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Glossary of Common Real Estate Terms

Please note:These definitions are not official or meant to be used to interpret any actual real estate transaction documents. Please have your interests represented by a real estate licensee or attorney. We do not assume any liabilities in the interpretation and application of these glossary terms, as they are for a basic understanding only.
abstract of title
Condensed summarized history of a particular piece of real estate with a certification by the abstractor.
acceleration clause
A clause in a mortgage contract which makes the entire loan amount due immediately if the mortgagor defaults.
acceptance
When a grantee receives a deed and the title is transferred. Also-Agreeing to an offer with the expectation of possessing it (Implied, partial, oral, or written.)
accession
Acquiring title to fixtures left behind by a tenant.
actual notice
A notice that has been expressed in words, or can be seen with the eyes or can be implied by knowledge of a fact.
ad valorem tax
A tax based on the value of real estate or personal property. Latin for "by value".
adjustable rate mortgage (ARM)
A mortgage loan that bears interest at a rate that is subject to change by a specified financial index that has been predetermined.
adverse possession
Process in which a title to another's property is acquired without compensation.
agency
An expressed contractual relationship which can be created in writing or orally in which a principal authorizes an agent to act on behalf of a principal in dealing with 3rd parties.
agency coupled with an interest
An agency relationship in which an agent holds an estate or interest in property that is the subject of the agency relationship.
agent
Someone who has expressed or implied authority to act on behalf of a principal in dealing with a 3rd party.
air lot
Air space above a lot.
air rights
The right to use and develop the empty space above the property owned.
alienation clause
A clause in a contract that gives the lender specific rights in the event that the mortgaged property is sold or transferred.
ALTA policy
A lender's insurance policy that covers their interest.
amortized loan
A mortgage in which both the principal and interest are paid according to a plan without any special balloon payments prior to maturity.
anticipation
The act of taking or dealing with funds before they are legally available or due.
antitrust laws
Laws passed with the intent of protecting the free enterprise system of the open market.
appraisal
The practice of developing an opinion of the value of real property by a licensed or certified appraiser.
appurtenant easement
A private easement which benefits another (dominant) tenement.
assemblage
Combining two or more adjoining parcels into one new parcel that is called plottage.
assessment roll
List of taxable properties that shows their assessed value and its owner.
assignment
The transfer of rights held by one party to another party.
attachment
Seizure of property by the court to acquire jurisdiction over the property to compel an appearance before the court or to secure a debt or cost of litigation.
attorney
Someone licensed to practice law.


attorney's opinion of title
An attorney's written opinion upon examining a title abstract on whether or not there are defects to a title.
automatic extension
A listing clause discouraged or prohibited in most states which automatically continues the contract for a set period of time after expiration date.

bail bond
Written promise of a defendant or surety to pay an amount fixed by the court if defendant fails to appear for designated court proceeding.
balance
The amount left over after subtracting any principal. (Adding improvements to increase value -appraisal term)
balloon payment
An installment payment on a promissory note, usually the final one, which is significantly larger than the other installment payments.
Bank Insurance Fund (BIF)
Deposit insurance fund operated by the FDIC, insuring deposits up to $100,000 interest and principal per account.
bargain and sale deed
A deed in U.S. real property law that conveys real property without covenants.
base line
An east-west reference line used to refer to surrounding land.
benchmark
A reference point for elevation.
beneficiary
The person a trust operates for and for whom income is drawn for from a trust.
bilateral contract
A contract under which two parties exchange promises for the performance of certain acts.
blanket loan
A loan that covers 2 or more properties, often subdivisions, where the properties are pledged as security and permits borrower to obtain partial reconveyance when a parcel is sold.
blockbusting
A practice used to encourage property owners to sell by giving them the impression that a neighborhood is changing.
breach of contract
The violation of any terms or conditions in a contract without having a legal excuse.
bulk transfer
Sale of all or most of a business inventory, supplies, merchandise at one time that is not normally done.
bundle of legal rights
Ownership of all legal rights to land. (Possession, control, disposition, enjoyment)
buy down
Pre-paying interest by the builder or seller of a property in order to reduce the rate - in effect, a discount.

capitalization rate
Rate of interest made up of interest rate (return on investment) plus recapture rate (return of original investment) which is considered a reasonable return on investment.
caveat emptor
"Let the buyer beware" - Purchasing at one's own risk.
certificate of title
Written document issued by attorney or other qualified person who has examined the record of real estate title reporting the state of that title.
chain of title
History of all conveyances and encumbrances of a piece of real estate and how it became vested with the current owner.
change
An economic principle used in appraisal of real property values. (No physical or economic condition can remain).
chattel
Personal moveable property.
Civil Rights Act of 1866
Prohibits racial discrimination in the sale and rental of housing.
COALD
Care, obedience, accounting, loyalty, disclosure. (What an agent must do for its principal).
Code of Ethics
Writing of a professional group setting forth a standard of acceptable conduct about the relationship of its members to each other, to the public, and to the organization which its members agree to abide by.
commission
Compensation or fee for services a licensee receives for providing agreed upon services under contract-usually a percentage of selling price and/or a percentage of rentals.
common elements
Things used equally by all condominium owners with undivided interest.
community property
Shared interest in property acquired by a married couple.
comparative market analysis
A study of recently sold homes, properties that failed to sell as well as properties currently on the market that are substantially equivalent to another home in terms of price, location, etc.
competition
An economic principle used in appraisal of real property. (excess profits attract competitors which decreases profit).
condominium
Total ownership of a unit of real estate and undivided (equal) interest in common elements.
conformity
An economic principle used in appraisal of real property. (Maximum value is realized if use is similar to neighborhood).
consideration
Anything necessary for a contract to be enforceable that is promised or given of value from one party to induce another party to enter into contract.
constructive notice
Facts imputed or knowledgeable to a person under law which a person could have discovered if the person had actual notice or that a prudent person's inquiring into public records could have found.
contingency
A contractual clause that calls for an uncertain future event to be done or to occur in order for the contract to be binding.
contract
A legally binding exchange of promises or agreement between parties that the law will enforce.
contribution
Payment by each or any of several entities having a common interest or liability for his/her share in the loss suffered or in the money necessarily paid by one of the parties on behalf of the others.
conventional loan
A loan without governmental underwriting and that conforms to that lenders own standards.
cooperating broker
Licensed broker who has entered a listing contract with an owner to assist in the selling of his/her property for which owner agrees to pay a certain compensation.
cooperative
A multi-unit piece of real estate which is owned by a trust or corporation and has beneficial owners.
co-ownership
a property that is owned by more than one owner concurrently.
corporate franchise tax
A tax imposed by a state government on corporations, LLCs, and/or other business entities chartered in that state.
corporation
A legal entity which can hold title to real estate in severalty.
correction lines
East-west lines used every 24 miles to adjust to the curvatures of the Earth.
cost approach
Value of property found by estimating replacement cost of improvements, minus depreciation accrued and then adding back market value of the land.
counter offer
A response to an offer to enter into a contract which acts as a rejection of the original offer and introduces a new offer or one with different terms and conditions.
curtesy
An interest in property owned by a surviving husband.

datum
Main sea level in the New York harbor. (0 elevation).
deed
A legal instrument used to grant a right. It names old and new owners, legal description of the property, and is signed by the grantor(s).
deed in trust
An agreement document in which interest of a borrower's land is transferred to a neutral 3rd party (trustee) to secure a borrower's debt.
deed restriction
A limitation put upon future use of a property by its seller.
default
Failure to make mortgage payments as agreed to in a mortgage or deed of trust.
defeasance clause
The clause in a mortgage that gives the mortgagor the right to redeem his/her property upon payment of the mortgagor's responsibilities to the mortgagee.
deficiency judgement
If a foreclosed property sells for less than the amount that is owed, a judgement can be given that makes the mortgagor pay the difference to the mortgagee.
delivery
Transfer of property from a seller to a buyer by actual delivery of a deed.
Department of Housing and Urban Development (HUD)
A department of the federal government responsible for the implementation and administration of HUD programs including FNMA, FHA, and PHUR. Also a clearinghouse for Fair Housing complaints.
depreciation
The natural decline in property value due to market forces, depletion of resources, or any cause.
descent
When a person who owns real estate dies without a will (intestate), the interest descends to their heirs.
dower
The right that a wife acquires the property of her husband had or acquired during their marriage.
dual agency
Agency relationship in which the agent acts for both principals at the same time in the same transaction.

earnest money
The deposit money given to a seller or his agent by the potential buyer upon signing the agreement of sale to show he/she is serious about the purchase.
easement
Authorized use of someone else's private property.
easement by condemnation
Legal eminent domain use of land that must pay the owner for that part of the land.
easement by necessity
An easement that is legally allowed means for an owner to utilize their land. (egress and ingress).
easement by prescription
An implied easement in which someone's using someone else's property by egress or ingress regularly over a period of time without the permission from the owner. (Must be continuous, open, uninterrupted, exclusive, and adverse).
easement in gross
A private easement which benefits an individual or legal entity rather than another parcel of land. (Over many parcels of land).
economic life
Period of time (usually years) from construction or acquisition during which improvement will add value to the land or will be depreciated for tax purposes.
eminent domain
The government's right to take private land for public use through a condemnation suit.
employee
A person who works under direct control of an employer holding employee status and for whom employer must withhold Social Security and income taxes from compensation.
encroachment
A building, wall, or fence that goes beyond its owners land and into the adjacent owner's land.
encumbrance
Liens, deed restrictions, easements, licenses, or encroachments to real estate.(claim or liability).
Equal Credit Opportunity Act
Federal law that prohibits discrimination in the extension of credit due to race, color, religion, national origin, sex, age, or marital status.
equalization factor
The factor by which the assessed value of a property is multiplied by to arrive at a value of a property.
equitable lien
A lien granted by the court as a result of legal action taken rather than as a result of statute.
equitable right of redemption
The borrower's right to reconveyance of title upon redemption.
equitable title
The interest held by someone who has agreed to purchase property but has not yet closed-right to gain title.
escape clause
A contractual clause that permits one or more of the parties to cancel all or part of the contract if certain events or situations do or do not materialize.
escheat
When an ownerless property is transferred to the State. (No will or heirs).
estate in land
Interests which are or will be possessed and are measured by a period of time.
estate taxes
Federal taxes due or paid on a descendant's real and personal property.
estoppel
Legal theory in which someone is stopped or barred from asserting or denying a fact because of their previous actions or words.
evidence of title
Proof of ownership of property such as certificate of title, an abstract of title with attorney's opinion, title insurance, or a Torren's registration certificate.
exclusive agency listing
A listing contract in which an owner appoints a broker as exclusive agent for a designated period of time, on the owner's terms for a commission - Owner can also sell on their own without a commission.
exclusive right to sell listing
Same as an exclusive agency listing, except commission is paid to that broker regardless of who sold it.
executed contract
A contract in which all parties have fulfilled their promises and whose terms have been performed and completed.
executory contract
A contract in which something remains to be done (or executed) by one or more of the parties.
express agreement
An oral or written agreement in which the parties have clearly stated their intentions and terms in words.
express contract
An oral or written agreement in which the parties have clearly stated their intentions and terms in words.
external obsolescence
Depreciation caused by issues out of property lines such as environmental, social, or economic factors. Often considered incurable.

Fair Housing Act of 1968
Title VIII of the Civil Rights Act of 1968 which prohibits discrimination in connection to the sale or rental of housing and vacant land.
Fair Housing Amendments Act of 1988
Added handicapped and familial status to the 1968 Act.
Farmer's Home Administration
An agency of the Federal Department of Agriculture that provides financial assistance from private sources to farmers and others in rural areas.
Fannie Mae (FNMA)
Federally chartered, stockholder owned corporation supporting secondary market for FHA, VA and conventional mortgages.
Federal Deposit Insurance Corporation (FDIC)
U.S. corporation that insures deposits up to $100,000 per institution as long as the bank is a member firm.
Federal Reserve System (The Fed)
The central banking system of the United States.
fee simple absolute
When grantors of an estate do not place conditions upon subsequent grantees to own the property.(The maximum right of ownership).
fee simple defeasible
When estate grantors place conditions on an estate in its deed.
FHA loan
A loan made by an approved lender in accordance to FHA regulations and insured by the FHA.
fiduciary
A party who is an agent in a position of trust and confidence and owes fiduciary duties to a principal or client which cannot be breached under the rules of an agency.
Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA)
Federal law passed in 1989 (S&L Bailout) that changed the rules under which federally regulated S&Ls operated and restructured the S&Ls regulation.
financing statement
Instrument filed to give public notice of a security interest which protects the interest of any secured parties in the collateral.
fixture
Personal property that has been permanently attached to real property that then becomes real property.
foreclosure
Equitable proceeding in which a bank or secured creditor sells or repossesses a parcel of real property due to owner's failure to comply with an agreement.
fraud
Intentional and successful employment of any cunning, deception, collusion, or trickery used to cheat, deceive, circumvent, or gain unfair advantage over another person.
Freddie Mac (FHLMC)
Federally chartered stockholder owned corporation supporting secondary market for conventional mortgages.
freehold estate
An estate in land that has no specific length of time. (Ownership and possession).
functional obsolescence
Loss of value due to factors inside the property lines such as defects in the plan, design, or age.
future interest
Interest in real property that will not take place until some time in the future. (ex:remainderman).

general agent
A party who has been authorized by a principal to represent the principal in a broad range of matters such as a property manager.
general lien
A broad based claim against several properties owned by a defaulting party.
general partnership
Two or more owners of a business for profit that share full liabilities.
general warranty deed
A deed in which the grantor guarantees with five covenants that he/she holds a clear title to the real estate and the right to sell it.
Ginnie Mae (GNMA)
An agency of HUD which functions in the secondary market and primarily in social housing programs.
government check
area between 2 correction lines and 2 guide meridians. (48 miles x 48 miles).
government lots
Fractional segments of the rectangle system that are smaller than 1/4 of a section.
graduated payment mortgage (GPM)
A fixed-rate, fixed schedule loan that starts with lower payments and payments then rise annually.
grantee
The entity receiving title to real estate (the buyer).
granting clause
Words in a deed of conveyance such as "convey and warrant", "grant", "grant, bargain and sell", etc., that demonstrate grantors intent to convey.
grantor
The entity selling real estate and conveying title.
gross income multiplier
Indicates how many times greater the price/value of the property is to the gross income it delivers to the owner.
gross rent multiplier
Indicates the ratio of the price of real estate investment to its annual rental income before expenses.
growing-equity mortgage (GEM)
Mortgage in which the monthly payments increase annually with increased amount applied to the outstanding principal-shortens the length of the loan.
guide meridians
North-south lines used to refer to land in 24 mile increments.

habendum clause
Language in a deed setting forth the interest being granted and any limitations on it.
highest and best use
A concept in appraisal - The reasonable and probable use that produces the highest property value.
home equity loan
An owner uses his/her residence as collateral for a loan which permits the draw of funds up to a preset amount. Sometimes called a line of credit.
homestead
Land that is owned and occupied. Primary residents are protected against judgements and non-secured debts.
Housing and Community Development Act of 1974
Added the protected class of sex to existing Fair Housing Act.
hypothecation
A pledge of property as collateral for a debt without the transfer of possession to the party making the loan.

implied agreement
A contract that one would conclude exists as a result of the acts and/or conduct of the parties involved.
implied contract
A contract that one would conclude exists as a result of the acts and/or conduct of the parties involved.
improvement
Man-made additions to real property.
income capitalization approach
An appraisal analysis based on the relationship between the rate of return that an investor requires and the net income that a property produces.
independent contractor
A person who acts for another but sells the final results and whose methods of achieving those results are not subject to that persons control.
index method
Estimating building cost by multiplying original cost of property by a percentage factor to determine current cost of construction. (inflation)
inheritance tax
State taxes collected on a descendant's real and personal property.
installment contract
A contract for the sale of real estate whereby purchase price is paid in periodic installments by purchaser who has possession. Seller retains title until paid off usually.
interest
The cost for the use of money for a period of time.
Internal Revenue Service tax lien
A general lien against property without consent of an owner.
intestate
Dying without a legal will.
involuntary alienation
Transfer of title without the owner's volition.
involuntary lien
A lien against property without the consent of an owner.

joint tenancy
Two or more owners of real estate that have been named together as joint tenants. Interest passes to surviving tenants.(Concurrent, equal parts, and survivorship).
judgement lien
A lien imposed to secure payment of a judgement.

land
The surface of the Earth down to the center and up into space (infinity) and its natural features.
land contract
Same as installment contract
law of agency
Laws that concern the rights and duties of principals, agents, and 3rd parties.
leasehold estate
A non-freehold estate in land that has a definite ascertainable period of possession. (Tenants right to occupy).
legal description
An accurate description of a land parcel that can be found and identified by a surveyor.
legality of object
An object in a contract that is permitted by law and is possible of performance.
legally competent parties
Parties with the ability, power, fitness to enter into contractual agreement as determined by law.
license
Temporary right to use land that cannot be sold. (Revocable)
lien
A type of security interest granted over an item of property to secure payment of a debt or performance of an obligation.
lien theory
The theory that places a lien on mortgaged property as security for a debt so the title to the property remains held by the borrower.
life estate
An estate in real or personal property that ends upon the owner's death. (It is uninheritable).
limited partnership
A business run by full liability partners and funded by silent partners who only assume investment losses.
liquidated damages
The sum agreed on by all parties to be the full and final amount of damages received if a certain event occurs.
listing agreement
An employment contract between an owner and a licensed real estate broker to find ready, willing, and able persons to buy, rent or lease a property under terms in the contract.
littoral rights>
The right of adjacent property owners to use a large body of water. (Lake or sea to the mean high water mark).
lot and block system
Identifies land within a subdivision of platted land.

market value
The highest price which a property will bring in the open market and under all conditions required for a fair sale not affected by undue pressures.
marketable title
A title to real property which has no encumbrances and which is free of any reasonable objection.
mechanic's lien
A lien imposed to secure payment for work done on property or land.
metes and bounds
Identify parcels of land by boundaries, landmarks, compass directions, and distance from a starting point to an ending point.
mill
One tenth of one cent. Used to state the property tax rate.
minor
Someone under the age of 18.
monument
A place marker (natural or man-made) in the metes and bounds system.
mortgage
A method of using property (real or personal) as security for the performance of an obligation. Usually payment of a debt by a promissory note or negotiable instrument.
mortgage lien
An instrument used where place real estate is pledged as a security for the payment of a debt and foreclosed on if at default.
multiple listing
An exclusive right to sell a listing taken by a member of a co-op organization of real estate licensees and shared in a pool with all its members for greatest market exposure.
multiple listing service
A database of real estate broker members share to find buyers for properties.

negotiable instrument
A specialized type of contract for the payment of money that is unconditional and capable of transfer by negotiation.
net listing
A listing, illegal in most states, which allows a licensee to keep any money above and beyond the predetermined net price as compensation.
note
A unilateral written agreement acknowledging a debt concerning real property that contains an express and absolute promise that the signer pays according to specified terms to person, to order, or bearer.
novation
The substitution or exchange of a new obligation or contract for a new one by the mutual agreement of the parties.

offer and acceptance
Two essential components of a valid contract, when all parties agree to the exact terms. "Meeting of the minds"
Office of Thrift Supervision (OTS)
Bureau of the U.S. Treasury Dept. that is responsible for issuing and enforcing regulations governing the nation's savings and loan industry.
open end loan
A loan that allows one to borrow additional money up to the loan's original amount after loan has been reduced without having to re-write the loan.
open listing
A listing given to any number of brokers and commission only goes to the broker that first procures a buyer.
option
A right, given for consideration, to purchase or lease a property, upon specified terms within a specific time period, and placing no obligation on receiving party to purchase the property.
option listing
A listing that gives the listing broker the right (option) to purchase the listed property.

package loan
A type of mortgage that is inclusive and covers the real property and the improvements as well as any moveable mechanical or electrical equipment.
parol evidence rule
Rule of evidence that a written agreement is the final expression of the agreement between the parties. It cannot be varied or contradicted orally or written.
partition
Dividing common interest in a property by court order when all parties do not agree to.
partnership
Two or more people own a business for profit.
party driveway
A driveway that is shared between adjacent property owners. (Each has an easement over the other's half).
party wall
A wall that supports two different buildings on two different lots.
personal property
Any property that can be moved from one location to another.
physical deterioration
An impairment and loss in value of a property brought about by wear and tear, disintegration, use and actions of the elements.-Curable or incurable.
plat map
A survey plat showing blocks, lots, and streets.
plottage
An appraisal principle that says assemblage will bring more value than separately.
point of beginning
The starting and stopping place marker in the metes and bounds system.
police power
The State's right to enact laws that govern ownership rights.
prepayment penalty
The charge payable under terms of a loan agreement to a lender by a borrower if principal balance is paid prior to its maturity.
primary market
The mortgage market made up of lenders in which loans are originated.
principal
A party who is also called a client who has authorized another to act on his/her behalf and is represented by an agent.
principal meridian
One of the main north-south lines used to refer to surrounding land in the rectangular system. (35 total)
prior appropriation
Water usage that is obtained through a government permit program.
priority
The order in which rights in respect to the same subject matter are given legal precedence or preference.
private mortgage insurance (PMI)
A type of mortgage insurance covering against loss by a lender due to a default by a borrower (usually with less than 20% down).
probate
Proving that a will is valid and executing that will.
procuring cause of sale
The action that starts a chain of events that results in the sale of real estate.
progression
When a lower valued property gains value when its among higher valued properties.
puffing
Illegal and unethical practice of making inflated, exaggerated, or superlative statements or opinions that clearly do not represent the truth.

quantity survey method
Highly technical process used by contractors and estimators to arrive at a cost for new construction. Sometimes referred to as the price take off method.
quit claim deed
Transfer of interest in real estate without guarantees.

range
North-south strips of land 6 miles wide, used to identify surrounding land in the rectangular system-depending on position to main meridian.
ratification
After the fact approval or adoption of an act performed by one party without the prior authorization of another party, but on his/her behalf.
ready, willing, and able buyer
A buyer fully prepared to enter into contract, is willing to buy, and clearly meets financial requirements to do so.
real estate
Land and improvements or additions that are man-made.
Real Estate Investment Trust (REIT)
A business trust allowing investors to channel funds into the real estate investment market and conforms to IRS codes.
real estate license law
State laws that regulate real estate sales and licenses.
real estate sales contract
An agreement to convey title to real property upon satisfaction of specified conditions which does not require conveyance within one year of contract.
real property
Land as distinct from personal or moveable possessions.
reconciliation
Final step in appraisal process in which different approaches are weighed objectively to arrive at a single best and supportable value.
reconveyance deed
Deed giving borrower title once debt is paid off.
recording
Filing a real estate transaction with the appropriate government agent. Once recorded, it is considered finalized.
rectangular (government) survey system
Method of dividing/identifying land by principal meridians and base lines. (est.1785)
redemption
The regaining of title to real property after a judicial foreclosure sale.
redemption period
Period of time established by law in mortgage states in which a property owner has the right to repurchase or recover real property following a foreclosure or tax sale.
red-lining
The practice of denying or increasing the cost of services to residents in certain determined areas.
regression
When a higher value property loses value when it is among lower valued properties.
Regulation Z
Regulations issued by the Fed that require lending institutions to disclose and inform the borrowers of the true cost of obtaining credit.
release deed
Instrument executed by mortgagee/trustee reconveyance or returning title to real estate secured by a loan back to mortgagor/trustor upon fulfilling payment of debt.
remainder interest
The interest in a property that is left after the termination of the prior estate.
replacement cost
The price that will have to be paid to replace an existing asset with a similar asset.
reproduction cost
The cost of exact duplication of a property as of a certain date.
Resolution Trust Corporation (RTC)
U.S. government agency created by the 1989 bailout bill to merge and close S&Ls becoming insolvent between 1989 and August 1992. It was terminated in 1996.
reverse-annuity mortgage (RAM)
A loan in which the homeowner receives monthly payments based on accumulated equity and must be repaid upon death of owner, sale of property, or pre-arranged date.
reverse discrimination
Establishment of quotas seeking to redress past injustices by granting priority to protected classes which conflicts with Fair Housing laws.
reversionary interest
The remaining interest a grantor has after granting a life estate.
right of survivorship
Gaining interest in another tenants part of property after that tenant's death.
riparian rights
The system of allowing water use to adjoining parcels of land (Rivers or moving water from center of navigable to mean high water mark).

sales comparison approach
Value of a property is compared to others like it that recently sold. (aka market approach).
satisfaction of mortgage
Act of recording a document that acknowledges the full repayment of the debt and which discharges the lien of a mortgage or trust deed.
sale and leaseback
Owner sells and gets cash and agrees to lease the property. buyer gets a fixed return on investment.
Savings Association Insurance Fund (SAIF)
Deposit insurance fund operated by the FDIC insuring deposits in federal S&Ls, federal savings banks, and state S&Ls up to $100,000 an account. Also took responsibilities from the RTC to deal with insolvent S&Ls.
secondary market
The market for purchase and sale of existing mortgages.
section
A parcel of land within a township in the rectangular system. (1 sq. mile - There are 36 per township).
security agreement
A contract between a secured party creditor and a debtor that creates a security interest in the debtor's property.
separate property
Property interest in marriage that is not shared due to prior ownership or inheritance.
severalty
Property ownership by one sole owner.
severance
Changing an item from real property into personal property.
shared-appreciation mortgage (SAM)
A fixed interest mortgage that started below the market rate and calls for contingent interest to be paid to lender at a certain percentage of appreciation of the property.
special agent
An agent that acts on behalf of a principal for a single transaction or specified series of transactions over a limited period of time.
special agency
When an agent represents a principal only for a specific transaction or transactions over a specific time period.
special assessment
A charge or tax on a subdivision or development that will benefit from public works improvement.
special warranty deed
A deed that only guarantees or warrants clear title during grantors ownership, not before.
specific lien
A lien affecting or attached only to a specific certain parcel of land or piece of property.
specific performance suit
A legal action brought in a court of equity in special cases to compel a party to carry out the terms of a contract.
square foot method
The way of finding replacement or reproduction cost by calculating the cost divided by space of a similar new built property that has sold.
statute of frauds
Statutory requirements that certain kinds of contracts must be in writing to be enforceable.
statute of limitations
Statute in law that sets the maximum period of time after certain events that legal proceedings based on those events may be initiated.
statutory lien
A lien, such as a real estate tax lien, granted to a party by statute or operation of law.
statutory right of redemption
Legal right granted for a limited time for a mortgagor to buy back title to his/her property after a foreclosure sale by paying the full amount plus any costs involved.
steering
The practice in which real estate brokers guide prospective home buyers towards or away from certain neighborhoods based on their race.
straight line method
Depreciation cost found by deducting the same amount over a period of time.
straight loan
A non-amortizing loan in which borrower pays principal in a lump sum and maturity and interest can be paid fully at maturity or in installments.
subagent
A person upon whom the powers of an agent have been conferred indirectly by the agent of the principal and who has been authorized to do so by that principal.
subordination agreement
an agreement by a holder of an encumbrance to permit his or her claim to take an inferior position to other encumbrances.
subrogation
Replacing one creditor with another in regards to legal right or obligation.
substitution
An appraisal principle that a value of a property may be determined by examining the sales prices of similar properties sold in the past.
subsurface rights
Ownership rights of anything below the Earth's surface.
supply and demand
Economic principle that says the price is determined by the point where supply equals demand.
surety bail bond
A contract used to secure the release from custody of a person charged with a criminal offense. The principal is the accused, the obligee is the government, and the surety is the bail bondsman. If the accused fails to appear, the fugitive recovery agent is the surety.
surface rights
Ownership rights of things only on the surface of the land.
suit to quiet title
A lawsuit to settle competing claims or rights to real property.
syndicate
A group of people or entities that pool resources to accomplish a venture.

taxation
The way the government raises funds.
tax foreclosure
The process of enforcing a lien against property for non-payment of delinquent property taxes.
tax lien
A lien imposed to secure payment of a tax.
tax sale
The public sale of a property by the government for non-payment of taxes.
tenancy by the entirety
Joint ownership of property acquired by a husband and wife during their marriage-also assumable after death.
tenancy in common
Co-ownership of property - unlike joint tenancy, the owners heirs can acquire interest after the owner's death. (Any time, any percentages, inheritable)
testate
Dying with a legal will.
testator
Someone who has written and executed a last will and testament to be in effect upon their death.
testers
People who pose as prospective buyers/tenants to find out if sellers/landlords are complying with the law.
time-sharing
Having temporary ownership interest in a property.
title
The right to and evidence of ownership of real estate.
title insurance
Policy which protects owner if a prior claim arises after purchase.
title theory
Theory that the lender has an interest in the title to mortgaged property as collateral to protect the lenders interest.
Torrens system
System which gives evidence of land title by registration with a public authority (registrar) insured by the state.
township line
Lines parallel to baselines-6 miles apart (6 sections high)
township square
36 sections that are each 1 sq.. mile in size.
trade fixtures
Items used in business and installed by the business tenant in a leased building.
transfer tax
Tax required to be paid when real estate is sold and is affixed onto the actual deed.
trust
Property from a trust is held and managed by a trustee for the beneficiary.
trust deed
When a seller (trustor) places legal title to real property with a trustee until repayment of money is complete.
trustee's deed
Device used to transfer property from the trustee back to the borrower.
trustee
Someone or entity responsible for administering and holding property for a beneficiary.
trustor
Someone who gives a property to a trust on the basis that it is administered and held for the beneficiary.
Truth-in-Lending Act
Federal statutes that insures that prospective borrowers who purchase on credit receive information.

undivided interest
Undivided and exclusive interest in property by its co-owners.
unenforceable contract
A valid but defective contract which cannot be enforced by court.
Uniform Commercial Code
Codified commercial laws passed and adopted by most states which unifies the regulation of commercial security transactions in personal property.
Uniform Residential Appraisal Report
A form which is used to document the methods used to determine the market value of single family residences and PUDs - aka form appraisal.
unilateral contract
A contract under which one party promises to do something in exchange for the completed act of another.
unilateral subagency
When a brokerage lists a property for a seller, all agents in that brokerage become sub-agents to the seller, even those that produce a buyer, unless a buyer's agency is spelled out.
unit-in-place method
Way of estimating building replacement cost in which quantities of component parts (foundations, floors, windows, etc) including labor and overhead are determined on an in-place basis rather than a purchased basis.
usury
Charging high or unreasonable interest rates.

VA loan
A loan made to qualified veterans to purchase real property. In the event of default, the VA guarantees the lender.
valid contract
A contract that complies with the four essential elements of a contract-capacity, consent, consideration, and lawful object and is binding and enforceable by all parties.
value
Monetary worth of property to buyers and sellers at a given time.
void contract
A contract that has no legal force or effect because it does not meet the essential elements of a contract.
voidable contract
An agreement that is capable of being made void but is not null and void and so must be either confirmed or voided.
voluntary alienation
Voluntarily transferring property and possession of land or other things to another.
voluntary lien
A lien placed on a property with the consent of or as a result of a conscious act of an owner.

will
Written legal declaration of how a person's property is to be disposed of after death.
wraparound loan
A financing device in which a lender assumes the payments on a borrower's existing loan and takes a new junior mortgage from the borrower.