Real Estate Terminologies


Real Estate Terminologies

Abutters – Neighbors with a common boundary.

Abstract of Title – A summary of a title’s, conveyances, transfers, liens and other facts on record.

Acceptance – An party’s consent to enter into a contract and be bound by the terms of the offer.

Accretion – An addition to land from natural causes, such as gradual action of the ocean or river waters.

Administrator – A person appointed by a probate court to administer the estate of a person who died
intestate.

Ad Valorem – According to valuation.

Adverse Possession – Open and notorious possession and occupancy of a property under an evident claim
or right.

Air Right – right of the property owner to use, control or occupy the air space over his property subject to
regulations.

Adjudication – the process of partitioning an estate among the heirs.

Alienation – The transferring of property to another.

Alluvion / alluvium – Soil deposited by flowing water or by accretion. An increase of earth on a shore or
bank of a river.

Amenity – A feature of real property that enhances its attractiveness and increases user’s satisfaction.

Amortization – The gradual repayment of a mortgage loan by installments.

Appurtenance – Something annexed to another thing which may be transferred incident to it.

Attachment – Seizure of property by court order to have it available if a judgment is obtained in a
pending suit.

Attorney-in-fact – One who holds a power of attorney from another to execute documents on behalf of
the grantor.

Avulsion – The sudden tearing away or removal of land by action of water flowing over or through it.

Beneficiary – The person designated to receive the income from a trust, estate, or a deed of trust, or
insurance proceeds.

Bequeath – To transfer personal property through a will.

Bequest – That which is given by the terms of a will.

Binder – preliminary agreement, secured by earnest money, in which a buyer offers to purchase real
estate.

Blighted Area – declining area affected by adverse economic forces such as informal settlers, crime,
deteriorating buildings.

Bona fide – In good faith, without fraud.

Bond – An interest-bearing certificate of debt with a maturity date.

Breach – A violation of any legal obligation.

Buyers Market – many properties for sale but few buyers, price tends to go down. Supply is more than
demand.

Capital Property – Refers to property exclusively owned by the husband.

Caveat Emptor – Means “let the buyer beware.” The buyer must examine the goods or property and buy
at his own risk.

Chain of Title – The history of all of the documents that transfer title to a parcel of real property, earliest
to most recent.

Chattel – Another name for personal property.

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

Closing Costs – Expenses (over and above the price of the property) incurred by buyers and sellers in
transferring ownership of a property. Closing costs include – notary fees, taxes, registration, etc.

Cloud on Title – conditions 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.

Collusion – An agreement between two or more persons to defraud another of his rights.

Community or Conjugal Property – Property accumulated through the joint effort of a husband and
wife living together.

Condemnation – This is a declaration that a structure is unfit for use.

Conditional Sales Contract – A contract for the sale of property stating that delivery is to be made to the
buyer, but the title remains vested in the seller until the condition of the contract has been fulfilled.
(Contract of Sale)

Consolidation – the legal process of effecting a foreclosure sale by auction.

Constructive Notice – Notice given by the public records.

Contingency – A condition that must be met before a contract is legally binding.

Contingency for Clear Title – the purchase is subject to your receiving clear title to the property.

Contingency for Financing – specifies if you don’t get the mortgage at the terms you want, the offer is
void and the deposit is refundable. Seller may provide in the contract that Buyer make a “good-faith
effort” to get the mortgage.

Contingency for Personal Property – -specifies that appliances, fixtures, and other personal property
that must remain in the home you will be buying.

Cooperative Project – A residential or mixed-use building wherein a cooperative corporation or trust
holds title to the property, sells shares of stock representing the value of a single apartment unit to
individuals who, in turn, receive a proprietary lease as evidence of title.

Corner Influence – The added desirability of utility of a lot due to its frontage parallel and perpendicular
streets.

Cul De Sac – A passageway with one outlet; a blind alley. Cul De Sac Lot – A lot fronting a cul-de-sac.

Devisee / Legatee – The persons receiving a gift by a will. Devisee – real property; Legatee – personal
property.

Dominant Estate – Land which does not have access to a public road and is given a right of way through
an adjoining land.

Earnest Money Deposit – A deposit made by potential buyer to show that he or she is serious about
buying the property.

Easement – A right of way giving persons other than the owner access to or over a property.

Eminent Domain – The right of a government to take private property for public use upon payment of its
fair market value. Eminent domain is the basis for condemnation proceedings.

Encroachment – An improvement that intrudes illegally on another’s property.

Encumbrance – Anything that affects or limits the fee simple title to a property -mortgages, leases,
easements, or restrictions.

Erosion – The wearing away of land by the action of water, wing or glacial ice.

Escrow – money, or documents deposited with a third party to be delivered upon the fulfillment of a
condition.

Escheat -The reverting of property to the estate when heirs capable of inheriting are lacking.

Estate – The ownership interest of an individual in real property. The sum total of all the assets by an
individual at time of death.

Exclusive Listing – A written contract that gives a licensed real estate agent the exclusive right to sell a
property for a specified time, but reserving the owner’s right to sell the property alone without paying
commission.

Exclusive Right To Sell Listing – A written agreement between an owner and an agent giving the agent
the right to collect a commission if the property is sold by anyone during the term of his agreement.

Executor – A person named in a will to administer an estate. “Executrix” is the feminine form.

Fee Simple – The greatest possible interest a person can have in real estate. Fee simple ownership
provides the owner with unrestricted powers to dispose of the owned property as the owner sees fit. Of all
types of ownership a person can have in real estate, fee simple provides the greatest amount of personal
control.

Fee Simple Estate – An unconditional, unlimited estate of inheritance. It is of perpetual duration.

Fiduciary – A person in a position of trust and confidence as between a principal and a broker; owes
loyalty.

Flag-lot – A lot which does not directly front a street but accessed through an alley or driveway.

Foreshore – land between high tide and low tide lines. Owner owns up to high tide, public has rights up
to the low tide line.

Freehold – An estate in fee simple; A life estate.

Hazard Insurance – Insurance coverage for physical damage to a property from fire, wind, vandalism, or
other hazards.

Hold Over Clause – A provision in listing agreement which entitles the broker to commission even after
the period of the authority provided that the buyer was registered by him and with whom he has
negotiated during the period of his authority.

Insurable Title – A property title that a title insurance company agrees to insure against defects and
disputes.

Insurance Binder – A document that states that insurance is temporarily in effect. Because the coverage
will expire by a specified date, a permanent policy must be obtained before the expiration date.

Intestate – A person who dies having made no will, or having made a will is defective in form in which
case his estate descends
to his heir at law or next of kin.

Involuntary Lien – A lien imposed against property without the consent of an owner – taxes, liens,
special assessments..

Joint Tenancy – co-ownership that gives each tenant equal interest and rights in property, including right
of survivorship.

Judgment – A decision made by a court of law. In judgments that require the repayment of a debt, the
court may place a lien against the debtor’s real property as collateral for the judgment’s creditor.

Key Lot – A lot next to a corner lot.

Laches – Delay or negligence in asserting one’s legal rights.

Land, Hereditament, Tenement – A phrase used in the early English law to express all sorts of property
of the immovable class. Its present use may be said to express real estate with all fixed improvement thereon, if any.

Lease-purchase Option – leaseholder has the option to buy the home after a designated period of time
(usually three or five years). Part of each rent payment is put aside toward savings to accumulate the down payment and closing costs.

Leasehold Estate – possessing a property without title but through a recorded long-term lease on it.

Leverage – Making an investment with only partial amount of the total amount of the investment. Also
called “On Margin”.

Lien – A legal claim against a property that must be paid off when the property is sold.

Material Fact – one which the agent should have realized would be likely to affect the judgment of the
principals in closing.

Mechanics Lien – lien of persons who have performed services or furnished materials in the erection or
repair of a building.

Meter and Bounds – Measurements and boundaries.

Monument – A fixed object and point establishment by surveyors to establish land locations.

Net Listing – the agent may retain as compensation for his services all sums received over and above a
net price to the owner.

Notice of Quit – A notice to a tenant to vacate rented property.

Offset Statement – A statement by the owner of property or the owner of a lien, about the present status
of lien.

Percentage Lease – A lease of property in which the rental is a percentage of portion of sales.

Planned Unit Development – A project or subdivision that includes common property that is owned and
maintained by a homeowners’ association for the benefit and use of the individual PUD unit owners.

Prima Facie – Presumptive on its face.

Privity – A mutual relationship to the same rights of property; a contractual relationship.

Procuring Cause – The act of a broker leading to the meeting of minds between the parties to a
transaction.

Quiet Title – A court action brought to establish title: to remove a cloud on the title.

Quitclaim Deed – A deed that transfers without warranty whatever interest or title a grantor may have.

Ratified Sales Contract – both the buyer and the seller have signed off on the final offer.

Real Estate – . Property in land and improvements that which is not personal property.

Real Property – Land and appurtenances, including anything of a permanent nature such as structures,
trees, minerals, and the interest, benefits, and inherent rights thereof.

Realtor® – A qualified member of a board affiliated with the National Association of Realtors.

Rescission – The cancellation or annulment of a transaction or contract by the operation of a law or by
mutual consent.

Reformation – An action to correct a mistake in deed or other document.

Rent Loss Insurance – Insurance that protects a landlord against loss of rent or rental value due to fire or
other casualty.

Replacement Reserve Fund – fund for replacement of common property in a condominium, PUD, or
cooperative project.

Reversion – The right to future possession or enjoyment by the person, or his heirs, creating the preceding
estate.

Reversionary Interest – The interest which a person has in lands or other property, upon termination of
preceding estate.

Right of First Refusal – A provision that gives another party the first opportunity to purchase/lease
property before others.

Right of Ingress or Egress – The right to enter or leave designated premises.

Right of Survivorship – In joint tenancy, the right of survivors to acquire the interest of a deceased joint
tenant.

Riparian Rights – The right of a landowner to water, on, under, or adjacent to his land.

Sale-Leaseback – a seller sells property to a buyer who simultaneously leases the property back to the
seller.

Sheriff’s Deed – A deed given by the court order in connection with the sale of property to satisfy a
judgment.

Specific Performance – A remedy in court compelling the defendant to carry-out the terms of the
agreement of contract.

Statute of Frauds – A state of law which provides that certain contracts must be in writing in order to be
enforceable.

Stewardship Ownership – Obliges owners to utilize their property to benefit not only their interest but
also the general welfare.

Subordination Clause – A clause in a junior or second lien permitting retention of priority for prior liens.

T-Lot – A lot directly in front of an intersection (“Tumbok”).

Tenancy by the Entirety – A type of joint tenancy of property that provides right of survivorship –
usually husband and wife.

Tenancy in Common – joint tenancy in a property without right of survivorship. .

Tenure in Land – Ownership by two or more persons who hold undivided interest, without right or
survivorship.

Title Search – A check of the title records to ensure clean title – no claims, no liens, authentic.

Title Company – A company that specializes in examining and insuring titles to real estate.

Title Insurance – protects the parties against loss arising from disputes over ownership. Types: Lender’s
policy; Owner’s policy.

Trustee – A fiduciary who holds or controls property for the benefit of another.

Trustor – One who deeds his property to a trustee to hold as security until he has performed his
obligation to a lender .

Vested -Having the right to use a portion of a fund such as an individual retirement fund.

Void – To have no force or effect; that which is unenforceable.

Voidable – That which is capable of being adjudged void, but is not void unless action is taken to make it
so.

Voluntary Lien – Any lien is placed on property with the consent, or as a result of the voluntary act of the
owner.

Warranty Deed – conveys real property with warranties of titles and quite possession; grantor agrees to
defend the premises against the lawful claims of third person

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