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| A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z abstract of title A condensed version of the history of title to a piece of land that lists any transfers in ownership, as well as any liabilities attached to it, such as mortgages. abutting The joining, reaching, or touching of adjoining land. Abutting pieces of land have a common boundary. acceleration clause A provision in a written mortgage, note, bond or conditional sales contract that, in the event of default, the whole amount of principal and interest may be declared to be due and payable at once.     acceptance An offeree’s consent to enter into a contract and be bound by the terms of the offer. accretion An addition to land through natural causes. acknowledgment A declaration made by a person to a notary public, or other public official authorized to take acknowledgments, that the instrument was executed by him and that it was his free and voluntary act. acre   (return to top) A measure of land equal to 43,560 square feet.   ad valorem Designates an assessment of taxes against property. Literally, according to value.     additional principal payment A payment by a borrower of more than the scheduled principal amount due in order to reduce the remaining balance on the loan. adjustable rate mortgage (ARM) A mortgage loan whose interest rate fluctuates according to the movements of an assigned index or a designated market indicator--such as the weekly average of one-year U.S. Treasury Bills--over the life of the loan. To avoid constant and drastic fluctuations, ARMs typically limit how often and by how much the interest rate can vary.     adjusted basis The original cost of a property plus the value of any capital expenditures for improvements to the property minus any depreciation taken.     adjustment date The date on which the interest rate changes for an adjustable-rate mortgage (ARM).     adjustment period (return to top) The period that elapses between the adjustment dates for an adjustable-rate mortgage (ARM).     adjustments Money that the buyer and sellers credit each other at the time of closing. Often includes taxes and down payment. administrator/administratrix A man/woman appointed by a court to settle the estate of a deceased person when there is no will. Contrast with executor/executrix. adverse possession The right of an occupant of land to acquire title against the real owner, where possession has been actual, continuous, hostile, visible, and distinct for the statutory period.  The requirements for adversely possessing property vary between states, but usually include continuous and open use for a period of five or more years and paying taxes on the property in question. affidavit    (return to top) Written statement signed and sworn to before some person authorized to take an oath. agency The legal relationship between a principal and an agent. In real estate transactions, usually the seller is the principal, and the broker is the agent: however, a buyer represented by a broker (i.e., buyer as principal is a growing trend. In an agency relationship, the principal delegates to the agent the right to act on his or her behalf in business transactions and to exercise some discretion while so acting. The agent has a fiduciary relationship with the principal and owes to that principal the duties of accounting, care, loyalty, and obedience. Also see buyer's broker. agent A person authorized to act for and under the direction of another person when dealing with third parties. The person who appoints an agent is called the principal. An agent can enter into binding agreements on the principal's behalf and may even create liability for the principal if the agent causes harm while carrying out his or her duties. See also attorney-in-fact. alienation clause A clause in a mortgage, which gives the lender the right to call the entire loan balance due if the property is sold; due-on-sale clause. amenities   (return to top) Non monetary benefits and satisfactions derived from property ownership, such as a pleasant view, pride in home ownership, etc.   amendment A modification to an existing contract, mutually agreed to by all parties.  Examples might include a change in the purchase price due to a low appraisal, or a change in the closing date. amortization The operation of paying off indebtedness, such as a mortgage, by installments. The conventional amortization periods are15 or 30 years. (See term) amortized mortgage  A mortgage requiring periodic payments that include both interest and principal.  Also see self amortized loan. annual membership The amount that is charged annually for having a line of credit available. Often charged regardless of whether or not you use the line. antitrust laws   (return to top) Federal and state laws prohibiting, among other things, monopolies, monopolistic practices, restraint of trade, and price fixing. application An initial statement of personal and financial information, which is required to approve your loan. application fee Fees that are paid upon application. Charges for property appraisal and a credit report are usually included in the application fee. appraisal A determination of the value of something, such as a house, jewelry or stock. A professional appraiser--a qualified, disinterested expert--makes an estimate by examining the property, and looking at the initial purchase price and comparing it with recent sales of similar property. Courts commonly order appraisals in probate, condemnation, bankruptcy or foreclosure proceedings in order to determine the fair market value of property. Banks and real estate companies use appraisals to ascertain the worth of real estate for lending purposes. And insurance companies require appraisals to determine the amount of damage done to covered property before settling insurance claims. appraised value    (return to top) An estimate of the present worth. appreciation An increase in value or worth of property. Opposite of depreciation. asking (list) price The price placed on property for sale. assessor A local government official who determines the value of the property for taxation purposes. assignee A person to whom a property right is transferred. For example, an assignee may take over a lease from a tenant who wants to permanently move out before the lease expires. The assignee takes control of the property and assumes all the legal rights and responsibilities of the tenant, including payment of rent. However, the original tenant remains legally responsible if the assignee fails to pay the rent. assignment A transfer of property rights from one person to another, called the assignee. assumable mortgage      (return to top) An existing mortgage that can be taken over by the buyer on the same terms given to the original borrower. assumption of mortgage The transfer of title to property to a grantee wherein he assumes liability for payment of an existing note secured by a mortgage against the property; should the mortgage be foreclosed and the property sold for a lesser amount than that due, the grantee-purchaser who has assumed and agreed to pay the debt secured by the mortgage is personally liable for the deficiency. Before a seller may be relieved of liability under the existing mortgage, the lender must accept the transfer of liability for payment of the note. Also known as simple assumption. Contrast with subject to mortgage. attachment Method by which a debtor's property is placed in the custody of the law and held as security pending outcome of a creditor's suit. attorney in fact A person who holds power of attorney, and therefore is legally designated to transact business and execute documents on behalf of another person.      attorney's opinion of title An instrument written and signed by the attorney who examines the abstracts of title, stating his opinion as to whether a seller may convey good title.   attractive nuisance Something on a piece of property that attracts children but also endangers their safety. For example, unfenced swimming pools, open pits, farm equipment and abandoned refrigerators have all qualified as attractive nuisances. auction        (return to top) A public sale of property to the highest bidder. balloon mortgage A mortgage where the final payment is considerably larger than the preceding payments. Contrast with amortized mortgage. balloon payment A large final payment due at the end of a loan, typically a home or car loan, to pay off the amount your monthly payments didn't cover. Many states prohibit balloon payments in loans for goods or services that are primarily for personal, family or household use, or require the lender to let you refinance the balloon payment before forcing collection. bill of sale    (return to top) A written instrument given to pass title to personal property. blanket mortgage One mortgage on a number of parcels of real property. blockbusting The illegal practice of inducing panic selling in a neighborhood by making representations of the entry, or prospective entry, of members of a minority group; panic peddling. See Fair Housing.   bond (1) A written agreement purchased from a bonding company that guarantees a person will properly carry out a specific act, such as managing funds, showing up in court, providing good title to a piece of real estate or completing a construction project. If the person who purchased the bond fails at his or her task, the bonding company will pay the aggrieved party an amount up to the value of the bond.   (2) An interest-bearing document issued by a government or company as evidence of a debt. A bond provides pre-determined payments at a set date to the bond holder. Bonds may be "registered" bonds, which provide payment to the bond holder whose name is recorded with the issuer and appears on the bond certificate, or "bearer" bonds, which provide payments to whomever holds the bond in-hand.  Mortgage interest rates are closely related to long term bond interest rates.     bonus to selling agent (BTSA) Compensation, above and beyond the sales commission, offered to the real estate agent who brings the buyer to the transaction.  A BTSA is used to provide an extra incentive for real estate agents to show a particular listing.  Often the bonus is tied to closing within a certain time period or the property selling for a certain price.  A buyer's agent should not consider the BTSA a factor in any negotiations between buyer and seller.  Realistically, most BTSA's tend to disappear during initial negotiations, eventhough they should never be considered as negotiable after they have been offered.  Any bonus to selling agent should be contained in a written agreement between the seller and listing broker.  The BTSA is technically offered by the listing broker, not the seller, and thus should not be a subject of negotiation. breach of contract     (return to top) Failure, without legal excuse, of one of the parties to a contract to perform according to the contract. brokerage For a commission or fee, bringing together parties interested in buying, selling, exchanging, or leasing real property.     BTSA Acronym - bonus to selling agent. building line A line fixed at a certain distance from the front and/or sides of a lot beyond which no structure can project. See set back. bundle of rights Ownership in real property implies a group of rights, such as the right of occupancy, use and enjoyment, the right to sell in whole or in part, the right to control the use, the right to bequeath, the right to lease any or all of the rights, the right to the benefits derived by occupancy and use of the property, etc. buy down     (return to top) A cash payment, usually measured in points, to a lender in order to reduce the interest rate a borrower must pay. buyer's broker A licensee who has declared to represent only the buyer in a transaction, regardless of whether compensation is paid by the buyer or the listing broker through a commission split. Some brokers conduct their business by representing buyers only. calendar Year A year using the actual number of days in each month for a total of 365 days in a year (366 days in a leap year). cap    (return to top) The maximum allowable increase, for either payment or interest rate, for a specified amount of time on an adjustable rate mortgage.     capital gains The profit on the sale of a capital asset, such as stock or real estate. If you sell your primary residence, you can exclude $250,000 in profit from capital gains tax. A couple can exclude $500,000. capitalization The estimation of the value of income producing property by dividing the annual net income by the capitalization rate. capitalization rate The rate of expected return on investment property. A ratio of income to value. cash out     (return to top) Receiving money back when refinancing your present mortgage. Not available on homestead property. (See homestead). CC&R See covenants, conditions & restrictions.   CCCS See Consumer Credit Counseling Service. ceiling     (return to top) The maximum allowable interest rate over the life of the loan of an adjustable rate mortgage. census An official count of the number of people living in a certain area, such as a district, city, county, state, or nation. The United States Constitution requires the federal government to perform a national census every ten years. The census includes information about the respondents' sex, age, family, and social and economic status.     Certificate of Eligibility The document given to qualified veterans which entitles them to VA guaranteed loans for homes, business, and mobile homes. Certificates of eligibility may be obtained by sending DD-214 (Separation Paper) to the local VA office with VA form 1880 (request for Certificate of Eligibility). chain of title   (return to top) A history of conveyances and encumbrances of a property from some starting point, whereby the present owner derives title. channeling The illegal practice of directing people to, or away from, certain areas or neighborhoods because of minority status; Steering. See Fair Housing. chattel See personal property.   cleaning fee A nonrefundable fee charged by a landlord when a tenant moves in. The fee covers the cost of cleaning the rented premises after you move out, even if you leave the place spotless. Cleaning fees are illegal in some states and specifically allowed in others, but most state laws are silent on the issue. Landlords in every state are allowed to use the security deposit to clean a unit that is truly dirty. clear title      (return to top) A land title that doesn't have any liens (including a mortgage) against it. closing The conclusion of the sales transaction when the seller transfers title to the buyer in exchange for consideration. In Florida, these proceedings are usually held at a title company. closing costs Costs the buyer must pay at the time of the closing in addition to the down payment which may include points, title charges, credit report fee, document preparation fee, mortgage insurance premium, inspections, appraisals, prepayments for property taxes, deed recording fee, and homeowners insurance. Closing costs can vary considerably from one financial institution to another. closing statement A detailed written summary of the financial settlement of a real estate transaction, showing all charges and credits made, and all cash received and paid out. cloud on title A claim or encumbrance that may effect title to land. co-tenants     (return to top) Two or more tenants who rent the same property under the same lease or rental agreement.  Each co-tenant is 100% responsible for carrying out the rental agreement, which includes paying the entire rent if the other tenant skips town and paying for damage caused by the other tenant. collateral Something of value deposited with a lender as a pledge to secure repayment of a loan. commingling The illegal practice of combining or mixing clients' funds with the agent's own funds. commission The compensation paid to a licensed real estate broker or by the broker to the salesman for services rendered. Usually a percentage of the selling price of the property. Community Reinvestment Act The federal law which requires federally regulated lenders to describe the geographical market area they serve. Deposits from that area are to be reinvested in that area whenever practical. comparables     (return to top) Properties which are similar to a particular property and are used to compare and establish a value for that property. compound interest Interest which is computed on the principal and any unpaid accumulated interest. Contrast with simple interest. condemnation The act of taking private property for public use, through due process under the right of eminent domain, with compensation to the owner. condominium A form of real estate, usually a dwelling with individual ownership of separate portions of the building plus shared ownership of the common areas. consideration    (return to top) The price or subject matter, which induces a contract; may be in money, commodity, exchange, or a transfer of personal effort. constructive eviction The provision of housing that is so substandard that, for all intents and purposes, a landlord has evicted the tenant. For example, the landlord may refuse to provide light, heat, water or other essential services, destroy part of the premises or refuse to clean up an environmental health hazard, such as lead paint dust. Because the premises are unlivable, the tenant has the right to move out and stop paying rent without incurring legal liability for breaking the lease. Usually, the tenant must first bring the problem to the landlord's attention and allow a reasonable amount of time for the landlord to make repairs.   Consumer Credit Counseling Service (CCCS) A national non-profit agency that, at no cost, helps debtors plan budgets and repay their debts. One major criticism of CCCS is that each office is primarily funded by voluntary donations from the creditors that receive payments from debtors repaying their debts through that office.  The goal of CCCS is to insure that consumers repay the debts that they owe.  CCCS may arrange easy payment plans that increase the chances for repayment, but harm a consumer's credit in the process.  Agreeing to a payment plan and following it to the letter may not stop creditors from reporting delinquent repayment information to credit bureaus for each month the payment falls short of the previous minimum amount.   contingency A provision in a contract stating that some or all of the terms of the contract will be altered or voided by the occurrence of a specific event.   A common example is a Buyer who enters into the purchase of another home before his current home is sold.  The Buyer will usually ask for the Seller to make the sale contingent upon the sale of the Buyer's current home.  If the Seller receives another offer for the property, the first Buyer must either agree to buy the home without any contingency, or step aside and let someone else purchase the home. contract     (return to top) A legally enforceable agreement to do, or not to do, a particular thing for a consideration. contract for deed A contract for the sale of real estate where the deed (title) of the property is transferred only after all the payments have been made. Also known as a land contract, agreement of sale, conditional sales contract, or installment contract.  Buyers should be wary of this type of contract, since they can lose their entire investment if the owner declares brankruptcy, before the deed has been transferred. contract for exchange of real estate A contract for the sale of real estate in which the consideration is paid wholly or partly in real property instead of cash. contract of sale The agreement between the buyer and seller on the purchase price, terms, and conditions necessary to both parties to convey the title to the buyer. conventional loan   (return to top) A real estate loan, which is not insured by the FHA or guaranteed by the VA. conveyance Written instrument, such as a deed or lease, that evidences transfer of some ownership interest in real property from one person to another.     cooperative housing (1) A form of real estate, usually a dwelling in which residents own shares, but  do not directly own the space they inhabit.  Rather, owning a share of the building entitles the shareholder with the right to inhabit a certain space within the dwelling, such as an apartment.  Shares are usually proportional to the amount of space in each apartment. (2) A living arrangement in which residents must perform certain duties or chores to benefit the entire residence, in addition to paying room and board. A common form of dormitory living.   cooperative sale      (return to top) A sale of property in which the buyer is brought to the transaction by a real estate agent who works for a different real estate broker than the listing agent.  Both brokers/companies have agreed to cooperate in closing the property, and typically, splitting the commission.  Offers of cooperation and compensation are commonly found in the MLS property listings. cost approach to value An estimate of value based on current construction costs, less depreciation, plus land value. Contrast with the income approach to value and the market data approach to value. counter offer The rejection of an offer to buy or sell that simultaneously makes a different offer, changing the terms in some way. For example, if a Buyer offers $160,000 for a home, and the Seller replies that he wants $175,000, the Seller has rejected the Buyer's offer of $160,000 and made a counteroffer to sell at $175,000. The legal significance of a counteroffer is that it completely voids the original offer, so that if the Seller decided to sell for $160,000 the next day, the Buyer would be under no legal obligation to pay that amount for the property.     covenant A restriction on the use of real estate that governs its use, such as a requirement that the property will be used only for residential purposes. Covenants are found in deeds or in documents that bind everyone who owns land in a particular development. See Covenants, Conditions & Restrictions.     covenants, conditions & restrictions (CC&Rs) The restrictions governing the use of real estate, usually enforced by a homeowners' association and passed on to the new owners of property. For example, CC&Rs may tell you how big your house can be, how you must landscape your yard or whether you can have pets. If property is subject to CC&Rs, buyers must be notified before the sale takes place.     credit bureau      (return to top) A private, profit-making company that collects and sells information about a person's credit history. Typical clients include banks, mortgage lenders and credit card companies that use the information to screen applicants for loans and credit cards. There are three major credit bureaus, Equifax, Experian and Trans Union, and they are regulated by the federal Fair Credit Reporting Act.       credit insurance Insurance a lender offers or requires a borrower to purchase to cover the loan. If the borrower dies or becomes disabled before paying off the loan, the policy will pay off the remaining balance.  Federal and state consumer protection laws require the lender to disclose to existing and potential borrowers the terms and costs of obtaining credit insurance because it can affect the terms of the loan. credit limit The maximum amount that you can borrow under a home equity plan.     credit report      (return to top) An account of your credit history, prepared by a credit bureau. A credit report will contain both credit history, such as what you owe to whom and whether you make the payments on time, as well as personal history, such as your former addresses, employment record and lawsuits in which you have been involved. An estimated 50% of all credit reports contain errors, such as accounts that don't belong to you, an incorrect account status or information reported that is older than seven years (ten years in the case of a bankruptcy).     credit score In the mortgage lending world, credit scores either make or break you when it comes to obtaining a home mortgage or getting the best rate you can.  There are three different scores available to a mortgage lender each being generated by the three different credit agencies. The most popular, known as a Fico score is from Experian (formally TRW), then there is a Beacon score from Equifax, and finally a Emperica score from Trans Union. This is the "mortgage scoring" system used to get a conventional mortgage.   Simply, credit scores are numbers calculated based upon your credit history. The better your credit, the higher your number or score will be - the worse your credit, the lower the score. The number of inquiries or times your credit has been pulled in the past 90 days will also lower your "score". In some instances, lack of credit results in "no score" on your report requiring you to provide "alternative credit" via your rental, utility or telephone payment histories. There's plenty you can do to improve your score if you know how the system works. Just don't expect much help from your lender--most consider the actual formulas a trade secret and don't want people angling for an advantage.  Congress is currently working on legislation to provide consumers with access to their credit scores and the formulas used to calculate these scores.   There are some lenders that do not rely on credit scores to the degree that most do. Some times, credit reports contain inaccuracies that lower your score, this is when a lender has to use a common sense approach to approving your loan. In some instances you may have to correct your credit report, wait for your score to improve, then reapply for the loan. Talk with your mortgage broker or lender to understand what your options are.     creditor      (return to top) A person or entity (such as a bank) to whom a debt is owed. cul-de-sac A dead end street which widens sufficiently at the end to permit an automobile to make a "U" turn. DBA Doing Business As. Business names or aliases filed with the county and state. debenture Bonds issued without security. debt service     (return to top) The total amount of credit card, auto, mortgage or other debt upon which you must pay. debt-service ratio The measurement of debt payments to gross household income which may include, in addition to the main wage earner's salary, salaries of other wage earners, commissions, bonuses, overtime, etc. Deceptive Trade Practices Act Part of the federal Consumer Protection Act originally passed in 1973 and made specifically applicable to real estate in 1975, specifically prohibiting a lengthy number of false, misleading and deceptive acts or practices. deduction In tax law, an amount that you can subtract from the total amount on which you owe tax.  Examples of federal income tax deductions include mortgage interest, charitable contributions and certain state taxes. For example, if Aimee receives an income of $60,000 in 1998 and pays $12,000 in mortgage interest during that same year, she can deduct $12,000 when she fills out her federal tax return, leaving an amount of $48,000 upon which she must pay tax. deed                   (return to top)  A written instrument by which title to land is conveyed. deed in lieu (of foreclosure) A means of escaping an overly burdenome mortgage. If a homeowner can't make the mortgage payments and can't find a buyer for the house, many lenders will accept ownership of the property in place of the money owed on the mortgage. Even if the lender won't agree to accept the property, the homeowner can prepare a quitclaim deed that unilaterally transfers the homeowner's property rights to the lender. deed of trust The legal instrument used some states in lieu of a mortgage, in which the property is conveyed in trust to a trustee to be held as security for a loan. deed restrictions Common name used to denote covenants, conditions & restrictions (CC&Rs).  Deed restrictions cover allowable land uses and home types and sizes within a neighborhood.  default        (return to top) Non-performance of a duty arising under a contract or otherwise. defeasanse A clause in a deed, lease, will or other legal document that completely or partially negates the document if a certain condition occurs or fails to occur. Defeasance also means the act of rendering something null and void. For example, a will may provide that a gift of property is defeasable--that is, it will be void--if the beneficiary fails to marry before the willmaker's death. delivery The actual transfer of the deed, or an act of a seller showing intent to make a deed effective, without which, there is no transfer of title to the property. depreciation A loss in value. descent Acquisition of property through inheritance laws when there is no will (when a person dies intestate). devise         (return to top) A transfer of real estate by will or last testament. disclosure The making known of a fact that had previously been hidden; a revelation.  For example, in many states you must disclose major physical defects in a house you are selling, such as a leaky roof or potential flooding problem. discount points (or points) The amount paid either to maintain or lower the interest rate charged. Each point is equal to one percent (1%) of the loan amount (i.e., two points on a $100,000 mortgage would equal $2,000). discount rate (1) The rate charged member banks who borrow from the Federal Reserve System. (2) The rate used to convert future income into present value. dispossess    (return to top) To oust from land by legal process. dominant tenement Property that carries a right to use a portion of a neighboring property. For example, property that benefits from a beach access trail across another property is the dominant tenement. down payment An amount of money the buyer pays which is the difference between the purchase price and the mortgage amount. dual agency Representing the buyer and the seller in the same transaction by the same agent. Since there is an inherent conflict in fiduciary obligations to two different principals, dual agency, at best, is a risky undertaking. TRELA requires that all parties to a dual agency have full knowledge and consent (Disclosed Dual Agency). Contrast with intermediary. due on sale    (return to top) A clause in a mortgage agreement providing that, if the mortgagor (the borrower) sells, transfers, or, in some instances, encumbers the property, the mortgagee (the lender) has the right to demand the outstanding balance in full. duress Forcing action or inaction against a person's will. earnest money A deposit made by the buyer as evidence of good faith in offering to purchase real estate and to secure performance of the contract. Earnest money is typically held by a title company, in an escrow account, during the period between acceptance of the contract and the closing. earnest money contract (EMC) A contract for the sale or purchase of real estate in which the purchaser is required to tender earnest money to evidence good faith in completing the contractual obligations. Almost every sales contract for real estate in Florida will be an earnest money contract. Also see sales contract and promulgated contracts. easement       (return to top) A right to use another person's real estate for a specific purpose. The most common type of easement is the right to travel over another person's land, known as a right of way. In addition, property owners commonly grant easements for the placement of utility poles, utility trenches, water lines or sewer lines. The owner of property that is subject to an easement is said to be "burdened" with the easement, because he or she is not allowed to interfere with its use. For example, if the deed to John's property permits Sue to travel across John's main road to reach her own home, John cannot do anything to block the road. On the other hand, Sue cannot do anything that exceeds the scope of her easement, such as widening the roadway. easement by prescription A right to use property, acquired by a long tradition of open and obvious use. For example, if hikers have been using a trail through your backyard for ten years and you've never complained, they probably have an easement by prescription through your yard to the trail. economic obsolescence Loss of value of real property due to external forces or events; eg., a sewer plant is built next door to the subject property. Contrast with Functional Obsolescence. effective interest rate The cost of credit on a yearly basis expressed as a percentage. Includes up-front costs paid to obtain the loan, and is, therefore, usually a higher amount than the interest rate stipulated in the mortgage note. Useful in comparing loan programs with different rates and points.     effluxion of time   (return to top) The normal expiration of a lease due to the passage of time, rather than due to a specific event that might cause the lease to end, such as destruction of the building.     egress An exit, or the act of exiting. The most famous use of this word was by P.T. Barnum, who put up a large sign in his circus tent saying "This Way to the Egress."  Thinking an egress was some type of exotic bird, people eagerly went though the passage and found themselves outside the circus tent. Compare ingress. emblements Annual crops produced by cultivation. They are deemed to be personal property. eminent domain The right of government to take private property for public use, through court action known as condemnation. The Fifth Amendment to the United States Constitution allows the government to take private property if the taking is for a public use and the owner is "justly compensated" (usually, paid fair market value) for his or her loss. A public use is virtually anything that is sanctioned by a federal or state legislative body, but such uses may include roads, parks, reservoirs, schools, hospitals or other public buildings. Sometimes called expropriation.   enclave community    (return to top) Smaller in scope than master-planned communities,  enclave communities typically blend different price ranges of residential neighborhoods with amenities such as public recreation areas and parks, neighborhood schools and extensive landscaping.  Recreation areas may include public swimming pools, tennis courts, and children's play grounds.  Many offer large water features and gated access. encroachment A fixture, or structure, such as a wall or fence, which invades a portion of a property belonging to another.  Solutions range from paying the rightful property owner for the use of the property to the court-ordered removal of the structure. encumbrance A cloud against clear, free title to the property which does not prevent conveyance, such as unpaid taxes, easements, deed restrictions, mortgage loans, etc. endorsement Writing one's name, either with or without additional words, on a negotiable instrument, or on a paper attached to it. Equal Credit Opportunity Act The 1974 federal law (Title VII of the Consumer Credit Protection Act) which requires fairness and impartiality without discrimination on the basis of race, color, religion, national origin, sex or marital status, or receipt of income from public assistance programs in the extension of credit, and good faith exercises of any right under the Consumer Credit Protection Act (eg. the creditor must state reasons for denial of credit). Equal Treatment/Different Impact It is possible to be guilty of discrimination even by treating two individuals the same. If the results of the treatment are discriminatory, or tend to exclude or otherwise harm members of a minority group, or have discriminatory impact, they are against the law. For example, an apartment house which rents only to doctors and lawyers, where there are few, if any, minority doctors or lawyers in the area, may be a violation of the Fair Housing Laws. equity         (return to top) The difference in dollars between a house's value and the mortgage amount. escalator clause The clause in a contract permitting adjustments of the payments. escheat The reversion of property to the state in the event the owner thereof dies without leaving a will (intestate) and has no heirs to whom the property may pass by lawful descent. escrow A trust arrangement by which none or more parties deposit things of value with an authorized escrow agent in accordance with the terms of a real estate agreement. escrow account (1) A third party account that holds money safely while a sale is in progress. (2) An account used to save monies required for the payment of an eventual debt.  Often used by lenders to save for property taxes, hazard insurance, homeowner's dues, etc. Escrow accounts are typically non-interest bearing for the contributors, but may pay interest to the entity holding the account (lenders, title companies, lawyers, etc.). estimate of value    (return to top) An appraisal; the appraised value. et ux Abbreviation for "et uxor", meaning "and wife".     eviction Removal of a tenant from rental property by a law enforcement officer. First, the landlord must file and win an eviction lawsuit, also known as an "unlawful detainer." exception As used in the conveyance of real estate, an exception is the exclusion of some part of the property conveyed, with title of that excepted part remaining with the grantor. For example, in most subdivision developments, mineral rights are not conveyed to the purchaser of a lot, but remain the property of the developer. Contrast with Reservation. exclusive agency (EA) A listing agreement which gives the listing agent the right to sell the property for a specified time. The owner reserves the right to sell the property himself without paying a commission to the agent. Brokers run the risk of investing their time, effort, and money in a listing that, even if sold through their marketing efforts, does not produce a commission. Contrast with Exclusive Right to Sell. exclusive right to sell (ERS)    (return to top) A listing agreement which gives the listing agent the right to sell the property for a specified time, with the right to collect a commission if the property is sold by anyone, including the owner, during the listing period. Contrast with Exclusive Agency.     exculpatory clause A provision in a lease that absolves the landlord from responsibility for all damages, injuries or losses occurring on the property, including those caused by the landlord's actions. Most states have laws that void exculpatory clauses in rental agreements, which means that a court will not enforce them.     executor/executrix The man/woman appointed in a will to carry out the requests of the will. Contrast with Administrator/Administratrix. expropriation   (return to top) See eminent domain. Fair Housing Act & Fair Housing Amendments Act Federal laws that prohibit housing discrimination on the basis of race or color, national origin, religion, sex, familial status or disability. The federal Acts apply to all aspects of the landlord/tenant relationship, from refusing to rent to members of certain groups to providing different services during tenancy. Fair Housing Laws Federal, state, and local laws, particularly Title VIII of the 1968 Civil Rights Act, Title VI of the Civil Rights Act of 1964, and the Civil Rights Act of 1866, which forbid discrimination because of race, sex, color, religion, or national origin, in the selling or renting of homes or apartments, and in other specified transactions. These laws have been recently been expanded to include familial status (having children) and disabilities (Americans with Disabilities Act). Fannie Mae Created by Congress in 1938 to bolster the housing industry during the Depression, Fannie Mae was originally part of the Federal Housing Administration (FHA) and authorized to buy only FHA-insured loans to replenish lenders' supply of money. In 1968, Fannie Mae became a private company operating with private capital on a self-sustaining basis.  Its role was expanded to buy mortgages beyond traditional government loan limits, reaching out to a broader cross-section of Americans.   Today, Fannie Mae operates under a congressional charter that directs it to channel its efforts into increasing the availability and affordability of homeownership for low-, moderate-, and middle-income Americans. Fannie Mae receives no government funding or backing, and is one of the nation's largest taxpayers as well as one of the most consistently profitable corporations in America.  Fannie Mae establishes strict guidelines for mortgage loans it is willing to purchase.  As the largest buyer of mortgage loans in the US, these guidelines have become the industry standard for the majority of home loans.  Any loan that meets these Fannie Mae guidelines is called a "conforming loan".   FDIC        (return to top) Acronym - The Federal Deposit Insurance Corporation.     Federal Deposit Insurance Corporation (FDIC) The Federal Deposit Insurance Corporation's mission is to maintain the stability of and public confidence in the nation's financial system. To achieve this goal, the FDIC has insured deposits and promoted safe and sound banking practices since 1933.  FDIC insurance is offered at almost every US bank and savings and loan. In general, the FDIC insures individual accounts in each financial institution for a maximum of $100,000.00 per account.  An individual or entity may only be insured for a total of $100,000.00 for all the accounts held in any one institution, or any of its branches.     Federal Emergency Management Agency (FEMA) FEMA is the governmental unit that has leadership responsibilities for the Nation's emergency management system. Once the President has declared a major disaster, FEMA coordinates not only its own response activities but also those of as many as 28 other Federal agencies that may participate.  FEMA also works with States, territories, and communities during non-disaster periods to help plan for disasters, develop mitigation programs, and anticipate what will be needed when major disasters occur.  Among its many responsibilities the agency operates the Federal Insurance Administration, which makes flood insurance available to residents of communities that agree to adopt and enforce sound floodplain management practices.     Federal Home Loan Mortgage Corporation (FHLMC) See Freddie Mac.     Federal Housing Administration The Federal Housing Administration (FHA), a wholly owned government corporation, was established under the National Housing Act of 1934 to improve housing standards and conditions; to provide an adequate home financing system through insurance of mortgages; and to stabilize the mortgage market. FHA was consolidated into the newly established Department of Housing and Urban Development (HUD) in 1965. Since 1934, FHA has been extremely successful in achieving these goals.  FHA loans require special a appraisal/inspection that determine if a property meet the agency's minimum property standards.  While somewhat more expensive that a conventional loan in terms of interest rates and insurance fees, FHA loans offer slightly more liberal qualifying criteria.  fee simple estate     (return to top) The most complete form of ownership of real property; absolute ownership. Commonly used to to denote a property where the owner has undivided title to the land on which the property is situated. FHA The Federal Housing Administration which insures mortgage loans made by approved lenders, in accordance with FHA regulations.   FHLMC Acronym - Federal Home Loan Mortgage Corporation.  See Freddie Mac. fiduciary The relationship of trust, honesty and confidence between agent and principal; the faithful relationship owed by an agent to the principal.     finder's fee            (return to top) A fee charged by real estate brokers and apartment-finding services in exchange for locating a rental property. These fees are permitted by law. Some landlords, however, charge finder's fees merely for renting a place. This type of charge is not legitimate and, in some areas, is specifically declared illegal. first mortgage A mortgage which is in first lien position, taking priority over all other liens (which are financial encumbrances). fixed rate mortgage A mortgage with an interest rate and monthly payment that doesn't vary for the term of the loan. fixture Personal property which has been attached to real estate so as to become part of the real property. The article must meet at least one of three conditions: 1. Attached in a permanent manner. 2. Specially adapted to the property. or 3. Intentionally made part of the real property. Flood Control District    (return to top) A special taxing district created to provide flood control in specific areas of a county.     flood insurance A special and separate type of homeowner's insurance the provides coverage for damages resulting from flooding.  Flood insurance is required by most lenders only if the property is located within a designated flood plain.  The cost of the policy is related to the associated flooding risk.  If a property has a small section of land located within a flood plain, but away from the residential improvements (house), the lender will still require a policy, but its cost will be much lower.  Likewise, flood insurance policies for properties not located within any floodplain, are fairly inexpensive.   Most flood insurance is underwritten by the federal government through FEMA and the National Flood Insurance Program in cooperation with private insurance agencies.  More than 18,000 communities participate in the Federal flood insurance program. More than 3.8 million National Flood Insurance Program (NFIP) home and business policies are in effect.  The United States experiences flooding threats throughout all four seasons of the year and, in fact, flooding is the most common natural disaster. There are, on average, 1000 floods per year in the U.S.  Nearly everyone is at some risk of experiencing the effects of flooding.   flood plain Flood plains are by definition subject to periodic flooding. They are generally characterized by relatively flat topography and soil types that were laid down during past inundations by flood waters.  If your property is in the 100-year flood plain, there is a 1-in-100 chance in any given year that your property will flood. If it is in the 25-year flood plain, there is a 1-in-25 chance in any given year that your property will flood. The statistical chance of flooding is not changed by any one flooding event; but repeated flooding may result in the flood plain being recalculated.   A 100-year flood plain is always wider than a 25-year flood plain, and the 25-year flood plain is contained within the 100-year flood plain. The flood prone areas of the United States cover approximately 150,000 square miles or 94 million acres of land, an area roughly the size of the State of Montana. People living in flood plains are 26 times more likely to experience a flooding disaster than they are a fire disaster during the life of the 30-year mortgage on their homes.   The changes in flood plain maps reflect changes in land use (such as increased building activity), changes in the waterways, and flood control improvements (such as detention ponds or other flood control measures).  As more lots are covered with more buildings and parking lots, the amount of water that flows into creeks and lakes increases because there is less vegetation to absorb the water when it rains. This is one reason why buildings that were not originally built in a flood plain are now in the 25-year or 100-year flood plain. FNMA       (return to top) Usually referred to as "Fannie Mae", the acronym stands for the Federal National Mortgage Association.   For Sale By Owner (FSBO) An individual homeowner who is attempting to sell his property without a real estate broker.  The acronym, FSBO is pronounced "fizzbo." foreclosure A legal process instituted by a mortgagee or lien creditor after the debtor's default.    forfeiture The loss of property or a privilege due to breaking a law. For example, a landlord may forfeit his or her property to the federal or state government if the landlord knows it is a drug-dealing site but fails to stop the illegal activity.  Likewise, a homeowner may lose his house to satisfy IRS debts or if the government suspects the home was bought with money derived from criminal acts.  The government may seize and sell the property at auction, often far below its fair market value, before the homeowner has been allowed the due process of a trial.  If the homeowner is found not guilty, the government is only required to pay back the amount received at auction, and not the market value. fraud       (return to top) A misstatement of a material fact made with intent to deceive or made with reckless disregard of the truth, and which actually does deceive.     Freddie Mac Chartered by Congress in 1970, Freddie Mac is a publicly held corporation that purchases mortgages in the secondary mortgage market.  Freddie Mac came into being as the Federal Home Loan Mortgage Corporation (FHLMC) with the mission to create a continuous flow of funds to mortgage lenders.  By supplying lenders with the money to make mortgages and packaging the mortgages into marketable securities which are sold to investors, Freddie Mac also helps to sustain a stable mortgage credit system which in turn, reduces the mortgage rates paid by homebuyers.  Over the years, Freddie Mac has been responsible for opening the door to homeownership for one out of six home buyers in America who would not have qualified otherwise. front foot One linear foot (12 inches) along the street side of a lot.   FSBO Acronym  - For Sale By Owner functional obsolescence Loss of value of real property caused by modernization or changing tastes or standards; e.g.. single bath, inadequate closet space, etc. Contrast with economic obsolescence. garden home       (return to top) See patio home gated community A neighborhood or group of neighborhoods, usually surrounded by masonary walls, restricting access through the use of a manned guard station or electronically operated gates.  The electronic gates may be opened through the use of individual remote controls and/or a numeric keypad and code.  Some gated communities restrict entry at all times, while others only limit access during the evening hours.  The costs associated with maintaining a manned guard gate can significantly impact monthly maintenance fees, depending on the size of the community. general lien A lien that includes all the property owned by a debtor, rather than a specific property. Contrast with Specific Lien. general warranty deed A deed in which the grantor fully warrants good and clear title to the property. A general warranty deed offers the most protection of any deed.     Ginnie Mae The common nickname for the Government National Mortgage Association.  Ginnie Mae was created in 1968 as a wholly owned corporation within the Department of Housing and Urban Development (HUD), having been separated from Fannie Mae.  Ginnie Mae does not loan money for mortgages. Instead, it operate in the secondary mortgage market, buying loans and selling mortgage-backed securities investors, which in turn, increases the availability of mortgage credit.     Government National Mortgage Association See Ginnie Mae.   GNMA          (return to top) Acronym - Government National Mortgage Association, also known as "Ginnie Mae" good faith estimate A written estimate of closing costs which a lender must provide you within three days of submitting an application. government survey method A system of land description which uses meridians (north and south lines) and base lines (east and west lines). Areas include quadrangles (24 miles on each side), townships (6 miles on each side), and sections (1 mile on each side). Also known as the Rectangular Survey Method. Contrast with metes and bounds, and recorded plat (Lot and Block Number) method. grace period A period of time during which a loan payment may be paid after its due date but not incur a late penalty. Such late payments may be reported on your credit report.     grant deed A deed containing an implied promise that the person transfering the property actually owns the title and that it is not encumbered in any way, except as descr