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Here’s the place to get the answer to all your real
estate related questions. If you have a question please email,
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What
are some common real estate terms or lingo that I might need
to know?
Annual Percentage Rate (APR): A uniform
measure of the cost of credit that includes interim discount
points and loan fees.
Ad Valorem: A Latin phrase meaning "according
to value" is usually used in connection with real estate
taxation.
Assessed Value: Value established by
the County Assessor as the bases for determining ad valorem
tax levies.
Competitive Market Analysis: A method
of evaluating real properly based on the principle of comparison.
The value of property is figured by comparing the prices paid
for similar properties, prices being asked for similar properties,
and prices for which comparable properties did not sell.
Dual Agency: Where one broker or associate
represents both parties to a transaction.
Earnest Deposit: Down payment made by
the purchaser of real estate as evidence of good faith. A deposit
or partial payment.
Equitable Title: The interest hold by
a contract buyer. The concept stems from the fact that the buyer
can sue in equity to get specific performance if the seller
refuses to sell after a contract for sale is signed and the
buyer tenders performance.
Escrow: The holding of money and/or documents
by a disinterested third party pending satisfaction of the instructions
that created the escrow arrangement.
Exclusive Agency Listing: A listing wherein
the owners reserve the right to sell property themselves, but
agree to list with no other brokers during the listing period.
Exclusive Right to Sell: A written listing
agreement appointing a broker the exclusive agent for the sale
of property for a specified period of time. An exclusive right
to sell listing provides the broker a commission whether the
property is sold by the broker, the owner or a third party.
Floor Time: A designated time for a sale
associate to answer the telephone and talk to walk-in prospects.
Graduated Payment Mortgage (GPM): A mortgage
with a fixed interest rate loan wherein the monthly payment
starts low and then increases.
Homestead Exemption: Often called "homestead"
or "homestead right;" a right given by statute to
the head of a family, by which property occupied as a home is
exempt from execution by creditors. The term may also refer
to the exemption from ad valorem taxes to the extent of $1,000
from assessed value.
HUD: The Department of Housing and Urban
Development is the federal department responsible for the major
housing programs in the United States, such as FHA and Fair
Housing Laws.
Involuntary Lien: A lien imposed against
property without consent of an owner; example: taxes, special
assessments, federal income tax liens, etc.
Lessee: One who holds the right to use
property but does not own it: the tenant.
Lessor: One who holds title and leases
out the property; the landlord.
Lien: A form of encumbrance that usually
makes specific property security for the payment of a debt or
discharge of an obligation. Example: judgements, taxes, mortgages,
deeds of trust, etc.
Lien: A form of encumbrance that usually
makes specific property security for the payment of a debt or
discharge of an obligation. Example: judgements, taxes, mortgages,
deeds of trust, etc.
Loan Origination Fees: The charge for
making loans.
Millage: One thousandth of a dollar.
Used in computing the tax liability of real estate.
Multiple Listing Service: An arrangement
among real estate board members whereby each broker makes listings
available to the other members, so that if a sales results,
the commission is divided between the broker bringing the listing
and the broker making the sale.
National Association of REALTORS (NAR): A
national trade association whose members have access to multiple
listing services and which must adhere to a strict code of ethics
and standards of professional practice.
National Association of Real Estate License Law Officials (NARELLO):
An organization of state license law
officials that promotes uniform policies, standards and enforcement
in the real estate industry.
Option: A right given for a consideration
to purchase or lease a property upon specified terms within
a specified time, without obligating the party who received
the right to exercise the right.
Option to Purchase: Provision in a lease
granting the lessee the right to purchase the leased premises
with rent payments applied to the payment of the purchase price.
PITI - principle, interest, taxes, and insurance: This
is the break down for most mortgage payments.
Points: Under FHA-insured or VA-guaranteed
loans, discounts of points paid to lenders are, in effect, prepaid
interest and are used by lenders to adjust their effective interest
rate so that it is equal to or nearly equal to the prevailing
market rate (the rate charged on conventional loans). The sellers
absorb the discounts. One point is one percent of the loan amount.
On FHA-insured and VA-guaranteed loans buyers may be charged
only one percent "service charge". This restriction
does not apply to conventional loans. Under conventional loans
the charge for making a loan at most institutions is usually
called a "loan fee", "service charge", commitment
fee" or may be referred to as "points to the buyer.
Prepayment Penalty: A clause in a mortgage
loan instrument providing for a certain sum to be paid by the
mortgagor if a loan is paid off before the maturity date.
PMI- Private Mortgage Insurance: Mortgage
insurance provided by private organizations.
Procuring Cause: That cause originating
from a series of events, without break in continuity, results
in the prime object of an agents employment producing a final
buyer; the real estate agent who first procures a ready, willing
and able buyer for the agreed upon price and terms and is entitled
to the commission.
Quitclaim Deed: An instrument of conveyance
with no covenants and no implication that the grantor owns the
property being deeded to the grantee.
Real Estate Settlement Procedures Act (RESPA): A
federal law that deals with procedures to be followed in certain
types of real estate closings.
Reverse Annuity Mortgage (RAM): A
mortgage where the lender makes a monthly payment to the homeowner
who later repays in a lump sum.
Specific Performance: Performance of
a contract in the specific form in which it was made, or according
to the precise terms agreed upon.
Statute of Frauds: A state law, based
on an old English statute, requiring certain contracts to be
in writing and signed before they will be enforceable at law,
e.g., contracts for the sale of real property, contracts not
to be performed within one year.
Statute of Frauds: A state law, based
on an old English statute, requiring certain contracts to be
in writing and signed before they will be enforceable at law,
e.g., contracts for the sale of real property, contracts not
to be performed within one year.
Sub-Agents: Persons upon whom the powers
of agency have been conferred, not by the principal, but by
an agent as authorized by the agent's principal. Normally, the
status of sales or broker associates.
Take Out Loan: A permanent loan arranged
to replace a construction loan.
Tax Exempt Property: Property that is
exempted in whole or in part from real estate taxation.
Tax Liens: Liens that can be enforced
through forced public sales of the affected real property.
Time Is of Essence: A condition of a
contract expressing the essential nature of performance of the
contract by a party in a specified period of time.
Time-Sharing: A modern approach to communal
ownership and use of real estate that permits multiple purchasers
to buy undivided interest in real property. Purchasers buy specific
or floating time periods for use of specific property within
a project, or of the project itself.
Title: Indicates "fee" position
of lawful ownership and right to property. "Bundle of Rights"
possessed by an owner. Combination of all elements constituting
proof of ownership.
Title Insurance: A comprehensive indemnity
contract under which a title insurance company warrants to make
good a loss.
ZERO LOT LINE: The construction of a
building on any of the boundary lines of a lot. Usually built
on the front line, such as a store built to the sidewalk.
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