Armbrust Real Estate Terms

STUDY
PLAY

Terms in this set (...)

where goods and services are bought and sold and price is determined.
market
the number of ready and willing buyers in a market
demand
residential, commercial, industrial, agricultural, special purpose
classifications of land use
the amount of product available for sale
supply
changes personal property to real property
annexation
a right, privilege, obligation or improvement that passes with title
appurtenance
scarcity, improvements, permanence of investment, area preference
economics characteristics of property
crops, considered to be personal property
emblements
where the parties set forth the agreement orally or in writing
express contract
a contract that has no legal force or effect, an illegal contract or one that lacks an essential element of a contract
void contract
when one party has the choice to buy or lease, the other party must perform
option
where one party to the contract has the right to terminate or enforce the agreement
voidable contract
violation of the terms or requirements of a contract
breach of contract
a contract that has been signed by both parties
ratified contract
a contract that has been fully performed and all promises have been fulfilled
executed contract
an agreement where one party makes a promise to induce another party to do somethings such as a listing contract
unilateral contract
when a title company defends an owner against a claim, the title company retains any award or judgement
subrogation
where one party cannot sue the other party to perform, such as an oral contract to purchase real estate
unenforceable contract
a contract that has yet to be fulfilled, such as a purchase agreement that has not closed
executory contract
an agreement where both parties are obligated to perform, such as a purchase agreement

"a promise for a promise"
bilateral contract
something of value between the parties to a contract
consideration
the transfer of an existing contract to new parties
assignment
an agreement between the borrower and lender that provides security for a debt, a two party agreement
mortgage
a lien as a result of a court action (lawsuit)
judgement lien
substitution of a new contract (debt or obligation) between the same or different parties
novation
an agreement between the borrower and lender that provides security for a debt, a three party agreement
deed of trust
changing the priority of a lien, moving a lien from 1st priority to 2nd priority
subordination
pledging property as collateral for a loan through a mortgage or deed of trust
hypothecate
in addition to real estate taxes, a charge by the tax authority to pay for municipal improvements
special assessment
a charge or claim against a property to enforce a debt
lien
meaning "pending litigation" once recorded a lis pendens gives notice of a possible future lien
lis pendens
one-thousandth of one dollar; 15 mills = $0.15, uses to calculate real estate taxes
mill
a lien where the collateral is a particular property, upon non-payment the lender can foreclose
specific lien
the right of a property owner to stop mortgage or tax foreclosure by paying the lien or taxes, plus costs and interest
redemption
inducing owners to sell by claiming that the entry of a protected class of people into the area might have a negative impact on property values
blockbusting
law that prohibits discrimination in the sale or rental of housing based on race, color, religion, national origin, sex, familial status, or disability
fair housing act
private limitations on use and ownership including deed restrictions, easements, leases, and liens
D.E.L.L.
refusing to make loans in specific areas regardless of the economic qualifications of the applicant
redlining
the presence of one or more individuals who have not reached the age of the majority who live with a legal guardian
familial status
the first law prohibiting racial discrimination
civil rights act of 1866
governmental limitations on use and ownership including police power, escheat, taxation and eminent domain
P.E.T.E.
the process by which the government exercises its right of eminent domain
condemnation
a compensation agreement where the commission amount is anything above a net amount to the seller
net listing
a type of listing where the broker earns a commission unless the seller finds a buyer
exclusive agency listing
known as the "holdover", allows broker to claim a commission after the listing expires
broker protection clause
meaning "for the life of another", a life estate based on the life of a person other than the life tenant
pur autre vie
the person who creates the life estate will recapture ownership, a future interes
reversionary interest
a form of co-ownership with the right of survivorship, requiring the unities of possession, interest, time, and title
joint tenancy
the person who benefits from the trust
beneficiary
title held by two or more natural or legal persons such as joint tenancy
co-owernship
a trust created during the trustor's lifetime as opposed to a testamentary trust which is created by a will
living trust
the future interest of the person named in a life estate who will become the owner
remainder interest
rights of owners whose land is adjacent to non-navigable waterways, land is owned to the center of the waterway
riparian rights
channeling home buyers to a particular area based on race, religion or discouraging buyers from considering a certain area has the affect of limiting choice
steering
illegal unearned fees for making referrals to settlement service providers
kickback
a detailed accounting of all monies, charges and credits in a real estate transaction
closing statement
a closing where a third party receives all documents and funds and coordinates the closing
escrow closing
a form required by RESPA that includes all monies paid into and out of a real estate closing
HUD-1
an estimate of all loan costs which must be given to the borrower within three days after loan application
good faith estimate
federal law that requires disclosure regarding loan closing costs and prohibits kickback or referral fees
RESPA
ingesting lead can cause serious damage, known lead based paint hazards must be disclosed when renting or selling residential property built before January 1, 1978
lead based paint
interest that is due and payable
accrued interest
the mathematical dividing of sharing of financial responsibility between the buyer and seller with the amounts entered onto the closing statement
proration
recorded on a closing statement indicating an amount owed and to be paid at the closing
debit
a naturally occurring odorless, tasteless, radioactive gas causing lung cancer
radon
items that have been paid in advance that should be reimbursed
prepaid item
recorded on a closing statement as an amount in ones favor
credit
fungus requiring organic material and moisture to grow which can cause sever allergic reactions and asthma
mold
the technique of layering soil over refuse in a landfill
capping
where a broker is an agent for both the buyer and seller in the same transaction, each party must consent to the dual agency
dual agency
a relationship of trust and confidence between the agent and the principal/client
fiduciary relationship
a development consisting of diverse land uses such as housing, recreation and retail, or diverse densities, all contained in one subdivision
PUD
a type of ownership with separate ownership of individual units and shared ownership of common elements and limited common elements
condominium
intentional misrepresentation of material facts
fraud
a person who is authorized to act for another (the principal) as a fiduciary and advocate
agent
notice presumed by law as a result of recording documents
constructive notice
an indefinite leasehold, very informal, death of either party will terminate
estate at will
a leasehold interest for a fixeo period of time with definite beginning and ending dates, much like a lease
estate for years
when various settlement services are offered by one company or affiliated companies, the affiliation and financial benefit must be disclosed to consumers
affiliated business arrangement
where many purchasers share ownership (time share estate) or rights of occupancy (time share use) of a single unit
time share
portions of a condominium where ownership is shared by all of the individual unit owners as tenants in common
common elements
where the monthly principle and interest payments fully retire the debt over the loan term, no balloon payment
amortized loan
charging more interest than in allowed by law, lender/creditor or non-lender/creditor
usury
interest that is due and payable
accrued interest
a contract between the landlord and the tenant for possession of property
lease
the tenant, receiver of the lease, has a leasehold interest
lessee
the landlord, giver of the lease, has a leased fee estate
lessor
a federal law that prohibits discrimination in the granting of credit to protected classes
Equal Credit Opportunity Act
a VA appraisal
certificate of reasonable value
a loan secured by both real and personal property
package loan
designed to implement T-I-L requiring disclosure to borrowers of the costs to obtain a loan
Regulation Z
a loan secured by more than one parcel of real estate, frequently used by subdivision developers
blanket loan
where only interest payments are made and the full principle balance is due at the end
straight loan
Federal National Mortgage Association, buys mortgages on the secondary mortgage market
fannie mae
a document indicating the debt has been paid, also called a release
satisfaction
a leaser where the tenant pays base rent plus the property expenses
net lease
a lease common in retail where the tenant pays a base rent plus some percentage of sales
percentage lease
a lease where a tenant lease space to a sub-tenant and remains responsible for the lease payment to the landlord
sub lease
the tenants right to occupy under the lease agreement
leasehold estate
a lease where the tenant pays a fixed amount and the owner pays all the property expenses
gross lease
a lease designed to facilitate and prior to the ultimate purchase of the property
lease purchase
transferring the tenants rights to a new tenant, the original tenant may or may not be responsible for the lease payments
lease assignment
the owners interest when the right of possession has been given to a lessee
leased fee estate
the market where existing loans are bought and sold, providing new funds for the primary mortgage market
secondary mortgage market
a loan typically with 20% down, minimum credit scores and ratios neither insured by FHA or guaranteed by VA
conventional loan
a loan by an approved lender where the lender is insured against loss by the FHA
FHA loan
the final loan payment that is much larger than the periodic payments because the loan is not fully amortized
balloon payment
a transaction where the seller rents back the property from the buyer
sale and leaseback
the market where loans are originated between borrowers and lenders
primary mortgage market
a loan by an approved lender guaranteed by the Department of Veteran Affairs
VA loan
any loan for the purchase of real property, includes seller financing
purchase money mortgage
an agreement between the borrower and the lender pledging real estate as security for a loan
mortgage
when a defaulting borrower pays the late payments and fees after the foreclosure sale, therefore retaining ownership
staturtory redemption
the lender who receives the mortgage
mortgagee
a loan charge that has the effect of increasing the lenders yield, one discount point increases yield by 1/8th of 1 percent
discount point
the borrower, who gives the mortgage
mortgagor
evidence of the debt, this loan document states the terms of repayment, a note may be sold
promissory note
the pledging of real property as collateral for a loan, usually through a mortgage or deed of trust
hypothecation
when a defaulting borrower pays the late payments and fees before the foreclosure sale, reinstating the loan
equitable redemption
when the tenant remains in possession without the landlords permission
estate at sufferance
that which is known, having been told
actual notice
conspiring to set fixed prices or commission rates
price fixing
requires a financing statement and security instrument when personal property is used as security for a loan
Uniform Commercial Code
a legal process in which the property pledged as collateral for the loan is sold to satisfy the debt
foreclosure
a clause in a mortgage or deed of trust that requires the lender to record a release of lien upon repayment of the loan
defeasance clause
a clause in a mortgage or deed of trust that permits the lender to require the entire balance be paid if the buyer transfers ownership of the property
alienation clause
a personal judgment against the borrower when the foreclosure sale does not produce enough money to fully pay the debt
deficiency judgment
a loan document that places the property as collateral for the loan
deed of trust
a clause in a mortgage or deed of trust that permits the lender to require the entire balance be paid if the seller sales the property
due on sale clause
a clause in a mortgage or deed of trust that permits the lender to require the entire balance be paid upon a buyer default
acceleration clause
the examination of public records to determine the chain of title or title defects
title search
the act of placing a document in public record
recording
a tax on the transfer of property, usually require stamps to be affixed to the deed
transfer tax
real property transferred through a will
devise
a policy insuring the buyer against loss of title
title insurance
title sufficient to convince a purchaser would be reasonably free from the risks of litigation or defects
marketable title
a legal process where a court will determine the validity of any will, the assets of the estate, and who will inherit property
probate
when a person dies without a will, property will pass to heirs according to state law
inestate
direct knowledge of facts
actual notice
a record of successive transfer of title from one owner to the next continuing from the beginning to the last conveyance
chain of title
the right to or ownership of property
title
a clause in a deed whereby the seller promises to defend the buyer's claim of title
quiet enjoyment
notice given by recording documents in the public records, the law presumes one could know upon diligent investigation
constructive notice
a record of all recorded documents that effect title to a particular property
abstract of title
a deed that offers no warranties or promises to the buyer and transfers whatever ownership the seller possesses
quiteclaim deed
the "to have and to hold" clause in a deed, describing the type of ownership of the buyer
habendum clause
law requiring legal documents to be in writing to be enforceable
statue of frauds
notarizing a document, often required for recordation
acknowledgement
a legal document that transfers ownerships rights
deed
the person who accepts the deeds (buyer)
grantee
mixing other people's money with the broker's personal funds
commingling
illegal possession of another's land which may lead to acquiring title
adverse possession
the person (seller) delivering a deed to another (buyer)
grantor
a type of deed that offers the most protection to the buyer
general warranty deed
a federal law intended to protect consumers and require lenders to advertise loan costs truthfully
Truth in Lending
also known as periodic tenancy or a tenancy from year to year, similar to a month to month rental agreement
estate fro period to period
payments made by the lessee to the lessor for possession
rent
cooperative
corporate owned building occupied by shareholders
sometimes called builders trade breakdown or the component method, a method of estimating cost by trades or individual building components
unit in place
the most probable price a property would sell under specific conditions
(arm's length, open market)
market value
minor repairs intended to keep equipment functioning
corrective maintenance
mitigating and evaluating risk, "avoid, control, transfer, retain"
risk management
the person charged with maintaining the owners investment and maximizing owners income
property manager
effective demand, utility, scarcity and transferability (D.U.S.T.)
components of value
an opinion of value
appraisal
employment agreement between the owner and manager establishing the relationship, scope of management duties and responsibilities
management agreement
scheduled maintenance to prevent costly repairs and replacements, annual servicing etc.
preventive maintenance
when a tenant vacates a property because the landlord failed to provide essential services
constructive eviction
the historical and factual selling price of a property
market price
the rate of return to the owner for the investment in property, used in the income approach IRV formula to estimate value
capitalization rate
a loss of value due to outmoded design, caused by changing tastes or construction standards
functional obsolenscence
a reduction of property value due to wear and tear of a component of deferred maintenance
physical deterioration
a loss of value due to misplaced improvements or economic conditions (external factors)
external obsolescence
income remaining after deductions for property expenses, used in the income approach IRV formula to estimate value
net operating income
information about the forces that affect the value (P.E.G.S.)
general data
information about the subject property and comparable sales
specific data
an agent who is authorized to perform a single act or assist in a single transaction for the principal
special agent
the agent for the agent, illegal in some states
sub agent
a hidden structural defect that would not be discovered by ordinary inspection
latent defect
the one who started a chain of even that results in a sale
procuring cuase
not knowing when the agent should have known
negligent misrespresentation
exaggerated comments about proprety
puffing
the person who hires the agent, could be the buyer, seller, landlord or tenant
principal
changing real property to personal property
severance
attached to property by a tenant for use in the business
trade fixture
interest, benefits, and rights of ownership
real property
an item that was once personal property has become real property
fixture
personal property, aka personalty
chattel
the land and all things permanently attached
real estate
immobile, indestructible, and unique
physical characteristics of real property
insurance paid by the borrower that protects the lender against loss insuring the top 20 percent of the loan
private mortgage insurance
used to achieve fairness and uniformity in real estate tax assessments
equalization factor
refers for real estate tax assessments, it means "according to value"
ad valorem
640 acres, one of 36 in a township
section
a reference used by surveyors to measure elevation
benchmark
east and west survey lines parallel to the base line, six miles apart, identifying tiers
township lines
5,280 feet
mile
43, 560 square feet
acre
natural or man-made surface markers used to identify lot boundaries or corners in a metes-and-bounds legal
monuments
a strip of land running north and south, six miles wide
ranges
used in the lot and block method of legal description, showing the boundaries of individual lots
plat map
a survey line running east and west in the rectangular survey land description system
base line
the person who creates a trust
trustor
six miles square and 36 square miles, consisting of 36 numbered sections
township
the starting point in a metes and bounds legal description
point of beginning
the person who holds title under the trustee's direction in a trust
trustee
a survey line running north and south in the rectangular survey land description system
principal meridan
a system of describing land using a grid system or surveyed lines
rectangular survey
a system of describing land which identifies the point of beginning and the perimeter boundary lines of the property
metes and bounds
where the owner (trustor) conveys to a third party (trustee) for the benefit of another (beneficiary)
trust
ownership of real property by one person only
severalty
a trust established by will after the trustor's death
testamentary trust
a possessory (non-ownership) interest in a time-share
time-share use
a type of property ownership where each spouse has an equal interest- property acquired during the marriage
community property
an ownership interest in a time share
time-share estate
a type co-ownership where each owner has an undivided fractional interest
tenancy in common
co-ownership by married couples only, each having an equal undivided interest and the right of survivorship
tenancy by the entirety
the property that has secured the right to use another property under an appurtenant easement
dominant tenement
a charge or liability that attaches to property such as liens, restrictions, or easements
encumbrance
the transfer of ownership to the state when the owner dies without a will or hiers
escheat
the highest form of real property ownership recognized by law
fee simple absolute
the property that has granted an appurtenant easement to another
servient tenement
a freehold estate that is limited in duration to the life of the holder of the life estate or the life of another
life estate
right of owners whose land is adjacent to navigable waterways, land is owned to the average water line
littoral rights
the legal life estate of a family home protected from unsecured creditors
homestead
the right of the government to take private property for public use
eminent domain
an ownership interest in real property, could be fee simple, defeasible or life estate
freehold estate
a right given to an individual allowing use or access to another's land such as a utility easement
easement in gross
an employment agreement between a licensee and a buyer, seller, landlord, or tenant
listing agreement
where one might secure the right to use another person's land without the owners approval
prescriptive easement
a fee simple estate that may be lost upon the occurrence of some event
ownership "so long as" or "as long as" also called "determinable fee"
defeasible fee
when one persons property extends beyond the lot lines onto the property of another
encroachment
a possessory interest in real property, could be estate for years, periodic tenancy, tenancy at will or sufferance
non-freehold estate
the amount of product available for sale
supply
the number of ready and willing buyers in a market
demand
alterations to a building or space to suit the tenants needs
tenant improvement
a process of estimating value by adjusting comparable sold prices for physical differences
sales comparison approach
the current cost to reproduce the structure with an exact duplicate using the same material and construction standards
reproduction cost
the income approach for single family rentals up to four units, GRM * MONTHLY RENT = VALUE
gross rent multiplier
building cost new minus building depreciation plus site value
cost approach
the current cost to rebuild the structure with a building of similar utility but with modern materials and construction standards
replacement cost
the potential use of the property that would produce the highest income or value
highest and best use
the act of combining two or more separately owned parcels into one larger parcel to increase the total value
assemblage
an appraisal concept that presumes a property is not worth more than the cost to the buyer for an equally desirable substitute ( comparable listings)
subsitution
when the value of the smallest and most inferior property is increased by its proximity to superior properties
progression
sometimes called the square foot method, a technique to estimate cost new on an overall cost per square foot basis
comparison method
the increase in value resulting from the assemblage
plottage
when the value of a superior property is negatively influenced by the surrounding inferior properties
regression
an easement that "runs with the land" allowing one property owner to use the land of another
appurtenant easement
a type of listing when only the broker who brings a buyer earns a commission, the seller retains the right to sell
open listing
a type of listing where the broker earns a commission regardless of who procures a buyer
exclusive right to sell
an intermediary between a buyer and seller who assists both without advocacy to either
transaction broker
standards for property within a subdivision
restrictive covenants
police power designed to protect the public health, safety and welfare
zoning
legal continued use of a property that does not conform to new zoning restrictions
nonconforming use
a clause in a deed limiting the use or ownership of property
deed restrictions
government permission to use land inconsistent with zoning to the public benefit
conditional use permit
an exception granted to use or improve a property differently than what is allowed under existing zoning ordinance
variance
issued by the local building inspector after completion and prior to occupancy
certificate of occupancy
a development including diverse land use or densities
PUD
a loss in value against cost new caused by physical deterioration, functional or external obsolescence
depreciation
a process of estimating value based on an analysis of income IRV or GRM
income approach