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Real Estate Terminology

It's a pleasure helping our clients learn more about the terms used in real estate, we understand many are not terms used everyday. Please print this list for your use or recommend it to a friend who may be interested in buying or selling property.

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Abatement - The termination of an offensive activity, as the abatement of a nuisance.

Abstract of title - A condensed compilation of the history of the title to a piece of property; starts with the original grant and contains all subsequent conveyances, liens, or other encumbrances.

Abut - To be next to or touch another property or body of water.

Acceleration Clause - A provision in a note, such that if payments are in default, the owner of the note can declare the entire balance due and payable earlier than the stated due date.

Acceptance - An act by which a grantor receives a deed with the intention of retaining it in order to vest himself with title to the real estate; an express or implied indication of willingness to be bound to the terms of an offer to contract.

Access - The right of a property owner to have a means of entry and exit from his property to a public street.

Accretion - Addition to land by deposit of soil or sand as a result of natural action by stream, lake, river, or sea.

Accrued Depreciation - The actual depreciation in a property that has already accrued as of a given date; past depreciation.

Acknowledgment - The process whereby a person goes before a notary public or other recognized officer and executes a legal document and at the same time declares that he is executing the document as a free and voluntary act.

Acre - A measure of land equal to 43,560 sq. ft.

Action - A court process to enforce a right.

Actual age - The number of years a building has been in existence; chronological age.

Administrator - A person appointed by a probate court to handle the estate of a deceased person who left no will.

Ad valorem - According to value.

Ad valorem rax - A real property tax based on the value of the property.

Adverse possession - The continuous, visible, hostile use or occupation of the property of another. Title may be acquired by adverse possession for a period prescribed by law.

After Acquired Title - A doctrine under which a prior grantee automatically obtains title to real estate acquired by a grantor who previously attempted to convey title which he did not in fact own.

Agency - The relationship between a principal and agent whereby the agent represents the principal in dealing with third parties.

Agent - A person who has authority to act for another.

Air rights - A landowner's right to the use and enjoyment of the space above his land to the extent that he can effectively enjoy it.

Alienate - To convey or transfer title to property.

ALTA - American Land Title Association.

ALTA title insurance policy - A broad form of title insurance policy, which includes unusual risks such as factors, which could be disclosed by inspection of the land or by a survey.

Amenities - Those qualities which are pleasing and agreeable; intangible benefits of property ownership such as pride of ownership or scenic beauty.

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Common elements - Those areas within a condominium which each owner of a condominium unit has the right to use in common with each other.

Common Law - The body of law based on custom and usage, some derived from English law.

Community property - Property owned half by each married partner, if acquired during the marriage period with joint funds or efforts; exists in only a few states.

Concurrent ownership - Ownership where two or more persons possess simultaneous estates in the same property.

Condemnation - The process whereby the government or a quasigovernment ownership takes title to private property for public use in exchange for just compensation under the power of eminent domain.

Conditional - Depends upon the occurrence of certain terms or events.

Condominium - A unit in an apartment or multifamily structure, which is owned by an individual in the same way an individual, can own other real property.

Conservator - A person appointed by a court to take legal charge of the person and property of a person incapable of managing his affairs.

Consideration - Anything of value, whether tangible or not, given by one party in a contractual agreement.

Constructive notice - Other than actual notice- notice given to the public through the process of recording documents in the public records office; notice imputed to a buyer by persons in possession of property.

Consummate Dower - After the death of a husband, the dower interest which the wife had in her husband's estate.

Contiguous - Next to and in actual contact.

Contingent - Dependent upon a future event which is uncertain.

Contingent remainder - An estate in land, the possession and enjoyment of which is delayed until the termination of a preceding estate and the occurrence of a condition. Contour Surface shape of land.

Contract - A legally enforceable agreement.

Contract for deed - See Installment land contract.

Contract rent - The rent stipulated in a lease agreement or contract.

Conventional mortgage - A mortgage other than one guaranteed by FHA or VA.

Conveyance - The transfer of title to real estate from one party to another by written instrument.

Cooperative - An apartment or multifamily building owned by several persons through a corporation, such that each owner is a stockholder and also leases a portion of the building.

Co-owners - Two or more persons who possess simultaneous estates in the same property.

Corporation - An artificial entity created by and under the authority of a state or other government for private or public purposes.

Cost approach - A property appraisal process in which the appraiser estimates building value as replacement cost minus depreciation.

Cul de sac - A circular turn-around street in a property development.

CPM - Certified Property Manager.

Courtesy - The right which a husband by law in his deceased wife's estate; applicable in only a few states.

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Damages - The amount recoverable by a person who has suffered an injury, either in person or property, due to the wrong of another.

Datum - A plan of elevation from which heights and depths are measured.

Debtor - The owner of a property in a security agreement; sometimes called mortgager.

Declaration of restrictions - An instrument other than a deed containing restrictive covenants which is incorporated by reference and made part of a deed.

Decree - A court order as a result of a judicial proceeding.

Dedication - A voluntary giving of property by the owner for use by authorized public officials on behalf of the public.

Deed - A written instrument by which title to real property is conveyed from one person to another.

Default - The failure to fulfill a contractual obligation.

Defeasance Clause - The clause in a mortgage note that allows the mortgager to redeem his property after all payments due the mortgagee are paid.

Deficiency Judgment - A judgment rendered after default when the security pledged for a loan does not satisfy the debt.

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Exception - A right or portion of property reserved in the grantor in a conveyance by deed.

Exclusive agency listing - A listing agreement between a seller and a broker where either has a right to sell the property; if sold by the broker, a commission will be due.

Exclusive right to sell - A listing agreement between a seller and a broker whereby the broker receives a commission, whoever sells the property.

Execute - To sign and deliver an instrument, such as a deed.

Executor - A person specified in a will to carry out the provisions of the will.

Express Contract - A contract whose elements are stated orally or in writing.

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Fee on a condition subsequent - A fee simple which is conveyed reserving to the grantor the right of entry upon occurrence of a condition subsequent.

Fee simple - The highest interest a person may have in real property.

Fee simple Determinable - (Qualified fee) Fee simple subject to a condition or limitation, the occurrence of which causes title to revert back to its grantor or his heirs automatically.

FHA - Federal Housing Administration; a federal agency which insures home mortgages.

Fiduciary - A relationship of trust and confidence as between a principal and agent.

Financing statement - An instrument filed with the recorder or register of deeds indicating that personal property is encumbered.

Fixture - An item that was originally personal property but is so attached to the property that it becomes part of the real estate.

Flashing - Sheet metal or other material used around chimneys or other places to prevent water seepage.

Footing - The base on which a home foundation stands.

Foreclosure - A legal proceeding by a lien claimant to force sale of a property to pay the amount due the lien claimant.

Forfeiture - The loss of money or right due to default or failure to perform in accord with a contract.

Foundation - The portion of a structure which supports the first floor and construction above it.

Fraud - Successful deception with the intent of deceiving another person.

Freehold Estate - An estate existing for an indefinite length of time; an estate of inheritance or for life.

Frontage - Property on a street, highway, or lake.

Front foot - A measure of property value where the distance is measured along the street, highway, stream, or other body of water.

Functional Obsolescence - Things internal to a structure that detract from a building value.

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General lien - A lien effective against all of a person's property, both real and personal.

Grade - The level of the ground at the structure foundation.

Graduated lease - A lease providing for a variable rate of rend depending upon some future event.

Grantor - A person who transfers property, such as a seller.

Gross lease - A lease agreement whereby the pro0perty owner pays taxes, insurance, repairs, and other costs.

Ground lease - An agreement for rental of land only.

Ground rent - The portion of property income attributed to the ground value itself'; used in a few states whereby a person can own a structure and rent the ground.

Guardian - A person granted power by a court to take care of and manage the property of another person who has been declared legally incapable of administering his own affairs.

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Habendum - A provision in a deed, which defines the extent of the ownership to be granted to and enjoyed by the grantee.

Heirs - The persons designated by statute to receive an estate where there is no will.

Hereditaments - Any property which can be inherited.

Highest and best use - The use of a property, which will yield the greatest return on the property.

Homestead - Any real estate where the owner resides and which is exempt from creditor's claims to an amount specified by state law.

HUD - Federal Department of Housing and Urban Development.

Hypothecate - To give something as security without giving up its possession.

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MAI - A member of the American Institute of Appraisers qualified to specified requirements.

Marginal land - Land in use which barely pays the cost of working it.

Market approach - The process of property appraisal by comparing it to sales of equivalent properties.

Market value - The highest price which property would be expected to bring in the open market under normal conditions.

Meander - To follow a winding course.

Meandered - Area such as a lake on which taxes are not paid.

Meander line - The approximate border of a natural body of water.

Mechanic's lien - A lien which can be filed by mechanics or material men who supply labor or materials for property improvement to secure payment.

Meridian - Map lines running north and south to locate land under the governmental survey system.

Metes and bounds - A method of legal description by use of measurements, boundaries and directions.

Mineral rights - A legal interest in minerals in land, which includes the right to take minerals from land.

Minor - A person not of legal age.

Modernization - Replacement of outmoded fixture, equipment, and other features of an improvement with modern features.

Monument - A fixed object, either natural or artificial, which surveyors use to measure.

Mortgage - A written instrument in which real estate is used as security for repayment of a debt or obligation.

Mortgage - The party who lends money for a mortgage.

Mortgager - The party who borrows money with his property as security.

Multiple Listing - A listing agreement whereby other brokers in an organization are allowed to sell a listed property.

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NAR - National Association of Realtors (formerly NAREB, National Association of Real Estate Boards.)

Navigable water - A waterway capable of passage by watercraft; navigable if so designated on a U.S. Map.

Net lease - A lease agreement in which the tenant pays rent plus all taxes, insurance, repairs, and other costs.

Net listing - A listing agreement whereby the owner receives a set amount and the broker receives all above that amount.

Nominal consideration - Consideration having no relationship to the actual value of the contract or property conveyed.

Nonfreehold estate - An estate in land of a certain duration, i.e., leasehold estate.

Note - A written instrument promising payment.

Notice to quit - Notice given to a tenant to vacate a rented property.

Nuisance - Anything that is offensive to a person or property.

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Obsolescence - Loss in value due to obsolete or out-of-date design or construction.

Open end mortgage - A mortgage agreement such that the mortgager can borrow additional funds in the future without rewriting the mortgage.

Open listing - A listing agreement whereby either the owner or the broker can sell the property; if the broker is the procuring cause, a commission is due.

Option - A contractual right given for a consideration permitting a person to lease or buy the property at a specified price within a given period.

Optionee - A person who holds an option.

Optionor - A person who gives an option to another person.

Ordinance - A law passed by the legislative body by a municipal corporation.

Overhang - The portion of a roof extending beyond the walls.

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Partition - An action seeking to have property owned by two or more persons sold and the proceeds divided between the parties; or to have the property divided into two or more portions.

Partnership - An association of two or more persons to carry on a business for profit as co-owners.

Party wall - A wall erected on the line between two adjacent properties for the use of both parties.

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Replacement cost - The cost incurred in replacing one property with another of similar utility using modernized equipment, materials, and techniques.

Reproduction cost - The cost of reproducing an exact replica property based on current prices.

Rescind - To declare a contract void in its inception and put an end to it as though it never existed.

Reservation - A right kept by a grantor when conveying property.

Restriction - An encumbrance created by deed or special agreement which limits use of the property.

Reversion - The portion of an estate remaining with the original grantor after the termination of a leasehold or life estate.

Right of redemption - A person's right by law to buy back property taken by forced sale for a period of time stated by law.

Right of way - The right to cross over or under another person's property for ingress, egress, utility lines, sewers, etc.

Riparian rights - Rights of an owner of property abutting water to use the water and have uninterrupted flow and drainage.

Rod - A measure of length equal to 161/2 ft.

Rural - Pertaining to the country; rather than urban.

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Satisfaction - Discharge of lien upon payment of debt.

Seal - An impression made to attest to the execution of a written instrument; also the word "seal" typed in to form a sealed document.

Section - A unit of land measure one-mile square containing 640 acres.

Security Deposit - Earnest money.

Seize - The possession of land under a claim of freehold estate.

Septic Tank - An underground tank used where city sewage is not available.

Servient estate - An estate burdened by an easement.

Setback - A distance from the curb to the building, often specified by ordinance.

Settlement - The process of completing the sale of real property; same as closing.

Severalty - Sole ownership; by one person.

Sheriff's deed - A deed given as a result of a court order to sell property in satisfaction of a judgment.

Signature - The act of putting down a person's name, mark, or symbol with the intent that it attest the validity of a written instrument.

Site - A plot of ground upon which anything is, has been, or will be located.

Situs - Location.

Special assessment - An assessment against real estate to pay for improvements such as sidewalks, curbs, streetlights, or other things which benefit certain property owners.

Special warranty deed - A form of deed whereby the grantor warrants the title only against claims generated while the grantor owned the property.

Specification - A document describing requirements for a house, subdivision, or other project.

Specific performance - A legal action to compel the performance of the terms of an agreement, such as the sale of a home.

Specific Lien - A lien which affects only a single parcel of property.

SRA - Designates a member of the Society of Real Estate Appraisers.

Statute - State or federal law.

Statute of frauds - The state law which requires that certain contracts, including those for the sale of real property, must by in writing.

Strict foreclosure - A court decree vesting title to mortgaged property in the mortgagee upon the default of the mortgagor without any sale of the property.

Stud - Vertical timbers in a house wall.

Subdivision - A tract of land divided into lots suitable for residential purposes.

Subject to - The purchase of real property subject to a mortgage, whereby the original holder remains personally liable for the mortgage.

Sublease - A lease given to another by a lessee.

Subordinate - To make a mortgage subservient to another mortgage.

Subsequent purchaser for value - A purchaser for value in good faith and without notice of any adverse interest in the property purchased.

Suburb - The area close and adjacent to a city or town.

Survey - The process of measuring land; the resulting map of the property.

Syndicate - A group of persons joining together to deal in real property.

Tangible - Existing physically; that which can be touched.

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