A naturally occurring gas that is suspected of causing
National Safety Council on Radon
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
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.
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 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 owned (REO)
A term used by lenders to refer to properties acquired
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
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.
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
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.
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
realized capital gain
When a property is sold, a capital gain or loss is
Law that prohibits escrow and title insurance companies
from giving rebates or favorable treatment as
consideration for the referral of business.
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.
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.
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.
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.
An option in the discharge of a contract. If both
parties agree, they may rescind a contract in a process
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
recognized capital gains
The recognized capital gain from the sale of an asset
subject to income taxes.
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.
In satisfying a deed of trust, the trustee reconveys
full title to the borrower.
A deed used by a trustee under a deed of trust to return
title to the truster.
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.
The right of a defaulted property owner to recover his
or her property by curing the default.
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.
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
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
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.
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.
An action by a court to revise a contract to read as it
was intended by the parties to read rather than as
An appraisal principle that states that between
dissimilar properties the value of the better-quality
property is affected adversely by the presence of the
Implements the Truth-in-Lending Act requiring credit
institutions to inform borrowers of the true cost of
To bring something back to its prior position, as in
restoring a defaulted loan to current status.
Proposing any deviation from the terms of the offer
constitutes a rejection of the original offer and
becomes a new offer.
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
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.
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
release of liability
The release of an old borrower from further
responsibility for repayment of an assumed loan.
An increase of the land by the permanent withdrawal of
the ocean or a river.
The property given up in the exchange.
The right of future possession and use that goes to
someone other than the grantor upon termination of a
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.
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.
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.
The result when vacancies (uncollected rent) is
subtracted from gross scheduled income.
A summary of rental amounts paid and security deposits
collected on a property used for rental purposes.
Ordinances that limit the rent a landlord can charge for
A multiplier used to establish the rental rate for
industrial properties based on the owner's desired rate
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.
In "no down-payment sales" where the buyer of a property
collects rents and deposits on the property without
making payments on the loan.
An act or instance of relinquishing, abandoning,
repudiating or sacrificing something, as a right, title,
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
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.
The property acquired in the exchange.
To annul, cancel.
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.
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.
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.
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
A probationary real estate license granted after a
license was revoked, suspended or denied.
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
Income-producing property from which various types of
retail products are sold.
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.
A wall built to hold back or support a bank of earth.
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
Many of them in temperate climates, are often structured
as PUDs. They may provide shopping, recreational
opportunities and health care facilities in addition to
A liability is not limited to the current owner of a
property, but includes people who have previously owned
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.
The right of future possession and use by the grantor of
a life estate.
The remnant of an estate that the grantor holds after
granting a life estate to another person.
The return of the rights of possession and quiet
enjoyment to the lessor at the expiration of a lease.
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
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.
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
The probability of getting your money back. High risk
means low probability; low risk means high probability.
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
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.
Evaluation and selection of appropriate property and
A loan that includes a call date earlier than its normal
amortization period; also called a renegotiable rate
loan or a bullet loan.
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.
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.