Acceleration Clause – clause used in an installment note and mortgage (or deed of trust), which gives the lender the right to demand payment in full upon the happening of an event such as failure to pay an installment by a certain date, change of ownership, etc.
Addendum – something added. A list or other material added to a document, contractual agreement, escrow instructions, etc.
Adjustable Mortgage Loan – loans under which the interest rate is periodically adjusted to more closely coincide with current rates.
Appraisal – an opinion of value based on a factual analysis of a property.
Appreciation – an increased value of property due to either a positive improvement of the area or the elimination of negative factors.
Assessed Value – value placed upon property for tax purposes by the tax assessors.
Backup Offer – A secondary offer to buy property, used in case the first (primary) offer fails. It is especially useful when the primary offer contains difficult contingencies.
Balloon Note – a note calling for periodic payments which are insufficient to fully amortize the face amount of the note prior to maturity so that a principal sum known as a “balloon” or final payment is due after a specified time.
Building Code – a comprehensive set of laws which control the construction of buildings, including design, materials used, construction, use, repair, remodeling, & other similar factors.
Caveat Emptor - “Let the Buyer Beware”. Legal maxim stating that the buyer takes the risk regarding quality or condition of the item purchased.
Closing – the final procedure in which documents are executed and/or recorded, and the sale (or loan) is completed.
Community Property – property owned in common by a husband and wife, which is not separate property.
Contingency – Commonly, the dependence upon a stated event which must occur before a contract is binding. i.e., the sale of a house, contingent upon the buyer obtaining financing.
Deposit - money given by the buyer with an offer to purchase. Good faith. Earnest money.
Equity – The market value of a real property, less the amount of existing liens & loans.
Escrow – All instruments necessary to the sale, including the deed and funds are delivered to a third (neutral) party, with instructions as to their use.
Escrow Instructions – Instructions that are signed by both buyer and seller, and which enable an escrow agent to carry out the procedures necessary to transfer real property, a business, or other assignable interest.
Fictitious Name – refers to a company name in a business. A corporation such as Points West Group may legally file with local government a “DBA” (doing business as) and use other names to conduct business such as: Points West Group, Points West Realty, Your Eco Team.
Fuduciary – one acting in a relationship of trust regarding financial transactions.
Fixed Rate Mortgage – a mortgage having a rate of interest which remains the same for the life of the mortgage.
Free and Clear – real property against which there are no liens, mortgages, or loans.
Gift Letter – a letter to HUD from the donor (giver) stating that a gift of money has been made to the buyer in order to purchase specific property. The relationship of the donor and buyer is stated, as well as the amount of the gift.
Hazard Insurance – Real estate insurance protecting against loss caused by fire, some natural causes, vandalism, etc. depending on the terms of the policy.
Impound Account – account held by a lender for payment of taxes, insurance, other periodic debts against real property. The borrower pays a portion of the yearly bill with each monthly payment. The lender pays the tax bill from the accumulated funds.
Joint Tenancy – an undivided interest in property, taken by two or more joint tenants. The interests must be equal, accruing under the same conveyance, & beginning at the same time.
Key Lot – a strategically located lot, adding to its value. (I.e. A corner lot or cul-de-sac lot)
Liquidated Damages – a definite amount set forth in a contract to be paid by the party
breaching the contract.
Listing – An agreement between an owner of real property and a real estate agent, whereby the agent agrees to secure a buyer or tenant for specific property at a certain price and terms in return for a fee or a commission.
Market Price - The price a property brings in a given market.
Master Plan - A zoning plan for an entire governmental subdivision such as a city. A comprehensive plan to allow a city to grow in an orderly and sound manner.
Mechanics Lien – A lien created by statute for the purpose of securing priority of payment for the price of value of work performed and materials furnished in construction or repair.
Multifamily Dwelling – a building occupied by more than one family and often designed for four or more families.
Net Worth – The difference between total assets & liabilities of an individual, corporation, etc.
Origination Fee – a fee made by a lender for making a real estate loan. Usually a percentage of the amount loaned such as one percent.
Over Improvement – an improvement, excessive in cost or size in relation to land value or value of surrounding improvements.
PITI – (principal, Interest, Taxes and Insurance) – used to indicate what is included in a monthly payment on real property. The four main portions of a monthly mortgage payment.
Probate - originally, the proving that a will was valid. Modernly, any action over which probate court has jurisdiction.
Quitclaim Deed – A deed operating as a release; intending to pass any interest, title, or claim which the grantor may have in the property.
REALTOR® - A designation given to a real estate broker or sales associate who is member of a board associated with the National Association of Realtors®.
Recording – Filing documents affe3cting real property as a matter of public record, giving notice to future purchasers, creditors, or other interested parties.
Return OF Investment – The recovery of invested capital.
Return ON Investment – The profit from invested capital.
Short Sale – A sale of property which includes some forgiveness of debt by the lender under a mortgage or trust deed. Designed to assist sellers in a “down” market BUT the debt forgiven may be considered income to the seller and is taxable.
Special Assessment – Lien assessed against real property by a public authority to pay costs of public improvements (sidewalks, sewers, street lights, etc.) Usually added to tax bill.
Speculator - One who buys property, not for his use, but with only the intent to sell at a profit.
Take Out Loan – The “permanent” (long term) financing of real estate after completion of construction.
Tentative Map – a map submitted by a subdivider to a planning commission for approval; approval is usually conditioned upon changes before a final map is recorded.
Unimproved Land – Most commonly land without buildings.
Variance - Change of a portion of zoning requirements without changing a zoning.
Void – Having no legal force or binding effect.
Waive – To knowingly abandon, relinquish, or surrender a right, benefit, or claim.
Working Capital – Cash, or assets which are readily convertible to cash, used to carry on a business.
X – A common mark for one who cannot sign their name. (A way to use the entire alphabet)
Yield – Ratio of income from an investment to the total cost of the investment over a given period of time.
Zero Lot Line – The construction of a building on any of the boundary lines of a lot.
Zoning Map – A map of a community showing the permitted use under zoning ordinances
