
or permanent.
APPURTENANT - Belonging to; adjunct; appended or annexed.
ARBITRATION - The non-judicial submission of a controversy to
selected third parties for their determination in the manner provided
by agreement or by law.
ASSESSED VALUATION - The value of real property as established
by the state government for purposes of computing real property taxes.
ASSESSMENT - A specific levy for a definite purpose, such as
adding curbs or sewers in a neighborhood. Individual condominium owners
are subject to special assessments benefiting the project as a whole
and not funded through regular maintenance charges.
ASSIGNMENT - The transfer of the right, title and interest in
the property of one person, the assignor, to another, the assignee.
In real estate, there are assignments of mortgages, contracts, agreements
of sale, leases, and options, among others.
ASSUMPTION OF MORTGAGE - The act of acquiring title to property
which has an existing mortgage on it and agreeing to be personally liable
for the terms and conditions of the mortgage, including payments.
ATTACHMENT - The legal process of seizing the real or personal
property of a defendant in a lawsuit, by levy or judicial order, and
holding it in the custody of the courts as security for satisfaction
of the judgment which the plaintiff may recover in any action upon a
contract, express or implied.
ATTORNEY-IN-FACT - One who is authorized by another to act in
his place under a power of attorney.
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BALLOON PAYMENT - The
final payment of a note or obligation, which is substantially larger
than the previous installment payments, and which repays the debt in
full; the remaining balance which is due at the maturity of a note or
obligation.
BARGAIN AND SALE DEED - A deed which recites a consideration
and conveys all of the grantor's interest in the property to the grantee.
BASE LINE AND MERIDIAN - An imaginary set of lines used by surveyors
to locate and describe land under the Rectangular Survey Method of property
description used in most mainland states.
BASIS - The financial
interest which IRS attributes to the owner of an asset for purposes
of determining annual depreciation and gain or loss on sale of the asset.
BENCH MARK - A mark affixed to a permanent reference or monument,
such as an iron post or a brass marker (usually embedded in a cement
sidewalk), used to establish elevations and altitudes over a surveyed
area.
BENEFICIARY - A person who receives the benefits from the gifts
or acts of another, such as one who is designated to receive the proceeds
from a will, insurance policy or trust.
BILATERAL CONTRACT - A contract in which each party promises
to perform an act in exchange for the other party's promise to perform.
BILL OF SALE - A written agreement by which one person sells,
assigns or transfers his right to, or interest in, personal property
to another.
BLANKET MORTGAGE - A mortgage which is secured by several structures
or a number of lots. A blanket mortgage is often used to finance proposed
subdivisions or development projects, especially cooperatives.
BLUE SKY LAWS - State securities laws designed to protect the
public from fraudulent practices in the promotion and sale of securities,
e.g., through limited partnerships, syndications, bonds.
BOOT - Money or other property given to make up any difference
in value or equity between two exchanged properties.
BOUNDARIES - The perimeters or limits of a parcel of land as
fixed by legal description which is usually a metes and bounds description.
BREACH OF CONTRACT - Violation of any of the terms or conditions
of a contract without legal excuse; default, non-performance, such as
failure to make payment when due.
BROKER - One who acts as an intermediary between parties to a
transaction. A real estate broker is a properly licensed person who,
for a valuable consideration, serves as an agent to others to facilitate
the sale or lease of real property.
BROKERAGE - That aspect of the real estate business which is
concerned with bringing together the parties and completing a real estate
transaction. Brokerage involves exchanges, rentals, trade-ins and management
of property, as well as sales.
BUDGET MORTGAGE - A mortgage with payments set up to cover more
than interest and principal reductions.
BUFFER ZONE - A strip of land separating one parcel from another.
BUILDING PERMIT - A written permission granted by the County
Building Department and required prior to beginning the construction
of a new building or other improvement (including fences, fence walls,
retaining walls and swimming pools).
BUILDING RESIDUAL TECHNIQUE - A method of determining the value
of an improvement normally used in appraising income property.
BULK TRANSFERS - Any transfer in bulk, and not in the ordinary
course of the seller's business, of a major part of the materials, inventory
or supplies of an enterprise.
BUNDLE OF RIGHTS - An ownership concept describing all those
legal rights which attach to the ownership of real property, including
the right to sell, lease, encumber, use, enjoy, exclude, will, etc.
BUSINESS DAYS - Days of the week excluding Saturdays, Sundays,
and holidays; normal working days.
BUSINESS OPPORTUNITIES - Any type of business which is for sale.
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