Real Estate Term Glossary

A-Z

Abstract of Title: A summary or history of the title of a property, including all recorded documents affecting the title.
Abut: To border or touch upon, usually referring to properties that share a common boundary.
Accessory Dwelling Unit (ADU): A secondary residential unit located on the same property as a primary residential unit, often used for rental income or as an additional living space.
Acquisition: The process of acquiring or purchasing real estate property.
Ad Valorem Tax: Property tax based on the assessed value of real property.
Adjustable-Rate Mortgage (ARM): A mortgage loan with an interest rate that may change periodically based on market conditions, typically with an initial fixed-rate period followed by adjustable-rate periods.
Addendum: An additional document added to a contract to modify, clarify, or supplement its terms and conditions.
Agent: A licensed individual or entity authorized to act on behalf of another party in real estate transactions, such as a real estate agent or broker.
Agreement of Sale: A legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate transaction, including the purchase price and closing date.
Air Rights: The rights to use or control the space above a property, often for purposes such as construction or airspace development.
Amortization: The process of gradually paying off a debt, such as a mortgage loan, through regular payments that include both principal and interest.
Annual Percentage Rate (APR): The annual cost of borrowing money expressed as a percentage, including interest and certain fees associated with the loan.
Appraisal: An evaluation or assessment of the value of real property, typically conducted by a licensed appraiser using established appraisal methods and criteria.
Appraisal District: A governmental entity responsible for assessing and valuing real property for property tax purposes within a specific jurisdiction.
Appreciation: An increase in the value of real property over time, often due to factors such as market demand, improvements, or inflation.
Arrears: Payment that is past due or overdue, often referring to missed mortgage payments or unpaid property taxes.
Assessment: The process of determining the value of real property for property tax purposes by a taxing authority or assessment district.
Assessed Value: The value assigned to real property for property tax purposes by a taxing authority, usually based on the property's market value or an assessment ratio.
Assignee: The party to whom rights or interests in a contract or property are transferred, often in the context of an assignment agreement.
Assignor: The party who transfers rights or interests in a contract or property to another party, often in the context of an assignment agreement.
Assumption of Mortgage: The act of assuming responsibility for an existing mortgage loan and becoming liable for its repayment, often in connection with the sale or transfer of real property.
Attorney-in-Fact: A person or entity authorized to act on behalf of another individual or entity, typically granted through a power of attorney document.
Balloon Mortgage: A type of mortgage loan that requires a large, lump-sum payment (the balloon payment) at the end of the loan term, typically after a series of smaller periodic payments.
Balloon Payment: A large, lump-sum payment due at the end of a loan term, often associated with balloon mortgages or certain types of financing arrangements.
Bankruptcy: A legal proceeding in which an individual or entity declares inability to pay debts and seeks relief from creditors, often involving the liquidation of assets or reorganization of finances.
Baseboards: Trim or molding installed at the base of walls to cover the joint between the floor and wall, often decorative in nature and used for aesthetic purposes.
Basis Point: A unit of measure used to express changes in interest rates or yields, equal to one one-hundredth of a percentage point (0.01%).
Bill of Sale: A legal document that transfers ownership of personal property from one party to another, typically used to document the sale of goods or chattels.
Biweekly Mortgage: A mortgage payment plan in which borrowers make payments every two weeks instead of once a month, resulting in accelerated repayment and interest savings over time.
Blue Laws: Laws or regulations that restrict certain activities, such as retail sales or business operations, on Sundays or other designated days.
Board of Realtors: An organization comprised of licensed real estate professionals (realtors) that provides services, support, and advocacy for its members, often affiliated with the National Association of Realtors (NAR).
Broker: A licensed real estate professional who acts as an intermediary between buyers and sellers in real estate transactions, often representing one or both parties and earning a commission on completed transactions.
Brokerage Fee: Compensation paid to a real estate broker or brokerage firm for their services in facilitating a real estate transaction, typically calculated as a percentage of the sale price.
Buyer: An individual or entity purchasing real estate property, often with the intention of occupying the property as a residence or investment.
Buyer's Agent: A real estate agent who represents the buyer in a real estate transaction, advocating for the buyer's interests and assisting with property search, negotiation, and closing.
Buyer's Market: A real estate market condition characterized by an oversupply of available properties relative to buyer demand, often resulting in favorable conditions for buyers, such as lower prices and more negotiating power.
Cap Rate (Capitalization Rate): A measure used to evaluate the return
Capital Expenditures (CapEx): Expenses incurred by real estate investors or property owners for the acquisition, improvement, or maintenance of a property, typically categorized as long-term investments.
Capital Gain: The profit earned from the sale of an investment or asset, such as real estate, calculated as the difference between the sale price and the purchase price.
Capital Improvement: Any significant alteration or enhancement made to a property that increases its value or extends its useful life, often requiring a substantial investment of capital.
Cash Flow: The net income generated by a real estate investment property after deducting operating expenses, mortgage payments, and other costs from rental income or revenue.
Certificate of Occupancy (CO): A document issued by local government authorities certifying that a newly constructed or renovated property complies with building codes, zoning regulations, and other requirements, allowing for occupancy or use.
Closing: The final stage of a real estate transaction where ownership of the property is transferred from the seller to the buyer, typically accompanied by the signing of legal documents and the exchange of funds.
Closing Costs: Expenses incurred by buyers and sellers during the closing process of a real estate transaction, including fees for title insurance, loan origination, appraisal, and attorney services.
Closing Statement: A document prepared by the closing agent or escrow officer summarizing the financial details and allocation of funds involved in a real estate transaction, including closing costs, prorated expenses, and credits to the buyer and seller.
Collateral: Property or assets pledged as security for a loan or mortgage, providing assurance to the lender that the borrower will repay the debt according to the terms of the agreement.
Commercial Real Estate: Real property used for business or commercial purposes, such as office buildings, retail centers, industrial facilities, and multifamily residential properties with five or more units.
Commission: A fee paid to real estate agents or brokers as compensation for their services in facilitating the purchase, sale, or lease of real property, typically calculated as a percentage of the transaction price.
Common Area: Shared or communal spaces within a multi-unit residential or commercial property that are owned and maintained collectively by all owners or tenants, such as lobbies, hallways, parking lots, and recreational facilities.
Comparable Sales: Recent sales of similar properties used by appraisers and real estate professionals to determine the market value of a subject property, often referred to as "comps" or "comparable properties."
Condemnation: The legal process by which a government entity exercises its power of eminent domain to acquire private property for public use, typically through fair compensation to the property owner.
Condo Association: A governing body or organization comprised of condominium unit owners that manages and governs the affairs of a condominium development, including maintenance, repairs, and enforcement of rules and regulations.
Condominium: A type of real estate ownership in which individuals own individual units within a multi-unit residential building or development, along with a shared interest in common areas and amenities.
Conditional Offer: A purchase offer made by a buyer that is contingent upon certain conditions being met, such as obtaining financing, completing a home inspection, or selling an existing property.
Conforming Loan: A mortgage loan that conforms to the underwriting guidelines and loan limits set by government-sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac, making it eligible for purchase or guarantee on the secondary mortgage market.
Contingency: A condition or provision included in a real estate contract that must be satisfied before the contract becomes legally binding, such as obtaining financing, appraising at a certain value, or completing a home inspection.
Contract for Deed: A real estate financing arrangement in which the seller provides financing to the buyer, who agrees to make monthly payments until the purchase price is paid in full, at which point the seller transfers title to the buyer.
Conventional Loan: A mortgage loan that is not insured or guaranteed by a government agency, such as the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA), often requiring higher credit scores and down payments.
Conveyance: The legal transfer of title or ownership of real property from one party to another, typically accomplished through a deed or other written instrument.
Counteroffer: A response made by one party to a real estate offer that modifies or rejects certain terms and conditions of the original offer, initiating further negotiation between the parties.
Covenant: A legal restriction or obligation imposed on real property by a deed, contract, or zoning ordinance, dictating how the property may be used or developed, such as architectural standards, land use restrictions, or maintenance requirements.
Credit Report: A detailed record of an individual's credit history and financial transactions, including payment history, outstanding debts, and credit inquiries, used by lenders and creditors to assess creditworthiness and determine loan eligibility.
Curb Appeal: The attractiveness or visual appeal of a property as viewed from the street or curb, often influenced by landscaping, exterior features, and architectural design, impacting a property's marketability and perceived value.
Days on Market (DOM): The number of days a property has been listed for sale on the market, used as a measure of market activity, pricing strategy, and property desirability.
Deed: A legal document that transfers ownership of real property from one party to another, typically containing a description of the property, names of the parties involved, and any conditions or restrictions on the transfer of title.
Default: Failure to fulfill or perform an obligation or duty, such as making timely mortgage payments, resulting in legal consequences or enforcement actions by lenders or creditors.
Deferred Maintenance: Delayed or postponed upkeep, repairs, or improvements to a property, often resulting in deterioration, reduced property value, or increased repair costs over time.
Delinquency: Failure to make timely payments on a debt or financial obligation, such as mortgage payments, resulting in penalties, fees, and negative effects on credit scores.
Depreciation: A decrease in the value of real property over time due to factors such as physical wear and tear, functional obsolescence, economic conditions, or changes in market demand.
Designated Agency: A real estate agency relationship in which specific agents within a brokerage firm are assigned to represent the interests of individual buyers and sellers, ensuring confidentiality and avoiding conflicts of interest.
Disclosure: The act of revealing or providing information about known defects, hazards, or material facts related to a property to prospective buyers or tenants, often required by law or ethical standards.
Discount Points: Upfront fees paid by borrowers to lenders at closing in exchange for a lower interest rate on a mortgage loan, expressed as a percentage of the loan amount and used to "buy down" the interest rate.
Due Diligence: The process of conducting thorough investigation, research, and analysis of a property, its condition, and its legal and financial status before entering into a real estate transaction, often performed by buyers, sellers, and investors to assess risk and make informed decisions.
Duplex: A residential building containing two separate living units or apartments, typically side-by-side or stacked vertically, each with its own entrance, utilities, and amenities.
Earnest Money: A deposit made by a buyer to demonstrate seriousness and good faith in entering into a real estate transaction, often held in escrow and applied towards the purchase price or forfeited if the buyer fails to complete the purchase.
Easement: A legal right or interest granted by a property owner to another party, allowing the latter to use the property for a specific purpose, such as access, utilities, or conservation, without possessing ownership or possession.
Eaves: The overhanging lower edge of a roof that extends beyond the exterior walls of a building, providing protection from the elements and contributing to architectural style and aesthetics.
Effective Gross Income (EGI): The total income generated by a real estate investment property before deducting operating expenses, vacancies, and allowances for collection losses, expressed as gross rental income minus vacancy losses and credit losses.
Encroachment: The unauthorized intrusion or invasion of one property onto another property, such as a fence, building, or tree extending beyond the property line, often resulting in disputes between neighboring property owners.
Encumbrance: Any claim, lien, restriction, or limitation on the title of real property that may affect its value, transferability, or use, such as mortgages, easements, judgments, or restrictive covenants.
Equity: The difference between the fair market value of a property and the outstanding balance of mortgage debt or other liens secured by the property, representing the owner's financial interest or ownership stake in the property.
Escalation Clause: A provision in a lease or contract that allows for periodic increases in rent or prices over time, often tied to changes in inflation, operating expenses, or market conditions, providing protection against rising costs.
Escrow: The process of placing funds, documents, or assets in the custody of a neutral third party (escrow agent or escrow company) until specified conditions or requirements of a real estate transaction are met, at which point the escrowed items are released and the transaction is completed.
Escrow Agent: A neutral third party (individual or company) responsible for holding funds, documents, or assets in escrow and ensuring compliance with the terms and conditions of a real estate transaction, including the disbursement of funds and execution of closing documents.
Estate: The total property, assets, and liabilities of an individual or entity, including real estate, personal property, financial accounts, and debts, often subject to probate or estate planning.
Eviction: The legal process by which a landlord removes a tenant from leased premises for nonpayment of rent, breach of lease terms, or other violations of rental agreements, typically initiated through court proceedings and enforcement of eviction orders.
Exclusive Agency Listing: A real estate listing agreement between a seller and a real estate broker or agent, granting the broker exclusive rights to market and sell the property for a specified period, while reserving the seller's right to sell the property independently and avoid paying a commission if the property is sold to a buyer not represented by the broker.
Exclusive Right to Sell Listing: A real estate listing agreement between a seller and a real estate broker or agent, granting the broker exclusive rights to market and sell the property for a specified period, entitling the broker to a commission regardless of who sells the property during the listing period, providing maximum incentive for the broker to actively promote and sell the property.
Executor: An individual appointed by a testator (deceased person) in a will to carry out the provisions and instructions of the will, including the distribution of assets, payment of debts, and settlement of the estate, often subject to probate court oversight and approval.
Expiration Date: The date specified in a real estate listing agreement or offer to purchase indicating the end of the agreement or validity period, after which the parties are no longer bound by its terms and conditions, requiring renewal, extension, or termination of the agreement.
Fair Housing Act: Federal legislation enacted to prohibit discrimination in housing on the basis of race, color, religion, national origin, sex, familial status, or disability, ensuring equal access to housing opportunities and promoting fair treatment for all individuals and families.
Fair Market Value: The price at which a willing buyer and a willing seller would agree to transact for a property in an open and competitive market, assuming both parties are knowledgeable, informed, and acting in their own best interests, often determined by appraisal or market analysis.
Federal Housing Administration (FHA): A federal agency within the U.S. Department of Housing and Urban Development (HUD) responsible for insuring mortgage loans made by approved lenders to eligible borrowers, particularly those with low down payments, low credit scores, or limited income, to promote homeownership and provide access to affordable financing.
Fee Simple: The highest and most complete form of ownership interest in real property, entitling the owner to exclusive rights of possession, use, enjoyment, and disposition of the property, subject only to applicable laws, regulations, and restrictions.
Fiduciary: A legal or ethical relationship of trust and confidence in which one party (fiduciary) owes a duty to act in the best interests of another party (beneficiary) and avoid conflicts of interest, such as the fiduciary duty owed by real estate agents to their clients, requiring loyalty, honesty, and disclosure.
Financing Contingency: A provision in a real estate purchase contract that makes the buyer's obligation to complete the transaction contingent upon obtaining financing or mortgage approval within a specified period, providing protection against financial loss or liability if financing cannot be obtained.
Fixed-Rate Mortgage: A mortgage loan with an interest rate that remains constant or fixed for the entire term of the loan, providing predictable monthly payments and protection against interest rate fluctuations or market volatility.
Fixer-Upper: A property in need of repairs, renovations, or improvements, often sold at a discounted price or below market value due to its condition, requiring investment of time, money, and effort to restore or enhance its value.
Fixture: An item of personal property that has become permanently attached or affixed to real property in such a way that it is considered part of the property and passes with the conveyance of title, such as built-in appliances, light fixtures, or landscaping.
Flood Insurance: Insurance coverage designed to protect property owners and lenders against losses resulting from flooding or flood-related damage, often required by lenders for properties located in designated flood hazard areas or high-risk flood zones.
Forbearance: The temporary suspension or reduction of mortgage payments by a lender or servicer to assist borrowers facing financial hardship or temporary difficulties in meeting their repayment obligations, often granted in response to extenuating circumstances such as job loss, illness, or natural disaster.
Foreclosure: The legal process by which a lender or mortgage holder repossesses and sells real property secured by a mortgage or deed of trust due to borrower default or nonpayment, typically initiated through court proceedings and foreclosure auctions.
Freddie Mac (Federal Home Loan Mortgage Corporation): A government-sponsored enterprise (GSE) chartered by Congress to provide liquidity, stability, and affordability to the U.S. mortgage market by purchasing and guaranteeing mortgage loans originated by approved lenders, particularly conforming loans eligible for purchase on the secondary mortgage market.
FSBO (For Sale By Owner): A real estate transaction in which the seller chooses to sell their property without the assistance of a real estate agent or broker, often to save on commission fees or maintain greater control over the sales process, requiring the seller to handle marketing, negotiations, and paperwork independently.
Full Disclosure: The legal and ethical obligation of real estate agents, sellers, and other parties involved in a real estate transaction to provide accurate, complete, and timely information about known defects, hazards, or material facts related to a property, ensuring transparency, fairness, and informed decision-making by buyers and tenants.
Fully Amortizing Mortgage: A mortgage loan with a fixed interest rate and regular payments that fully amortize or repay the loan over the term of the loan, typically resulting in the gradual reduction of principal and interest until the loan is paid in full, providing predictability and stability for borrowers.
Functional Obsolescence: A decrease in the value or desirability of real property due to factors such as outdated design, inefficient layout, or lack of modern amenities, often resulting in decreased marketability or difficulty in attracting buyers or tenants.
Garage Apartment: A residential unit located above or adjacent to a garage, typically offering separate living quarters, amenities, and entrances, often used as rental income or additional living space by homeowners.
Garnishment: A legal process by which a creditor obtains a court order to seize or withhold funds from a debtor's wages, bank accounts, or other assets to satisfy a debt or judgment, often used to enforce child support payments, tax obligations, or court-awarded judgments.
General Warranty Deed: A type of deed used to convey real property from a seller (grantor) to a buyer (grantee), containing warranties or assurances that the seller has clear title to the property, has the right to sell it, and will defend the buyer against any claims or defects in title arising from prior ownership.
Graduated Payment Mortgage (GPM): A type of mortgage loan with initial payments that are lower than standard amortizing payments but increase gradually over time, often allowing borrowers to qualify for higher loan amounts or afford larger properties by deferring a portion of the principal and interest payments to later years.
Certainly! Let's continue defining each term:
1. Capital Expenditures (CapEx): Expenses incurred by real estate investors or property owners for the acquisition, improvement, or maintenance of a property, typically categorized as long-term investments.
2. Capital Gain: The profit earned from the sale of an investment or asset, such as real estate, calculated as the difference between the sale price and the purchase price.
3. Capital Improvement: Any significant alteration or enhancement made to a property that increases its value or extends its useful life, often requiring a substantial investment of capital.
4. Cash Flow: The net income generated by a real estate investment property after deducting operating expenses, mortgage payments, and other costs from rental income or revenue.
5. Certificate of Occupancy (CO): A document issued by local government authorities certifying that a newly constructed or renovated property complies with building codes, zoning regulations, and other requirements, allowing for occupancy or use.
6. Closing: The final stage of a real estate transaction where ownership of the property is transferred from the seller to the buyer, typically accompanied by the signing of legal documents and the exchange of funds.
7. Closing Costs: Expenses incurred by buyers and sellers during the closing process of a real estate transaction, including fees for title insurance, loan origination, appraisal, and attorney services.
8. Closing Statement: A document prepared by the closing agent or escrow officer summarizing the financial details and allocation of funds involved in a real estate transaction, including closing costs, prorated expenses, and credits to the buyer and seller.
9. Collateral: Property or assets pledged as security for a loan or mortgage, providing assurance to the lender that the borrower will repay the debt according to the terms of the agreement.
10. Commercial Real Estate: Real property used for business or commercial purposes, such as office buildings, retail centers, industrial facilities, and multifamily residential properties with five or more units.
11. Commission: A fee paid to real estate agents or brokers as compensation for their services in facilitating the purchase, sale, or lease of real property, typically calculated as a percentage of the transaction price.
12. Common Area: Shared or communal spaces within a multi-unit residential or commercial property that are owned and maintained collectively by all owners or tenants, such as lobbies, hallways, parking lots, and recreational facilities.
13. Comparable Sales: Recent sales of similar properties used by appraisers and real estate professionals to determine the market value of a subject property, often referred to as "comps" or "comparable properties."
14. Condemnation: The legal process by which a government entity exercises its power of eminent domain to acquire private property for public use, typically through fair compensation to the property owner.
15. Condo Association: A governing body or organization comprised of condominium unit owners that manages and governs the affairs of a condominium development, including maintenance, repairs, and enforcement of rules and regulations.
16. Condominium: A type of real estate ownership in which individuals own individual units within a multi-unit residential building or development, along with a shared interest in common areas and amenities.
17. Conditional Offer: A purchase offer made by a buyer that is contingent upon certain conditions being met, such as obtaining financing, completing a home inspection, or selling an existing property.
18. Conforming Loan: A mortgage loan that conforms to the underwriting guidelines and loan limits set by government-sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac, making it eligible for purchase or guarantee on the secondary mortgage market.
19. Contingency: A condition or provision included in a real estate contract that must be satisfied before the contract becomes legally binding, such as obtaining financing, appraising at a certain value, or completing a home inspection.
20. Contract for Deed: A real estate financing arrangement in which the seller provides financing to the buyer, who agrees to make monthly payments until the purchase price is paid in full, at which point the seller transfers title to the buyer.
21. Conventional Loan: A mortgage loan that is not insured or guaranteed by a government agency, such as the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA), often requiring higher credit scores and down payments.
22. Conveyance: The legal transfer of title or ownership of real property from one party to another, typically accomplished through a deed or other written instrument.
23. Counteroffer: A response made by one party to a real estate offer that modifies or rejects certain terms and conditions of the original offer, initiating further negotiation between the parties.
24. Covenant: A legal restriction or obligation imposed on real property by a deed, contract, or zoning ordinance, dictating how the property may be used or developed, such as architectural standards, land use restrictions, or maintenance requirements.
25. Credit Report: A detailed record of an individual's credit history and financial transactions, including payment history, outstanding debts, and credit inquiries, used by lenders and creditors to assess creditworthiness and determine loan eligibility.
26. Curb Appeal: The attractiveness or visual appeal of a property as viewed from the street or curb, often influenced by landscaping, exterior features, and architectural design, impacting a property's marketability and perceived value.
27. Days on Market (DOM): The number of days a property has been listed for sale on the market, used as a measure of market activity, pricing strategy, and property desirability.
28. Deed: A legal document that transfers ownership of real property from one party to another, typically containing a description of the property, names of the parties involved, and any conditions or restrictions on the transfer of title.
29. Default: Failure to fulfill or perform an obligation or duty, such as making timely mortgage payments, resulting in legal consequences or enforcement actions by lenders or creditors.
30. Deferred Maintenance: Delayed or postponed upkeep, repairs, or improvements to a property, often resulting in deterioration, reduced property value, or increased repair costs over time.
31. Delinquency: Failure to make timely payments on a debt or financial obligation, such as mortgage payments, resulting in penalties, fees, and negative effects on credit scores.
32. Depreciation: A decrease in the value of real property over time due to factors such as physical wear and tear, functional obsolescence, economic conditions, or changes in market demand.
33. Designated Agency: A real estate agency relationship in which specific agents within a brokerage firm are assigned to represent the interests of individual buyers and sellers, ensuring confidentiality and avoiding conflicts of interest.
34. Disclosure: The act of revealing or providing information about known defects, hazards, or material facts related to a property to prospective buyers or tenants, often required by law or ethical standards.
35. Discount Points: Upfront fees paid by borrowers to lenders at closing in exchange for a lower interest rate on a mortgage loan, expressed as a percentage of the loan amount and used to "buy down" the interest rate.
36. Due Diligence: The process of conducting thorough investigation, research, and analysis of a property, its condition, and its legal and financial status before entering into a real estate transaction, often performed by buyers, sellers, and investors to assess risk and make informed decisions.
37. Duplex: A residential building containing two separate living units or apartments, typically side-by-side or stacked vertically, each with its own entrance, utilities, and amenities.
38. Earnest Money: A deposit made by a buyer to demonstrate seriousness and good faith in entering into a real estate transaction, often held in escrow and applied towards the purchase price or forfeited if the buyer fails to complete the purchase.
39. Easement: A legal right or interest granted by a property owner to another party, allowing the latter to use the property for a specific purpose, such as access, utilities, or conservation, without possessing ownership or possession.
40. Eaves: The overhanging lower edge of a roof that extends beyond the exterior walls of a building, providing protection from the elements and contributing to architectural style and aesthetics.
41. Effective Gross Income (EGI): The total income generated by a real estate investment property before deducting operating expenses, vacancies, and allowances for collection losses, expressed as gross rental income minus vacancy losses and credit losses.
42. Encroachment: The unauthorized intrusion or invasion of one property onto another property, such as a fence, building, or tree extending beyond the property line, often resulting in disputes between neighboring property owners.
43. Encumbrance: Any claim, lien, restriction, or limitation on the title of real property that may affect its value, transferability, or use, such as mortgages, easements, judgments, or restrictive covenants.
44. Equity: The difference between the fair market value of a property and the outstanding balance of mortgage debt or other liens secured by the property, representing the owner's financial interest or ownership stake in the property.
45. Escalation Clause: A provision in a lease or contract that allows for periodic increases in rent or prices over time, often tied to changes in inflation, operating expenses, or market conditions, providing protection against rising costs.
46. Escrow: The process of placing funds, documents, or assets in the custody of a neutral third party (escrow agent or escrow company) until specified conditions or requirements of a real estate transaction are met, at which point the escrowed items are released and the transaction is completed.
47. Escrow Agent: A neutral third party (individual or company) responsible for holding funds, documents, or assets in escrow and ensuring compliance with the terms and conditions of a real estate transaction, including the disbursement of funds and execution of closing documents.
48. Estate: The total property, assets, and liabilities of an individual or entity, including real estate, personal property, financial accounts, and debts, often subject to probate or estate planning.
49. Eviction: The legal process by which a landlord removes a tenant from leased premises for nonpayment of rent, breach of lease terms, or other violations of rental agreements, typically initiated through court proceedings and enforcement of eviction orders.
50. Exclusive Agency Listing: A real estate listing agreement between a seller and a real estate broker or agent, granting the broker exclusive rights to market and sell the property for a specified period, while reserving the seller's right to sell the property independently and avoid paying a commission if the property is sold to a buyer not represented by the broker.
51. Exclusive Right to Sell Listing: A real estate listing agreement between a seller and a real estate broker or agent, granting the broker exclusive rights to market and sell the property for a specified period, entitling the broker to a commission regardless of who sells the property during the listing period, providing maximum incentive for the broker to actively promote and sell the property.
52. Executor: An individual appointed by a testator (deceased person) in a will to carry out the provisions and instructions of the will, including the distribution of assets, payment of debts, and settlement of the estate, often subject to probate court oversight and approval.
53. Expiration Date: The date specified in a real estate listing agreement or offer to purchase indicating the end of the agreement or validity period, after which the parties are no longer bound by its terms and conditions, requiring renewal, extension, or termination of the agreement.
54. Fair Housing Act: Federal legislation enacted to prohibit discrimination in housing on the basis of race, color, religion, national origin, sex, familial status, or disability, ensuring equal access to housing opportunities and promoting fair treatment for all individuals and families.
55. Fair Market Value: The price at which a willing buyer and a willing seller would agree to transact for a property in an open and competitive market, assuming both parties are knowledgeable, informed, and acting in their own best interests, often determined by appraisal or market analysis.
56. Federal Housing Administration (FHA): A federal agency within the U.S. Department of Housing and Urban Development (HUD) responsible for insuring mortgage loans made by approved lenders to eligible borrowers, particularly those with low down payments, low credit scores, or limited income, to promote homeownership and provide access to affordable financing.
57. Fee Simple: The highest and most complete form of ownership interest in real property, entitling the owner to exclusive rights of possession, use, enjoyment, and disposition of the property, subject only to applicable laws, regulations, and restrictions.
58. Fiduciary: A legal or ethical relationship of trust and confidence in which one party (fiduciary) owes a duty to act in the best interests of another party (beneficiary) and avoid conflicts of interest, such as the fiduciary duty owed by real estate agents to their clients, requiring loyalty, honesty, and disclosure.
59. Financing Contingency: A provision in a real estate purchase contract that makes the buyer's obligation to complete the transaction contingent upon obtaining financing or mortgage approval within a specified period, providing protection against financial loss or liability if financing cannot be obtained.
60. Fixed-Rate Mortgage: A mortgage loan with an interest rate that remains constant or fixed for the entire term of the loan, providing predictable monthly payments and protection against interest rate fluctuations or market volatility.
61. Fixer-Upper: A property in need of repairs, renovations, or improvements, often sold at a discounted price or below market value due to its condition, requiring investment of time, money, and effort to restore or enhance its value.
62. Fixture: An item of personal property that has become permanently attached or affixed to real property in such a way that it is considered part of the property and passes with the conveyance of title, such as built-in appliances, light fixtures, or landscaping.
63. Flood Insurance: Insurance coverage designed to protect property owners and lenders against losses resulting from flooding or flood-related damage, often required by lenders for properties located in designated flood hazard areas or high-risk flood zones.
64. Forbearance: The temporary suspension or reduction of mortgage payments by a lender or servicer to assist borrowers facing financial hardship or temporary difficulties in meeting their repayment obligations, often granted in response to extenuating circumstances such as job loss, illness, or natural disaster.
65. Foreclosure: The legal process by which a lender or mortgage holder repossesses and sells real property secured by a mortgage or deed of trust due to borrower default or nonpayment, typically initiated through court proceedings and foreclosure auctions.
66. Freddie Mac (Federal Home Loan Mortgage Corporation): A government-sponsored enterprise (GSE) chartered by Congress to provide liquidity, stability, and affordability to the U.S. mortgage market by purchasing and guaranteeing mortgage loans originated by approved lenders, particularly conforming loans eligible for purchase on the secondary mortgage market.
67. FSBO (For Sale By Owner): A real estate transaction in which the seller chooses to sell their property without the assistance of a real estate agent or broker, often to save on commission fees or maintain greater control over the sales process, requiring the seller to handle marketing, negotiations, and paperwork independently.
68. Full Disclosure: The legal and ethical obligation of real estate agents, sellers, and other parties involved in a real estate transaction to provide accurate, complete, and timely information about known defects, hazards, or material facts related to a property, ensuring transparency, fairness, and informed decision-making by buyers and tenants.
69. Fully Amortizing Mortgage: A mortgage loan with a fixed interest rate and regular payments that fully amortize or repay the loan over the term of the loan, typically resulting in the gradual reduction of principal and interest until the loan is paid in full, providing predictability and stability for borrowers.
70. Functional Obsolescence: A decrease in the value or desirability of real property due to factors such as outdated design, inefficient layout, or lack of modern amenities, often resulting in decreased marketability or difficulty in attracting buyers or tenants.
71. Garage Apartment: A residential unit located above or adjacent to a garage, typically offering separate living quarters, amenities, and entrances, often used as rental income or additional living space by homeowners.
72. Garnishment: A legal process by which a creditor obtains a court order to seize or withhold funds from a debtor's wages, bank accounts, or other assets to satisfy a debt or judgment, often used to enforce child support payments, tax obligations, or court-awarded judgments.
73. General Warranty Deed: A type of deed used to convey real property from a seller (grantor) to a buyer (grantee), containing warranties or assurances that the seller has clear title to the property, has the right to sell it, and will defend the buyer against any claims or defects in title arising from prior ownership.
74. Graduated Payment Mortgage (GPM): A type of mortgage loan with initial payments that are lower than standard amortizing payments but increase gradually over time, often allowing borrowers to qualify for higher loan amounts or afford larger properties by deferring a portion of the principal and interest payments to later years.
75. Gross Income Multiplier (GIM): A measure used to estimate the value of income-producing real estate properties based on their gross rental income relative to their sale price or market value, calculated by dividing the property's sale price or value by its gross rental income, providing a quick and simple method for comparing investment properties.
76. Ground Lease: A long-term lease agreement in which a tenant (lessee) leases land from a landlord (lessor) for a specified period, often used for commercial or residential development purposes, with the tenant typically responsible for constructing improvements on the leased land and paying rent to the landlord for the use of the land.
77. Hazard Insurance: Insurance coverage designed to protect property owners and lenders against losses resulting from specified perils or hazards, such as fire, theft, vandalism, or natural disasters, often required by lenders as a condition of obtaining a mortgage loan or financing.
78. Home Equity Loan: A type of loan secured by the equity or ownership stake in a borrower's primary residence, allowing homeowners to borrow against the value of their home equity for purposes such as home improvements, debt consolidation, or major expenses, typically with fixed interest rates and monthly payments.
79. Home Inspection: A thorough examination and assessment of the condition, safety, and functionality of a residential property, typically conducted by a licensed home inspector or qualified professional prior to purchase or sale, to identify potential defects, hazards, or maintenance issues affecting the property.
80. Homeowners Association (HOA): A governing body or organization comprised of homeowners within a planned community, condominium development, or neighborhood association, responsible for managing and maintaining common areas, enforcing community rules and regulations, and collecting dues or assessments from members to fund shared expenses and amenities.
81. Homeowners Insurance: Insurance coverage designed to protect homeowners against financial losses resulting from property damage, liability claims, or personal injuries occurring on the property, often including coverage for dwelling replacement, personal property, liability protection, and additional living expenses.
82. Homestead Exemption: A legal provision or tax benefit that allows homeowners to reduce the taxable value of their primary residence for property tax purposes, typically by exempting a portion of the home's assessed value or providing a flat dollar amount of tax relief, providing financial relief to eligible homeowners and encouraging home ownership.
83. Housing Ratio: A financial ratio used by lenders to evaluate the affordability of a mortgage loan for a borrower, calculated by dividing the borrower's total monthly housing expenses (including mortgage payment, property taxes, insurance, and homeowners association dues) by their gross monthly income, typically expressed as a percentage and compared to acceptable thresholds or guidelines.
84. HUD (U.S. Department of Housing and Urban Development): A federal agency responsible for overseeing and administering housing and urban development programs, policies, and initiatives aimed at expanding access to affordable housing, promoting community development, and combating discrimination in housing, including the Federal Housing Administration (FHA) mortgage insurance program and fair housing enforcement.
85. HUD-1 Settlement Statement: A standardized form used in real estate transactions to itemize and disclose all financial transactions and costs associated with the purchase or sale of a property, including closing costs, loan fees, and adjustments between the buyer and seller, providing transparency and accountability in the closing process.
86. Implied Warranty: An unwritten or unspoken guarantee or assurance that a product or service will meet certain standards of quality, performance, or fitness for a particular purpose, often implied by law or custom and enforced by courts in the absence of explicit contractual terms or disclaimers.
87. Improvements: Alterations, additions, or enhancements made to real property to increase its value, utility, or appeal, such as renovations, repairs, landscaping, or infrastructure upgrades, often requiring investment of time, money, and resources by property owners or developers.
88. Income Property: Real estate investment properties acquired for the primary purpose of generating rental income or investment returns, such as residential rental properties, commercial buildings, or multifamily apartment complexes, typically purchased by investors seeking cash flow, appreciation, or portfolio diversification.
89. Index: A benchmark or reference rate used to determine the interest rate on certain adjustable-rate mortgage (ARM) loans or financial products, such as the London Interbank Offered Rate (LIBOR), Constant Maturity Treasury (CMT) rate, or Prime Rate, often adjusted periodically based on changes in market conditions or economic indicators.
90. Ingress: The legal right or permission to enter or access a property or premises, often granted by the owner or landlord to tenants, guests, or authorized individuals, typically subject to certain conditions, restrictions, or limitations imposed by lease agreements, property management policies, or applicable laws.
91. Inheritance: The transfer of property, assets, or wealth from a deceased person (decedent) to their heirs or beneficiaries through the legal process of probate or estate administration, often governed by the decedent's will or by intestate succession laws in the absence of a valid will.
92. Inspection Contingency: A provision in a real estate purchase contract that allows the buyer to conduct a professional inspection of the property within a specified period, typically to assess its condition, identify potential defects, and negotiate repairs or credits with the seller, providing protection against unforeseen issues or hidden problems.
93. Interest: The cost of borrowing money or the return earned on invested capital, expressed as a percentage of the principal amount (loan or investment) over a specified period, typically calculated as the product of the interest rate and the principal amount, influencing the total cost of loans, mortgages, and other financial products.
94. Interest Rate: The annualized percentage rate charged by lenders or financial institutions for borrowing money or extending credit to borrowers, typically expressed as a nominal rate or annual percentage rate (APR) and determined by factors such as market conditions, credit risk, inflation expectations, and monetary policy.
95. Intestate: The legal status of a deceased person who dies without a valid will or testamentary document, resulting in the distribution of their estate according to intestate succession laws or statutes, typically prioritizing surviving spouses, children, and other close relatives as heirs or beneficiaries.
96. Investment Property: Real estate acquired for the primary purpose of generating income, profits, or investment returns through rental income, appreciation, or resale, often distinguished from owner-occupied properties or personal residences by its income-producing potential, capital appreciation, or tax benefits.
97. Joint Tenancy: A form of co-ownership of real property in which two or more individuals hold equal shares or interests in the property, with the right of survivorship, meaning that upon the death of one co-owner, the remaining co-owners automatically inherit the deceased owner's share without the need for probate or estate administration.
98. Judgment: A formal decision or legal order issued by a court or judicial authority in a civil lawsuit or legal proceeding, typically determining the rights, obligations, or liabilities of the parties involved and enforceable as a legal obligation or debt, often resulting from breach of contract, negligence, or nonpayment of debts.
99. Jumbo Loan: A mortgage loan that exceeds the conforming loan limits established by government-sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac, often used to finance higher-priced properties or luxury homes, requiring larger down payments, higher credit scores, and stricter underwriting standards.
100. Landlord: The owner or lessor of real property who leases or rents the property to tenants in exchange for rent payments, responsible for maintaining the property, enforcing lease terms, and addressing tenant issues, often subject to landlord-tenant laws and regulations governing rental housing.
101. Lease: A legal contract or agreement between a landlord (lessor) and a tenant (lessee) granting the tenant the right to occupy and use real property for a specified period in exchange for rent payments, outlining the terms, conditions, and obligations of the landlord-tenant relationship, such as rent amount, lease term, and maintenance responsibilities.
102. Lease Option: A lease agreement that includes an option for the tenant to purchase the leased property at a specified price and terms within a predetermined period, providing flexibility and opportunity for the tenant to buy the property after leasing it for a certain period, often used as a form of rent-to-own arrangement.
103. Leasehold Estate: An interest in real property that grants a tenant or lessee the right to possess, use, and occupy the property for a specified period under the terms of a lease or rental agreement, without transferring ownership or title to the property, typically subject to the landlord's ownership rights and lease conditions.
104. Legal Description: A detailed and precise description of real property that uniquely identifies its location, boundaries, and dimensions in a manner recognized and accepted by law, often using metes and bounds, lot and block, or government survey methods, as specified in deeds, plats, or land records.
105. Lender: A financial institution, bank, or mortgage company that provides funds or capital to borrowers for the purpose of financing real estate purchases, construction projects, or business operations, typically in exchange for interest payments, fees, or collateral security.
106. Lessee: The tenant or occupant of real property who holds a leasehold interest in the property under a lease or rental agreement, entitled to possess, use, and enjoy the property for a specified period subject to the terms and conditions of the lease, typically paying rent to the landlord in exchange for occupancy rights.
107. Lessor: The landlord or owner of real property who grants a leasehold interest in the property to a tenant under a lease or rental agreement, responsible for providing possession, use, and enjoyment of the property to the tenant in exchange for rent payments and compliance with lease terms, typically retaining ownership rights and control over the property.
108. Liability Insurance: Insurance coverage designed to protect individuals, businesses, or property owners against claims or lawsuits alleging negligence, property damage, bodily injury, or other liability-related losses, often providing coverage for legal defense costs, settlement payments, and judgments awarded to injured parties.
109. Lien: A legal claim or encumbrance against real property that serves as security for the repayment of a debt or obligation, such as a mortgage lien, tax lien, judgment lien, or mechanic's lien, giving creditors or lienholders the right to enforce payment through foreclosure, seizure, or sale of the property.
110. Listing Agent: A real estate agent or broker who represents the seller in a real estate transaction, responsible for marketing the property, finding qualified buyers, negotiating offers, and facilitating the sale process on behalf of the seller, typically earning a commission upon successful sale of the property.
111. Loan Officer: A licensed professional employed by a financial institution or mortgage lender who assists borrowers in obtaining mortgage loans or financing for real estate purchases, refinances, or home equity loans, responsible for evaluating loan applications, assisting with preapproval, and guiding borrowers through the loan process.
112. Loan Origination Fee: A fee charged by lenders or mortgage companies to cover the administrative costs and expenses associated with processing, underwriting, and closing a mortgage loan, typically expressed as a percentage of the loan amount or as a flat dollar amount, paid by borrowers at closing or rolled into the loan.
113. Loan Servicing: The process of managing and administering mortgage loans on behalf of lenders or investors, including collecting monthly payments, processing escrow accounts, handling borrower inquiries, and managing delinquencies, typically performed by specialized servicing companies or departments within financial institutions.
114. Loan-to-Value Ratio (LTV): A financial ratio used by lenders to assess the risk of a mortgage loan by comparing the amount of the loan to the appraised value or purchase price of the property, typically expressed as a percentage and used to determine loan eligibility, interest rates, and mortgage insurance requirements.
115. Lock-In Rate: An agreement between a borrower and a lender to fix or "lock in" the interest rate on a mortgage loan for a specified period, typically during the loan application or approval process, providing protection against interest rate fluctuations or market volatility until the loan closes or funds.
116. Maintenance: The ongoing care, upkeep, and repair of real property to preserve its condition, functionality, and value, including routine maintenance tasks such as cleaning, landscaping, painting, and minor repairs, as well as periodic inspections and preventive maintenance to address potential issues and extend the lifespan of building systems and components.
117. Market Analysis: An evaluation or assessment of current market conditions, trends, and factors affecting supply, demand, and pricing of real estate properties within a specific geographic area or market segment, often conducted by real estate professionals or appraisers to determine property values, identify investment opportunities, or inform decision-making by buyers and sellers.
118. Market Value: The estimated price at which a property would sell in an open and competitive market between a willing buyer and a willing seller, assuming both parties are knowledgeable, informed, and acting in their own best interests, typically determined by appraisal or comparative market analysis based on recent sales of similar properties.
119. Master Plan: A comprehensive and long-range land use plan or development framework established by local government authorities or planning agencies to guide growth, development, and land use decisions within a community or jurisdiction, typically addressing zoning, transportation, infrastructure, environmental conservation, and urban design principles.
120. Mechanic's Lien: A legal claim or encumbrance filed by contractors, subcontractors, or suppliers against real property to secure payment for labor, materials, or services provided in the construction, improvement, or repair of the property, giving the claimant the right to enforce payment through foreclosure or sale of the property.
121. Mortgage: A legal agreement or contract between a borrower and a lender in which the borrower pledges real property as collateral security for a loan, promising to repay the loan amount plus interest according to the terms and conditions specified in the mortgage note and related documents.
122. Mortgage Broker: A licensed intermediary or middleman who connects borrowers with lenders or financial institutions offering mortgage loans, assisting borrowers in finding suitable loan products, comparing rates and terms, and navigating the loan application and approval process, typically earning a commission or fee for their services.
123. Mortgage Insurance: Insurance coverage designed to protect lenders or investors against losses resulting from borrower default or nonpayment on mortgage loans, typically required for loans with high loan-to-value (LTV) ratios or low down payments, providing assurance of repayment and mitigating risk for lenders.
124. Mortgagee: The lender or financial institution that provides funds or capital to a borrower in a mortgage loan transaction, holding a security interest or lien against real property as collateral security for the repayment of the loan amount plus interest, typically specified in the mortgage contract or deed of trust.
125. Mortgagor: The borrower or property owner who pledges real property as collateral security for a mortgage loan, promising to repay the loan amount plus interest according to the terms and conditions specified in the mortgage note and related documents, typically specified in the mortgage contract or deed of trust.
126. Multiple Listing Service (MLS): A centralized database or online platform used by real estate agents, brokers, and appraisers to share and exchange information about properties listed for sale or lease within a specific geographic area or market, facilitating cooperation, collaboration, and efficient marketing of real estate listings to a wide audience of potential buyers and tenants.
127. Negative Amortization: A situation in which the principal balance of a loan increases over time rather than decreases, typically occurring in mortgage loans with adjustable interest rates or payment options that allow for payments that are insufficient to cover the full amount of interest due, resulting in deferred interest being added to the loan balance.
128. Net Operating Income (NOI): The total income generated by a real estate investment property after deducting operating expenses such as property taxes, insurance, maintenance, utilities, and management fees, representing the property's potential profitability and cash flow before accounting for debt service or financing costs.
129. Nonconforming Loan: A mortgage loan that does not meet the underwriting guidelines or loan limits established by government-sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac, often due to factors such as loan amount, credit risk, property type, or borrower qualifications, requiring alternative financing options or private lending sources.
130. Notice of Default (NOD): A formal notification issued by a lender or mortgage servicer to a borrower informing them that they have defaulted on their mortgage loan or failed to meet the terms of the loan agreement, typically triggering legal proceedings and initiating the foreclosure process on the property.
131. Offer: A proposal or indication of willingness by a buyer to purchase a property at a specified price and terms, typically communicated to the seller through a written purchase offer or contract, outlining the proposed purchase price, contingencies, and other conditions of the offer, subject to acceptance or negotiation by the seller.
132. Open House: A scheduled event or period of time during which a property listed for sale is made available for public viewing and inspection by potential buyers, typically hosted by the listing agent or broker to showcase the property, attract interested buyers, and generate offers or inquiries.
133. Option Contract: A legally binding agreement between a buyer and a seller granting the buyer the exclusive right or option to purchase a property at a specified price and terms within a predetermined period, typically in exchange for payment of an option fee or consideration, providing flexibility and opportunity for the buyer to secure the property while conducting due diligence or arranging financing.
134. Original Principal Balance: The initial amount of a loan or mortgage when it is first originated or disbursed by the lender to the borrower, typically representing the total amount of funds borrowed by the borrower before any payments, credits, or adjustments are applied, serving as the basis for calculating interest, payments, and loan amortization.
135. Owner Financing: A real estate financing arrangement in which the seller provides financing to the buyer to facilitate the purchase of the property, typically through a promissory note or contract for deed, allowing the buyer to make payments directly to the seller over time instead of obtaining traditional mortgage financing from a third-party lender.
136. Parcel: A defined portion or piece of land that is identified, described, and delineated on a land survey, plat map, or legal document, typically bounded by specific boundaries, markers, or landmarks and used as the basis for property ownership, taxation, and land use regulations.
137. Partition: The legal process by which co-owners of real property seek to divide or separate their interests in the property through court proceedings or judicial sale, typically initiated when co-owners cannot agree on how to use, manage, or dispose of the property and seek intervention by the court to resolve the dispute.
138. Passive Income: Income generated from investments, business activities, or rental properties in which the investor or owner is not materially involved or actively participating, often in the form of dividends, interest, rental income, or capital gains, providing ongoing cash flow or investment returns with minimal effort or direct involvement.
139. Payoff Statement: A document issued by a lender or mortgage servicer to a borrower or property owner providing a detailed breakdown of the amount required to pay off or settle the remaining balance of a mortgage loan, typically including the outstanding principal balance, accrued interest, prepayment penalties, and other fees or charges.
140. PITI: An acronym used in real estate and mortgage financing to refer to the four primary components of a mortgage payment: Principal, Interest, Taxes, and Insurance, representing the total monthly housing expenses paid by homeowners or borrowers to lenders or mortgage servicers for the repayment of mortgage loans and property-related costs.
141. Planned Unit Development (PUD): A type of residential or mixed-use development characterized by a master-planned community or neighborhood with a variety of housing types, amenities, and land uses, typically governed by a homeowners association (HOA) and subject to restrictive covenants, architectural standards, and shared maintenance responsibilities.
142. Points: Upfront fees paid by borrowers to lenders at closing in exchange for a lower interest rate on a mortgage loan, expressed as a percentage of the loan amount and used to "buy down" the interest rate, with each point typically equal to one percent of the loan amount and reducing the interest rate by a certain percentage.
143. Power of Attorney: A legal document or instrument that grants authority to an individual or agent to act on behalf of another person (principal) in legal, financial, or personal matters, such as signing contracts, managing finances, or making medical decisions, often used in real estate transactions to facilitate representation and decision-making by absent or incapacitated parties.
144. Preapproval: A preliminary evaluation or assessment of a borrower's creditworthiness, financial stability, and loan eligibility by a lender or mortgage underwriter, typically based on income, assets, debts, credit history, and other financial information provided by the borrower, resulting in a conditional commitment or approval for a mortgage loan up to a specified amount and subject to final verification and documentation.
145. Prepayment Penalty: A contractual provision or fee imposed by lenders on borrowers who pay off or refinance a mortgage loan before the end of the loan term or a specified period, typically designed to compensate lenders for lost interest income or costs associated with early repayment, often expressed as a percentage of the loan amount or as a specified number of months' interest.
146. Principal: The original amount of money borrowed in a loan or mortgage transaction, excluding interest and other charges, typically repaid over time through periodic payments that include both principal and interest components, reducing the outstanding balance of the loan until it is paid in full, serving as the basis for calculating interest charges and loan amortization.
147. Private Mortgage Insurance (PMI): Insurance coverage designed to protect lenders or investors against losses resulting from borrower default or nonpayment on mortgage loans with high loan-to-value (LTV) ratios, typically required for conventional loans with down payments below 20% of the purchase price or appraised value of the property, providing assurance of repayment and mitigating risk for lenders.
148. Probate: The legal process by which a deceased person's estate is administered, managed, and distributed under the supervision of a probate court or judicial authority, typically involving the identification and valuation of assets, payment of debts and taxes, and transfer of remaining property to heirs or beneficiaries according to the decedent's will or applicable laws.
149. Promissory Note: A written promise or agreement by which a borrower (maker) pledges to repay a specified amount of money to a lender (payee) according to the terms and conditions outlined in the note, typically including the principal amount, interest rate, repayment schedule, maturity date, and any other terms or provisions governing the loan transaction.
150. Property Manager: A licensed professional or management company hired by property owners or investors to oversee and manage real estate properties on their behalf, responsible for tasks such as tenant relations, rent collection, property maintenance, repairs, leasing, and financial reporting, ensuring efficient operation and maximum returns on investment.
151. Public Record: Official documents, records, or information maintained and made available by government agencies or authorities for public inspection, review, or access, typically related to property ownership, transfers, liens, mortgages, deeds, taxes, assessments, permits, and other legal or administrative matters affecting real estate.
152. Purchase Agreement: A legally binding contract or agreement between a buyer and a seller outlining the terms, conditions, and obligations of a real estate transaction, including the purchase price, financing terms, contingencies, disclosures, and closing date, often prepared by real estate agents or attorneys and signed by both parties as a formal offer to buy or sell a property.
153. Quiet Enjoyment: The legal right or assurance that a tenant or property owner has to peacefully and undisturbedly use, occupy, and enjoy their property without interference, disturbance, or nuisance from landlords, neighbors, or third parties, typically implied in leases and property conveyances and enforced by law or legal remedies.
154. Quitclaim Deed: A type of deed used to transfer or convey real property from a grantor (seller) to a grantee (buyer) without any warranties or assurances of title, typically used in situations such as transfers between family members, divorces, or clearing clouds on title, providing a means of relinquishing or disclaiming any interest or claim in the property.
155. Real Estate Investment Trust (REIT): A type of investment vehicle or company that owns, operates, or finances income-producing real estate properties such as commercial buildings, apartment complexes, or shopping centers, typically structured as publicly traded companies or private trusts and offering investors shares or ownership interests with dividends or distributions based on rental income and property appreciation.
156. Real Property: Land, buildings, improvements, and other tangible assets or interests that are permanently attached or affixed to land, including surface rights, subsurface rights, air rights, and water rights, typically distinguished from personal property or chattels by its immobility, permanence, and attachment to land.
157. Realtor: A licensed real estate professional or agent who is a member of the National Association of Realtors (NAR) and subscribes to its strict Code of Ethics and Standards of Practice, typically engaged in buying, selling, or leasing real estate properties on behalf of clients, providing expertise, guidance, and representation throughout the real estate transaction process.
158. Recording: The act of officially registering or filing real estate documents, deeds, mortgages, liens, or other instruments with the appropriate government office or agency responsible for maintaining public land records, typically the county recorder's office or registrar of deeds, to provide public notice and establish priority of interests in real property.
159. Refinance: The process of obtaining a new mortgage loan to replace an existing loan or debt obligation secured by real property, typically to take advantage of lower interest rates, reduce monthly payments, access equity, consolidate debts, or change loan terms, often requiring appraisal, underwriting, and closing similar to the original mortgage transaction.
160. Rent Control: Government regulations or ordinances that limit the amount or frequency of rent increases for residential rental properties, typically imposed to protect tenants from excessive rent hikes, ensure affordability, and maintain stable housing costs, often implemented in high-cost or rapidly gentrifying markets with limited rental housing options.
161. Rescission: The legal right or process by which a party to a contract or agreement cancels, voids, or annuls the contract and restores the parties to their original positions before entering into the contract, typically exercised within a specified period or under certain conditions such as fraud, misrepresentation, duress, or violation of statutory rights.
162. Reserve Study: A comprehensive evaluation or assessment of the physical condition, maintenance needs, and financial requirements of common elements, facilities, or amenities within a homeowners association (HOA) or condominium association, typically conducted by professional reserve analysts to develop funding plans and budgets for future repairs, replacements, or capital improvements.
163. Restrictive Covenant: A legal restriction or limitation imposed by a property owner or governing authority on the use, development, or improvement of real property, typically contained in deeds, plats, or homeowners association (HOA) documents, and intended to maintain property values, preserve aesthetics, or regulate land use activities within a community or development.
164. Reverse Mortgage: A type of mortgage loan available to homeowners aged 62 or older that allows them to convert a portion of their home equity into cash or monthly income payments, typically without the need to sell the property or make monthly mortgage payments, with repayment deferred until the borrower moves out, sells the property, or passes away.
165. Right of First Refusal: A contractual right or option granted to a party allowing them to purchase or lease real property on the same terms and conditions offered by a third-party seller or prospective tenant, typically exercised within a specified period before the property is offered to others, providing priority or preference in acquiring or leasing the property.
166. Right of Survivorship: A legal principle or feature of joint tenancy or tenancy by the entirety in which co-owners of real property automatically inherit the share or interest of a deceased co-owner upon their death, without the need for probate or estate administration, resulting in full ownership by the surviving co-owners.
167. Second Mortgage: A mortgage loan or lien secured by real property that ranks subordinate or junior to a first mortgage or primary lien, typically used by homeowners to access additional funds or borrow against home equity, often in the form of a home equity loan, home equity line of credit (HELOC), or subordinate financing, with repayment terms and conditions distinct from the first mortgage.
168. Seller's Market: A real estate market condition characterized by low inventory, high demand, and rising prices, typically favoring sellers over buyers and resulting in competitive bidding, multiple offers, and quick sales of properties, often driven by strong economic conditions, demographic trends, or limited housing supply relative to demand.
169. Servicemembers Civil Relief Act (SCRA): A federal law that provides certain legal protections and financial benefits to active-duty military personnel and their families, including provisions related to interest rate caps on preexisting debts, foreclosure and eviction protections, lease termination rights, and postponement of civil court proceedings during periods of military service.
170. Setback: The minimum distance required by zoning ordinances, building codes, or land use regulations between a structure or improvement and the property line, street, or neighboring buildings, intended to ensure safety, privacy, access, and compatibility with surrounding development, often varying by zoning district, land use, or property type.
171. Short Sale: A real estate transaction in which the seller owes more on their mortgage loan than the property is worth and agrees to sell the property for less than the outstanding balance of the loan, typically with the approval of the lender or mortgage holder, to avoid foreclosure, satisfy the debt, and minimize financial losses for all parties involved.
172. Sole Proprietorship: A business structure or ownership model in which a single individual owns and operates a business as an individual or unincorporated entity, typically assuming full responsibility for the business's operations, debts, liabilities, and legal obligations, and entitled to all profits generated by the business.
173. Special Assessment: A mandatory fee, charge, or levy imposed by a local government, homeowners association (HOA), or special district on property owners within a defined area or community to fund specific improvements, services, or projects that benefit the properties or residents, typically based on the proportional benefit or value received by each property.
174. Special Warranty Deed: A type of deed used to convey real property from a seller (grantor) to a buyer (grantee), containing warranties or assurances that the seller has clear title to the property and will defend the buyer against any claims or defects in title arising during the seller's ownership, but not warranting against defects or claims arising from prior ownership or events.
175. Staging: The process of preparing and presenting a property for sale or rental by enhancing its appearance, aesthetics, and appeal to attract potential buyers or tenants, typically involving cleaning, decluttering, organizing, decorating, and arranging furniture and accessories to highlight the property's features and create a favorable impression.
176. Standard of Care: The level of competence, skill, and diligence expected or required of real estate professionals, agents, brokers, appraisers, and other practitioners in performing their duties and providing services to clients or customers, typically defined by professional standards, ethics codes, industry practices, and legal obligations.
177. Statute of Frauds: A legal doctrine or statute requiring certain types of contracts or agreements to be in writing and signed by the parties in order to be enforceable in court, typically including contracts for the sale of real property, leases, mortgages, and agreements lasting longer than one year, intended to prevent fraud, misunderstandings, and disputes over oral contracts.
178. Steering: The illegal practice or act of directing or channeling prospective buyers or tenants to or away from certain neighborhoods, communities, or properties based on protected characteristics such as race, ethnicity, religion, national origin, familial status, or disability, in violation of fair housing laws and regulations prohibiting discrimination in housing.
179. Sublease: A real estate transaction or agreement in which a tenant (sublessor) leases or rents all or part of their leased premises to another party (sublessee) under a separate lease or sublease agreement, typically with the consent of the landlord (master lessor), subject to the terms, conditions, and obligations of the original lease and any additional provisions in the sublease.
180. Survey: A detailed and precise measurement or assessment of real property boundaries, dimensions, features, and improvements conducted by licensed surveyors or professionals using specialized equipment and techniques, typically resulting in a survey plat, map, or report documenting the property's legal description, boundaries, easements, encroachments, and other relevant information.
181. Tax Lien: A legal claim or encumbrance imposed by a government authority or taxing agency against real property to secure payment of delinquent property taxes or unpaid tax debts, typically resulting in a lien certificate, tax sale, or foreclosure process that allows the government to collect the overdue taxes or recover the property for public auction or sale.
182. Tenancy at Sufferance: A legal status or relationship between a landlord and a tenant that arises when a tenant remains in possession of leased premises after the expiration of the lease term without the landlord's consent, typically resulting in the tenant being treated as a holdover tenant and subject to eviction proceedings or legal action by the landlord.
183. Tenancy at Will: A type of rental agreement or leasehold arrangement in which a tenant occupies real property with the landlord's permission for an unspecified period or duration, typically on a month-to-month basis, without a formal written lease or fixed term, subject to termination by either party with proper notice or at will, providing flexibility and minimal commitment for both parties.
184. Tenancy by the Entirety: A form of joint tenancy or co-ownership of real property between married spouses in which each spouse holds an undivided interest in the property with the right of survivorship, meaning that upon the death of one spouse, the surviving spouse automatically inherits the deceased spouse's share of the property without the need for probate or estate administration.
185. Tenancy in Common: A form of co-ownership of real property in which two or more individuals hold undivided interests in the property as tenants in common, with each co-owner having the right to use, possess, and transfer their share of the property independently, subject to the rights of the other co-owners, and without the right of survivorship.
186. Title Insurance: Insurance coverage designed to protect property owners and lenders against financial losses resulting from defects, encumbrances, or challenges to the title of real property, typically issued by title insurance companies after conducting a title search and examination to verify the ownership history and status of the property's title.
187. Title Search: An investigation or examination of public records, documents, and instruments related to the ownership, chain of title, and encumbrances affecting a specific parcel of real property, typically conducted by title professionals, attorneys, or abstractors to verify the seller's right to convey clear and marketable title to the buyer in a real estate transaction.
188. Total Debt Service Ratio (TDSR): A financial ratio used by lenders to assess a borrower's ability to manage all of their debt obligations, including mortgage payments, property taxes, insurance, and other debts, expressed as a percentage of the borrower's gross income and compared to acceptable thresholds or guidelines to determine loan eligibility and affordability.
189. Transfer Tax: A tax imposed by state or local governments on the transfer or conveyance of real property ownership from one party to another, typically calculated as a percentage of the property's sale price or value and paid by either the buyer, seller, or both parties at the time of closing or recording of the property transfer deed or instrument.
190. Underwriting: The process of evaluating and assessing the creditworthiness, financial stability, and risk of a mortgage loan applicant by a lender or mortgage underwriter, typically based on factors such as income, assets, debts, credit history, employment stability, property appraisal, and loan-to-value ratio, to determine loan approval, terms, and conditions.
191. Vacancy Rate: A metric used to measure the percentage of unoccupied or vacant rental units within a specified geographic area, property type, or market segment, typically calculated by dividing the number of vacant units by the total number of available units and expressed as a percentage, providing insight into market conditions, supply and demand dynamics, and investment performance.
192. Variable Rate Mortgage: A type of mortgage loan with an interest rate that fluctuates or varies over time based on changes in a specified benchmark or index, such as the prime rate, LIBOR, or Treasury securities rate, often resulting in periodic adjustments to the borrower's monthly payments, total interest costs, and loan amortization schedule.
193. Zoning: The legal regulation or division of land within a municipality or jurisdiction into designated zones, districts, or areas with specific permitted land uses, building types, densities, and development standards, typically established by zoning ordinances, codes, or regulations to promote orderly growth, protect property values, and ensure compatibility of land uses within communities.
194. 1031 Exchange: A tax-deferred exchange or transaction authorized by Section 1031 of the Internal Revenue Code (IRC) that allows real estate investors to sell one investment property and reinvest the proceeds into another "like-kind" property of equal or greater value, typically without recognizing capital gains taxes on the sale, subject to certain rules, timelines, and requirements imposed by the IRS.
195. 1099-S Form: A federal tax form used to report proceeds from real estate transactions, such as sales or exchanges of real property, including land, buildings, or residential units, typically issued by closing agents, escrow companies, or title insurance companies to sellers or transferors of real property and filed with the Internal Revenue Service (IRS) to report taxable gains or losses.
196. 401(k) Loan: A loan or borrowing option available to participants in employer-sponsored retirement plans, such as 401(k) plans, allowing plan participants to borrow funds from their retirement savings for specified purposes such as home purchases, education expenses, or financial hardships, typically subject to loan limits, repayment terms, and interest rates set by the plan administrator.
197. 403(b) Plan: A tax-advantaged retirement savings plan offered to employees of certain nonprofit organizations, educational institutions, and government agencies, allowing eligible participants to contribute pre-tax dollars to individual retirement accounts (IRAs) or annuities for long-term retirement savings, typically subject to contribution limits, investment options, and employer matching contributions.
198. 529 Plan: A tax-advantaged college savings plan authorized by Section 529 of the Internal Revenue Code (IRC) that allows individuals to save and invest funds for qualified education expenses, such as tuition, fees, books, and room and board, typically offered by states or educational institutions with various investment options, contribution limits, and tax benefits.

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