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Real Estate Terms / Real Estate Dictionary

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Calendar Year
A 12-month period starting on January l and continuing through December 31 of a specific year.

California Bungalow
An early twentieth-century small, compact, one-story house.

Called Loan
A loan that is due and payable at the demand of the lender usually as a result of an acceleration or alienation clause becoming effective. See Acceleration clause and Alienation clause.

Call Option
A provision in the mortgage that gives the mortgagee (the lender) the right to call the mortgage due and payable at the end of a specified period for whatever reason.

Cancellation Clause
A provision in a contract that gives a party the right to terminate his/her obligations upon the occurrence of a specified condition or event.

Cap - Interest Rate
A provision of an adjustable-rate mortgage (ARM) that limits how much the interest rate or mortgage payments may increase or decrease to protect the borrower from large increases in the interest rate or the payment level.

Cap - Payment Rate
The maximum payment amount increase allowable on an adjustable rate mortgage (ARM) which may result in negative amortization.

1. Money used to create income, either as an investment in a business or long-term assets.
2. Stocks, bonds, or mortgages that can be sold to raise money to purchase assets, as well as retained earnings.
3. The accumulated wealth of a person or business.
4. The net worth of a business represented by the amount by which its assets exceed liabilities.

Capital Appreciation
The appreciation accruing to the benefit of the capital improvement to real estate.

Capital Expenditure
The cost of a capital improvement made to extend the useful life of a property or to add to its value. It may be investments in land, buildings, machinery, or equipment.

Capital Improvement

Any structure or component erected as a permanent improvement to real property that adds to its value and useful life.

An economic system based on the principles of private ownership of property, equality and personal rights.

A garage for one or two cars consisting of a roof supported by poles. It does not have a door as a garage would have.

Cash Method
An accounting method that calls for income and expenses to be booked when the income is received or the expense obligation is paid.

Cash-Out Refinance
A refinance transaction in which the borrower receives additional cash that can be used for any purpose. This occurs because the money received from the new loan exceeds the total of the money needed to repay the first mortgage, closing costs, points, and the amount required to satisfy any mortgage liens.

A Casita is a Spanish term meaning a small house, often a guest house.

CBS (Concrete Block Structure)
CBS refers to a "Concrete Block Structure", as opposed to the more common wood frame structure. There are many reasons why to build CBS homes, but they are most commonly found in Florida. A concrete block home can stand up to the perils of fire, rot, termites, and hurricane force winds when the concrete is properly reinforced with steel bars. CBS homes save energy by providing superior insulation for temperature and sound.

See Certificate of Deposit

Certificate of Deposit (CD)
A type of savings account that carries a specified minimum deposit and term and generally provides a higher yield than traditional savings accounts.

Certificate of Reasonable Value (CRV)
The Federal VA appraiser's opinion as to the maximum value of a property.

Certificate of Sale
A document issued to the highest bidder at a tax foreclosure sale to indicate ownership but does not convey actual title. It indicates that all past due taxes have been paid and that title will pass upon the expiration of the statutory redemption period.

Certificate of Title
A written document issued by an attorney or a qualified person who has examined the record of the real estate title reporting the state of that title.

Chain of Title
The history of all of the documents that transfer title to a parcel of real property, starting with the earliest existing document and ending with the most recent.

A vacation cottage or home usually in the mountains but sometimes at the beach or other vacation locations. The chalet may be in clusters with other chalet homes such as at a resort. A chalet usually has a sloping roof and widely overhanging eaves.

A chateau is an impressive manor house, castle or fortress in France usually belonging to nobility or the wealthy. Chateau is also a neighborhood in Pittsburgh, Pennsylvania.

Another name for personal property. Does not include Real Property.

When used in date ranges, a circa is applied before a date, meaning that it is an approximate date. In real estate, it is important to know the age of a home, but sometimes much older homes may not have records of the exact date and thus it is approximated. For example, Circa 1904.

Clear Title
A title that is free of encumbrances, liens or legal questions as to ownership of the property.

A meeting at which all parties to a real estate transaction conclude their details and deliver the title of the real estate property. The buyer signs any mortgage documents and payment is made pursuant to the sales contract.

Closing Costs
Miscellaneous Expenses (over and above the price of the property) incurred by buyers and sellers in transferring ownership of a property. Closing costs may include recording fees, attorney fees, title insurance premium, origination fee, taxes, escrow , and charges for obtaining title insurance and a survey.

Closing Statement
A separate accounting of funds to the buyer and seller as required by law at the completion of every real estate transaction. See HUD-1 statement.

Cloud on Title
Any outstanding claim, lien, encumbrance, document or condition revealed by a title search that adversely affect the title to real estate. Usually clouds on title cannot be removed except by a quitclaim deed, release, or court action.

Cluster Homes
A community developement of single family detached homes constructed of lightweight building materials spaced ten feet or less apart. They usually have vinyl or wood siding, zero clearance chimneys and narrow travel paths separating each home. Cluster homes are on smaller lots and usually have short driveways.

The ownership of the same property by two or more persons.

Co-venture Loan
A loan where the lender gets a share of ownership or income from the property.

Code of Ethics
A writing by a professional group setting forth a standard of acceptable conduct about its members in relationship to each other, to the general public and to the organization which the members agree to abide by.

Coffered Ceiling
A coffered ceiling is a ceiling that consists of sunken or recessed panels usually trimmed with ornamental moldings to enhance the detail. The trimming may be of a contrasting color to give even more of a sunken or recessed appearance. These decorative ceilings may also serve a purpose such as hiding load-bearing beams.

Coffered Ceiling
Coffered Ceiling

Coffered Ceiling
Coffered Ceiling

An insurance-related term that often describes a splitting or spreading of risk between multiple parties.

Any asset having marketable value (such as land, home or car) that a borrower pledges as security in order to obtain a loan. The borrower risks losing the asset if the loan is not repaid according to the terms of the loan contract.

The efforts used to bring a delinquent loan current and to file the necessary notices to proceed with foreclosure if necessary.

The fee charged by a broker or agent for negotiating a real estate transaction. A commission is usually a percentage of the selling price of the property, a percentage of rentals, a flat fee, etc.

Commitment Fee
A charge made by a lender at the time of a loan application to lock in or guaranty specific terms.

Commitment Letter
A formal offer by a lender stating the terms under which it agrees to lend money to a home buyer and a expiration (or close by) date. Also known as a "loan commitment."

Common Area
Common interest areas in a subdivision that are used by all of the unit owners, who share in the common expenses of their operation and maintenance. Common areas include swimming pools, tennis courts, club houses, playgrounds, parking areas, etc.

Common Area Assessments
Levies against individual unit owners in a condominium or planned unit development (PUD) project for additional capital needed to cover the costs and expenses and to repair, replace, maintain, improve, or operate the common areas.

Common Law

An unwritten body of law that grew out of the customs, practices and court decisions developed and used in England from as long as people can remember. They are used to an extent in the United States.

Community Property
1. Land considered to be public property.
2. A legal term denoting an incorporeal hereditament consisting of a right of one person in the land of another.
3. A form of ownership under which property acquired during a marriage is presumed to be owned jointly unless acquired as separate property of either spouse.

Comparables (Comps)
Short for "comparable properties". They are properties that are used in the appraisal process that have recently sold which have very similar characteristics, may be in close proximity, and are situated in a similar market as the subject property. Another example would be home is an upscale waterfront communities are compared to homes in another upscale waterfront community.

Comparative Market Analysis (CMA)
A comparison of recently-sold homes that are substantially equivalent to each other in terms of selling price, location, style and amenities. See Comparables.

Compound Interest
Interest paid on the original principal balance and on the accrued and unpaid interest that has accumulated as the debt matures until the time it becomes due.

1. The determination that a building is not unfit for use or is dangerous and must be destroyed.
2. The act by which property of a private owner is taken for public use by a political subdivision without the owner's consent but with the owner's awareness and with the payment of just compensation. Called the Right of Eminent Domain.

Condominium (Condo)
A real estate project in which each unit owner has title to a unit in a building, an undivided interest in the common areas of the project, and sometimes the exclusive use of certain limited common areas. The boundaries are described on a recorded final map, parcel map or condominium plan.

The major difference between a townhome and a condo is that a condominium owns his or her individual unit, but does not own the land surrounding the living space. The condo does, however, own a percentage of the surrounding property, including land and any amenities on the property which are outlined in deed. The buyer of a townhome owns the individual unit, as well as the ground underneath that unit and any front and back yards. Each townhome has its own roof, in contrast to condominiums which may be part of a multiple story building.

Condominium Conversion
A process by which rental units are turned into individually owned units called Condos.

Condominium Hotel
A condominium project will all the conveniences of a Hotel such as a rental or registration desks, short-term occupancy, food and telephone services, and daily cleaning services. It is operated as a commercial hotel even though the units are individually owned.

The process of saving resources or of using them in such a way that minimizes their depletion.

Construction Loan
A short-term, interim loan for financing the cost of construction or improvements on land. The funds are usually dispersed in payments (sometimes three) as the construction progresses.

A condition that must be met before a contract is legally binding. For example, the home buyer may include in the contract that the purchase is contingent on him/her selling their current home. Or the buyer may have a contingency that the contract is not binding until the purchaser obtains a satisfactory home inspection report from a qualified home inspector.

A contract is an oral or written agreement to do or not to do certain obligations. A contract for the sale of real property must be in writing and signed by the parties who have agreed to perform to be enforceable.

There are four essential elements:
1. Terms
2. Competent, adult parties and their consent
3. Mutual agreement
4. Consideration - Meaning every party is conferring a benefit on the other party or himself. This is usually an amount.
4. A lawful purpose

Conventional Loan
A type of mortgage loan that is customarily made by a bank or other financial institution that is not insured or guaranteed by the federal government. Contrast with government mortgage.

Convertibility Clause

A provision in some adjustable-rate mortgages (ARMs) that allows the borrower to change the ARM to a fixed-rate mortgage at specified point in time after loan origination.

Convertible ARM
An adjustable-rate mortgage (ARM) that can be converted to a fixed-rate mortgage under specified conditions for a nominal fee and at a rate that is determined according to the loan documents.

Cooperative (Co-Op)
A type of multiple ownership in which the residents of a multi-unit housing complex own shares in the cooperative corporation that owns the property, giving each resident the right to occupy a specific apartment or unit. A cooperative places substantial restraints on the sale of the units as well as their use.

Corporate Relocation
Arrangements under which an employer moves an employee to another area as part of the employer's normal course of business or under which it transfers a substantial part or all of its operations and employees to another area because it is relocating its headquarters or expanding its office capacity.

A second party who signs a promissory note together with the primary borrower.The cosigner promises to pay another person's debt if the borrower fails to do so.

A response to an offer to enter into a contract which acts as a rejection of the original offer and introduces a new offer or one with different terms and conditions.

A clause in a mortgage that obligates or restricts the borrower and that, if violated, can result in foreclosure.

Crawl space
A narrow opening between the ground and the underside of a structure which is usually not tall enough to permit a person to stand but is sufficient to give necessary access to wiring, plumbing and other utilities. The floor is usually dirt.

1. An agreement in which a borrower receives something of value in exchange for a promise to repay the lender at a later date.
2. In lending, the power of an individual to obtain goods or secure money, based on the favorable opinion held by a lender or by the community, as to his/her solvency and reliability.

Credit History
A record of a person's repaid and unpaid debts. A credit history helps a lender determine whether a potential borrower has a history of repaying debts in a timely manner or not.

Credit Report
An evaluation of an individual's credit history prepared by one of the three major credit associations. Individuals have access to this report. Lender's use the report to determine a loan applicant's creditworthiness.

Credit Reporting Agency
An organization that prepares reports that are used by lenders to determine a potential borrower's credit history. The agencies are Equifax, Experian and TransUnion.

Credit Repository
An organization that gathers, records, updates, and stores financial and public records information about the payment records of individuals who are being considered for credit.

A person to whom money is owed.

A dead-end street (usually of a subdivision) with a widened circular area at the end enabling cars to make a U-turn.

Curb Appeal
The attractiveness of a home or property when viewed from the sheet.

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