Real Estate Terms
Some of you may reached this page out of curiosity while others may be here because they need help with their real estate exam. This small glossary will cover the top real estate terms that people have problems with on their real estate test. This real estate glossary is only a small sample of what will on your exam. Most of these come from public records, listing companies and public records.
It really does not matter if you are looking at listing with a broker, searching for an agent or just finding out information about the transaction process, this glossary will help.
What are some real estate terms?
There are thousands! But the most reported terms on the real estate exam include a title search, public records, private mortgage insurance, hazard insurance, a fixed rate mortgage, earnest money deposit, loan application, pre approval, escrow account, eminent domain, construction loan and exclusive listing.
Just learning these terms will put you miles ahead when preparing for your examination. Below we have put together a glossary of some of the most important terms there are on the real estate exam. If you are studying to be a broker, and agent these are must knows for all future realtor.
What does terms mean in real estate?
If you found this page looking for the answer to this, you won’t find much detail. When an agent is talking about the terms in a real estate deal, they could be talking about interest rates, seller concessions, cash offers or other terms that the buyer is wanting. This article covers mostly material that buyers and an agent will need to know about a payment or a transaction in a real estate deal.
Abandonment – The deliberate and permanent cessation of utilization or satisfaction with no aim to continue or recover one’s belonging or intrigue. May relate to an easement of real property.
Abutting – An area of land or a building, be next to or have a common boundary.
Accelerated Depreciation– A method of calculating for tax purposes and reduction of an income property.
Accession – Title to improvements or additions to the real property gained because of the accumulation of alluvial stores along the banks of streams or because of the extension of installations.
Acknowledgment – An assertion made by an individual to a legal official open or other open authority approved to take affirmation that the individual had executed an instrument as a free and willful act.
Balloon payment – The last payment of a mortgage loan that is considerably bigger than the required periodic payments because the loan amount not amortized.
Beneficiary – The individual for whom a trust works or for whose sake the pay from a trust estate is drawn. A lender who loans cash of land and reclaims a note and deed of trust from the borrower.
Bill of sale – A composed instrument was given to pass title to individual property.
Blockbusting – The illegal practice with regards to instigating mortgage holders to sell their properties by making representations in regards to the passage, or forthcoming section, of minority people into the area.
Bundle of legal rights – The principle that land ownership entails of all criminal rights to the land, along with ownership, manipulate within the law, and enjoyment, rather than who owns of the property itself.
Capitalization rate – The rate of return a property will deliver on the owner’s investment.
Chain of title for buyer – The succession of conveyances from some acceptable starting point by which the present holder of real property derives his or her title.
Chattels – Personal property.
Community property – A strategy for property possession dependent on the theory that every life partner has equal interest for the real estate property gained by the endeavors of either spouse during marriage.
Comparables – The sold properties, recorded in an appraisal report, which are significantly identical to the subject property. Continuing or procedure to practice the intensity of a prominent area.
Deficiency judgment – A private judgment levied towards the mortgagor while a foreclosures sale does not produce enough price range to pay the loan debt in full.
Discount rate – The fee of interest a commercial, financial institution ought to pay when it lends from its federal reserve financial institution. Consequently, the cut-price charge is the fee of interest the banking system incorporates inside its framework. Member banks may additionally take positive promissory notes that they have received from customers and promote them to their district federal reserve financial institution for less than face price. With the funds acquired, the banks could also make loans. Changes in the bargain rate may also purpose banks and other creditors to reexamine credit policies and situations.
Duress – The use of unlawful pressure that forces action or inaction against a person’s will.
Easement– A right to use the land of every other for a particular motive, including for a proper-of-manner or utilities; an incorporeal hobby in land. An easement appurtenant crosses with the area when conveyed.
Equal Credit Opportunity Act (ECOA) – Federal legislation ordering lenders to make loan equally accessible without discrimination based on race, sex, color, religion, marital status, age, national origin, or declaration of income from public assistance.
Executed buyer contract – A contract in which all individuals have fulfilled their obligations and thus completed the contract. These are the most common with the national association of realtors.
Fair Market Housing Act of 1968 – The terms which forbids discrimination or judgment based on the color of skin, race, sex, religion.
Federal Home Loan Mortgage Corporation (FHLMC) – A federally chartered corporation designed to accommodate a secondary mortgage market for traditional loans (Freddie Mac).
Federal Housing Administration (FHA) – It was created by the National Housing Act in 1934 to encourage growth in housing examples and conditions, to provide a sufficient home financing way through the insurance of housing mortgages and credit, and to exercise a stabilizing impact on the mortgage broker market.
Federal income tax – An annual tax based totally on earnings, consisting of monies derived from the lease, use, or operation of actual estate.
Fee-simple estate – The best possible estate or claim of ownership of real property proceeding forever.
Fixture – An article that becomes once personal property, however, has been so affixed to the actual real estate that it has to turn out to be real property.
Freehold estate – An estate in land wherein ownership is for an indeterminate length of time, in comparison to a leasehold property.
Functional obsolescence – The impairment of purposeful capability or performance; the inability of a shape to carry out appropriately the characteristic for which it currently is employed. Functional obsolescence displays the loss in the real estate cost added about using factors that affect the property, together with overcapacity, inadequacy, or changes within the artwork. Important to know in the real estate appraisal world.
General contractor- A production specialist who enters right into a formal construction contract with a landowner or master lessee to construct a real property constructing or venture. The fashionable contractor regularly contracts with several subcontractors focusing on various aspects of the constructing procedure to perform unique jobs.
Government lots – Fractional parts in the rectangular survey system (government survey system) that are less than one full quarter-section in area loan.
Grant – The order of sending or transferring title to real property and real estate.
Grantee – The buyer. A person to whom real estate is conducted.
Grantor – The seller. A person who conducts real estate by deed.
Gross Lease – A lease or property below which a landlord will pay all belongings charges often incurred through ownership, which includes repairs, taxes, coverage, and working costs and residential leases are gross leases mostly.
Gross rent multiplier (GRM) – A figure applied as a multiplier of the total month-to-month condominium profits of assets to supply an estimate of the assets’ cost for the real estate.
Habendum clause – The deed clause starting “to have and to hold,” which defines or limits the extent of ownership in the state given by the deed estate.
Heir – One who would possibly inherit or succeed to an interest in the land beneath the state law of descent while the owner dies without leaving a legitimate will.
Holographic will – A will that is dated, and signed in the handwriting of the maker.
Homestead provision – The land and the upgrades thereon precise by using the proprietor as his or her homestead and, consequently, blanketed by using country regulation, either incomplete or in part, from pressured sale by way of positive creditors of the proprietor.
Implied contract– A contract under which their acts and conduct demonstrate the agreement of the parties.
Implied grant- A way of creating an easement. One party can be using another’s property for the advantage of both companies.
Index lease – The lease that allows the rent to be increased or decreased periodically, based on changes in a chosen economic index, such as the Consumer Price Index.
Insurance – The indemnification towards loss from a selected danger or peril through an agreement (referred to as a coverage) and for a consideration (referred to as a top premium). Not needed for a title search.
Interest – A lender for the use of money will make a charge.
Joint tenancy – The possession of an actual estate by two or extra persons who’ve been named in one conveyance as joint tenants. On the loss of life of a joint tenant, her or his hobby passes to the surviving joint tenant or tenants by the proper of estate survivorship.
Judgment clause – A provision that may be covered in notes, leases, and contracts with the aid of which the debtor, lessee, or obligor authorizes any attorney to enter the courtroom to confess judgment in opposition to him or her for default in charge. Also called a cognovit depending on how the estate is defined.
Lessee – The tenant who leases a property.
Lessor – One who leases the property to a tenant for the real estate.
Life estate – A hobby in real or private ownership that is confined in length to the lifetime of its proprietor or a few other specific man or woman.
Life tenant – An individual in possession of a life estate, normally this is single family real estate.
Liquidated damages – Liquidated damages occur while, through contractual agreement, defaulted earnest cash becomes the personal assets of the vendor.
Liquidity – The capacity to sell an estate asset and convert it into cash at a price close to its real value.
Littoral rights – A landowner’s right to use water in large lakes and oceans adjoining to her or his property. The ownership rights to land adjoining these bodies of water up to the high-water mark.
Lot and block description – A type of real property that identifies a parcel of land by reference to lot and block numbers within a subdivision, as known on a subdivided plat duly registered in the county recorder’s office.
Real Estate Management agreement – A contract between the proprietor of profits property and a control firm or individual belongings manager describing the scope of the manager’s jurisdiction.
Marginal lease – A lease agreement that barely covers the costs of operation for the property or the estate
Mechanic’s lien – A statutory lien created in the desire of contractors, people, or material suppliers who have executed work or provided substances in improving real property.
Metes-and-Bounds description – Legal information of a parcel of land that starts at a properly-marked point and follows the bounds, the usage of route and distances across the tract, lowers back to the starting point.
Mill – A tax rate used by municipalities to compute property tax on an estate
Monetary policy – The government regulation of the amount of money in circulation through such institutions as the Federal Reserve Board.
Money judgment – A court judgment ordering amount of money rather than the specific performance of a particular action.
Month-to-Month Tenancy – A periodic tenancy – the tenant rents for one period at a time. In the absence of a rental settlement (oral or written), a tenancy generally is taken as a month to month.
Monument – Fixed natural or artificial objects, used in the real metes-and-bounds description, to establish the boundaries; located at the corners.
Mortgage – The real estate document is creating a mortgage lien. Also a conditional transfer or pledge of real estate as security for a loan depending on the terms of the lender.
Municipal ordinances – The laws, regulations, and codes enacted by the governing body of a municipality.
Net operating income – The total income of the property deducting vacancy, collection losses, and operating expenses (not including debt service). In commercial real estate, these terms are responsible for value.
Nonconforming use – The use of a property that is permitted to continue after a zoning ordinance prohibiting it has been set for the area. The realtor or broker normally does not know this about the listing. It can be title issue if not addressed.
Notarize – A way to certify or attest to a document, as by a notary public before payment.
Notary public – A public official empowered to certify and attest to documents, take acknowledgments, take affidavits, administer oaths, and perform other such acts.
Offer and notification of acceptance – The two parts of a legal real estate contract; a “meeting of the minds.”
Officer’s deed – A deed by sheriffs, trustees, guardians, etc.
Ownership – The special proper to preserve, own or manipulate, and dispose of a tangible or intangible component. Ownerships may be held by someone, company, or governmental entity.
Package mortgage – A method of financing in which the purchase of the land also finances the purchase of certain personal property items.
Private mortgage insurance – is a type of insurance you might be required to pay that protects the lender if you stop paying your mortgage. For only a title search, this is not needed depending on the terms.
Principal Interest Taxes – sum of a mortgage payment for real estate that includes the principal amount, loan interest, property tax, and homeowner’s property and private mortgage insurance premiums.
Party wall easement – A wall that is placed on or at a boundary line between two adjacent parcels for the use of the proprietors of both properties.
Performance bond – A binding agreement, often accompanied by the surety and usually posted by one who is to perform work for another, that assures that project or undertaking will be completed as per the agreement or contract.
Power of attorney – A written device authorizing a person (the attorney-in-reality) to behave on behalf of the maker to the extent indicated inside the instrument.
Prepayment clause – In a mortgage, the announcement of the terms on which the mortgagor may also pay the whole or said the quantity of the loan necessary at some time earlier than the due date.
Principle of conformity – The appraisal concept is declaring that homes which might be similar in design, creation, and age to different buildings inside the place have a higher price than they could have in a community of different structure.
Property disclosure acts – State-mandated vendor’s property disclosure reports. These reports place the responsibility of defect disclosure on the vendor. Agents are not obliged to discover property defects but are expected to disclose them if they are considered.
Property management – The operation of the property of any other for payment. Involves marketing space; advertising and condo sports; collecting, recording, and remitting rents; preserving the assets; tenant relations; hiring employees; retaining right money owed, and rendering periodic reviews to the owner. This is very popular in commercial real estate circles.
Property tax – Taxes levied by using the authorities against either actual or personal property. The proper to real tax belongings inside the United States rests solely with the states, no longer with the federal government.
Qualifying – The act of figuring out a prospect’s motivation, then matching his or her needs with the available inventory. Depending on the agent, this is normally done before there is a listing, payment or the broker is involved.
Quitclaim deed – A conveyance using which the grantor transfers something interest she or he has inside the actual real estate without warranties or duties.
Real estate –Land; a portion of the earth’s floor extending downward to the center of the earth and upward infinitely into space, including all matters wholly connected to it, whether through nature or using a man.
Real estate settlement procedures act – The act requires lenders, agent, broker, brokers, title agent, loan consultants and the company involved of a home loan to provide borrowers with pertinent and timely disclosures regarding the nature and costs of the real estate settlement process. The act also prohibits specific practices that are unethical.
Real estate broker – Any man or woman, cap partnership, association, or enterprise that sells (or offers to promote), buys (or gives to shop for), or negotiates the acquisition, sale, or change of actual property, or that leases (or provides to rent) or rents (or offers to lease) any actual ownership or the changes thereon for others and for a compensation or treasured attention. A real property dealer won’t behavior business without an actual property broker’s license.
Real property – Real property (or real estate) consists of land, whatever affixed to it to be appeared as an everlasting a portion of the land, that which is appurtenant to the land, and that that’s stable by using law, including all rights and interests.
REALTOR® – A certified trademark terms kept for the sole use of active affiliates of local REALTORS® boards affiliated with the National Association of REALTORS®.
Recission – The termination of a contract by agreement of the parties. A company with an agent or a broker can handle this after the listing or before the sale if they agree to share the marketing transaction.
Riparian rights – A real estate owner’s rights in land that border water, such as a creek or river. These advantages include access to and use of the water.
Sales contract – An agreement containing the entire terms of the agreement among customer and seller for the sale of a particular parcel or parcels of actual real estate.
Servient tenement – Also named a servient estate. The land on which an easement is in favor of neighboring property.
Setback – The quantity of area nearby zoning regulations require between lots line and the building line.
Severalty – The ownership of real property by one person only; also called sole ownership. A buyer or listing broker does not need to be involved.
Short sale – A sale of secured assets that produce much less cash than is owed to the lender, however, to expedite the sale and keep away from foreclosure expense, the lender releases its interest so the property can be bought.
Syndicate – A combination of two (or more) persons or firms to accomplish a joint real estate venture of mutual interest. The title of the company can share marketing buyers.
Tax lien – A rate towards belongings created by the operation of regulation. Tax liens and tests take priority over all other lien.
Tax sale – A court-ordered sale of actual assets to raise money to cover delinquent taxes.
Tenancy at sufferance – The tenancy of a lessee who legally comes into ownership of a landlord’s real estate but who proceeds to hold the premises improperly after her or his lease rights have expired.
Tenancy in common – A form of co-ownership by which each operates an undivided interest in real property as if he or she were is the only owner. Each has the right to partition. Not like a joint tenancy, there is no right of survivorship between tenants in general, and owners may have unequal interests.
Termination (listing) – The cancellation of a real estate broker’s most important employment contract. A listing can be terminated with the aid of death or insanity of either birthday party, expiration of a list duration, mutual settlement, enough written be aware, or the completion of performance under the settlement.
“Time is of the essence” – A phrase in a settlement that requires the overall performance of a particular action inside a stated time. Common transaction verbage from the realtor and the broker.
Township – The central unit of the rectangular survey method. A township is a square, an area of 36 square miles and with six-mile sides.
Unearned increment – A change in the price of a property caused by increased population, development, or demand for which the owner is not responsible.
Unilateral contract term – A one-sided settlement by way of which one celebration makes a promise to induce a 2d party to do something. The 2nd party is not legally sure to perform; if the second one party does comply; but, the first celebration is obligated to hold the promise.
Variable rate mortgage – A loan mortgage that consists of an interest price provision associated with a particular index. Under this provision, the interest rate may be adjusted annually either up or down.
Variance Term– An exception from the zoning ordinances; permission granted by zoning government to construct a structure or conduct a use this is expressly forbidden with the aid of the zoning law. Needed in many real estate developments regardless of equity.
Writ of attachment – The approach via which a debtor’s belongings are positioned within the custody of the regulation and kept as security, pending the outcome of a creditor’s fit.
Real Estate Slang Phrases And Terminology
Although not condoned by the national association of realtors, there is another real estate glossary with terms you will need to know for your real estate definition vocabulary.
“A gentle slope” – probably a cliff!
“A certificate” – Normally a deed
“Realtor” – Someone who helps a company or a buyer or buyers with a listing, offer, sale, loan and payment of real estate. The broker or the agent will not have equity in the deal.
What is another word for real estate?
Real estates meaning can also be called a home, land, holdings, farms, etc.
Whew! That is an exhaustive list of real estate terms. Real Estate Agents make great money, but you have to put in the work. This real estate glossary is just a small sample of some of the real estate definitions and terms you will need to know for your real estate exam.
If you would like to access these real estate terms flashcards as well as hundreds of other questions for your real estate exam, let’s get started now.