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Top Keywords in Alphabetical Order
Abatement - a reduction in property taxes; must file taxes before requesting
Abstract of Title - a condensed history of legal title, summarizing all instruments in chain of ownership; provided by lender's
attorney and paid by borrower
Abutting - neighboring land with a common boundary
Acceleration Clause – a clause in note protecting lender; upon default, balance of debt becomes due immediately instead of
maturity date; prelude to foreclosure
Acceptance - indication by signature of offeree that he is willing to be bound by terms of offer from offeror
Accretion – increase of property by gradual natural additions, as of land by alluvion
Acknowledgement - an act of executing a legal instrument such as a deed, mortgage or discharge before a lawyer or other officer
of state such as a notary public; this act declares signing to be free and voluntary; this is necessary before recording at registry
Acre - 43,560 square feet
Ad Valorem - tax assessment based on actual value
Adverse possession: occupant's right to acquire legal title to private property held by title holder by deed if occupant holds land
openly, notoriously, adversely and without permission for 20 years; also known as squatter's rights.
Air rights - ownership or lease of air space over a specific parcel of realty, such as a building over a turnpike
Alluvion – increasing of land area along a shore by deposited alluvium or by the recession of water
Alluvium – clay, silt, sand, gravel, or similar detrital material deposited by running water
Amenities - features of property making it desirable and thus adding value, such as scenic views, convenient shopping, etc.
Amortization - paying indebtedness by equal and periodic payments; each payment is equal but ratio of principal and interest
changes with an increasingly larger portion credited to reducing debt
Appraisal - an estimate of value
Appreciation - increase in value resulting from market forces such as demand stronger than supply
Appurtenance - a right belonging to and passing with a property such as having a right of way through adjoining property
Assets - all real and personal property one owns; assets minus liabilities such as mortgages, equal net worth (equity) transfer of
title or interest in writing; assignor gives and assignee receives
Associate broker - a broker who chooses to work as a salesperson for another broker (the employing broker)
released and in event of foreclosure and deficiency, mortgagee can look to either original mortgagor or new grantee or both
Attachment - a writ issued, beginning or during a legal action commanding sheriff to attach (“seize”) property, rights and effects of
defendant to satisfy possible credit demands of plaintiff if judgment comes out in plaintiff’s favor
Balloon mortgage - principal loan amount paid off in lump sum at end of term as opposed to amortized direct reduction method
Benchmark - mark on stone or cement permanently fixed to ground; used as measuring point by surveyors
Betterments - improvements adding to value of realty, done by local government and paid for by gainers of value; sidewalks,
streets, etc. Results in a special assessment
Bilateral contract - one person’s promise in exchange for another person’s promise such as purchase and sale agreement
Bill of sale - a written instrument that is the evidence of transfer of one person’s right in personal property to another
Binder - deposit or earnest money given as evidence of good faith by buyer to secure property until sale is consummated; it can
also refer to a temporary memorandum outline a real estate deal, similar to a letter of intent.
Blanket mortgage - a single mortgage instrument securing more than one parcel of property as security for the loan
Blockbusting - employing fear tactics to induce panic selling or panic peddling in a neighborhood: illegal
Bona fide - in good faith and without fraud
Bond - guarantee by third party that it will make good any loss, up to a certain amount, incurred by a party dealing with a broker
not acting in good faith; bonding company is Surety and obligor and State is oblige. Broker bond is made payable to State
Bundle of rights - all rights that go with ownership of realty
Capital expenditures - investments of cash for improvements to remain competitive in a business
Capitalization - process of computing current value from expected future income by dividing annual net income by selected rate of
return desired for that type of property; the cap rate
Capitalization rate - Profit expressed as a percentage that an investor expects from an investment on a yearly basis. A rate of
return.
Cash flow - profit after principal and interest are deducted from net operating income (NOI)
Certificate of title - a written opinion by an attorney or title company that certifies condition of title.
Chain of title -history of conveyances and encumbrances affecting a title
Chattel - an article of personal property
Clear title - title free of encumbrances
Client - principal who hires an agent; CUSTOMER is the unrepresented party.
Closing costs - costs of seller and buyer at conveyance of realty.
Cloud on title - outstanding claim or encumbrance which if proved to be valid, would impair title and marketability of property.
Collateral - a security, such as a mortgage, given to protect debt
Collusion - agreement between parties to defraud another
Condominium - multi-unit structure made up of individually-owned units with separate deeds and shared ownership of common
areas
Covenant - a promise or guarantee usually found in a deed
Covert - hidden or concealed defect in the title
Cubage or cubic content - length x width x height of interior
Curtesy - rights of husband to share in wife’s realty upon her death only. Dower is rights of wife to share in husband’s realty upon
his death; both these rights are life interests only
Deed of trust (trust deed) - in some states used instead of a mortgage deed
Deed restriction - provision in deed controlling use of land
Depreciation - decrease in value for various reasons
Devise - a gift of realty by will; deceased is devisor
Domicile - place where one has permanent residence, no matter where one is currently living
Duress - unlawfully forcing someone to do something against their will
Earnest money - deposit given with Agreement to Buy
Easement - a right which one person has in lands of another
Easement in gross - a personal right to use another’s land.
Emblements - crops growing which require annual or semi-annual planting and cultivation; normally personal and belonging to
tenant
Eminent domain - right of government to take private property against owner’s wishes for public use with fair compensation
Encroachment - physical trespass of a property on that of another such as overhang; the discovery is by survey
Encumbrance - anything that burdens (limits) the fee title to property, such as a lien, easement or restriction of any kind
Equity - value or interest an owner of realty has above any debt on property; difference between value and mortgage debt
Erosion – The process by which the surface of the earth is worn away by the action of water, wind, etc.
Escheat - power of state to take property if no will and no heirs
Escrow - the holding of something of value (e.g. a deposit on a home) by a person (escrowee or escrow agent) for the benefit of
other parties
Eviction - the depriving of a person’s possession of realty
External obsolescence - loss in value due to outside forces, such as neighborhood deterioration; not curable; a/k/a economic
obsolescence
Federal Home Loan Mortgage Corp. (FHLMC) - known as “Freddie Mac,” it is a secondary market operation that buys
conventional mortgages from lenders to keep market for mortgages fluid
Federal Housing Administration (FHA) - part of U.S. Dept of Housing and Urban Development (HUD) which insures mortgage
loans originated by qualified and approved lenders with the home buyer paying loan insurance premium
Federal National Mortgage Association (FNMA) - known as “Fannie Mae,” it is a secondary market loan buyer
Federal Reserve Board - U.S. central bank composed of Governors with Chairperson; establishes and regulates monetary policy
Fee simple - largest possible estate or interest person can have in a parcel of realty; least limited estate
Fee simple defeasible - granting of title (Fee Simple Subject to a Condition Subsequent) or duration of title (Fee Simple
Determinable) is dependent on a specific condition named in the title
Fiduciary - a position of trust (e.g. broker to principal)
Fixture - article that was personalty, but is now realty because it is permanently attached
Forcible entry - legal action to recover possession of premises unlawfully held
Foreclosure - legal remedy whereby collateral is sold to pay debt because Note terms, such as non-payment, were not met
Forfeiture - loss of money or anything of value due to failure to perform according to terms of contract
Fraud - intentional deception in which an injured party has loss
Freehold - an interest in realty of not less than a life estate
Front foot - number of feet of frontage on street side
Functional obsolescence - loss in value due to out-of-date, poorly designed or old-fashioned fixtures or equipment; may be
curable
General lien - a lien on any and all property of debtor such as: judgment, decedent’s debts, inheritance taxes, state tax liens, IRS
liens
Government National Mortgage Assoc. (GNMA) - known as “Ginnie Mae,” this is a secondary market government sponsored
enterprise, that buys federally-backed mortgages to help fluidity, and encourage low-cost housing
Grantor - one who transfers title to real estate to the Grantee
Gross lease - owner receives rent and pays out expenses such as in apartment leasing, as opposed to net lease where the owner
receives rent and tenant also pays out expenses normally paid by owner such as taxes, etc.
Homestead laws - laws designed to protect homeowner from forced sale of home to satisfy certain debts
Interim financing - development loan such as construction money used during creation of realty investment
Intestate - no will or a defective will by the deceased
Junior mortgage - any mortgage after a previous mortgage
Laches - unreasonable delay in asserting one’s rights causing the loss of such rights
Leaseback - the purchase of improved property and the leasing of it back to seller; creates capital and favored tax treatment for
seller
Leasehold - the interest that a lessee has in realty
Lien - a debt; claim against property for payment of some debt
Life estate - estate or interest held during a certain person’s life; non-inheritable; lowest of freehold estates
Lis pendens - notice filed in a registry of deeds warning all persons that title to certain property is in litigation
Litigation - a contest in court of law between two parties to determine who is in the right
Littoral - shoreline of large body of water
Master deed - basic title document in creation of condominium; it defines individual fee units and common interests
Mechanic’s lien - a statutory lien on a specific property for labor and material contributed to a work of improvement of realty
Metes and bounds - boundaries of land described in directions and distances
Mile – 5,280 feet
Mortgage - a legal instrument conveying conditional title to lender in order to secure the repayment of the debt described in the
note
Mortgage broker - a party who, for a fee, brings together an investor and borrower
Mortgagee - the lender
Mortgagor - the borrower
Municipal lien certificate - a document from municipality to ascertain status of taxes, water, sewerage, betterments etc.; a
required document at closing of title
Net listing - a fixed, specified price below which owner will not sell and at which broker receives no commission; broker receives everything over fixed price; illegal in some states like Massachusetts.
Nonconforming use - a legal use that was in existence prior to current zoning, which may continue to exist
Novation - substitution of old obligation for a new one
Obsolescence - loss of value from any source other than wear and tear
Offer - statement of intent by offeror; Acceptance is the statement of intent to accept offer by offeree
Open listing - any hired broker can sell property for a commission but if owner sells, no commission payable
Open mortgage - a mortgage that has matured or is overdue and subject to foreclosure
Ordinance - law by local government body
Overt - openly known
Ownership - title; an estate in realty to the exclusion of others
Partition - a legal action (e.g. lawsuit) to divide co-owned realty
Percentage lease - a lease contract in which rental is based on a percentage of gross sales; usually with a fixed minimum
Point of beginning (P.O.B.) - the starting point in a metes and bound description of property, either from a monument or a reference point on the street; the description begins and ends at the P.O.B.
Police power - right of government to enact laws (e.g. building codes, zoning bylaws, license laws) in the public interest or for the
public welfare
Power of attorney - written instrument authorizing another to act in his/her place; person given power is attorney-in-fact
Prescription - a method of obtaining an easement by adverse use for a period of years (20), hostile to owner’s wishes
Primary mortgage market - market where loans are made directly to borrowers
Private restriction - a restriction placed on realty by grantor (seller) at time of sale imposed on immediate and subsequent
owners
Prime rate - lowest interest rate charged by commercial banks to most credit-worthy customers; the discount rate is rate
charged to these banks by Federal Reserve, and the fed funds rate is the rate at which banks borrow from each other
Procuring cause - the effort of broker who produced a ready willing and able buyer
Prorate - term used to describe proportional adjustment of monies between seller and buyer at closing such as fuel, rents, etc.
Public restriction - government law or regulation restricting the use of real estate.
Puffing – an exaggeration made by a salesperson or found in an advertisement that concerns the quality of goods offered for sale
Purchase money mortgage (PMM) - aka seller financing. As part payment of purchase price, the buyer (grantee) gives a Note
and mortgage Deed back to seller
Quiet enjoyment - right of owner or tenant to possession without interference
Quieting title - court action to establish true owner and title
Quitclaim deed - written instrument releasing interest of grantor
Reality of consent - agreement to a contract must be real and free from fraud, duress, undue influence, misrepresentation and
error
Reciprocity - mutual exchange of privileges
REO – Real Estate Owned; a bank owned property
Reliction – an increase of the land by the sudden retreat of the sea or a river
RESPA (Real Estate Settlement Procedures Act) - a law requiring full disclosure of closing costs to buyer and seller.
Restrictive covenant - clause in deed limiting certain realty use
Right of first refusal – Effectively “dibs” on a property; provides the person holding the right to match a future offer and buy the
property in lieu of the offeror
Right of way - right of one person to pass over estate of another; a form of easement
Riparian - belonging to or relating to banks of a body of water
Secondary financing - junior mortgages, not to be confused with secondary mortgage market.
Secondary mortgage market - marketplace for the sale and purchase of existing mortgages which originated in primary market
Pre-Licensing Course Study Guide
Seisin – possession of realty with a freehold claim in it. Also can be spelled seizin.
Severalty - sole ownership; owned by one person only
Short Sale – a settlement with the lender where the lender accepts a payment of less
Specific lien - a lien on a particular property such as: mortgage, municipal taxes, mechanic’s lien, attachment, special assessment,
condominium association fees
Square feet – length x width
Square mile – 640 acres or 27,878,400 feet
Statute of Frauds - law requiring all realty contracts to be in writing in order to be enforceable in court of law
Subdivision - act of land legally divided into lots for residential construction; recorded in plat book
Surety - one who guarantees performance of another
Survey - act of establishing legal description of property
Syndication – a corporation formed for the investment in a piece or pieces of real estate
Tax rate – municipal tax rate multiplied by assessment to produce annual tax. It is given as a millage rate (usually per $1000)
Tax sale - sale of property by public auction to satisfy delinquent taxes
Tax title - title or ownership acquired at tax sale
Tenancy at sufferance - a tenancy arising when tenant remains in possession after lease expires and without owner’s permission
Pre-Licensing Course Study Guide
Tenancy at will - a tenancy which is subject to termination at will of either landlord or tenant (“month to month”)
Tenancy by the entireties - joint tenancy of married couple only
Tenancy in common - holding of title by different persons, under different titles, each
Title insurance - insurance against loss resulting from defect in title to particular parcel of realty
Torrens system - procedure of registering titles in land
Trade fixtures - personal articles used in business and affixed to realty; necessary for trade and are removable
Usury - charging higher rate of interest than law allows
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