Abandonment is the voluntary surrender or relinquishment of possession of real property with the intention of terminating one’s possession or interest, but without vesting this interest in any other person.
Abatement is a reduction or decrease in amount, degree, intensity or worth.
Abstract of Title
A concise, summarized history of the title to a specific parcel of real property, together with a statement of all liens and encumbrances affecting the property. The abstract of title doesn’t guarantee or assure the validity of the title of the property. It merely discloses those items about the property which are of public record, and thus doesn’t reveal such things as encroachments, forgeries, and the like.
Stipulation in a mortgage agreement that allows the lender to demand immediate payment of the entire loan balance if any scheduled payment is missed.
Adjustable rate mortgage (ARM)
Mortgage loan on which the interest rate falls and rises with changes in prevailing rates. The mortgage rate is tied to a selected index and may be adjusted annually. Also called a variable rate mortgage.
Person authorized to act by and on behalf of another.
Right to occupy and use the open space above a parcel of land or property, such as in the leasing of air space over existing buildings or highways.
Pay a debt in monthly or other periodic installments until the total amount, along with the interest, if any, is paid.
Annual percentage rate (APR)
Combines the interest rate with other loan costs, such as points and loan fees, into a single figure that shows the true annual cost of borrowing.
A formal estimate of property value conducted by a professional qualified to make such an opinion.
Increase in property value or worth due to economic or related factors; the opposite of depreciation.
Said of property offered for sale in its present condition with no guarantees as to quality and no promise of repair or fix-up by the seller; property is purchased in exactly the condition in which it is found.
A value placed on a property by an agency of the government for taxation and other purposes.
Tax or charge levied on property by a taxing authority to pay for local improvements such as sidewalks, streets, and sewers.
Assumption of mortgage
Taking title to property that has an existing mortgage, and being personally liable for its payment as a condition of the sale.
Mortgage loan in which a larger final payment becomes due because the loan amount was not fully amortized.
Short purchase contract used in some areas to secure a real estate transaction until a more formal contract can be signed at a later date; usually accompanied by an earnest money deposit.
Single mortgage that covers more than one real property, i.e. – a house plus the vacant lot next door.
Illegal practice of creating panic selling in a neighborhood for financial gain. Typically exploits racial and religious bias to get homeowners to sell low so the properties can be resold at a mark up.
Breach of Contract
When one party fails to live up to the terms and conditions of a contract, without a valid, legal excuse.
Licensed individual who acts independently in conducting a real estate brokerage business; also a person who buys and sells for another for a commission.
Business of a broker. Also, the amount charged for a broker’s service.
Written statement by a builder assuring that a dwelling was completed according to a stipulated set of standards. It protects the buyer from any latent defects.
Minimum construction standards set by state or local laws for public safety and health. Includes the design, construction, repair, and quality of building materials, as well as the use and occupancy of structures.
Cash payment to a lender to reduce the interest rate a borrower must pay on a new mortgage loan. Commonly used by builders to sell new homes.
Describes an excess supply of homes for sale, in which there are few buyers and many sellers. In such a market, the buyer can typically negotiate more favorable prices and terms.
Rules and regulations that govern how a homeowners’ association will be run.
Stipulation in a contract that allows a buyer or seller to cancel the contract in the event of a certain specified occurrence.
Profit earned from the sale of an asset.
Latin for “Let the buyer beware.” Under this legal phrase, the buyer is expected to judge and evaluate property carefully before buying, or purchase at their own risk.
Stands for covenants, conditions and restrictions. They are the rules by which a property owner in a condominium agrees to abide.
Act of finalizing a transaction in which all the concerned parties meet to transfer title to a property. Also, when real estate formally changes ownership.
Expenses over and above the price of property that must be paid by buyers and sellers before title is transferred. Also known as settlement costs.
Written account of all expenses, adjustments, and disbursements received by the buyer and seller when completing a real estate transaction.
Cloud on title
Defect in the title that impairs the owner’s ability to market the property. This might be a lien, claim, judgment, or encumbrance.
Something of value given or pledged to a lender as security for the repayment of a loan.
Mixing of a clients’ funds, or escrow, with an agent’s personal funds in an account; considered to be grounds for the suspension or revocation of the broker’s real estate license.
Payment, or brokerage fees, given by the seller of a property to a real estate agent for services rendered. Usually paid at the closing.
Parts of a condominium, cooperative, or private home association shared by all residents, so that each unit owner holds an undivided interest in, for example, the hallways, parking facilities, or swimming pool.
Properties similar to a specific piece of property that are used to help estimate the value of that property.
Competitive Market Analysis
A method of determining home value that looks at recent home sales, homes presently on the market, and homes that were listed but did not sell.
Type of housing where buyers own their units outright, plus an undivided share, or joint ownership, in the common elements of the building or community.
Something of value, usually money, given to induce another to enter into a contract.
Type of loan where money is doled out as construction takes place; borrower must obtain a permanent long-term mortgage from another source to repay the construction loan. Also called an interim loan.
A provision in a contract that keeps it from becoming binding until a certain event happens. A satisfactory inspection report might be a contingency.
A legally enforceable agreement between two or more parties. To be valid, a real estate contract must be dated, in writing, include a consideration, have a description of the property, the place and date of delivery of the deed, and spell out all terms and conditions that were mutually agreed upon. It also must be executed (signed) by the buyer and seller.
One who contracts to do something for another. For example, in construction, a specialist who enters into a formal construction contract to build a real estate structure or handle renovations, improvements, and additions to an existing structure.
Real estate loan that is not insured by the FHA or guaranteed by the VA.
To transfer property from one person to another.
Document used to transfer title. A deed is a conveyance.
Land and building owned or leased by a corporation which in turn leases space to its shareholders, who are also part owners of the building and have a proprietary lease. In lieu of rent, they each pay a proportionate monthly or quarterly fixed rate to cover operating costs, mortgage payments, taxes, etc.
An offer made in response to an earlier, unacceptable one; it terminates the original offer.
A past history of debt repayment used by creditors as an indicator of future readiness to responsibly repay debt.
Written document that when executed and delivered conveys title to real property.
Deed of Trust
Document resembling a mortgage that conveys legal title to a neutral third party as security for a debt. Also called a trust deed or deed in trust.
Provisions placed in deeds to control how future landowners may or may not use the property. Also called deed covenants.
Breach of a contract or failure to meet a legal obligation. Nonpayment of a mortgage beyond a certain number of payments is considered a default.
Judgment issued against a borrower when the sale of foreclosed property does not bring in enough to pay the balance owed on the mortgage.
One where the borrower is behind, or late, in payments.
Gradual decline on paper in market value of real estate, especially because of age, obsolescence, wear and tear, or economic conditions.
Full-service broker who charges less than the prevailing commission rates in his or her community.
Added loan fee charged by a lender to make the yield on a lower-than-market-value loan competitive with higher-interest loans.
Initial cash investment made as evidence of good faith when purchasing real estate. It is usually a percentage of the sale price.