Abstract and attorney's opinion of title
An opinion of title status based on a review of the abstract by an attorney. Similar to a certificate of title, the opinion of title does not protect against defects that cannot be discovered from the public records.
Abstract of title
The condensed history of a title to a particular parcel of real estate, consisting of a summary of the original grant and all subsequent conveyances and encumbrances affecting the property and a certification by the abstractor that the history is complete and accurate.
Abstract of judgment, law
The summary of a court judgment that creates a lien against a property when filed with the county recorder.
Accelerated cost recovery system
A tax calculation that provides greater depreciation in the early years of ownership of real estate or personal property.
A bookkeeping method that depreciates property faster in the early years of ownership.
A provision that gives a lender the right to collect the balance of a loan if a borrower misses a payment.
Acquiring title to additions or improvements to real property as a result of the annexation of fixtures or the accretion of alluvial deposits along the banks of streams.
On a closing statement, items of expense that are incurred but not yet payable, such as interest on a mortgage loan or taxes on real property.
The legal process that results in the tenants being physically removed from the leased premises.
Additional principal payment
Extra money included in the monthly payment to help reduce the principal and shorten the term of the loan. This may activate a prepayment penalty clause.
Adjustable-rate mortgage (ARM)
A loan with an interest rate that is periodically adjusted to reflect changes in a specified financial index.
Adjusted cost basis
The cost of any improvements the seller makes to the property. Deducting the cost from the original sales price provides the profit or loss of a home when it is sold.
Ad valorem tax
A tax levied "according to value", generally used to refer to real estate tax. Also called the general tax.
The amount of time between interest rate adjustments in an adjustable-rate mortgage.
Adjustable-rate mortgage (ARM)
A mortgage loan with the interest rate on the note periodically adjusted based on an index which reflects the cost to the lender of borrowing on the credit markets.
The acquisition of title to property through possession without the owner's consent for a certain period of time.
This five-member council is charged with considering applications for real estate licensing schools and instructors in Illinois. Prelicensing and continuing education (CE) course content is also supervised by this body. Members are appointed to 4-year staggered terms, with a 12-year lifetime limit.
Affidavit of title
A written statement, under oath by a seller or grantor of real property and acknowledge by a notary public, in which the grantor identifies himself and indicates marital status, certifies that the title is without defects, and certifies he is in possession of the property.
Affiliated business disclosure
A disclosure that a company or individual referring settlement services has either an affiliate relationship with or a direct or beneficial ownership interest of more than 1% in a provider of settlement services.
The relationship of trust that exists between sellers and buyers and their agents. The ______ is formed through a written contract.
Agency coupled with an interest
The agency relationship in which the agent is given an estate or interest in the subject of the agency.
A designated airspace over a piece of land. An ______, like surface property, may be transferred.
The right to use the open space above a property, usually allowing the surface to be used for another purpose.
The act of transferring property to another. ______ may be voluntary, such as a by gift or sale, or involuntary, as through eminent domain or adverse possession.
A provision that requires the borrower to pay the balance of the loan in a lump sum after the property is sold or transferred. This clause prevents the borrower from assigning the debt without the lenders approval.
Allocation of Customers or Markets
An agreement among real estate companies to divide their markets and refrain from competing for each other's business. This is Illegal under antitrust laws.
A system of land ownership in which land is held free and clear of any rent or service due to the government; commonly contrasted to the feudal system. Land is held under this system in the United States.
American Land Title Assoc. (ALTA) policy
A title insurance policy that protects the interest in a collateral property of a mortgage lender who originates a new real estate loan.
Americans with Disabilities Act (ADA)
A law passed in 1990 that outlaws discrimination against a person with a disability in housing, public accommodations, employment, government services, transportation and telecommunications.
The process of paying the principal and interest on a loan through regularly scheduled installments.
A loan with scheduled periodic payments of both principal and interest. This is opposed to loans with interest-only payment features, balloon payment features and even negatively amortizing payment features.
Annual Percentage Rate (APR)
The cost of the loan expressed as a yearly rate on the balance of the loan.
The appraisal principle that holds that value can increase or decrease based on the expectation of some future benefit or detriment produced by the property.
Laws designed to preserve the free enterprise of the open marketplace by making illegal certain private conspiracies and combinations formed to minimize competition.
The process of estimating a property's market value based on established methods and professional judgment.
A detailed written report on the value of a property based on recent sales of comparable sites in the area.
An independent person trained to provide an unbiased opinion of value in an impartial and objective manner.
The way a taxing body actually authorizes the expenditure of funds and provides for the sources of the funding.
An easement that is annexed to the ownership of one parcel and allows the owner the use of the neighbor's land.
Article 15 of the Real Estate License Act of 2000
Provides legal definitions of real estate terms in Illinois.
A fire-resistant mineral used for insulation and home products that has been found to pose a health hazard.
The combining of two or more adjoining lots into one larger tract to increase their total value.
A tax assessor's determination of the value of a home in order to calculate a tax base.
The estimated value of a piece of real estate or a levy placed on property in addition to taxes.
A provision that allows a buyer to take responsibility for the mortgage from a seller.
A fee the lender charges to process new records for a buyer who assumes an existing loan.
The act of taking a person's property into legal custody by writ or other judicial order to hold it available for application to that person's debt to a creditor.
Attorney's opinion of title
An abstract of title that an attorney has examined and certified to be, in his opinion, an accurate statement of the facts concerning the property ownership.
Computer systems that permit lenders to expedite the loan approval process and reduce lending costs.
A clause in a listing agreement that states that the agreement will continue automatically for a certain period of time after its expiration date. This is illegal in many states including Illinois.
The sudden tearing away of land, as by earthquake, flood,, volcanic action, or the sudden change in the course of a stream.
Arrangements that an owner makes to oversee the sale of one property and the purchase of another at the same time.
The appraisal principle that states that the greatest value in a property will occur when the type and size of the improvements are proportional to each other as well as to the land.
A mortgage in which monthly installments are not large enough to repay the loan by the end of the term. As a result, the final payment due is the lump sum of the remaining principal.
A proceeding in which an insolvent debtor can obtain relief from payment of certain obligations. ______ remain on a credit record for seven years and can severely limit a person's ability to borrow.
Bargain and sale deed
A deed that carries with it no warranties against liens or other encumbrances but that does imply that the grantor has the right to convey title. The grantor may add warranties to the deed at his discretion. Granting clause example: "I, ______, grant, bargain, and sell..."
The main imaginary line running east and west and crossing the principal meridian at a definite point, used by surveyors for reference in locating and describing land under the rectangular (government) survey system of legal description.
The financial interest that the Internal Revenue Service attributes to an owner of an investment property for the purpose of determining annual depreciation and gain or loss on the sale of the asset.
A permanent reference mark or point established for use by surveyors in measuring differences in elevation.
The lender who makes a loan, also called a mortgagee. The person borrowing money is the mortgagor.
A contract in which the parties involved give mutual promises. Also called "reciprocal" contracts.
A report issued by a title insurance company that details the condition of a home's title and provides guidelines for a title insurance policy.
A mortgage covering more than one parcel of real estate, providing for each parcel's partial release from the mortgage lien on repayment of a definite portion of the debt.
An advertisement whereby the sponsoring broker's name is not identified in the advertisement.
The illegal practice of inducing home owners to sell their properties by making representations regarding the entry or prospective entry of persons of a particular race or national origin into the neighborhood.
Blue sky laws
Regulations on the sale of securities to prevent consumers from investing in fraudulent or high-risk companies without being informed of the risks.
Money or property given to make up any difference in value or equity between two properties in an exchange.
Occurs when two or more businesses conspire against another business or agree to withhold their patronage to reduce competition.
A secondary place of business apart from the principal or main office from which real estate business is conducted. A ______ usually must be run by a licensed real estate managing broker working on behalf of the sponsoring broker. Illinois requires ______ to hold separate licenses.
A written or oral agreement between a sponsoring broker and a consumer for licensed activities to be provided to a consumer in return for compensation or the right to receive compensation from another. All exclusive ______ must be in writing.
Broker's price opinion (BPO)
The estimated value of a property as determined by a real estate broker or other qualified individual or firm. A ______ is based on the characteristics of the property being considered.
Provides federal funding to states and localities to clean up brownfields sites.
A strip of land, usually used as a park or designated for a similar use, separating land dedicated to one use from land dedicated to another use (e.g., residential from commercial).
A comprehensive set of laws that controls the construction or remodeling of a home or other structure.
A city or county employee who enforces the building code and ensures that work is correctly performed.
Building line or setback
Guidelines that limit how close an owner can build to the street or an adjacent property.
A permit issued by a local government agency that allows the construction of a home or renovation of a house.
Bundle of rights
The concept of land ownership that includes ownership of all legal rights to the land. The five rights are possession, control, enjoyment, exclusion, disposition.
A financing technique used to reduce the monthly payments for the first few years of a loan. Funds in the form of discount points are given to the lender by the builder or seller to buy down or lower the effective interest rate paid by the buyer, thus reducing the monthly payments for a set time.
Buyer agency agreement
A principal-agent relationship in which the sponsoring broker is the agent for the buyer, with fiduciary responsibility to the buyer.
A real estate licensee who represents the prospective purchaser in a transaction. They owe the buyer/principal the statutory agency duties.
A real estate licensee who represents prospective residential buyers exclusively. They owe the buyer/principal the common law or statutory agency duties.
CAN-SPAM Act of 2003
Establishes requirements for commercial e-mail, spells out penalties for e-mail senders, and gives consumers the right to have e-mailers stop sending e-mails to them.
Any improvement that extends the life or increases the value of a piece of property.
A mathematical formula that investors use to compute the value of a property based on net income. Net income divided by rate is equal to value.
The percentage rate of return estimated from the net income of a piece of property.
A highly poisonous, odorless, tasteless and colorless gas formed when carbon material burns with restricted access to oxygen.
The amount of cash a rental property investor receives after deducting operating expenses and loan payments from gross income.
In an agricultural lease, the amount of money given as rent to the landowner at the outset of the lease, as opposed to sharecropping.
Certificate of reasonable value (CRV)
A form indicating the appraised value of a property being financed with a VA loan
Certificate of sale
A document issued at a judicial sale, which entitles the buyer to receive a deed after court confirmation of the purchase of the property.
Certificate of title
A written opinion on the status of a piece of property based on an examination of the public record.
Chicago Bar Association, et al. v. Quinlan and Tyson
The 1966 Illinois supreme court decision placed certain limitations on real estate licensees in drafting a contract of sale. The court ruled that licensees are authorized only to fill in the blanks on printed form contracts that are customarily used in the real estate community.
Nontoxic, nonflammable chemicals containing atoms of carbon, chlorine, and fluorine. Most often used in air conditioners, refrigerators, paints, solvents, and foam-blowing applications.
Civil Rights Act of 1866
An act that prohibits racial discrimination in the sale and rental of housing.
The final procedure in which documents are signed and recorded, and the property is transferred.
Expenses incidental to the sale of real estate, including loan, title and appraisal fees.
A document which details the final financial settlement between a buyer and seller and the costs paid by each party.
The grouping of home sites within a subdivision on smaller lots than normal, with the remaining land used as common areas.
A clause in insurance policies covering real property that requires that the policyholder maintain fire insurance coverage generally equal to at least 80 percent of the property's actual replacement cost.
The illegal act by a real estate licensee of placing client of customer funds with personal funds.
The negotiable percentage of the sales price of a home that is paid to the agents of the buyer and seller.
Parts of a property that are necessary or convenient to the existence, maintenance, and safety of a condominium or are normally in common use by all of the condominium residents. Each owner has an undivided ownership interest in the ______.
Common law of agency
The traditional law governing the principal-agent relationship, superseded by statute in Illinois.
Fees paid by the owners of a condominium project or planned-unit development to maintain, repair, improve or operate common areas.
Community Association Manager Licensing & Disciplinary Act
Legislation created to provide for the regulation of managers of community association management and provide for high standards of professional conduct by those licensed.
Community Reinvestment Act (CRA)
A federal law that encourages financial institutions to loan money in the neighborhoods where minority depositors live.
Property accumulated through the joint efforts of husband and wife. It is a classification of property peculiar to certain states.
Comparative market analysis (CMA)
An estimate of the value of a property based on an analysis of sales of properties with similar characteristics.
The valuable consideration given by one person or entity to another person or entity in exchange for the performance of some activity or service.
The interest paid on the principal balance in a mortgage and on the accrued and unpaid interest of the loan.
Comprehensive Environmental Response, Compensation, and liability Act (CERCLA)
A federal law administered by the EPA that establishes a process for identifying parties responsible for creating hazardous waste sites.
Comprehensive Loss Underwriting Exchange (CLUE)
A database of consumer claim history that allows insurance companies to access prior claim information in the underwriting and rating process.
A long-term land use plan sometimes known as a master plan that can be updated and revised based on changing needs and growth.
The process the government uses to take private property for public use without the consent of the owner.
A promise by a lender to make a loan if the borrower meets certain conditions.
Written governmental permission allowing a use inconsistent with zoning but necessary for the common good, such as locating an emergency medical facility in a predominantly residential area.
Individual units in a building or development in which owners hold title to the interior space while common areas such as parking lots, community rooms and recreational areas are owned by all the residents.
A key element to fiduciary duties; client information obtained during the term of the brokerage agreement must not be shared unless the principal authorizes disclosure.
Information given by a client to a licensee during the term of a brokerage agreement that (1) the client requests the licensee keep in confidence; (2) relates to the client's negotiating position; or (3) could do damage to the client's negotiating position if disclosed.
Confession of judgment clause
Permits judgment to be entered against a debtor without the creditor's having to institute legal proceedings.
The appraisal principle that holds that the greater the similarity among properties in an area, the better they will hold their value.
Short-term loans a lender makes for the construction of homes and buildings. The lender disburses the funds in stages.
Construction to permanent loan
The conversion of a construction loan to a longer-term traditional mortgage after construction has been completed.
Actions of a landlord that so materially disturb or impair a tenant's enjoyment of the leased premises that the tenant is effectively forced to move out and terminate the lease without liability for any further rent.
Notice given to the world by recorded documents. All people are charged with knowledge of such documents and their contents, whether or not they have actually examined them.
When a buyer's agent is acting as designated agent for multiple prospective buyers who the designated agent has reason to believe are making or preparing to make offers to purchase the same property, the buyers have the option of being referred to another designated agent. (Clients must be provided with written disclosure)
An agreement between two or more parties that creates or modifies an existing relationship.
The appraisal principle that states that the value of any component of a property is what it gives to the value of the whole or what its absence detracts from that value.
Controlled business arrangement
A business relationship in which a provider of settlement services receives a referral from an affiliated company in another settlement service business.
The wrongful appropriation of property belonging to another; also, the process of changing a property's status from rental to condominium.
Convertible adjustable-rate mortgage
A mortgage which starts as an adjustable-rate loan, but allows the borrower to convert the loan to a fixed-rate mortgage during a specified period of time.
A real estate broker who finds a buyer for a property that another broker has listed.
A project in which a corporation holds title and sells shares representing individual units to buyers who then receive a proprietary lease as their title.
In Illinois, compensation does not determine the agency relationship. Both buyer's and seller's real estate agents are often paid by the seller in a ______ arrangement.
A business trust that holds the title to a cooperative residential building and grants occupancy rights to shareholders in the corporation.
An entity or organization, created by operation of law, whose rights of doing business are essentially the same as those of an individual. The entity has continuous existence until it is dissolved according to legal procedures.
Provisions in the rectangular survey (government survey) system made to compensate for the curvature of the earth's surface.
The process of estimating the value of a property by adding to the estimated land value the appraiser's estimate of the reproduction or replacement cost of the building, less depreciation.
A new offer made in response to an offer received. It has the effect of rejecting the original offer, which cannot be accepted thereafter unless revived by the offeror.
Covenant against encumbrances
The grantor warrants that the property is free from liens or encumbrances, except for any specifically stated in the deed. Encumbrances generally include mortgages, mechanics' liens, and easements. If the covenant is breached, the grantee may sue for the cost of removing the encumbrances.
Covenants, conditions and restrictions (CC&Rs)
Rules and regulations for a development, such as acceptable landscaping or improvements that can be made to individual units.
Covenant of quiet enjoyment
(1) The covenant implied by law by which a landlord guarantees that a tenant may take possession of leased premises and that the landlord will not interfere in the tenant's possession or use of the property. (2) The grantor guarantees that the grantee's title will be good against third parties who might bring court actions to establish superior title to the property, If the grantee's title is found to be inferior, the grantor is liable for damages.
Covenant of further assurance
The grantor promises to obtain and deliver any instrument needed to make the title good. For example, if the grantor's spouse has failed to sign away dower rights, the grantor must deliver a quit-claim deed to clear the title.
Covenant of seisin
The grantor warrants that she owns the property and has the right to convey title to it. The grantee may recover damages up to the full purchase price if the covenant is broken.
Covenant of warranty forever
The grantor promises to compensate the grantee for the loss sustained if the title fails at any time in the future.
The money a lender extends to a buyer for a commitment to repay the loan within a certain time frame.
The degree of credit worthiness assigned to a person based on credit history and financial status.
A deficiency in a property that is easy or inexpensive to fix, such as chipping paint.
A life estate, usually a fractional interest, given by some states to the surviving husband in real estate owned by his deceased wife. Abolished in most states.
The third party or non-represented consumer for who some level of service is provided (ministerial acts).
On a closing statement, an amount charged; that is, an amount that the debited party must pay.
The voluntary transfer of private property by its owner to the public for some public use, such as for streets of schools.
Deed in lieu of foreclosure
A deed given by the mortgagor to the mortgagee when the mortgagor is in default under the terms of the mortgage. This is a way for the mortgagor to avoid foreclosure.
Deed in trust
An instrument that grants a trustee under a land trust full power to sell, mortgage, and subdivide a parcel of real estate. The beneficiary controls the trustee's use of these powers under the provisions of the trust agreement.
Deed of reconveyance
An official document from a mortgage holder releasing the debtor from the mortgage. It is evidence that the mortgage has been paid in full. The mortgage note is marked paid, the original mortgage is returned and a deed of reconveyance is issued to the home owner showing the mortgage has been paid off.
Deed of trust
A document that gives a lender the right to foreclose on a piece of property if the borrower defaults on the loan.
The failure to fulfill a duty or promise or discharge an obligation, such as making monthly mortgage payments.
A clause used in leases and mortgages that cancels a specified right upon the occurrence of a certain condition, such as cancellation of a mortgage on repayment of the mortgage loan.
Defeasible fee estate
An estate in which the holder has a fee simple title that may be divested on the occurrence or nonoccurrence of a specified event. Two categories: fee simple on condition precedent (fee simple determinable) and fee simple on condition subsequent.
A personal judgment levied against the borrower when a foreclosure sale does not produce sufficient funds to pay the mortgage debt in full.
A mortgage that involves a borrower who is behind on payments. If the borrower cannot bring the payments up to date within a specified number of days, the lender may begin foreclosure proceedings.
The amount of goods people are willing and able to buy at a given price; often coupled with the term supply.
Zoning ordinances that restrict the maximum average number of houses per acre that may be built within a particular area, generally a subdivision.
Department of Housing and Urban Development (HUD)
Government agency that administers the Fair Housing Act, governs RESPA, and provides standardized forms such as the 1003 loan application, the HUD-1 settlement statement, and the good-faith estimate (GFE).
Acquisition of an estate by inheritance in which an heir succeeds to the property by operation of law.
A licensee authorized by a sponsoring broker to act as the agent for a specific principal in a particular transaction.
One who attempts to put land to its most profitable use through the construction of improvements.
A statement to a potential buyer listing information relevant to a piece of property, such as the presence of radon or lead paint.
Disclosure of compensation
According to the Illinois real estate licensing act, clients must be made aware of compensation, source of compensation, and the sponsoring broker's policy on sharing commission with cooperating sponsoring brokers. If compensation is being issued to an agent from both buyer and seller in one transaction, this must be disclosed. Any third party compensation must also be disclosed.
Fees that a borrower pays at the time the lender makes the loan. A point equals 1 percent of the total loan amount.
The interest rate set by the Federal Reserve that member banks are charged when they borrow money through the Fed.
Division of Professional Regulation
The division of the IDFPR with primary authority to administer the Illinois Real Estate License Act of 2000. It is also empowered to issue rules and regulations that implement and interpret the act.
Doctrine of prior appropriation
The right to use any water, with the exception of limited domestic use, is controlled by the state rather than by the landowner adjacent to the water.
A property that includes in its ownership the appurtenant right to use an easement over another person's property for a specific purpose.
The legal right or interest, recognized in some states, that a wife acquires in the property her husband held or acquired during their marriage. During the husband's lifetime the right is only a possibility if an interest; on his death , it can become a real interest in land.
The amount of money a buyer agrees to give the seller when a sales agreement is signed. Complete financing is later secured with a lender.
A relationship in which a real estate agent or broker represents both parties in a transaction.
Standard language in a mortgage which states that the loan must be paid when a house is sold.
Unlawful constrain or action exercised on a person whereby the person is forced to perform an act against his will. A contract entered into under ______ is voidable.
A right given to a third party to use a portion of the property for certain purposes, such as power lines or water mains.
Easement by condemnation
An easement created by the government or government agency that has exercised its right under eminent domain.
Easement by necessity
An easement allowed by law as necessary for the full enjoyment of a parcel of real estate; for example, a right of ingress and egress over a grantor's land.
Easement by prescription
An easement acquired by continuous, open, and hostile use of the property for the period of time prescribed by state law (20 years in Illinois).
Easement in gross
An easement that is not created for the benefit of any land owner by the owner of the easement by that attaches personally to the easement owner. Example: a right granted by Eleanor Franks to Joe Fish to use a portion of her property for the rest of his life would be an ______.
Growing crops, such as grapes and corn that are produced annually through labor and industry; also called "fructus industrials".
The government's right to condemn private land for public use, such as the routing of a public highway.
Someone who works as a direct ______ of an employer and has ______ status. The employer is obligated to withhold income taxes and Social Security taxes from the compensation of ______.
A document evidencing formal employment between employer and employee or between principal and agent. In real estate business, this generally takes the form of a listing agreement or management agreement.
A method of controlling environmental contamination by sealing off a dangerous substance.
Environmental Impact Statement (EIS)
A government-mandated evaluation of all aspects and effects a development will have on the environment of a proposed site.
Equal Credit Opportunity Act (ECOA)
A federal law that prohibits a lender or other creditor from refusing to grant credit based on the applicant's sex, marital status, race, religion, national origin or age. The law also prohibits a creditor from refusing to grant credit because the applicant receives public assistance.
The raising or lowering of assessed values for tax purposes in particular county or taxing district to make them equal to assessments in other counties or districts.
A factor (number) by which the assessed value of a property is multiplied to arrive at a value for the property that is in line with statewide tax assessments. The ad valorem tax is based on this adjusted value.
A lien created by a court to ensure the payment of a judgment as well as by agreement.
Equitable right of redemption
The right of a defaulted property owner to recover the property prior to its sale by paying the appropriate fees and charges.
The interest held by a vendee under a contract for deed or an installment contract; the equitable right to obtain absolute ownership to property when legal title is held in another's name.
Equity in Eminent Domain Act
Legislation that provides protections for private property owners when government seeks to acquire land for economic development projects. The law places the burden on the government to prove that an area is blighted before forcing property owners to sell their property for private development projects.
The gradual wearing away of land by water, wind, and the general weather conditions; the diminishing of property by the elements.
Errors and omissions insurance
The name used to describe a type of malpractice insurance coverage for real estate professionals. The coverage protects against financial losses from lawsuits filed as a result of your work in the real estate profession.
The reversion of property to the state or county, as provided by state law, in cases where a decedent dies intestate without heirs capable of inheriting or when the property is abandoned.
A neutral third party holds the documents and money involved in a real estate transaction and ensures that all conditions of a sale are met. ______ also refers to a special account that a lender establishes to hold monthly installments from the borrower to cover property taxes and insurance.
An account that a lender or mortgage servicer establishes to hold funds for the payment of expenses such as homeowners insurance and property taxes. Also known as an impound account.
A document that sets forth the duties of the escrow agent, as well as the requirements and obligations of the parties, when a transaction is closed through an escrow.
All moneys, promissory notes, or any other type or manner of legal tender or financial consideration deposited with any person for the benefit of the parties to the transaction.
Estate (tenancy) at sufferance
The tenancy of a lessee who lawfully comes into possession of a landlord's real estate but who continues to occupy the premises improperly after his lease rights have expired.
Estate (tenancy) at will
An estate that gives the lessee the right to possession until the estate is terminated by either party; the term of this estate is indefinite.
Estate (tenancy) for years
An interest for a certain exact period of time in property leased for a specified consideration.
Estate (tenancy) from period to period
An interest in leased property that continues from period to period, week to week, month to month, or year to year.
Method of creating an agency relationship in which someone states incorrectly that another person is his agent, and a third person relies on that representation.
A document in which a borrower certifies the amount owed on a mortgage loan and the rate of interest.
Evidence of title
Proof of ownership of property; commonly a certificate of title, an abstract of title with lawyer's opinion, title insurance, or a Torrens registration certificate.
Examination of title
An inspection by a title company of public records and other documents to determine the chain of ownership of a property.
A transaction in which all or part of the consideration is the transfer of like-kind property (such as real estate for real estate).
A listing contract under which the owner appoints a sponsoring broker as his exclusive agent for a designated time period to sell the property on stated terms for a commission. The owners reserve the right to sell without paying commission if they find a buyer independently.
A listing contract under which the owner appoints a sponsoring broker as his exclusive agent for a designated time period to sell the property on stated terms. The owner agrees to pay the broker a commission when the property is sold regardless of who finds the buyer.
A contract in which all parties have fulfilled their promises and thus performed the contract.
The signing and delivery of an instrument. Also a legal order directing an official to enforce a judgment against the property of a debtor.
A contract under which something remains to be done by one or more of the parties.
An oral or written contract in which the parties state the contract's terms and express their intentions in words.
A contract that exists when the parties state the terms and show their intentions in words. An express contract may be oral or written.
Reduction in a property's value caused by outside factors (those that are off the property).
A type of incurable depreciation caused by negative factors not on the subject property, such as environmental, social or economic forces. The loss in Value cannot be reversed by spending money on the property.
Fair Housing Act
Landmark federal law passed in 1965 and amended in 1988 that makes it illegal to deny rent or refuse to sell to anyone based on race, color, religion, sex or national origin. The 1988 amendment expanded the protections to include family status and disability.
The official name of the Federal National Mortgage Association, it is a congressionally chartered, shareholder-owned company that buys mortgages from lenders and resells them as securities on the secondary mortgage market.
Farmer's Home Administration
A U.S. Department of Agriculture agency that provides credit to farmers and rural residents.
Federal Deposit Insurance Corporation (FDIC)
An independent federal agency that insures the deposits in commercial banks.
Federal Home Loan Mortgage Corporation
Known as Freddie Mac, the corporation was established to purchase primarily conventional mortgage loans in the secondary mortgage market.
Federal Housing Administration (FHA)
This government agency operates a variety of home-loan programs. Its most popular is the Sec. 203(b), program, which provides low-rate mortgages to buyers who make a down payment as small as 3 percent.
Federal National Mortgage Association
Now officially dubbed Fannie Mae, this federally chartered agency buys mortgages from lending institutions, pools them with other loans and sells shares to investors.
Federal Open Market Committee (FOMC)
A component of the Federal Reserve System; buys and sells U.S. Government securities on the open market.
Federal Reserve Board
A group of economists and other experts who set the nation's monetary policy. Its chief tool to control inflation is the power to control interest rates.
Federal Reserve System
The country's central banking system, which controls the nation's monetary policy by regulation the supply of money and interest rates.
Fee simple absolute
This type of ownership is the maximum interest a person can have in a piece of real estate. It entitles the owner to use the property in any manner they see fit, in accordance with state and local laws. Granting clause example: "to ______ and to his/her heirs and assigns forever.".
Fee simple defeasible
A type of property ownership in which the grant of title or duration of ownership is dependent on a specified condition.
Fee simple determinable
An interest in property which may last forever, except upon the happening or nonhappening of a specified event, at which point it will automatically terminate
A system of ownership in which the king or other sovereign is the source of all rights. The right to possess real property was granted by the sovereign to an individual as a life estate only. On the death of the individual, the title passed back to the sovereign.
Mortgages that are insured by the Federal Housing Administration. The FHA's 203(b) loan program provides low-rate mortgages to buyers who make a down payment as small as 3 percent. The agency also operates loan plans for investors and purchasers of rural property.
One in who trust and confidence is placed; a reference to a sponsoring broker employed under the terms of a listing contract or buyer agency agreement.
The relationship of trust that buyers and sellers expect from a real estate agent. The term also applies to legal and business relationships.
A relationship of trust and confidence, as between trustee and beneficiary, attorney and client, or principal and agent.
Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA)
This act restructured the savings and loan association regulatory system; enacted in response to the savings and loan crisis of the 1980s.
The government's policy in regard to taxation and spending programs. The balance between these two areas determines the amount of money the government will withdraw from of feed into the economy, which can counter economic peaks and slumps.
A home loan with an interest rate that will remain at a specific rate for the term of the loan. About 75 percent of all home mortgages have ______.
Personal property permanently attached to a house, such as drapery rods, toilets, built-in bookcases or a furnace.
A course of action a lender may pursue to delay foreclosure or legal action against a delinquent borrower.
The legal process reserved by a lender to terminate the borrower's interest in a property after a loan has been defaulted. When the process is completed, the lender may sell the property and keep the proceeds to satisfy its mortgage and any legal costs. Any excess proceeds may be used to satisfy other liens or be returned to the borrower.
A volatile organic compound (VOC). Potential sources in the home include pressed wood products, such as particleboard or fiberboard; smoking; and glues and adhesives.
A parcel of land less than 160 acres, usually found at the edge of a rectangular survey.
The common name for the Federal Home Loan Mortgage Corporation, a congressionally chartered institution that buys mortgages from lenders and resells them as securities on the secondary mortgage market.
An estate in land in which ownership is for an indeterminate length of time, in contrast to a leasehold estate.
Fully amortized adjustable-rate mortgage
A mortgage that amortizes, or pays down, the balance of a loan.
A loss of value to an improvement to real estate arising from functional problems, often caused by age or poor design.
A person's present right to an interest in real property that will not result in possession or enjoyment until sometime in the future, such as a reversion or right of reentry.
A provision in contracts signed by new buyers that prohibits the owners from publicizing complaints about the builder.
A defect in the chain of title of a particular parcel of real estate; a missing document or conveyance that raises doubt as to the present ownership of the land.
A fiduciary relationship whereby the agent is given the power to bind (sign for) the principal for certain business purposes.
One who is authorized by a principal to represent the principal in a specific range of matters.
The right of a creditor to have all of a debtor's property - both real and personal - sold to satisfy debt.
A partnership in which all the partners participate in the operation and management of the business and share full liability for business losses and obligations.
General real estate tax
Taxes based on the value of the property being taxed. Also called Ad Valorem tax.
General warranty deed
A deed in which the grantor fully warrants good clear title to the premises. Used in most real estate deed transfers, ______ offers the greatest protection of any deed. Granting clause example: "I,______, convey and warrant..."
The Government National Mortgage Association buys home loans from lenders, pools them with other loans and sells shares to investors. It differs from its cousins, Fannie Mae and Freddie Mac, in that it only purchases loans backed by the federal government.
Good-faith estimate (GFE)
An estimate from an institutional lender that shows the costs a borrower will incur, including loan-processing charges and inspection fees.
The 24-mile-square parcels composed of 16 townships in the rectangular (government) survey system of legal description.
Fractional sections in the rectangular (government) survey system that are less than one quarter section in area.
Government National Mortgage Association
Commonly known as Ginnie Mae, this agency buys home loans from lenders, pools them with other loans and sells shares to investors. Ginnie Mae differs from its cousins, Fannie Mae and Freddie Mac, in that it only purchases loans backed by the federal government.
Government survey system
A rectangular survey system established by congress in 1785 to standardize the description of land acquired by the newly formed federal government.
Graduated-payment mortgage (GPM)
A mortgage that requires a borrower to make larger monthly payments over the term of the loan. The payment is unusually low for the first few years but gradually rises until year three or five, then remains fixed.
Words in a deed of conveyance that state the grantor's intention to convey the property at the present time. This clause is generally worded as "convey and warrant"; "grant"; "grant, bargain, and sell"; or the like.
Gross income multiplier (GRM)
A figure used as a multiplier of the gross annual income of a property to produce an estimate of the property's value.
A lease of property according to which a landlord pays all property charges regularly incurred through ownership, such as repairs, taxes, insurance, and operating expenses. Most residential leases are ______.
Gross rent multiplier (GRM)
The figure used as a multiplier of the gross monthly income of a property to produce an estimate of the property's value.
A lease of land only, on which the tenant usually owns a building or is required to build as specified in the lease. Such leases are usually long-term net leases; the tenant's rights and obligations continue until the lease expires or is terminated through default.
The water that exists under the earth's surface within tiny spaces or crevices in geological formations.
When two or more businesses conspire against another business or agree to withhold their patronage to reduce competition. This is illegal under antitrust laws.
Growing-equity mortgage (GEM)
A fixed rate mortgage that increases payments over a specific period of time. The extra funds are applied to the principal.
Guaranteed sales plan
Any real estate purchase or sales plan in which a sponsoring broker enters into an unconditional written contract with a seller, promising to purchase the seller's property for a specified price if the property has not sold within an agreed period of time on terms acceptable to the seller.
That part of a deed beginning with the words "to have and to hold," following the granting clause and defining the extent of ownership the grantor is conveying.
This provision of homeowners insurance covers damage by fire, wind or other disaster. It is required by all lenders before a loan is approved.
One who might inherit or succeed to an interest in land under the state law of decent when the owner dies without leaving a valid will.
Highest and best use
The possible use of a property that would produce the greatest net income and thereby develop the highest value.
A tenancy whereby a lessee retains possession of leased property after the lease has expired and the landlord, by continuing to accept rent, agrees to the tenant's continued occupancy as defined by state law.
Home equity conversion mortgage
Loans made to older owners who want to convert equity into money. Because borrowers are qualified on the basis of the value of their home, e, the loan is not the same as a home equity loan. Also known as reverse mortgages.
An examination of a home's construction, condition and internal systems by an inspector or contractor prior to purchase.
Home Mortgage Disclosure Act
Requires that all institutional mortgage lenders with assets in excess of $36 million and with one or more offices in a given geographic area make annual reports.
A group that governs a modern subdivision or planned community. An association collects monthly fees from all owners to pay for maintenance of common areas, handle legal and safety issues, and enforce the covenants, conditions and restrictions set by the developer.
This insurance includes hazard coverage for any damages that may affect the value of a house, in addition to personal liability and theft coverage.
Homeowners Protection Act of 1998
Under this act private mortgage insurance (PMI) must terminate automatically when the borrower reaches a 22 percent equity position based on the original value of the property at the time the loan was originated with no allowance for appreciation or depreciation if the loan was written after July 29, 1999, and the borrower is current on mortgage payments.
Special insurance policies that cover certain home repairs for a specified amount of time.
Land that is owned and occupied as the family home. In many states, a portion of the area or value of this land is protected or exempt from judgments for debts.
The ______ is limited to $7,500 for one person and $15,000 for two or more persons living at the same homestead. The exemption does not apply against taxes and debts for purchase or improvement of the property. If a husband and wife own a property, the law usually requires that both of them sign a conveyance or mortgage regarding the real estate for it to be applicable or enforceable against both spouses.
The illegal practice of denying an individual or group the right to buy or rent a home based on race, color, religion, national origin, sex, disability or family status.
HUD-1 Uniform Settlement Statement
A closing statement or settlement sheet that outlines all closing costs on a real estate transaction or refinancing.
To pledge property as security for an obligation or loan without giving up possession of it.
Illinois Department of Financial and Professional Regulation (IDFPR)
The entity responsible for administering and enforcing the Illinois Real Estate License Act of 2000.
Illinois Human Rights Act
Legislation that prohibits discrimination on the basis of race, color, religion, sex, national origin, ancestry, familial status, physical or mental disability, age, marital status, unfavorable military discharge, sexual orientation, and order of protection status.
Illinois Land Sales Registration Act
An act that regulates the offering, sale, lease or assignment of any improved or unimproved land divided into 25 or more lots and offered as a part of a common promotional plan.
Illinois Radon Awareness Act
Legislation that requires a seller to provide to a buyer, before the buyer is obligated under any contract to purchase residential real property, a disclosure of information on radon hazards along with a pamphlet entitled "radon testing guidelines for Real Estate Transactions".
This occurs when the actions of the parties indicate that they have mutually consented to an agency.
A contract under which the agreement of the parties is demonstrated by their acts and conduct. (can be created unintentionally)
Implied warranty of habitability
Court cases which determined that all new homes are assumed to be fit for human habitation and meet all building codes.
Account established by a mortgage lender to pay a borrower's property tax and insurance costs. Mortgage payments are increased to include these costs, and the funds collected are disbursed when the payments are due.
(1) Any structure, usually privately owned, erected on a site to enhance the value of the property for example, building a fence or a driveway. (2) A publically owned structure added to or benefiting land, such as a curb, sidewalk, street, or sewer.
The process of estimating the value of an income-producing property through capitalization of the annual net income expected to be produced by the property during its remaining useful life.
A defect in a property that cannot be fixed, such as an adjacent hazardous waste site, or that would cost too much to repair relative to the value of the property.
Someone who is retained to perform a certain act but who is subject to the control and direction of another only as to the end result and not as to the way in which the act is performed. Unlike an employee an ______ pays for all expenses, Social Security, and income taxes, and receives no employee benefits. Most real estate salespeople are ______.
The appraisal method of estimating building costs by multiplying the original cost of the property by a percentage factor to adjust for current construction costs.
This event occurs when there is more money available than there are goods and services to be purchased. Mortgage rates, which are determined by the marketplace and the actions of the Federal Reserve Board and Wall Street, are sensitive to ______ fears.
Informed written consent
______ is given based upon a clear appreciation and understanding of the facts, implications, and future consequences of an action.
Innocent landowner immunity
An amendment to the Superfund program that recognizes that in certain cases, a landowner in the chain of ownership was completely innocent of all wrongdoing and therefore should not be held liable for contaminated sites.
In Illinois, a license status that prohibits a licensee from engaging in real estate activities because he is unsponsored or his license has lapsed or been suspended or revoked.
A purchase agreement in which the buyer does not receive title to the property until all installments are paid.
A transaction in which the sales price is paid in two or more installments over two or more years. If the sale meets certain requirements, a taxpayer can postpone reporting such income until future years by paying tax each year only on the proceeds received that year.
The fee borrowers pay to obtain a loan. It is calculated based on a percentage of the total loan.
Interest only loan
An ______ is a loan in which, for a set term, the borrower pays only the interest on the principal balance, with the principal balance unchanged.
The sum, expressed as a percentage, charged for a loan. Interest payments on most home loans are tax- deductible.
Interest rate buy-down plans
For cash-short buyers, some sellers are willing to advance funds from the sale of the home to buy down the interest rate and reduce the buyer's monthly obligation.
Interest rate caps
A limit on the amount that can be charged to the monthly payment of an adjustable-rate mortgage during an adjustment period.
Intermediate mortgage theory
Theory based on the principles of title theory states but still requiring the mortgagee to formally foreclose to obtain legal title.
Interstate Land Sales Full Disclosure Act
Federal law that regulates the sale of certain real estate in interstate commerce.
The condition of a property owner who dies without leaving a valid will. Title to the property will pass to the decedent's heirs as provided in the state law of descent.
An appraisal term referring to the value created by a person's personal preferences for a particular type of property.
A court remedy for a private land owner whose interest or ownership in land has been interfered with or taken away outright by a governmental body.
Money directed toward the purchase improvement, and development of an asset in expectation of income or profits.
Real estate that generates income, such as an apartment building or a rental house.
The responsibility of two or more people to fulfill the terms of a home loan or debt.
Ownership by two or more people that gives equal shares of a piece of property. Rights pass to the surviving owner or owners.
The joining of two or more people to conduct a specific business enterprise. A joint venture is similar to a partnership in that it must be created by agreement between the parties to share in the losses and profits of the venture. It is unlike a partnership in that the venture is for some specific project only rather than a continuing business relationship.
The decision of a court or law. If a court decides that a person must repay a debt, a lien may be placed against that person's property.
Junk Fax Prevention Act of 2005
Prohibits faxing unsolicited fax advertisements or solicitations and does allow for an established business relationship exception.
Kelo v. City of New London
A ruling in which the court held that the local governments an condemn homes and businesses for private or economic development purposes.
The earth's surface, extending downward to the center of the earth and upward infinitely into space, including things permanently attached by nature, such as trees and water.
Under a ______ , the seller (also known as the vendor) retains legal title. The buyer (called the vendee) takes possession and gets equitable title to the property. The buyer agrees to give the seller a down payment and pay regular monthly installments of principal and interest over a number of years. The buyer also agrees to pay real estate taxes, insurance premiums, repairs, and upkeep on the property.
An invisible problem in a piece of property such as bad wiring, termite damage or lead paint.
Law of increasing returns
A law that applies when money spent on improvements produces an increase in income or value.
Law of diminishing returns
A law that applies when money spent on improvements no longer produces an increase in income or value.
A metallic chemical element present in older dwellings, primarily in the form of lead-based paint and lead plumbing. Exposure to lead has been found to be a health risk.
Lead-Based Paint Hazard Reduction Act
Persons selling or leasing residential housing constructed before 1978 must disclose the presence of known lead-based paint and provide purchasers or tenants with any relevant records or reports.
A tenant's right to occupy real estate during the term of a lease, generally considered to be a personal property interest.
A lease that contains the right to purchase the property for a specific price within a certain time frame.
The purchase of real property, the consummation of which is preceded by a lease, usually long term. Typically done for tax or financing purposes.
Leasing agent license
In Illinois, a limited license for individuals who wish to engage only in activities related to leasing residential property.
Blemishes on a piece of property, such as a zoning violation or fraudulent title claim.
A specific way of identifying and locating a piece of real estate that is acceptable to a court.
Legally competent parties
People who are recognized by law as being able to contract with others; those of legal age and sound mind.
Letter of intent
A formal statement that the buyer intends to purchase the property for a certain price on a certain date.
The use of a small amount of cash (5 percent or 10 percent down payment) to buy a piece of property.
To assess; to seize or collect. To ______ a tax is to assess a property and set the rate of taxation. To ______ an execution is to officially seize the property of a person to satisfy an obligation.
(1) A privilege or right granted to a person by a state to operate as a real estate broker, managing broker, or salesperson. (2) The revocable permission for a temporary use of land - a personal right that cannot be sold.
Some states interpret a mortgage as being purely a lien on real property. The mortgagee thus has no right of possession but must foreclose the lien and sell the property if the mortgagor defaults.
A disclaimer presented to the landowner who ordered the work with the names of the general contractor and all subcontractors. At the completion of the work the document should be signed by the contractor releasing their lien rights.
Life cycle costing
In property management comparing one type of equipment with another based on both purchase cost and operating cost over its expected useful lifetime.
An interest in real or personal property that is limited in duration to the lifetime of its owner or some other designated person or persons.
Limited liability company (LLC)
A business structure that combines the most attractive features of limited partnerships and corporations. The members of an ______ enjoy the limited liability offered by a corporate form of ownership and the tax advantages of a partnership.
A ______ , consists of one or more general partners as well as ______. The business is run by the general partner or partners. The ______ are not legally permitted to participate, and each can be held liable for business losses only to the extent of their investment.
An amount predetermined by the parties to a contract as the total compensation to an injured party should the other party breach the contract.
The ability to sell an asset and convert it into cash, at a price close to its true value, in a short period of time.
A recorded legal document giving constructive notice that an action affecting a particular property has been filed in either a state or a federal court.
A contract between an owner (as principal) and a real estate sponsoring broker (as agent) by which the sponsoring broker is employed as agent to find a buyer for the owner's real estate on the owner's terms, for which service the owner agrees to pay a commission.
The sponsoring broker in a multiple listing situation from whose office a listing agreement is initiated as opposed to the cooperating sponsoring broker, from whose office negotiations leading up to a sale are initiated.
(1) A landowner's claim to use water in large navigable lakes and oceans adjacent to her property. (2) The ownership rights to land bordering these bodies of water up to the high water mark.
A technical measure used by lenders to assess the relationship of the loan amount to the value of the property
Loan origination fee
Most lenders charge borrowers an ______, or points for processing a loan. A point is 1 percent of the total loan amount.
The amount of a time set by the lender for a buyer to pay a mortgage. Most conventional loans have 30-year or 15-year ______.
An economic characteristic, sometimes called area preference or situs which refers to peoples preferences for given areas. It is the most important economic characteristic of land.
Lot-and-block (recorded plat) system
A method of describing real property that identifies a parcel of land by reference to ______ numbers within a subdivision, as specified on a recorded subdivision plat.
A contract between the owner of income property and a management firm or individual property manager that outlines the scope of the manager's authority.
A broker who has supervisory responsibilities for licensees in one or, in the case of a multi office company, more than one office and who has been appointed as such by the sponsoring broker.
Illinois law recognizes that a husband and wife acquire joint rights in all property acquired after the date of marriage for the duration of the marriage. Illinois labels such property ______, all of which will be divided between the two parties in the event of a divorce.
Good or clear title, reasonably free from the risk of litigation over possible defects.
The most probable price property would bring in an arm's length transaction under normal conditions on the open market.
A "comprehensive plan" to guide the long term physical development of a particular area.
Subcontractors or suppliers sometimes will file an encumbrance, or ______, against a property to seek payment.
Medium of advertising
Any method of communication intended to influence the general public to use or purchase a particular good or service or real estate.
Federal legislation that promotes the establishment of state registration systems to maintain residential information on every person who kidnaps children, commits sexual crimes against children, or commits sexually violet crimes.
One of a set of imaginary lines running north and south and crossing a base line at a definite point, used in the rectangular (government) survey system of a property description.
Metes and bounds description
A legal description of a parcel of land that begins at a well-marked point and follows the boundaries, using directions and distances around the tract, back to the point of beginning.
A provision of the Real Estate License Act of 2000 that requires licensees to perform the following for clients. (1) Accept delivery of and present to the client all offers and counteroffers to buy, sell, or lease the client's property or the property the client seeks to purchase or lease. (2) Assist the client in developing, communicating, negotiating, and presenting offers, counteroffers, and notices that relate to the offers and counteroffers until the lease or purchase agreement is signed and all contingencies are satisfied or waived. (3) Answer the client's questions relating to the offers, counteroffers, notices, and contingencies.
In Illinois, acts that a licensee may perform for a consumer that are informative and do not constitute active representation.
Someone who has not reached the age of majority and therefore does not have legal capacity to transfer title to real property.
A project that combines several different functions, such as residential space above a commercial establishment or an entire development combining commercial, residential and public accommodations.
Fungi that grows in the form of multicellular filaments called hyphae. Some ______ can cause disease, and others play a role in biodegradation or in the production of antibiotics and enzymes.
Governmental regulation of the amount of money in circulation through such institutions as the Federal Reserve Board.
A periodic tenancy under which the tenant rents for one month at a time. In the absence of a rental agreement (oral or written), a tenancy is generally considered to be a ______.
A fixed natural or artificial object used to establish real estate boundaries for a metes-and-bounds description.
A legal document specifying a certain amount of money to purchase a home at a certain interest rate, and using the property as collateral.
Mortgage acceleration clause
A clause which allows a lender to demand that the entire balance of the loan be repaid in a lump sum under certain circumstances. The ______ is usually triggered if the home is sold, title to the property is changed, the loan is refinanced or the borrower defaults on a scheduled payment.
A company that provides home loans using its own money. The loans are usually sold to investors such as insurance companies and Fannie Mae.
A company that matches lenders with prospective borrowers who meet the lender's criteria. The ______ does not make the loan, but receives payment from the lender for services.
Mortgage Disclosure Improvement Act (MEDA)
An act which set timelines for certain disclosures which now affects the date of closings. Three business days from application to provide the truth-in-lending statement and good-faith estimate, seven business days before the signing of loan documents, after the borrower receives the final truth-in-lending statement and good-faith estimate, and three business days to wait for closing if the APR has changed more than 0.125 percent from the original or most recent TIL and GFE.
Required by lenders in some loans to protect them from a possible default . All conventional loans with less than a 20 percent down payments require private ______, or PMI.
The tax write-off that the Internal Revenue Service allows most owners to claim for the annual interest payments they make on their real estate loans.
A lien or charge on the property of a mortgagor that secures the underlying debt obligations.
Mortgage loan originators (MLOs)
Anyone who for compensation or expectations of compensation, takes a residential mortgage loan by phone or in person.
A bank or other financial institution that lends money to the borrower. The borrower is considered the mortgagor.
Insurance policies that offer protection from a range of potential perils, such as those of a fire, hazard, public liability, and casualty.
Multiple listing clause
A provision in an exclusive listing for the authority and obligation on the part of the listing broker to distribute the listing to other brokers in the multiple listing organization.
Multiple listing service (MLS)
The service combines the listings for all available homes in an area, except For-Sale-By-Owner (FSBO) properties, in one directory or database.
Munjal v. Baird & Warner, Inc.
A broker or salesperson has no duty to discover "latent material defects" if a seller has not disclosed these defects to them prior to sale.
National Do Not Call Registry
A registry managed by the federal trade commission that lists the phone numbers of consumers who have indicated their preference to limit the telemarketing calls they receive.
National Flood Insurance Act of 1968
Required owners who finance property with federal or federal related mortgage loans, in flood prone areas known as special flood hazard areas (SFHAs) to obtain flood insurance.
Nationwide Mortgage Licensing System (NMLS)
Mortgage loan originators (MLOs) in Illinois are required to register in this system.
A written promise or order to pay a specific sum of money that may be transferred by endorsement or delivery. The transferee then has the original payee's right to payment.
The situation occurs when a borrower's monthly payment is not large enough to cover both the principal and interest of a loan. As a result, the outstanding balance of the loan actually grows larger with each payment rather than smaller. Most fixed-rate loans are not subject to ______, but many adjustable-rate mortgages are susceptible.
Occurs when a licensee should have known that a statement about a material fact was false.
A lease requiring that the tenant pay not only rent but also costs incurred in maintaining the property, including taxes, insurance, utilities, and repairs.
A listing based on the net price the seller will receive of the property is sold. Under a ______ the sponsoring broker can offer the property for sale at the highest price obtainable to increase the commission. This type of listing is legal in Illinois.
Net operating income (NOI)
The income projected for an income-producing property after deducting losses for vacancy, collection, and operating expenses.
An intermediary between a buyer and seller or landlord and tenant, who assists both parties in a transaction without representing either.
A loan provision that prohibits the transfer of a mortgage to another borrower without lender approval.
A use of a property that is permitted to continue after a zoning ordinance prohibiting it has been established for the area.
A mortgage condition by which the mortgagee agrees not to terminate leases (if the lessees are in compliance with lease terms) in the event of mortgage foreclosure.
A lack of uniformity; dissimilarity. Because no two parcels of land are exactly alike, real estate is said to be non-homogeneous.
A foreclosure in which the mortgage lender notifies the borrower with a notice of default. Since the mortgage loan terms already specify that a sale process kicks off right away (without going through the court system) - the lender can start the foreclosure process very quickly. Then the borrower has a fixed period of time (which varies state by state) to either sell the home, or negotiate to solve the financial problem. If the consumer does not accomplish this on their own, the mortgage lender then can come in and auction off the home to the highest bidder. (not applicable in Illinois)
Non-recurring closing costs
Costs that are one-time only fees for such items as an appraisal, loan points, credit report, title insurance and a home inspection.
The legal document that requires a borrower to repay a mortgage at a certain interest rate over a specified period of time.
Notice of default
A lender's initial action when a mortgage payment is late and attempts to reconcile the issue out of court have failed.
Substituting a new obligation for an old one or substituting new parties to an existing obligation.
An oral will declared by the testator in her final illness, made before witnesses and afterward reduced to writing.
The loss of value due to factors that are outmoded or less useful. ______ may be functional or economic.
A permit issued by the appropriate local governing body to establish that the property is suitable for habitation by meeting certain safety and health standards.
Office of Thrift Supervision (OTS)
Monitors and regulates the savings and loan industry. ______ was created by FIRREA (the department).
Open buyer agency agreement
An agreement that permits the buyer to enter into multiple agreements with an unlimited number of sponsoring brokers, and the sponsoring broker receives compensation only if she locates the property the buyer ultimately purchases; also called a non exclusive buyer agency agreement.
A mortgage loan that is expandable by increments up to a maximum dollar amount, the full loan being secured by the same original mortgage.
A property given to a number of brokers to market at the same time. (most MLSs do not permit this type of listing)
A situation in which a buyer puts down money for the right to purchase a piece of real estate within a set time period but does not have an obligation to buy.
Listing with a provision that gives the listing sponsoring broker the right to purchase the listed property.
Contractual arrangements that are not in writing and are usually not legally binding.
Original principal balance
The amount of principal owed on a loan before a borrower makes any payments.
A fee charged by most lenders--also called points--for processing a loan. A point is 1 percent of the total loan amount.
A form of implied agency relationship created by the action of the parties involved rather than by written agreement or document.
A transaction in which the seller of a property agrees to finance all or part of the purchase.
A real estate loan used to finance the purchase of both real property and personal property, such as in the purchase of a new home that includes carpeting, window coverings, and major appliances.
Parole evidence rule
A rule of evidence providing that a written agreement is the final expression of the agreement of the parties, not to be varied or contradicted by prior or contemporaneous oral or written negotiations.
A mortgage loan wherein the lender has a partial equity interest in the property or receives a portion of the income from the property.
The division of cotenants' interests in real property when the parties do not all voluntarily agree to terminate the co-ownership; takes place through court procedures.
An association of two or more individuals who carry on a continuing business for profit as co-owners. Under the law a ______ is regarded as a group of individuals rather than as a single entity. A general ______ is a typical form of joint venture in which each general partner shares in the administration, profits, and losses of the operation. A limited ______ is a business arrangement whereby the operation is administered by one or more general ______ and funded, by and large, by limited or silent ______who are, by law responsible for losses only to the extent of their investments.
A wall that is located on or at a boundary line between two adjoining parcels of land and is used by the owners of both properties.
A visible deficiency in a piece of property, such as a cracked basement slab or a sagging porch.
A legal limit on the amount a monthly payment can increase on an adjustable-rate mortgage.
A lease, commonly used for commercial property, whose rental is based on the tenant's gross sales at the premises; it usually stipulates a base monthly rental plus a percentage of any gross sales above a certain amount.
An inspection performed to determine if harmful insects exist in a building.
A reduction in a property's value resulting from a decline in physical condition; can be caused by action of the elements or by ordinary wear and tear.
PITI (Principal, Interest, Taxes, Insurance)
When a buyer applies for a loan, the lender will calculate the ______, ______, ______and ______. The figure is designed to represent the borrower's actual monthly mortgage-related expenses.
The concept began in the 19th century and describes any town or neighborhood built with certain guidelines and goals.
Planned-unit development (PUD)
Residents own the home and the land, and share the use and financial responsibility for common areas.
A map of a town, section, or subdivision indicating the location and boundaries of individual properties.
The increase in value or utility resulting from the consolidation (assemblage) of two or more adjacent lots into one larger lot.
The card issued by the IDFPR to signify that the person named on the card is currently licensed under the Real Estate License Act of 2000.
Fees charged by lenders at the time a loan is originated. A point is equal to 1 percent of the total loan amount.
Point of beginning (POB)
In a metes-and-bounds legal description, the starting point of the survey, situated in one corner of the parcel; all metes-and bounds descriptions must follow the boundaries of the parcel back to the point of beginning.
The government's right to impose laws, statutes, and ordinances, including zoning ordinances and building codes, to protect the public health, safety, and welfare.
Used as an insulating material in dielectric oil and may be present in electrical equipment.
When a buyer signs the papers and receives the keys to the house, the buyer officially takes ______.
Possibility of reverter
When a former owner sets special limitations (words such as "so long as", "while", or "during") they can reacquire ownership if the limitation is violated. In Illinois the condition passes from owner to owner forever, however the original grantor's right of reverter continues for only 40 years. After that time, the condition still may be enforced but no longer by the threat of losing the property.
A letter from a lender that informs a seller about the amount of money that a potential buyer can obtain.
Interest paid before it is due. For example, at the close of a real estate transaction borrowers usually pay for the interest on their loan that falls between the closing period and the first monthly payment.
Lenders can impose a ______ on a borrower who pays a loan off before its expected end date.
Many lenders will ______ a borrower who is shopping for a loan by completing a preliminary assessment of the buyer's ability to pay for a home.
The practice of setting prices for products or services rather than letting competition in the open market establish those prices. This practice is Illegal under antitrust laws.
Primary mortgage market
The mortgage market in which loans are originated, consisting of lenders such as commercial banks, savings and loan associations, and mutual savings banks.
(1) A sum loaned or employed as a fund or an investment, as distinguished from its income or profits. (2) The original amount (as in loan) of the total due and payable at a certain date. (3) A main party to a transaction - the person for whom the agent works.
The main imaginary line running north and south and crossing a base line at a definite point, used by surveyors for reference in locating and describing land under the rectangular (government) survey system or legal description.
Principle of conformity
The idea that a house will more likely appreciate in value if its size, age, condition and style are similar to, or conform to, other houses in the neighborhood.
Principle of progression
An appraisal term which states that real estate of lower value is enhanced by the proximity of higher-end properties.
Principle of regression
An appraisal term which states that the value of higher-end real estate can be brought down by the proximity of too many lower-end properties.
A concept of water ownership in which the landowner's right to use available water is based on a government-administered permit system.
The order of position or time. The ______ of liens is generally determined by the chronological order in which the lien documents are recorded; tax liens, however, have ______ even over previously recorded liens.
Private mortgage insurance (PMI)
A special type of loan insurance that many lenders require borrowers to purchase if the borrower's down payment is less than 20 percent of the home's purchase price.
A legal process by which a court determines who will inherit a decedent's property and what the estate's assets and liabilities are.
The effort that brings about the desired result. Under an open listing the sponsoring broker who is the ______ of the sale receives the commission.
A financing instrument that states the terms of the underlying obligation, is signed by its maker, and is negotiable (transferable to a third party).
Property disclosure report
A ______ must be given to the buyer before an offer is made and accepted or the buyer will have three days in which to rescind the contract, based on any negative disclosures.
Property management agreement
An agreement between the property owner and sponsoring broker. It sets forth the nature of the relationship between the two parties. The agreement covers such items as time period, property manager's responsibilities, extent of property manager's authority, compensation, and reporting to name a few.
Someone who manages real estate for another person for compensation. Duties include collecting rents, maintaining the property, and keeping up all accounting.
A lease given by the corporation that owns a cooperative apartment building to the shareholder for the shareholder's right as a tenant to and individual apartment.
Agreed-upon percentages of certain expenses associated with a piece of property that must be paid by the buyer or the seller at the time of closing.
Any group of people designated as such by the Department of Housing and Urban Development (HUD) in consideration of federal and state civil rights legislation. Currently includes ethnic minorities, women, religious groups, the handicapped, and others.
Purchase-money mortgage (PMM)
A note secured by a mortgage or deed of trust given by a buyer, as borrower, to a seller, as lender, as part of the purchase price of the real estate.
The appraisal method of estimating building costs by calculating the cost of all of the physical components in the improvements, adding the cost to assemble them and then including the indirect costs associated with such construction.
A summary proceeding in which a plaintiff / condemner may obtain immediate fee simple title to real property, including the rights of possession and use.
A conveyance by which the grantor transfers whatever interest she has in the real estate, without warranties or obligations. Granting clause example: "I, ______, remise, release, alienate, and convey..."
A ground-generated radioactive gas that seeps into some homes through sump pumps, cracks in the foundation and other inlets. A leading cause of lung cancer, ______ is found in mostly the northern half of the country.
A strip of land six miles wide, extending north and south and numbered east and west according to its distance from the principal meridian in the rectangular (government) survey system of legal description.
The limit on the amount the interest rate can be increased at each adjustment period in an adjustable-rate loan. The limit also may set the maximum interest rate that can be charged during the life of the loan.
A loan with a clause that entitles a borrower to a one-time cut in the interest rate without going through refinancing.
Method of creating an agency relationship in which the principal accepts the conduct of someone who acted without prior authorization as the principal's agent.
Ready, willing, and able buyer
One who is prepared to buy property on the seller's terms and is ready to take positive steps to consummate the transaction.
Land and anything permanently affixed to it, including buildings, fences and other items attached to the structure.
Real Estate Administration and Disciplinary Board
The ______ acts in an advisory capacity to the Real Estate Coordinator regarding matters involving standards of professional conduct, discipline, and examination. The ______ also conducts hearings on disciplinary actions against persons accused of violating the Act or the rules.
Real estate assistant
A licensed or unlicensed individual who assists a licensee in the real estate business.
Real Estate Audit Fund
A fund established and administered through the Division of Professional Regulation to conduct audits of special accounts.
Real estate broker
One who is licensed by the state to represent a buyer or seller in a real estate transaction in exchange for a commission.
Real Estate Coordinator
A licensed broker is appointed to the position of ______ by the secretary of the IDFPR after the recommendation of real estate professionals and organizations are considered. Their duties include, acting as ex officio chairperson of the real estate administration and disciplinary board, being the liaison between the department & the profession, preparing and circulating educational and informational material for licensees, appointing committees, supervising real estate activities, and serving as ex officio chairman of the advisory council.
Real Estate Administration and Disciplinary Board
The ______ acts in advisory capacity to the Real Estate Coordinator regarding matters involving standards of professional conduct, discipline, and examination. In addition to its advisory functions, the board conducts hearings on disciplinary actions against persons accused of violating the Act or the rules.
Real Estate Investment Trusts (REITs)
The trusts are publicly traded companies that own, develop and operate commercial properties.
Real Estate License Act 2000
State law enacted to protect the public from fraud, dishonesty, and incompetence in the purchase and sale of real estate. It was amended in 2011.
Real Estate License Administration fund
A fund established and administered through the Division of Professional Regulation to finance the regulatory operations of the state.
Real Estate Licensee
One who acts as a point of contact between two or more people in negotiating the sale, purchase, or rental of property. In Illinois: leasing agent, broker, managing broker, sponsoring broker
Real Estate Mortgage Investment Conduit (REMIC)
A tax entity that issues multiple classes of investor interests (securities) backed by a pool of mortgages.
Real Estate Recovery Fund
A fund established to cover claims of aggrieved parties who have suffered monetary damage through the actions of a real estate licensee.
Real Estate Research and Education Fund
A fund established and administered through the Division of Professional Regulation to fund research and scholarships.
Real Estate Settlement Procedures Act (RESPA)
The federal law that requires certain disclosures to consumers about mortgage loan settlements. The law also prohibits the payment or receipt of kickbacks and certain kinds of referral fees.
A designation for an agent or broker who is a member of the National Association of Real Estate Brokers.
A designation for an agent or broker who is a member of the National Association of Realtors.
The final step in the appraisal process in which the appraiser combines the estimates of value received from the sales comparison, cost and income approaches to arrive at a final estimate of market value for the subject property.
When a borrower completely pays off the mortgage, the property is reconveyed to them from the lender.
The act of entering or recording documents affecting or conveying interests in real estate in the recorder's office established in each county. Until it is ______ a deed or mortgage ordinarily is not effective against subsequent purchasers or mortgagees.
Rectangular (government) survey system
System established in 1785 by the federal government, providing for surveying and describing land by reference to principal meridians and base lines.
A period of time established by state law during which a property owner has the right to redeem her real estate from a foreclosure or tax sale by paying the sales price, interest, and costs. Many states do not have mortgage redemption laws.
The practice by a bank or insurance company to deny credit or insurance to people based on ethnic background or neighborhood.
Reduction certificate (payoff statement)
The document signed by a lender indicating the amount required to pay a loan balance in full and satisfy the debt; used in the settlement process to protect both the seller's and buyer's interests.
An appraisal principle that states that between dissimilar properties, the value of the better quality property is affected adversely by the presence of the lesser quality property.
A person working an average of 20 hours per week for a person or entity who would be considered as an employee under the IRS.
The federal code issued under the Truth-in-Lending Act which requires that a borrower be advised in writing of all costs associated with the credit portion of a financial transaction.
A document, also known as a deed of reconveyance, that transfers all rights given a trustee under a deed of trust loan back to the grantor after the loan has been fully repaid.
The remnant of an estate that has been conveyed to take effect and be enjoyed after the termination of a prior estate, such as when an owner conveys a life estate to one party and the remainder to another.
This is an agreement by Landlord to provide Tenant the exclusive right to lease space beyond the original lease term for a pre-arranged term and amount.
A fixed, periodic payment made by a tenant of a property to the owner for possession and use, usually by prior agreement of the parties.
A statement of proposed rental rates, determined by the owner or the property manager or both, based on a building's estimated expenses, market supply and demand, and the owner's long-range goals for the property.
Rent loss insurance
A policy that covers any loss of rent or rental value in the event of fire or other damage that renders the property uninhabitable.
A type of home insurance that protects the holder against accidents, damages, and losses that occur in a rented residence. ______ provides coverage both for the insured's belongings and for liability that may result from an accident in the insured's home.
The construction cost at current prices of a property that is not necessarily an exact duplicate of the subject property but serves the same purpose or function as the original.
The construction cost at current prices of an exact duplicate of the subject property.
The taking back of property by a lender or seller from the borrower or buyer, usually due to default.
Residential Real Property Disclosure Report
A disclosure that is meant for the seller to reveal any material defects in the residence that the seller is aware of. Even if the property is being sold "As is" the seller is still required to disclose any known problems and/or defects with the property. It is the responsibility of the listing agent to make sure that the seller fills out the Residential Real Property Disclosure Report. The agent is not to fill it out the report. If a material defect is disclosed in the Residential Real Property Disclosure Report after acceptance by the prospective buyer, then the prospective buyer may, within three business days after receipt of that report by the prospective buyer, terminate the contract.
Resolution Trust Corporation
The organization created by FIRREA to liquidate the assets of failed savings and loan associations.
A special type of loan available to equity-rich, older owners. Repayment is not necessary until the borrower sells the property or moves into a retirement community.
The remnant of an estate that the grantor holds after granting a life estate to another person.
The return of the rights of possession and quiet enjoyment to the lessor at the expiration of a lease.
Right of first refusal
An agreement by a property owner to give another person the right to buy or rent the property before it goes on the open market.
Right of survivorship
Upon the death of a joint tenant, the deceased's interest transfers directly to the surviving joint tenant(s).
The right given by one landowner to another to pass over the land, construct a roadway, or use as a pathway, without actually transferring ownership.
Right to recission
A provision in the federal Truth-in-Lending Act that allows borrowers to cancel certain kinds of loans within three days of signing.
An owner's rights in land that borders on or includes a stream or river. These rights include access to and use of the water.
Rules and regulations
Real estate licensing authority orders that govern licensees' activities; they usually have the same force and effect as statutory law.
Rural Housing Service
A U.S. Department of Agriculture program that provides financing to farmers and certain borrowers to purchase rural property when other funds are not available.
A transaction in which the buyer leases back the property to the seller for a specified period of time.
Sales comparison approach
The process of estimating the value of a property by examining and comparing actual sales of comparable properties.
Secondary mortgage market
A market of packaged home loans that are resold as securities to investors. Major players are Fannie Mae and Freddie Mac.
A portion of a township under the rectangular (government) survey system. A township is divided into 36 ______, numbered 1 through 36. A ______ is a square with mile-long sides and an area of one square mile, or 640 acres.
Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act)
Act requires that each individual state must license and register mortgage loan originators (MLOs).
A payment by a tenant, held by the landlord during the lease term and kept (wholly or partially) on default or destruction of the premises by the tenant.
Seller disclosure form
Sellers are required to provide this form to buyers, identifying any property defects that the seller may be aware of.
Under community property law, property owned solely by either spouse before the marriage, acquired by gift or inheritance after the marriage, or purchased with separate funds after the marriage.
Land on which an easement exists in favor of an adjacent property (called dominant estate); also called a servient estate.
Changing an item of real estate to personal property by detaching it from the land; for example, cutting down a tree.
In an agricultural lease, the agreement between the landowner and the tenant farmer to split the crop or the profit from its sale.
A sale of real estate in which the sale proceeds fall short of the balance owed on the property's mortgage loan.
Sherman Antitrust Act
This act prohibits monopolies and any contracts, combinations, and conspiracies that unreasonably restrain trade.
A document giving ownership rights in property to a buyer at a sheriff's sale (a sale held by a sheriff to pay a court judgment against the owner of the property). The giving of said deed begins a Statutory Redemption period.
A sale of property by the sheriff under authority of a court's writ of execution in order satisfy an unpaid obligation.
Small Business Liability Relief and Brownfields Revitalization Act
A law that provides funds to assess and clean up brownfields, clarifies liability protections, and provides tax incentives toward enhancing state and tribal response programs.
One who is authorized by a principal to perform a single act or transaction; a real estate broker is usually a ______ authorized to find a ready, willing, and able buyer for a particular company.
When a homeowners' association needs or wants extra funds, it levies a special assessment upon the owners.
Special Service Area (SSA)
A taxing mechanism that can be used to fund a wide range of special or additional services and/or physical improvements in a defined geographic area within a municipality or jurisdiction.
Special warranty deed
A deed in which the grantor warrants, or guarantees, the title only against defects arising during the period of tenure and ownership of the property and not against defects existing before that time. Granting clause example: "I,______, remise, release, alienate, and convey..."
A lien affecting or attaching only to a certain, specific parcel of land or piece of property.
In Illinois, a card that certifies a new licensee's relationship with a sponsoring broker and serves as a temporary permit to practice until a permanent pocket card is received.
The broker who has issued a sponsor card to a licensed broker, managing broker, or leasing agent; ultimately responsible for all the actions of all licensee working under the umbrella of that particular firm.
The appraisal method of estimating building costs by multiplying the number of square feet in the improvements being appraised by the cost per square foot for recently constructed similar improvements.
Statue of frauds
The part of a state law that requires that certain instruments, such as deeds, real estate sales contracts, and certain leases, be in writing to be legally enforceable.
Statute of limitations
That law pertaining to the period of time within which certain actions must be brought to court.
A lien imposed on property by statute - a tax lien, for example; in contrast to an equitable lien, which arises out of common law.
Statutory right of redemption
The legal right of a mortgagor to redeem the property after it has been sold at a foreclosure sale. This right is granted by state law for a limited period of time, depending on the state. (not offered in Illinois)
Statutory right of reinstatement
When the defaulting mortgagor wishes to cure the default and reinstate the loan as if no acceleration had occurred. The mortgagor has the right to exercise this statutory right for a period of 90 days after service of summons or publication date. At the lender's discretion, expressed through an attorney, the right of reinstatement may be extended to run as long as the equitable right of redemption.
The illegal practice of channeling home seekers to particular areas, either to maintain the homogeneity of an area or to change the character of an area, which limits their choices of where they can live.
A property that has acquired an undesirable reputations due to an event that occurred on or near it, such as a violent crime, gang-related activity, illness, or personal tragedy.
A method of calculating depreciation for tax purposes, computed by dividing the adjusted basis of a property by the estimated number of years of remaining useful life.
Straight (term) loan
A loan in which only interest is paid during the term of the loan, with the entire principal amount due with the final interest payment.
A strict foreclosure decree sets out the amount due under the mortgage, orders it to be paid within a particular time limit, and provides that if payment is not made, the mortgagor's right and equity of redemption are forever barred and foreclosed. If the mortgagor does not pay within the time designated, then title to the property vests in the mortgagee without any sale thereof. (not applicable in Illinois)
When an agent brings a buyer to a property, they in effect act as a ______ to the listing agent.
One who buys undeveloped land, divides it into smaller, usable lots, and sells the lots to potential users.
The process in which the owner of a large piece of property divides it into smaller parcels.
Subdivision and development ordinances
Municipal ordinances that establish requirements for subdivisions and development.
The leasing of premises by a lessee to a third party for part of the lessee's remaining term.
A written agreement between holders of liens on a property that changes the priority of mortgage, judgment, and other liens under certain circumstances.
The substitution of one creditor for another, with the substituted person succeeding to the legal rights and claims of the original claimant. ______ is used by title insurers to acquire from the injured party rights to sue to recover any claims the insurers have paid.
An appraisal principle that states that the maximum value of a property tends to be set by the cost of purchasing an equally desirable and valuable property, assuming that no costly delay is encountered in making the ______.
Ownership rights in a parcel of real estate to the water, minerals, gas, oil, and so forth that lie beneath the surface of the property.
Suit for possession
A court suit initiated by a landlord to evict a tenant from leased premises after the tenant has breached one of the terms of the lease or has held possession of the property after the lease's expiration.
Suit for specific performance
A court action in which the defaulting party is sued to perform under the terms and conditions agreed to in the contract.
Suit to quiet title
A court action intended to establish or settle the title to a particular property, especially when there is a cloud on the title.
A popular name of the hazardous waste cleanup fund established by the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).
Superfund Amendments and Reauthorization Act (SARA)
An amendatory statute that contains stronger cleanup standards for contaminated sites, increased funding for ______, and clarification of lender liability and innocent landowner immunity.
The amount of goods available in the market to be sold at a given price. The term is often coupled with the term demand.
Supply and demand
The appraisal principle that follows the interrelationship of the ______ of real estate. As appraising is based on economic concepts, this principle recognizes that real property is subject to the influences of the marketplace just as in any other commodity.
An agreement by an insurance or bonding company to be responsible for certain possible defaults, debts, or obligations contracted for by an insured party. In the real estate business a ______ is generally used to ensure that a particular project will be completed at a certain date or that a contract will be performed as stated.
Ownership rights in a parcel of real estate that are limited to the surface of the property and do not include the air above it (air rights) or the minerals below the surface (subsurface rights).
A combination of people or firms formed to accomplish a business venture of mutual interest by pooling resources. In a real estate investment ______, the parties own and/or develop property, with the main profit generally arising from the sale of the property.
Adding or combining successive periods of continuous occupation of real property by adverse possessors. This concept enables someone who has not been in possession for the entire statutory period to establish a claim of adverse possession.
A ______ occurs when the government encroaches upon or occupies private land for its own proposed use. Even a minimal permanent physical occupation of real property requires compensation.
Agreements to sell one product only if the buyer purchases another product as well. The sale of the first (desired) product is "tied" to the purchase of a second, less desirable, product. This practice is illegal under antitrust laws.
Tenancy by the entirety
A type of concurrent estate in real property held by a Husband and Wife whereby each owns the undivided whole of the property, coupled with the Right of Survivorship, so that upon the death of one, the survivor is entitled to the decedent's share.
Tenants in common
Two or more owners who share interest in a specific property. Each individual owner has the right to partition, Unlike joint tenants, ______ have right of inheritance.
Alterations to the interior of a building to meet the functional demands of the tenant.
The 72-hour clause
When a buyer has a house to sell before they can purchase another home, most sellers insist on a ______. In the event of a better offer coming in before the contingency is settled, this clause entitles the seller to give the buyer ______ to remove the contingency or lose the house.
Tier (township strip)
A strip of land six miles wide, extending east and west and numbered north and south according to its distance from the base line in the rectangular (government) survey system of legal description.
Time is of the essence
A phrase in a contract that requires the performance of a certain act within a stated period of time.
Ownership that involves the acquisition of a specific period of time, or that percentage of interest, usually in a vacation home or resort.
Firms that ensure that the title to a piece of property is clear and provide title insurance.
A policy issued to lenders and buyers to protect any losses because of a dispute over the ownership of a piece of property.
A check of public title records to ascertain that the seller is the legal owner and that there are no claims or liens against the property.
Some states interpret a mortgage to mean that the lender is the owner of mortgaged land. On full payment of the mortgage debt, the borrower becomes the landowner.
The principal unit of the rectangular (government) survey system. A ______ is a square with six mile sides and an area of 36 square miles.
An article installed by a tenant under the terms of a lease and removable by the tenant before the lease expires.
An assessment by state or local authorities at the time a piece of property changes hands.
A fiduciary arrangement whereby property is conveyed to a person or institution, called a trustee, to be held and administered on behalf of another person, called a beneficiary. The one who conveys the ______ is called the trustor.
An instrument used to create a mortgage lien by which the borrower conveys title to a trustee, who holds it as security for the benefit of the note holder (the lender); also called the deed of trust.
A federal law that protects consumers in a variety of ways. One of its key provisions allows a consumer to cancel a home-improvement loan, second mortgage or other loan if the home was pledged as security (except for a first mortgage or first trust deed) until midnight of the third business day after the contract was signed.
An adjustable mortgage with two interest rates, one for the first five or seven years of the loan, and the other for the remainder of the loan term.
Agreements to sell one product only if the buyer purchases another product as well. The sale of the first product is "tied" to the purchase of a second product.
Unauthorized practice of law
Persons or entities who engage in the practice of law but are not authorized to practice law pursuant to state law.
The process that lenders go through to evaluate the risks posed by a particular borrower and to set appropriate conditions for the loan.
Underground storage tanks (UST)
A tank and any underground piping connected to the tank that has at least 10 percent of its combined volume underground.
A contract that has all the elements of a valid contract, yet neither party can sue the other to force performing of it.
Uniform Settlement Statement (HUD-1)
A special form that itemizes all charges to be paid by buyer and seller in connection with settlement.
Uniform Standards of Professional Appraisal Practice (USPAP)
Appraisal standards set by the Appraisal Qualifications Board of the Appraisal Foundation.
Uniform probate code
This gives the surviving spouse the right to take what is called an elective share (a term which describes a proportion of an estate which the surviving spouse of the deceased may claim in place of what they were left in the decedent's will) on the death of the other spouse.
Uniform Vendor and Purchaser Risk Act
This act states that the seller bears any loss that occurs before the title passes or the buyer takes possession.
A one-sided contract wherein one party makes a promise so as to induce a second party to do something. The second party is not legally bound to perform; however, if the second party does comply, the first party is obligated to keep the promise.
The appraisal method of estimating building costs by calculating the costs of all of the physical components in the structure, with the cost of each item including its proper installation, connection, and so forth; also called the segregated cost method.
Unit of ownership
The four unities that are traditionally needed to create a joint tenancy - unity of title, time, interest, and possession.
A person empowered to do anything the principal could do to a particular business or activity. The agent's authority to act on behalf of the principal is virtually unlimited. In Illinois: written power of attorney is required.
An ______ transfers ownership from one party to another without being officially recorded.
Any type of debt or general obligation that is not collateralized by a lien on specific assets of the borrower in the case of bankruptcy or liquidation.
Urea-formaldehyde foam insulation (UFFI)
A type of foamed in-place insulation that releases formaldehyde gas. It was banned by the Consumer Public Safety Commission in 1982 from use in residences and schools. Holding that the risks had not been proven, a Federal Court lifted the ban in 1983.
A contract that complies with all the essentials of a contract and is binding and enforceable on all parties to it.
The power of a good or service to command other good in exchange for the present worth of future rights to its income or amenities.
Variable interest rate
A loan rate that moves up and down based on factors including changes in the rate paid on bank certificates of deposit or Treasury bills.
Variable rate mortgage
A loan with an interest rate that hinges on factors such as the rate paid on bank certificates and Treasury bills.
Permission obtained from zoning authorities to build a structure or conduct a use that is expressly prohibited by the current zoning ordinances.
A contract is ______ when it has no legal force or effect because it lacks some or all of the essential elements of a contract.
A contract that seems to be valid on the surface but may be rejected or disaffirmed by one or both of the parties.
A buyer's final inspection of the home to determine if conditions in the purchase agreement have been satisfied.
An improper use or an abuse of a property by a possessor who holds less than fee ownership, such as a tenant, life tenant, mortgagor, or vendee. Such ______ ordinarily impairs the value of the land or the interest of the person holding the title or the reversionary rights.
The most basic legal document outlining the disposition of a person's estate in the event of death.
Workers' compensation acts
Laws that require an employer to obtain insurance coverage to protect employees who are injured in the course of their employment.
A loan to a buyer for the remaining balance on a seller's first mortgage and an additional amount requested by the seller. Payments on both loans are made to the lender who holds the ______.