D
Debit -
Money owed. (Debt)
Decree
- Court order
Deed
- A written instrument, usually under seal, which contains an agreement to
transfer some property interest from a grantor to a grantee.
Deed in Lieu of Foreclosure -
Used by the mortgagor (borrower) who is in
default to convey the property to the mortgagee (lender) in order to
eliminate the need for a foreclosure.
Deed of Trust -
A deed to real property, which serves the same purpose as a mortgage,
involving three parties instead of two. The third party holds naked
title for the benefit of the lender. Beneficiary (Lender), Trustor
(Borrower), Trustee (Third Party)
Defeasance Clause -
A necessary mortgage clause in title theory states. When the debt is
satisfied, this clause causes title to pass automatically back to the
borrower. Satisfaction of mortgage; release from records.
Defeasible Fee Simple -
- Or FEE SIMPLE DEFEASIBLE - Ownership with conditional restrictions
which, if broken, can result in title to the property reverting back to
the grantor or his heirs.
Defect in Title -
Any lien, claim or encumbrance, on a particular piece of real estate,
that has been properly recorded in the public records. Recorded defects
impair clear title and may result in the title being unmarketable.
Deficiency Judgment -
A personal claim based on a judicial order against the debtor. This
occurs when the property fails to bring in a price at the foreclosure
sale which covers the mortgage amount.
Depreciation
- A decrease in value due to physical deterioration, functional or
economic obsolescence.
Descent
- Refers to any passage of title to property, upon intestacy to those
heirs, related by blood or marriage, whom the law designates.
Devise
- Transferring title to real property by means of a will.
Discount Points -
A fee charged by the lender at settlement that results in increasing the
lender's effective yield on the money borrowed. One discount point
equals one percent of the loan amount.
Dominant Estate -
The tract of land in an easement appurtenant which benefits from the
easement.
Down Payment -
The amount paid by the purchaser, which when added to the mortgage
amount, equals the total sales price. At time of closing this is
referred to as equity.
Due-on-Sale Clause -
A clause, included in many mortgages, permitting the lender to require
the borrower to repay the outstanding balance when the property is sold.
Prevents loan assumption.
Duress
- Involves the use of force or improper actions, against a person or
property, in order to induce a party to enter into a contract.
E
Earnest Money -
A sum of money given to bind an offer or
agreement.
Easement
- A right to limited use or enjoyment by one or more persons in the land
of another.
Easement Appurtenant -
An easement created to benefit adjacent land.
Easement by Implication -
Occurs because of necessity, such as the conveyance of a land-locked
property.
Easement in Gross -
A personal right to use the land of another.
Economic Life -
The time period over which an improvement to land earns more income than
the cost incurred in generating the income. Profitability.
Economic Obsolescence -
A loss in value due to factors outside the subject property, such as
changes in competition or surrounding land use. Also referred to as
external obsolescence.
Economic Rent -
The amount of rental which a building would receive, if set by the
market, as opposed to contract rent set by the lease.
Effective Age -
The difference between the theoretical economic life of a structure and
its actual remaining economic life. Maintaining the property.
Effective Gross Income -
Income received from property before the deductions for operating
expenses; also called gross income. Gross Income minus vacancy.
Emblements
- Refers to crops which require annual planting.
Eminent Domain -
The right of government to acquire property, for a public purpose, after
paying just compensation.
Encroachment
- The extension of some improvement or object across the boundary of an
adjoining tract. (Off sides).
Encumbrance
- Any interest in or claim on, the land of another, which in some manner
burdens or diminishes the value of the property.
Equal Credit Opportunity Act. (ECOA)
- A federal act, which prohibits discrimination by lenders on the basis of
sex or marital status in any aspect of a credit transaction.
Equitable Lien -
Created when justice and fairness would require a court of equity to
declare such a lien exists or when conduct of parties would imply that a
lien was intended.
Equity
- value of real estate less any liens against it.
Escalation Clause -
(1) in finance, permits the lender to raise the interest rate upon the
occurrence of certain stipulated condition, (2) in leasing, permits the
lessor to raise lease payments upon the occurrence of certain stipulated
condition.
Escheat
- The right of government to ownership of property, which is left by a
deceased property owner who leaves no will, and dies without
descendants.
Escrow
- The deposit of funds with a neutral third party who is instructed to
carry out the provisions of an agreement.
Estate
- A legally recognized interest in the use, possession, control and
disposition that a person has in land, and defines the nature, degree,
extent and duration of a person's ownership in land.
Estate at Sufferance -
Retention of possession without the consent of the landlord after the
lease has expired; also referred to as tenancy at sufferance.
Estate at Will -
An occupation of space, for an indefinite period, which can be
terminated by either the lessor or lessee at any time. Also referred to
as tenancy at will.
Estate for Years -
A conveyance of realty for a definite stated period of time. The term
may be one year, one month, one week or even one day. No notice needed
to terminate.
Estate from Period to Period -
A leasehold, which is automatically
renewed for the same term as in the original lease; also referred to as
a periodic tenancy or an estate from period to period. Month to month
rental. Notice needed to terminate.
Estate in Fee -
The maximum possible estate one can possess in real property; also
referred to as fee simple or fee simple absolute.
Exclusive Agency Listing -
The owner employs only one broker but retains the right to personally
sell the property, and thereby not pay a commission. However, if any
other real estate company sells the property, the listing broker is
still entitled to the commission stipulated.
Exclusive Right to Sell Listing -
Under this listing arrangement, the broker
employed is entitled to a commission no matter who sells the property
during the listing period. (Even the Seller)
Executed Contract -
One in which the obligations have been performed on both sides of the
contract and nothing is left to be completed. (Closed Deal)
Executor
- A person appointed in the will to carry out the instructions of the
testator, pay the debts of the estate, and dispose of the property as
instructed.
Express Contract -
An agreement formed through the oral or written words of the parties.
F
Fair Market Value -
The price negotiated for a parcel of real
estate in a competitive market where both buyer and seller are free to
act and under no undue pressure.
Federal Deposit Insurance Corporation
(FDIC) -
A federal agency established to insure the
deposits in member commercial banks.
Federal Fair Housing Act of 1968 -
An act prohibiting discrimination in the
sale or rental of housing on the basis of race, color, religion or
national origin sex, handicap and familial status.
Federal Home Loan Bank System - FHLBB -
A federal agency which oversees and
regulates all federally charted savings and loan association.
Federal Home Loan Mortgage Corporation
(FHLMC) -
"Freddie Mac" is a wholly owned subsidiary
of the Federal Home Loan Bank System, which serves as a secondary
mortgage market for savings and loan associations, who are members of
the FHLBB; also referred to as The Mortgage Corporation.
Federal Housing Administration- (FHA) -
A federal agency established in 1943 to
increase home ownership by providing an insurance program to safeguard
the lender against the risk of nonpayment. Currently part of HUD.
Federal National Mortgage Association
(FNMA) -
Commonly known as "Fannie Mae", this
quasi-private corporation is the largest buyer of existing mortgages in
the secondary mortgage market.
Federal Reserve System (FRS) -
A federal agency which oversees and
regulates monetary policy, which in turn affects the availability of
credit and interest rates. All federally chartered commercial banks must
be members.
Fee Simple Absolute -
The maximum possible estate one can possess in real property; also
referred to as fee simple or fee.
Fee Simple Determinable -
An estate which has been created to exist
only until the occurrence or nonoccurrence of a particular event.
Returns automatically.
Fee Simple Subject to a Condition
Subsequent
- An estate which is subject to a power in the original grantor, or the
grantor's heirs, to terminate the estate upon the happening of an event.
Back to court.
Fiduciary
- A person who essentially holds the character of trustee. A fiduciary
must carry out the duties in a manner which best serves the interest of
the party for whom the fiduciary relationship is established. A real
estate licensee has a fiduciary duty to his/her client. (Seller,
landlord, buyer or tenant)
First Lien -
Claim with highest priority against property; also known as a superior
to the rights of subsequent lenders. (Recorded first)
First Mortgage -
A mortgage on real estate in which the lender's rights are superior to
the rights of subsequent lenders. (Recorded first)
Fixture
- Broadly defined as personal property which has become realty. Examples
include built-in cabinets or bathtubs.
Foreclosure
- A legal procedure to levy on pledged property used to secure a debt
under a mortgage or other lien.
Fraud
- A misrepresentation of a material fact, which is made with knowledge of
its falsity, and with intent to deceive a parry who in fact relies on
the misrepresentation to his or her detriment and injury.
Freehold Estate -
One which continues for an indefinite period of time. For at "least a
lifetime or greater" (will)
Fully Amortized Mortgage -
A method of loan repayment in which the
dollar amount of each payment is the same. The first part of each
payment is interest and the remainder reduced the principal. Over the
life of the mortgage, the outstanding balance is reduced to zero.
Functional Obsolescence -
A loss in value due to conditions within the structure which make the
building outdated when compared with a new building. (4 bedrooms and 1
bath, insulation, narrow stairway, etc.)
Member, National Association of Realtors
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