Real Estate
Terms & Definitions
-A-
- Abstract
of judgment, law The summary of a court judgment that
creates a lien against a property when filed with the county recorder.
- Accelerated
cost recovery system A tax calculation that provides
greater depreciation in the early years of ownership of real estate or
personal property.
- Accelerated
depreciation A bookkeeping method that depreciates
property faster in the early years of ownership.
- Acceleration
clause A provision that gives a lender the right to
collect the balance of a loan if a borrower misses a payment.
- Acceptance The
seller's written approval of a buyer's offer.
- Access Any
means by which a person can enter property.
- Accessibility The
degree to which a building or site allows access to people with
disabilities.
- Accretion The
gradual addition to the shore or bank of a waterway by deposits of sand or
silt.
- Acknowledgment A
written declaration affirming that a person acted voluntarily.
- Acre-foot The
volume of material needed to cover an acre of land one foot deep.
- Acre A
measurement of land equal to 43,560 square feet.
- Active
solar system A system that utilizes electric pumps or
fans to transfer solar energy for storage or direct use.
- Actual
age The number of years a structure has been
standing.
- Addendum An
addition or change to a contract.
- Additional
principal payment Extra money included in the monthly
payment to help reduce the principal and shorten the term of the loan.
- Add-on
interest The interest a borrower pays on the
principal for the duration of the loan.
- Adjustable-rate
mortgage (ARM) A loan with an interest rate that is
periodically adjusted to reflect changes in a specified financial index.
- Adjusted
cost basis The cost of any improvements the seller
makes to the property. Deducting the cost from the original sales price
provides the profit or loss of a home when it is sold.
- Adjustment
period The amount of time between interest rate
adjustments in an adjustable-rate mortgage.
- Administrator A
person given authority to manage and distribute the estate of someone who
died without leaving a will.
- Administrator's
deed A legal document that an administrator of an
estate uses to transfer property.
- Adverse
possession The acquisition of title to property
through possession without the owner's consent for a certain period of
time.
- Adverse
use The access and use of property without the
owner's consent.
- Aeolian
soil Soil that is composed of materials deposited by
the wind.
- Affiant A
person who makes a sworn statement.
- Affirmation A
substitution for an oath granted to people based on religious reasons.
- A-frame
design An interior style that features a steeply
peaked roofline and a ceiling that is open to the top rafters.
- Agency
closing The process by which a lender uses a title
company or other firm as an agent to complete a loan.
- Agency The
relationship of trust that exists between sellers and buyers and their
agents. The agency is formed through a written contract.
- Agent A
person licensed by the state to conduct real estate transactions.
- Agreed
boundary A compromise boundary to which property
owners agree in order to resolve a dispute.
- Agreement
of sale A document the buyer initiates and the seller
approves that details the price and terms of the transaction.
- Alcove A
recessed section of a room, such as a breakfast nook.
- Alienation
clause A provision that requires the borrower to pay
the balance of the loan in a lump sum after the property is sold or
transferred.
- Alkali Mineral
salt found in soil.
- Alkaline
soil Soil that contains a higher concentration of
mineral salt than natural acid.
- Alley A
lane behind a row of buildings or between two rows of buildings.
- Allowances Budgets
offered by builders of new homes for the purchase of carpeting and
fixtures.
- Alternative
mortgage Any home loan that does not conform to a
standard fixed-rate mortgage.
- Aluminum
siding A metal covering that provides an alternative
to paint for owners of wood homes.
- Aluminum-clad
windows Wooden windows with aluminum covering the
exterior.
- Amenities Parks,
swimming pools, health-club facilities, party rooms, bike paths, community
centers and other enticements offered by builders of planned developments.
- American
Society of Home Inspectors The American Society of
Home Inspectors is a professional association of independent home
inspectors. Phone: (800) 743-2744.
- Americans
with Disabilities Act A law passed in 1990 that
outlaws discrimination against a person with a disability in housing,
public accommodations, employment, government services, transportation and
telecommunications.
- Amortization
tables Mathematical tables that lenders use to
calculate a borrower's monthly payment.
- Amortization The
process of paying the principal and interest on a loan through regularly
scheduled installments.
- Amperage The
strength of an electrical current.
- Anchor
bolt A large steel bolt anchored in concrete and
attached to a building to prevent the structure from moving.
- Annual
mortgagor statement A yearly statement to borrowers
that details the remaining principal and amounts paid for taxes and
interest.
- Annual
Percentage Rate (APR) The cost of the loan expressed
as a yearly rate on the balance of the loan.
- Annual Any
kind of plant that must be planted every year.
- Annuity The
payment of a fixed sum to an investor at regular intervals.
- Anticipatory
breach A communication that informs a party that the
obligations of the original contract will not be fulfilled.
- Application
fee The fee that a lender charges to process a loan
application.
- Application A
document that details a potential borrower's income, debt and other
obligations to determine credit worthiness.
- Appraisal
fee The fee that an appraiser charges to estimate the
market value of the property.
- Appraisal
report A detailed written report on the value of a
property based on recent sales of comparable sites in the area.
- Appraisal An
opinion of the value of a property at a given point in time.
- Appraised
value An opinion of the current market value of a
property.
- Appreciation An
increase in the value of a home or other property..
- Arbitration A
method of resolving a dispute in which a third party renders a decision.
- Arbor An
area shaded by trees, shrubs or vines on a latticework structure.
- Arch A
curved structure that supports weight over an area, such as a doorway.
- Architect A
licensed professional who designs homes, buildings and other structures.
- Architectural
fees The fee an architect charges for services. In
general, architects charge for their services by the hour, by the square
foot, or by a percentage of the project budget.
- Arpent A
French measurement of land equal to .84625 acres.
- Asbestos A
fire-resistant mineral used for insulation and home products that has been
found to pose a health hazard.
- As-is
condition The purchase or sale of a property in its
existing condition.
- Asking
price A seller's initial price for a property.
- Assessed
value A tax assessor's determination of the value of
a home in order to calculate a tax base.
- Assessment
rolls A list of taxable property compiled by the
assessor.
- Assessment The
estimated value of a piece of real estate or a levy placed on property in
addition to taxes.
- Assets Items
of value, which include cash, real estate, securities and investments.
- Assignor A
person who transfers rights and interests of a property.
- Assumable
mortgage A mortgage that can be transferred to
another borrower.
- Assumption
clause A provision that allows a buyer to take
responsibility for the mortgage from a seller.
- Assumption
fee A fee the lender charges to process new records
for a buyer who assumes an existing loan.
- Average
price The price of a home determined by totaling the
sales prices of all houses sold in an area and dividing that number by the
number of homes.
- Avigation
easement An easement over private property near an
airport that limits the height of structures and trees.
- Awning
windows Single-sash windows that tilt outward and up.
(Return to Top)
-B-
- Back
fill Soil used to solidify the foundation of a
structure.
- Back
title letter A letter that a title insurance company
gives to an attorney who then examines the title for insurance purposes.
- Back-to-back
escrow Arrangements that an owner makes to oversee
the sale of one property and the purchase of another at the same time.
- Backup
offer A secondary bid for a property that the seller
will accept if the first offer fails.
- Backwater
valve A valve in a sewer line that prevents sewage
from flowing back into a house.
- Balance
sheet A statement that shows the assets, liabilities
and net worth of an individual.
- Balloon
loan A mortgage in which monthly installments are not
large enough to repay the loan by the end of the term. As a result, the
final payment due is the lump sum of the remaining principal.
- Balloon
payment The final lump sum payment due at the end of
a balloon mortgage.
- Balloon-frame
construction A type of framing used in two-story
homes in which studs extend from the ground to the ceiling of the second
floor.
- Balustrade Railing
held up by a set of posts on a porch or stairway.
- Bankruptcy A
proceeding in which an insolvent debtor can obtain relief from payment of
certain obligations. Bankruptcies remain on a credit record for seven
years and can severely limit a person's ability to borrow.
- Bargain
sale The sale of a piece of property for less than
market value.
- Baseboard
electric heat Heating units installed in the floor
that can be controlled by a central thermostat.
- Baseboard Any
board or molding found at the bottom of an interior wall.
- Basement The
area of a home below ground level.
- Basis
Point A basis point is one one-hundredth of one
percentage point. For example, the difference between a loan at 8.25
percent and a mortgage at 8.37 percent is 12 basis points.
- Bay
window A window that projects outward in a curve.
- Bay The
opening between two columns or walls that forms a space.
- Bearing
wall A wall that supports its own weight in addition
to other parts of a structure.
- Before-tax
income Total income before taxes are deducted.
- Beneficiary The
lender who makes a loan, also called a mortgagee. The person borrowing
money is the mortgagor.
- Bequest Personal
property given to a person through a will.
- Betterment An
improvement that increases a property's value as opposed to repairs that
maintain the value.
- Bidding
war Offers from multiple buyers for a piece of
property. Agents also sometimes compete to list a house for sale.
- Bilateral
contract A contract in which the parties involved
give mutual promises. Also called "reciprocal" contracts.
- Bill
of sale A document that transfers ownership of personal property.
- Binder A
report issued by a title insurance company that details the condition of a
home's title. and provides guidelines for a title insurance policy.
- Biweekly
mortgage A mortgage that requires payments every two
weeks and helps repay the loan over a shorter term.
- Blanket
insurance policy A policy that covers more than one
person or piece of property.
- Blanket
mortgage A mortgage that covers more than one
property owned by the same borrower.
- Blighted
area A neighborhood that has deteriorated.
- Blind
nailing Nails driven into a wall and concealed with
putty.
- Blue
sky laws Regulations on the sale of securities to
prevent consumers from investing in fraudulent or high-risk companies
without being informed of the risks.
- Blueprint
- Blue-ribbon
condition A house maintained close to its original
condition. Also called mint condition.
- Board
foot Measurement of lumber that is the equivalent of
144 cubic inches.
- Board
of Equalization A state board charged with ensuring
that local property taxes are assessed in a uniform manner.
- Board-and-batten
siding Siding is composed of 8- to 12-inch wide
wooden boards nailed vertically to create a barn-like exterior.
- Boilerplate Form
language used in deeds, mortgages and other documents. Individual parties
can add details.
- Bona
fide A legal term that refers to actions or persons
that are honest and in good faith.
- Bond An
agreement that insures one party against loss by acts or defaults of
another party.
- Book
value The value of a property as a capital asset
based on its cost plus any additions, minus depreciation.
- Boring
test An analysis of soil in which holes are bored
into the ground and samples are removed.
- Borough A
section of a city that has authority over local matters.
- Borrow
pit The hole at a site that has been excavated.
- Borrow Sand,
gravel or other material used for grading.
- Boulevard A
street lined with trees or constructed with a landscaped median.
- Boundary The
dividing line between two adjacent properties.
- Braced
framing A construction method in two-story homes in
which the frame is reinforced with posts and braces.
- Breach
of contract The failure to perform provisions of a
contractwithout a legal excuse.
- Breach
of covenant The failure to obey a legal agreement.
- Breach
of warranty A seller's inability to pass clear title
to a buyer.
- Break-even
point The point in which the owner's rental income
matches expenses and debt.
- Breast
height The height at which the diameter of a tree is
measured: four feet, six inches above the ground.
- Breezeway A
roofed passageway with open sides.
- Brick Building
material made from clay molded into oblong blocks and fired in a kiln.
- Bridge
loan A short-term loan for borrowers who need more
time to find permanent financing.
- Broker A
person licensed by the state to deal in real estate.
- Brokerage The
act of bringing together two or more parties in exchange for a fee or
commission.
- Broom
clean The ideal condition of a building when it is
turned over to an owner or tenant.
- Brownstone A
vintage row house constructed of red sandstone.
- Buffer
strip A parcel of land that separates two or more
properties.
- Builder
upgrades Extra house features or better finishing
materials that a builder offers.
- Building
and loan association An organization that raises
money to helps its members purchase real estate or construct a building.
- Building
code A comprehensive set of laws that controls the
construction or remodeling of a home or other structure.
- Building
inspector A city or county employee who enforces the
building code and ensures that work is correctly performed.
- Building
line or setback Guidelines that limit how close an
owner can build to the street or an adjacent property.
- Building
moratorium A halt on home construction to slow the
rate of development.
- Building
paper A thick, water-resistant paper that serves as
insulation.
- Building
permit A permit issued by a local government agency
that allows the construction of home or renovation of a house.
- Building
restrictions Regulations that limit the manner in
which property can be used.
- Built-ins Appliances
or other items that are framed into a home or permanently attached.
- Bulkhead A
retaining wall designed to hold back water from the ocean or another body
of water.
- Bundle
of rights The various interests or rights an owner
has in a property.
- Bungalow A
small one-story house or cottage.
- Butterfly
roof A roof formed by two gables that dip in the
middle to resemble a butterfly's wings.
- Buy-down
mortgage A home loan in which the lender receives a
premium as an inducement to reduce the interest rate during the early
years of the mortgage.
- Buyer
broker A real estate broker who exclusively
represents the buyer's interests in a transaction and whose commission is
paid by the buyer rather than the seller.
- Buyer's
market A slow real estate market in which buyers have
the advantage.
- Buyer's
remorse An emotion felt by first-time homebuyers
after signing a sales contract or closing the purchase of a house.
- Bylaws The
rules and regulations that a homeowners association or corporation adopts
to govern activities. (Return to Top)
-C-
- Call
option A clause in a loan agreement that allows a
lender to ask for the balance at any time.
- Can
lights Cylindrical chambers with bulbs recessed into
the ceiling.
- Cancellation
clause A clause that details the conditions under
which each party may terminate the agreement.
- Cantilever A
projecting structure supported on one end, such as a balcony.
- Cap A
limit on the amount the interest rate or monthly payment can increase in
an adjustable-rate mortgage.
- Cape
Cod style A wood-frame or shingled house with a steep
roof and several windows projecting from the second floor.
- Capital
expenditure The cost of making improvements on a
property.
- Capital
gains tax A tax placed on the profits from the sale
of real estate or investments.
- Capital
gains Profits an investor makes from the sale of real
estate or investments.
- Capital
improvement Any improvement that extends the life or
increases the value of a piece of property.
- Capital Money
used to create income, such as funds invested in rental property.
- Capitalization
rate The percentage rate of return estimated from the
net income of a piece of property.
- Capitalization A
mathematical formula that investors use to compute the value of a property
based on net income.
- Caravan A
group of real estate agents who tour a house that has been recently listed
for sale.
- Carport A
roof that covers a driveway or other parking area.
- Casement
window A window hinged on its sides to allow it to
swing open vertically.
- Cash
flow The amount of cash a rental property investor
receives after deducting operating expenses and loan payments from gross
income.
- Cashier's
check A check the bank draws on itself rather than on
a depositor's account.
- Cash-out
refinance The refinancing of a mortgage in which the
money received from the new loan is greater than the amount due on the old
loan. The borrower can use the extra funds in any manner.
- Cathedral
ceiling A high open ceiling formed by finishing
exposed roof rafters.
- Caulk An
acrylic or silicon sealant used to fill cracks, crevices and holes in a
home.
- Caveat
emptor A legal principle derived from Latin than
means "let the buyer beware."
- Caveat A
formal notice, that asks a court to suspend action until the party which
filed the challenge can be heard.
- Cavedium A
courtyard or atrium.
- Ceiling
height The standard height of a ceiling is eight
feet.
- Central
air conditioning A device that generates cold air
through an outside unit that is connected to ductwork inside the house.
- Central
business district The area of a city where most large
businesses are located.
- Certificate
of Deposit (CD) A document which shows that the
bearer has a specified amount of money on deposit with a bank,
stock-brokerage firm or other financial institution.
- Certificate
of deposit index An index based on the interest rates
on six-month CDs. It used to determine the interest rate for some
adjustable-rate mortgages.
- Certificate
of eligibility A document issued by the Veterans
Administration that verifies the eligibility of a veteran for a loan
program.
- Certificate
of occupancy A document which states that a home or
other building has met all building codes and is suitable for habitation.
- Certificate
of sale A document issued at a judicial sale, which
entitles the buyer to receive a deed after court confirmation of the
purchase of the property.
- Certificate
of title A written opinion on the status of a piece
of property based on an examination of the public record.
- Chain
of title The official record that details the
ownership history of a piece of property.
- Chair
railing Decorative trim installed on a wall about 32
inches above the floor, which protects against scuffs from furniture.
- Change
frequency The adjustment schedule on an
adjustable-rate mortgage.
- Change
order A modification of the construction contract to
authorize a change in the work, an adjustment in the amount of the
contract or a change in the contract time. The owner, architect and
contractor must sign the change.
- Chattel
mortgage A lien on personal property used as
collateral for a loan.
- Chattel Personal
property such as furniture, clothing or a car.
- Chimney
back The back wall or lining of a fireplace or
furnace chimney.
- Chimney
flue The passage inside a chimney that channels smoke
and heat to the outside.
- Chimney
pot A short pipe at the top of a chimney that
increases ventilation to the fireplace and reduces smoke.
- Cinder
block A block made of ash and cement that is used in
construction.
- Cinder
fill Cinders used below a basement or around a
foundation to promote drainage.
- Circuit
breaker An electric fuse that activates or
deactivates a circuit.
- Cistern A
tank used to store rainwater.
- Classified
property tax A tax that varies in rate depending on
the use of the property.
- Clear
title A property that does not have liens, defects or
other legal encumbrances.
- Closing
costs Expenses incidental to the sale of real estate,
including loan, title and appraisal fees.
- Closing
statement A document which details the final
financial settlement between a buyer and seller and the costs paid by each
party.
- Closing The
final procedure in which documents are signed and recorded, and the
property is transferred.
- Cloud
on title An invalid encumbrance on real property.
- Cluster
development A method of squeezing more homes into
less space.
- Codicil A
change to a will that adds or subtracts provisions or clarifies portions
of the document.
- Co-housing Individual
housing units that are clustered around a common building where residents
share cooking and other activities.
- Coign The
cornerstone of a building that differs in shape or color from the rest of
the wall.
- Co-insurance Coverage
that involves the use of two or more insurers..
- Collar
beam The structural element that connects roof
rafters.
- Collateral
security Additional security that a borrower supplies
to obtain a loan.
- Collection The
series of steps a lender takes to bring a delinquent mortgage up to date.
- Collusion The
action of two or more people to break the law.
- Colonia Unincorporated
communities along the U.S.-Mexico border.
- Column
footing The support base for a load-bearing column.
The footing is usually made of reinforced concrete.
- Column A
slender upright structure that consists of a base, a round or square shaft
and a capital.
- Co-maker A
person who signs a promissory note with the borrower and assumes
responsibility for the loan.
- Combination
door An outer door with interchangeable screen and
glass panels.
- Combination
window A window with interchangeable screen and glass
panels.
- Commercial
bank A financial institution that provides a broad
range of services, from checking and savings accounts to business loans
and credit cards.
- Commercial
property An area that is zoned for businesses.
- Commingling The
mixing of money held in trust with other funds.
- Commission The
negotiable percentage of the sales price of a home that is paid to the
agents of the buyer and seller.
- Commitment
fee The fee a lender charges for promising to make a
loan.
- Commitment A
promise by a lender to make a loan with specific terms for a specified
period.
- Common
area An area inside a housing development that is
owned by all residents.
- Common
law A body of laws based on custom, usage and rulings
by courts in various jurisdictions.
- Common-area
assessments Fees paid by the owners of a condominium
project or planned-unit development to maintain, repair, improve or
operate common areas.
- Common-interest
development A project composed of individually owned
units that share usage and financial responsibility for common areas.
- Community
property Property accumulated through the joint
efforts of husband and wife. It is a classification of property peculiar
to certain states.
- Community
Reinvestment Act A federal law that encourages
financial institutions to loan money in the neighborhoods where minority
depositors live.
- Commute The
distance and time it takes a person to reach the workplace.
- Comparables Properties
used as comparisons to determine the value of a certain property.
- Comparative
market analysis An estimate of the value of a
property based on an analysis of sales of properties with similar
characteristics.
- Competent A
term for a buyer who is legally fit to enter into a sales contract.
- Compound
interest The interest paid on the principal balance
in a mortgage and on the accrued and unpaid interest of the loan.
- Concrete
tilt-up The process of pouring concrete into forms on
the ground, allowing the forms to harden and then raising the material to
a vertical position to form walls.
- Condemnation The
process the government uses to take private property for public use
without the consent of the owner.
- Conditional
commitment A promise by a lender to make a loan if
the borrower meets certain conditions.
- Condominium
conversion The change in title from a single owner of
an entire project or building to multiple owners of individual units.
- Condominium Individual
units in a building or development in which owners hold title to the
interior space while common areas such as parking lots, community rooms
and recreational areas are owned by all the residents.
- Conduit A
metal pipe that houses electrical wiring.
- Consent
judgment A binding written agreement between two
parties to have a judgment entered and recorded.
- Conservator A
court-appointed guardian.
- Consideration Anything
that is legal, has value and induces a person to enter into a contract.
- Construction
budget The funding that an owner arranges for the
construction of a project.
- Construction
documents Drawings and specifications from an
architect that provide detailed requirements for the construction of a
project.
- Construction
loan Short-term loans a lender makes for the
construction of homes and buildings. The lender disburses the funds in
stages.
- Construction
to permanent loan The conversion of a construction
loan to a longer-term traditional mortgage after construction has been
completed.
- Consumer
Credit Counseling Service (CCCS) A nationwide,
nonprofit organization that helps consumers get out of debt and improve
their credit profile. National headquarters: 8701 Georgia Avenue., Suite
507, Silver Springs, MD 20910. Phone: (800) 388-2227.
- Contemporary
style A design that features streamlined shapes,
large unadorned windows and industrial materials.
- Contiguous
lots Pieces of property that are adjoined.
- Contingency
listing A property listing with a special condition
attached.
- Contingency A
condition specified in a purchase contract, such as a satisfactory home
inspection.
- Contingent
fee A fee that must be paid if a certain event
occurs.
- Contract
for deed A contract in which the seller agrees to
defer all or part of the purchase price for a specified period of time.
- Contract
to purchase A contract the buyer initiates which
details the purchase price and conditions of the transaction and is
accepted by the seller. Also known as an agreement of sale.
- Contract An
agreement between two or more parties that creates or modifies an existing
relationship.
- Contractor The
individual who contracts for the construction of a home or project.
- Contractual
lien A voluntary obligation such as a mortgage or
trust deed.
- Controlled
growth Any restrictions imposed on the amount or type
of new development in an area.
- Conventional
loan A long-term loan a lender makes for the purchase
of a home.
- Convertible
adjustable-rate mortgage A mortgage which starts as
an adjustable-rate loan, but allows the borrower to convert the loan to a
fixed-rate mortgage during a specified period of time.
- Conveyance
tax A tax imposed on the transfer of real property.
- Conveyance The
transfer of title of property.
- Cooperating
broker A real estate broker who finds a buyer for a
property that another broker has listed.
- Cooperative
corporation A business trust that holds the title to
a cooperative residential building and grants occupancy rights to
shareholders in the corporation.
- Cooperative
mortgages Any loans related to a cooperative
residential project.
- Cooperative
project A project in which a corporation holds title
and sells shares representing individual units to buyers who then receive
a proprietary lease as their title.
- Corner
bead A reinforcement placed in the corner where two
walls intersect.
- Corner
influence The effect on the value of a property
because it is situated on a corner or near a corner.
- Cornice A
horizontal molding that projects from the top of a structure or wall.
- Corporate
relocation An arrangement by which employers pay to
transfer and move employees.
- Corrective
work Necessary or desired repairs to remedy problems
uncovered by a home or specialized inspection.
- Co-signer A
second party who signs a promissory note and takes responsibility for the
debt.
- Cost-plus
contract A construction contract that determines the
builder's profit based on a percentage of the cost of labor and materials.
- Cottage A
small, one-story house.
- Counteroffer A
response to an offer.
- Covenant A
legal assurance or promise in a deed or other document, or implied by the
law.
- Covenants,
conditions and restrictions (CC&Rs) Rules and
regulations for a development, such as acceptable landscaping or
improvements that can be made to individual units.
- Craftsman
style An architectural style that evolved as part of
the Arts and Craft movement near the turn of the century.
- Crawl
space The space between the ground and the first
floor of a home, usually no higher than four feet.
- Creative
financing Innovative home-financing arrangements that
help sell a property.
- Credit
history A record of an individual's current and past
debt payments.
- Credit
life insurance Insurance that pays off a mortgage in
the event of the borrower's death.
- Credit
rating The degree of credit worthiness assigned to a
person based on credit history and financial status.
- Credit
report A credit bureau report that shows a loan
applicant's history of payments made on previous debts. Several companies
issue credit reports, but the three largest are Trans Union Corp., Equifax
and Experian (formerly TRW ).
- Credit
repository Large companies that gather financial and
credit information from various sources about individuals who have applied
for credit.
- Credit
union Nonprofit cooperative organizations that
provide banking and financial services, including mortgages, home
improvement loans and home equity loans, to their members.
- Credit The
money a lender extends to a buyer for a commitment to repay the loan
within a certain time frame.
- Creditor An
individual or institution to whom a debt is owed.
- Cross-bridging The
strengthening of a structure by bracing cross members between beams.
- Cul
de sac A street or alley that is closed at one end.
- Cupola A
dome-like structure that sits on top of a roof.
- Curable
defect A deficiency in a property that is easy or
inexpensive to fix, such as chipping paint.
- Curb
appeal The first impression of a house as seen from
the street.
- Curtain
wall An exterior wall that encloses a yard or other
area but does not provide any structural support to a home.
- Custom
builder A builder who constructs a home or building
based on plans created by the owner.
- Custom
home A structure designed by an architect hired by
the owner. (Return to Top)
-D-
- Damper A
movable plate in a fireplace that allows smoke and fumes to travel up the
chimney's flue.
- Days
on the market The period of time a property is listed
for sale until it is sold or taken off the market
- Deadbolt
lock Locks that require a key to open from the
outside and a turn button from the inside.
- Debt Any
amount one person owes to another.
- Deck A
roofless, floored area that adjoins a house.
- Deed
of trust A document that gives a lender the right to
foreclose on a piece of property if the borrower defaults on the loan.
- Deed The
legal document that transfers ownership of a piece of property.
- Deep-seal
floor drain A drain used to dispose of water from the
basement floor to a sewer line.
- Default The
failure to fulfill a duty or promise or discharge an obligation, such as
making monthly mortgage payments.
- Deferred
maintenance Any repair or maintenance of a piece of
property that has been postponed, resulting in a decline in property
value.
- Delinquent
mortgage A mortgage that involves a borrower who is
behind on payments. If the borrower cannot bring the payments up to date
within a specified number of days, the lender may begin foreclosure
proceedings.
- Density
test An analysis of soil to determine if the surface
can support the foundation of a house.
- Dentils Small
rectangular blocks that project from a building, usually under cornices or
along rooflines.
- Deposit Money
given by the buyer with an offer to purchase property. Also called earnest
money.
- Depreciation The
decline in value of a piece of property.
- Design/build A
project in which the owner contracts directly with an individual or
company to perform design and construction.
- Designer Unlike
architects, designers are limited to drawing blueprints.
- Digital
images Images that are incorporated into house
listings to give potential buyers a view of the property.
- Dimension
plans Plans which show the layout of a house but are
less detailed than full blueprints.
- Disability
insurance An insurance policy which covers an
individual's ability to produce income.
- Disclosure A
statement to a potential buyer listing information relevant to a piece of
property, such as the presence of radon or lead paint.
- Discount
points Fees that a borrower pays at the time the
lender makes the loan. A point equals 1 percent of the total loan amount.
- Distressed
property Property that is in poor physical or
financial condition.
- Document
needs list A list of documents a lender requires when
a potential submits a loan application.. The required documents range from
paycheck stubs to credit card statements.
- Domed
ceiling A hemispherical ceiling that projects upward
without support.
- Domicile A
person's primary or permanent home.
- Dormer A
window set upright in a sloping roof.
- Double-hung
window A window that consists of two sashes that
slide up and down.
- Dovetail
joints Joints that lock two pieces of wood together
with meshed teeth.
- Down
payment The amount of money a buyer agrees to give
the seller when a sales agreement is signed. Complete financing is later
secured with a lender.
- Down
spouts A vertical gutter that empties water from the
roof to the ground.
- Drainage A
system of gutters and drainpipes that carry water away from the foundation
of a house.
- Draw A
payment made to subcontractors or suppliers from a construction loan.
- Dropped
ceiling A flat ceiling built lower than the original
ceiling.
- Dry
rot A fungal decay that causes wood to become brittle
and crumble.
- Drywall A
construction material composed of gypsum or plaster wrapped in paper and
produced in large sheets that can be nailed to wall studs.
- Dual
agency A relationship in which a real estate agent or
broker represents both parties in a transaction.
- Duct Any
kind of pipe or channel that carries water, wiring or conditioned air
through a house.
- Due-on-sale
clause Standard language in a mortgage which states
that the loan must be paid when a house is sold.
- Duplex A
structure that consists of two separate family units.
- Dutch
colonial style A design that features barn-like
gambrel roof, a ground-level front porch, and dormers. (Return
to Top)
-E-
- Early
occupancy The condition in which buyers can occupy
the property before the sale is completed.
- Earnest
money Money a buyer gives with an offer to purchase a
property. Also called a deposit.
- Earthquake
insurance A policy that provides coverage against
damage to a home from an earthquake.
- Easement A
right given to a third party to use a portion of the property for certain
purposes, such as power lines or water mains.
- Eaves The
projecting overhang at the lower edge of a roof.
- Effective
age The age of a structure estimated by its condition
rather than its actual age.
- Effective
gross income Additional income that a lender
considers when assessing the loan application of a potential borrower.
- Electric
service panel A panel that transfers power from the
utility line into a house to be distributed through fuses or circuit
breakers.
- Elevations The
exterior view of a home design that shows the position of the house
relative to the grade of the land.
- Ell An
extension or wing of a house that is at right angles to the main
structure.
- Eminent
domain The government's right to condemn private land
for public use, such as the routing of a public highway.
- Employer-assisted
housing Programs which help employees purchase homes
through special plans developed with lenders.
- Empty
nesters Potential buyers who have raised their
families and want to move into a smaller home.
- Encroachment Fences
or other structures that extend into the property of another owner.
- Encumbrance A
claim or lien on a property which complicates the title process.
- End
loan The conversion from a construction loan to
permanent financing a condominium buyer secures after all units in a
project have been completed.
- Endorser A
person who signs over ownership of property to another party.
- English
Tudor style An architectural design that features
stone or brick exterior walls and exposed beams.
- Environmental
impact statement A government-mandated evaluation of
all aspects and effects a development will have on the environment of a
proposed site.
- Environmentally
friendly home construction A method of construction
that utilizes recycled materials.
- Equal
Credit Opportunity Act. A federal law that prohibits
a lender or other creditor from refusing to grant credit based on the
applicant's sex, marital status, race, religion, national origin or age.
The law also prohibits a creditor from refusing to grant credit because
the applicant receives public assistance.
- Equifax Equifax
Credit Information Services, Inc., is one of the "Big Three"
credit-reporting bureaus that operate nationwide. Address: P.O. Box
740249, Atlanta, GA 30374.
- Equity A
determination of the value of a property after existing liens are
deducted.
- Errors
and omissions insurance A policy that pays for any
mistakes a builder or architect makes in a project.
- Escrow
account An account that a lender or mortgage servicer
establishes to hold funds for the payment of expenses such as homeowners
insurance and property taxes. Also known as an impound account.
- Escrow
agent A neutral third party who ensures that all
conditions of a real estate transaction are met.
- Escrow
analysis A lender's periodic examination of an escrow
account to determine if the lender is withholding enough funds from a
borrower's monthly mortgage payment to pay for expenses such as property
taxes and insurance.
- Escrow
closing Escrow closes when all conditions of a real
estate transaction are met and the title of the property is transferred to
the buyer.
- Escrow
company Firms that act as neutral third parties to
ensure that all conditions that the buyer, seller and lender establish in
a real estate transaction are met.
- Escrow
payment Funds that a mortgage servicer withdraws from
a borrower's escrow account to pay property taxes and insurance.
- Escrow A
neutral third party holds the documents and money involved in a real
estate transaction and ensures that all conditions of a sale are met..
Escrow also refers to a special account that a lender establishes to hold
monthly installments from the borrower to cover property taxes and
insurance.
- Estate The
total assets of a person, including real property, at the time of death.
- Eviction A
legal procedure to remove a tenant for reasons including failure to pay
rent.
- Examination
of title An inspection by a title company of public
records and other documents to determine the chain of ownership of a
property.
- Excavation The
process of clearing trees, removing topsoil and grading land before the
foundation is laid.
- Exclusive
listing A contract that gives an agent the exclusive
right to market a property for a specific period of time.
- Executor A
person appointed to carry out the instructions in a will. If there is no
will, a probate court will appoint an executor.
- Exhaust
fan Ventilating devices that remove water vapor,
undesired smells or smoke.
- Experian Experian,
formerly known as TRW Information Systems & Services, is one of the
"Big Three" credit-reporting bureaus.. Address: 505 City Parkway
West, Orange, CA 92868. (Return to Top)
-F-
- Facade The
part of a building facing the street or a courtyard.
- Fair
Credit Billing Act A federal law that governs credit
and charge card billing errors. If a credit or charge card company
violates any provision, consumers can sue to recover damages.
- Fair
Credit Reporting Act. A federal law passed in 1971
that regulates the activity of credit bureaus. It is designed to prevent
inaccurate or obsolete information from staying in a consumer's credit
file and requires credit bureaus to have reasonable procedures for
gathering, maintaining and disseminating credit information. The act also
requires credit bureaus to show a consumer their credit file if the
consumer presents proper identification, although the bureau reserves the
right to charge a fee for doing so.
- Fair
Debt Collection Practices Act. A federal law passed
in 1977 which outlaws debtor harassment and other types of collection
practices. The act regulates collection agencies, original creditors who
set up a separate office to collect debts, and lawyers hired by the
creditor to help collect overdue bills. An original creditor--the company
or individual that originally granted the credit--is not covered by the
act, but may be covered by similar measures approved by state governments.
- Fair
Housing Act Landmark federal law passed in 1965 and
amended in 1988 that makes it illegal to deny rent or refuse to sell to
anyone based on race, color, religion, sex or national origin. The 1988
amendment expanded the protections to include family status and
disability.
- Fannie
Mae The official name of the Federal National
Mortgage Association, it is a congressionally chartered, shareholder-owned
company that buys mortgages from lenders and resells them as securities on
the secondary mortgage market.
- Farmer's
Home Administration A U.S. Department of Agriculture
agency that provides credit to farmers and rural residents.
- Fascia A
board that connects the ends of the roof rafters and provides a surface to
support gutters.
- Federal
Home Loan Mortgage Corporation,law The Federal Home
Loan Mortgage Corporation, commonly known as Freddie Mac. The company buys
mortgages from lending institutions, pools them with other loans and then
sells shares to investors.
- Federal
Housing Administration (FHA) This government agency
operates a variety of home-loan programs. Its most popular is the Sec.
203(b), program, which provides low-rate mortgages to buyers who make a
down payment as small as 3 percent.
- Federal
National Mortgage Association Now officially dubbed
Fannie Mae, this federally chartered agency buys mortgages from lending
institutions, pools them with other loans and sells shares to investors.
- Federal
Reserve Board A group of economists and other experts
who set the nation's monetary policy. Its chief tool to control inflation
is the power to control interest rates.
- Federal
style The all-American home architecture style that
evolved after the Revolutionary War. Details include bigger windows and a
front doorway surrounded by glass and topped with an arched window.
- Federal
Trade Commission The government agency responsible
for regulating a variety of companies and industries, from credit bureaus
and collection agencies to timeshare operators and certain types of
creditors. National headquarters: Sixth and Pennsylvania Avenue NW,
Washington, D.C. 20580. Phone: (202) 326-2222.
- Fee
simple defeasible The owner of the property holds a
fee simple title contingent upon certain conditions.
- Fee
simple This type of ownership is the maximum interest
a person can have in a piece of real estate. It entitles the owner to use
the property in any manner they see fit, in accordance with state and
local laws.
- Feng
shui An ancient Chinese belief that the physical
characteristics of a house and the positioning of the home will affect the
fortunes of the owner.
- FHA
loans Mortgages that are insured by the Federal
Housing Administration. The FHA's 203(b) loan program provides low-rate
mortgages to buyers who make a down payment as small as 3 percent. The
agency also operates loan plans for investors and purchasers of rural
property.
- Fiduciary
duty The relationship of trust that buyers and
sellers expect from a real estate agent. The term also applies to legal
and business relationships.
- Field
changes Modifications made on the construction site
that do not match blueprints.
- Fill
dirt Soil brought in to solidify a finished
foundation.
- Filled
land An area where the ground has been raised by
adding dirt, gravel or other fill material.
- Finder's
fee A fee in any amount that is paid to someone.
- Finish
grade A finish that prepares a lot for landscaping.
- Fire
wall A buffer composed of fire-resistant material.
- Firm
commitment A promise made by a lender when it agrees
to loan money for the purchase of property.
- First
mortgage The primary mortgage on a property that has
priority over all other voluntary liens.
- Fixed
installment The monthly payment on a home loan.
- Fixed
time The specific weeks in a year an owner of a
timeshare arrangement has access to accommodations.
- Fixed-rate
mortgage A home loan with an interest rate that will
remain at a specific rate for the term of the loan. About 75 percent of
all home mortgages have fixed rates.
- Fixer-upper A
house that needs refurbishment or remodeling It usually sells at a
below-market price.
- Fixture Personal
property permanently attached to a house, such as drapery rods, toilets,
built-in bookcases or a furnace.
- Flashing Metal
strips placed around chimneys, skylights, vents, windows, doors, beneath
shingles and along seams in the roof to prevent water seepage.
- Flat
fee A set fee charged by a broker instead of a
commission.
- Flat
roof A roof with a level surface.
- Float
floor drain A drain that diverts water from the
basement to a collection area. Water is then removed with a sump pump.
- Floating
wall Walls built to withstand movement in the
basement floor.
- Flood
insurance Hazard coverage that is required in
designated flood areas.
- Flood
plain Flat, flood-prone areas located along
waterways.
- Floor
area ratio The calculation of the floor area of all
homes or buildings in a project. It is used in the planning and
development of a site.
- Florida
rooms Enclosed porches built on the side or back of a
home.
- Footings Concrete
foundations that support a structure.
- For
Sale By Owner (FSBO) The owner acts as the agent to
avoid paying a sales commission.
- Forbearance A
course of action a lender may pursue to delay foreclosure or legal action
against a delinquent borrower.
- Foreclosure The
legal process reserved by a lender to terminate the borrower's interest in
a property after a loan has been defaulted. When the process is completed,
the lender may sell the property and keep the proceeds to satisfy its
mortgage and any legal costs. Any excess proceeds may be used to satisfy
other liens or be returned to the borrower.
- Forfeiture The
relinquishing of property rights by a delinquent borrower.
- Foundation The
support structure of a house.
- Foyer The
entrance hall to a home or building.
- Framing The
construction of the skeletal framework of a house.
- Freddie
Mac The common name for the Federal Home Loan
Mortgage Corporation, a congressionally chartered institution that buys
mortgages from lenders and resells them as securities on the secondary
mortgage market.
- Free-market
lots Owners of these types of lots may hire any
builder to construct their home.
- French
doors Two adjoining doors inlaid with glass that open
from the middle.
- Frontage The
portion of property that borders a roadway or body of water.
- Fully
amortized adjustable-rate mortgage A mortgage that
amortizes, or pays down, the balance of a loan, usually with annual
adjustments for interest rate.
- Furnace An
enclosed heating device pow
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