Real Estate Definitions

As a real estate investor, we become familiar with the language spoken within the industry. It’s only natural to learn it as we start having more conversations within the profession.

It’s important to understand these words or phrases when speaking with brokers and attorneys when we are seeking to acquire real estate of all kinds (commercial or residential). I’ve curated the most comprehensive list and definitions used in real estate that will wow any real estate related professional during your exchanges.

Real estate terminology from A to Z.

ABANDONMENT: lessee leaves without consent of lessor before lease expires. Does not break lease or relieve lessee of obligations

ABATEMENT: reduction of property taxes

ABSTRACT OF TITLE: a condensed history of legal title, summarizing all instruments in chain of ownership

ABUTTING: land with a common boundary (adjacent/adjoining)

ACCELERATION CLAUSE: a clause in Note; upon default, balance of debt becomes due immediately instead of maturity date; prelude to foreclosure

ACCEPTANCE: indication by signature of offeree that s/he is willing to be bound by terms of offer from offeror

ACCRETION: the gradual addition of land by action of water or wind

ACCRUED DEPRECIATION: cumulative loss in value; difference between cost of replacing property new and present value

ACKNOWLEDGMENT: a notary public declares signing to be free and voluntary

ACRE: 43,560 square feet

ACTUAL NOTICE: actual, specific and direct knowledge given to someone as opposed to constructive/public notice (information made available for public viewing such as in registry of deeds)

ADA: Americans with Disabilities Act of 1990 (federal law)

ADJUSTMENTS: taxes, rents, fuel, etc., apportioned or prorated between buyer and seller at closing

ADMINISTRATOR: appointed by court to settle estate of person leaving no will

AD VALOREM: according to value, tax assessment based on actual value

ADVERSE POSSESSION: occupant’s right to acquire legal title to private property they hold land openly, notoriously, adversely and without permission for 20 years; also known as squatter’s rights

AEOLIAN SOIL: sand dunes formed by the action of the wind

AFFIDAVIT: a sworn statement; written oath such as acknowledgment (affirmation is an oath)

AGENCY: a contract by which one party undertakes to represent another in certain business situations

AGENT: a person (natural), corporation, society, association or partnership (legal persons) acting by authority of a principal in a realty transaction for compensation

AGREEMENT OF SALE: also known as Purchase and Sale Agreement (P&S)

AIR RIGHTS: ownership and use of air space over a specific parcel of realty which can be leased or sold to others

ALIENATION: voluntary transfer of realty

ALIENATION CLAUSE: clause in mortgage giving lender right to accept or reject new owner of take-over mortgage (also known as due-on-sale and assumption clause)

ALJ: Administrative Law Judge (a judge presiding over hearings for government agencies)

ALLUVION (ALLUVIUM): sand or mud carried by water and deposited on other land

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

ANNEXATION: property changes from personal to real

ANTICIPATION: a forecast of expected benefits during ownership and resale

APPARENT: it looks as if it exists (as in authority)

APPRAISAL: an estimate of value

APPRECIATION: increase in value resulting from market forces

APPROACHES TO VALUE: three methods used by appraiser to form an estimate of value: sales comparison (market data), income, and cost

APPURTENANCE: an intangible right belonging to and passing with a property such as having a right of way through adjoining property

ARM’S LENGTH TRANSACTION: sale without duress on either party; an open and willing sale

ASSEMBLAGE: combining two or more lots under single ownership.

ASSESSED VALUATION: value given to realty for property taxation purposes ASSETS:  all real and personal property one owns

ASSOCIATE BROKER: a broker who chooses to work as a salesperson for another broker (the employing broker)

ASSUMPTION OF MORTGAGE: taking of title to property by grantee who assumes existing loan; mortgagee can pursue grantor or new grantee or both

ATTACHMENT: court order issued during a lawsuit prohibiting sale of realty

ATTEST: affirm under oath something is true (attestation)

ATTORNEY-AT-LAW: a lawyer employed by a party to manage a cause

ATTORNEY-IN-FACT: anyone who is authorized in writing to perform certain acts

for another; valid only during lifetime of party giving this power

AUCTION: public sale of property to highest bidder

AVULSION: the sudden loss of land by action of water

BALLOON MORTGAGE: principal loan amount paid off in lump sum at end of term

BENCHMARK: mark on stone or cement (monument) permanently fixed to ground; used as measuring point by surveyors

BEQUEATH: to give personal property by will; bequest

BETTERMENTS: improvements done by town/city and paid for by owner

BILATERAL CONTRACT: mutual and simultaneous exchange of consideration

BILL OF SALE: a written instrument which is the evidence of transfer of one person’s right in personal property to another

BINDER: deposit given by buyer to secure property until closing; in insurance, it is memorandum of temporary coverage at closing

BLANKET MORTGAGE: a single mortgage instrument securing more than one parcel of property as security for the loan

BLOCKBUSTING: induces panic selling in a neighborhood based on a member of a protected class entering neighborhood

BONA FIDE: in good faith and without fraud

BOND: guarantee by third party that it will make good any loss, up to certain amount, incurred by a party dealing with a broker not acting in good faith; bonding company is Surety and obligor and State is obligee. Broker bond is made payable to State

BREACH: default or violation of terms of contract

BROKER OF RECORD: the broker is responsible for what happens in the agency

BUILDING CODE: regulations setting forth minimum structural requirements

BUILDING LINE: no building can be erected between building line and lot lines

BUNDLE OF RIGHTS: all rights that go with ownership of realty

CAPITAL EXPENDITURES:  long term improvements to the property

CAPITALIZATION: computing current value from expected future income

CAPITALIZATION RATE: profit stated as a percentage on a yearly basis

CARRYING CHARGES: expenses necessary for holding property such as vacant land pending development or zoning changes

CASH FLOW: profit after principal and interest are deducted from net operating income (NOI)

CASH ON CASH: the return on equity (divide cash flow by equity)

CAVEAT EMPTOR: let the buyer beware – no longer applicable

CERTIFICATE OF REASONABLE VALUE: instrument issued by V.A. stating property value (CRV)

CERTIFICATE OF TITLE: opinion of attorney/title company certifying condition of title.

CHAIN OF TITLE: history of conveyances and encumbrances affecting a title

CHANGE: real estate values always move up or down in a predictable cycle (growth, stability, decline and renewal)

CLEAR TITLE: title free of encumbrances

CLIENT: principal who hires an agent; CUSTOMER is the other party

CLOSING COSTS: costs of seller and buyer at conveyance of realty.

CLOSING STATEMENT: accounting of funds at closing – Settlement Statement

CLOUD ON TITLE: claim or encumbrance impairing title and marketability

CMA: Competitive (comparable, comparative) market analysis, market value determined by a real estate agent

COLLATERAL: a security, such as a mortgage, given to protect debt

COLLUSION: agreement between parties to defraud another

COLOR OF TITLE: deed appears to provide good title, but actually does not

COMMINGLING: the mixing of funds held for the benefit of others with the broker’s personal or business funds

COMMISSION: money or other valuable consideration given to broker by principal for services rendered; amount is by agreement

COMPETITION: excess profits attract competition on supply side

CONDEMNATION: the taking of private property by law of eminent domain

CONDOMINIUM: multi-unit structure made up of individually owned units with separate deeds and shared ownership of common areas

CONFORMITY: maximum value is created with homogenous property

CONSIDERATION: something exchanged between parties of a contract

CONSTRUCTION LOAN: progressive payments to builder during stipulated stages in erection of building

CONTRACT:  a written agreement between two parties to do something

CONTRIBUTION: added investment in a site is measured by added value

CONVEY: to transfer and grant; to convey as a transfer of legal title in land by an instrument in writing such as deed

COOPERATIVE: one corporation owns all real estate with stockholders occupying units through leases

CORPORATION: a legal person created by state law owned by one or more people; realty corporation must be licensed and bonded

COST OF REPRODUCTION: cost of exact duplication of property using similar materials

COUNTEROFFER: voids first offer and creates new offer

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

CUL DE SAC: a road with one outlet, usually ending in a circle

DAMAGES: estimated monetary damages for breach of contract

DEBENTURE: an unsecured note as opposed to mortgage Note

DECEDENT: deceased person

DEDICATION: to convey private property over to public use

DEED: instrument in writing, duly executed and delivered for the purpose of conveying title (ownership) to real property

DEED OF TRUST: in some states used instead of a mortgage (trust deed)

DEED RESTRICTION: provision in deed controlling use of land

DEFAULT: non-performance of a duty under an instrument

DEFEASANCE CLAUSE: clause in mortgage which defeats mortgagee interest if loan is repaid according to Note

DEFENDANT: party sued; PLAINTIFF: party initiating action DEFERRED PAYMENTS: money payments to be made at future date DEFICIENCY

JUDGMENT: court award to lender if sale at auction does not equal debt

DELINQUENCY: a loan in default or overdue

DELIVERY: irrevocable transfer such as with deed

DEMAND LOAN: lender may demand payment of the loan at any time.

DEMISE: to lease

DENSITY: number of dwellings and commercial units per acre

DEPRECIATION: decrease in value for various reasons

DEVISE: a gift of realty by will; deceased is devisor

DIRECT REDUCTION MORTGAGE: debt repaid by amortization

DOMICILE: place where one has permanent residence

DUPLEX: a home with two living units, a physical description that does not define ownership of the building

DURESS: unlawfully forcing someone to do something against their will

DUST: acronym for elements of value (effective demand, utility, scarcity and transferability)

EARNEST MONEY: deposit or binder given with signing of P&S

EASEMENT: a right which one person has in lands of another (easement in gross is a personal contract right to use another’s land)

ECOA: Equal Credit Opportunity Act, federal law prohibiting discrimination in credit/lending

ECONOMIC LIFE: period of time in which property may be profitably used; each income property sale begins a new property economic life

EEOC: Equal Employment Opportunity Commission, federal body that makes policy/approves employment discrimination suits

EFFECTIVE DEMAND: the ability to act on the desire to buy

ELEMENTS OF VALUE: that which is necessary to achieve value

EMBLEMENTS: crops; deemed personal and belonging to tenant or reserved by seller as removable prior to or after sale of land

EMINENT DOMAIN: right to take private property for public use for fair value

ENCROACHMENT: physical stationary trespass of a property on that of another

ENCUMBRANCE: anything which burdens (limits) the fee title to property

EQUITY: value or interest an owner of realty has above any debt on property; difference between value and mortgage debt

EQUITY PARTICIPATION: a further return on investment for lender in addition to interest; part ownership with lender

EROSION: the gradual loss of land by action of water or wind

ESCHEAT: power of state to take abandoned property or if no will/heirs

ESCROW: the holding of something of value by a person (escrowee or escrow agent) for the benefit of other parties

ET AL.: a term meaning “and others” (Et Ux. means “and wife” Et Con. means “and husband”)

EVICTION: the depriving of a person’s possession of realty (also forcible entry and ejectment)

EXCLUSIVE AGENCY: Principal agrees to work with one agency for a stated period of time (no commission earned if client does own deal)

EXCLUSIVE RIGHT TO: to sell or represent, agency earns commission even if client does own deal

EXECUTOR: person named in will to execute or probate the will

EXPRESS: directly stated to exist (as in authority)

EXTERNAL OBSOLESCENCE: loss in value due to outside forces, a/k/a economic obsolescence

FEDERAL HOME LOAN MORTGAGE CORP. (FHLMC): known as “Freddie Mac,” it is a secondary market loan buyer

FEDERAL HOUSING ADMINISTRATION (FHA): part of HUD; insures mortgage loans originated by 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: establishes and regulates monetary policy

FEE SIMPLE: also known as fee and fee simple absolute, largest possible estate or interest person can have in a parcel of realty; least limited estate, defining characteristic is inheritability

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

FHEO: Office of Fair Housing and Equal Opportunity (part of HUD)

FIDUCIARY: a position of trust (e.g. broker to principal)

FIDUCIARY DUTIES: duties (obedience, undivided loyalty, full disclosure, confidentiality, full account, reasonable care) owed by agents to clients

FINDER’S FEE: fee for locating a property, client or customer – commission

FIXTURE: article that was once personalty but is now realty because it is permanently attached

FORECLOSURE: collateral is sold to pay debt because of default

FORFEITURE: loss of deposit for failure to perform terms of contract

FRAUD: intentional deception in which injured party has loss

FREEHOLD: an ownership interest in realty of not less than a life estate

FRIABLE: crumbling/brittle – such as asbestos

FRONT FOOT: number of feet or frontage abutting a street

FUNCTIONAL OBSOLESCENCE: loss in value due to utility problems

GENERAL LIEN: a lien against more than one piece of property of debtor

GOVERNMENT NATIONAL MORT-GAGE ASSOC. (GNMA): known as “Ginnie Mae,” a government secondary market government buyer focused on low-cost housing

GRADUATED LOAN: lower payments leading to negative amortization (unpaid interest is added on to the principal owed)

GRANTEE: one receiving title to real estate from grantor

GRANTOR: one who transfers title to real estate to the grantee

GROSS LEASE: owner receives rent and pays out expenses.

NET LEASE: owner receives rent and tenant also pays out expenses

GROSS LIVING AREA: square foot of living space, measured from outside the building, above ground, enclosed, heated, habitable space

HABENDUM CLAUSE: “to have and to hold” clause in deed for life estate

HEREDITAMENTS: inheritable property, real and personal

HIGHEST AND BEST USE: use of a property that produces greatest net income

HOMESTEAD LAWS: protects home from forced sale to satisfy unsecured debts

HUD: Department of Housing and Urban Development

HYPOTHECATE: to give something as security without giving up possession such as to mortgage a property

IMPLIED: people act as if it exists (as in authority)

IMPOUNDS: reserves such as tax and insurance payments made to and held by mortgagee

INFRASTRUCTURE: network of public facilities of an area

INGRESS/EGRESS: entering and leaving

INJUNCTION: court order to stop a party to a contract from doing something

IRREVOCABLE: unchangeable

INSTALLMENT SALES CONTRACT: conditional sales contract, land contract or contract for deed/land, buyer acquires “equitable title” until final payment; after delivery of deed, buyer has “legal title”

INSTRUMENT: a formal written document

INSURABLE VALUE: the value of property for insurance purposes (cost)

INTERIM FINANCING: development loan such as construction money

INTESTATE: no will or a defective will by the deceased

INVESTMENT: total value of property: down payment and loan

INVESTMENT VALUE: the value of property to a particular investor

JOINT TENANCY: two or more owners with rights of survivorship; not inheritable, most be specifically chosen

JUDGMENT: the final determination of a court of a matter presented to it

JUNIOR MORTGAGE: any mortgage after a previous mortgage

LACHES: unreasonable delay in asserting one’s rights

LEASE: rental contract for possession of realty for specified period

LEASEBACK: the purchase of property and the leasing of it back to seller

LEASEHOLD: the interest which a lessee has in realty

LEGAL DESCRIPTION: method of describing property ascertained by survey

LEVERAGE: maximum use of borrowed money and minimum use of cash in the purchase of realty (loan to value ratio)

LICENSE TO SELL: Court order to sell property out of probate

LIEN: a money 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

LIMITED LIABILITY COMPANY: a legal person created by state law owned by one or more

members: same licensing rules apply as with corporation

LIQUIDATION VALUE: value of property in a forced sale such as foreclosure

LIQUIDITY: a person’s cash assets

LIS PENDENS: a recorded notice by plaintiff of pending litigation affecting title to property; not a lien, but a “cloud on title”; ceases when action is dismissed or when judgment is final and recorded.

LISTING: an agreement between principal and agent to provide services

LITIGATION: a contest in court of law between two parties

LITTORAL: use and ownership of shoreline of large body of water

LOT LINE: legal line separating a lot from another lot

MARKET PRICE: the price property actually sells for

MARKET VALUE: price for which realty can be sold on open market if there is a

willing seller and buyer and a reasonable time to make sale negotiated at arm’s length

MARKETABLE TITLE: a title which buyer would accept, and a lender would accept as collateral

MASTER DEED: basic title document in creation of condominium; it defines individual fee units and common interests

MECHANIC’S LIEN: statutory lien for labor/material for improvement of realty

MEETING OF MINDS: an offer and acceptance; mutual assent, an agreement/contract

METES AND BOUNDS: boundaries of land described in directions and distances

MORATORIUM: action by government temporarily halting construction

MORTGAGE: a legal instrument conveying conditional title to lender in order to secure the repayment of the debt described in Note

MORTGAGE BROKER: a party who, for a fee, brings together lender and borrower

MORTGAGE COMMITMENT: a written notice from lender promising a future loan under certain conditions and terms

MORTGAGEE: the lender

MORTGAGEE-IN- POSSESSION: lender takes possession of property from defaulted party and collects income from lessees pending foreclosure

MORTGAGOR: the borrower

MUNICIPAL LIEN CERTIFICATE: document confirming status of taxes, water, sewerage, betterments etc.; a required document at closing of title

NATIONAL ASSOC. OF REALTORS (NAR): a national private trade association with state and local chapters whose members are called REALTORS

NECESSARIES: essentials of existence: food, clothing, shelter

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

NET OPERATING INCOME: (N.O.I.); effective gross income minus operating expenses

NET WORTH: value left after liabilities are deducted from assets

NOMINAL CONSIDERATION: something of value bearing no relation to real value

NONCONFORMING USE: grandfathered use in existence prior to current zoning

NOTE: promissory instrument given by borrower to lender as evidence of debt; I.O.U.

NOVATION: substitution of old obligation with a new one

OBSOLESCENCE: loss of value from any source other than wear and tear

OFFER: statement of intent by offeror; ACCEPTANCE: statement of intent to accept offer by offeree

OPEN-END MORTGAGE: a line of credit

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

OPTION: a contract between owner and potential buyer or lessee to buy or lease in future at specified terms

ORDINANCE: law by local government body

OVERABDUNANCE: too much supply given the demand

OVERT: openly known

OWNERSHIP: title; an estate in realty to the exclusion of others

PACKAGE MORTGAGE: a loan secured by both real and personal property

PAROL: oral, as distinguished from written

PARTITION: a legal action to divide realty co-owned

PARTY WALL: wall or fence on common boundary for benefit of both

parties: both parties are responsible for maintenance

PERCENTAGE LEASE: a lease in which rental is based on a percentage of gross sales

PERCOLATION TEST: a soil test designed to measure rate of water absorption and drainage such as for septic systems

PERSONAL PROPERTY: moveable items not fixed to a particular location; personalty, chattel

PERSONAL REPRESENTATIVE: the term may be used to replace executor/administrator

PHYSICAL DEPRECIATION: loss in value resulting from wear and tear, deterioration

PLANNED UNIT DEVELOPMENT: high density of dwellings with maximum open spaces

PLOTTAGE VALUE: increase in the value of land by assemblage of smaller lots into one ownership; known as plottage increment.

POINTS: one-time charge by lender to increase yield on investment; paid at passing; one-point equals 1% of loan amount

PLAT: a plan or map of a parcel, such as one showing the various lots of a proposed subdivision (arrows point north)

PLAT BOOK: public record of recorded plans or maps

PLOT PLAN: a diagram showing the existing or proposed use of parcel of land. This will show improvements on land.

POINT OF BEGINNING (P.O.B.): starting and ending point in metes and bounds description

POLICE POWER: building codes and zoning ordinances

POWER OF ATTORNEY: written instrument authorizing another to act in his/her place; person given power is attorney-in-fact

PREPAYMENT PENALTY: penalty for full pay-off of loan before maturity date

PRESCRIPTION: a method of obtaining an easement by adverse use for a period of years (20), hostile to owner’s wishes

PRIMA FACIE: on first view; on the face of it; an obvious fact

PRIMARY MORTGAGE MARKET: market where loans are made directly to borrowers

PRIME RATE: lowest interest rate charged by commercial banks to most credit-worthy customers; the DISCOUNT RATE is a rate charged to these banks by Federal Reserve

PRIVATE RESTRICTION: restriction placed on realty in deed by grantor

PROBATE: processing assets after death

PROCURING CAUSE: the one who brought about the sale of the property

PROMULGATE: to publish or make known such as license law

PRORATE: term used to describe proportional adjustment of monies between seller/buyer at closing such as taxes, fuel, rents

PROSPECTUS: an advertisement and invitation to buy securities (reviewed

by the Securities and Exchange Commission (SEC)

PUBLIC RESTRICTION: government law or regulation restricting the use of realty

PURCHASE AND SALE AGREEMENT: binding written agreement whereby buyer promises to buy, and seller promises to sell; Agreement of Purchase, P&S

PURCHASE MONEY MORTGAGE (PMM): as part of purchase price, buyer gives note and mortgage 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: instrument releasing interest of grantor without liability

REAL PROPERTY: land and everything that is directly or indirectly permanently attached or affixed to the land; real estate, realty

REALITY OF CONSENT: agreement to a contract must be free from misrepresentation, fraud, undue influence, and duress.

RECIPROCITY: mutual exchange of privileges

RECONCILIATION: final step in appraising

RELICTION: gradual withdrawal of water exposing land

RESCISSION OF CONTRACT: annulling or abrogation of contract by mutual consent

RESPA: Real Estate Settlement Procedures Act. A law requiring full disclosure of closing costs to buyer and seller.

REVOCATION: a recall or cancellation

RIGHT OF WAY: right of one person to pass over estate of another; easement

RIPARIAN: rights belonging to or relating to banks of a waterway

SALES COMPARISON APPROACH: approach to value by which valuation of a property is based

on comparison with previously sold properties with similar characteristics; also known as Market Data

SATISFACTION PIECE: also known as discharge, recorded instrument which satisfies debt of mortgagor; it releases, discharges, and pays in full

SCARCITY: insufficient supply to meet demand

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

SECURITY DEPOSIT: money of tenant deposited with landlord to offset damages beyond reasonable wear and tear done by tenant

SEISIN: possession of realty with ability to convey, in warranty deeds

SEPARATE PROPERTY: property owned by married person in own right

SETBACK: distance from curb/street to where building may be erected

SEVERALTY: sole ownership; owned by one person only

SEVERANCE: property changes from real to personal.

SHARED EQUITY LOAN: in addition to making a loan, lender pays a portion of the down payment and gets a split of the equity on resale

SHERIFF’S DEED: conveys title to property sold to satisfy a judgment

SINKING FUND: money set aside to pay for replacement of improvements

SPECIAL AGENT: broker working directly for the client

SPECIFIC LIEN: a lien on a particular piece of property

SPECIFIC PER-FORMANCE: court decision ordering one party to comply with terms of contract

SQUARE FOOT: the front foot measurement multiplied by the depth.

STATUTE: act of legislature

STATUTE OF FRAUDS: law requiring all realty purchase agreements to be in writing in order to be enforceable in a court of law

STEERING: choosing property to show prospective buyers/renters based on protected classes

STIGMATIZED PROPERTY: psychologically impacted property due to death-related event, murder, suicide, haunted house

SUBAGENT: agent working indirectly for client (salesperson/co-broker)

SUBDIVISION: act of land legally divided into two or more separate lots

SUBORDINATION: willingness of lien holder such as a junior mortgage, to accept a position behind another later lien holder

SUBPRIME: riskier loan due to borrower’s poor credit

SUBSTITUTION: when two or more like properties are for sale, the one with the lowest price attracts the greatest demand

SURETY: one who guarantees performance of another

SURVEY: act of establishing legal description of property

SWING LOAN: short term loan so buyer can purchase new property based on equity in property buyer is selling; a/k/a bridge loan.

SYNDICATION: joining of mutually interested parties to accomplish a joint venture by pooling their money

TAKING: a tax lien recorded when property taxes are delinquent

TAX RATE: rate multiplied by assessment to produce annual taxes

TAX SALE: sale of property by public auction for overdue property taxes

TAX TITLE: title or ownership acquired at tax sale

TENANCY AT SUFFERANCE: tenant remains in possession after lease expires and without owner’s permission

TENANCY AT WILL: rental subject to termination at will of either landlord or tenant

TENANCY BY THE ENTIRETY: form of joint tenancy reserved for married couples – a choice

TENANCY IN COMMON: holding of title by two or more people, the least restrictive, most flexible form of co-ownership, automatic

TESTATOR: one who makes will of last testament

TIME IS OF ESSENCE: exact and punctual performance of contract

TIME SHARE: vacation property made more affordable by limiting possessory rights

TITLE INSURANCE:  insurance against loss resulting from defect in title

TITLE REFERENCE: book/page number, method of cataloging at registry of deeds

TITLE SEARCH: examination of registry records to determine chain of title

TOPOGRAPHY: nature or contour of land surface

TORRENS SYSTEM: procedure of registering titles in land court

TRADE FIXTURES: personal property used in business and affixed to realty; necessary for trade and are removed by tenant

TRANSFERABILITY: a seller has to be able to transfer title

UCC: Uniform Commercial Code – laws governing commercial transactions and establishing claims for collateral.

UNEARNED INCREMENT: Increase in value, not anticipated by owner, due primarily to outside forces. Example: population growth and inflation

UNILATERAL CONTRACT: one party promises to act upon the completed act of the other

UNIMPROVED PROPERTY: land without buildings or other improvements, raw land

URAR: Uniform Residential Appraisal Report. method of reporting a residential appraisal; required by Fannie Mae

USPAP: Uniform Standards of Professional Appraisal Practice – a code of conduct in performing appraisals

UTILITY: the ability to satisfy desires and expectations

USURY: charging higher rate of interest than law allows

VARIABLE INTEREST: loan originates at one rate but fluctuates according to an agreed index; known as adjustable rate mortgage (ARM)

VARIANCE: permission from local government to develop land in a manner contrary to existing zoning laws due to hardship

WARRANTY DEED: Grantor has liability for third-party claims

WEIGHTED AVERAGING: math technique where one or more numbers has greater impact than others on final number

WRAPAROUND MORTGAGE: a mortgage that includes a first and second mortgage instead of having two different ones

ZONING: local government regulations relating to the use of land

If you have considered investing with a private equity investment firm, please create your investor profile with The Fortes Company at www.investwithfortes.com.

Disclaimer: The views and opinions expressed in this blog are provided for informational purposes only, and should not be interpreted as an offer to buy or sell any investment or course of action.

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