Land O Lakes Real Estate News - JLS Investment Realty

Real Estate Glossary - Part II
January 17th, 2011 7:37 PM

CO-MAKER   Back to top
A second party who signs a loan, along with the borrower, and becomes liable for the debt should the borrower default.

COMMON LAW   Back to top
As opposed to statute law. Laws that have been established by custom, usage and courts over many years.

COMMISSION   Back to top
A percentage of the sales price or a fixed fee negotiated by an agent to compensate for the effort expended to sell or purchase property.

COMMON AREA ASSESSMENTS   Back to top
Fees which are charged to the tenants or owners of properties to cover the costs of maintaining areas shared with other tenants or owners. Commonly found in condominium, PUD or office spaces.

COMMON AREAS   Back to top
Any areas, such as entryways, foyers, pools, recreational facilities or the like, which are shared by the tenants or owners of property near by. Commonly found in condominium, PUD or office spaces.

COMMUNITY PROPERTY   Back to top
In many jurisdictions, any property which has been acquired by a married couple. The ownership of the property is considered equal unless stipulated otherwise by both parties.

COMPARABLES   Back to top
An abbreviated term used by appraisers to describe properties which are similar in size, condition, location and amenities to a subject property whose value is being determined. The Uniform Standards of Professional Appraisal Practice (USPAP) establish clear guidelines for determining a comparable property.

COMPOUND INTEREST   Back to top
Interest paid on the principal amount, as well as any accumulated interest.

CONCESSIONS   Back to top
Additional value granted by a buyer or seller to entice another party to complete a deal.

CONDEMNATION   Back to top
The official process by which a property is deemed to be uninhabitable or unusable due to internal damage or other external conditions.

CONDENSATION   Back to top
The transition of water vapor to liquid. Typically forms in areas of high humidity.

CONDOMINIUM   Back to top
A development where individual units are owned, but common areas and amenities are shared equally by all owners.

CONDOMINIUM CONVERSION   Back to top
Commonly, the conversion of a rental property such as an apartment complex into a CONDOMINIUM-style complex where each unit is owned rather than leased.

CONDUIT   Back to top
The pipe through which electric wiring is run.

CONSTRUCTION LOAN   Back to top
A loan made to a builder or home owner that finances the initial construction of a property, but is replaced by a traditional mortgage one the property is completed.

CONTIGUOUS   Back to top
Connected to or touching along an unbroken boundary.

CONTINGENCY   Back to top
Something that must occur before something else happens. Often used in real estate sales when a buyer must sell a current home before purchasing a new one. Or, when a buyer makes an offer that requires a complete home inspection before it becomes official.

CONTRACT   Back to top
A legally binding agreement, oral or written, between two parties.

CONVENTIONAL MORTGAGE   Back to top
A traditional, real estate financing mechanism that is not backed by any government or other agency (FHA, VA, etc.).

CONVERTIBLE ARM   Back to top
A mortgage that begins as and adjustable, that allows the borrower to convert the loan to a fixed rate within a specific timeframe.

COOPERATIVE (CO-OP)   Back to top
A form of ownership where each resident of a multiunit property owns a share in a cooperative corporation that owns the building. With each resident having rights to a specific unit within the building.

CORPORATE RELOCATION   Back to top
A situation where a person's employer pays all or some of the expenses associated with moving from one location to another, usually over a substantial distance. Relocation expenses often include the amounts, such as brokerage fees, incurred in the selling and buying of the employee's primary residence.

COST OF FUNDS INDEX (COFI)   Back to top
An index of financial institutions costs used to set interest rates for some Adjustable Rate Mortgages.

COVENANT   Back to top
A stipulation in any mortgage that, if not met, can be cause for the lender to foreclose.

CREDIT   Back to top
A loan of money for the purchase of property, real or personal. Credit is either secured by an asset, such as a home, or unsecured.

CREDIT HISTORY   Back to top
A record of debt payments, past and present. Used by mortgage lenders in determining credit worthiness of individuals.

CREDITOR   Back to top
A person to whom money is owed.

CREDIT REPORT   Back to top
A detailed report of an individuals credit, employment and residence history prepared by a credit bureau. Used by lenders to determine credit worthiness of individuals.

CREDIT REPOSITORY   Back to top
Large companies that gather and store financial and credit information about individuals who apply for credit.

CUL-DE-SAC   Back to top
A dead-end street. One with only one entrance/exit.

DATE OF APPRAISAL   Back to top
The specific point in time as of which an appraiser designates the value of a home. Often stipulated as the date of inspection.

DEBT   Back to top
An obligation to repay some amount owed. This may or may not be monetary.

DEBT EQUITY RATIO   Back to top
The ratio of the amount a mortgagor still owes on a property to the amount of equity they have in the home. Equity is calculated at the fair-market value of the home, less any outstanding mortgage debt.

DEED   Back to top
A document indicating the ownership of a property.

DEED-IN-LIEU (OF FORECLOSURE)   Back to top
A document given by a borrower to a lender, transferring title of the property. Often used to avoid credit-damaging foreclosure procedures.

DEED OF TRUST   Back to top
A document which transfers title in a property to a trustee, whose obligations and powers are stipulated. Often used in mortgage transactions.

DEED OF RECONVEYANCE   Back to top
A document which transfers ownership of a property from a Trustee back to a borrower who has fulfilled the obligations of a mortgage.

DEED OF RELEASE   Back to top
A document which dismisses a lien or other claim on a property.

DEED OF SURRENDER   Back to top
A document used to surrender any claim a person has to a property.

DEFAULT   Back to top
The condition in which a borrower has failed to meet the obligations of a loan or mortgage.

DELINQUENCY   Back to top
The state in which a borrow has failed to meet payment obligations on time.

DEPOSIT   Back to top
Cash given along with an offer to purchase property, Also called EARNEST MONEY.

DEPRECIATION   Back to top
The natural decline in property value due to market forces or depletion of resources.

DETACHED SINGLE-FAMILY HOME   Back to top
A single building improvement intended to serve as a home for one family.

DISCOUNT POINTS   Back to top
Points paid in addition to the loan origination fee to get a lower interest rate. One point is equal to one percent of the loan amount.

DISTRESSED PROPERTY   Back to top
A mortgaged property which has been foreclosed on.

DOWNSPOUT   Back to top
The pipe that water moves through to reach the ground from the rain gutter.

DUE-ON-SALE PROVISION   Back to top
A clause in a mortgage giving the lender the right to demand payment of the full balance when the borrower sells the property.

DUPLEX   Back to top
A single-building improvement which is divided and provides two units which serve as homes to two families.

DWELLING   Back to top
A house or other building which serves as a home.

DOWN PAYMENT   Back to top
An amount paid in cash for a property, with the intent to mortgage the remaining amount due.

EARNEST MONEY DEPOSIT   Back to top
A cash deposit made to a home seller to secure an offer to buy the property. This amount is often forfeited if the buyer decides to withdraw his offer.

EASEMENT   Back to top
The right of a non-owner of property to exert control over a portion or all of the property. For example, power companies often own an easement over residential properties for access to their power lines.

EAVE   Back to top
The part of the roof that extends beyond the exterior wall.

ECONOMIC DEPRECIATION   Back to top
The decline in property value caused by external forces, such as neighborhood blight or adverse development.

ECONOMIC LIFE   Back to top
The amount of time which any income-producing property is able to provide benefits to its owner.

EFFECTIVE AGE   Back to top
The subjective, estimated age of a property based on its condition, rather than the actual time since it was built. Excessive wear and tear can cause a property's effective age to be greater than its actual age.

EMINENT DOMAIN   Back to top
The legal process whereby a government can take ownership of a piece of property in order to convert it to public use. Often, the property owner is paid fair-market value for the property.

ENCROACHMENT   Back to top
A building or other improvement on one property which invades another property or restricts its usage.

ENCUMBRANCE   Back to top
A claim against a property. Examples are mortgages, liens and easements.

ENERGY EFFICIENCY RATIO   Back to top
An efficiency rating system for air conditioning units that corresponds to the number of BTU's output per watt of electricity used.

EQUAL CREDIT OPPORTUNITY ACT (ECOA)   Back to top
U.S. federal law requiring that lenders afford people equal chance of getting credit without discrimination based on race, religion, age, sex etc

EQUITY   Back to top
The difference between the fair market value of a property and that amount an owner owes on any mortgages or loans secured by the property.

EQUITY BUILDUP   Back to top
The natural increase in the amount of equity an owner has in a property, accumulated through market appreciation and debt repayment.

ERRORS AND OMISSIONS INSURANCE   Back to top
An insurance policy taken out by appraisers to cover their liability for any mistakes made during the appraisal process.

ESCROW   Back to top
An amount retained by a third party in a trust to meet a future obligation. Often used in the payment of annual taxes or insurance for real property.

ESCROW ACCOUNT   Back to top
An account setup by a mortgage servicing company to hold funds with which to pay expenses such as homeowners insurance and property taxes. An extra amount is paid with regular principal and interest payments that go into the escrow account each month.

ESCROW ANALYSIS   Back to top
An analysis performed by the lender usually once each year to see that the amount of money going into the escrow account each month is correct for the forecasted expenses.

ESCROW DISBURSEMENTS   Back to top
The payout of funds from an escrow account to pay property expenses such as taxes and insurance.

ESTATE   Back to top
The total of all property and assets owned by an individual.

EXAMINATION OF TITLE   Back to top
The report on the title of a property from the public records or an abstract of the title.

EXCLUSIVE LISTING   Back to top
An agreement between the owner of a property and a real estate agent giving the agent exclusive right to sell the property.

EXECUTOR   Back to top
The person named in a will to administer the estate.

FACADE   Back to top
The front exposure of any building. Often used to describe an artificial or false front which is not consistent with the construction of the rest of the building.

FAIR CREDIT REPORTING ACT   Back to top
A federal law regulating the way credit agencies disclose consumer credit reports and the remedies available to consumers for disputing and correcting mistakes on their credit history.

FAIR MARKET VALUE   Back to top
The price at which two unrelated parties, under no duress, are willing to transact business.

FANNIE MAE   Back to top
A private, shareholder-owned company that works to make sure mortgage money is available for people to purchase homes. Created by Congress in 1938, Fannie Mae is the nation's largest source of financing for home mortgages.

FASCIA   Back to top
The boards that enclose the eaves.

FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC)   Back to top
The U.S. Government agency created in 1933 which maintains the stability of and public confidence in the nation's financial system by insuring deposits and promoting safe and sound banking practices.

FEDERAL HOUSING ADMINISTRATION (FHA)   Back to top
A sub-agency of the U.S. Department of Housing and Urban Development created in the 1930's to facilitate the purchase of homes by low-income, first-time home buyers. It currently provides federally-subsidized mortgage insurance for private lenders.

FEE APPRAISER   Back to top
A certified, professional appraiser who forms an opinion of the fair market value of property and receives a set fee in exchange.

FEE SIMPLE   Back to top
A complete, unencumbered ownership right in a piece of property.

FEE SIMPLE ESTATE   Back to top
A form or ownership, or holding title to real estate. It is the most complete form of title, having an unconditional and unlimited interest of perpetual duration.

FHA MORTGAGE   Back to top
A mortgage that is insured by the Federal Housing Administration (FHA).

FINAL VALUE ESTIMATE   Back to top
The opinion of value of a piece of property resulting from an appraisal following the USPAP guidelines.

FIRST MORTGAGE   Back to top
The primary loan or mortgage secured by a piece of property.

FIXED-RATE MORTGAGE (FRM)   Back to top
A mortgage which has a fixed rate of interest over the life of the loan.

FIXTURE   Back to top
Any piece of personal property which becomes permanently affixed to a piece of real property.

FLASHING   Back to top
The metal used around the base of roof mounted equipment, or at the junction of angles used to prevent leaking.

FLOOD INSURANCE   Back to top
Supplemental insurance which covers a home owner for any loss due to water damage from a flood. Often required by lenders for homes located in FEMA-designated flood zones.

FLOOR PLAN   Back to top
The representation of a building which shows the basic outline of the structure, as well as detailed information about the positioning of rooms, hallways, doors, stairs and other features. Often includes detailed information about other fixtures and amenities.

FLUE   Back to top
The furnace exhaust pipe, usually going through the roof.

FLUSH VALVE   Back to top
The valve between the toilet bowl and the tank.

FOOTING   Back to top
The partially buried support for a vertical structural member such as a post.

FORECLOSURE   Back to top
The process whereby a lender can claim the property used by a borrower to secure a mortgage and sell the property to meet the obligations of the loan.

FORFEITURE   Back to top
The loss of property or money due to the failure to meet the obligations of a mortgage or loan secured by that property.

FOUNDATION   Back to top
The solid structural element upon which a structure is built.

FRONTAGE   Back to top
The segment of a property that runs along a point of access, such as a street or water front.

FUNCTIONAL OBSOLESCENCE   Back to top
A decrease in the value of property due to a feature or lack thereof which renders the property undesirable. Functional obsolescence can also occur when the surrounding area changes, rendering the property unusable for its originally intended purpose.

GABLE ROOF   Back to top
A steeply angled, triangular roof.

GALVANIZED PIPE   Back to top
Iron pipe with a galvanized (zinc) coating.

GAMBREL ROOF   Back to top
A ''barn-like'' roof, where the upper portion of the roof is less-steeply angled than the lower part.

GENERAL LIEN   Back to top
A broad-based claim against several properties owned by a defaulting party.

GEORGIAN   Back to top
A classic, English-style hose characterized by simple rectangular shape and multiple stories.

GFI   Back to top
Ground Fault Interrupter. A type of circuit breaker required in areas where water is present.

GINNIE MAE   Back to top
A wholly owned corporation created in 1968 within the U.S. Department of Housing and Urban Development to serve low-to moderate-income homebuyers.

GIRDER   Back to top
A main supporting beam.

GOVERNMENT MORTGAGE   Back to top
Any mortgage insured by a government agency, such as the FHA or VA.

GRADE   Back to top
The slope of land around a building. Also ground level.

GRANTEE   Back to top
Any person who is given ownership of a piece of property.

GRANTOR   Back to top
Any person who gives away ownership of a piece of property.

GROSS AREA   Back to top
The sum total of all floor space, including areas such as stairways and closet space. Often measured based on external wall lengths.

GROUTING   Back to top
Material used around ceramic tile.

GUTTER   Back to top
The trough around the edge of the roof that catches and diverts rain.

HALF-SECTION   Back to top
320 acres.

HAZARD INSURANCE   Back to top
Insurance covering damage to a property caused by hazards such as fire, wind and accident.

HEADER   Back to top
The framing elements above an opening such as a window or door.

HEARTH   Back to top
The floor of a fireplace or the area immediately in front of it.

HEIGHT ZONING   Back to top
A municipal restriction on the maximum height of any building or other structure.

HIDDEN AMENITIES   Back to top
Assets of a property which contribute to its value, but are not readily apparent. Examples might include upgraded or premium building materials.

HIGHEST AND BEST USE   Back to top
The most profitable and likely use of a property. Selected from reasonably probable and legal alternative uses, which are found to be physically possible, appropriately supported and financially feasible to result in the highest possible land value.

HOME EQUITY CONVERSION MORTGAGE (HECM)   Back to top
Also known as a reverse annuity mortgage. It allows home owners (usually older) to convert equity in the home into cash. Normally paid by the lender in monthly payments. HECM's typically do not have to be repaid until the borrower is no longer occupying the home.

HOME EQUITY LINE OF CREDIT   Back to top
A type of mortgage loan that allows the borrower to draw cash against the equity in his home.

HOME INSPECTION   Back to top
A complete examination of a building to determine its structural integrity and uncover any defects in materials or workmanship which may adversely affect the property or decrease its value.

HOME INSPECTOR   Back to top
A person who performs professional home inspections. Usually, with an extensive knowledge of house construction methods, common house problems, how to identify those problems and how to correct them.

HOMEOWNER'S ASSOCIATION   Back to top
An organization of home owners in a particular neighborhood or development formed to facilitate the maintenance of common areas and to enforce any building restrictions or covenants.

HOMEOWNER'S INSURANCE   Back to top
A policy which covers a home owner for any loss of property due to accident, intrusion or hazard.

HOMEOWNER'S WARRANTY   Back to top
An insurance policy covering the repair of systems and appliances within the home for the coverage period.


Posted in:General
Posted by Jennifer Stepanek on January 17th, 2011 7:37 PMPost a Comment

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