A glossary of real estate terms is a basic tool in understanding real estate investing. Understanding the terminology of real estate is part of building a solid foundation for your business.
GLOSSARY OF REAL ESTATE TERMS
ABANDONMENT – The voluntary surrender of property rights, with no intention of reclaiming them and without vesting interest in another person. Nonuse is not necessarily abandonment.
ABSTRACT – A history of the ownership of a property, showing transfers in ownership and factors affecting ownership, such as mortgages.
ACCELERATION CLAUSE – A clause in a promissory note, agreement of sale, or mortgage which gives the lender the right to call all sums due and payable in advance of the fixed payment date upon the occurrence of a specified event, such as a sale, default, assignment or further encumbrance of the property.
ACCEPTANCE – The expression of the intention of the person receiving an offer (offeree, usually the seller) to be bound by the terms of the offer. The acceptance must be communicated to the offeror and must be in writing to be enforceable. The buyer has the right to revoke the offer any time before the seller’s acceptance.
ACCRUED DEPRECIATION – The difference between the present worth of improvements and the reproduction or replacement cost new, both measured on the appraisal date.
ACQUISITION – The act of becoming the owner of certain property; used also of the thing or property acquired.
ACRE – A measure of land equaling 43,560 square feet; or 4,840 square yards; or 160 square rods; or a tract about 208.71 feet square.
ADEQUATE PROTECTION – To protect the value of the creditors interest in the property being used by the debtor in possession.
ADMINISTRATOR – A person appointed by the court to manage and settle the estate of a deceased person who has left no will.
ADVERSE POSSESSION – Acquisition of title to real property owned by someone else, by open, notorious, and continuous possession for the statutory period of time. Burden to prove title is on the possessor, who does not have a marketable title until he obtains and records a judicial decree quieting title. No right of adverse possession may be obtained against the United States.
AFFIDAVIT – A written declaration, sworn before an officer who has authority to administer oaths.
AGREEMENT OF SALE – A written agreement whereby the purchaser agrees to buy certain real estate and the seller agrees to sell upon terms and conditions set forth in the agreement.
ALLOTMENT – Authorization by the head of an agency to subordinates to incur financial obligations up to a specified amount. An agency makes allotments under the regulations in OMB Circular No. A-34, and not to exceed the amount allowed by OMB.
AMENITIES – Tangible and intangible benefits generated and received through exercise of rights to real property, not necessarily in the form of money.
AMORTIZATION – Liquidation or gradual retirement of a financial obligation by periodic installments.
AMORTIZATION PERIOD – The period of time for economic recovery of the net investment in a project. This period is the lesser of 1) the period of time over which the plan can be expected to serve a useful purpose, or 2) the period of time when further discounting of beneficial and adverse effects will not appreciably influence design.
ANALYZED PRINT OUT – A summary page on a piece of property generated from Turbo Bidder (a real estate investing tool).
ANGLE – A measure of rotation about a point, generally used in surveys to show the relationship of one line to another. Angles are usually measured in degrees, 360 degrees to a full circle or one full rotation back to the point of beginning. Each degree is broken down into 60 minutes, and each minute into 60 seconds.
ANIMAL UNIT – A measure of numbers of livestock equivalent to a mature cow. One A.U. equals 1,000 pounds live weight, or one cow, horse, or mule; five sheep or swine; six goats.
ANNEXATION – The act of attaching, adding or joining one thing to another, generally a smaller or subordinate thing with a large or principal thing. Usually with respect to land or fixtures.
APPLICATION – A form used to apply for a mortgage loan, containing information about the borrower’s income, savings, assets, debts etc.
APPORTIONMENT – A distribution by OMB of amounts available for obligation in an appropriation or fund account, including budgetary reserves established by law. An apportionment divides amounts by specific time periods (quarters), activities, projects, objects, or a combination.
APPRAISAL – A written estimate and opinion of value; a conclusion resulting from the analysis of facts.
APPRAISER – One qualified by education, training, and experience that is hired to estimate the value of real and personal property based upon experience, judgment, facts, and the use of the formal appraisal processes.
APPRECIATION – An increased conversion value of property or mediums of exchange due to economic or related causes which may prove to be either temporary or permanent. 166
APPROPRIATION – Authorization by act of Congress permitting Federal agencies to incur obligations and make payments out of the ‘treasury for specific purposes.
ASKING PRICE (LIST) – The price placed on property for sale.
ASSESSED VALUATION – An assessment of property values, by a unit of Government, for purposes of taxation.
ASSESSMENT – A charge against real estate made by a unit of government to cover a proportionate cost of an improvement, such as street or sewer.
ASSESSOR – A public official who establishes the value of a property for tax purposes.
ASSETS – All valuable things owned by a person, corporation, or other entity, encumbered or not.
ASSIGNMENT (OF TEASE) – A transfer to another of rights, interest, or claim in or to real or personal property. The party who assigns or transfers his interest is the assignor, and the assignee is the one to whom the assignment is made.
ASSUMPTION AGREEMENT – An undertaking of a debt or obligation primarily resting upon another person.
ASSUMPTION OF MORTGAGE – The taking of title to property by a grantee wherein he assumes liability for payment of an existing note secured by a mortgage or deed of trust against the property. He becomes a co-guarantor for the payment of the mortgage or deed of trust along with the original maker of the note, who is not released from his responsibility.
ATTACHMENT – The legal process of seizing the real or personal property of a defendant in a law suit, by levy or judicial order, and holding it in the custody of the court as security for satisfaction of the judgment.
ATTORNEY IN FACT – A person authorized to perform certain acts for another person, under power of attorney.
AUCTION – A public sale of property to the highest bidder.
AUDIT – An examination of records of real estate transactions to verify accuracy and adequacy.
BALLOON PAYMENT – A final payment on a note. It is usually substantially larger than any of the preceding installments.
BENEFICIARY – A person who receives and benefits from the gifts or acts of another, such as one who is designated to receive the proceeds from a will or trust.
BEQUEATH – To leave personal property to another by will. To leave real property by will is to devise.
BILL OF SALE – A written instrument transferring title, right, and interest in personal property to another.
BINDER – An agreement to cover an earnest money deposit for the purchase of real property as evidence of the purchaser’s good faith and intention to complete the transaction.
BLANKET MORTGAGE – A single mortgage which covets more than one piece of real estate.
BOND – Any obligation under seal. A real estate bond is a written obligation, usually issued on security of a mortgage or a trust deed.
BREACH OF CONTRACT – Violation of any of the terms or conditions of a contract without legal excuse.
BROKER – A person who, for a commission or a fee, brings parties together and assists in negotiating contracts between them. See mortgage broker.
CAP RATE – defines the percentage number used to determine the current value of a property based on estiamted future operating income.
CAPITALIZATION – In appraising, determining value of property by considering net income and percentage of reasonable return on the investment.
CAPITALIZATION RATE – The percentage ratio between net income from investment and the value of the investment. Commonly expressed as “return on and return of” capital.
CARTOGRAPHY – The science or act of making maps.
CASH VALUE – The actual money that an Asset will bring on the open market without any lengthy delay.
CAVEAT EMPTOR – “Let the buyer beware” is Latin. Summarizes the rule that the buyer must examine, judge and test merchandise/property for himself.
CERTIFICATE OF TITLE – A document stating that title to a particular property is clear. It is prepared by an attorney or qualified person who has examined the abstract of title, but is not to be confused with title insurance. It is only an opinion that title is good. Usually given to a homeowner with the deed.
CHATTEL – Personal property which is tangible and movable. (The word “chattel” evolved from the word “cattle”, one of man’s early important possessions.)
CLEAR TITLE – A title free and clear of all encumbrances.
CLOSING – A meeting at which a sale of a property is finalized by the buyer signing the mortgage documents and paying closing costs.
CLOSING COSTS – Expenses (over and above the price of the property) incurred by buyers and sellers in transferring ownership of a property. Closing costs normally include an origination fee, an attorney’s fee, taxes, an amount placed in escrow, and charges for obtaining title insurance and a survey. Closing costs percentage will vary according to the area of the country; lenders or realtors often provide estimates of closing costs to prospective homebuyers.
CLOSING STATEMENT – An accounting by a broker of funds in a real estate sale, made to the seller and to the buyer.
CLOUD ON TITLE – An outstanding claim or encumbrance which would affect or impair the owner’s title, if valid. A judgment or dower interest.
COINSURANCE – A relative division of risk between the insurer and insured, depending on relative amount of the policy and the actual value of the property insured. Takes effect only with partial loss, less than the amount of the policy coinsurance clauses induce the owner to carry full or nearly full coverage.
COLLOCATE – Sharing of one property by more than one user; especially armed forces recruiting facilities.
COLLATERAL SECURITY – A separate obligation attached to a contract to guarantee its performance; the transfer of property or of other contracts or valuables, to ensure the performance of a principal agreement.
COMMON ELEMENT – In a condominium, land and parts of buildings used by all owners for mutual convenience and safety.
CONDOMINIUM COMMON EXPENSE – In a condominium, expenses of operation and sums declared by the bylaws to be common expense.
COMMUNITY PROPERTY – Property accumulated through joint efforts of husband and wife, or by either one, during their marriage and owned in common.
COMPARABLE – Properties listed in an appraisal report which are substantially equivalent to the subject property, comparable in selling price, rental, income or similar measure.
COMPENSABLE INTEREST – Interest of parties that is to be compensated.
COMPLIANCE INSPECTION – Inspection of outgrants, military and civil, for compliance with terms of the outgrant and to review management/development of the property, particularly of outgrants which provide services to the general public.
COMPOUND INTEREST – Interest paid both on the original principal and on interest accrued from the time it fell due.
CONDEMNATION – In real property law, the process by which property of a private owner is taken for public use, with just compensation to the owner. Condemnation occurs under the right of eminent domain.
CONDITIONAL COMMITMENT – A commitment for a loan subject to one or more conditions.
CONDITIONAL SALE CONTRACT – A contract whereby the owner retains title to the property until the purchaser has met all of the terms and conditions of the contract.
CONDOMINIUM – Fee ownership of a unit in multi-unit building with joint ownership of common areas.
CONSIDERATION – An act or forbearance, or the promise thereof, which is offered by one party to induce another to enter into a contract; that which is given in exchange for something from another. Consideration is usually something of value, such as the purchase price in money, though it may be personal services or exchanged property. It is the price bargained for and paid for a promise.
CONTINGENCY – A condition that must be met before a contract is legally binding.
CONTAMINATION – Presence of unexploded conventional ordnance, or of biological, radioactive, toxic chemical, or hazardous substances (defined in comprehensive Environmental Response Compensation and Liability Act of 1980) at levels that present a public hazard or exceed applicable standards.
CONTRACT – An agreement, either oral or written to do or not to do certain things. In real estate, there are many different types of contracts, including listings, contracts of sale, options, mortgages, assignments, leases, deeds, escrow agreements, and loan commitments, among others.
CONTRACT RENT – Payment for use of property, as specified in a lease.
CONVENTIONAL MORTGAGE – A mortgage on real estate securing a loan made by a private investor, not guaranteed by a Government agency such as FHA or VA.
CONVEYANCE – The transfer of title to real property by means of a written instrument, such as a deed.
COST OF REPRODUCTION – The normal cost of exact duplication of a property with the same or closely similar materials as of a certain date or period.
COVENANT – A written agreement in a deed which pledges that either party will perform or abstain from specified acts on a certain property, or which specifies or forbids certain uses of the property.
CREDIT – An agreement in which a borrower receives something of value in exchange for a promise to repay the lender at a later date.
CREDIT HISTORY – A record of an individual’s open and fully repaid debts. A credit history helps a lender determine whether a potential borrower has a history of repaying debts in a timely manner.
CREDIT REPORT – A report of an individual’s credit history prepared by a credit bureau and used by a lender in determining a loan applicant’s creditworthiness.
CRITERIA – The standards you set for the real estate you choose to invest in.
DAMAGES – Compensation or indemnity recovered through the courts by any person who has suffered loss, detriment or injury to person, property or rights. A sum of money awarded to a person injured by an act of another. May be compensatory or punitive.
DEBT SERVICE – Periodic payment on a debt, for interest on and retirement of the principal.
DEED – A legal instrument in writing, duly executed, sealed, and delivered, whereby the owner of real property (grantor) conveys to another (grantee) some right, title, or interest in real estate.
DEED RESTRICTION – A provision in a deed controlling or limiting the use of the land.
DEFAULT – Failure to perform a specific, required legal duty.
DEFERRED MAINTENANCE – Existing but unfulfilled requirements for repairs and rehabilitation, deferred until a later date.
DEFICIENCY JUDGMENT – At a foreclosure sale, the difference between the indebtedness sued upon and the sale price or market value of the real estate.
DEFICIENCY PAYMENT – Additional compensation required in a final judgment in condemnation proceedings. See also DEFICIENCY JUDGMENT.
DEPOSIT – A sum of money given to bind the sale of real estate, or a sum of money given to insure payment or an advance of funds in the processing of a loan.
DEPRECIATION – (1) A lowering of value. A reduction; lessening. The decline in value of property. Loss in market value. Deterioration over a period of time. The opposite of appreciation. (2) In appraising, depreciation is the reduction on value of a property as measured from the cost to replace it. It is the difference between the replacement cost and the market value. (3) In accounting, it is a write-off (usually annually) of a portion of an asset on the records.
DETERIORATION – Impairment of condition. One of the causes of depreciation and reflecting the loss in value brought about by wear and tear, disintegration, use in service, and the action of the elements.
DEVISE – A transfer of real property under a will. The donor is the devisor and the recipient is the devisee. Where there is no will, the real property “descends” to the heirs.
DISCOUNT – (1) That which can be taken off the established amount. Mortgages, for example, are frequently discounted when paid in advance of maturity. (2) A sum paid to obtain certain preferred mortgages, as the payment of points to a lending institution for FHA and VA mortgages.
DISPOSSESS – To deprive a person of possession and/or use of real property.
DOWN PAYMENT – The part of the purchase price of a property that the buyer pays in cash and does not finance with a mortgage.
DUE-ON-SALE PROVISION – A provision in a mortgage that allows the lender to demand repayment in full if the borrower sells the property that serves as security for the mortgage.
EASEMENT – A privilege or right which the owner of one parcel of land may have to use or enjoy the lands of another, i.e., a right-of-way.
EARNEST MONEY – The cash deposit made by a purchaser of real estate as evidence of good faith.
EBAY – An online auction site www.ebay.com.
EMINENT DOMAIN – The right of the government, both state and federal, to take private property for a necessary public use, with just compensation paid to the owner.
ENCROACHMENT – Trespass; the building of a structure or any improvements partly or wholly intruding upon the property of another.
ENCUMBRANCE – Any claim, lien, charge or liability attached to and binding upon real property which may lessen the value of the property but will not necessarily prevent transfer of title.
EQUITY – In real estate, the interest or value of the real estate over and above the amount of the indebtedness thereon.
ESCALATION CLAUSE – A clause in a lease which causes a rent increase, contingent on a specific action
ESCROW – In real estate, it is the state or condition of a deed which is conditionally held by a third party, called the escrow agent, pending the performance or fulfillment of some act or condition.
ESCROW AGREEMENT – A written agreement between two or more parties whereby the grantor, promisor or obligor, delivers certain instruments or property into the hands of a third party, the escrow agent, to be held by said third party until the happening of a contingency or performance of a condition, and then to be delivered to the grantee, promisee, or obligee.
ESTATE – In real estate it refers to the degree, quantity, nature, and extent of interest which a person has in real property, such as a fee simple absolute estate, an estate for years.
EVICTION – Dispossession by process of law; the act of depriving a person of the possession of lands he has held pursuant to a judgment of the court.
EXCHANGE – Disposal of any real interest by exchanging it for another real interest of equal value instead of cash.
EXECUTOR – An individual or institution designated in a will and appointed by a court to settle the estate of the testator.
EZ RENT TO OWN – The process of renting a house to someone with a Rental Agreement and a Purchase Agreement. The rent and deposit is applied to the purchase price.
FAIR MARKET VALUE – Legal term synonymous with MARKET VALUE.
FIGURING CAP RATE
FIRST MORTGAGE – The mortgage on property that is superior in right to any other mortgage.
FIXTURE – A chattel which is affixed to and becomes a part of realproperty.
FORECLOSURE – Procedure whereby property pledged as security for a debt is sold to pay the debt in event of default in payments or terms.
GENERAL LIEN – A lien which attaches to all property owned by the debtor.
GENERAL WARRANTY – A covenant in the deed whereby the grantor agrees to protect the grantee against the world.
GOOD OFFER – A good offer is one that—when accepted, is low enough to guarantee an excellent return on the investment of time and money.
GRANT – The act of conveying or transferring real property, the operative words in a conveyance of real estate are to “grant, bargain, and sell”. The grantor (the person who conveys the real estate) delivers the grant, in the form of a deed, to the grantee.
GRANTEE – Entity to whom a grant is made, or to whom real estate is conveyed. The buyer.
GRANTOR – Entity who makes a grant, conveys real estate by deed. The seller.
GROSS INCOME – The projected annual income from operation of a business or from management of a property.
GROSS RENT MULTIPLIER – Ratio of sales price to monthly rental income for single family residential properties.
GROUND LEASE – A lease to use land for a stated period; may be secured by improvements which the tenant will provide.
HARD MONEY – Hard terms.
HARD MONEY LOANS – Also known as private money loans, they are usually made by private, non banking organizations which are generally secured by real estate and command interest rates higher than a typical bank would require because they usually carry more risk.
HOA – A collectivity of home owners into which monthly fees are paid in exchange for the ability to use common areas.
HOLDOVER TENANT – A tenant who remains in possession of leased property after the expiration date of the lease term.
HOME STEAD – A home that is used as a personal residence. Where there is homestead protection, the homeowner generally files a homestead declaration with the county recorder, setting forth his marital status, describing the land and estimating the value of the homestead. The homestead is then exempt from creditor’s claims up to the statutory amount.
HUD (Housing and Urban Development) – The federal department responsible for the major housing programs in the U.S. including HUD auctions.
HVAC – An abbreviation for Heat, Ventilation and Air conditioning and refers to the climate control system in a building.
IMPROVEMENTS – An addition to land which costs labor or capital (buildings, pavements, etc.), more or less permanently attached. More than repair or replacement.
INCOME PROPERTY – Property owned or purchased primarily for the monetary return it will bring. It may be classified as commercial, industrial, or residential.
INDEMNIFY – To protect against or keep free from loss/ damage. To insure. To repay for loss/damage. To compensate for loss, reimburse.
INFLATION – A rise in the prices of goods and services, as happens when spending increases relative to the supply of goods on the market.
INSTALLED BUILDING EQUIPMENT – Equipment and furnishings required to make a building usable and attached as a permanent part of the structure (e.g., docks, overhead crane, etc.).
INSTALLMENT CONTRACT – Purchase of real estate upon an installment basis; upon default, payments are forfeited. Often called a LAND CONTRACT, the deed to the property is not given to the purchaser until either all or a certain portion of the purchase price has been paid.
INSTRUMENT – A written legal document created to affect the rights of the parties.
INTEREST – The fee charged for borrowing money.
INTEREST RATE – The rate of interest in effect for the monthly payment due.
INVOLUNTARY LEN – A lien imposed against property without consent of the owner; example: special assessments and Federal income tax.
JOINT AND SEVERAL – An obligation which binds two or more persons individually and jointly. This type of obligation can be enforced by joint action against all or separate actions against one or more.
JOINT TENANCY – Co-ownership of real property by two or more persons, whereby the joint tenancy have equal interest, accruing by the same conveyance, commencing at the same time, and held by equal and undivided possession. Joint tenancy includes the right of survivorship, by which interest of a deceased tenant passes to survivors.
JUDGMENT – The final determination of the rights and liabilities of the parties in an action, as decreed by a court.
JUNIOR LIEN – A lien placed upon property after a previous lien has been made and recorded.
JUST COMPENSATION – Market value paid for real estate taken in a condemnation action.
LANDLORD – One who rents property to others.
LEASE – A written document by which the owner transfers the rights of use and occupancy of land and/or structures to another person or entity for a specified period of time in return for a specified rental.
LEGAL DESCRIPTION – A statement containing a designation by which land is identified according to a system set up by law or approved by law.
LESSEE – A person/entity to whom property is rented under terms of a lease.
LESSOR – A person who rents property under a lease; the landlord.
LEVERAGE – The use of debt financing of an investment to maximize the return per dollar of equity invested.
LIABILITY – Any drawback, debt, or obligation. Something that acts as a disadvantage. An obligation or duty that must be performed. The opposite of asset.
LICENSE – Authority to enter or use another person’s land or property, without possessing estate in it; revocable. Would otherwise constitute a trespass.
LIEN – A hold or claim which one person has upon the property of another as a security for some debt or charge.
LIST OF REPAIRS – A summary of repairs that need to be made on a house before renting or selling it.
MARKET PRICE – The price paid regardless of pressures, motives, or intelligence.
MARKET VALUE – The price at which a willing seller would sell and a willing buyer would buy, neither being under abnormal pressure.
MECHANICS LIEN – A statutory lien to secure payment to material men and mechanics for materials and services used to repair, improve, or maintain real property.
MINERAL RIGHTS – The right to extract minerals from land. Does not include right to use the surface of the land to conduct mineral extraction. This must be obtained from the surface owner.
MLS (Multiple Listing Service) – An association of real estate agents providing for a pooling of listings and the sharing of commissions of a specified basis.
MORTGAGE – A legal instrument pledging a described property for repayment of a loan under certain terms.
MORTGAGE BROKER – An individual or firm that makes mortgage loans on its own behalf, with its own funds, usually expecting to re-sell the loans to lenders at a profit.
MORTGAGEE – one to whom a mortgage is made; the lender.
MORTGAGOR – One who makes a mortgage, the borrower.
NEGOTIABLE – A promissory note, or similar instrument, is said to be negotiable if title to the instrument, and the money it represents, can be transferred by mere endorsement and delivery by the holder, or by delivery only.
NET OPERATING INCOME (NOI) – in general, synonymous with net earnings, but considered a broader and better term; the balance remaining, after deducting from the gross income all operating expenses, maintenance, taxes, and losses pertaining to operating properties excepting interest or other financial charges on borrowed or other capital.
NET LEASE – A lease agreement whereby the lessee pays all property charges (taxes, insurance, maintenance) in addition to rent. Local market customs and terms vary, in some areas, “net, net” and “net, net, net” are used.
NOTE – A written instrument acknowledging a debt and promising payment.
NOTICE TO QUIT – A written notice from a landlord to a tenant that the tenant must vacate the premises at the end of the term or immediately, if the lease is at will.
OBLIGATION – Legal reservation of funds based on known requirements (a contract, for example), or a realistic estimate of costs.
OFFER – A promise by one party to act in a certain manner provided the other party will act in the manner requested. The offeror is the one who makes the offer to the offeree.
OPEN-END MORTGAGE – A mortgage containing a clause that permits the mortgagor to borrow money after the loan has been reduced without rewriting the mortgage.
OPTION – A privilege, acquired for a consideration, of demanding within a specified time the carrying out of a transaction upon stipulated terms. The optionor grants an option to an optionee.
OWNER FINANCING – A property purchase that is partly or wholly financed by the seller.
PERSONAL PROPERTY – All physical objects of a personal or movable nature subject to ownership, except real estate (real property). See also PROPERTY and REAL PROPERTY.
PLAT – Map of town, section, or subdivision, showing location and boundaries of individual properties.
PLOT – A piece of land.
POWER OF ATTORNEY – An instrument authorizing someone to act as another person’s agent or attorney. The agent is attorney in fact, and his power is revoked at the death of the principal by operation of law. Power of attorney may be general or special.
PREPAYMENT PENALTY – Penalty for the payment of a mortgage or deed of trust note before it actually becomes due.
PRICE – The amount paid in legal tender, goods, or services; the consideration; purchase price. The terms for which a thing is done.
PRINCIPAL – Amount of a loan balance. In a mortgage payment of principal and interest, the principal repays the loan.
PROBATE – a court-supervised process by which the deceased person’s property is distributed to pay off the deceased person’s debts and then to give the remaining money and property to the rightful heirs. The “estate” is composed of everything the decedent owned including realestate, cars, bank accounts, furniture, etc.
PROPERTY – The rights or interests a person has in the thing he owns; not, in the technical sense, the thing itself. These rights include the right to possess, to use, to encumber, to transfer and to exclude, commonly called the bundle of rights. In modern understanding, however, property has come to mean the thing itself to which certain ownership rights are attached. Property is either real or personal.
PURCHASE MONEY MORTGAGE – A mortgage given by the grantee to the grantor, on the same land and concurrently with the conveyance, to secure the unpaid balance of the purchase price.
QUITCLAIM DEED – A deed of conveyance with conveys to the grantee without warranty of title whatever interest, title, or claim the grantor possesses.
REAL ESTATE – Land and anything built on, growing on, or affixed to land.
REAL ESTATE AGENT – A person licensed to negotiate and transact the sale of real estate on behalf of the property owner.
REALTY – A term sometimes used as a collective noun for real property or real estate.
REDEMPTION – The right to redeem property during the foreclosure period; the right of an owner to redeem his property after a sale for taxes. Often referred to as Equity of Redemption.
RELATED FURNISHINGS – Property which is not fixed to or part of a building: furniture, furnishings, equipment.
RELEASE OF LIEN – The discharge of certain property from the lien of a judgment, mortgage, or claim.
RENT – Compensation, either in money, provisions, chattels, or labor, received by the owner of real estate from the occupant.
RENT TO OWN – A means of acquiring ownership over time without taking on debt.
REPLACEMENT COSTS – Cost of a building with equivalent utility but with modern materials and eliminating deficiencies of the building it replaces.
RESERVATION – A right reserved by an owner in the grant (sale or lease) of a property.
RESTRICTION – A limitation upon the use or occupancy of real estate, placed by covenant in deeds or by public legislative action.
REVERSION – The residue of an estate left in the grantor to commence in possession after the determination of some particular estate granted out by him. The return of land to the grantor and his heirs after the grant is over.
RIGHT OF SURVIVORSHIP – The distinctive characteristic of a joint tenancy (also tenancy by the entirety) by which the surviving joint tenants) succeeds to all right, title, and interest of the deceased joint tenant without the need for probate proceedings.
RIGHT-OF-ENTRY – A written instrument, binding on all parties, which provides authority to enter on certain premises to perform specified acts, without acquiring any estate or interest in the property.
RIGHT-OF-WAY – The right or privilege, acquired through accepted usage or by contract, to pass over a designated portion of the property of another. A right-of-way may be private, as in an access easement given a neighbor, or public, as in the right-of-way to use the highways and streets.
SALE-LEASEBACK – A situation where the owner of a piece of property wishes to sell the property and retain occupancy by leasing it from the buyer.
SALES CONTRACT – A contract by which buyer and seller agree to the terms of the sale.
SATISFACTION OF MORTGAGE – An instrument for recording and acknowledging payment for an indebtedness secured by a mortgage.
SCREENING – Circulation of notice within the Army of real property which is no longer required by one Army organization but may be required and useful to another.
SECOND MORTGAGE – A mortgage that has a lien position subordinate to the first mortgage.
SECONDARY FINANCING – A loan secured by a second mortgage or trust deed on real property.
SECURITY INTEREST – An interest in personal property or fixtures, obtained to ensure payment owed as performance of an obligation.
SITE – A parcel of land, sufficiently improved to be used as a building lot or for other purposes requiring an improved site.
SORTING – Sorting selected text by alphabetizing or by numerical order.
SPECIAL WARRANTY DEED – A deed in which the grantor warrants or guarantees the title only against defects arising during his ownership of the property and not against defects existing before the time of his ownership.
SUBDIVISION – Any land which is divided or is proposed to be divided for the purpose of disposition into two or more lots, parcels, units, or interests.
SUBJECT TO – The taking of title to Property by a grantee, wherein he is not responsible to the holder of the promissory note for the payment of any portion of the amount due. In the event of foreclosure, the most that he can lose is his equity in the property. The original maker of the note is not released from his responsibility.
SUBLETTING – A leasing by one tenant to another, who holds the right of use and occupancy subject to the original lease; the sub lessee.
SUBORDINATE – To make subject to, or junior to.
SURFACE RIGHTS – Ownership rights in a parcel of real estate that are limited to the surface and do not include air above the property (air rights) or minerals below the surface (subsurface rights).
SURRENDER – The cancellation of a lease by mutual consent of lessor and lessee.
SURVEY – The act by which the quantity and boundaries of a piece of land are ascertained; the paper containing a statement of the courses, distance, and quantity of land is also called a survey.
TACTICS – Ways to find deals in real estate.
TAX APPRAISAL – You can get this off any government website. It gives the Tax Appraisal Value, owner’s name and address, deed date and number of prior owners.
TAX DEED – A deed given where property has been purchased at a sale to the public of property for nonpayment of taxes.
TAX LIEN – A government claim for unpaid real estate tax.
TAX SALE – A sale of property, usually at auction, for nonpayment of taxes assessed against it.
TENANCY IN COMMON – Co-ownership of real property by two or more persons, each entitled to possession according to his proportionate share. Unlike joint tenancy, there is no right of survivorship. See also JOINT TENANCY, TENANCY BY ENTIRETY, RIGHT OF SURVIVORSHIP.
TENANT – One who holds or possesses land or tenements by any kind of title, either in fee, for ‘life, for years, or at will. In a popular sense, the one who has temporary use and occupation of lands or tenements which belong to another, the duration and other terms of whose occupations are usually defined by a lease, while the parties thereto are placed in the relationship of landlord and tenant.
TERM – The extent of time for which an estate is granted. For example, the period which is granted for the lessee to occupy the premises; it does not include the time between making the lease and the tenant’s entry.
TERMINATION – End of a lease or contract, usually before the anticipated time; termination may be by mutual agreement or by exercise of one party of a legal remedy due to default of the other party.
TIME IS OF THE ESSENCE – One of the essential requirements to the forming of binding contract; it contemplates a punctual performance.
TITLE – The right to or ownership of lands. Also, the evidence of ownership. Title to property encompasses all the bundle of rights an owner possesses.
TITLE COMPANY – A company that specializes in examining and insuring titles to real estate.
TITLE INSURANCE – Indemnity against loss or damage resulting from defects in or liens on a title at the date of the insurance.
TRACT – An area of land contained in one description.
TRANSFER – Change of jurisdiction over real property from one Federal agency or department to another, including military departments and defense agencies.
TRUST DEED OR DEED OF TRUST – A deed conveying land to a trustee as collateral security for the payment of a debt; upon payment of a debt secured thereby, the deed of trust is released; upon default, the trustee has the power to sell the land and pay the debt.
TRUSTEE – One why holds property in trust for another to secure the performance of an obligation.
VALUE – Ability to command goods, including money, in exchange; the quantity of goods, including money, which should be commanded or received in exchange for the thing valued; utility; desirability. As applied to a property value may be broadly defined as “the present worth of all the rights to future benefits arising from ownership”.
VENDOR – The person who transfers Property by sale.
VOID – That which is unenforceable; having no force or effect.
VOLUNTARY LIEN – Any lien placed upon property with consent of, or as a result of, the voluntary act of the owner.
WAIVER – The renunciation, abandonment, or surrender of a right, claim, or privilege.
WARRANTY DEED – A deed that contains a covenant that the grantor will protect the grantee against any claimant.
WRAPAROUND MORTGAGE – A mortgage that includes the remaining balance on an existing first mortgage plus an additional amount requested by the mortgagor. Full payments on both mortgages are made to the wraparound mortgagee, who then forwards the payments on the first mortgage to the first mortgagee.
ZILLOW – An online real estate service company. It allows users to see the value of millions of homes across the United States. It offers several features including giving value estimates of homes.
ZONING – The public regulation, through police power, of the character and extent of real estate use. Uniform restrictions on improvements, building height, density of population, and other factors regulate the use and development of private property.
Now that you’ve read the glossary of real estate terms, check out some other training aids.