~ Real Estate Terms ~

1. Active (or Back on Market) Listing - Property is on the market, for sale.
2. Adjustable Rate Mortgage (ARM) - A mortgage that permits the lender to periodically adjust the interest rate to reflect fluctuations in the cost of money.
3. Annual Percentage Rate (APR) - The relationship of the total finance charges associated with a loan. This must be disclosed to the borrowers by lenders under the Truth-in-Lending Act.
4. "AS IS" Value - The value of the property in its current condition.
5. "AS Repaired" Value - An estimate of what the property will sell for if it is rehabilitated to a condition competitive in the market place for homes of the subject's age and type.
6. Bank Owned Properties / REO's (Real Estate Owned - Property that goes back to the mortgage company after an unsuccessful foreclosure auction. Banks are not in the business of holding real estate so, their goal it sell it as quickly as possible to get it off their books. The price a property is listed at is basically the suggested list price from an appraiser or a real estate broker. You are able to make a "reasonable" offer at any amount so, don't let the list prices scare you way.
7. Competitive Market Analysis (CMA/Comps/Comparables) - An estimate of the fair market price of a property for sale or purchase. CMA's/Comps are traditionally prepared by real estate agents in anticipation of a listing, considering an offer or to assist a buyer in making an offer on a property.
8. Contingency Period - This is the time period you have from the start date of the contract, to the deadline date you have to complete certain items (contracted time frame).
9. Curable Repair - Repairable or able to be fixed; something that can be fixed at a reasonable cost, with the value added to the property being more than the cost of the repair. Compare to: Incurable.
10. Days on Market (DOM) - How long a listing is for sale before being sold.
11. Deed - A written instrument that, when executed and delivered, conveys title of or an interest in real estate.
12. Deed in Lieu of Foreclosure - Is a deed instrument in which a mortgagor (i.e. the borrower) conveys all interest in a real property to the mortgagee (i.e. the lender) to satisfy a loan that is in default and avoid foreclosure proceedings. The deed in lieu of foreclosure offers several advantages to both the borrower and the lender. The principal advantage to the borrower is that it immediately releases him/her from most or all of the personal indebtedness associated with the defaulted loan. The borrower also avoids the public notoriety of a foreclosure proceeding and may receive more generous terms than he/she would in a formal foreclosure. Another benefit to the borrower is that it hurts his/her credit less than a foreclosure does. Advantages to a lender include a reduction in the time and cost of a repossession, lower risk of borrower revenge (metal theft and vandalism of the property before sheriff eviction), and additional advantages if the borrower subsequently files for bankruptcy. In order to be considered a deed in lieu of foreclosure, the indebtedness must be secured by the real estate being transferred. Both sides must enter into the transaction voluntarily and in good faith. The settlement agreement must have total consideration that is at least equal to the fair market value of the property being conveyed. Sometimes, the lender will not proceed with a deed in lieu of foreclosure if the outstanding indebtedness of the borrower exceeds the current fair value of the property. Other times, lenders will agree since they will end up with the property anyway and the foreclosure process is costly to the lender. Because of the requirement that the instrument be voluntary, lenders will often not act upon a deed in lieu of foreclosure unless they receive a written offer of such a conveyance from the borrower that specifically states that the offer to enter into negotiations is being made voluntarily. This will enact the parol evidence rule and protect the lender from a possible subsequent claim that the lender acted in bad faith or pressured the borrower into the settlement. Both sides may then proceed with settlement negotiations. Neither the borrower nor the lender is obliged to proceed with the deed in lieu of foreclosure until a final agreement is reached.
13. Estate - Property owned by a person who is now deceased.
14. Equity - The interest or value that an owner has in property over and above all debts on property.
15. Executor/Executrix - A person appointed in a will to carry out the provisions of the will. If a man is appointed, he is called an Executor. If a woman is appointed, she is called an Executrix.
16. Fair Housing Act - The federal law that prohibits discrimination in housing based on race, color, religion, sex, handicap, familial status, age and national origin.
17. Foreclosure - The legal process whereby the lender, who is not being paid, reclaims the property, which is security for the loan.
18. Functional Obsolesence - Where your home is located, and how your home was built can lead to lower property value.
19. HUD - The Department of Housing and Urban Development, a government agency that deals with housing issues.
20. Joint Tenancy - Ownership of real estate between two or more parties who have been named in one conveyance as joint tenants. Upon the death of a joint tenant, the descendant's interest passes to the surviving joint tenant or tenants by the right of survivorship.
21. Offer/Sales Agreement - Your written proposal/agreement to purchase a property. Once all parties have signed the offer/sales agreement, it is now a contract.
22. Pending Listings - A property is under contract but has not reached settlement yet.
23. Physical Depreciation - A loss in value from general eroding of the physical structure or from deferred maintenance.
24. Prepayment Penalty - A penalty charged by the lender to the borrower if the loan is paid off early.
25. Quitclaim Deed (sometimes erroneously referred to as a "quick-claim" deed) is a legal instrument by which the owner of a piece of real property, called the grantor, transfers his interest to a recipient, called the grantee The owner/grantor terminates (“quits”) his right and claim to the property, thereby allowing claim to transfer to the recipient/grantee. Unlike most other property deeds, a quitclaim deed contains no title covenant and thus, offers the grantee no warranty as to the status of the property title; the grantee is only entitled to whatever interest the grantor actually possesses at the time the transfer occurs. This means that the grantor does not guarantee that he actually owns the property at the time of the transfer, or if he does own it, that the title is free and clear. It is therefore possible for a grantee to receive no actual interest, and -- because a quitclaim deed offers no warranty -- have no legal recourse to recover her losses. Further, if the grantor should acquire the property at a later date, the grantee is not entitled to take possession, because the grantee can only receive the interest the grantor held at the time the transfer occurred. In contrast, other deeds often used for real estate sales (called grant deeds or warranty deeds, depending on the jurisdiction) contain warranties from the grantor to the grantee that the title is clear and/or that the grantor has not placed any encumbrance against the title. Because of this lack of warranty, quitclaim deeds most often used to transfer property between family members, as gifts, placing personal property into a business entity (and vise-versa) or in other special or unique circumstances. Quitclaim deeds are rarely used to transfer property from seller to buyer in a traditional property sale; in most cases, the grantor and grantee have an existing relationship or is the same person. Another common use for a quitclaim deed is in divorce, whereby one spouse terminates any interest in the jointly-owned marital home, thereby granting the receiving spouse full rights to the property. For example, when a wife acquires the home in the divorce settlement or by court decision, the husband could execute a quitclaim deed eliminating his interest in the property and transferring full claim to the wife quickly and inexpensively. In some jurisdictions, quitclaim deeds may also be used in tax deed sales, where a property is sold in a public auction to recover the original homeowner’s outstanding tax debt. The auctioning body is usually the local government, which claims no interest to the property whatsoever, but is selling only to recover the back-owed taxes without extending any warranty for the property title.
26. Quiet Title Action - is a lawsuit filed to establish ownership of real property (land and buildings affixed to land). The plaintiff in a quiet title action seeks a court order that prevents the respondent from making any subsequent claim to the property. Quiet title actions are necessary because real estate may change hands often, and it is not always easy to determine who has title to the property. A quiet title suit is also called a suit to remove a cloud. A cloud is any claim or potential claim to ownership of the property. The cloud can be a claim of full ownership of the property or a claim of partial ownership, such as a lien in an amount that does not exceed the value of the property. A title to real property is clouded if the plaintiff, as the buyer or recipient of real estate, might have to defend her full ownership of the property in court against some party in the future. A landowner may bring a quiet title action regardless of whether the respondent is asserting a present right to gain possession of the premises.
27. REO (Real Estate Owned) - A property that has gone through the foreclosure process and is owned either by the original lender, a private mortgage insurance (PMI) company, or an intermediary.
28. RTO - Rent to Own.
29. Short Sale - Is a lender-approved sale in which the proceeds from the sale are not sufficient to cover the mortgage amount(s). Typically, short sale is done to avoid foreclosure and all the high costs involved. Even though the seller may approve the offer amount, the mortgage lender(s) must also approve the offer. Some buyers have waited months for a deal to go through in a short sale transaction. Banks are currently working to improve the turn around time from contract to settlement.
30. Sold Listing - A property that was on the market for sale that has reached settlement.
31. Survey - The process by which boundaries are measured and land areas are determined; the on-site measurement of lot lines, dimensions and position of a house on a lot, including the determination of any existing encroachments or easements.
32. Tenancy in Common - A form of co-ownership by which each owner holds an undivided interest in real property as if he or she were sole owner. Each individual owner has the right to partition. Unlike joint tenants, tenants in common have right of inheritance.
33. Title Insurance - A policy insuring the owner or mortgagee against loss by reason of defects in the title to a parcel of real estate, other than encumbrances, defects and matters specifically excluded by the policy.
34. Title Search - The examination of public records relating to real estate to determine the current state of the ownership.