Referred to a property owner who does not reside on the property and manages the property through the services of a property manager.
Absolute auction
Also known as "auction without reserve"; the property is offered without any limiting condition or amount and sold to highest bidder.
Absolute ownership
A type of real property ownership; when owners has the most rights, least limitations and are indefeasible; applicable in common law countries.
Abstract of title
A complete history of the property's ownership that includes summaries of transfers, conveyances, legal proceedings and other documents pertaining to the continuity of ownership and evidence of title.
Accelerated depreciation
A cost write-off method, which is used to depreciate the property faster for tax purposes usually in the early years of ownership.
Acceptance of Sale/ Sales Contract
A contract of purchase where by signing, both buyer and seller agrees on the details of the property transaction.
Accrued
Accumulated over time; as in accrued interest.
Acquisition
The process by which a person acquires or owns a property.
Act of God
An unpreventable and uncontrollable natural event which excuses non- performance of a contractual duty.
Actual eviction
Removal of the tenant, usually by the landlord or property owner legally.
Add-on interest
An interest calculated based on the full amount of the loan for the entire loan period, which is then added to the principal loan amount
Adjustable Rate Mortgage
A loan with an interest rate that fluctuates depending on prevailing market conditions.
Adjustment Period
The time between the interest rate adjustments for adjustable rate mortgage; typically 1, 3, 5 or 7 years.
Affidavit of Title
A written statement, sworn before a notary public, by a seller of a real property, in which seller identifies himself or herself, indicates marital status, confirms possession of property and certifies that no defects are present since the date on the contract when title was examined.
Affordable housing
A term which encompasses both subsidized and non-subsidized housing provided for people with no means to buy or rent properties on the open market due to low income.
Agency
Formed through a written contract in which relationship based on trust exists between principal and agent; principal authorizes agent to act on his/her behalf and even accepts full liability.
Agent / sales associate
A state-licensed individual who acts in behalf of the principal or property owner in real estate transactions.
Agreement of sale
A written contract that is approved by both buyer and seller and contains approved details of the real estate transaction.
Alternative mortgage
Referred to home loans which differs from the traditional fixed rate mortgage.
Amortization
A process of debt elimination, such as a mortgage, by making regular payments over a definite time; total payment covers both principal and interest amounts.
Annual Percentage Rate
The cost of a mortgage, including origination fee and interest mortgage insurance, calculated yearly and expressed in percentage.
Annuity
A fixed sum received at fixed regular intervals by an investor/lender.
Appraisal
An opinion on the fair market value of a property given by a professional third party usually a licensed real estate appraiser.
Appraisal Fee
The amount paid to an appraiser for providing appraisal report.
Appraisal Report
A detailed, written report provided by the appraiser that contains information such as location, condition, etc., leading to the estimated property value and includes recent sales of comparable properties in the area.
Appraised value
Market value of a property at a given time based on an expert opinion.
Appreciation
Pertains to the increase of a property's market value over a period of time.
Asking price
Also known as list price; amount which owner/seller wants for the property.
Assessment
The estimated official value of a property for tax purpose.
Letter B
Back up Offer
A secondary bid that is only accepted by the seller if the first real estate purchase contract does not close.
Balance
The remaining amount on a loan after deducting all payments that have been made from the total amount that includes the interest and the principal.
Balloon Mortgage
A home loan where installment payments made over a specified period of time are too small; in effect last payment due is lump sum amount of remaining balance .
Balloon Payment
The final payment of a loan which is significantly more considerable than the other installment payments; usually applicable in a balloon mortgage.
Bankruptcy
A proceeding where a person declares his inability to settle a financial debt and where relief from obligations is sought and granted by a special court.
Bargain Sale
The sale of a real property for less than current market value.
Bedroom community
A neighborhood or suburban area where employment opportunities are small but provide plenty of housing; where workers from major cities reside.
Bequeath
The giving or leaving of a property's ownership through a will after a person' death.
Bid
The highest amount a buyer offers a seller to pay for a property at a given time.
Bilateral contract
A contract where promises are exchanged by both parties; also known as reciprocal contract.
Bill of Sale
A legal document that transfer title of a property from seller to buyer.
Biweekly mortgage
A mortgage payment with two weeks interval; shortens loan payment terms and lowers total interest paid.
Blanket mortgage
A loan where several properties are involved but are owned by the same borrower.
Bond
An agreement where one party assures another party of performance.
Book value
The present value of a property as capital where all debts and liabilities are deducted and accumulated appreciation are added for accounting purposes.
Breach of Contract
An unjustifiable violation of any of the terms and conditions in a legal contract.
Broker
A state-licensed individual that is authorized to by a seller of a property to act on his/her behalf.
Brokerage
The business where two parties, such as buyer/lessor and seller/lessee, are brought together by brokers for a fee or commission.
Budget
A specific amount of money allocated for a particular purpose.
Building inspector
A local or state employee who is responsible for inspecting buildings and/or building sites to check if they comply with building codes.
Built-ins
Any appliances or extra items not included in the original house but are no longer detachable.
Buy-back agreement
A specific provision in a purchase contract where seller agrees to repurchase a property when certain conditions in the contract are not met.
Buy-down mortgage
A home financing technique where the lender receives an initial payment from the seller to induce a reduction on the interest rate.
Buy-sell agreement
A business agreement between partners or shareholders that obliges one to buy and the other to sell in events specified in the agreement.
Buyer broker
A real estate broker who represents a buyer exclusively in all transactions.
Buyer's remorse
A feeling of guilt or regret experienced by first-time buyers after closing or signing the purchase contract.
Letter C
Cancellation clause
A provision in a legal document or contract that gives each party the right to terminate the agreement based on stipulated conditions.
Cap
A limit placed to safeguard against excessive adjustments in the interest rates of an adjustable rate mortgage.
Capital gain
Income gained by an investor from the sale of a real property; taxed lower than ordinary income.
Cash flow
The net income a rental property investor gets after deducting operating costs and loan payments and before deducting non-cash expenses and depreciation.
Cash-out refinance
A type of refinancing in which the cash loan amount exceeds the amount due on the old mortgage leaving the borrower with extra cash.
Certificate of Deposit
A document that proves a specified amount of money is deposited in a bank, stock brokerage firm or other financial institution .
Certificate of Title
A document prepared by a lawyer that defines the state or condition of a property's title based on public record.
Chattel
Any personal property that is not a real property.
Chattel Mortgage
A claim or lien on a personal property used as loan collateral.
Clear Title
The title of a property that is free from any defect, liens or legal encumbrances.
Closing
The conclusion of a real estate transaction wherein the seller and buyer sign documents that transfers the property to the buyer.
Closing costs
All miscellaneous costs, including lawyers, appraisal and insurance fees, pertaining to the sale of the property.
Closing statement
A document that accounts all costs between the buyer and seller in the conclusion of a real estate transaction.
Commercial property
Any real property that is used for business or zoned in a business area.
Commission
The amount paid to the agents for the sale of a property usually computed at a certain percentage of the properties selling price.
Commitment fee
The fee charged by a lender for promising to take a loan in effect locking in specific loan terms.
Co-maker
A person who assumes responsibility for a loan by signing together with the principal borrower; also called endorser.
Collateral security
A separate obligation or additional security that a borrower provides to guarantee performance of the contract.
Commencement Date
Date when lease of a property begins even when lease was signed and negotiated at a different date.
Community property
Any property acquired by husband wife during marriage entitling them to equal rights on the property.
Compound interest
The interest paid on a loan amount accumulated over a period of time calculated not only on the principal amount but also on the accrued interest.
Contractor
Person responsible for the construction of a home or development of a land.
Contract of Sale
An agreement made between buyer and seller that details the purchase of a real estate property.
Contractual lien
A financial obligation entered into voluntarily such as trust deed or mortgage.
Convertible ARM
A loan that began as an adjustable rate mortgage but permits the borrower to convert it to a fixed-rate mortgage at a specified period of time.
Credit report
A report prepared by a credit bureau that details credit history of a person.
Letter D
Date of closing
The date on which the real estate transaction is finalized; buyer pays the seller and seller delivers the deed.
Days on the market
Period when a property was first listed until it was sold.
Debt
Any amount of money owed to another person or entity.
Declaration of trust
An official document where a trustee acknowledges legal hold to the title of a property as authorized by the beneficiary of the trust.
Decree of foreclosure
A court decree allowing the lender to a mortgaged property due to the inability of the property owner to settle amount due.
Deductions
Any miscellaneous amount that is deducted from the gross amount to arrive at a net amount; usually for tax purposes.
Deed
A legal document that states contains details pertaining to the ownership of the property.
Deed in lieu of foreclosure
An option available to the property owner where lender is given the title or deed to the mortgaged property in exchange for halting foreclosure proceedings.
Deed restrictions
Any limitations indicated on the deed that pertains to the property's use.
Default
Non-fulfillment of a financial obligation.
Defective title
An impaired title in which the claim of ownership is disputed.
Deferred payment option
An option in which borrower is allowed to pay .
Delinquent mortgage
A mortgage where borrower has been unable to fulfill mortgage payment obligations and will be due for foreclosure unless amount due is settled.
Demand note
A letter of demand which contains no date and authorizes lender to ask for payment anytime.
Deposit
An initial payment usually a certain percentage of the total amount made together with an offer for a property; also known as earnest money.
Deposit receipt
A receipt given to a person who made a deposit to secure an offer made to a real estate property; given by the owner to signify acceptance of the offer.
Depreciation
Any decrease in a property's market value.
Developer
Any landowner or agent of the landowner that improves and then sells the developed property for profit.
Disability
The lack of legal capacity a person has to perform or fulfill an obligation.
Disclosure
Any relevant details pertaining to the property provided to potential buyers.
Distressed property
A property in financial trouble and must be sold to pay mortgage dues.
Documentary stamps
Government stamps issued as tax payments; required for transfers, deeds and mortgages; amount depends on the State.
Down payment
The partial payment made by a buyer to the lender as soon as a sales agreement has been reached.
Dual agency
An agency that performs a single transaction on behalf of two principals at the same time.
Due Process
A legal principle involving a person's right to fair and adequate process before deprivation of life, liberty or property.
Letter E
Early occupancy
A provision where buyer is given right to occupy a property even before the sale of the property is completed.
Earnest money
A sum of money given by an interested buyer as a sign of good faith together with a formal offer to buy the property; also known as deposit.
Easement
An authorized use of a portion of a property given to a third party .
Effective age
The estimated age of a structure based on its physical condition.
Effective date of value
The specific date when a property's final value is applied.
Effective interest rate
The actual interest rate computed on a yearly basis that is being paid by a borrower to include up-front costs; usually a higher value than the nominal or named interest rate.
Ejectment
A legal action that removes a person from a property since he has no contractual right to stay there.
Employer-assisted housing
A special program in which employees can buy homes with the help of their employers and partner-lenders.
Encumber
To compromise a property's title with a lien such as mortgage.
Encumbrance
Any lien, claim or liability attached to a property.
Enforceable
An action initiated by a court of law that compels either party to fulfill a certain contractual obligation.
Equal Credit Opportunity Act (ECOA)
A federal law that discourages discrimination of borrower's on the basis of race, age, color, national origin or religion.
Equitable lien
A lien imposed by a court of equity that recognizes a lender's interest in a borrower's property.
Equity
The net value of a property determined by deducting all claims held against it from the property's current market value.
Escalator mortgage
A type of mortgage in which the interest rate can change based on a specific money market at a certain period of time.
Escape Clause
A contractual provision allowing any of the parties involved to invalidate contract due to specified situations or events.
Estate
Encompasses all assets of an individual including real estate at the time of death.
Estate taxes
A government-imposed tax on the transfer of a property's ownership from the deceased person to the legal heir/heirs.
Eviction
A legal procedure which effectively removes a tenant from a leased property due to inability to meet contractual obligations.
Evidence of title
Any legal document that serves as proof of property ownership.
Examination of Title
A legal inspection done to determine ownership history of a real property.
Exclusive agency listing
An agreement or contract between a real estate broker and owner that gives the broker exclusive right to sell a property under specific terms and conditions stated by the owner; broker receives a commission from the sale of the property.
Exclusive right to sell
A listings contract in which the owner can still sell the property to a buyer not referred or claimed by the authorized broker.
Executor
A person who is in charge of handling all probate proceedings as well as payment of debts and taxes and collection of property in an estate.
Existing mortgage
Any housing loan that has not been fully paid.
Letter F
Face value
The exact amount of money as shown by words or numbers in a document.
Fair market value
The amount in which both buyer and seller agreed upon as the selling price of a property.
Fannie Mae
A Federal National Mortgage Association-issued security obtained from pools of conventional and other federally-insured mortgages in the secondary mortgage market.
Federal Housing Administration
A federal government agency that acts as an insurance agency of private lenders to finance loans on new and existing homes.
Fee simple
Pertains to absolute ownership of a real estate property obtained through an inheritance.
Financial statement
A written report summarizing the over-all financial state or health of a company.
Financing
The purchase of a real property by borrowing money from a third party, usually a lending institution; lender and borrower works out a schedule to repay the principal loan and interest accrued.
Financing process
A very systematic process strictly implemented by lending institutions before a mortgage or financing application is approved.
Finder's fee
A commission paid to a person by a licensed broker for finding a purchaser of a listed property.
First mortgage
A housing loan taken on a property for the first time.
Fiscal year
A 12-month accounting period that a company uses instead of a regular calendar year.
Fixed payment loan
A loan in which the amount to be paid remains fixed for the whole term of the loan.
Fixed rate loan
A loan in which the interest rate is fixed for the whole life of the loan despite changes in prevailing market interest rates.
Flexible payment mortgage
A housing loan that allow borrowers to start with small monthly payments gradually increasing the amount throughout the loan term.
Flip
A selling technique in which properties are bought and sold very quickly for instant profit.
Forbearance
A request made by a borrower to the lender to allow him to delay payment of amount due.
Force majeure
Any event considered as an "Act of God", such as natural disasters that will deem any person incapacitated from performing his contractual duties.
For Sale By Owner
A real estate term referring to properties in which owners directly sells to a buyer without any real estate agent involved.
Forced sale
The selling of a property by an owner under duress at a selling price that is not influenced by prevailing market prices.
Foreclosure
A legal action wherein properties are re-possessed by the lender because of the failure of the borrower to comply with the terms and conditions of a mortgage.
Forfeiture of title
A penalty imposed for non-fulfillment of a particular contractual obligation in a deed reverting the title of the property to the person who imposed the condition.
Freddie Mac
Popular name for the Federal Home Loan Mortgage Corporation that purchases conventional mortgages and turning them into securities which now provides better access and lower housing costs to homeowners and renters.
Free and clear sale
Any real estate property sale in which the title is free from any liens, claims or encumbrances.
Front money
An amount of money that is required to begin a real estate transaction.
Full disclosure
A provision requiring the seller to detail all relevant information and facts pertaining to the property's condition.
Letter G
General agent
An agent authorized by an owner/seller to act on his behalf on all transactions including management of property.
General contractor
A person or company that contracts directly with the owner to perform or supervise construction; either use own workforce or hires subcontractor.
General lien
A legal claim on all assets of a borrower including real properties.
General real estate tax
The tax paid to the government for owning real estate.
General warranty deed
A deed in which the seller protects the buyer's ownership of a property against any defects against the title; used during real estate title transfers.
Gift deed
A deed that transfers a property's ownership not because of a sales transaction but for love and affection reasons.
Gift tax
A tax paid to the federal government for monetary gifts above $10,000; details on gift tax outlined in the Economy Recovery Tax Act of 1981.
Ginnie Mae
Popular name for Government National Mortgage Association-issued securities that are backed by a pool of mortgages exceeding $1 million
Good and marketable title
Any title that is free form competing claims, liens or interests.
Good faith
A legal term that describes a person's honesty and decency to fulfill obligations.
Good faith estimate
An estimate based on closing costs given by lenders to mortgage applicants during loan application; required by the Real Estate Settlement Procedures Act.
Good faith purchaser
A person who buys a property with a title that has no adverse claims made against it.
Government survey system
A survey system that is used in describing and surveying a land based on its longitude and latitude.
Grace Period
A period of time in which borrower is still not considered to be in default even if payment is delayed.
Graduated payment loan
A loan in which the borrower was allowed to pay a lower amount during the first few years but gradually increases over the duration of the loan; also know as stepped-payment loan.
Grant
Any transfer or donation of a real property from one person to another.
Grantee
The recipient of a property given by grant.
Grantor
The person who transfers the ownership of a property to another person.
Gross Domestic Product
The total value of all goods and services of a country from labor production.
Gross National Product
The dollar value of all goods and services including those produced abroad by a nation.
Gross profits
The amount calculated by deducting all sales costs from the sales revenue.
Gross sales
The total sales amount before any deductions.
Ground rent
Rent paid for the use of a land that is to be used for a building.
Growing-equity loan
A loan, usually a mortgage, where monthly payments increases periodically thus effectively lowering the amount of principal loan owed and shorten payment period.
Guarantee of title
An assurance that title is free from liens or adverse claims.
Letter H
Habitability
A legal term used to describe a place's suitability for living in according to the Civil Code.
Hard costs
Any direct costs that include material, labor and equipment use.
Hard money
Money received as cash like from a loan instead of as extended credit.
Hard money loan
A type of loan similar to a foreclosure bailout loan usually applicable to commercial real estate property loans.
Hazard insurance
Insurance that covers all damages to property caused by hazards such as fire, vandalism, wind, etc.
Hedge against inflation
Any investment considered to be protected from any form of financial loss since its value never decreases below the present rate of inflation.
Heirs and assigns
A person who by law receives assets according to the terms and conditions of a will.
Highest and best use
Used in property appraisal to describe the highest possible appraised value of the property based on zoning classifications and how it can be used best to generate the greatest return.
Historical age
The age of a building since it was constructed.
Hold harmless clause
A specific provision in a contract that relieves the other party from any liability due to circumstances that were both agreed upon as valid reasons for not fulfilling contractual obligations.
Holder in due course
An individual who acquires a negotiable instrument for value, like a note, check or bill, in good faith during the course of a transaction.
Holding company
An entity that can have partial or complete control over a company; usually owns majority of voting stock.
Holding period
The real or expected length of time an entity holds an asset.
Holdout
A situation in which the owner refuses to sell a property at the highest possible price.
Home equity conversion mortgage
Any home loan which converts the homeowner's equity into money.
Home equity loan
A loan in which the owner uses the equity in their homes as a form of collateral or guarantee to secure a loan.
Home inspection
Any investigation or examination of a property's physical condition by a home inspector done before a purchase.
Home loan
A loan secured for the specific purpose of purchasing a residential property.
Homeowner's insurance
An insurance that has liability, theft and hazard coverage effectively protecting the property from all forms of damages.
Homeowner's insurance policy
A policy containing the homeowner's insurance coverage.
Homeowner's warranty
A special insurance provision that covers home repairs up to a certain period of time.
Homestead exemption
For tax purposes; real properties used as homes are usually taxed lower but only up to a certain amount or property value.
Housing and Urban Development
A federal department responsible for the administration and implementation of all government housing and urban development in the United States.
Housing discrimination
The legal term for denying a person's right to buy or rent a home on the basis of religion, color, nationality, sex, disability or family status.
Housing code
Safety and sanitation standards set by the municipality or city council for existing residential properties.
Housing stock
The total number of residential properties available for rent, lease or purchase.
Letter I
Income property
A real property that generates an income such as rent.
Income statement
A financial report containing the sources and amount of revenues and corresponding expenses, costs and losses.
Indemnity
An insurance to protect from any future loss.
Independent contractor
A legal term for an individual hired for a specific task but is not considered to be an employee.
Independent fee appraiser
A third party with no holding interest on a property and is responsible for providing a fair estimate on the value of a property.
Index lease
A lease with a varying rental amount based on established cost or price indexes.
Inflation
An economic situation in which consumer prices increases while the value of currency decreases.
Infrastructure
Ahe basic services, facilities and equipment needed by a community for purposes such as communication, transportation, etc
Ingress
A means or place to enter.
Inheritance taxes
Government-imposed taxes on properties received through legal succession or terms of a will.
Insurable interest
An ownership interest of a person which should be protected from loss or damage.
Insurable title
A title which is free from all claims and thus can be protected or covered by a title insurance company.
Insurable value
A value of interest that can be protected.
Insured mortgage
a mortgage with an insurance policy that is guaranteed by a party other than the borrower; protects lenders in case of default.
Inspection
any investigation on a document's accuracy and credibility or a property's physical condition before purchase is made.
Installment loan
a loan in which payment is made periodically and total amount (principal plus interest) is distributed equally over a certain period of time.
Installment sale
a sale of a property in which payment is spread over a number of years for tax purposes.
Intangible assets
assets that can not be physically touched.
Interest-only loan
a loan in which borrower is allowed to pay the interest periodically and the principal amount in lump sump at the end of the loan term.
Interest rate
calculated annually or monthly as percentage and is the amount a lender charges for the use of a certain amount of borrowed money.
Inventory
a detailed list that includes quantity and amount of particular items.
Investment
any property purchased with profit or return of capital in mind.
Involuntary lien
any claim imposed on a property without the owner's consent and even knowledge such as government taxes.
Irrevocable
a condition that is impossible to retract, change or undo.
Letter J
Joint and several liability
a description of a liability in which two or more parties can be held responsible, individually or as a whole, in fulfilling contractual obligations.
Joint venture
a business enterprise participated by two or more individuals whereby all profits and losses are shared equally.
Joint liability
legal term used to describe a single responsibility shared by two or more people in settling full debt.
Joint tenancy
a description of an ownership in which two or more people share equal right to a property.
Judgment
a decision rendered final and executory by a court of law.
Judgment lien
a legal claim by the creditor on all assets of a debtor as ordered under a judgment.
Judicial foreclosure
a legal action in which re-possession of a property is ordered by a court of law usually as payment of mortgage debt.
Judicial notice
a rule of evidence in which a fact is allowed as evidence based on its undeniable truth even without any evidence supporting it.
Judicial precedent
a previous court decision that establishes a new legal concept.
Jumbo loan
a housing loan that has an amount equal to or more than $250,000.
Junior lien
a lien on a property considered to be a subordinate to another lien upon the same property.
Junior mortgage
a mortgage that will be repaid only after the senior mortgage has been settled.
Jurisdiction
having the legal power and right to interpret and apply the law.
Just compensation
the amount of money paid to an owner when a government takes his property for public use.
Letter K
Letter L
Land and improvement loan
a loan usually obtained for the purpose of using it to purchase and develop a land such as in subdivisions.
Land grant
a donation in the form of a land by any public entity to a private entity.
Land improvements
any physical changes made on a land to increase its market value and potential usage.
Land lease
any lease that only covers the ground.
Land use regulation
pertains to all codes and permits required by the local government to comply with building standards.
Landlord
also known as lessor in a lease agreement.
Landmark
any structure which establishes a boundary, usually placed between two adjoining parcels.
Late charge
a penalty imposed against a party who failed to meet due date.
Lease
a contractual agreement between lessor and lessee that contain the terms and conditions pertaining to the use of a property and payment for such usage.
Lease with an option to purchase
a provision in a lease contract in which the lessee has a contractual right to purchase the real property being leased as long as the lessee complies with the terms of the provision.
Lease-purchase agreement
an agreement between lessor and lessee whereby a portion of the lease payment is considered as a down payment for the leased property and after a specified time, lessor should pay a lump sum to formally purchase the leased property.
Legal age
the age in years when a person can be held legally responsible for fulfilling or not fulfilling any contractual obligations.
Legal capacity
the power or capacity of a person to enter any legal transaction.
Legal notice
the information required by law to be given.
Lessee
any party under a lease agreement who pays for the right to use a real property for a specified period of time; also known as tenant.
Lessor
a person who grants a lessee the right to use a real property; also known as owner or landlord.
Liability
any legal obligation or responsibility in which non-performance will render agreement as void.
Licensing examination
the examination required by the government for a person to have a professional credibility to perform a certain task.
Lien
a claim or encumbrance against a property which is used as a security for the discharge of an obligation or payment of a debt.
Life estate
a collection of all the properties of a living person for the person's life.
Limited liability
any personal obligation that is restricted to the amount invested.
Listing
a contract wherein a property owner hires a licensed real estate broker to assist in selling or leasing the property.
Listing contract
a legal document that contains terms and conditions pertaining to the hiring of a real estate broker to perform real estate transactions including property sale or lease.
Loan maturity
the period of time when a loan will be due and payable.
Letter M
Maintenance
Any work or activity that will keep a property's condition for optimum performance.
Management contract
A legal document that contains the terms and condition in hiring a person to maintain a property.
Mandatory
A command or an imperative.
Market indicators
Indices that provide direction and strength of market activity.
Market price
The price of an item paid based on the laws of supply and demand without the influence of external factors.
Market value
The highest price that a seller may expect to receive in the open market for a property.
Marketable title
Title free from risk of litigation because of liens or adverse claims.
Maturity
The due date of a loan.
Maximum rent
The highest amount of rent as established by a rent order or regulation.
Merger
Any consolidation of two parties usually created through a pooling of interest or purchase acquisition.
Minimum Property Requirements
A regulation imposed by the US Federal Housing Authority which requires a real property to be well-built and habitable before loan application is approved
Misrepresentations
False statements made to mislead a person and are usually favorable to the person who made the false statements.
Month-to-month tenancy
In absence of any oral or written agreement, a month-to-month basis of rental condition is usually followed.
Mortgage
A loan obtained specifically to purchase a property; property is then considered as security or collateral for the loan.
Mortgage bond
An evidence of debt secured by a mortgage on a property.
Mortgage broker
Any individual or business entity who acts as a go-between lenders and borrowers for a fee.
Mortgage company
A private business entity that provides loans for the purpose of purchasing real properties.
Mortgage insurance
A policy to protects lenders from financial losses in case of the borrower's death or disability.
Mortgage investment company
A business entity that purchases mortgages for investment.
Mortgage pool
A collection of mortgages or housing loans used as collateral for securities.
Mortgage relief
A freedom from mortgage obligations usually because another party assumes the mortgage debt.
Mortgagee in possession
When a lender takes over or assumes management of a mortgaged property in default to protect it from damages.
Multiple Listing Service
A compute-based service which provides real estate brokers with detailed information about properties for sale or lease.
Multiple listing clause
A provision in a listings contract which allows the broker to enlist the property in a Multiple Listing Service.
Letter N
Negative amortization
A gradual increase in mortgage debt because of insufficient payment made by the borrower to cover the amount due.
Negative cash flow
A financial situation in which expenses exceed income obtained from an existing investment.
Negative easement
An easement where a property owner is restricted from doing any improvements on personal property that will adversely affect the property of another.
Negotiable
The ability to be transferred.
Negotiable instrument
Any document that transfers the money of the signee on demand or at a specified time to another person whose name is usually indicated in the instrument; common examples are checks, drafts, promissory note.
Net income
The total revenue minus expenses, taxes and insurance.
Net lease
A lease in which the lessee pays taxes and insurances in addition to the rent.
Net listing
A type of listing in which the seller will only receive net price of the property and broker may retain all sums over and above the net price received.
Net operating income
The amount in cash that is left before deducting income tax and after deducting operational expenses.
Net profit
The total revenue or earnings after deducting operating expenses.
Net worth
The total value of a person or entity calculated by deducting all liabilities from all assets.
Nominal interest rate
The actual interest rate prevailing in the market.
Nominal tax
The government-imposed tax that is not adjusted for inflation.
Non-conforming loan
Any loan which does not follow the guidelines and standards imposed by federal agencies (FNMA/FHLMC); such as jumbo loans and subprime loans.
Non-residential
Any real property whose purpose is not for residing; examples are schools, churches, clubhouses, recreational buildings, government buildings and hotel rooms rented for 6 months or less.
Notary public
A person who is legally empowered to attest oaths and certify their validity by placing his official seal and signature.
Note
Any short-term instrument to secure debt.
Notice of cessation
A legal notice given to one or more individuals to prohibit them from continuing to perform a particular action.
Notice of completion
A legal notice to indicate and record the completion of a work done on a property; required for filing mechanic liens.
Notice of default
A notice filed in a court of law to inform that a borrower is late for payments.
Notice of intention to sell
A legal notice recorded and published before a property is sold for the purpose of informing the existing creditors of the seller.
Notice of non-responsibility
A legal notice designed to remove all the property owner's responsibility or liability for any amount incurred on any unauthorized work done on the property.
Notice of trustee's sale
A published notice indicating a trustee's decision to sell a property for the satisfaction of a debt.
Notice to quit
A legal notice given to a tenant ordering him to vacate or leave the rented or leased property.
Null and void
No longer legally valid.
Letter O
Occupancy
The act of residing or occupying a real estate property.
Occupancy level
The total number of occupied units, expressed as percentage, in a neighborhood or city.
Occupancy permit
A written permission usually issued by local building departments to establish that a new property does not pose any threat or hazard to the safety of the future occupants.
Offer
A proposal made with a purpose to enter a particular arrangement and can be accepted or rejected.
Offer to purchase
A formal proposal that contains a specified amount or price offered for the purchase of a particular property; can have certain conditions attached to it.
Open house
The practice of showing properties for sale to the public.
Open listing
A type of listing in which a property can be marketed by several brokers at the same time.
Open space
Pertaining to any undeveloped areas of land that can be enhanced or preserved in a planned community to be used for parks or walking paths.
Open-end loan
A mortgage loan where the principal amount can be expanded without re-negotiating the loan terms such as the interest rate.
Operating expense ratio
The ratio obtained by dividing the operating expenses by the gross revenue.
Operating expenses
The cost of operating a business.
Option listing
A type of listing contract where the listing broker is given a right to buy the listed property.
Option to purchase
A provision in a legal contract where a person has a right but not an obligation to buy a property.
Oral contract
Any agreement entered into without formal documentation; in real estate, it is not legally binding.
Ordinary income
Income derived from business activities that does not include capital gains and are thus subject to full or ordinary rate taxation.
Original cost
The initial amount of money paid by the present for the purchase of a property.
Original equity
The initial down payment made by the present owner for a property.
Outstanding balance
The total amount of money that is owed on a mortgage.
Overall interest rate
Interest rate composed of pure return for the investor, inflation rates and return on equity investment.
Owner
A person or entity that has the legal right to possess a property.
Owner financing
A legal transaction in which the borrower obtains financing from the borrower and not through banks or other lending institutions.
Owner occupant
A property owner who resides on his property.
Owner's equity
The total amount of investment in terms of money that an owner has in his business.
Owner's policy
The insurance policy of a property owner that covers losses from liens against or defects in the title.
Ownership
The legal right to possess and transfer a property.
Letter P
Package loan
A mortgage loan that can be secured for the purpose of purchasing a home and improving the property as well.
Panic selling
Widespread selling of properties after market prices suddenly decline sharply.
Paramount title
The title in which ownership is superior or stronger compared to other claims.
Parcel
A piece or extended area or tract of land.
Partial reconveyance deed
A deed in which a provision exists that allows a piece of land to be freed from any encumbrances.
Partial release clause
A provision in a trust deed that allows a part of the real property to be freed from the lien upon paying of a certain amount of the debt.
Partially amortized loan
A loan in which only a certain portion of the loan is amortized while the rest is considered as straight term loan.
Participation loan
A mortgage loan provided by more than one lender and where profits and losses are shared based on the portion of the loan each of the lenders owns.
Party or parties
Refers to the person or persons who enter a real estate transaction as a principal player like buyer, lender, borrower or seller.
Payback period
The duration in time it takes for investors to regain capital and earn revenues/profit.
Payment adjustment date
The date in which the principal and interest payment made by borrower of an adjustable rate mortgage loan changes.
Payment cap
A provision typical in adjustable rate mortgages that limits any increases in the amount being paid by the borrower .
Payment rate
The rate in which a borrower under an adjustable rate mortgage repays the loan.
Payoff statement
A legal document in which a loan payoff is being considered and contains the loan account status, total amount due and interest rate; also known as letter of demand.
Penalty
Monetary punishment for non-fulfillment of contractual obligation established by law or authority.
Percentage lease
A lease of property where rental payment is calculated based on the tenant's retail sales or profits.
Performance
The fulfillment of contractual obligations as required by law.
Periodic interest rate cap
The maximum increase or decrease in the interest rate of an adjustable rate mortgage loan at a certain period in time.
Permanent loan
A mortgage loan which has a minimum term of ten years and is fully amortized.
Plus interest
A loan payment option in which equal payments are made to reduce principal loan amount as well as accrued interest value.
Power of sale
A provision in a will, deed or trust that authorizes the sale or sale of a property according to the specific terms and conditions of the provision.
Prepayment clause
A provision in a mortgage agreement that gives the borrower the right to pay a part or all the mortgage debt before maturity.
Purchase agreement
A legal contract that details the sale of the property between buyer and seller.
Purchase and installment saleback
An agreement that allows the purchase of a property once construction is completed and at the same time, the immediate saleback of the property on an installment contract.
Purchase and leaseback
An agreement that involves a property being leased back to the seller as soon as a buyer purchased the property.
Letter Q
Qualified fee
A base fee which has a limitation annexed to it.
Quasi-contract
Refers to a legal obligation imposed by law for reasons of fairness and justice.
Quiet title
A court action taken to establish ownership and remove any cloud on the title.
Quiet title action
A legal process with a purpose of eliminating all adverse claims against a property to perfect the title.
Quitclaim deed
Deed that releases all interests a person may have on a property and used to remove all adverse claims against the title.
Letter R
Rate
Amount or quantity relative some basis
Rate of Return
The total gain or loss, expressed in percentage, gained from an investment; usually calculated on a yearly basis.
Rate adjustment date
The specific date in an adjustable rate mortgage when the interest rate is adjusted or changed.
Raw land
Any undeveloped land in its natural state.
Ready, willing and able buyer
A person who is prepared and firm on his decision to consummate a real estate purchase transaction.
Real Estate Owned
Any foreclosed or-repossessed property owned by a lending institution in which acquisition was due to mortgage default.
Real estate
Any portion of land which includes all its permanent, natural and man-made attributes.
Real estate agent
A state-licensed individual authorized to negotiate real estate transactions by a real estate broker.
Real estate broker
A person, partnership or corporation who brings together buyer and seller for a commission; must be state licensed.
Real estate financing
The purchase of a property thru borrowed or equity funds.
Real estate market
The total amount of buyers and sellers of real estate properties at the current time.
Real estate tax
Government-imposed tax paid by the property owner based on the property's appraisal value.
Real property
Any land and all the permanent fixtures on it including trees and buildings.
Reconveyance
A legal document issued when all liens and claims created by a deed of trust on a property are removed .
Recording
The process of documenting a file done by county public officials to make it available to the public.
Refinancing
The payment of an existing loan with money from a new loan.
Registrar of Deeds
The government agency responsible for issuing and transferring titles, recording and maintaining public records.
Release clause
A clause or provision in a sales contract that allows the seller to continue to accept other offer; provision in a mortgage which pertains to a portion of a property that can be freed from any liens upon payment of a specific amount.
Rent control
Any regulation imposed by municipal ordinance or federal law that limits rent increases annually.
Restriction
Any limitation imposed on the use of a property.
Return on investment
Calculated based on the money gained or lost in an investment.
Return of investment
A regain of money invested from a sale or depreciation.
Right of occupancy
Having legal right to use and occupy a property under a lease contract.
Risk analysis
A scientific and systematic method of calculating risks based on the occurrence of specific events and the magnitude of their consequences.
Rollover loan
A loan that allows a borrower to renew or extend the loan's term.
Letter S
Safe rate
An interest rate provided by investments such as secured first mortgages or high grade bonds.
Sale and leaseback
An agreement in which a buyer purchases a property and allows the seller to lease the property.
Sales contract
A legal agreement between buyer and seller detailing the terms and conditions of a property purchase.
Sandwich lease
A leasing contract whereby the lessee subleases the same property.
Seasoned loan
A mortgage loan that has been settled in a lender's book for a minimum of 12 months.
Second mortgage
A mortgage loan which has been used on an earlier mortgage as collateral.
Secondary financing
A mortgage loan that is subordinate to a senior mortgage.
Secret interest
A concealed interest in a property.
Security
An investment instrument to guarantee payment of debt.
Self-liquidating loan
A mortgage loan primarily used to finance current assets.
Seller financing
Situation where property owner holds the buyer's mortgage.
Senior mortgage
Also known as first mortgage; higher in priority and is the first paid or settled.
Servicing loan
The administering of a mortgage loan to make it current like mortgage payment collection.
Severalty ownership
Where property has only one owner.
Sheriff's deed
The sale of a property, usually due to foreclosure, by the sheriff.
Sheriff's sale
A public sale of properties legally seized by a court where proceeds go to the county treasury.
Short-term capital gain
A profit obtained from the sale of a security owned for less than a year.
Simple interest
The amount of interest based on a principal amount and not on earned interest.
Slander of title
An intentional and malicious public statement meant to harm a person's ownership of a property.
Soft money
Money that was spent in architect's fees, legal fees and others during an investment or development of a property.
Sole ownership
Possession or ownership of a property by one person or entity.
Special assessment
A property tax imposed only on specific parcels of land that directly benefits there from.
Special power of attorney
A legal authority given to a person to transact on behalf of another person under particular terms and condition.
Special warranty deed
A deed where seller agrees to protect the buyer from any adverse claims made against the property which will result in the buyer's losing the title.
Specific lien
A lien attached to a particular property.
Letter T
Take-out loan
A permanent loan arranged by the owner for a buyer usually to pay for construction costs.
Tangible property
Any property such as real estate that can be physically seen and touched.
Tax
Any fee imposed by the government on an income, service or activity.
Tax deed
A property deed issued at a public sale during the purchase of a property that was seized due to nonpayment of taxes.
Tax lien
A claim against a property placed when the owner has failed to pay assessment or property taxes.
Tax title
The title transferred through a tax sale.
Taxable value
The property's market value which serves as the basis for tax calculation.
Tenancy at sufferance
A condition in a lease whereby tenant remains in possession of the leased property after expiration of the lease, without the landlord's consent.
Tenancy at will
A situation whereby tenant is allowed to remain in the leased property even after lease contract has expired.
Tenant
Lessee; the person who pays for the possession of a property under the terms and conditions of a lease contract.
Term mortgage
A housing loan where only the interest is paid in the first five years and where entire principal is due at the end of the term.
Termination statement
A legal document stating that the borrower has paid all financial obligations to the lender.
Third party
A separate person or entity aside from the two principals.
Tight money market
A condition of a market where interest rates increase and underwriting requirements are tightened because of the high demand for money while supply is insufficient.
Trading on equity
Borrowing funds to magnify return on capital investment; also known as financial leverage.
Transfer fee
The amount charged by a lending mortgage institution to change its records to indicate a different owner.
Transfer tax
Tax imposed by the government when title is transferred from the seller to the buyer.
Trust
A legal arrangement in which fiduciary control of a property is given by an individual to a person or institution.
Trust deed
A deed that transfers the property's title to a trustee who uses it as a loan security.
Trust deed lien
A lien on a property used to secure a trust deed loan.
Trust funds
Any securities or money held in a trust.
Trustee
A person or institution to which a property is legally entrusted.
Truth-In-Lending Act
A federal law requiring lenders to disclose all terms and conditions of a mortgage in full including the APR.
Turnkey project
A type of project in which a single supplier is responsible for all its components.
Turnover
The ratio of inventory to annual sales.
Letter U
Underwriting
The procedure undertaken to calculate risks in approving a particular loan.
Underwritten company
A company that is not authorized to insure but only conducts title searches in return for a percentage of the premium.
Undisclosed principal
A principal who is represented by an agent and remains unknown until real estate transaction is complete.
Unenforceable contract
Any agreement that can not be legally enforced due to valid legal reasons such as incapacity or presence of undue influence.
Unilateral contract
An agreement in which services are paid only after it has been performed successfully.
Unity of title
An estate characteristic in which time, title, interest and possession exists in joint tenancy.
Unity of ownership
Composed of the four unities required to establish joint tenancy of a property.
Universal agent
A person fully authorized to act on behalf of the principal in all transactions; also known as general agent.
Unlimited liability
A type of investment wherein a partner has full responsibility for the general partnership's obligations.
Unsecured
An obligation backed by the integrity of the borrower and not by any collateral.
Letter V
Vacancy factor
A measurement, expressed in percentage and calculated by dividing the actual gross rental income loss by the potential gross rental income.
Vacancy rate
The number, expressed in percentage, of all the occupied and unoccupied units at a given period in time.
Valid contract
A contract which contains all the requirements and pre-requisites to make it binding and enforceable.
Valuation
A report which contains the assessed value of a property.
Value analysis
A systematic method used to determine the functions of specific systems to satisfy the requirements of reliability, quality and performance at the lowest total effective cost possible.
Value calculation
The estimated value in the market place as recognized by buyers, lenders and sellers.
Value in exchange
The trading of services of goods by two persons or more.
Value in use
The value calculated based on annual cash inflows plus the disposal value and obtained from a property.
Value of property
The initial price of a real property.
Variable Rate Mortgage
A housing loan in which the interest rate depends on money market conditions; also known as floating rate mortgage.
Variable interest rate
An interest rate that is adjusted based on indices such as prime rates.
Variable interest rate loan
A housing loan in which the interest rates are based on the adjustments in prime lending rates.
Variance
Any discrepancy that departs from expectations.
Vendee
A person who buys property, services or goods.
Vendor
A person who sells property, goods or services.
Vendor's lien
The legal right of a seller to re-possess a property or goods if buyer refuses to pay.
Verbal
Employed the use of words to communicate.
Vested
Absolute and fixed; without contingency.
Veteran's Administration
The federal agency in charge of the VA loan guarantee as well as other services provided for eligible veterans.
Veteran's Administration loan
A housing loan provided by the federal government to eligible veterans where they could apply for a mortgage loan with no down payment and a 1% mortgage insurance premium.
Veteran's Administration-guaranteed mortgage
Real estate loans availed by veterans under a federal housing program.
Void contract
A contract that is not enforceable or valid.
Voidable contract
A contract that can be rejected by one or both parties.
Volume
Quantity; a measurement of amount.
Voluntary lien
Any lien placed on a title that is known to the owner.
Letter W
Waive
To relinquish
Waiver
Usually in the form of a document stating intentional.
Warranty
Any agreement between a buyer and seller during a purchase.
Warranted value
The term often confused with warranted price
Warranty deed
A deed in which the seller guarantees a clean title to the property.
Warranty of authority
An assurance that a person was fully authorized to perform a deed and relieves the owner from any liabilities from losses incurred if the person has no authority.
Wear and tear
The non-performance of a part or gradual deterioration of an asset due to prolonged use.
Wild document
A document without basis or reason.
Will
A legal document that contains a person's directions for disposal of his assets.
Without recourse
A legal term referring to a document holder who does not have any recourse to the person who owns the document.
Words of conveyance
The statement in a deed that shows a grantors' consideration to transfer a property.
Working capital
The assets of a business over current liabilities at any given time.
Wrap around loan
A finance technique that allows an existing loan to be refinanced at an interest rate that is almost equal to the existing loan.
Writ of attachment
A legal order to seize a property to secure a creditor's claim.
Writ of execution
A court order that instructs an officer of the court to enforce the court's judgment.
