Real Estate Terms

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Addendum
Additional documents attached to and made part of a contract.

Avulsion
A sudden tearing away of land caused by water such as a dam breaking.

Accretion
An increase in the amount of land due to natural causes such as a receding waterline.

Amenities
Features without value to the property.

Agency relationship
Special relationship of trust by which one person, the agent, is authorized to conduct business, sign papers, or otherwise act on behalf of another person, principal. A person who acts four and in the place of another, called a principal, for the purpose of affecting the principles legal relationship with third person.

Appreciation
An increase in the worth or value of a property. The increase in market value of real estate. An increase in the property value with the passage of time.

Appurtenances
Encumbrances and covenants that run with the land. Considered real property.

Arbitrator
In a dispute, the parties hire a neutral person to listen to each side. The arbitrator makes a binding decision on all parties to the dispute.

Assumption of mortgage
The taking of a title to property by a grantee who assumes liability for payment of an existing note secured by a mortgage or deed of trust against the property.

Attorney in fact
The person holding the power of attorney. A competent and disinterested person who is authorized by another person to act in his or her place in legal matters.

Broker
An agent who earns income by arranging sales and other contracts. The real estate broker is an individual licensed by the state of California to arrange the sale or transfer of interest in real property for compensation.

Brokerage
An activity involving the sale of something through an intermediary negotiate the transaction for payment.

Bilateral contract
An agreement in which each person promises to perform an act in exchange for another persons promise to perform.

Bilateral instructions
One set of escrow instructions signed by both the seller and buyer.

Blockbusting
The illegal practice of telling people the property value in the neighborhood will decline because of a specific event, such as the purchase of homes by minorities.

Bona fide purchaser
Bona fide means good faith, so a bona fide purchaser is one who pays for value of property in good faith, and without notice of adverse claims.

Breach of contract
A failure to perform on part or all of the terms and conditions of a contract.

Bundle of rights
A metaphor to explain the rights of property ownership. These include the right to sell, lease, use, encumber, exclude, devise, and enjoy.

Buyers agent
A broker employed by the buyer to locate a certain kind of real property.

Buyers broker
An agent who represents only the buyer and has a fiduciary duty to find the best house for the least money at the terms most favorable to his or her principal, the buyer.

Buyers market
A market containing more supply than demand.

Buyers profile
A document indicating the buyers motivation and how much they can afford to spend on a home.

Buyers statement
A record of costs and credits incurred for the purchase of the property

CC&Rs
Covenants, conditions, and restrictions

Client
The person who employs an agent to perform a service for a fee.

Caravan
An opportunity for the sales people in the office and other members of the MLS to preview a new listing.

Closing
Process by which all the parties to a real estate transaction conclude the details of a sale or mortgage. The process includes the signing and transfer of documents and distribution of funds.

Cladding
The external protective skin of the exterior surface of a home (surface coating, siding, doors, windows, trim, shutters, entryways, and flashings).

Contract
Legally enforceable agreement made by competent parties to perform or not perform a certain act.

Customer
A prospective buyer of real estate, not to be confused with a property seller, who is the listing brokers client.

California fair employment and housing act
State law that prohibits discrimination in the sale, rental, or financing of practically all types of housing.

California land title association
Trade organization of the states title companies.

Can-spam laws
Federal and state law regulating commercial email messages.

Capitol gains
Profit made from the sale or transfer of property.

Career book
A marketing piece that identifies a sales person and highlights their qualifications. This marketing piece is solely about the salesperson's credentials and successes.

Caveat emptor
Let the buyer beware.

Chain of title
A chronological summary of all the useful documents discovered in a title search regarding the ownership of a property.

Chattel Real
Tangible movable personal property.

Closing costs
The miscellaneous expenses buyers and sellers normally in cur transfer of ownership of real property over and above the cost of the property.

Closing statement
And accounting of funds mailed to the buyer and seller separately. Required by law to be made at the completion of every real estate transaction.

Cloud on title
Any condition that affects the clear title of real property or minor defect in the chain of title which needs to be removed.

Commingling
The illegal practice of depositing clients funds into a broker's personal or general business account.

Commission
A fee for services rendered usually based on a certain percentage of the sale price of a property.

Commission split
Previously agreed-upon division of money between a broker and sales associate when the brokerage has been paid commission for my sale made by the associate.

Common interest development
Combines the individual ownership of a private dwelling with the shared ownership of common facilities of the entire project.

Community property
All property acquired by husband and wife during a valid marriage.

Community property with right of survivorship
Community property with the added tax benefit of "double step up in bias".

Comparable sales (Comps)
Recent selling prices of properties that are similar to the subject property. Used to help set the selling price on a listed in the term in the property value in the appraisal process.

Comparative market analysis (CMA)
A comparison analysis that real estate brokers use while working with the seller to determine an appropriate listing price for the sellers house.

Condominium
Housing unit consisting of a separate fee in a particular space plus an undivided interest in all common areas of the development. Which unit owner has a deed, separate financing, and pays the property taxes or his or her unit.

Consideration
The buyers deposit usually 1%-3% of the purchase price of the property.

Consumer credit protection act
A federal law that includes the truth in lending laws

Contingencies
A statement defining the terms of an agreement giving the other party to the agreement cause to void an offer if the terms are not met.

Contract date
The date the contract is created. The contract is created when the final acceptance was communicated back to the offeror.

Contract of sale
A contract for the sale of real property where the seller gives up possession but retains title until the total of the purchase price is paid off.

Convenience
The transfer of title to land by use of a written instrument.

Conversion
The procreation of property or funds belonging to another, as in a broker using a client's money.

Counter offer
The rejection of an original purchase offer and the submission of a new and different offer.

Covenants, conditions, and restrictions (CC and Rs)
Restrictions placed on certain types of real property to limit the activity of owners. Covenants and conditions or promises to do or not do certain things.

Credit scoring
An objective, statistical method that lenders use to quickly assess the borrower's credit risk.

Curb appeal
A phrase in playing an informal evaluation of property based on observation and experience.

Deficiency judgment
Personal claim based on a judicial order against the debtor. This occurs when the property fails to bring in a price at the foreclosure sale which covers the mortgage amount.

Executor
Person appointed to carry out instructions of testator, pay the bills of the estate, and dispose of the property as instructed.

Estate at will
A less than freehold estate that can be terminated at any time by the landlord or tenant.

Estate at sufferance
A property in which the tenant continues to occupy the property after the lease or agreement was finished.

Estate for years
In a state held for a fixed period of time. Not necessarily a year this property can be held between a start date and an end date therefore no notice of termination is required

Fixtures
Considered real property because it is incorporated into the land. Use the acronym MARIA. Method, adaptability, relationship, intention, and agreement.

Fiduciary
A relationship of trust, especially with regard to the relationship between a trustee and a beneficiary.

Fee simple estate
A type of freehold estate. Also called an estate of inheritance or a fee simple absolute. Can be sold or inherited and is not free of encumbrances. Fee simple absolute is the most interest someone can hold in the land.

Fee simple defeasible
Put conditions on the property such as no alcohol on the property. If the condition is violated the owner could lose title.

Freehold estate
In the state held for an undefined amount of time.

Gross lease
Tenant pays a fixed amount to a landlord. A common lease agreement.

Gross rent multiplier GRM
Method of appraising single-family or duplex is based on the monthly gross income.

HELOC
Home Equity Line of Credit

Lease
A contract between a lessor and a leasee giving possession but not ownership to a property. A lease is considered personal property.

Less than freehold estate
The property his title is held for a defined length of time.

Life estate
An interest in real property that lasts the length of someone’s life. Considered a freehold estate because it is indefinite in duration.

Life estate pur autre vie
Meaning, for the life of another. Interest in a property that lasts lol length of a persons life and then reverts to owner.

Life estate, pur autre vie
Meaning, for another’s life. The interest in a property for the length of someone’s life.

Litoral rights
Rights associated with property bordering a static body of water such as a lake, sea, or ocean.

Novation
Replacing an old obligation with a new obligation, an old debt with and a new debt.

Net lease
In which the tenant pays for taxes insurance and maintenance In addition to rent and other utilities.

Percentage lease
Amount of rent paid by leasee as a percentage of of the gross income of the leasees business.

Periodic tenancy
A less than freehold estate that is held for a period of time. Week to week, month to month, year to year.

Personal property
Property that goes with the person when selling a home that are not considered fixtures.

RESPA
Real Estate Settlement Procedures Act

Reliction
A gradual recession if land that will permanently be uncovered.

Real property
Generally immovable things that go with a property including a home and it’s fixtures.

Riparian rights
Riots applying to property along a moving body of water as in a river or stream.

Sale leaseback
One property is sold and then leased back. essentially becoming a tenant of the new owner.

Sub-lease or sandwich lease
When a leasee sublets to a third-party.

Trustor
The person who creates an invoice with instructions to the trustee, the borrower.

Trade fixtures
Considered personal property because although they may be attached to the land they belong to the business rather than the property.