ABANDONMENT - The voluntary relinquishment of rights of ownership or another interest (such as an easement) by failure to use the property, coupled with an intent to abandon (give up your interest). Time limits vary by state.

ABATEMENT - A reduction or decrease. Usually applies to a decrease of assessed valuation of ad valorem taxes after the assessment and levy.

ABSORPTION - The filling of space, such as the rental of units or sale of a tract of land. The time or rate must be estimated and considered as part of the owner's (often a builders) cost.

ABSTRACT - A Summary; an abridgment.

ABSTRACT OF JUDGMENT - A summary of the essential provisions of a court judgment, which when recorded in the county recorder's office, creates a lien upon the property of the defendant in that county, bout presently owned or after acquired.

ABSTRACT OF TITLE - A compilation of the recorded documents relating to a parcel of land, from which an attorney may give an opinion as to the condition of title. Still used in some states, but being replaced by title insurance.

ABUTMENTS - The vertical members (walls or heavy columns) which bear the load or pressure of the cross member, such as a arch, pier, or similar structure.

ABUTTING OWNER - One whose land is contiguous to (abuts) a public right of way.

ACCELERATION CLAUSE - Condition in a mortgage that may require the balance of the loan to become due immediately, if regular mortgage payments are not made or for breach of other contract conditions.

ACCELERATED DEPRECIATION - A general term including any method of depreciation greater than straight line depreciation.

ACCEPTANCE - Voluntarily agreeing to the price and terms of an offer. Offer and acceptance create a contract.

ACCESSION - The right of an owner to an increase in his property by natural means.

ACCESS RIGHT - A right to ingress and egress to and from one's property. May be expressed or implied.

ACCRETION - The gradual addition to the shore line or bank of a waterway. The land generally becomes the property of the owner of the shore or bank, except where statutes specify otherwise.

ACKNOWLEDGMENT - A written declaration by a person executing an instrument, given before an officer authorized to give an oath (usually a notary public), stating that the execution is of his own volition.

ACQUISITION COSTS - Costs of acquiring property other than purchase price: escrow fees, title insurance, lenders fees, etc.

ACRE - A measurement equal to 160 square rods or 43,560 square feet.

ACT OF GOD - Damage caused by nature: floods, winds, etc.

ADDENDUM - Something added. (A list added to a document, letter or contract.)

ADJOINING - touching or contiguous to.

ADJUDICATION - A judgment or decision by a court.

ADJUSTED GROSS INCOME - Gross income of a building if full rented, less an allowance for vacancies. A person's income after taxes.

AD VALOREM - "According to value". In real estate it refers to the property tax rate per thousand.

ADVERSE POSSESSION - Most states have laws which permit someone to claim ownership of property which is occupied by him for a number of years. This is common where a fence is erected over a boundary line (called and "encroachment") without the objection of the rightful owner. After a number of years, the person who erected the fence may be able to commence a court proceeding to declare that the property belongs to him.

AGREEMENT OF SALE - Meaning varies by state. It is synonymous with either a purchase agreement or a land contract.

AGENCY - Any relationship win which one party (agent) acts for or represents another (principle) under the authority of the latter. Agency involving real property should be in writing, such as listing, trusts, power of attorney, etc.

AGENT- Acts of behalf of another, representing that person's interests and serving as an intermediary.

ALIENATION - Transfer of property from one owner to another.

ALIENATION CLAUSE- A clause within a loan instrument calling for a debt in its entirety upon the transfer of ownership of the secured property. Also called a "due on sale" clause.

ALTA - American Land Title Association.

AMENDMENT - A change, either to correct an error or to alter a part of an agreement without changing the principal idea or essence.

AMENITIES - Those settings or improvements to property which increase the desirability or enjoyment other than necessities. For example a swimming pool.

AMORTIZATION - Payment of a debt over equal installments of principal and interest, rather than interest only payments.

ANNUAL PERCENTAGE RATE(APR) - The total cost or finance charge for a loan per year, expressed as a percentage of the loan amount. It is the sum of the interest and any other fees, such as discount points, compared to the amount of the loan. The lender is required by the Truth-In-Lending Act to disclose the APR using a procedure prescribed by the federal government.

ANTENUPTIAL AGREEMENT - An agreement between a man and a woman in contemplation of marriage, setting forth the property rights of each during the marriage, and in the even of death or divorce.

APPRAISAL - An opinion of value at a given time, based upon a factual analysis of the location, improvements, etc., done by a disinterested person of suitable qualifications. The three methods are: Cost, Market Value, or Income.

ARM - An adjustable rate mortgage. A loan whose interest rate may adjust over time depending on certain factors or a predetermined formula.

ARREARS - A payment made after it is due is in arrears, versus a payment made before it is due. Interest is said to be "paid in arrears" where it is made current, by agreement, to and including the payment date.

ARTESIAN WELL - A well well bored into a subterranean body of water, which, being under pressure, rises naturally to the surface without artificial pumping.

"AS IS" CONDITION - Premises accepted by a buyer or tenant in the condition existing at the time of the sale or lease, including all physical defects.

ASKING PRICE - The price a seller is offering property for sale. The eventual selling price may be lower after negotiation with a buyer. In a tight market competition among buyers may cause the final price to exceed asking price.

ASSEMBLAGE - The acquisition of contiguous properties into one ownership for a specific use.

ASSESSED VALUE - Value placed upon property for property tax purposes by the tax assessor.

ATTACHMENT - An act of seizing persons or property by judicial order.

ATTESTATION CLAUSE - The clause in a document (deed or mortgage) in which the witnesses certify that the documents has been properly executed.

BACK TITLE LETTER - In states where attorneys examine title for title insurance purposes, this letter is given by a title insurance company to an attorney, giving to said attorney the condition of title as of a certain date.

BACKUP OFFER - A secondary offer to buy property, used in case the first (primary) offer fails.

BALLOON PAYMENT - The final installment paid at the end of the term of a note. For example; a buyer may take out an interest only loan for five years with the principle due at the end of this time period.

BASIS POINT - A finance term meaning a yield of 1/100th of 1% annually.

BATHROOM - A room containing a toilet, sink and either a bathtub or a bathtub and shower combination. A room with the above but a shower in place of a tub is called a 3/4 bath. If the room only has a sink and toilet it is called a 1/2 bath.

BATT - A strip of insulation fitting closely between the studs of a wall.

BATTEN - A narrow strip (usually wood) used to cover seams between siding boards.

BENCH MARK - A survey mark showing the height of that point in relation to seal level.

BIANNUAL - Twice per year.

BIENNIAL - Every two years.

BILATERAL (RECIPROCAL) CONTRACT - Contract under which the parties expressly enter into mutual promises, such as sales contracts.

BI-LEVEL - Two levels. Commonly refers to construction of a house. Also called "split" level.

BILL OF SALE - An instrument by which one transfers personal property.

BINDER - 1) A report issued by a title insurance company setting forth the condition of title as of a certain date, and setting forth the conditions which if satisfied will cause a policy of title insurance to be issued. 2) A policy of title insurance calling for a reduced rate (used by investors) for a future policy if the property is sold within a specified period.

BLANKET MORTGAGE (Trust Deed) - A single mortgage or trust deed which covers more than one piece of real estate.

BLOCK - 1) In a city, a square or rectangular area enclosed by streets. 2) In some states, a part of a subdivision legal description, such as Lot 1, Block 2, Tract 7.

BLOCK BUSTING - An illegal method of obtaining houses at below fair market value by telling residents that people of a different race or religion, moving into the area, will cause the property values to fall.

BOARD - A lumber description meaning 2 inches thick and 8 or more inches wide.

BOARD AND BATTEN - A siding construction of wide boards (usually one foot wide) placed 1/2 inch apart; the seams are covered by 3 inch wide battens.

BOILER PLATE - The form of language used for contract, CC&R's (restrictions), etc.

BOND - 1) An insurance agreement insuring against loss by acts or default of a third party. In construction a performance bond insures that the builder will finish the projects.

BREACH OF CONTRACT - Failure to performance a contract, in whole or part, without legal excuse.

BREEZEWAY - 1) In construction of a house with no garage, a canopy which extends from the house over the driveway as a protection from the weather for an automobile and for those people going between the house and the automobile. 2) A covering over a porch or patio, connecting two sections of a house or garage. Open on two sides, allowing air circulation.

BRIDGE (LOAN) FINANCING - A form of interim loan, generally made between a short term loan and a permanent or long term loan, when a borrower needs to have more time before taking on long term financing.

BRIDGING - Floor joist bracing, usually of wood or metal.

BROKERAGE - The act of bringing together principals (buyer-seller, landlord-tenant, etc.) for a fee or commission, rather than acting as a principal.

BROKERAGE COMMISSION - see commission.

BROKER, REAL ESTATE - One who is licensed by the state to carry on the business of dealing in real estate. A broker may receive a commission for his or her part in bringing together a buyer and seller, landlord and tenant, or parties to an exchange.

BROOM CLEAN (BROOM SWEPT) - A term used to describe the condition of a building, delivered to a buyer or tenant. As the term indicates, the floors are swept and free of debris.

BUFFER ZONE (BUFFER STRIP) - A parcel of land separating two other parcels or areas, such as a strip of land between and industrial and residential area.

BUILDER - One whose occupation is the construction of structures (homes or buildings).

BUILDING CONTRACT - A contract setting forth the terms under which construction is to be undertaken. Price may be based on a flat sum or cost plus a percentage.

BUILDING LINE - a line beyond which there can be no construction.

BUILDING PERMIT - A permit given by a local government to construct a building or make improvements.

BUILDING RESTRICTIONS - Prohibition by a government body (zoning restrictions) or a private party (a former owner) against construction of certain structures on a property.

BUILT-IN'S - Commonly described as stoves, microwaves, dishwashers, ovens, and other appliances or furniture framed into the building construction and not movable.

BULKHEAD - 1) a retaining wall to hold back water and thereby extend the shoreline. 2) A metal double doorway that leads to the basement.

BUS - A copper bar through which electrical current flows.

BUTTE - A steep hill, usually standing alone.

BUTTRESS - A support for a wall. A prop.

BUYERS MARKET - A condition favoring the buyers. More homes for sale then there are interested buyers.

BUY-SELL OFFER - An offer by one owner to buy out the interests of another owner, partner or shareholder.

BX CABLE - The main conduits coming into a house. Electrical wiring that runs through metal conduits.

BY-LAWS - Rules and regulations, adopted by an association or corporation that govern its activities. I.E. a condo association or neighborhood association.

CALIFORNIA RANCH ARCHITECTURE - A sprawling, one story, ranch-style building, lending itself to interior flexibility in floor plan design.

CANCELLATION CLAUSE - A clause in a contract, setting forth the terms and conditions under which each party may cancel or terminate the agreements.

CANDLE POWER - The intensity of a light, expressed in candles.

CAPITALIZATION - A present value of income property by taking the annual net income (either known or estimated) and discounting by using a rate of return commonly acceptable to buyers of similar properties. Example: Net Income = $10,000 per year. Capitalizing at a rate of 10%, the property would be worth $100,000. (10,000 / .1 = 100,000)

CAP RATE - The percentage (acceptable to an average buyer) used to determine the value of income property through capitalization.

CARPORT - A roof supported by pillars or cantilevered which shelters a car.

CASEMENT WINDOW - A window hinged at its sides, allowing it to swing open vertically.

CASH SALE - A A sale for full payment in cash.

CASING - The exterior surface covering an item: window, door, roof, etc.

CAVEAT EMPTOR - "Let the Buyer Beware". Legal maxim stating that the buyer takes the risk regarding the quality or condition of the item being purchased. States have enacted laws placing more responsibility for disclosure on the seller and the real estate broker.

CC&R's - Covenants, conditions, and restrictions.

CERTIFICATE OF OCCUPANCY - A certificate issued by a local building department to a builder or renovator, stating that the building is in proper condition to be occupied.

CERTIFICATE OF SALE - Certificate issued by a buyer at a judicial sale (for example a tax sale), which entitles the buyers to a deed upon confirmation of the sale by the court under under certain conditions.

CERTIFICATE OF TITLE - In areas where attorneys examine abstracts or chains of title, a written opinion, executed by the examining attorney, stating that title is vested as stated in the abstract.

CERTIFIED COPY - A true copy, attested to be true by the officer holding the original.

CHAIN OF TITLE - The chronological order of conveyance of a parcel of land, from the original owner (usually the government) to the present owner.

CHAINS AND LINKS - Real estate measurements used in surveying. A chain is 66 feet long or 100 links, each link being 7.92 inches.

CHATTEL - Personal property.

CHATTEL MORTGAGE - A lien on personal property.

CHATTEL REAL - All estates in real property less than fee estates, such as a lease.

CINDER BLOCK - A building block composed of cinders (ashes) and cement, which does not have the weight or strength of a cement block.

CIRCLE HEAD WINDOW - A semicircular window, usually above a door or another window, which has no moving parts and is used as a decorations as well as a method of adding light.

CIRCUIT BREAKER - An electrical device which has taken the place of fuses in most homes. the circuit breaks when there is an electrical overload. Rather than replace a fuse you reset a circuit breaker.

CISTERN - A tank used to store rain water for use in areas where there is no water delivered to the property through plumbing.

CLAPBOARD - Narrow boards used as siding for frame houses, and having one edge thicker than the other. The boards run horizontal with the thicker edge overlapping the thinner edge.

CLEAR TITLE - Usually called "Free and Clear" or without liens or mortgages.

CLIENT - In real estate it refers to the principal of a real estate agent, insurance agent, stock broker, etc. Traditional meaning is one who represented by an attorney.

CLOSING - The final procedure in a real estate transaction in which documents are executed and recorded, and the sale or loan is completed.

CLOSING COSTS - Expenses incidental to the sale of real estate, such as loan fees, title fees, appraisal fees, etc.

CLOSING STATEMENT - The statement which lists the financial settlement between buyer and seller and which costs each must pay at the time of closing.

CLOUD ON TITLE - An invalid encumbrance on real property, which if valid, would affect the rights of the owner. For example X buys lot A but by mistake it is recorded as the purchase of lot B. A cloud now exists on lot B. The cloud may be removed by quitclaim deed or court order.

CLUSTER HOUSING - Houses built close together with small yards and shared common lands. To preserve open spaces governing bodies often allow more houses to on a parcel of land in a cluster development than it would if each house was on a standard size lot.

CODE - A comprehensive set of laws drawn up to cover completely a given subject. Covers diverse subjects, such as the criminal code, and the building code.

COLLATERAL - Often mistakenly used to mean collateral security (see below)..

COLLATERAL ASSIGNMENT - An assignment of property as collateral security, and not with the intent to transfer ownership from assignor to assignee.

COLLATERAL SECURITY - Most commonly used to mean some security in addition to the personal obligation of the borrower.

COLLUSION - An agreement of two or more people to do something unlawful. Generally, an agreement between people who represent different interests and "sell out" these interests for personal gain.

CO-MAKER - A security under a loan. The co-maker is equally responsible for repayment as the borrower (maker). Sometimes referred to as the "Co-Signer" on a loan.

COMMINGLING - To mix funds held in trust with other funds. A broker or builder must open a trust account to hold deposits that are directed to another party provided certain events take place. It is legal to place more than one client's funds into the trust account. However, it is illegal to add these funds to any other account therefore commingling the funds.

COMMISSION - An amount, usually a percentage, paid to an agent (real estate broker) as compensation for services. The amount is generally a percentage of the sales price or total rental.

COMMITMENT - A written promise to make or insure a loan for a specified amount and on specified terms.

CONDEMNATION - The taking of private property for public use without the consent of the owner, but only upon payment of just compensation.

CONDITION - In real property law, some limiting restriction to a grant or conveyance of property, stating that upon the happening or failure to happen of a stated event, the estate shall be changed in some manner.

CONDITIONAL COMMITMENT - A loan commitment that will become true if what the borrower (buyer) told the finance company can be verified. Sometimes referred to as a pre-approval.

CONDITIONAL SALES CONTRACT - A sale in which the title to property remains with the seller until the purchaser has fulfilled the terms of the contract, usually payment in full.

CONDOMINIUM - A structure of two or more units, the interior space of which is individually owned; the balance of the property (both land and buildings) is owned in common by the owners of the individual units. The size of each unit is measured from the interior surfaces of the exterior walls, floors, and ceiling. The balance of the property is called the common area. A new form of condominium agreement is for all or a portion of the land exclusive of the building, sidewalks, and driveways.

CONFORMITY, PRINCIPLE OF - An appraisal term stating that general uniformity of the structures in an area will produce the highest value.

CONSEQUENTIAL DAMAGES - Damages created by a change in other property. An owner's right to compensation varies with state stature.

CONSERVATION - Preservation, through zoning, of improved areas to maintain the quality of the area.

C0NSIDERATION - Anything which is, legal, of value, and induces one to enter into a contract.

CONSTRUCTION COST - The total cost of building, including overhead and profits as well as land, labor, and materials.

CONSTRUCTION LOAN - Short term financing of real estate construction.

CONTIGUOUS - Near or close to , whether actually touching or not. Generally refers to touching or bordering on.

CONTINGENCY - Commonly, the dependence upon a stated event which must occur before a contract is binding For example, the sale of a house could be contingent on the buyer obtaining financing.

CONTINGENT FEES - Fees to be paid only in the event of a future occurrence. A broker's commission is paid only if the property is sold or leased (unless otherwise agreed upon). A buyer broker may be paid a fee that counts toward a commission in the even a property is purchased, but it may be forfeited if a transaction does not take place within a time certain.

CONTRACT - An agreement between two or more persons or entities which creates or modifies a legal relationship. Generally based upon offer and acceptance.

CONTRACT OF SALE - In some areas of the country, synonymous with land contract. In other areas synonymous with purchase agreement.

CONTRACTUAL LIEN - A voluntary lien such as a mortgage or deed of trust.

CONVENTIONAL LOAN - A mortgage or deed of trust not obtained under a government insured program.

CONVERSION - 1) Legal term referring to the "legal" changing from real to personal property (or vice versa), although there is no actual change in the property. 2) A taking of something for one's own use which was originally in his possession only to hold for the owner. 3) The changing of an apartment to a condominium.

CONVEYANCE - Transfer of title to land. Includes most instruments by which an interest in real estate is created, mortgaged, or assigned.

COOPERATING BROKER - The broker who finds the buyer and so shares in the commission with the listing broker.

CORD - A measure, usually associated with cut wood. Pile of wood 4' high, 4' wide, and 8' long equal to 1.28 cubic feet.

CORNICE - The "crowning" member of a wall. The top molding near the ceiling.

CORPOREAL PROPERTY - That property which can be touched. An example would be a window glass. The view through the window is incorporeal.

COST APPROACH - An appraisal method, estimating the replacement cost of a structure, less depreciation, plus land value.

COST ESTIMATING - 1) In construction, the expenditure of building based on a detailed cost of materials (usually includes the cost of labor). 2) In appraisal the term is general, referring to replacement cost, but not limited to a specific method of arriving at the cost.

COST-PLUS CONTRACT - A building contract setting the builder's profit as a percentage of the actual cost of labor and materials.

COUNTER OFFER - An offer (as opposed to an acceptance) in response to a offer. For example A offers to buy B's house for X dollars. B responds with an counter that is higher than what A offered. B's response is a counter offer. In the absence of specific language to the contrary, a counteroffer is a rejection of an offer.

COURTESY OF BROKERS - Willingness of a seller to pay a commission to any broker supplying a suitable buyer, or the willingness of a listing broker to share the commission with any broker supplying a suitable buyer.

COVENANT - Refers to any written agreement. In real estate the covenant is most often expressed in a deed by the grantor or implied by law.

COVENANT OF QUIET ENJ0YMENT - Usually inserted in leases or conveyances whereby grantor promises that the tenant or grantee shall enjoy possession of the premises in peace and without disturbance caused by defective title.

CREDIT REPORT - A report on the past ability of a loan applicant to pay installment payments.

CRV (Certificate of Reasonable Value) - An appraisal of property for insurance purposes required by the Veteran's Administration.

CUL DE SAC - A street or alley open at one end only. In real estate the term usually applies to a dead-end street, in a subdivision, with a large circular area where U turns are permitted.

CURTESY - A common law interest of a husband in a deceased wife's property. Abolished in most states.

CUSTOM BUILDER - One who builds for a specific owner, designing the building or home to suit said owner's need, rather than building a home speculating that a buyer can be found.

CUSTOMER - A buyer of goods or services.

DAMAGES - 1) Money recoverable by one suffering a loss or injury. 2) The loss of value to property adjourning a property taken in condemnation proceedings, rather than the value of the property taken.

DEBIT - Term used to designate a payment or amount owning, as opposed to a credit which is an amount received or owed.

DEBTOR - One who owes a debt.

DEBTOR'S POSITION - Refers to the value over and above the amount owned. Also known as equity.

DECK - Any flat surface on a roof or porch that is not enclosed.

DECLARATION OF RESTRICTION - A set of restrictions (rules) filed by a subdivide to cover an entire tract or subdivision.

DEED - Actually, any one of many conveyance or financing instruments, but generally a conveyance instrument, given to pass fee title to property upon sale.

DEED OF TRUST - An instrument used in many states in place of a mortgage. Property is transferred to a trustee by the borrower (trustor), in favor of the lender (beneficiary), and reconveyed upon payment in full.

DEFEASIBLE TITLE - Title which is not absolute but possible may be annulled or voided at a later time. For example, Title conveyed to A with the condition that A marries before age 21, or title will go to B.

DEFECTIVE TITLE - 1) Title to a negotiable instrument obtained by fraud. 2) Title to real property which lacks some of the elements necessary to transfer good title.

DEMAND NOTE - A note having no date for repayment, but due on demand of the lender.

DEPARTMENT OF REAL ESTATE - That department of the state government responsible for the licensing and regulation of persons engaged in the real estate business. The person heading the department is usually called The Real Estate Commissioner. Other names for the department are The Division of Real Estate and The Real Estate Commission.

DEPOSIT - Money given by the buyer with an offer to purchase. Show good faith. Commonly referred to as Ernest Money.

DEPRECIABLE LIFE - A tax term meaning the number of years used to determine depreciation of an asset. The useful life is defined by the IRS.

DEVELOPER - 1) a Builder, 2) One who prepares the raw land for construction and then sells the lots to one or more builders.

DEVELOPMENT - A planned construction project - includes land and buildings.

DEVELOPMENT LOAN - A loan for the purchase of land or off-site improvements other than building costs. The land involved is used to secure the loan.

DEVISE - Real estate left by will.

DEVISEE - One to whom real estate is given by will.

DEVISOR - A testator who leaves real estate.

DISINTERESTED APPRAISAL - An estimate of value of real estate by one having no personal interest in the property.

DISTRESS SALE - A sale of property when the seller is under extreme pressure to sell. Generally the property is sold for less than market value.

DIVIDED INTEREST - Different estates in the same property, such as the interest of the owner, lessee, mortgage holder, etc.

DOCUMENTARY TAX STAMPS - Stamps affixed to a deed showing the amount of transfer tax paid. In most states a stamp in now used instead of actual stamps.

DOCUMENTARY TRANSFER TAX - A state tax on the sale of real property (real estate) based on the sale price or equity transferred. Most states quote the rate as X per thousand.

DOWN PAYMENT - Cash portion paid by a buyer from his own funds, as opposed to that portion of the purchase price which is financed.

DRIVEWAY - 1) Commonly, a private road, paved or unpaved leading from a public street or road to a private property. 2) The entrance to private land for any purpose.

DUAL AGENCY - The representation of opposing principals (buyer and seller) at the same time. Some states have declared that the real estate agent aids the buyer but is the agent of the seller. In real estate it means that both the buyer and seller are represented by the same real estate brokerage company. A problem arises when both buyer and seller pay the broker. Full disclosure must be made. An escrow agent is the agent of the buyer and the seller and is usually paid by both. This is why an escrow agent must be neutral.

DUE-ON-SALE-CLAUSE - same as Alienation Clause.

ERNEST MONEY - See deposit.

EASEMENT - A right created by grand, reservation, agreement, prescription, or necessary implication , which one has in the land of another. It is either for the benefit of land (appurtenant), such as right to cross A to get to B, or "in gross", such as a public utility easement.

EASEMENT APPURTENANT - An easement for the benefit of another parcel of land, such as the right to cross parcel A to reach B. The easement will pass with the transfer of property to a new owner.

EASEMENT IN GROSS - An easement for the benefit of a person or company, rather than for the benefit of another parcel of land. Commonly these easements are for the public utilities.

EASEMENT OF NECESSITY - An easement granted by a court when it is determined that said easement is absolutely necessary for the use and enjoyment of the land. Commonly given to landlocked parcels.

EFFECTIVE AGE - Age of a structure as estimated by its condition rather than its age. May take into account rehabilitation and maintenance.

EGRESS - A term concerning a right to come and go across the land (public or private) of another. Usually part of the term ingress and egress.

ELEVATION - 1) Height above sea level. 2) The height measured from any point, such as the elevation from a floor. Vertical elevation.

EMINENT DOMAIN - A government right to acquire private property for public use by condemnation, and the payment of just compensation.

EMPLOYMENT LETTER - A letter from an employer stating the time a person has been employed and the income from said employer.

ENCROACHMENT - Generally, construction onto the property of another, as of a fence, wall, building, etc.

ENCUMBRANCE, ENCUMBRANCE - A claim, lien, charge or liability attached to and binding on real property. A right to or interest in land which may exist in one other than the owner, but which will not prevent the transfer of free title.

ENVIRONMENT - Surroundings. An appraisal term meaning the characteristics of the area around a property which may have an affect of the value of the property. For example a property bordering a golf course as opposed to a highway.

EQUITABLE LIEN - A lien in a court of equity, based on evidence of an intent between debtor and creditor to create a lien on specific property of the debtor, but a failure to legally create said lien.

EQUITABLE MORTGAGE - 1) A lien against real property (mortgages) which is enforceable in a court of equity, but does not legally constitute a mortgage. 2) A deed given as security for a debt will be held to be a mortgage, rather than a transfer of title.

EQUITY - The market value of real property , less the amount of existing liens.

EQUITY PURCHASER - One who purchases the equity of another in real property, either assuming or taking subject to existing mortgages or deeds of trust.

ESCHEAT - A reversion of property to the state in the absence of an individual owner. Usually occurs when a property owner dies intestate, and without heirs.

ESCROW - Delivery of a deed by a grantor to a third party for delivery to the grantee upon the happening of a contingent event. In some states, all instruments necessary to the sale (including funds) are delivered to a third (neutral ) party, with instruction as to their use.

ESTATE - The interest or nature of the interest which one has in property, such as a life estate, the estate of a deceased, real estate, etc.

ESTOPPEL - The prevention of one from asserting a legal right because of prior actions inconsistent with the assertion.

ETHICS - With regard to professions, a code of professional standards, containing aspects of fairness and duty to the profession and the general public.

EVICTION - A court action to remove one from possession of real property. Most commonly the removal of a tenant or tenants.

EVIDENCE OF TITLE - A document establishing ownership to property. Normally a deed.

EXCLUSIVE AGENCY AGREEMENT - See Agency agreement.

EXCLUSIVE LISTING - A written contract between a property owner and a real estate broker, whereby the owner promises to pay a fee or commission to the broker if certain real property of the owner is sold during a defined time period, regardless of whether the broker is or is not the cause of the sale. The broker promises to put forth his or her best efforts to sell the property, and may make specific promises as to advertising or other promotion in certain instances.

EXCLUSIVE RIGHT TO SELL - See exclusive listing.

EXTENSION - A continuation under the same conditions, as opposed to as renewal, which implies new terms or conditions. An example would be to extend a lease without changing the rent or terms.

FACE VALUE - The value of notes, mortgages, etc., as stated on the face of the instrument, without considering any discount.

FAIR CREDIT REPORTING ACT - Federal law protecting consumers by establishing procedures to correct errors on credit reports. Gives consumers specific rights in dealing with credit reporting agencies.

FAIR MARKET VALUE - Price that probably would be negotiated between a willing seller and a willing buyer in a reasonable time. Typically arrived at by comparable sales in the area.

FANNIE MAE (FNMA) - The Federal National Mortgage Association. It purchases, sells and guarantees conventional, VA or FHA mortgages.

FEASIBILITY SURVEY - A study of an area before construction of a project to determine the probable financial success of the project.

FEDERAL FAIR HOUSING LAW - Title VIII of the Civil Rights Act which forbids discrimination in the sale or rental of residential property because of race, color, sex, religion or national origin.

FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC) - Known as Freddie Mac. Purchases conventional mortgages loans in the secondary mortgage market.

FEDERAL REVENUE STAMPS - Also called IRS stamps. A transfer tax on the sale of real estate that has ended at the Federal level and has been taken up by most states. Most commonly known as a transfer tax.

FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION (FSLIC) - A federally charted institution for savings and home mortgages, under the regulation of the Federal Home Loan Bank.

FEDERAL TRUTH IN LENDING ACT - Requires disclosures about terms and costs intended to give consumers cost vs. credit comparisons.

FEE SIMPLE - An estate under which the owner is entitled to unrestricted powers to dispose of the property, and which can be left by will or inherited. Commonly, a synonym for ownership.

FEDERAL HOUSING ADMINISTRATION (FHA) - A federal agency that purchases first mortgages, both conventional and federally insured, from members of the Federal Reserve System, and the Federal Home Loan Bank system.

FICO SCORE - Enables a credit grantor to score borrowers using a system that measures ones historic credit history.

FICTITIOUS DOCUMENT - A document containing general provisions but not regarding a specific property. The fictitious document is recorded in all counties of a state. Whenever the same type of document is recorded regarding a specific property, the provisions of the fictitious document are incorporated by reference, saving the cost of printing and recording extra pages.

FIDUCIARY - One acting in a relationship of trust, regarding financial transactions.

FINAL DECREE - A decree completely deciding all pending matters before a court thus eliminating the need for further litigation.

FINANCING COSTS - The cost of interest and other charges involved in borrowing money to build or purchase real estate.

FIRST MORTGAGE - A mortgage having priority over all other voluntary liens against certain property.

FIXTURES - Personal property which is attached to real property, and is legally treated as real property while it is so attached. Fixtures, not specifically exempted from an accepted offer to purchase, pass with the real estate.

FLOOD INSURANCE - Insurance indemnifying against loss by flood damages. Required by lenders (usually banks) in areas designated (federally) as potential flood areas. The insurance is written by private insurance companies, but is federally subsidized.

FLOOR PLAN - The layout of a building or portion of a building showing the size of the rooms and the purpose of each.

FORCED-AIR FURNACE - A furnace with a fan or blower which forces hot air through the ducts.

FORCED SALE - A sale which is not voluntary on the part of the owner, such as to satisfy a debt. The selling price under such a sale would not be considered market value.

FORECLOSURE - A proceeding in or out of court, to extinguish all rights, title, and interest, of the owner(s) of the property in order to sell the property to satisfy a lien against it.

FORECLOSURE SALE - A sale of property used as security for a debt, to satisfy the debt.

FORFEITURE - The taking of an individual's property by a government because the individual has committed a crime. In the United States, private property cannot be taken, except by eminent domain upon payment of just compensation, or for nonpayment of taxes.

FREE AND CLEAN - Real property against which there are no liens, especially voluntary liens such as mortgages.

FREEHOLD - An estate, at least of duration of a lifetime, or of fee.

FROST LINE - The depth to which the soil freezes.

FULL DISCLOSURE - In real estate, revealing all the known facts which may affect the decision of a buyer or tenant. A broker must disclose known defects in the property for sale or lease. A builder must give to a potential buyer the facts of his new development. A broker cannot charge a fee to buyer and seller unless both know and agree.

GAZEBO - An open structure, usually in the garden where one may set and enjoy the view. Also called a belvedere.

GENERAL CONTRACTOR - One who contracts for the construction of an entire building or project, rather than a portion of the work. The general contractor hires the subcontractors such a plumbers and electricians.

GENERAL LIEN - 1) A lien such as a tax lien or judgment which attaches to all property of the debtor. 2) The right of a creditor to hold personal property of a debtor for payment of a debt not associated with the property being held. Must be done under an agreement since since it is against the general precepts of law.

GERRYMANDER - To divide an area into districts, against the obvious natural divisions, in order to accomplish an unlawful purpose. Examples would be; to divide a school district to keep out certain people for reason of race or religion. To divide a political district so as to give power to a political party.

GIFT - a voluntary transfer of property without valuable consideration.

GIFT LETTER - A signed letter or statement from an individual providing a ash gift to a borrower in order to qualify for a loan. The letter or statement states that the cash gift does not have to be repaid.

GINNIE MAE (GNMA) - Government National Mortgage Association. A federal association working with FHA which offers special assistance in obtaining mortgages, and purchases mortgages in a secondary capacity.

GOOD FAITH - Something done with good intentions, without knowledge of fraudulent circumstances, or reason to inquire further.

GOOD FAITH ESTIMATE - A document prepared by the lender showing borrowers the estimated cost they will incur that will be payable at closing.

GOVERNMENT SURVEY - The survey from which our present system of townships, sections, etc., was developed.

GRACE PERIOD - A period of time past the due date that a mortgage payment or insurance premium may be made and not considered delinquent.

GRADUATED PAYMENT MORTGAGE (GPM) - A mortgage based on payments that will be increased over time dependent on a predetermined schedule.

GRANDFATHER CLAUSE - A clause in the law permitting the continuation of use which when established was permissible but because of a change in the law, is now not permissible.

GRANTEE - One to whom a grant is made. Typically the buyer.

GRANTOR - One who grants property or property rights. Typically the seller.

GROSS INCOME MULTIPLIER - Using the gross annual income of a property to calculate an estimate of a property's value.

GROUND LEVEL - Being at the level of the surrounding land, such as the ground floor of a building.

HABENDUM - The clause in a deed, following the granting clause, which defines the extent of the estate of the grantee.

HAZARD INSURANCE - Insurance policy placed o n property improvement that covers damage by fire or other natural causes.

HECTARE - A French unit of measurement, equaling 10,000 square meters (2.471 acres).

HEIR - One who by law, rather than by will, receive the estate of a deceased person.

HEIRS AND ASSIGNS - Words usually found in a deed, showing the interest the grantee is receiving. A deed to "A, his heirs and assigns", would grant the property to A, with the right to assign said property or to have it descent to A's heirs upon A's death.

HETEROGENEOUS - An appraisal term describing an area composed of building of varied styles or uses. Not as desirable as homogenous property.

HIGHEST AND BEST USE - The use of land which will bring the greatest economic return over a given time.

HISTORICAL COST - The cost of a building when first constructed.

HOLDBACK - Portion of a loan held back by the lender until a contingency is met. Typically 1.5 to 2 times the estimated cost of the repairs. If the repairs are not made in the allotted time period these funds are used to make the repairs. In construction financing, funds are held back until, for example a certain percentage of a subdivision has been sold, or a certain portion of a building have been completed.

HOMOGENEOUS - Similar of the same. In appraisal, an area having similar style properties or properties of similar use is considered more valuable that a heterogeneous area.

HOUSING AND URBAN DEVELOPMENT (HUD) - Department of the US Government responsible for all facets of the federal housing and urban development programs.

IMPLIED - Something apparent from the circumstances, rather than from direct action or communication.

IMPLIED CONTRACT - A binding contract created by the actions of principals, rather than by written or oral agreement of the parties. An Implied Contract may not be enforceable in court.

IMPROVEMENTS - Generally, buildings, but may include any permanent structure or other development, such as a street, utilities, etc..

INCUMBRANCE (ENCUMBRANCE) - A claim, lien, charge, or liability attached to and binding real property. Any right to, or interest in, land which may exist in one other than the owner, but which will not prevent the transfer of fee title.

INDEMNITY AGREEMENT - An agreement by which one party agrees to compensate another for any loss or damage the latter may suffer.

INDEPENDENT APPRAISAL - An appraisal by one who has no interest in the property or nothing to gain from a high or low appraisal.

INDEX - A factor used to calculate the interest on an adjustable rate mortgage.

INDORSEMENT (ENDORSEMENT) - The act of the holder of a note, bill, check, or other negotiable instrument, of assigning said instrument by signing the back of the instrument, with or without qualifications.

INGRESS AND EGRESS - A right to enter upon and pass through land.

IN GROSS - Personal rather than attached to land. An easement in gross has no dominant tenement.

IN PERPETUITY - Of endless duration; forever.

INSPECTION - An examination of property for various reasons, such as a termite inspection, inspection to see if required repairs were made before funds were released. To determine the general condition of a building.

INSTALLMENT SALE OR CONTRACT - A tax term used to describe a sale which is usually accomplished by use of a land contract. If the seller receives less than x percent (at the time this was written 30%) of the sale price in the year of the sale (not including interest), the tax on the profit (gain) from the sale may be paid over the installment period, providing the percentage rule is followed each year.

INSURABLE VALUE - Value of property for insurance purposes. Based on the value of the property, less indestructible parts (land) for fire insurance. For insurance purposes the sales price, market value, or replacement value is used.

INSURANCE - A contract under which, for a consideration, one party (the insurer) agrees to indemnify another (the insured) for a possible loss under specific conditions. May be loss of life, health, property, or property rights.

INSURED MORTGAGE - A mortgage insured against loss to the mortgagee in the event of default and a failure of the mortgaged property to satisfy the balance owning plus costs of foreclosure. May be insured by FHA, VA or by independent mortgage insurance.

INTEREST RATE - The percentage of an amount of money which is paid for its use for a specified time. Usually expressed as an annual percentage rate.

INTERIM FINANCING - Temporary financing, usually for construction.

INTERLOCUTORY DECREE - A provisional or temporary decree, pending some contingency before a final decree. Sometimes the contingency may be only the passage of time.

INTERPLEADER - A court action which may be filed in an existing case to be the initial action. One holding funds which are in dispute, but not having in interest in the funds, would file an interpleader. Example would be an escrow agent holding a deposit of a buyer which funds both buyer and seller claim to be entitled. Escrow is willing to give the funds to either party (buyer or seller) but does not want to be liable. The interpleader filed by the escrow agent asks the court to determine to whom the funds should be awarded.

IN TESTATE - Without leaving a will, or leaving an invalid will so that the property of the estate passes by the laws of succession rather than by direction of the deceased.

JOINT APPRAISAL - An appraisal by more than one appraiser, but one which states common conclusions of all.

JOINT TENANCY - An undivided interest in property, taken by two or more joint tenants. The interest must be equal, accruing under the same conveyance, and beginning at the same time. Upon the death of a joint tenant, the interest passes to the surviving joint tenants, rather than to the heirs of the deceased.

JOINT TENANTS - Those holding joint tenancy.

JUDGMENT (Judgment) - The decision of a court of law. Money judgments, when recorded, become a lien on real property of the defendant.

JUDICIAL FORECLOSURE - Foreclosure through court action rather than by a power of sale. Judicial foreclosure is sometimes necessary to remove certain tax liens.

JUDICIAL SALE - A sale made under court order, by one court appointed, rather than a voluntary sale by the owner.

JUMBO LOAN - A home load that is monetarily more than the limits of Freddie Mac or Fannie Mae.

JUNIOR LIEN - A lien which is subordinate to a prior lien.

JUST COMPENSATION - In condemnation the amount paid to the property owner. Just is defined as making the owner no richer or poorer than before the taking.

KICK PLATE - A metal or plastic strip, placed at the lower edge of a door or riser to protect it from damage by accidental kicking.

KILOWATT - 1000 watts.

KITE WINDER - The steps at the curvature of a circular stairway, which are triangular, or kite-shaped.

KNOLL - A small rounded hill.

KNOT - The hard irregular shaped defects in boards caused by cutting at the point where the branch of a tree meets the truck.

LAISSEZ-FAIRE - Leave alone, let proceed, French expression made used to describe a theory that free trade promotes a better business climate that government controls.

LALLY COLUMNS - Load-bearing steel columns, which are filled with concrete (lally).

LAND - A general term which includes the ground and those things of a permanent nature such as trees, crops, oil and minerals in the ground, unless specifically excepted.

LAND CONTRACT - A contract used in a real property sale where the seller keeps the title to the property until the sales price has been paid.

LANDLOCKED PARCEL - A parcel of land surrounded entirely by privately owned land, with no access to a public right of way (road). Condemnation for a limited access highway is a major cause of such parcels.

LANDSCAPING - Act of modifying a landscape, or features used in such modification, such as trees, lawns, grade changes, etc.

LAND USE MAP - A map of a given area, showing the different land uses in the area.

LATENT DEFECT - A hidden or concealed defect. One which could not be discovered by inspection, using reasonable care.

LEACHING - Removal of liquid waste material from sewage by filtration (gravel, sand, etc.) or in which filtration materials are placed to remove the liquid waste from sewage.

LEASEHOLD - An estate in realty held under a lease; an estate for a fixed term. Considered in many states to be personal property.

LEASE WITH OPTION TO PURCHASE - A lease under which the lessee has the right but not the obligation to purchase the property.

LEE STREET MANAGEMENT - A Chicago area residential rental real estate management firm owned and operated by Michael Lee.

LEGAL DESCRIPTION - A method of geographically identifying a parcel of land, which is acceptable in a court of law.

LEGAL RATE OF INTEREST - A rate of interest established by law, rather than by agreement.

LEGAL TITLE - Usually title without ownership rights, such as the title placed in a trustee under a deed of trust, or the title in a vendor under a land contract.

LENDER - A general term encompassing all mortgages, and beneficiaries under deeds of trust.

LETTER OF ATONEMENT - A letter from a grantor to a tenant, stating that the property has been sold, and directing rent to be paid to the grantee (new owner).

LETTER OF INTENT - A formal method of stating that a prospective developer, buyer, or lessee, is interested in property. Not an offer and creates no obligation. A builder may use letters of intent to justify a loan to construct a property.

LEVERAGE - Use of debt financing to purchase a property.

LEVY - A collection, seizure, assessment, etc. such as a tax levy.

LIABILITY - A general term used to describe all types of debts and obligations.

LIEN - A encumbrance (legal hold) against the property as security for the payment of debt, mortgages, judgments or taxes.

LIFE - The length of time an improvement will last, either in relation to its physical utility or as an accounting procedure.

LIFE ESTATE - An estate in real property for the life of a living person. The estate then reverts back to the grantor or to a third party.

LISTING - An agreement between an owner of real property and a real estate agent, whereby the agent agrees to secure a buyer or tenant for specific property at a certain price and terms in return for a fee or commission.

LISTING AGENT - A real estate agent obtaining a listing. The opposite of the selling agent.

LOAN - A lending of a principal sum of money to one who promises to repay said sum, plus interest.

LOAN PACKAGE - The file of all items necessary for the lender to decide to give or not give a loan. Items would include the information of the prospective borrower (loan application, credit report, financial statement, employment letters, etc.) and information on the property (appraisal, survey, etc.). There may be a charge for "packaging" the loan.

LOAN POLICY - A title insurance policy insuring a mortgagee, or beneficiary under a deed of trust, against loss caused by invalid title in the borrower, or loss of priority of the mortgage or deed of trust.

LOAN TO VALUE RATION - Ration reflecting the mortgage loan amount to the appraised value or purchase price of a home.

LOCK-IN - The prohibition of prepayment of a loan secured by mortgage or deed of trust, so that the borrower is "locked in" to the loan for a specific time period.

LOT - Generally, any portion or parcel of real property. Usually refers to a portion of a subdivision.

MAINTENANCE FEE - As applied to condominiums and planned developments, the amount charged each unit owner to maintain the common areas. Usually a monthly fee paid as part of the budget.

MAKER - One who executes (signs) as the maker (borrower) of a note.

MANUFACTURED LOT - A lot upon which construction of a building may begin. Having all off-site improvements and approvals of government agencies.

MARKETABILITY - Salability. The probability of selling property within a period of time, within a price range, for specific terms.

MARKETABLE TITLE - Title which can be readily marketed (sold) to a reasonably prudent buyer aware of the facts and their legal meaning concerning liens and encumbrances.

MARKET VALUE - The highest price that a buyer is willing to pay and the lowest price that a seller is willing to accept for real estate.

MARKET VALUE APPROACH - Appraising the value of property by comparing the price of similar properties (comparables) recently sold. The degree of similarity of the properties and circumstances of the sale are important considerations in determining value.

MASTER PLAN - A zoning plan for an entire governmental subdivision, such as a city. A comprehensive plan to allow a city to grow n an orderly and sound manner, both economically and ecologically.

MATERIAL FACT - A fact upon which an agreement is based, and without which said agreement would bet be made.

MECHANIC'S LIEN - A lien created by stature for the purpose of securing priority of payment for the price or value of work performed and materials furnished in construction or repair of improvements to land, and which attaches to the land as well as the improvements.

METES AND BOUNDS - Description of land by boundary lines, with their terminal points and angles. Originally meets referred to distance, bounds to direction; modernly, the words have no individual meaning of practical significance.

MINERAL RIGHTS - The ownership of minerals (coal, gold, iron, etc) under the ground, with or without ownership of the surface of the land.

MINIMUM LOT - The smallest allowable lot size for development, as stipulated by local zoning laws.

MISREPRESENTATION - A statement or conduct by a person which represents to another a fact which is not true. A seller, broker, or builder may have a duty to disclose certain defects n property to a buyer or tenant. Failure to disclose is also misrepresentation The misrepresentation may be innocent( reasonably believed to be true), deliberate (known to be wrong), or negligent (should have known). Depending on the facts and extent of misrepresentation, there may be a suit for damages, rescission of a contract, punitive action against the broker (loss of license), etc..

MORTGAGE - A guarantee of real estate from a borrower as security for the payment of a loan to a lender.

MORTGAGE INSURANCE - Insures the lender against nonpayment of a government or conventional loan.

MORTGAGEE - The lender for a home loan.

MORTGAGOR - The borrower in a home loan.

MULTIPLE LISTING - An exclusive listing, submitted to all members of a real estate association, so that each member may have an opportunity to sell a property.

NAME CHANGE - In conveyancing, setting forth both the present name of the grantor and the name under which said grantor acquired title, if different. For example; Jane Doe, a married woman who acquired title as Jane Smith prior to her marriage.

NATIONAL ASSOCIATION OF REALTORS (NARA) - An association of people engaged in the real estate business. Organized in 1908, it currently lists over half a million members. NARA is dedicated to the betterment of the real estate industry thorough education, legislation, and high ethical standards for its members.

NATIONAL ASSOCIATION OF REAL ESTATE BOARDS (NAREB) - A national trade association whose members include not only real estate brokers, but appraisers, property managers, and other affiliated groups.

NATIONAL ASSOCIATION OF REAL ESTATE BROKERS - An organization dedicated to the betterment of the real estate industry and specifically to the roll of blacks in the real estate industry. It is comprised of black real estate brokers who have adopted the term "realists". Founded in 1947.

NEGATIVE AMORTIZATION - A loan schedule in which the principal increases due to a payment that does not cover all of the interest.

NEGOTIABLE - Capable of being negotiated. Commonly used to mean assignable or transferable in the ordinary course of business, such as negotiable bonds, securities, notes, etc. Many charges on home loans are negotiable as is the price of buyer is willing to pay.

NEIGHBORHOOD - A general term describing a contiguous area of similar properties. Since the development of tract housing, the term is not as significant.

NET ACRE - An acre which may be used for building. Assume a builder or developer purchases a 20 acre tract and uses 3 acres for roads, sidewalks and other off-site improvements. The remaining 17 acres are the net acres of the 20 acre tract.

NET INCOME MULTIPLIER - The number which, when multiplied by the net income, gives the selling price. Found by dividing the sales price by the net income. Usually, a gross income multiplier is used.

NET LISTING - A listing under which a real estate agent receives any amount over a given net amount to the seller. Illegal in some states.

NONEXCLUSIVE LISTING - A listing under which the real estate broker has an exclusive listing as opposed to other agents, but the owner may sell the property without using an agent, and not be liable to pay a commission. Also called an agency agreement.

NONRECOURSE LOAN - A loan not allowing for a deficiency judgment. The lenders only recourse in the event of a default is the security (property) and the borrower is not personally liable.

NOTE - A unilateral agreement containing an express and absolute promise of the signer to pay to a named person, or order, or bearer, a definite sum of money at specified date or on demand. Usually provides for interest and, concerning real property, is secured by a mortgage or trust deed.

NOTICE OF ACTION - A recorded notice that property may be subject to a lien, or even that the title is defective due to pending litigation.

NOTICE OF CESSATION - A notice stating that work has stopped on a construction project. Done to accelerate the period for filing a mechanic's lean.

NOTICE OF COMPLETION - A notice, recorded to show that a construction job is finished. The length of time in which mechanic's liens can be filed depends upon when and if a notice of completion is recorded.

NOTICE OF DEFAULT - Written notice to a borrower showing default on a mortgage.

NOTICE OF RESPONSIBILITY - A notice filed by an owner of property to show that work being done has not been contracted by said owner. If properly done, mechanic's liens will not attach to the property. Often done when a tenant contract for work on a property.

NOTICE OF PRECISION - A recorded notice to rescind a notice of default of a mortgage or deed of trust.

NOTICE TO QUIT - A notice by a landlord to a tenant to vacate rented property.

NOTORIOUS POSSESSION - A requirement for adverse possess

Lee Street Management's Real Estate Dictionary

Lee Street Management's
Real Estate Dictionary