Real Estate Glossary
Lansing Area Real Estate
REAL ESTATE
 
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R

radon
A naturally occurring gas that is suspected of causing lung cancer.
  National Safety Council on Radon

range
1. A measure of the difference between the highest and lowest variates. (See variates) 2. A strip of land six miles wide, extending north and south and numbered east and west according to its distance from the principal meridian in the rectangular (government) survey system of legal description. For example, Range 3 East would be a strip of land between 12 and 18 miles east of its principal meridian.

rate cap
The limit on the amount the interest rate can be increased at each adjustment period in an adjustable rate loan. The cap may also set the maximum interest rate that can be charged during the life of the loan.

rate factor
The number of dollars required to pay off each $1,000 of a mortgage loan.

ready, willing and able buyer
One who is prepared to buy property on the seller's terms and is ready to take positive steps to consummate the transaction.

real estate
The physical land at, above and below the earth's surface with all appurtenances, including any structures; any and every interest in land whether corporeal or incorporeal, freehold or non-freehold; for all practical purposes, the term real estate is synonymous with real property.

real estate assistant
A real estate assistant (also known as a personal assistant or professional assistant) is a combination of office manager, marketer, organizer and facilitator with a fundamental understanding of the real estate industry.

real estate brokerage
A Real Estate Brokerage is a business in which real estate license-related activities are performed under the authority of a real estate broker.

real estate license law
State law enacted to protect the public from fraud, dishonesty and incompetence in the purchase and sale of real estate.

real estate owned (REO)
A term used by lenders to refer to properties acquired through foreclosure.

Real Estate Settlement Procedures Act (RESPA)
A federal law, enacted in 1974 and later revised, that ensures that the buyer and seller in a real estate transaction have knowledge of all settlement costs when the purchase of a one-to-four-family residential dwelling is financed by a federally related mortgage loan. Federally related loans are broadly defined to include loans made by savings and loan associations or other lenders whose deposits are insured by federal agencies, insured by the FHA or VA, administered by the Department of Housing and Urban Development or intended to be sold by the lender to Fannie Mae or a similar federal agency.
  HUD—RESPA Overview

REALTORS® Code of Ethics
A written system of standards of ethical conduct. Because of the nature of the relationship between a broker and a client or other persons in a real estate transaction, a high standard of ethics is needed to ensure that the broker acts in the best interests of both the principal and any third parties.

real property
The earth's surface, the air above and the ground below, as well as all appurtenances to the land including buildings, structures, fixtures, fences and improvements erected upon or affixed to the same, excluding growing crops. The term real property includes the interests, benefits and rights inherent in the ownership of real estate.

reality of consent
Although a contract may meet all of the basic requirements, it may still be void or voidable, according to the realty of consent, which states that a contract must be entered into as a free and voluntary act of each party, and each party must be able to make a prudent and knowledgeable decision without undue influence. A mistake, misrepresentation, fraud, undue influence or duress would deprive a person of that ability, and if any of these circumstances were present, the contract would be voidable by the injured party. If the other party were to sue for breach, the injured party could use lack of voluntary assent as a defense.

REALTOR®
A registered trade name that may be used only by members of the state and local real estate boards affiliated with the National Association of REALTORS® (NAR). The term REALTOR® designates a professional who subscribes to associations of REALTORS® to govern real estate practices of members of the board. The use of the name REALTOR® and the distinctive seal in advertising is strictly governed by the rules and regulations of the national association.

realized capital gain
When a property is sold, a capital gain or loss is realized.

rebate law
Law that prohibits escrow and title insurance companies from giving rebates or favorable treatment as consideration for the referral of business.

recapture clause
A clause in some percentage leases where the lessor has the right to terminate a lease if a tenant does not obtain a desired gross.

recapture rate
A periodic allowance for the recovery of investment capital from the property's income stream.

reconstructed cash flow analysis
An estimated cash flow analysis for a rental property, prepared by an agent using accurate property information. Its purpose is to present what the cash flow numbers for the investment property will look like when in the hands of a potential buyer.

recasting
The process of rewriting existing loans, especially when there is a default. The term and interest rate may be adjusted to take pressure off the borrower.

receiver
An independent party appointed by a court to impartially receive, preserve and manage property that is involved in litigation, pending final disposition of the matter before the court.

recission
An option in the discharge of a contract. If both parties agree, they may rescind a contract in a process called recission.

recognition clause
A clause found in some blanket mortgages used to purchase a tract of land for subdivision development providing for protection of the rights of the ultimate buyers of individual lots in case of default by the developer.

recognized capital gains
The recognized capital gain from the sale of an asset subject to income taxes.

reconciliation
1. The final step in an appraisal process, in which the appraiser reconciles the estimates of value received from the direct sales comparison, cost, and income approaches to arrive at a final estimate of market value for the subject property. 2. The balancing of entries in a double-entry accounting system.

reconveys
In satisfying a deed of trust, the trustee reconveys full title to the borrower.

reconveyance deed
A deed used by a trustee under a deed of trust to return title to the truster.

recording
The act of entering into the book of public records the written instruments affecting the title to real property, such as deeds, mortgages, contracts for sale, options and assignments. There is also a body of public records apart from the real estate recording system that has a bearing on the quality of title. A title searcher would also check, for example, public records regarding probate, marriage, taxes and judgements.

rectangular (government) survey system
A system established in 1785 by the federal government, providing for surveying and describing land by reference to principal meridians and base lines.

redemption
The right of a defaulted property owner to recover his or her property by curing the default.

redemption period
A period of time established by state law during which a property owner has a right to redeem real estate after a foreclosure or tax sale by paying the sales price, interest and costs. Note that many states do not have such statutory redemption periods. Michigan allows a six month redemption period.

red flag
A visual sign or indication of a defect. Something that warns a reasonably observant person of a potential problem, thus requiring further investigation. A broker who spots uneven floors or water-stained ceilings is on notice to inquire about soil settlement and roof leakage problems.

redlining
A practice by some lending institutions that restricts the number of loans or the loan-to-value ratio in certain areas of a community. A redlining policy may be so severe that in effect the lending institution prohibits lending any money in certain areas of the city. The usual justification for redlining is that the lender wants to limit the risks in an area that is deteriorating. The lender discriminates against a whole class of risks rather than distinguishing among individual risks.

reduction certificate (payoff statement)
The document signed by a lender indicating the amount required to pay a loan balance in full and satisfy the debt; used in the settlement process to protect both the seller's and the buyer's interests.

refinance
To obtain a new loan to pay off an existing loan, or to pay off one loan with the proceeds from another. Properties are frequently refinanced when interest rates drop and/or the property has appreciated in value. Sometimes, a buyer will purchase a property by way of a contract for deed with the expectation of either selling the property before the balance under the contract for deed becomes due or refinancing at better terms and interest rates than exist at the time the agreement of sale is entered into.

reformation
An action by a court to revise a contract to read as it was intended by the parties to read rather than as stated.

regression
An appraisal principle that states that between dissimilar properties the value of the better-quality property is affected adversely by the presence of the lesser-quality property.

Regulation Z
Implements the Truth-in-Lending Act requiring credit institutions to inform borrowers of the true cost of obtaining credit.

reinstatement
To bring something back to its prior position, as in restoring a defaulted loan to current status.

rejection
Proposing any deviation from the terms of the offer constitutes a rejection of the original offer and becomes a new offer.

release
Any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment of a hazardous or toxic chemical or extremely hazardous substance.

release clause
A provision found in many blanket mortgages enabling the mortgagor, upon payment of a specific sum of money, to obtain a partial release of particular portions or parcels of the collateral.

release deed
A document, also known as a deed of re-conveyance, that transfers all rights given a trustee under a deed of trust loan back to the grantor after the loan has been fully repaid.

release of liability
The release of an old borrower from further responsibility for repayment of an assumed loan.

reliction
An increase of the land by the permanent withdrawal of the ocean or a river.

relinquished property
The property given up in the exchange.

remainder
The right of future possession and use that goes to someone other than the grantor upon termination of a life estate.

remainder estate
A future interest in real estate created at the time and by the same instrument of the original estate, but limited its immediate authority upon the termination of the prior estate. For example, Hoe Phigg owns a property in fee simple and conveys the property "to Barry Clink and upon Clink's death, to Cora Quibb and her heirs." Cora Quibb has a remainder estate, which is vested because the estate automatically passes to Cora Quibb and her heirs upon the death of Barry Clink.

remainder interest
The remnant of an estate that has been conveyed to take effect and be enjoyed after the termination of a prior estate, such as when an owner conveys a life estate to one party and the remainder to another.

rent
A fixed, periodic payment made by a tenant of a property to the owner for possession and use, usually by prior agreement of the parties.

rental income
The result when vacancies (uncollected rent) is subtracted from gross scheduled income.

rental statement
A summary of rental amounts paid and security deposits collected on a property used for rental purposes.

rent control
Ordinances that limit the rent a landlord can charge for a property.

rent factor
A multiplier used to establish the rental rate for industrial properties based on the owner's desired rate of return.

rent schedule
A statement of proposed rental rates, determined by the owner or the property manager or both, and based on a building's estimated expenses, market supply and demand and the owner's long-range goals for the property.

rent skimming
In "no down-payment sales" where the buyer of a property collects rents and deposits on the property without making payments on the loan.

renunciation
An act or instance of relinquishing, abandoning, repudiating or sacrificing something, as a right, title, person, etc.

repair or corrective maintenance
Involves the actual repairs that keep the building's equipment, utilities and amenities functioning. Repairing a boiler, finding a leaky faucet and mending a broken air-conditioning unit are acts of corrective maintenance.

replacement cost
The construction cost at current prices of a property that is not necessarily an exact duplicate of the subject property but serves the same purpose or function as the original.

replacement property
The property acquired in the exchange.

rescind
To annul, cancel.

rescission
The legal remedy of canceling, terminating or annulling a contract and restoring the parties to their original positions; a return to the status quo. Contracts may be rescinded due to mistake, fraud or misrepresentation and, there is no need to show any money damage.

reserve fund
Monies a lender will often require a borrower to set aside as a cushion of capital for future payment of items such as taxes, insurance, furniture replacement and deferred maintenance. Sometimes a reserve fund is referred to as an impound account or customer's trust fund. Replacement reserves should be maintained especially when the owner is installing items having a short life expectancy-for example, appliances, furniture or carpeting in a furnished apartment.

reserve funds
An expense category in the operating budget. Monies that are set aside for replacement expenditures not covered by insurance such as roof or furnace repairs.

restraining order
An order that may issue from filing for an injunction. Though the term is sometimes used as a synonym of injunction, it is distinguished from an injunction in that it is intended only as a restraint upon a defendant until the granting of a temporary or perpetual injunction.

restricted license
A probationary real estate license granted after a license was revoked, suspended or denied.

restrictive covenants
A clause in a deed that limits the way the real estate ownership can be used.

Resource Conservation and Recovery Act
Federal law administered by the EPA which regulates the generation, processing and transportation of hazardous waste.

retail property
Income-producing property from which various types of retail products are sold.

retainer
Retainer is a professional relationship between an advisor and a client in which a client engages the services of a professional through payment of a fee. The professional's obligation is to provide advice or services as needed by the client.

retaining wall
A wall built to hold back or support a bank of earth.

retaliatory eviction
An eviction due to a tenant's complaints to the landlord, a public agency or tenant association. It is illegal for a landlord to decrease services, increase rent or evict the tenant within 180 days of such a complaint.

retirement communities
Many of them in temperate climates, are often structured as PUDs. They may provide shopping, recreational opportunities and health care facilities in addition to residential units.

retroactive liability
A liability is not limited to the current owner of a property, but includes people who have previously owned the property.

return on investment
The net annual income divided by the original cash investment equals a percentage return on investment.

reverse-annuity mortgage (RAM)
A loan under which the homeowner receives monthly payments based on his or her accumulated equity rather than a lump sum. The loan must be repaid at a prearranged date or upon the death of the owner or the sale of the property.

reversion
The right of future possession and use by the grantor of a life estate.

reversionary interest
The remnant of an estate that the grantor holds after granting a life estate to another person.

reversionary right
The return of the rights of possession and quiet enjoyment to the lessor at the expiration of a lease.

revocation
An offeree may fail to accept the offer before it expires. The offeror may revoke the offer at any time before receiving the acceptance. This revocation must be communicated to the offeree by the offeror, either directly or through the parties' agents.

right of correlative user
The right of a landowner to the reasonable use of underground percolating water.

right of first refusal
The right to the first opportunity to lease or purchase real property. For example, apartment tenants might retain the right of first refusal when their units are being converted to condominiums.

right of survivorship
The distinctive characteristics of a joint tenancy (also tenancy by entirety) by which the surviving joint tenant(s) succeeds to all right, title and interest of the deceased joint tenant without the need for probate proceedings.

right-of-way
The right given by one landowner to another to pass over the land, construct a roadway or use as a pathway, without actually transferring ownership.

riparian rights
The rights of a landowner whose land borders on a stream or watercourse to use and enjoy the water which is adjacent to or flows over the owners land provided such use does not injure other adjacent land owners. Property boundary would be the center line of a non-navigable river or the low waterline of a navigable stream or river.

risk
The probability of getting your money back. High risk means low probability; low risk means high probability.

risk assessment
Qualitative and quantitative evaluation of the risk posed to human health and/or the environment by the actual or potential presence and/or use of specific pollutants.

risk-based financing
When the lender sets loan terms based on potential risk. Borrowers that show little risk of default would be entitled to a better rate and terms than a borrower where a higher probability of default is indicated.

risk management
Evaluation and selection of appropriate property and other Insurance.

rollover loan
A loan that includes a call date earlier than its normal amortization period; also called a renegotiable rate loan or a bullet loan.

routine maintenance
Includes such day-to-day duties as cleaning common areas, performing minor carpentry and plumbing adjustments and providing regularly scheduled upkeep of heating, air-conditioning and landscaping.

run with the land
A phrase describing rights or covenants that bind or benefit successive owners of a property. An example is a restrictive building covenant in a recorded deed that would affect all future owners of the property. Unlike an easement in gross, an easement appurtenant runs with the land and thus passes to a succeeding owner even if it is not specified in the deed. For example, if the grantee Sylvia Buckner agrees, as part of the consideration to a transaction, to repair a building located on land owned by grantor Leonard Musslewhite, such a covenant will not run with the land. This is because it merely places a duty on the grantee Buckner. The promise does not touch and concern the land granted from Musslewhite to Buckner--it is only a personal covenant for the grantor's benefit.

R-value
A term used to describe the effectiveness of various kinds of insulation to indicate their resistance to heat flow. If more than one layer of insulation is used, the R-value of the individual layers are added together to indicate a total R-value.
 

A B C D E F G H I J L M N O P Q R S T U V W XYZ
 
 
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