Home Real Estate and Foreclosures Glossary

Foreclosure Glossary

There are a lot of technical terms tossed around in the real estate industry, so we've compiled this Real Estate glossary to help you learn about them and expand your knowledge. If you find any terms that confuse you as you're reading about foreclosures, you can find definitions and explanations below by clicking the links in our foreclosure glossary.

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A

A la Carte Real Estate Services: A real estate transaction with additional itemized prices for a commission based service.

Absolute Auction: A type of a public sale where an auctioned property is awarded to the highest bidder. The seller has no control over the price of the property.

Accelerated Cost Recovery System: A faster recovery method that allows the property costs shorter useful life than previously permitted by the tax code.

Accelerated Depreciation: A System of depreciation that permits much more deductions in the beginning stages of the life of an asset.

Acceleration Clause: Is part of a loan agreement that lets the lender accelerate the deadline of payment in full, in the event that the borrower misses a payment.

Acceptance: An agreement between the seller and buyer staying within the terms and conditions placed by the buyers offer.

Acre: Determines the dimensions of a land area equal to 43,560 square feet. acre-foot; The quantity of solid matter in depth of a foot that would cover an acre.

Acceleration: A provision in one’s mortgage allowing the lender to request payment of a default loan balance from a borrower for varied reasons. Usually, accelerating a particular loan happens when borrower failed to pay certain financial obligations or transferred a property title to another person without consent of the lender.

Actual Age: The time lapsed since a structure has been constructed.

Ad Valorem Tax: Taxes that are imposed on an estimated value of a property.

Add-On Interest: The interest that is compiled on the principal amount of a loan through its entirety that must be repaid even if the loan is paid off early.

Addendum: An attachment to a contract or substitution.

Adjustable Rate Mortgage (ARM): An interest rate that fluctuates according to on going interest rates which may change on a yearly basis.

Adjusted Cost Basis: The cost of home improvements that are subtracted from the original sales price of a property to show loss or profit when sold.

Adjustment Period: Adjustment Interval. The time between rate changes on a flexible mortgage rate.

ARM (Adjustable Rate Mortgage): Is a variable rate loan that with an interest rate that changes according to the current interest rates.

Awning Windows: A top hinged window that tilts out-ward and up with a single frame.

A-Frame Design: An interior style that features a steeply peaked roofline and a ceiling that is open to the top rafters.

Abstract of Judgment: The summary of a court judgment that creates a lien against a property when filed with the county recorder.

Abstract or Title Search: A review of all public title records to ascertain that there are no title defects, no claims or liens against the property that would interfere with the transfer of ownership for the property.

Access: Any means by which a person can enter a property.

Accessibility: The quality of ease of access for persons with disabilities.

Accretion: The gradual addition to the shores of a body of water by deposits of sand or silt.

Acknowledgment: A written declaration affirming that the execution of an act was completed voluntarily.

Additional Principal Payment: An extra payment made by the borrower in order to reduce the principal amount owing and shorten the term of the loan.

Administrator: A court appointed person given authority to act for another person who is incapable of acting for him/herself, or a court appointed person given authority to administer the estate of a person who died intestate.

Administrators Deed: A legal document that an administrator of an estate uses to transfer property.

Adverse Possession: A method of claiming ownership to property owned by another person without the owner’s consent, by occupying the property for a certain amount of time.

Adverse Use: The access and use of property without the owners consent.

Aeolian Soil: Soil that is composed of materials deposited by the wind.

Affiant: A person who makes a sworn statement.

Affirmation: A solemn and formal declaration of the truth of a statement of facts used by a person who objects to taking an oath, usually due to religious convictions that preclude swearing an oath.

Agency: The relationship between a Principal and an Agent who represents the interests of the Principal in dealings with third parties whereby the Principal is bound by the statements, warranties and contracts.

Agency Closing: The process by which a lender uses a title company or other firm to act on the lenders behalf for closing the purchase of a home or refinancing a home loan.

Agency Disclosure: Documents that disclose the agents and brokerage agency relationships with the parties involved in the real estate transaction.

Agreed Boundary: Property line boundaries that are drawn to settle a dispute between the property owners.

Agreement of Sale: A document initiated by a buyer, which contains the terms and conditions for the transfer of title of a given property.

Air Handler: An appliance that pushes air across a central air conditioners evaporator coil and into the ducts. The fan that blows the air from your furnace throughout your house.

Air Lot: A designated airspace over a piece of property.

Air-Handling Unit: An appliance that pushes air across a central air conditioners evaporator coil and into the ducts. The fan that blows the air from your furnace throughout your house.

Alcove: A recessed section of a room or an extension of a room that forms part of the room.

Alienation Clause: A term in a mortgage which allows the creditor to request full payment of the balance of a mortgage upon the transfer of title of the property.

Alkali: Soluble mineral salts found in natural water and arid soils.

Alkaline Soil: Soil that contains a higher concentration of mineral salt than natural acid.

Alley: A narrow street or passageway between or behind a row of buildings.

Allowance: A budget offered by builders of new homes for the purchase of carpeting and fixtures.

Alternative Mortgage: Any home loan that is not a standard fixed-rate mortgage.

Aluminum Siding: A metal covering for homes.

Aluminum-Clad Windows: Wooden windows with aluminum covering the exterior.

Amenities: Positive features and attractions located in or near a neighborhood which increase the value of a property.

American Society of Home Inspectors (ASHI): Professional association of independent home inspectors whose members must meet the standardized national policies. Call (800) 743-2744 for list of ASHI-certified inspectors in your area.

Americans with Disabilities Act (ADA): 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: A loan repayment plan which allows for equal payments to be made to the creditor at regularly scheduled intervals over the life of the loan. Payments cover the interest accrued over the interval period first with the remainder of the payment being applied to the principal. The loan will be completely repaid at the end of the amortization period if all payments are made and made on time.

Amortization Tables: Mathematical tables that lenders use to calculate a borrowers monthly payment.; A mathematical formula which calculates a borrowers monthly payment based on the amount borrowed, the interest rate and the term of the loan.

Amperage: The strength of an electrical current.

Ampere: A unit of electric current in the meter-kilogram-second system.

Anchor Bolt: A large steel bolt anchored in concrete and attached to a building to prevent the structure from moving.

Annual: Any kind of plant that completes its entire life cycle in a single growing season and must be planted every year.

Annual Assessments: The process of assessing a property for value for the strict purpose of taxation.

Annual Mortgagor Statement: A report sent to a borrower once a year detailing how much interest, taxes and principal were paid on the loan during the year.

Annual Percentage Rate (APR): A standard format to provide the annual average compound interest rate over the term of the loan so borrowers can comparison shop for loans. In mortgages, it is the interest rate when taking into account the interest, mortgage insurance, and certain closing costs.

Annuity: A periodic payment of a fixed sum of money paid to an investor.

Anticipatory Breach: A notification that informs the parties to a contract that one party will not be fulfilling the obligations of the contract, releasing the other party (or parties) from having to fulfill their end of the agreement.

Antioxidant Compound: A substance applied to aluminum wiring connections to seal and promote conduction.

Appellant: A taxpayer or representative who appeals to a higher tribunal.

Application: A form that is filled out when applying for a mortgage which documents personal and financial information of the applicant.

Application Fee: The fee that the lender charges the applicant to process the application for a loan.

Appraisal: An estimate of the market value of a property after an inspection of the property

Appraisal Fee: The fee that is charged by an appraiser to do a market evaluation on a property.

Appraisal Report: A written report which supports an appraisal of property value based on recent sales of comparable properties in the same area.

Appraised Value: An estimate of the market value on a property after an inspection of the property and the analysis of similar properties in the same area.

Appreciation: An increase in the value of a property due to changes in market conditions, inflation or changes to the value of surrounding properties.

Approval: A confirmation of the amount a borrower may obtain.

APR (Annual Percentage Rate): A standard format to provide the annual average compound interest rate over the term of the loan so borrowers can comparison shop for loans. In mortgages, it is the interest rate when taking into account the interest, mortgage insurance, and certain closing costs.

Apron: A paved area, such as the junction of a driveway with the street.

Aquastat: A thermostat submerged in water and used to control the operation of a device.

Arbitration: An alternative dispute resolution method in which a third party renders a decision without resorting to court.

Arbor: A shaded area often made of rustic work or latticework on which plants, shrubs or vines are grown.

Arc: A highly luminous, hot discharge of electricity between two electrodes. Characterized by a high current, low voltage and of indefinite duration that is usually started when two electrodes carrying an electric current are drawn apart.

Arch: A structure forming the curved, pointed, or flat upper edge of an open space and supporting the weight above it.

Arch Surround: Half-round or elliptical trim mounted above a door or window for decorative purposes.

Architect: A licensed professional who designs and supervises the construction of buildings and other structures.

Architectural Fees: The fee an architect charges for services.

ARM Index: A reliable financial indicator used to adjust the interest rate for an adjustable rate loan (ARM). ARM mortgages rely on the U.S. Treasury Securities rate and the London Inter-Bank Offered Rate (LIBOR) for the rates.

Arpent: A French measurement of land equal to .84625 acres.

Array: A term used by tax assessors to describe a list of properties in a specific category that have been sold within a given period of time.

Asbestos: A natural incombustible and chemical-resistant material that was used for fireproofing, electrical insulation, building materials, brake linings, and chemical filters. Made up of tiny fibers that can lodge in the lungs and lead to cancer or scarring of the lungs. In 1989, the Environmental Protection Agency imposed a ban on 94% of U.S. asbestos production and imports.

As-Is Condition: Acceptance of the property in its current condition which releases the vendor from any liability for problems found before or after closing.

ASHI (American Society of Home Inspectors): A Professional association of independent home inspectors whose members must meet the standardized national policies. Call (800) 743-2744 for list of ASHI-certified inspectors in your area.

Asking Price: The advertised price of the property; may suggest flexibility regarding the price.

Assemblage: The combining of two or more adjoining properties into one larger property to increase the total value.

Assessed Value: The value placed on a property by the municipality to establish the taxes payable by the owner of the property.

Assessment: The process of placing a value on a property for tax purposes. May also refer to a levy placed on a property for a special purpose.

Assessment Rolls: A public record of taxable property compiled by an assessor.

Assessor: A public official employed by the municipality to determine the value of a property for taxation purposes.

Assets: Items of monetary value owned by a person. Includes property, personal property and investments.

Assessed Value: A tax assessor’s estimated value on a particular property for the purpose of tax calculations.

Auction: Selling of properties in public in a form of bidding.

See also:

Foreclosure Auctions

Assignment: The transfer of a mortgage from one lender to another.

Assignor: A person who transfers rights and interests of a property.

Assumable Mortgage: A mortgage or loan that can be taken over (assumed) by the new owner with the new owner paying the seller the difference between the sales price and the balance on the loan.

Assumption Clause: A provision in an assumable mortgage that states the borrower has the right to have the mortgage assumed by a purchaser.

Assumption Fee: A fee the lender charges the purchaser of a property to process the records for the assumption of the existing mortgage.

Automatic Extension: A clause in a listing contract that states the agreement will automatically continue for a specified period of time after the expiration date. This is discouraged and prohibited in many states.

Automatic Flue Damper: An energy saving device in the flue of a heating unit that closes to prevent heat loss when the unit is not in use.

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: Used to secure airspace for an airport and runway approach. May consist of the right-of-flight; the right to cause noise; the right to remove all objects protruding into the airspace and to prohibit future obstructions; and the right of ingress/egress on the land to exercise the rights. May also contain any number of additional restrictions the airport owner deems necessary.

B

Back Title Letter: A notice from a title insurance company to a person who is searching and certifying that a title search has been completed on the property.

Back-End Ratio: A calculation that compares a borrower’s total debt to the gross monthly income to assess the ability to carry a mortgage or loan.

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.

Backerboard: A board placed under or behind something to provide firmness or support.

Backfill: The replacement of soil into a hole, crevice or against a structure to strengthen it.

Backsplash: A surface or border, usually made of tile, which protects the wall behind a sink or stove.

Backup Offer: A secondary bid for a property that puts you next in line if the accepted offer falls through.

Backwater Valve: A backwater valve is a valve that is put on a sewer line in the basement to prevent sewer backflows.

Baffle: A device used as a heat shield to deflect the byproducts of combustion.

Balance Sheet: A statement that shows the assets, liabilities, and net worth of an individual on a given date.

Ball Cock: A self-regulating device to control the supply of water in a tank, cistern, or toilet by a float that is connected to a valve that opens or closes with a change in the water level.

Ballcock Assembly: A hollow float ball attached to the end of a long float arm, or float cup assembly which uses an open plastic cup directly on the valve assembly, to control flushing in the toilet tank.

Balloon Loan: A loan with small monthly payments for a period of time, with one final payment in full made at the end of the contract.

Balloon Payment: The final lump-sum payment that is made at the maturity date of a balloon mortgage and pays the loan in full.

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.

Baluster: An upright support, usually rounded or vase-shaped, which supports a balustrade.

Balustrade: A rail and the row of balusters or posts that support it, as found on a stairway or gallery.

Bankruptcy: A legal proceeding in which a person or business, who is unable to pay their debts, voluntarily assigns themselves into or is petitioned into bankruptcy by their creditors. This protects them from legal action by some of their creditors.

See also:

Bankruptcy Homes

Bargain Sale: The sale of property for less than market value.

Base Loan Amount: The amount upon which loan payments are based. Any other charges accrued will be added to the base loan amount.

Baseboard: Any board or molding found at the bottom of an interior wall.

Baseboard Electric Heat: Heaters that are controlled by thermostats located in each room that contains an electric baseboard heater.

Basement: The substructure or foundation of a building, usually below ground level.

Basis Point: One one-hundredth of a percentage point. For example, the difference between a loan at 8.25 percent and a mortgage at 8.37 percent is 12 basis points.

Batten: A narrow strip of wood used to fasten down the edges of a material on the outside of a house to cover joints in walls.

Bay: An opening or recess in a wall between vertical elements, such as columns or pilasters.

Bay Window: A window that projects from the outer wall of a building and forms a recess within the building.

Bearing Wall: A wall in the lower story of a building that holds up the upper levels of a house and the roof. They carry the weight of the floors above.

Before-Tax Income: Gross earnings before taxes are deducted.

Beneficiary: a person or corporate entity that benefits from an insurance policy or will.; a person or entity that benefits from a promise, agreement, or contract.

Bequest: An item or property given to a person or entity under the instructions of a will.

Berm: A concrete ledge designed to prevent runoff water from accessing an area of the property or building.

Betterment: A home improvement or addition to the property that increases its value.

Building Permit: An authorization from the local government office allowing new construction or renovation of an existing structure.

Bi-Level: A home that has two levels, where the main entrance is between the two levels.

Bi-Metal Coil: A mechanical device in a home heating system that automatically responds to changes in temperature and activates switches to control the temperature.

Bid Out: The process that contractors use to estimate the cost of a house or project before it is completed.

Bidding War: Multiple offers on a property for sale.

Bilateral Contract: A legal agreement where both parties promise to give something to each other, as in a transfer of property (the buyer promises to give the funds and the seller promises to transfer the property).

Bill of Sale: A document that provides evidence that the title to personal property (chattels) has been passed to the purchaser.

Binder: a preliminary agreement between a buyer and a seller for the sale of a property; the deposit is lost if the purchaser does not complete the purchase.; a written commitment from an insurance company to insure a property.

Biweekly Mortgage: A mortgage that has scheduled payments every two weeks resulting in 26 payments per year. This increased payment schedule substantially reduces the interest payments and the life of the mortgage.

Blanket Insurance Policy: An insurance policy that covers more than one person or property, such as areas owned in common. This type of policy does not cover dwellings or contents of dwellings.

Blanket Mortgage: A loan that is secured against more than one piece of property. Usually refers to commercial property.

Blighted Area: An unsightly area or community where the infrastructure and buildings have deteriorated.

Blind Nailing: A method of concealing a nail by driving in the finish nail or brad, counter sink it, and fill the top of the hole with plastic wood putty.

Blockbusting: An illegal practice of persuading homeowners to sell their properties quickly by putting a fear of declining property values due to people of ethnic origins moving in.

Blue-Ribbon Condition: A term used to refer to a house that appears as brand-new or in mint condition.

Blue-Sky Laws: A law that protects the public from investing in or buying fraudulent securities or investment in high-risk companies without being informed of the risks.

Blueprint: The construction plans for a home or structure that detail specifics about the building.

Board and Batten: A type of siding that consists of vertical wide boards or plywood sheets that are covered by narrow strips of wood (battens) over joints or cracks.

Board Foot: A unit of cubic measure used for lumber that is equal to one foot square by one inch thick.

Board of Equalization: A government agency that ensures uniform property tax assessments.

Board-and-Batten Siding: A type of siding that consists of vertical wide boards or plywood sheets that are covered by narrow strips of wood (battens) over joints or cracks.

Boilerplate: A standard clause or provision used in deeds, mortgages, and other documents which appears in all similar contracts.

Bona Fide: A legal term that refers to actions made in good faith, at fair market value, and without deceit or fraud.

Bond: 1. An interest bearing certificate, representing a debt that is issued with a maturity due date.; 2. A bond that is secured by a mortgage or deed of trust.

Bonus Room: A room in a house which could be used for many different purposes. Sometimes placed over a garage or in an attic.

Book Value: The value of a property based on its cost plus any additions, minus depreciation. Not necessarily identical to the amount that it could bring in on the open market.

Boot: A piece of sheet metal that connects a heating or cooling duct and a vent.

Boring Test: An examination of the load bearing capabilities of soil by boring holes into the ground and removing samples.

Borough: A town or a section of a city which has a municipal corporation and certain rights over local matters such as self-government.

Borrow: to obtain a loan; sand, gravel or other material used for grading.

Borrow Pit: The hole from which the topsoil, gravel or other material has been removed for use in a grading or construction project.

Boulevard: A city street, often lined with trees or landscaping.

Boundary: The dividing line, edge or limit of a property.

Braced Framing: A construction technique which uses posts and cross-bracing for reinforcement.

Bracing: The technique used to reinforce a structure.

Branch Circuit: An electrical circuit with its own circuit breaker in the service panel.

Breach of Contract: Failure to meet ones obligation in a contract without a legal excuse.

Breach of Covenant: Continuing failure to meet the legal obligations in a contract or property deed.

Breach of Warranty: A seller’s inability to pass clear title of a property to the buyer, as by a defect in title.

Break-Even Point: The point at which the return on investment is equal to the amount invested, as in the point where expenses meet income or savings.

Breezeway: A roofed, open-sided passageway, usually between a house and a garage.

Brick: A rectangular block of clay that is baked by the sun or in a kiln until it is hard which is used for building or paving.

Brick Veneer: A decorative facing, with the appearance of brick, on a wall or fireplace.

Bridge Loan: A short-term loan to bridge the gap between the purchase of a new home and the sale of the current home when the purchase closes before the equity from the sale of the current home is available.

Broker: An intermediary who charges a percentage of the contract price as a fee to bring together mortgage lenders and borrowers; or real estate agents with vendors.

Brokerage: The business or office of a broker.

Broom Clean: An ideal condition of a building or property when it is turned over to an owner or a tenant.

Brownstone: A building with a façade of brownish-red sandstone.

Buffer Strip: A parcel of land designed to separate one zoning area from another, such as a residential neighborhood from an industrial area.

Buildability: The feasibility of constructing a home or other structure on a piece of land.

Builder Upgrades: Extra features or materials offered by a builder for an extra charge.

Building and Loan Association: A financial institution that helps its members finance real estate or construction of a building.

Building Code: A comprehensive set of regulations established by a municipality to control construction standards for building or remodeling of structures.

Building Inspector: A local government employee who enforces the building code and ensures that the construction or renovation work is done properly.

Building Line or Setback: The minimum distance that a building may be from the property line, street or an adjacent property.

Building Moratorium: A temporary or permanent halt on construction of a home or building.

Building Paper: A heavy paper used in walls or roofs to prevent moisture-related problems.

Building Restrictions: Regulations that appear in building codes or title documents which limit the manner in which a property can be renovated or built upon.

Built-Ins: Appliances or cabinets that are permanently attached to a building.

Bulkhead: A retaining wall that acts as a protective barrier from a body of water.

Bundle of Rights: The legal rights that an owner has regarding a property.

Bungalow: A small single story house or cottage.

Butt: To join by fastening ends together without overlapping.

Butterfly Roof: A roof formed by two gables that dip in the middle to resemble a butterfly wings.

Buydown Mortgage: A home loan where the purchaser makes an initial lump sum payment to the lender in exchange for a discounted interest rate which gradually increases over one to three years.

Buyers Agent: A person with a state/provincial license who represents a buyer or a seller in a real-estate transaction in exchange for a commission from the transaction.

Buyers Broker: A person who represents a buyer of a property. The broker earns a commission at closing, for assisting in the negotiation of the sale.

Buyers Market: When sellers significantly outnumber buyers, giving the advantage to the buyers and driving the prices down.

Buyers Remorse: Emotional anxiety that a buyer feels after closing on a property or after signing a sales contract.

Buyers Resource Real Estate: National buyer’s brokerage company with offices in 13 states. Call (800) 359-4092 for information and referrals.

Buyers Home Finding Network: National referral service for buyers brokers only. Call (800) 500-3569 for information and referrals.

Bylaws: The rules and regulations governing an organization such as the homeowners association.

C

California Real Estate Inspection Association: The California Real Estate Inspection Association is a voluntary, nonprofit public-benefit organization of real estate inspectors. Inspectors must meet the educational and performance requirements to become members. Call (800) 388-8443 for list of CREIA-certified inspectors in your area.

Call Option: A clause in a home loan agreement that gives the lender the right to request the balance due and payable at any time.

Can Light: A metal can with an incandescent light; mounted flush with a surface.

Can Lights: Cylindrical chambers with bulbs recessed into the ceiling.

Cancellation Clause: A clause in a contract which gives the right for either party to terminate the agreement upon the occurrence of specified events.

Cantilever: A projecting structure that is supported at one end and carries a load at the other end.

Cap: A limit in adjustable rate mortgages, on the amount the interest rate or monthly payment can increase.

Cape Cod Style: A wood-frame or shingled house with a steep roof and several windows projecting from the second floor.

Capitall: 1. The net worth of a business or person, defined by its assets and liabilities; 2. Money used to create income.; 3. The decorative top of a column or pilaster.

Capital Expenditure: Money spent to make improvements to a property to add to its value.

Capital Gain: An increase in the value of a property; when the property is sold an investor makes a profit.

Capital Gains Tax: A tax that is owed; calculated from the profits of the sale of real estate or investments.

Capital Improvement: Improvements to a structure or other asset that adds value.

Capitalization: A formula that investors use to estimate the value of a property using the rate of return on investment and the properties annual net operating income.

Capitalization Rate: The estimated percentage rate of return that will be returned from the owner’s investment.

Caravan: A group of real estate agents who tour a house that has been recently listed for sale.

Carport: An open sided storage place, with a roof, for a vehicle.

Carryback Financing: Financing in which a seller agrees to take back a note for a set amount of the sale of the home.

Casement Window: A window that is hinged at the side and opens outward like a door.

Cash Flow: The net income generated from a property sale after all expenses and loan payments are paid.

Cash-Out Refinance: Refinancing of a mortgage on the same property where the amount to be borrowed is greater than the amount owing on the previous mortgage.

Cashiers Check: A check drawn by a bank on itself, payable to a third party named by the customer. It is a guarantee that the funds are available.

Casing: The flat, decorative molding around a window or door to cover the inside edge of the jambs and the rough openings between the window unit and the wall.

Cathedral Ceiling: A large, vaulted space replacing an attic between the living area and rafters.

Caulk: A flexible compound used to seal joints, fill crevices around windows, chimneys, etc. Can be used prior to or after painting.

Caveat: A legal document forbidding any dealings in the property being registered until the party that filed the challenge is able to be heard.

Caveat Emptor: Latin for “let the buyer beware” meaning that the onus is on the purchaser to ensure that the property or goods are suitable and in good condition.

Cavedium: A courtyard or atrium.

CD (Certificate of Deposit): A documented time deposit with a fixed maturity date, issued by a financial institution, which shows the bearer has a specified amount of money on deposit.

Ceiling Fan: A fan suspended from the ceiling of a room.

Ceiling Height: The standard height of a ceiling is eight feet; measured from the finished floor to the lowest projection from the ceiling.

Center Mullion: The vertical bar that divides the window lights or panels.

Central Air Conditioning: Devices that are connected to the ductwork inside a building to provide the function of air cooling, air-circulation, air-cleaning, dehumidifying or humidifying.

Central Business District: Refers to the commercial heart of a city; where most of the businesses are located.

Certificate of Deposit (CD): A documented time deposit with a fixed maturity date, issued by a financial institution, which shows the bearer has a specified amount of money on deposit.

Certificate of Deposit Index: A table of interest rates paid on certificates of deposits that are used to determine the interest rates for adjustable-rate mortgage plans.

Certificate of Eligibility: A document that verifies that a veteran is eligible for a Department of Veterans Affairs (VA) loan.

Certificate of Occupancy: A document issued by the local municipality that states a building is suitable for occupancy; confirms that the dwelling complies with the safety and health by-laws.

Certificate of Sale: A document issued at a judicial or tax sale that entitles the buyer to the property deed after the courts confirmation.

Certified International Property Specialist (CIPS): A designation issued by institutions to members who meet specific education, work and financial standards.

Certified Real Estate Brokerage Manager (CRB): A designation earned as a measure of success in brokerage and real estate business management. Awarded to realtors who have completed advanced educational and professional requirements.

Certified Residential Specialist (CRS): The highest designation awarded in the residential real estate sales industry. It is awarded in recognition of most experienced, educated and excellence in the field of residential sales.

Chain of Title: Part of a title search. Legal records that list, in chronological order, the ownership of a property.

Chair Railing: A decorative piece of molding that is installed on a wall, usually mounted 32-inches from the floor, to protect the wall from damage from the backs of chairs.

Change Frequency: A term used to describe the frequency of payments or interest rate changes on an adjustable rate mortgage.

Change Order: A document that defines alterations in construction contracts or plans; may include adjustments to the amount of the contract or a change in the timeframe.

Chase: A channel for drainpipes or wiring.

Chattel: A piece of personal property which is not affixed to the land or building. Chattels are generally not included in the sale of a property.

Chattel Mortgage: A lien on personal assets used as collateral for a loan.

Chimney Back: The back wall or lining of a fireplace or furnace chimney.

Chimney Cap: A concrete cap around the top of a chimney that protects the masonry from the elements.

Chimney Flue: Provides a path for channeling the smoke and gases from a fire to the outside.

Chimney Pot: A short, usually earthenware pipe placed on the top of a chimney to increase ventilation to the fireplace and reduce smoke.

Chipboard: A medium density fiberboard made from wood waste fibers glued together with resin, heat and pressure. It is used for cabinetry and molding.

Cinder Block: A block made with concrete and coal cinders, usually hollow.

Cinder Fill: Cinders used below a basement or around a foundation to promote drainage.

Circuit: An electrical source.; A closed in path capable of being followed by an electric current.; A configuration of electronic, connected components or devices.

Circuit Breaker: An automatic switch that is designed to stop the flow of electric current in the event of a sudden overload.

Cistern: A tank that holds liquid; especially used to catching and storing rainwater.

Clapboard: A type of siding. A long narrow board that has one edge thicker than the other; overlaps horizontally to cover the outer walls and frame structures.

Classified Property Tax: Government property taxes that vary depending on the use of the property. Generally, commercial property taxes are heavier than residential property taxes.

Cleanout: A pipe from the sewage system to the surface that gives easy access to the sewer for cleaning or inspection.; A Y-Shaped Fitting with a Cap in the Line that is Capped Off.

Clear Title: A title to a property that is free of all liens, disputed interests, or claims that would allow others to question the ownership of the property.

Clevis: A U-shaped metal piece with holes in each end through which a pin or bolt is run,

Closing: A meeting involving the seller, the buyer, the real estate broker and the lender for the finalization of the real estate transaction.

Closing Costs: The total of all the expenses related to the sale of a property, paid at closing; includes the loan, title and appraisal fees.

Closing Statement: A document which details the financial specifics related to the real estate transaction; it details fees that are paid by the seller and the buyer.

Cloud on Title: Conditions such as an encumbrance, a lien or a claim which is revealed when doing a title search. The condition adversely affects the title to real estate and often cannot be removed except by a quitclaim deed release or a court action.

Cluster Development: A method where a developer makes some areas more densely populated than others.

Co-Housing: A housing arrangement where all units have access to a shared space with a large kitchen, dining area, laundry and children play area.

Co-Insurance: A coverage technique used in larger developments. The coverage is shared between several insurance companies, each covering a certain percentage of the total value of the property.

Co-Maker: A person who signs the loan document along with the principal borrower; the co-makers signature guarantees equal responsibility for the loan and that the loan will be repaid should the borrower fail to make payment. Also known as a guarantor, or co-signer.

Co-Signer: A person who signs the loan document along with the principal borrower; the co-makers signature guarantees equal responsibility for the loan and that the loan will be repaid should the borrower fail to make payment. Also known as a co-maker or guarantor.

CO/ALR: Copper-aluminum revised. A designation on special light switches and outlets intended to be installed with aluminum wiring.

Codicil: A supplement or appendix to a will that adds or subtracts provisions or makes clarifications to the document.

Collar Beam: A horizontal beam that connects two roof rafters to add stability.

Collateral Security: Additional security for a loan that the borrower provides; such as property.

Collection: The process of bringing a delinquent mortgage up to date; filing notices to proceed with repossession or foreclosure when it is necessary.

Collusion: The deceitful actions of two or more people to defraud others.

Colonia: Hispanic communities along the U.S.-Mexico border.

Column: An upright supporting pillar that consists of a base, a cylindrical shaft and a capital.

Column Footing: The support base for a load-bearing column. The footing is usually made of reinforced concrete.

Combination Door: A wood framed door with an interchangeable screen and glass panel.

Combination Window: A wood or clad wood frame storm window with an interchangeable screen and glass panel.

Combustion Gases: Small particles caused by incomplete burning of fuel from wood heaters, furnaces, wood stoves and fireplaces. The types and amounts vary depending on the type of fuel, the type of appliance, how well it has been designed, built, installed and maintained. The most common, carbon monoxide, nitrogen dioxide and carbon dioxide, are colorless and odorless.

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: Property that is designed for business or retail purposes.

See also:

Commercial Foreclosures

Commingling: The mixing of money from different sources and deposited into the same account for the use by each person.

Commission: A small percentage of the sale price of the property or amount borrowed, paid to the agents of the buyer and seller.

Commitment: An agreement, usually written, in which a lender promises to make a loan under specific terms for a specified period of time.

Commitment Fee: A sum of money that the borrower pays to the lender to guarantee the loan, the terms, and the specified period of time.

Common Area: The areas on a property that are used by all owners and tenants. May include swimming pools, tennis courts, recreational facilities, common corridors of a building and parking areas.

Common-Area Assessments: Fees paid by owners of a condominium complex or a planned unit development for the repairs, maintenance and improvements to the common areas.

Common-Interest Development: An area with individually owned units where owners belong to a homeowners association who maintain the common areas, or that share financial responsibility for the usage of common areas.

Common Law: Laws or legal principles that have been established by courts over the years based on custom, usage and rulings in various jurisdictions.

Community Property: In some states, ownership of property is presumed to be equally owned by both the husband and wife unless it was acquired as a separate property of either spouse.

Community Reinvestment Act: A federal law that required financial institutions to loan money in areas where they take deposits, this includes in poor and minority neighborhoods.

Commute: The process of traveling from a residence to a place of work.

Comparables: Properties that area used for comparative purposes in appraising other properties that are similar, have been sold recently and are in the same location; used to determine a fair market value for the property.

Comparative Market Analysis: A method used to estimate property value by comparing the sale price of similar properties that were sold recently in the same location.

Competent: A term that states that a person is legally fit to make decisions and enter into a contract.

Compound Interest: Interest that is paid on the original principal balance, plus the accumulated and unpaid interest.

Compressor: Motorized equipment in a refrigeration (or air conditioning) system that circulates coolant through the system.

Concrete Tilt-Up: The process of assembling forms and pouring large slabs of concrete at the job site. Once hardened, the panels are tilted up into position to form walls.

Condemnation: The process of the government taking private property under the right of eminent domain, for public use without the owners consent. Also, a determination that a building is not fit, is dangerous and must be destroyed.

Condensate Drain: A drain required by a dehumidifier, high-efficiency furnace, or similar appliance to carry away condensation.

Condensate Pump: For use with high-efficiency furnaces or other appliances; transports or collects and transports condensation back into the system for reused or pumps it out to a drain.

Condenser: An apparatus on a refrigerator or an air conditioner that is used to condense vapor.

Conditional Commitment: A promise by a lender to make a loan if the borrower meets certain conditions.

Conditional Sale: A sale that is complete only when one or more conditions are met.

Condominium: A building or development where each owner has title to their own unit and joint ownership of common areas such as parking lots, recreational areas and community rooms.

Condominium Conversion: The change of ownership of an entire rental property to individual ownership of the units.

Conduit: A tube or duct that houses electric wires or cables.

Conforming Loan: A loan that does not exceed the maximum loan amount for most common mortgages. The current maximum loan amount is $252,700.

Consent Judgment: A judge’s legally binding written agreement between two parties of a lawsuit.

Conservator: A person appointed by the courts as the guardian of the property for a person who is not capable of managing his own affairs. Also known as a Committee, or a Personal Representative.

Consideration: Anything of value, that is legal or that is an asset which is offered to another person in a contract in exchange for the agreement to enter into the contract.

Construction Budget: Money that is set for the construction of a building.

Construction Documents: Documents that an architect provides for the construction of a project. Includes drawings and plans (blueprints), specifications, construction work drawings, and architectural and engineering drawings.

Construction Loan: A short term loan that is used for financing the construction of a new home. The lender makes payments to the builder in stages and the borrower makes payments on the interest only. The loan is refinanced into a permanent loan once the home is completed.

Construction-To-Permanent Loan: A loan that pays for the construction first, then is converted to a long-term traditional mortgage once the construction is complete.

Consumer Credit Counseling Service (CCCS): A service that offers counseling to consumers to help them get out of debt; they help them work out a realistic budget, a repayment schedule, and works with the creditors.

Contemporary Style: A style that uses straight lines, sculptural elements, art, and bold colors; a design that is clean, spare and unique.

Contiguous Lots: Properties that share a common boundary.

Contingency: A condition specified in the purchase contract that must be met before the contract can become legally binding; conditions such as a satisfactory home inspections or approved financing.

Contingency Listing: A property listing with a special condition attached.

Contingent Fee: A fee that is to be paid if a specified event occurs.

Continuity Tester: A simple, battery-powered tool which indicates whether an electrical circuit is complete or incomplete by lighting or buzzing when you touch its two probes to the wires.

Contract: A legally binding agreement, either written or oral, between two or more persons to do an exchange of some sort for consideration.

Contract For Deed: A contract where the seller and buyer agree to the title remaining in the vendors name until the final payment is made to the vendor. This is usually arranged for a specified period of time.

Contract To Purchase: A contract where the buyer and the seller have approved the price and other terms for the transfer of title. Also known as an agreement of sale, a purchase contract or a sale contract.

Contractor: A tradesperson who contracts for the construction of a home or a project.

Contractual Lien: A legal claim against a property due to the presence of a voluntary contract such as a mortgage.

Controlled Growth: A set of restrictions that are set by local government to govern the amount, type and density of any new construction developments.

Conventional Loan: A loan that is not insured or guaranteed with a government agency.; A loan with a fixed interest rate, fixed payments and a fixed term.

Conversion: the change in the purpose for a property (i.e. from private to condominium).; the improper exchange of property.

Convertible Adjustable-Rate Mortgage: An adjustable rate mortgage (ARM) that can be converted to a fixed rate loan if certain conditions are met.

Conveyance: The document that makes the transfer of the title to a property effective.

Conveyance Tax: A tax imposed on the transfer of real property.

Cooperating Broker: A real estate broker who is involved in a real estate transaction by handling the negotiations and is entitled to a commission.

Cooperative Corporation: A business that holds the title to a cooperative residential building and grants occupancy rights to shareholders in the corporation through leases or rental agreements.

Cooperative Mortgage: A loan that allows a borrower to buy shares in a cooperative residential project.

Cooperative Project: A building in which a corporation holds the title and sells shares of stock to individuals who receive a lease or agreement as evidence of title.

Corbel: A block or bracket made of stone, wood, brick or other building material which projects from a wall and provides support to a cornice or arch.

Corner Bead: Used to create smooth, straight and finished corners to drywall. It is a strip of galvanized steel or PVC that is attached to the drywall and becomes part of the wall once joint compound (drywall mud) is applied over it.

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 and completes the building or wall.

Corporate Relocation: A situation where an employer transfers an employee and pays the moving expenses.

Corrective Work: Necessary repairs or maintenance work that must be completed before the transfer of title is completed.

Cost-Plus Contract: A contract which stipulates a contractor is to receive a fee based on a percentage of the total costs paid for the labor and materials, plus a percentage of the profit.

Cottage: A small, single-story vacation house situated in the country.

Counterbore: Cylindrical enlargement of the mouth of a hole so that it will fit a cylindrical screw head.

Counteroffer: A response to an offer.

Courier Fee: The fee a lender charges to cover the delivery of documents to other parties involved in the loan; such as an attorney, title company, and escrow company.

Covenant: A legal assurance or promise in a deed or other document, or implied by law.

Covenants, Conditions, and Restrictions (CC&Rs): The rules and regulations that govern the use of property; such as how big your house can be, how your landscaping must be, if you can have pets, etc. Usually enforced by a homeowners association. Buyers must be advised of the existence of the rules and regulations before a sale takes place.

Craftsman Style: A style of architecture that evolved from the Arts and Crafts movement at the turn of the century.

Crawl Space: The space in a building that is between the ground floor and the first floor; usually no higher than four feet.

Creative Financing: Home financing arrangements that can help sell a property.

Credit: The money that a lender contracts to a buyer that must be repaid within a specific timeframe and under specific conditions.

Credit History: A record of an individuals debt payments, current and past.

Credit Life Insurance: Insurance that is taken out on a mortgage to pay off the entire amount in the event of the borrower’s death.

Credit Rating: A record that can be accessed that relays a persons creditworthiness based on their credit history and financial status.

Credit Report: A report on a person’s credit, employment and residence history. Lenders use this report to determine the applicant’s creditworthiness for loan and mortgage applications.; Trans Union Corp, Equifax and Experian are the three largest credit bureaus.

Credit Repository: Companies that research the financial and credit information regarding individuals who have applied for credit.

Credit Union: A nonprofit cooperative organization that provides banking and financial services to its members.

Creditor: Any individual or institution to which a debt is owed.

CREIA: California Real Estate Inspection Association.
A trade organization of home inspectors; the members must meet the education and performance requirements to qualify for membership.

Cross-Bridging: Bracing cross members placed between beams to strengthen a structure.

Crown: A decorative molding attached at the top around a room.

CU/AL: Light switches and outlets that were intended to be installed with copper wiring.

Cul-De-Sac: A street that is has no exit; only one way in and out.

Cupola: A dome-like structure that is on the top of a roof.

Curable Defect: A defect in a property that is easily and inexpensively fixed.

Curb Appeal: The first impression that a person has on a property.

Current Value: The value of a home at the time of appraisal.

Curtain Wall: A nonstructural exterior wall that encloses an area.

Custom Builder: A builder who is contracted to build a structure based on plans that were created by the owner

Custom Home: A building that was designed by an architect who was hired by the owner.

Cylindrical Lockset: The most common type of doorknob mechanism; designed to fit into a hole bored through the face of a door stile.

D

Damper: A movable shield that is installed in a fireplace to allow smoke and fumes to travel up the chimney.

Days on the Market: The period of time between when a property is listed for sale and the date of sale when it is taken off the market.

Deadbolt Lock: A type of lock system installed on doors where the inside is locked with the turn of a button and the outside requires a key.

Debt: An amount of money that is owed by one person to another.

Debt Assumption Letter: The transfer of a debt from one party to another. The contract of assumption must be signed by both parties. Also known as assignment of debt.

Deck: A roofless, floored area that is joined to the outside of a building.

Decorating Allowance: A sum of money negotiated between a buyer and seller, held in escrow for the buyer and to be applied toward decorating changes to the property.

Deed: A legal document that transfers the ownership of a piece of property.

Deed of Trust: Part of a loan contract that gives the lender the right to foreclose on the property if the borrower defaults on the loan.

Deep-Seal Floor Drain: A drain in a basement that drains water from the basement floor into a sewer line.

Default: The failure to fulfill an obligation or contract.

Deferred Maintenance: Repairs or maintenance on a property that has been postponed and results in a decline in the property value.

Delinquent Mortgage: A mortgage where the borrower is behind on payments. The borrower is given a specified number of days to bring the payments up to date or the lender may begin foreclosure proceedings.

Density Test: Soil analysis to determine if the surface can support the foundation of a building.

Dentils: Are small rectangular blocks that can be seen along a molding on top of a wall or under a roof line

Deposit: The money that the buyer gives with an offer to purchase. Also called earnest money.

Depreciation: A decline in the value of a property.

Design/build: A contract between an owner and an individual or company to design and construct a building.

Designer: An individual or company that draws up blueprints.

Digital Images: Pictures that are included with the house listing to give potential buyers an initial view of the property.

Dimension Plans: Plans which show the layout of a building; less detailed than full blueprints.

Dimensional Lumber: Pieces of lumber that are cut to standard dimensions.

Dimmer: A light switch that allows control of the brightness from off to full range.

Dimple: A tiny pocket that is made around a nail with a light blow of a hammer; typically used when hanging drywall.

Dip Tube: An extension of the water supply line in a storage tank to deliver water close to the heat source on the bottom of a water heater.

Disability Insurance: An insurance policy that is taken out to cover a person’s ability to produce income in the event of disability.

Disclosure: A statement that discloses relevant information on a property to a potential buyer.

Discount Points: Fees that are paid by borrowers to lenders to get a lower interest rate. The lender offers a borrower pay points to adjust the interest rate to the market rate. One point equals one percent of the loan amount.

Distressed Property: Property that is in poor physical or financial condition.

Document Needs List: A list of documents required by a lender from a potential borrower when submitting a loan application.

Documentation Preparation: A fee that is charged by the escrow company or attorney to ready the paperwork for closing.

Domed Ceiling: A ceiling in the shape of a dome that projects upward without support.

Domicile: The primary or permanent home of an individual.

Dormer: Is an upright window projecting into a sloping roof

Double-Hung Window: A window with two sashes that slide up and down.

Dovetail Joints: The joint that locks two pieces of wood together with meshed teeth.

Dowel: A length of wood that is round and made of hardwood.

Dowel Plug: A short, round piece of wood that is fit into a counter bored hole to hide the head of a screw.

Down Payment: The money that is paid by the borrower out of their own funds upon the purchase of a property and is subsequently not included in the loan or mortgage.

Downspout: The vertical gutter piece that drains the water from the roof to the ground.

Drain Auger: A long, coiled-wire that is unwound and pushed into a drain to free a clog. Also called a snake.

Drain Flange: The round metal trim that fits into the hole in a sink or bathtub.

Drain Valve: A valve that is used to drain the water from a storage tank.

Drainage: The gutter and drainage system that carries the water away from the foundation of a building.

Drainpipe: Part of a buildings plumbing system that carries the waste to the sewer or septic system.

Draw: Payments taken from a construction loan to pay subcontractors or suppliers.

Drip Caps: Angled strips of metal flashing designed to protect the eaves from water damage. They tuck under the first layer of shingles and extend down over the fascia.

Drip Loop: A loop in the service conductor that minimizes the chance of water penetration.

Drip Loopdropped Ceiling: A type of ceiling that set several inches below the original ceiling

Dry Rot: Decaying in wood making it become brittle and crumble, caused by fungus.

Drywall: Construction material that is composed of gypsum or plaster wrapped in paper and produced in large sheets.

Dual Agency: The situation where a real estate agent represents both the buyer and the seller in a transaction.

Dual Agent: A real estate agent who represents both the buyer and the seller in a transaction.

Duct: An insulated tube that is designed to deliver air to and from a furnace or other air-handling unit.

Drip Loopduct: The pipe or channel that carries water, wiring or air through a building.

Ductwork: The system of pipe or channel that carries water, wiring or air through a building.

Due-On-Sale Clause: The clause in a mortgage which states that the loan must be paid in full when the building is sold.

Duplex: A building that consists of two separate family units.

See also:

Duplex Foreclosures

Duplex Receptacle: An electrical outlet with two plugs.

Dutch Colonial Style: A style of house that has dormers and a Gambrel roof

E

Early Occupancy: When the buyer is able to occupy the property before the sale is complete.

Earnest Money: The money that the buyer gives with an offer to purchase.

Earthquake Insurance: An insurance policy with coverage against damage from an earthquake.

Easement: A right given to a third party to use a portion of a property for certain purposes.

Electronic Transfer: Is authorizing a lender to transfer funds from a personal bank account in order to make automatic payments form your bank to your mortgage account.

Effective Age: The estimated age of a structure; calculated by the condition of the structure.

Effective Gross Income: Additional income that a lender takes into consideration when assessing an application for a loan.

Efflorescence: A white, powdery substance found on concrete, stucco or other masonry that is caused by water-soluble salts leaching to the surface.

Electric Service Panel: The panel that transfer the power from the utility line into the building.

End Loan: Is the change for the buyer from the construction loan to a permanent loan upon completion of the construction of the entire building project.

Elevations: The position of the building 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 take private property for public use.

Employer-Assisted Housing: Arrangements that employers have with lenders to help employees purchase homes.

Empty Nesters: Potential buyers who have grown children that no longer live with them so they are looking for a smaller home to purchase.

Encroachment: Any structure that extends onto the property of another owner.

Encumbrance: A claim, lien, a right or interest in a property which complicates the transfer of title process.

Endorser: The individual who signs over the ownership of a property to another individual.

English Tudor Style: An unsymmetrical layout style of house built with a combination of stone, stucco and timber.

Environmental Impact Statement: A government evaluation of the effects a proposed development will have on the environment.

Environmentally Friendly Home Construction: A method of construction that utilizes recycled materials.

Equal Credit Opportunity Act (ECOA): Federal law that prohibits a lender or creditor from refusing credit to applicants based on sex, marital status, race, religion, national origin, or age, or because the applicant receives public assistance.

Equalization: An appraisal of all property within an area for the purpose of equalizing values and to ensure that taxes are assessed equally and fairly.

Equifax: A credit-reporting bureau that operates nationwide. Also known as Equifax Credit Information Services, Inc.

Equity: The value of a property after the liens are deducted.

Errors and Omissions Insurance: An insurance policy that pays for any mistakes that a builder or architect makes.

Escheat: When the ownership of a property reverts to the state when the owner dies without leaving a will.

Escrow: A neutral third party that holds the documents and money during a real estate transaction and ensures that all the conditions of the sale are met.

Escrow Account: An account where funds are held for the payment of expenses on the sale of a property. Also known as an impound account.

Escrow Agent: A neutral third party that holds the documents and money during a real estate transaction and ensures that all the conditions of the sale are met.

Escrow Analysis: A periodic examination of an escrow account to determine if the lender is withholding enough funds from a borrower’s monthly payment to pay for expenses such as property taxes and insurance.

Escrow Closing: The period of time when all conditions of a real estate transaction have been met and the title of property is transferred to the buyer.

Escrow Company: A neutral third party that holds the documents and money during a real estate transaction and ensures that all the conditions of the sale are met.

Escrow Payment: Funds that a lender withdraws from a borrower’s monthly escrow amount to pay property taxes or insurance.

Estate: The total assets of an individual at the time of their death.

Estimated Closing Costs: An estimate of the incidental expenses that will be due upon the sale of the property. These expenses are in addition to the price of the property and are prepaid at closing.

Estimated Hazard Insurance: An estimate of insurance coverage for fire and wind damage. Also known as homeowners insurance or fire insurance.

Estimated Property Taxes: An estimate of property taxes based on local tax rates and assessed property value.

Estimated Taxes and Insurance: An estimate of the monthly fees for taxes and insurance that a lender uses to evaluate a borrowers monthly housing expenses.

Estoppel: An agency error where one party incorrectly states who the agent is, and a third party relies on that representation.

European Style: A cabinetry term that refers to a style of cabinet without a face frame. Also known as box cabinet.

Evaporator: A system of coils in refrigeration or air conditioning system. When filled with cold refrigerant, they cool the air around it.

Eviction: A legal procedure to remove a tenant.

Examination of Title: The inspection of public records and other documentation to determine the ownership history on a property.

Excavation: The process of clearing trees, removing topsoil and grading land before a foundation is laid.

Exceptional Depreciation: The term used to describe unusual damages to a building.

Exclusive Agency: An agreement or contract to employ a specific agent for the sale of a property. If another agent makes the sale, both will be entitled to the commission.

Exclusive Buyers Agent (EBA): An agent or company that works exclusively with buyers as a fiduciary agent.

Exclusive Listing: A contract that gives an agent the exclusive right to market the property for a specified period of time.

Executed Contract: A contract in which all parties have fulfilled their promises.

Executor: A person or court appointed individual who carries out the instructions in a will.

Exemption: The removal of a piece of property from the tax base. An exemption may be partial or complete.

Exfiltration: Leakage of air from the interior of a building to the environment.

Exhaust Fan: A ventilating device to remove water vapor, undesirable odors or smoke.

Experian: A credit reporting bureau.; Address: 505 City Parkway West, Orange, CA 92868. Phone: (800) 392-1122.

Express Agreement: A verbal contract.

F

FaÇade: The part of a building facing a street or courtyard.

Facilitator: A real estate professional that assists with the transaction but does not have an agency relationship with the buyer or seller. Also known as a transaction broker or intermediary.

Fair Credit Billing Act: A federal law which protects consumers against violations involving credit and charge card billing errors.

Fair Credit Reporting Act: A federal law designed to regulate procedures, to prevent old or inaccurate information from remaining on record and gives the right for individuals to inspect their own credit files.

Fair Debt Collection Practices Act: A federal law which outlaws debtor harassment, and regulates collection agencies, original creditor collection offices and creditors lawyers.

Fair Housing Act: A federal law that makes it illegal to refuse to rent or sell to individuals based on race, color, religion, sex, national origin, family status and disability.

Fannie Mae: The Federal National Mortgage Association is a shareholder-owned company that buys mortgages from lenders and resells them as securities on the secondary mortgage market.

See also:

Fannie Mae Foreclosures

Farmers Home Administration (FmHA): A U.S. Department of Agriculture agency that provides credit to farmers and rural residents.

Fascia: The flat board that runs horizontally along the eaves of a roof to give the roof edge a finished look and to provide a base for attaching gutters.

Federal Fair Housing Law: A law prohibiting discrimination in terms of race, sex, color, or national origin in renting or selling houses and apartments.

Federal Home Loan Mortgage Corporation (FHLMC): The Federal Home Loan Mortgage Corporation (or Freddie Mac) buys mortgages from lending institutions, pools them with other loans, and sells shares to investors.

Federal Housing Administration (FHA): A government agency which operates a variety of home-loan programs.

See also:

FHA Foreclosures

Federal National Mortgage Association (FNMA): Fannie Mae is a shareholder-owned company that buys mortgages from lenders and resells them as securities on the secondary mortgage market.

Federal Reserve Board: The Federal Reserve Board consists of a group of economist and other experts who set the nations monetary policy, control inflation and interest rates.

Federal Style: An architectural style of home that includes big windows and a front doorway surrounded by glass and topped with an arched window.

Federal Trade Commission (FTC): A government agency which regulates companies and industries such as credit bureaus, collection agencies, timeshare operators and some creditors.
National headquarters: Sixth and Pennsylvania Avenue NW, Washington, D.C. 20580. Phone: (202) 326-2222.

Fee Simple: A type of ownership where the owner has maximum interest in the property which entitles the owner to use the property in any manner they choose in accordance with state and local laws. Also known as fee simple absolute.

Fee Simple Absolute: A type of ownership where the owner has maximum interest in the property which entitles the owner to use the property in any manner they choose in accordance with state and local laws. Also known as fee simple.

Fee Simple Defeasible: The owner of the property holds a fee simple title that is subject to certain conditions.

Fenestration: Refers to the way windows are arranged in a building.

Feng Shui: An ancient Chinese design philosophy in which the positioning and physical characteristics of the home are believed to affect the fortunes of the owner.

FHA Loans: Mortgages that are insured by the Federal Housing Administration (FHA). The FHA loan plans are for investors and purchasers of rural property, and provides low-rate mortgages to buyers who make a down payment as low as 3 percent.

Fiduciary Duty: The relationship of trust that buyers and sellers expect from a real estate agent, or a legal or business relationship.

Field Changes: Modifications made to the building or construction site that do not match what is on the blueprints.

Fill Dirt: Soil that is 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.

Financed Closing Costs: Costs that are added to the loan amount upon closing.

Finders Fee: A fee that is paid to another individual.

Finish Grade: Preparing a property for landscaping.

Fire Wall: A buffer wall composed of fire-resistant material.

Firm Commitment: A lenders promise to loan money for the purchase of property.

First Mortgage: The primary mortgage on a property.

Fixed Installment: The monthly payment installment on a home loan.

Fixed Time: The specified weeks in a year that one of the owners has arranged access to the accommodations.

Fixed-Rate Mortgage: A mortgage with an interest rate that remains at a specified rate for the entire term of the loan.

Fixer-Upper: A house that needs renovations or refurbishment; these houses usually sell at a below-market price.

See also:

Fixer Upper Homes

Fixture: Personal property that is permanently attached to a house.

Flashing: Metal strips that are placed around chimneys, skylights, vents, windows, doors, beneath shingles and along seams to prevent water damage.

Flat Fee: A predetermined fee to be paid to a broker instead of a commission.

Flat Roof: A roof with a level surface; no slopes.

Flip Switch: An electrical switch with a control knob that is pushed up or down.

Float Arm: A device that attaches a float ball to the ball cock.

Float Ball: A round or oval ball that floats on top of the water inside some toilet tanks to regulate the water flow.

Float Floor Drain: A drain that diverts water from a basement to a collection area which is then removed with a sump pump.

Floating Slab: A concrete floor that is not connected to the foundation wall.

Floating Wall: Walls built to withstand movement in the basement floor.

Flood Certification: The process of determining if a property is located within a known flood zone; if it is, the lender will require the inclusion of federally provided flood insurance.

Flood Insurance: Insurance on property that is required in designated flood areas.

Flood Plain: Flood prone areas that are located along waterways.

Floor Area Ratio: The calculation of the floor space of homes and building; used in the planning and development of a site.

Florida Rooms: Enclosed porches built onto the side or back of a home.

Flue: A chimney that is designed to exhaust unwanted gasses and byproducts from a combustion appliance.
A fireplace has a flue to carry away smoke.

Flush Door: A door with smooth surfaces.

Flush Valve: The passageway between a toilet tank and bowl.

Flush Valve Seat: The seal in the passageway between a toilet tank and bowl.

Footing: A concrete foundation that supports a structure.

For Sale By Owner (FSBO): The seller acts as their own selling agent and handles all the sales proceedings directly with the buyer, eliminating the need to pay any commissions.

Forbearance: A course of action a lender may pursue to delay foreclosure or legal action against a delinquent borrower.

Foreclosure: A legal process where the lender takes back the property upon default of the loan by the borrower. The lender sells the property and keeps the proceeds to pay for the mortgage and legal costs and returns the balance, if there is any, to the borrower.

See also:

Foreclosures

Forfeiture: Where the delinquent borrower relinquishes property rights.

Foundation: The structural support of a building.

Four-Way Switch: A device used when three or more switches are needed to control the same light fixture.

Foyer: The entranceway or hall to a home or building.

Framing: The skeletal framework of a building.

Freddie Mac: The Federal Home Loan Mortgage Corporation buys mortgages from lending institutions, pools them with other loans, and sells shares to investors.

See also:

Freddie Mac Foreclosures

Free-Market Lots: Type of lot which allows an owner to hire any builder to construct a home on the lot.

Freehold Estate: Where ownership is for an indeterminate length of time.

French Doors: Two adjoining doors inlaid with glass that open from the middle.

Front Footage: The size of the property measured by the number of feet from the street frontage.

Front-End Ratio: A calculation that lenders use to determine a borrowers monthly housing expenses to gross monthly income.

Frontage: The portion of a property that borders a roadway or body of water.

FSBO (For Sale By Owner): The seller acts as their own selling agent and handles all the sales proceedings directly with the buyer, eliminating the need to pay any commissions.

Full-Service Broker: A real estate broker who performs all transactions for the sale of a property; includes the listing and the selling.

Fully Amortized Adjustable-Rate Mortgage: A mortgage that amortizes the balance of a loan.

Functional Obsolescence: When an improvement loses value because of functional problems caused by age or poor design.

Furnace: An enclosed heating device that can be powered by coal, oil, propane or natural gas.

Furring Strips: Strips of wood that are used to support walls, ceilings, or floors on irregular or masonry surfaces.

Fuse: A small device that is in an electrical circuit and is designed to shut down the circuit in the event of an electrical overload or a short circuit situation.

G

Gable: a section of wall that is triangular, is situated at the end of a pitched roof and occupies the space between the two slopes of the roof.

Gable Decoration: A decorative filigree or panel for a gable.

Gable Roof: A sloped roof that has a gable at each end.

Gag Rule: Part of a contract with a builder that prohibits new buyers from publicizing complaints about the builder.

Gambrel Roof: A two-sided roof that has a double slope on each side with the lower slope having the steeper pitch.

Gap: A missing part of the property title document that can cause doubts as to the ownership of the property.

Gas Valve: A type of faucet or mechanical contrivance that control the flow of gas.

General Contractor: The overall contractor who hires the subcontractors and suppliers for a project.

General Plan: A long-range plan for land usage.

General-Purpose Circuit: An electrical circuit that supplies outlets for a number of lights or appliances.

Geodesic Dome: A structure in the shape of a dome or vault that is constructed of lightweight straight elements forming interlocking polygons.

Georgian Style: A style of architecture distinguished by a symmetrical facade, a prominent front entrance, and quoins (decorative blocks of masonry or wood that are set in the corners of a house).

Gift: Cash that is given to an individual.

Gingerbread Decoration: A wood trim that is an intricate, lacy type of design.

Girders: The crossbeams that support the floor joists in buildings.

Glazed: A window with a glass pane.

Glaziers Point: A small metal clip that holds a pane of glass in the window frame.

Good-Faith Estimate: A lenders estimate showing the costs a borrower will incur.

Government National Mortgage Association (GNMA): An agency that purchases loans from lenders that are backed by the federal government, pools them with other loans and sells shares to investors. Also known as Ginnie Mae.

GPM (Graduated-Payment Mortgage): A type of mortgage that has monthly payments that start unusually low then gradually rise until the third to fifth year after which they remain fixed.

Grace Period: The specified amount of time allowed for a borrower to make a late loan payment without incurring a penalty.

Grade: The elevation of land above ground level.

Grade Level: The grade of the surface upon which a building has been built.

Graduate Realtor® Institute (GRI): A designation that is issued by the National Association of Realtors (NAR) to its members who meet the specified performance and education requirements for residential real estate sales.

Graduated-Payment Mortgage: A type of mortgage that has monthly payments that start unusually low then gradually rise until the third to fifth year after which they remain fixed. Also known as GPM.

Granny Flat: Slang term for a separate unit within a house, or above a garage.

Grantee: An individual who has gained interest in a piece of property.

Grantor: The individual who has given the interest in a piece of property to another individual.

Greek Revival Style: A style of house that features a pillar-anchored pediment forming a portico at the front of the house.

Greenbelt: A park, open space or natural setting situated in a community.

Gross Income: Total income of a household before taxes.

Ground Fault Circuit Interrupter: A device to detect leakage of electrical current into the ground and prevents accidental shock.

Ground Rent: Money that is paid for the use of a property that is a leasehold estate.

Group Home: A residential building that is used for unrelated individuals who require special care or supervision.

Grout: Mortar that is used to fill the areas between tiles, stone or marble.

Growing-Equity Mortgage: A fixed-rate mortgage that increases the payments over a specified period of time and the extra funds are applied to the principle.

Guarantee Mortgage: A loan that is guaranteed by a third party.

Guaranteed Sales Program: A program where a real estate brokerage purchases the sellers equity in a property should it not sell during a predetermined period of time.

Gutters: Horizontal channels that are installed at the edge of a roof to carry water away from the house.

Guy: A cable attached to a structure to guide it or hold it in place.

H

Habendum Clause: A clause that defines the quantity of the estate granted in the deed; “to have and to hold”.

Half-Bath: A bathroom that contains a toilet and a sink only. Also known as a powder room.

Handymans Special: A house that is in need of repairs; not in good repair.

See also:

Handyman Specials

Hardboard: A simulated wood that is made from wood fibers.

Hardwood: Wood that comes from trees such as oak, walnut and maple.

Hazard Insurance: Insurance that covers physical risks such as fire and wind damage. Also known as homeowners or fire insurance.

Head Jamb: The horizontal piece at the top of a door or window frame.

Header: The crossbeam that is set above a window or door.

Heat Anticipator: A component within a mechanical thermostat that regulates the furnace or boiler by shutting them off just before the set temperature is reached.

Heat Pump: An electric cooling and heating system.

Hectare: The equivalent of 2.471 acres.

Hiatus: A small piece of property that is between two parcels of land but does not belong to either property owner.

High Density: A concentration of housing units in an area or on a property.

High-Rise: Any building that is six stores or taller.

Hip Roof: A roof that is pitched and has sloping sides.

Historic Preservation: 1. the rehabilitation of historic homes or buildings.; 2. a movement that began in the 1960’s in the United States to preserve and protect landmarks and urban neighborhoods.

Historic Structure: A home or building that is certified as historic by the U.S. Secretary of the Interior and is listed in the National Register of Historic Places.

Hollow-Core Door: A door that is hollow in the middle.

Home Equity Conversion Mortgage: Loans that are made to older homeowners who want to convert equity into cash. Also known as reverse mortgages.

Home Equity Line of Credit: An open-ended line of credit that is based on a homeowners accumulated equity.

Home Equity Loan: A loan where owners borrow against the equity in their home.

Home Inspection: A physical examination of a home by an inspector prior to the purchase; examines construction, condition and internal systems.

Home Inspector: A professional who evaluates the construction, condition and internal systems of a building.

Home Price: The agreed upon price by a buyer and seller for a home.

Home Rule: A local government’s power to adopt its own land-use regulations.

Home Warranty: An insurance that covers repairs to certain parts of a building and some of the fixtures.

Homeowners Insurance: An insurance that includes hazard coverage for damages that may affect the value of a home, personal liability and theft.

Homeowners Association (HOA): A group that governs a subdivision, condominium or planned community. Owners pay monthly fees to the association to pay for common area maintenance, legal and safety issues, the enforcement of covenants, conditions and restrictions set by the developer.

Homeowners Association Dues: Monthly payment that owners pay to a homeowners association for common area maintenance, legal and safety issues, the enforcement of covenants, conditions and restrictions set by the developer.

Homeowners Warranty: An insurance policy that covers specific home repairs for a specified period of time.

Homestead: A parcel of land used by the owner as a primary residence.

Homesteading: A document that protects specified home equity from lawsuits.

Homogenous: A term used to describe a neighborhood where the property types are all similar.

Hopper Window: A window with a single sash that tilts inward.

Hose Bibb: A threaded faucet connection.

Hot Wire: An ungrounded conductor that carries electric current from the source.

House Wrap: A barrier wrap for a house that is used to save energy.

Housing Discrimination: The illegal practice of denying an individual or group the right to buy or rent a home based on race, color, religion, national origin, sex, disability, or family status.

Housing Expense Ratio: A percentage of the gross monthly income that is devoted to housing costs.

HUD: The abbreviation for the Department of Housing and Urban Development. A federal agency that oversees the Federal Housing Administration (FHA) and a variety of housing and community development programs.

HUD Home: A foreclosed property which is listed for selling by the HUD.

See also:

HUD Homes

Hud-1 Uniform Settlement Statement: A statement that outlines all the closing costs on a real estate transaction or refinancing.

Hugger: A type of ceiling fan that is used in buildings with low ceilings as it used very little vertical space.

Humidistat: Thermostat that measures the amount of water vapor in the air and regulates a humidifier or dehumidifier.

HVAC: Heating, ventilation and air conditioning.

I

Impact Fees: Fees that are collected from developers of new homes to pay for schools, parks and other facilities.

Implied Warranty of Habitability: A legal doctrine that states that all new homes are assumed to be fit for human habitation and meet all the building codes.

Impounds: A portion of monthly mortgage payments that is set aside in a separate account and used to pay for insurance and property taxes.

Improvement: Any change that adds value to a building or prolongs its useful life.

In-File Credit Report: An objective history report from credit repositories.

Income Property: Any property that is not occupied by the owner but is used to generate income.

Incurable Defect: A defect in the property that cannot be fixed or would cost too much to repair relative to the value of the property.

Independent Contractor: A contractor hired for a specific job; the contractor pays for their own expenses and taxes and receives no employee benefits.

Index: Financial tables that are used to calculate the interest rates on adjustable mortgages and on Treasury Bills.

Individual Retirement Account (IRA): A tax-deferred savings account in which a person may accrue retirement funds.

Infill Development: Significant new construction in an already established area.

Infill Housing: Home construction in and already established areas.

Infiltration: Air from the environment that enters a building.

Inflation: An increase in the level of consumer prices that is the result of an increased availability of money and credit that is proportionately more than the availability of goods and services.

Infrastructure: Community roads, schools, parks, utilities, bridges and communication systems.

Initial Interest Rate: The original interest rate on an adjustable rate mortgage.

Initial Rate Cap: A specified limit that the interest rate may increase defined in some adjustable rate loans.

Initial Rate Duration: An initial interest rate in an adjustable rate loan, that is below the current market rate, for a specified period of time.

Inlet Valve: A mechanism inside a toilet tank that automatically refills the tank with water after then tank empties.

Inspection Fee: A fee paid to a home inspector for the physical inspection of a building.

Inspection Report: A report completed by a home inspector after an inspection of the buildings exterior, foundation, framing, plumbing, electrical system, heating, air conditioning, fireplace, kitchen, bathroom, roof and interior.

Installment Contract: A purchase agreement where the buyer does not receive the title to the property until all installments are paid.

Installment Sale: A real estate transaction where the sales price is paid in installments.

Instrument: A written legal document.

Insulation: Materials in a building that slow heat loss.

Insurable Title: Title to a property that is insurable.

Insurance: Policies that owners can purchase to guarantee compensation for specific losses or damages.

Insurance Binder: A temporary arrangement put in effect until a permanent policy is obtained.

Interest: The fee that borrowers pay for a loan; calculated based on the percentage of the total loan.

Interest Accrual Rate: The rate at which interest accrues on a mortgage.

Interest Paid Over Life of Loan: The total amount paid to a lender during the life of a loan.

Interest Rate: The fee that is charged by the lender for a loan; expressed as a percentage.

Interest Rate Buy-Down Plans: An advancement of funds from the sale of a home for the purpose of buying down the interest rate and reducing the buyer’s monthly obligation.

Interest Rate Cap: The maximum interest rate charge allowable on the monthly payment of an adjustable rate mortgage during the adjustment period.

Interest Rate Ceiling: The highest interest rate a lender can charge for an adjustable rate mortgage.

Interest-Only Loan: A loan where the borrower pays only the interest that accrues on a loan balance each month; all the payments go toward interest therefore the outstanding balance of the loan does not decline with the payments.

Interim Financing: Short-term financing used by sellers to bridge the gap between the sale of one house and the purchase of another. Also known as a bridge or swing loan.

Investment Property: Real estate property that generates an income.

J

Jack Plane: A tool that is designed for shaving off small amounts of wood.

Jalousie Window: A type of window that consists of vertical rows of horizontal glass slats that operates by a crank mechanism that connects all the slats.

Jamb: The framing for the opening for a door.

Joint Liability: The responsibility of more than one individual to fulfill the terms of a home loan or debt.

Joint Tenancy: Ownership by more than one individual where each individual has equal shares to the property.

Joist: A part of the structural framing for a floor.

Judgment: A decision made by a court of law that an individual must repay a debt or a lien may be placed against that individual’s property.

Judicial Foreclosure: A procedure to handle foreclosure proceedings as a civil matter.

Jumbo: Also referred as non- conforming loan. The amount of a particular loan that exceeds standards making it suitable for sale to Freddie Mac and Fannie Mae.

Jumbo Loan: Loans that exceed the conforming limits for mortgages.

Junior Mortgage: A loan that is secondary to the primary loan.

K

Key: 1. Metal pieces that are notched and grooved and used to open or close a lock.; 2. Wedge-shaped stones in an arch that locks its parts together.

Keys: Little plaster fingers that squeeze through a lath. It holds the plaster in place when hardened.

Keystone: An angular block set as the crown of an arch, over a door or window.

Kick-Out Clause: A clause in a sales contract that allows the seller to opt out of the first buyers offer in favor of a second, better offer.

Kit Home: A prefabricated home that is delivered and put together by a contractor.

Knee Wall: A structure that is like a wall and used to support the roof rafters.

Knob-and-Tube Wiring: An old type of wiring system that has been replaced by fuses and circuit breakers.

L

Lally Column: A pipe that is filled with concrete and used to support girders and beams.

Laminate: A material that is used to seal countertops.

Lanai: An open living room or a room similar to a porch; commonly found in homes in warm climates.

Landscape: Improving the grounds surrounding a home by adding flowers, shrubs and trees.

Landscape Architect: A professional who has an architectural degree in landscaping and is trained in horticulture, design and planning of properties.

Landscape Contractor: A professional who carries out the plans of a landscape architect or a landscape designer.

Landscape Designer: A designer who is trained in horticulture and landscape planning, but does not necessarily hold a degree.

Lap Siding: A type of siding that has horizontal boards each overlapping the board below it.

Late Charge: A fee imposed by a lender when the borrower does not make a payment on time.

Late Payment: A payment a lender receives after the due date has passed.

Latent Defect: A problem with a property that is not visible; such as bad wiring, termite damage or lead paint.

Lead: A metallic chemical present in lead-based pains and lead plumbing; exposure to this chemical has been linked to health risks.

Leader: Part of a gutter system that carries the rainwater from the gutters to the ground.

Lease: A legal agreement containing the terms and conditions of a renters occupancy.

Lease Option: A lease that contains that allows the purchase of the property for a specified price within a specified time frame.

Lease Purchase: A lease purchase contract that has a closing date and provides options to the seller should the buyer default.

Leasehold: A contract that gives the right to inhabit a property for a specified period of time after which the property reverts back to the owner.

Leasehold Estate: An arrangement in which an individual possesses a property on a long-term lease but does not own the property.

Leasehold Interest: A contract that gives the right to inhabit a property for a specified period of time after which the property reverts back to the owner.

Legal Blemish: Problems with a piece of property such as a zoning violation or a fraudulent title claim.

Legal Description: Identification of property that is acceptable to the courts.

Lender: A company that offers home loans.

Lessee: An individual who is leasing a property.

Lessor: An individual who leases a property to another individual.

Letter of Intent: A formal agreement that states it is the buyer’s intention to purchase a property for a specified price on a specified date.

Leverage: The use of a small down payment to buy a property.

Levy: The amount of money a governing body certifies is due to be paid from the property tax for a specified purpose.

Liabilities: The financial debts and obligations of a borrower.

Liability Insurance: A type of insurance policy that protects owners against claims of negligence, personal injury or property damage.

Libor: London Interbank Offered Rate is an index used to determine interest rate changes for adjustable rate mortgages.

Lien: A claim placed on a property by and individual or company as security for money owed.

Lien Holder: A person or a company that places a lien on real properties.

Life Cap: The limit of the amount that a loan rate can change during the term.

Life-Cycle Cost Analysis: A projection of the operating, maintenance and replacement costs, calculated by an architect.

Lifetime Rate Cap: A maximum interest rate that may not be exceeded over the entire life of an adjustable rate loan (ARM).

Limited Partnership: A type of ownership where a general partner makes the groups investment decisions, oversees the investment and is primarily liable for any losses.

Lintel: A horizontal piece over a door or window that carries the weight of the structure above it.

Line of Credit: The maximum amount of credit a lender can extend the borrower over a set period of time. In real estate, a borrower’s line of credit is secured through one’s property.

Liquid Assets: Cash and other assets that can be quickly and easily converted to cash.

Liquidated Damages: A sum of money that is specified in a purchase contract to be paid by one party to the other party in the event of a breach of contract.

Liquidity: Selling an asset at a price close to its true value to quickly convert it into cash.

Listing: A property that has been placed on the market by a listing agent.

Listing Agent: A broker or a sales agent who has been contracted by a seller to list a property for sale.

Listing Broker: A broker who has been contracted by a seller to list a property for sale. Also called a lister or sellers broker.

Listing Inventories: The number of properties for sale within a given market.

Live-In Partnership: An arrangement in which two unrelated people purchase a home together.

Live-Work Space: An officially designated dwelling where an occupant conducts a home-based business.

Load-Bearing Wall: A wall that supports its own weight plus the weight of other parts of a building.

Loan Application: The process of filling out the basic financial information and request for a home loan.

Loan Application Fee: A fee that is charged by the lender to cover the incidental expensed related to a loan application.

Loan Amount: The total amount of a debt excluding interest.

Loan Commitment: A lenders promise to supply a loan for a specific amount for a specific term.

Loan Officer: An official representative for a lending institute, who acts on behalf of the lender.

Loan Origination Fee: The fee to cover the direct costs of arranging the loan.

Loan Term: The specified time set by a lender for repayment of a mortgage.

See also:

Lenders

Loan Type: Loan types vary and determine the borrowing limit, down payment requirements and qualifying rules. They include conforming, jumbo, FHA and VA.

Loan-To-Value Ratio (LTV): The ratio for a loan is determined by the loan amount in comparison to the value of the property.

Local Improvement District (LID): A district established by state law for the benefit of a specified area. Bonds are issued by the district to finance improvements, then they levy assessments on real estate in the area to repay those funds.

Lock-In: A lenders commitment to guarantee a specific interest rate for a limited amount of time.

Lock-In Period: A period of time where a lender guarantees an agreed upon interest rate to a borrower even if the rates rise.

Loft: A living space built above a larger room or a room that is not partitioned.

Log Cabin: A home built with rough-hewn timbers.

Louvers: Slatted panels that are mounted in the upper portion of a gable wall and provide ventilation to the attic.

Low Density: A low concentration of housing units in a specific area.

Low Down-Payment Loan: A home loan where the borrower need only make a small down payment to obtain the financing to purchase a property.

Low-Documentation Loan: A mortgage where only minimal verification of income and assets is required.

Low-Emissivity: A coating or a film that is applied between the panes of glass in a high-efficiency glazing. Also known as Low-E.

Lowball Offer: An offer to purchase a property that is substantially below market value.

LTV (Loan-To-Value Ratio): The ratio for a loan is determined by the loan amount in comparison to the value of the property.

M

Main Girder: The main support that runs between the foundation walls to carry the weight of the floor.

Main Water Shut-Off Valve: The primary valve that shuts the water flow from the water meter to the home.

Maintenance Fee: A monthly fee that is paid by homeowners to a homeowners association for the repairs and maintenance to common areas.

Managed-Competition Lots: Lots in which a buyer can choose between several builders.

Mansard Roof: A roof that has four sides and slopes upward from the roof edge to a square peak.

Mantel: The decorative facing around a fireplace that is made of stone, marble or other material.

Manufactured Housing: Prefabricated homes such as trailers or pre-constructed homes.

See also:

Manufactured Foreclosures

Manufacturer's Rebate: A money back plan made by a manufacturer when a buyer purchased a specific item and complies with the terms of a rebate program they offer.

Margin: An amount added to the index for the entirety of a loan

Market Conditions: Factors that affect the sale or purchase of properties at a particular point in time.

Market Value: The price that a piece of property sells for at a particular point in time.

Marketable Title: A title that is clear and free of defects.

Masonry: The brick or stone work on a building.

Master-Planned Community: The plan for a suburban location that includes homes, commercial buildings, educational buildings and community facilities.

Mastic: Construction adhesive.

Material Defect: Defects in a property that could affect the sale of the property or the property value.

Material Fact: Information about a property that may affect a buyer’s decision to purchase it.

Maximum Financing: A loan amount that is within 5-percent of the highest loan-to-value ratio allowed for a property.

Mechanics Lien: An encumbrance or mechanical lien that a subcontractor or supplier files against a property in order to seek payment.

Mechanical Systems: Plumbing, wiring, heating and cooling systems.

Median Price: The sale price of a property that falls in the middle of the total number of properties for sale in that area.

Mediation: A dispute-resolution process where a neutral party works to resolve contract differences.

Merged Credit Report: A report that includes credit information that is collected from the Big Three credit reporting companies: Equifax, Experian, and Trans Union Corp.

Meter: A device that measures the electrical current or water flow to a property.

Meter Pan: A piece of equipment that the service conductor runs through.

Metes and Bounds: A time-honored land survey method that describes the land in terms of shape and boundary dimensions.

Mint Condition: A term used when a property looks like new.

Miter: A miter cut is when two boards meet at right angles so that the ends do not show.

Mixed-Income Housing: A neighborhood that contains houses within a wide price range.

Mixed-Use Development: An area that contains properties for many different functions such as residential, commercial, public accommodations, etc..

MLS (Multiple Listing Service): A service that contains all the listings of properties for sale in an area, with the exception of properties that are for sale by owner.

Modification: A change in the terms of a loan agreement.

Modified Annual Percentage Rate (APR): An index of loan costs based on the standard APR and adjusted according to the time the borrower expects to hold the loan.

Molding: A decorative trim that is applied to walls, ceilings, and window and door openings.

Money Market Account: Accounts that allow individual investors to participate in managed investments and to withdraw funds under most conditions.

Money Market Funds: A mutual fund where the resources from a number of individuals is pooled together to invest.

Monolithic Slab: A slab that is part of the footings.

Monthly Association Dues: A monthly fee that is paid by homeowners to a homeowners association for the repairs and maintenance to common areas.

Mortar: The cement-based material that provides a base for brick, stone and other masonry materials.

Mortgage: 1. the sum of money that is borrowed for the purchase of a property, which will be repaid at a specified interest rate and where the property is used as collateral.; 2. a legal document that specifies the property as collateral for the loan.

Mortgage Acceleration Clause: A clause within the mortgage contract which allows the lender to demand repayment in full, under certain circumstances.

Mortgage Banker: A company that provides home loans using its own money. The loans are usually sold to investors such as insurance companies and Fannie Mae.

Mortgage Broker: A company that connects lenders with prospective borrowers.

Mortgage Insurance: An insurance that lenders require as a protection on some loans; mostly on loans with down payments that are less than 20-percent of the property value.

Mortgage Life Insurance: An insurance that will pay off a mortgage in the event that the borrower dies before the debt has been repaid.

Mortgage-Interest Deduction: A tax write-off that the Internal Revenue Service allows most owners to claim on their annual interest payments to real estate loans.

Mortgagee: A bank or financial institution that lends money to a borrower.

Mortgagor: The person who borrows money to purchase property.

Mortise Lockset: A doorknob and latch set designed to fit into a rectangular pocket that is cut into the edge of a door.

Motivated Buyer: A buyer that has a strong incentive to make a purchase.

Motivated Seller: A seller that has a strong incentive to make a sale.

Move-In Condition: A property that is ready for a new occupant.

Move-Up Buyer: A buyer who has previously purchased a home and is now looking for a bigger or more expensive property.

Mullion: The vertical dividing bar set between windowpanes or panels.

Multidwelling Property: A property that contains several individual units but carries only one mortgage.

Multifamily Mortgage: A mortgage on a multifamily dwelling with more than four families.

Multiple Listing Service (MLS): A service that contains all the listings of properties for sale in an area, with the exception of properties that are for sale by owner.

Multiple Offers: A situation in which there is more than one offer to purchase a property at the same time.

Municipal Housing Inspector: Inspectors that are employed by cities or counties to check the construction sites and to verify that the contractors are meeting all the building codes.

Muntin: A wooden division that separates panes of glass in a multi-paned window or door.

N

NAHI (National Association of Home Inspectors): An independent professional association of home inspectors whose members meet the group’s education and performance requirements.

Nail Pops: Nails that are set in load-bearing parts of new homes that pop out slightly due to the settling of the home.

NAR (National Association of Realtors): A trade organization for real estate agents and brokers; when they become members, they must abide by the organizations code of ethics.

NAR Code of Ethics: A formal code of ethics and standards of practice that was established by the National Association of Realtors (NAR) and which all members must abide by.

National Association of Exclusive Buyer Agents: A national trade organization of buyers and brokers whose members do not accept property listings.

National Association of Home Inspectors (NAHI): An independent professional association of home inspectors whose members meet the group’s education and performance requirements.

National Association of Realtors (Nar): A trade organization for real estate agents and brokers; when they become members, they must abide by the organizations code of ethics.

National Council of State Housing Agencies: A nonprofit organization that provides information on local and state housing agencies.
Phone: (202) 624-7710.

National Foundation For Consumer Credit: A nonprofit organization that provides information on nationwide nonprofit credit counseling centers. Phone: (301) 589-5600.

Needs-Based Pricing: An asking price that is based upon factors such as the amount of funds that are required to pay off the seller’s mortgage, the cost of remodeling or the purchase of another home.

Negative Amortization: This situation occurs when a borrowers monthly payment is too small to cover both the principal and the interest on a loan, so the outstanding balance actually grows larger with each payment.

Negative-Slope Driveway: A driveway that slopes down from street level to the garage.

Neo-Traditional Planning: A planned community which favors new home development with traditional features such as grid-street patterns, prominent front porches, backyard garages, multi-use buildings and housing clustered near commercial service areas.

Net Cash Flow: The after expenses income that is gained from investment property.

Net Listing: A listing agreement where the commission the broker earns consists of an amount above a net price that is set by the owner. If the net price is not met, the broker does not earn a commission.

Net Worth: The net worth of an individual is based on the difference between the total assets and liabilities.

Neutral Bus Bar: A grounded metal bar set inside an electrical service panel or sub panel, and which all neutral and grounding wires are connected to.

Neutral Wire: A grounded conductor that carries electrical current back to the source.

New Urbanism: A planned community which favors new home development with traditional features such as grid-street patterns, prominent front porches, backyard garages, multi-use buildings and housing clustered near commercial service areas.

Niche: A small recess in a wall, traditionally arched at the top.

No-Cash-Out Refinance: The amount of a new mortgage that covers the remaining balance of the first mortgage plus closing costs and liens, and yields no more than 1 percent of the new mortgages principal in cash.

No-Competition Lots: A lot in which a preselected builder will construct the home.

No-Documentation Loan: A loan application that does not require verification of income; granted in such cases as a large down payment is deposited.

Non-Conforming Loan: A loan that does not meet the qualifications or is too large to be purchases by Fannie Mae or Freddie Mac. The current conforming loan limit is $252,700.00.

Non-Liquid Asset: An asset that can not be easily turned into cash.

Non-Solicitation Order: An order that is issued to brokers and agents by the secretary of state, prohibiting them from soliciting listings in a designated area.

Nonassumption Clause: A loan provision that prohibits the transfer of a mortgage to another borrower without lenders consent.

Nonrecurring Closing Costs: A one-time-only fee for items such as an appraisal, loan points, a credit report, title insurance and a home inspection.

Nosing: The front edge of a stair tread that extends over the riser.

Not in My Back Yard (NIMBY): A response that is given by neighborhoods or communities to proposed changes or development.

Note: A legal document that requires a borrower to repay a mortgage at a specified interest rate over a specified period of time.

Note Rate: The interest rate specified in a mortgage note.

Notice of Default: A lenders initial action due to a borrowers defaulting on mortgage payments and the attempts to reconcile the issue out of court have failed.

Novation: The release to liability on a loan to a first borrower, and the substitution of a next borrower with the lenders approval.

O

O-Ring: A small rubber ring that provides a water seal in faucets and other plumbing fittings.

Online Real Estate Listings: Properties that are listed for sale on the internet.

Open House: A marketing tool where a listing agent schedules an open house for the public to drop in to view the property without an agent or an appointment.

Open Listing: A property with a number of brokers marketing it at the same time.

Open Space: Undeveloped areas reserved for parks, walking paths or other natural used in a planned community.

Option: A situation where a buyer puts a sum of money down for the right to purchase a property within a specified time period, but does not have an obligation to purchase it.

Option Listing: A listing agreement that contains a clause giving the listing broker the right to purchase the property.

Oral Agreement: Contractual arrangements that are not done in writing and are usually not legally binding.

Orange Peel: A wallboard finish that has a texture much like an orange peel.

Oriented-Strand Board: An inexpensive manufacture wood panel that is typically sold in 4-foot or 8-foot size and used for roof and wall sheathing. Also known as OSB.

Original Principal Balance: The amount of principal that is owed on a loan before the borrower makes any payments.

Origination Fee: The fee that is charged by lenders to cover the direct costs of arranging a loan; also called points.

Ostensible Agency: An agency relationship that does not involve a written agreement or documentation.

Outbuilding: A structure that is located on a property in addition to the house or other main building.

Overflow Plate: A small plate that is installed to cover an outlet that is situated near the rim of a sink or tub.

Overflow Prevention Switch: An air-pressure switch in a dehumidifier that turn the unit off when the water in the reservoir reaches a certain level.

Overhang: A protruding structural feature.

Overimproved Property: Property that was not sold at a price high enough to recoup the cost of improvements.

Owner Financing: A transaction in which the seller of a property agrees to finance all or part of the purchase.

P

P&Amp;i: Also referred as principal and interest. These are monthly fees such as mortgage payments excluding taxes and insurance charges that are paid in escrow.

Panel: Part of a wall, ceiling or flat piece of building material that forms part of the surface.; An electrical distribution box with circuit breakers, fuses and terminals which house the wiring.

Panel Door: A type of door frame with horizontal rails and vertical stiles that surround raised or recessed panels.

Paneling: Strips of wood or wood-like material applied as a finish to a wall.

Parcel: A piece of land.

See also:

Land Foreclosures

Parget: A coating that is applied to a foundation wall to prevent water leakage.

Parking Strip: The strip of grass that is between the sidewalk and the street.

Particleboard: A board composed of wood chips glued together under pressure.

Partition: A structure that divides one room from another.

Partnership: Unmarried individuals who buy a piece of property together.
There are two types of partnership options:; 1. live-in partnership – both buyers share the residence;; 2. shared-equity partnership – one buyer lives on the property and the other is an investor in the property.

Party Wall: A wall built along the boundary between two properties.

Pass-Through: An opening that is set in a wall between the kitchen and breakfast or dining room.

Passive Loss: A tax term that refers to any loss from a passive activity, such as the ownership but not the operation of a piece of rental real estate.

Passive Solar System: A system that supplies solar heat without the use of electric fans or pumps.

Patent Defect: A deficiency in a property that is visible.

Patio: An interior courtyard or a paved backyard area.

Payment Cap: The legal limit that a monthly payment amount can increase with an adjustable rate mortgage.

Pediment: A decorative panel above a doorway.

Per-Diem Interest: Interest that is charged or accrued daily.

Percolation Test: A test that is used to determine the ability of soil to accommodate a septic system.

Perennial: Plants that grow from seeds or bulbs year after year.

Pergola: An arbor that has open roof rafters that are supported by posts or columns.

Personal Property: Unattached and movable property in a house.

Pest-Control Inspection: An inspection of the property for insect infestation.

Photoelectric Switch: A switch that automatically turns the lights or other electrical devices on or off depending on the amount of light.

Pier: A rectangular masonry support column.

Pigtail: A short wire that is connected to another wire with a wire nut.

Pigtail Cord: A short electrical cord with an integral plug; designed to be attached to an appliance.

Pilasters: Decorative vertical columns attached to the wall or frame on each side of a doorway.

Pilot: The flame or electronic control that ignites gas or oil burners.

Pilot Light: A small, continuously burning gas flame inside an appliance that ignites the appliances gas burner when it is turned on.

Pipestem Lot: A lot that is connected to the street by a narrow strip of land.

Pitch: The slope of a roof calculated by the ratio of vertical rise to horizontal run.

PITI (Principal, Interest, Taxes, and Insurance): A payment amount that is calculated by the lender to include the principal, interest, taxes, and insurance on an amortizing loan. The calculated amount represents the borrower’s actual monthly mortgage-related expenses.

Pivot Rod: The pop-up assembly in a sink or tub that either pushes the stopper up or pulls the stopper down.

Plane: A tool that is designed for shaving off small amounts of wood.

Planned Community: Any town or neighborhood that has been built within certain guidelines or goals.

Planned Unit Development (PUD): A residential project that consists of a cluster of homes surrounded by areas of commonly owned open space that is maintained by a nonprofit community association.

Plaster: A labor-intensive wall finish consisting primarily of lime, sand, and water.

Plat Book: A public record of maps that shows the division of streets, blocks and lots, and indicates the measurements of individual parcels of land.

Plate: The bottom or top piece of a wall.

Plenum: The heat distribution box on a furnace or central air-handling unit.

PMI (Private Mortgage Insurance): A type of insurance that lenders require on a loan when the borrowers down payment or property equity is less than 20 percent of the property value; the insurance provides partial protection to the lender if the borrower defaults on the loan.

Pocket Door: A type of interior door that recesses into the wall when open.

Point: An amount equal to 1 percent of the loan amount.

Porch: A structure that is an entrance to a home.

Porte-CochÈre: A porch-like roof that extends over a driveway.

Portfolio Lender: A lender that makes loans using its own funds and keeps the loans on the company’s books but in other words, rather than selling the loans on a secondary market.

Portico: A porch that is supported by a row of columns.

Possession: The term used when a buyer officially takes possession of a property upon signing the closing papers and receiving the keys.

Power of Attorney: A document that authorizes an individual to act on behalf of someone else.

Pre-Approval: The completion of a loan application, the through assessment the lender makes of a potential borrowers ability to pay for a property and the confirmation of the amount to be borrowed.

Pre-Approval Letter: A letter issued from a lender that advises the borrower of the amount of money that can be borrowed.

Pre-Sold Home: A home that is sold before it is built.

Prepaid Expenses: Expenses that are paid before their due date.

Prepaid Fees: Funds collected by the lender from the borrower to pay in advance for certain recurring items.

Prepaid Interest: Interest that is paid before it is due.

Prepayment Penalty: A penalty that a lender may impose on the payment of a loan off before its expected end date.

Prequalification: The preliminary assessment the lender does on a buyer’s ability to pay for a home and an estimate of how much the buyer can borrow.

Pressure Relief Valve: A safety vent that relieves excess pressure in a water heater.

Price Range: The upper and lower limit that a buyer is willing to pay for a home.

Prime Lending Rate: 1. The minimum short-term interest rate charged by commercial banks to their most creditworthy clients.; 2. The rate used as a basis for mortgages, business and personal loans.

Primer: The initial preparation of paint or a sealant that is applied to a surface to prepare it for painting.

Principal: 1. The amount of money originally borrowed in a mortgage, minus any payments made subsequently.; 2. The seller, the broker or the agent’s client.

Principal and Interest: The combined amount of the loan that includes the principal amount and the interest; the total amount that must be repaid.

Principal Paid Over Life of Loan: The sum of scheduled principal payments is calculated by the lender to equal the face amount of the loan.

Principal, Interest, Taxes, and Insurance (PITI): A payment amount that is calculated by the lender to include the principal, interest, taxes, and insurance on an amortizing loan. The calculated amount represents the borrower’s actual monthly mortgage-related expenses.

Principle of Conformity: The thought that a house will appreciate in value when the size, age, condition and style are similar to other houses in the neighborhood.

Principle of Progression: An appraisal term which states that real estate of lower value is enhanced by the proximity of higher-end properties.

Principle of Regression: An appraisal term which states that the value of higher-end real estate can be brought down by the close proximity of lower-end real estate.

Privacy Fence: A structure that is erected between two pieces of property.

Private Mortgage Insurance (PMI): A type of insurance that lenders require on a loan when the borrowers down payment or property equity is less than 20 percent of the property value; the insurance provides partial protection to the lender if the borrower defaults on the loan.

Probate: The process of establishing the validity of a will before a duly authorized court or person.

Processing Fee: A fee charged by lenders for gathering the necessary information to process the loan.

Procuring Cause: A legal term that is used to determine whether a broker is entitled to a commission.

Production Home: Homes that are mass-produced by one builder.

Programming: A written summation by an architect of a projects design objectives, constraints, and criteria.

Project Budget: A financial document that details the construction budget including the costs for land, furniture, equipment, financing, professional services, contingencies, and owner-furnished goods and services.

Property Line: An official dividing line between properties.

Property Report: A disclosure that is filed with the state when a time-share project or subdivision is sold.

Property Tax: Tax paid on privately owned property and based on local tax rates and a property value assessment.

Property Tax Deduction: A tax deduction for the amount homeowners have paid in property taxes.

Property Value: The value of a property based on the price that buyers will pay at a specific time.

Prorate: To allocate percentages of certain expenses that will be paid by the buyer and seller at the time of closing.

PUD (Planned Unit Development): A residential project that consists of a cluster of homes surrounded by areas of commonly owned open space that is maintained by a nonprofit community association.

Punch List: A list compiled by a buyer prior to a sale detailing items to be fixed before closing.
A list that is completed bye a buyer prior to the sale, which details the items to be fixed before closing.

Purchase Agreement: A document that details the purchase price and conditions of the transaction.

Purchase Contract: A legal document that binds the buyer and the seller to the purchase and sale of a property.

Purchase-Money Mortgage (PMM): A mortgage obtained by a borrower as partial payment for a property

Q

Qualifying Ratio: A ratio that is calculated by the lender to determine how much a potential buyer can borrow.

Queen Anne Style: A Victorian-era style of architecture and furniture dating back to the late 19th century.

Quiet Enjoyment: The right of an owner of property to use the property without interference.

Quiet Title Suit: A lawsuit that is filed to determine who has the legal rights to a property.

Quitclaim Deed: A document that releases a party from any interest in a piece of real estate.

Quoin: The exterior angle of a wall or any of the stones used in forming the angle.

R

R-Value: A measure of the capacity of insulation to impede heat loss; the higher the value, the slower the rate of heat loss.

Radiant Heating: A type of heating; can be through wall registers, coils beneath a flooring or above the ceiling or via hot water that is circulated through floor tubing or radiators.

Radon: A ground-generated radioactive gas that can seep into homes through the sump pumps, cracks in the foundation or other source.

Rafter: Part of a series of beams that form the slope of a pitched roof.

Rails: The horizontal structure of a door.

Rammed-Earth Construction: A building process where moist soil is mixed with a small portion of clay and dumped into forms. The mixture is compacted and the forms are removed once it solidifies. It is a very common type of construction in arid regions where wood is in scarce supply.

Ranch Style: A modern, no nonsense style of home.

Rate Cap: The maximum interest rate charge allowable on a monthly payment of an adjustable rate mortgage during the adjustment period.

Rate Lock: The lenders guarantee to the borrower to lock in a specific interest rate for a limited amount of time.

Rate Type: The rate type determines if and how payments will adjust over the term of a loan.

Rate-Improvement Mortgage: A loan that includes a clause that entitles the borrower to have a one-time interest rate cut without the need to refinance.

Real Estate: Land and/or buildings.

Real Estate Agent: An individual who is licensed by the state to represent a buyer or seller in a real estate transaction in exchange for a commission.

Real Estate Broker: An individual, corporation or partnership that is licensed by the state to represent a buyer or seller in a real estate transaction. Brokers supervise licensed sales agents who act for the broker.

Real Estate Investment Trust (REIT): Publicly traded companies that own, develop and operate commercial properties.

Real Estate Professional: Any individual, broker, sales agent or attorney who holds a real estate license.

Real Estate Settlement Procedures Act (RESPA): A federal law that is designed to make sellers and buyers aware of settlement fees and other transaction-related costs for properties.

Real Property: The land and any permanent fixtures on it.

Realtist: A designation given to an agent or broker who is a member of the National Association of Real Estate Brokers.

Realtor: A designation given to an agent or broker who is a member of the National Association of Real Estate Brokers.

Reconveyance: The lenders act of transferring a property back to a borrower when the borrower completely pays off their mortgage.

Recorder: The public official who is responsible for keeping records of all real estate transactions.

Recording: The act of filing property-related documents into public record.

Recording Fee: The fee that is charged by real estate agents for transferring the sale of property into the public record.

Redlining: An illegal practice by a bank or insurance company that denies credit or insurance to people based on prejudices.

Refinancing: The process of redoing a mortgage in favor of a new mortgage with better terms.

Regression: The belief that property the value of one property is adversely affected by the proximity of a lesser-quality property.

Regulation Z: A federal code issued under the Truth in Lending Act which requires that a borrower be advised in writing of all the costs associated with the credit portion of a financial transaction.

Rehabilitation Mortgage: A type of mortgage that is provided to cover the costs of repairing and improving a property for the purpose of resale.

REIT (Real Estate Investment Trusts): Publicly traded companies that own, develop and operate commercial properties.

Release Clause: A provision that is within a purchase contract which allows the seller to continue marketing the property and to accept any other offers.

Relocation Benefits: Employer paid benefits such as the coverage of moving costs, reimbursement for temporary housing and transportation, real estate fees and discounted loans.

Relocation Company: A firm that administers all the aspects for the relocation of new employees from one location to another.

Remaining Balance: The amount of unpaid principal on a home loan.

Remaining Term: The original loan term minus the number of payments made.

Rent Loss Insurance: An insurance policy that covers the loss of rent or rental value in the event of a fire or other damage that renders the property uninhabitable.

Renters Insurance: A policy for renters that covers the replacement value of possessions.

Repayment Plan: The lenders negotiated repayment plan with a borrower that falls behind on mortgage payments; an alternative to going to court.

Replacement Cost: The cost of rebuilding a structure to the original specifications.

Replacement Reserve Fund: Money that is set aside from a homeowners assessments that will be used to replace common property in a planned developments community room.

Repointing: Replacing damaged mortar in the joints between bricks or stones.

Repossess: A lender may take back a property if the borrower fails to make their mortgage payments.

Resale Value: A properties future value which may be affected by the surrounding neighborhood, school district, and economic and house market conditions.

Rescission: The cancellation of a contract by law or with the consent from the parties involved.

Reserve Fund: Money that is set aside by a homeowners association to be used for major repairs or improvements.

Resilient Channel: A channel run across wall studs underneath wallboard to reduce sound transmission.

RESPA (Real Estate Settlement Procedures Act): A law appointed by the federal government to make sellers and buyers aware of settlement fees and other related transactions to costs for properties.

Restriction: Any limitation on the use of property.

Restructured Loan: A newly negotiated loan.

Return on Investment: The amount of profit that a property generates.

Reverse Mortgage: A type of loan that is available only to older, equity-rich owners. Repayment is not necessary until the borrower sells the property.

Ridge Board: The upper-most horizontal framing board on a roof structure.

Ridge Vent: A vent that is located along the ridge board that allows moisture to escape.

Right of First Refusal: An agreement by a property owner to give another individual the right to buy or rent the property before it gets listed on the open market.

Right of Way: The right to pass over property owned by another individual.

Right To Rescission: A provision in the federal Truth in Lending Act that allows borrowers to cancel certain types of loans within three days of signing.

Riparian Rights: An owner’s right to use a river, stream, or lake bordering their property.

Riser: The vertical boards that are between the steps of a stairway.

Rocker Switch: An electrical switch that is operated by tapping the top or bottom of the control plate.

Rollback: A limitation on the annual assessed value increases or a reduction in the amount of property tax paid.

Roof Sheathing: The flat boards that are nailed to the rafters to which a covering is fastened.

Rough-In: The installation of plumbing, electrical, and other mechanical systems.

Rural Housing Service: The U.S. Department of Agriculture financial aid to farmers and certain other borrowers of rural properties when other funding options are not available to them.

See also:

USDA Homes

Rv Pad: A large concrete pad for parking a recreational vehicle.

S

Sacrificial Anode: A metal rod inserted into a water heater to extend the life of the tank.

Sale-Leaseback: A real estate transaction where the buyer leases the property back to the seller for a specific period of time. Also known as a seller rent-back.

Sales Concession: A cost that is paid by the seller, despite the fact that the cost is usually paid by the buyer.

Sales Contract: A contract that is signed by the buyer and seller that provides the details and terms of the purchase.

Saltbox Style: A design in the shape of saltboxes that dates back to colonial times.

Sanitary Sewer: The drain line that carries away the wastewater to the municipal sewer system or to a septic tank.

Sash: 1. One window of the two windows in a double-hung window.; 2. The frame into which the panes of a window or a door are set.

Schematic Designs: A sketch of the floor plans and the exterior of a building.

Sale-Leaseback: The sale of property with the understanding that the seller can lease it back from the new owner.

Sealed Bids: Amount of the bid offered enclosed in an envelop so that other bidders would not see the amount offered.

Secondary Market: A market which buy and sells mortgages after being offered in primary markets.

Second Mortgage: A second loan placed upon property.

Secondary Mortgage Market: Packaged home loans that are resold as securities to investors.

Secured Loan: A loan backed by collateral.

Security: A piece of property that has been designated as collateral.

Seller Carry-Back: An agreement where the seller provides the financing for the purchase of the home.

Seller Financing: The seller allows the borrower to use a portion of the equity in the property to finance the purchase.

Seller Rent-Back: A real estate transaction where the buyer leases the property back to the seller for a specific period of time. Also known as a sale lease-back.

Seller Take-Back: An agreement where the seller provides the financing for the purchase of the home.

Sellers Market: A real estate market where the sellers have the advantage and multiple offers are a common occurrence.

Selling Agent: A real estate broker or salesperson that writes up the offer to purchase for the buyer, but may not be the buyer’s regular representative.

Septic System: A self-contained sewage treatment system that holds wastewater in an underground storage area and relies on bacterial action to decompose solid waste matter.

Service Conductor: Are the wires extending from property utility equipment to the corresponding company’s line.

Servicer: A firm that collects mortgage payments and manages a borrowers escrow accounts.

Setback: The minimum amount of distance that a building must be set from the property line.

Settlement or Closing Fees: Fees that are paid for the completion of the written instruction for the agreement between the buyer and the seller and the lender.

Settlement Statement: A document that provides the details regarding what payments have been made and to whom.

Severalty: The ownership of real property by one individual. Also known as sole ownership.

Severance: Changing an item from real property to personal property by detaching it from the land.

Shake: A thick wood shingle, often made from cedar, that is used for roofs and siding.

Shared-Appreciation Mortgage: A type of loan that allows more than one party to share in the borrowers profits when the home is sold.

Shared-Equity Transaction: A transaction where there are two buyers purchasing a property; one is to be the resident on the property and the other will be an investor.

Sheathing: A layer of boards or other fibrous material that is applied to the outer studs, joists and rafters of a building to strengthen the structure and serve as the base for an exterior weatherproof cladding.

Shed Ceiling: A ceiling that pitches upward at one end.

Shed Roof: A roof that pitches up further on one side than the other.

Shingle Ripper: A flat, bar-like tool with a sharp hook that is designed to make removing shingles easier.

Shingles: Thin oblong pieces of material made of slate or wood, which is laid in overlapping rows to cover a roof or sides of a building.

Shiplap: Wood siding applied horizontally so that the edge of one board overlaps the one next to it in a flush joint.

Shoe Molding: A finishing trim set between the floor and the baseboard.

Shutoff Valve: A small valve that is under a sink or behind a toilet and controls the water supply to the plumbing fixture.

Shutters: Covers that are mounted on each side of a window.

Sidelights: Tall, narrow windows that are set beside a door.

Siding: A type of covering of exterior walls of buildings.

Sill: The lowest horizontal piece of a door or window opening.

Sill Cock: An exterior threaded faucet connection for a garden hose.

Sill Plate: A horizontal piece of wood placed on top of the foundation.

Sill Sealer: A material that seals the gaps between the foundation and sill plate.

Simple Assumption: A type of loan assumption in which the original borrower remains a liable as a secondary borrower should the original borrower default.

Single Agent: An agent who represents either the buyer or the seller in a transaction.

Single-Pole Switch: A conventional light switch that controls one or more lights from a single location.

Sink Trap: The P- or S-shaped section of a drainpipe located directly beneath a sink; intended to hold a small amount of water so that it blocks sewer gasses from rising into the house.

Skylight: A window in built into a roof to allow natural light to illuminate a room.

Slab Foundation: A foundation that is built directly on soil; it does not have a basement or a crawl space.

Slider Window: A window that is made of two windows or sashes and that glides open and closed on a metal track.

Snubber: A spring-like device that is placed between the top of a door and the door jamb to pull the door shut.

Soffit: The external area under the overhang of a roof.

Soils Test: A test of the subsoil to ensure that a foundation can be safely constructed at that spot.

Sole Plate: The bottom horizontal component of a frame wall on which the studs sit.

Solid-Core Door: A door that is completely solid throughout.

Soundboard: A special board that is placed beneath the wallboard to reduce the transmission of sound through the wall.

Spanish Mission Style: An architectural design that derived from Spanish missions established in the Southwest.

Special Assessment: A specific amount of money that homeowners pay to a homeowners association for the purpose of performing public improvements.

Special Deposit Account: An account that is required for rehabilitation mortgages to hold and disperse the restoration and remodeling funds to the contractors as the work is completed.

Specifications: Written requirements for material, equipment, and construction systems and standards.

Speculation Home: A home that has been built without a buyer.

Splash Block: A slanted block that is used to divert the runoff water from a downspout away from the foundation.

Spline: A thin piece of wood, metal or vinyl that secures a joint.

Split-Level Style: A style of home that is similar to ranch style, but built to fit on a smaller lot.

Square Footage: The number of square feet of livable space in a building.

Standard Metropolitan Statistical Area (SMSA): A designation given by the U.S. Office of Management and Budget to cities of 50,000 or more residents.

Standard Payment Calculation: A calculation that is used to determine the monthly payment that will be necessary to repay the balance of a home loan in equal installments.

Starter Home: A first home that is generally of a lower-than-average price.

Steel Framing: A construction method used by commercial and residential builders.

Step-Rate Mortgage: A type of home loan that allows a gradual increase in the interest rate during the first few years.

Stigmatized Property: Property that has an undesirable reputation because of an event that had occurred on or near the site.

Stiles: The vertical pieces that make up the construction of a door.

Stool: Part of an interior window frame that extends horizontally across the lower part of the opening.

Stop: A thin strip of wood fastened to the face of a doorjamb; intended to stop the door when you close it. Also called a doorstop).

Storm Sewer: A drain line that is not connected to the sewer line and is used to remove all other wastewater from a building.

Storm Window: A window that is installed on top of an ordinary window and is used for additional protection in extreme weather conditions.

Straight Purchase: A transaction where a buyer gives the builder a deposit to begin building, and the balance when the house is completed and the sale closes.

Strike Plate: The flat metal plate that is fastened to a doorjamb to receive a lockset latch or bolt to keep a door closed.

Stucco: A mixture of sand and cement that is used to cover the exterior surface or the interior walls of a building.

Studs: The horizontal pieces of lumber or steel in a wall to which a wall covering is attached.

Subagent: An agent who assists another agent in representing a principal, a party or in a transaction.

Subcontractor: Specialty construction company that is hired by the general contractor to perform a specific task.

Subdivision: The division of a large piece of property into smaller parcels.

Subflooring: Plywood or boards beneath a finished floor, that is nailed directly to floor joists, and provides a structural base for finish flooring material.

Subject-To: The transfer of rights to pay a debt from one party to another, with the original party remaining liable for the debt if the second party defaults.

Subordinate Loan: A second or third mortgage.

Subsequent Rate Adjustments: The adjusted interest rate with an adjustable rate loan (ARM) that may be adjusted at regular intervals.

Subsequent Rate Cap: The maximum amount that the interest rate may increase at each regularly scheduled interest rate adjustment period for an adjustable rate loan (ARM).

Sump Pump: A pump that moves water from a basement sump pit.

Surround: The material that surrounds a bathtub or shower and protects the wall from water damage.

Survey: A precise measurement of a piece of property by a licensed land surveyor.

Swale: A wide, shallow depression in the ground designed to channel drainage of rainwater.

Sweat Equity: The non-cash value added to a piece of property by the owner, such as do-it-yourself home improvements

T

T1-11: An exterior siding with vertical grooves that simulate boards.

Tank Stopper: The rubber plug that seals the valve seat between the toilet tank and the bowl.

Tap Fees: The fee that is charged by most companies for hooking up the utilities.

Tax Deduction: A tax break offered by the government.

See also:

Government Tax Foreclosures

Tax Lien: A lien placed against a property for nonpayment of taxes.

See also:

Tax Lien Foreclosures

Tax Sale: The public sale of a property by the government for nonpayment of taxes.

Tax Service Fee: A fee that is collected to set up a third-party monitoring system for the borrowers property tax payments so that the payments are made on time and to prevent tax liens from being put in place.

Tax Shelter: A term referring to various tax advantages.

Tear-Down: A building that must be torn down and rebuilt from the ground up.

Teaser Rate: A low, short-term interest rate offered on a mortgage to entice the borrower.

Tenancy by the Entirety: A form of ownership where a husband and wife have joint ownership in a property, where they both hold title to the whole property, with right of survivorship.

Tenancy in Common: A form of ownership where two or more owners hold an undivided, but not necessarily equal, interest in the property, with no right of survivorship.

Tenure: A law term that refers to the way in which a piece of property is held, such as a fee simple or leasehold.

Terra Cotta: A red, low-fired tile.

Terrace: A terrace is a veranda, a roofed balcony, an unroofed paved area next to a house, or a raised bed of earth constructed to enhance a landscape.

The Buyers Agent Inc.: A national buyer’s brokerage company with franchises in 28 states. Call (800) 766-8728.

Thermocouple: 1. A thick copper wire that acts as a safety device on a gas burner.; 2. A safety device on a pilot light gas ignition system.

Thermostat: A mechanical control that automatically turns on an appliance such as a heater, a furnace or an air conditioner, when the room temperature reaches the preset level.

Thermostatic Control: A device used to regulate the point at which the burner for the water heater is activated.

Third-Party Origination: In a third-party origination transaction, the lender has another institution create all or part of a mortgage.

Three-Way Switch: Controls one or more lights from more than one location.

Threshold: A flat trim strip that is made of oak or aluminum and provides a smooth transition between the floors on both sides of a door.

Throw: The distance a deadbolt extends out from the edge of a door when it is in a locked position.

Time is of the Essence: A phrase in a purchase contract that indicates a specific period of time in which an act must be performed.

Timeshare: Ownership that involves the acquisition for a specific period of time or a percentage of interest in a property.

Title: The legal document that grants ownership to a piece of real estate.

Title Company: A firm that ensures that the property title is clear and provides title insurance.

Title Examination: An examination of the public record to determine that the seller is the legal owner and there are no claims or liens that would affect the transfer of title to the property.

Title Insurance: A policy issued to lenders and buyers to protect against loss due to disputed property ownership.

Title Insurance Binder: A title insurance companies written commitment to insure the title to the property, subject to specific conditions and exclusions.

Title Risk: A possible problem to the transfer of title from one owner to another.

Title Search: The process of reviewing all recorded transactions in the public record to determine whether any title defects exist that could interfere with the clear transfer of ownership of the property.

Toilet Seal: A gasket that seals the joint between the bottom of a toilet and the drain pipe, and prevents water leakage and escape of sewer gases.

Tongue and Groove: Lumber with a small groove down one side of each board and a protruding piece (tongue) on the other side; the tongue fits into the groove when the boards are installed.

Top Producer: A real estate term that refers to agents and brokers who sell a high volume of homes.

Top Rail: The horizontal structural piece of a door that runs across the top.

Top Soil: The top layer of soil that is removed when lots are graded in preparation for construction.

Total Expense Ratio: The percentage of monthly debt obligations relative to gross monthly income.

Total Lender Fees: Fees required by the lender to obtain the loan. Also known as finance charges.

Total Loan Amount: The base loan amount plus any closing costs that have been financed.

Total Monthly Housing Costs: The sum of all the monthly housing expenses related with home ownership.

Total of All Payments: The total cost of the loan, including principal amount interest payments.

Total Paid At Closing: A total of all the costs at the time of closing.

Townhouse: An attached home that is not a condominium.

See also:

Townhouse Foreclosures

TPRV: Temperature/pressure relief valve. A device that releases built-up energy in a tank when it reaches a specific temperature or pressure.

Tract Home: A mass-produced house constructed by one builder in a project. Also known as a production home.

Trade Equity: Other real estate or assets that a buyer gives to a seller as part of the down payment.

Trading Down: Buying a home that is less expensive than the buyer’s current house.

Trading Up: Buying a home that is more expensive than the buyer’s current house.

Trans Union Corporation: A credit-reporting bureau that operates nationwide. One of the "Big Three". Address: 760 Sproul Road, P.O. Box 390, Springfield, PA 19064-0390. Phone: (800) 888-4213.

Transaction Broker: A real estate professional who does not represent either the buyer or the seller but is hired to help them reach an agreement.

Transfer of Ownership: Any legal means by which a piece of real estate changes hands.

Transfer Tax: An assessment by a government authority at the time a piece of property changes hands.

Transom: A small hinged window directly above a door.

Trap: 1. In plumbing, a trap is a curved section of drainpipe that fills with water providing a liquid seal to prevent the emission of sewage gases.; 2. The U- or S-shaped section of drainpipe directly beneath a plumbing fixture. Its shape is intended to hold a small amount of water and blocks sewer gasses from rising into the home.

Tray Ceiling: A horizontal ceiling that is constructed part of the way up toward the ridge of a roof.

Tread: The flat part of a stair step.

Treasury Bills: Securities issued by the Treasury Department that have the full backing of the U.S. government.

Treasury Index: An index used to determine interest rate changes for adjustable rate mortgages.

Trellis: A decorative landscape structure that is made of thin strips of wood or plastic.

Trim Work: The finishing around doors, doorways, window frames and floors.

Truss: A prefabricated framework of girders, struts and other items used to support a roof or other load-bearing component.

Trust Account: A special account used by a broker or escrow agent to safeguard funds for a buyer or seller.

Trustee: A legally empowered individual who controls a property for another person.

Truth in Lending Act: A federal law that allows a consumer to cancel a home-improvement loan, second mortgage or other loan until midnight of the third business day after a contract is signed providing the home was pledged as security (except for a first mortgage or first trust deed).

Tuck-Point: The process of removing old mortar from between bricks and replacing it with new mortar.

Two- to Four-Family Property: A piece of property that is owned by one person but provides housing for up to four households.

Two-Step Mortgage: An adjustable mortgage with two interest rates: one for the first five or seven years of the loan, and another for the remainder of the loan term.

U

U-Value: The amount of heat a door or window handles between the inside air and the environment.

U.S. Department of Housing and Urban Development: A federal agency that oversees the Federal Housing Administration (FHA) and a variety of housing and community development programs. Also known as HUD.

Unbundled Real Estate Services: Real estate services that are purchased one transaction at a time.

Underlayment: A layer of wood between the sub floor and the floor.

Underwriters Knot: A code-approved knot that is tied at the end of an electrical cord to prevent the wires from being pulled away from their connection to electrical terminals.

Underwriting: The process in which lenders evaluate the risks posed by a particular borrower and set appropriate conditions for the loan.

Underwriting Fee: A fee charged by the lender to verify information on the loan application, authenticate the properties worth as collateral, and make a final determination about whether to grant a loan to the applicant.

Undisclosed Heir: A person who claims the right to a property after the death of an owner who died without leaving a will.

Undisclosed Spouse: A marital partner who can claim the right to a piece of property but is not identified in the owners will.

Unilateral Contract: A one-sided contract where one party makes a promise to do something, the second party is not legally required to perform. However, if the second party does comply, the first party is obligated to keep the promise.

Unrecorded Deed: A deed that transfers ownership from one party to another without being officially recorded.

Unsecured Loan: A loan that is not backed up by collateral.

Upgrades: Additional options offered to buyers in a new-home project.

Upzoning: The process in which a property is zoned from a lower to a higher use.

Urban Sprawl: The unplanned expansion of a development.

Usury: Illegally excessive interest charged on a loan.

V

V-Cap: A piece of ceramic tile that is used at the edge of a counter to trap liquids.

VA (Veterans Administration): The Veterans Administration allows most veterans to purchase a house without a down payment.

See also:

VA Foreclosures

VA Loan: A loan through the Veterans Administration program.

Valley: The angled intersection between two roof planes where water collects and runs off the roof via a special metal flashing installed for that purpose.

Valuation: 1. The estimated worth or price.; 2. The act of valuation by appraisal.

Vapor Barrier: A material that prevents the passage of moisture.

Variable Interest Rate: A loan rate that moves up and down based on specific factors.

Variable Rate: An interest rate that changes with fluctuations in the indexes.

Variable Rate Mortgage (VRM): A loan with an interest rate that is based on specific factors.

Vaulted Ceiling: An elongated half-cylinder ceiling that arches above the floor.

Veneer: A thin surface layer that is glued to an inferior material.

Vent: A pipe that allows air to flow in a drainage system.

Ventilation: The process of replacing stale air with fresh air.

Verification of Deposit: Part of a loan process where the lender asks the borrowers bank to sign a statement verifying the borrowers account balances and history.

Verification of Employment: Part of a loan process where the lender asks the borrowers employer for confirmation of the borrowers position and salary.

Vestibule: A small entrance hall or room.

Veterans Administration (VA): The Veterans Administration allows most veterans to purchase a house without a down payment.

Victorian Style: An architectural style that dates from the mid-19th century.

Vinyl-Clad Windows: Wood windows that are sheathed in vinyl on the outside.

Violation: An act, deed, or condition that is contrary to the permissible use of property.

Visqueen: A brand of polyethylene sheet that is used to cover the ground in a crawl space.

Voidable Contract: A contract that may be rejected by either one of the parties involved.

Volt: A unit of measurement of electrical force between two points in a circuit.

Volt-Ohm Meter: An electrical test device used for making a variety of electrical measurements, including voltage and current.

Voltage: The pressure behind the flow of electricity.

Voluntary Lien: A lien that a homeowner willingly gives to a lender

W

Wainscoting: Wood paneling, tongue-and-groove boards or similar material that is installed between a baseboard and a chair rail.

Waiver: A voluntary relinquishing of certain rights or claims.

Walk-Out Basement: A feature in a building where there is a door opening on ground level.

Walk-Through: A buyer’s final inspection of the home to determine if all the conditions that are in the purchase agreement have been satisfied.

Wallboard: Sheets of compacted gypsum with a paper exterior. Also known as dry wall, sheetrock, gypsum board, and plaster board.

Warehouse Fee: A closing-cost fee that represents the lenders cost of temporarily holding a borrower’s loan before it is sold on the secondary mortgage market.

Warranty: A legally binding guarantee on something for a specified time.

Water Table: The level at which the ground is saturated with water.

Watt: A unit used to measure the rate at which a device consumes electricity.

Weather Stripping: Individual lengths of rubber or plastic that are used to plug air leaks around doors and window frames.

Weep Holes: Spaces or small openings left in a masonry wall to allow water to drain from behind the wall.

Western Style: A cabinetry term referring to a style of cabinet with a face frame around the front opening.

Wetlands: Watery areas such as swamps, marshes and floodplains.

Wild Deed: An improperly recorded deed.

Window Light: An individual pane of glass.

Window Seat: A built-in bench under an interior window.

Window Well: A curved, corrugated steel insert that is used to isolate basement windows from moisture if they are below the soil line.

Window Well Covers: Curved plastic covers that are designed to be installed on top of a window well to cover the opening.

Wraparound Mortgage: A loan given to a buyer for the remaining balance on a seller’s first mortgage and an additional amount requested by the seller. Payments on both amounts are made to the lender who holds the wraparound loan.

X

Y

Z

Z-Flashing: A special type of metal flashing that protects horizontal joints that are between siding panels that don’t overlap.

Zero-Lot Line: The positioning of a house near or on top of the lot boundary which results in little or no space between the houses.

Zero-Net: When a seller receives little or no net proceeds from a property sale.

Zoning: Regulations that control the use of land within a jurisdiction.

Zoning Variance: A one-time modification of the existing zoning laws.