Utah Stringham Real Estate – Flashcards
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A loan with three years of the same rate then rate adjustments every year thereafter.
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3/1 ARM
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The continuing education course required by the Utah Division of Real Estate for a new licensee's initial renewal period.
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12 HOUR NEW AGENT COURSE
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All borrowers must receive this notice if the loan is a refinance loan.
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72-HOUR RIGHT OF RESCESSION
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When a tenant leaves a property before the expiration of the lease agreement.
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ABANDONMENT
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An interest rate quoted that would give a credit to the borrower.
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ABOVE PAR
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To nullify or replace. Signing of the closing documents nullifies the Real Estate Purchase Contract except for warranties which extend beyond the closing date.
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ABROGATION
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Allows a loan to become due and payable immediately if certain requirements are not met, such as making payments, maintaining the physical condition of the property or paying property taxes and hazard insurance.
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ACCELERATION CLAUSE
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The process of adding to real property.
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ACCESSION
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The legal process of having the signature on a contract or other legal document verified by a notary public.
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ACKNOWLEDGE
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43,560 square feet.
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ACRE
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Consists of 43,560 cubic feet of water, or an acre of land covered by 12 inches of water.
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ACRE FEET
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Transferring a deed from the grantor to the grantee by handing the deed to the grantee or sending it by certified mail.
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ACTUAL DELIVERY
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The legal process by which a lessor evicts the lessee and regains possession of the property.
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ACTUAL EVICTION
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The loan amount including upfront funding fee.
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ACTUAL MORTGAGE AMOUNT
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A tax levied according to the value of the property.
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AD VALOREM TAX
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Additions or changes incorporated into the REPC by reference.
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ADDENDUM
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This form is used for any additional terms the buyer or seller wish to include in the agreement.
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ADDENDUM TO LEASE AGREEMENT WITH OPTION FOR PURCHASE
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A loan where the interest rate is periodically adjusted based on a specific economic indicator (or financial index).
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ADJUSTABLE RATE MORTGAGE (ARM)
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Cost basis plus improvements, minus depreciation claimed during the years the property was owned.
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ADJUSTED COST BASIS
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Lengthen of time between interest rate adjustments on an adjustable rate loan.
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ADJUSTMENT PERIOD
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A person appointed by the court to carry out the terms of a will.
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ADMINISTRATOR
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The process whereby a non-owner can gain ownership of property by occupying it in hostile, continuous, open, and notorious possession, and in Utah, paying the property taxes for the statutory period of time (7 years in Utah).
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ADVERSE POSSESSION
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A financial interest in a business that could provide services to a borrower in a loan transaction. The lender is required to disclose such affiliations to the borrower and may not require that the borrower use the affiliate. Disclosure is also required when it is the policy of the lender to share private information of borrowers with its affiliates. The borrower may refuse permission to share information by returning the notice indicating that they Opt Out of the companies sharing policy.
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AFFILIATED BUSINESS ARRANGEMENT (AfBA)
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A relationship between two parties wherein the principal hires another person to represent him or her.
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AGENCY
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The principal seeks to deny an agency relationship, but the court stops him from denying the agency, and thereby confirms it.
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AGENCY BY ESTOPPEL
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The agency is created by implication, or actions, and the principal approves it by agreeing after the agency service has been performed to compensate the agent.
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AGENCY BY RATIFICATION
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The law has given rise to the agency, such as a Sheriff appointed by the court to be the agent of the owner in a foreclosure sale.
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AGENCY BY STATUTE
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The person hired by a principal to act for and in behalf of, or to represent the principal, always acting in the principal's best interest.
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AGENT
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A formula for determining that no more than the RESPA allowed amount is being held in the borrower's reserve account.
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AGGREGATE ESCROW ANALYSIS
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In condominium ownership, what is actually owned by the unit owner (in addition to tenancy in common for common areas).
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AIR SPACE
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A change of ownership. May be voluntary (sold the property) or involuntary (foreclosure sale).
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ALIENATION OF TITLE
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A clause which allows the lender to call the loan due and payable immediately if the property is sold or the loan is assumed.
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ALIENATION, DUE ON SALE, NON-ASSUMPTION CLAUSE
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A State-approved document used for security, usually in seller financing, where the financing is structured as a wraparound.
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ALL-INCLUSIVE TRUST DEED (AITD)
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A socio-economic system that allows for private ownership of real property.
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ALLODIAL
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The lender's title insurance policy which offers coverage in the amount of the loan which includes a site visit to discover unrecorded encumbrances.
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ALTA POLICY
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A "nice, but not necessary" feature which provides personal pleasure to the owner of real property. It can be tangible or intangible
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AMENITY
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An act designed to eliminate discrimination against handicapped persons in employment, government services, and all facilities and services offered to the public.
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AMERICANS WITH DISABILITIES ACT (ADA)
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A loan which has regular monthly payments of principal and interest that if paid would reduce the balance of the loan with each payment until the balance is zero at the end of the amortization period.
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AMORTIZED LOAN
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A schedule of payments toward principal and interest and loan balance after each payment through the life of a loan.
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AMORTIZATION SCHEDULE
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The interest rate plus any other charges for the loan, including such things as discount points and origination fees; computed as a yearly percentage rate. It is used for comparing loans.
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ANNUAL PERCENTAGE RATE (APR)
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The effective interest rate based on the frequency of interest payments paid on deposits.
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ANNUAL PERCENTAGE YIELD (APY)
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The appraisal principle that weighs the value of the future benefits a product or property will bring.
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ANTICIPATION
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Materially representing or even omitting any item on the 1003 or other loan application with the intent of misleading a lender.
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APPLICATION FRAUD
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A professional process for estimating the value of real property.
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APPRAISAL
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Inflation or materially overstating the value of a property with the intention of obtaining a higher loan or even cash-out.
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APPRAISAL FRAUD
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A percentage of increase in the value of the property over its value when it was originally purchased.
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APPRECIATION
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Attached to the land (such as a house) or the deed (such as a recorded easement).
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APPURTENANT
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The two parties in disagreement agree to accept the decision of a third party who acts both as a mediator and a judge. It avoids the excessive time and high costs of a court action.
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ARBITRATION
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The clause in the Real Estate Purchase Contract that stipulates the buyer is buying the property in its current condition and with the faults that have been disclosed.
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"AS IS" CLAUSE
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Combining two or more parcels of land into one.
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ASSEMBLAGE
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A percentage of the appraised value, as determined by law, upon which the tax rate will be levied to determine the property tax.
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ASSESSED VALUE
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One party in a contract substitutes another party in his place. The original party retains secondary liability for the performance of the contract. It does not require the agreement of the other original party in the contract.
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ASSIGNMENT OF CONTRACT
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Should be used when a contract was entered into between Seller and Buyer #1. Before closing, Buyer #1 wishes to assign his/her position in the contract to Buyer #2.
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ASSIGNMENT OF INTEREST ADDENDUM
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A contract that substitutes a new tenant in the lease. The assignee becomes liable for the remaining term of the lease. Unless prohibited by the lease contract, this can be done without the approval of the lessor, but the original lessee retains secondary liability.
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ASSIGNMENT OF LEASE
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A person with a broker's license who works under the supervision of an employing principal broker.
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ASSOCIATE BROKER
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The legal process when real or personal property is seized by the court and held as security for satisfaction of a judgment.
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ATTACHMENT
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A person who has been given power to sign in behalf of another.
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ATTORNEY IN FACT
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A lawyer's examination and evaluation of the history of title. It includes a brief summary of all recorded instruments which affect the title, including records of taxes, special assessments, judgments, mortgages and trust deeds.
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ATTORNEY'S OPINION
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Authority for the property manager to sign leases effectively binding the owner to the lease agreement must be specifically stated in the agency agreement.
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AUTHORITY TO SIGN LEASE
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A loan with a balloon payment at the end of its term. It could be a partially amortized or a straight loan or note.
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BALLOON MORTGAGE
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Required payments larger than the regular payment. These payments are often made at the end of the loan, retiring the loan early; but can be made at other times during the term of the loan.
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BALLOON PAYMENTS
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The amount of funds that a depository institution must hold in reserve against specified deposit liabilities or other risks.
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BANK RESERVE REQUIREMENTS
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This deed makes no guarantees as to the condition of the title, but unlike the Quit Claim Deed, the grantor implies some actual interest in the property.
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BARGAIN AND SALE DEED
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This loan amount is set based on the median home price in a county.
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BASE LOAN AMOUNT
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An east-west line which intersects the meridian and creates a point from which land can be measured under the Government or rectangular survey method.
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BASELINE
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A finance term meaning a yield of 1/100th of 1% annually. 100 basis points = One percent.
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BASIS POINT
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An interest rate quoted that would require a charge to the borrower.
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BELOW PAR
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The lender under a Trust Deed & Note.
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BENEFICIARY
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A gift of personal property given in a will.
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BEQUEST OR LEGACY
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A contract wherein a promise is exchanged for a promise, thus making the contract binding on both parties.
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BILATERAL CONTRACT
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Evidence of transfer of ownership of personal property.
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BILL OF SALE
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Monday through Saturday except holidays.
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BUSINESS DAY
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A loan that uses two or more parcels of real property as security.
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BLANKET MORTGAGE
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An advertisement which fails to indicate that the advertiser is a real estate brokerage or that sales agents or brokers are selling their own property.
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BLIND AD
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The illegal practice of inducing panic selling in a neighborhood by starting rumors involving minorities moving in.
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BLOCKBUSTING
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The body to which one would appeal in order to obtain a variance to do something contrary to the current zoning law.
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BOARD OF ADJUSTMENT
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The body of appeal if you think your property tax appraisal is too high.
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BOARD OF EQUALIZATION
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Personal property or money needed to make up a difference in value when exchanging real property.
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BOOT
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Any remote operation of the main real estate office which will be in operation more than 12 months and must be registered with the Real Estate Division.
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BRANCH OFFICE
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A short term loan to help the buyers have up-front funds to get into their new home, when the sale on the old one is going to close later than the closing to purchase the new one.
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BRIDGE, SWING OR GAP LOAN
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A broker's written opinion of the value of a particular property that may not be used in connection with the originating a federally related loan; not an appraisal.
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BROKER PRICE OPINION (BPO)
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An area established by the zoning and planning commission to separate commercial and industrial areas from residential. Its purpose may be safety or economics.
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BUFFER ZONE
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Rules set by government to establish minimum standards of construction.
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BUILDING CODES
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All rights and interests that can be legally held in real property. They are separated into Possession, Use & Control, Quiet Enjoyment and Disposition.
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BUNDLE OF RIGHTS
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A written overview that reveals the basic philosophy and strategy for an investment property.
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BUSINESS PLAN
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A financing technique in which a borrower is able to obtain a lower interest rate by paying discount points at the time the loan is originated. (1 point = 1% of the loan amount).
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BUYDOWN
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A broker who represents the buyer in a fiduciary capacity.
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BUYER'S BROKER
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This booklet must be provided to the borrower within 3 days of application.
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BUYING YOUR HOME, SETTLEMENT COSTS AND HELPFUL INFORMATION
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The abbreviation given to restrictions and requirements created in the Uniform Declaration of Restrictions for condominiums.
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CC&R'S
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The borrower/co-borrowers' ability to repay the loan.
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CAPACITY
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Total value of assets. This term is sometimes used to refer to the amount actually paid as down payment and closing costs, as in "the borrower's capital in the transaction". Also used to refer to the total value of an investment as in "CAP Rate (Rate of return on capital invested or purchase price)."
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CAPITAL
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The taxable profit derived from the sale of a capital asset, such as real property.
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CAPITAL GAIN
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Markets (including informal markets as well as organized markets and exchanges) in which mortgage backed securities are bought and sold.
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CAPITAL MORTGAGE MARKET
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The ratio created when the net operating income is divided by the value of the property. It is also called the rate of return.
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CAPITALIZATION RATE OR CAP RATE
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The philosophy that says "Let the buyer beware."
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CAVEAT EMPTOR
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Comprehensive Environmental Response, Compensation & Liability Act, which is also known as the Superfund Act.
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CERCLA
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Endorsement from the Veterans Administration indicating the right of a veteran to obtain a VA loan and the amount of his eligibility.
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CERTIFICATE OF ELIGIBILITY
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The document required for a VA loan that verifies the value of property being used as security for the VA loan (VA appraisal).
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CERTIFICATE OF REASONABLE VALUE
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The document given to the individual who successfully bids and purchases a property at a Sheriff's Sale. It does not convey title to the property.
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CERTIFICATE OF SALE
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A historical record of land ownership and liens or encumbrances against the property.
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CHAIN OF TITLE OR ABSTRACT OF TITLE
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This appraisal principle involves activity which goes from growth or integration to equilibrium to disintegration and perhaps to growth again.
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CHANGE, CYCLE OF OR NEIGHBORHOOD CYCLE
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Bankruptcy with all debts cancelled.
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CHAPTER 7
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Bankruptcy with a payment plan.
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CHAPTER 13
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A synonym for personal property. It comes from the word "cattle."
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CHATTEL
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A loan secured by personal property.
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CHATTEL MORTGAGE
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A loan with a specific balance set at the beginning, and the balance cannot be increased during the term of the loan.
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CLOSED-END LOAN
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When any loan funds are received from the lender(s) and the applicable documents are recorded. This comes after the settlement.
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CLOSING
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A term that refers to any kind of lien or encumbrance against the title.
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CLOUD ON THE TITLE
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These persons are equally entitled to receive disclosures.
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CO-BORROWER (CO-SIGNERS)
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Standards for ethical conduct which have been systematized for a group of professionals.
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CODE OF ETHICS
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An addition or change to an existing will.
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CODICIL
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A term that refers to security used for a loan. It may be real or personal property.
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COLLATERAL
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To all outward public appearance, or from a document that seems to be valid, the possessor of the property would seem to have ownership.
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COLOR OF TITLE
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The ratio of all financing (first and junior mortgages) to the value of the property
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COMBINED LOAN TO VALUE RATIO (CLTV)
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A classification of real estate that includes income-producing property such as office buildings, gasoline stations, restaurants, shopping centers, hotels, and motels, parking lots, and stores.
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COMMERCIAL PROPERTY
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A broker puts personal funds in excess of $500 into the real estate trust account.
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COMMINGLING
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One entity of the Division of Real Estate composed of five people, one of whom is a chairman.
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COMMISSION
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A member of a state regulatory real estate commission, board, or division.
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COMMISSIONERS
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The one member of the Commission that is from the general public.
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COMMISSIONERS-AT-LARGE
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Land or improvements in a condominium developments designated for the use and benefits of all residents, property owners, and tenants.
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COMMON AREA
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The process of notifying the offeror that the offer has been accepted.
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COMMUNICATION
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A form of ownership between husband and wife where each has an equal interest in property obtained during their marriage. The only way either can hold separate property is to obtain it before marriage, after the marriage is ended, or during the marriage by gift or inheritance.
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COMMUNITY PROPERTY
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A method of valuing homes that looks not only at recent home sales but also at homes presently on the market plus homes that were listed but did not sell.
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COMPARATIVE MARKET ANALYSIS (CMA)
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A condition that allows an underwriter to overlook negative underwriting information.
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COMPENSATING FACTORS
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The ability to understand the terms of a contract and to make a rational decision as to whether or not to enter into it.
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COMPETENCY OR CAPACITY
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An appraisal principle: When a particular use of property is bringing a high return, others enter into the same business or purchase property for the same purpose.
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COMPETITION
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Filing this document with the court initiates foreclosure under a mortgage.
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COMPLAINT
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Interest is paid on earned interest as well as on the principal. It is used in savings accounts.
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COMPOUND INTEREST
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Process by which government exercises the power to transfer ownership of property from private to public use. See Eminent Domain
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CONDEMNATION ACTION
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One owns the air space of one's own unit and an undivided interest in the common area.
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CONDOMINIUM
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The act which governs ownership and related issues when one owns airspace and undivided interest in the common area.
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CONDOMINIUM OWNERSHIP ACT
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An appraisal principle which states that because all homes in a particular area are harmonious in design and value, their value is sustained and tends to increase over time.
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CONFORMITY
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A loan that does not exceed the monetary limits set by FNMA and FHLMC, and which is not an FHA or VA loan.
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CONFORMING LOAN
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The maximum loan amount permitted by Fannie Mae on a single family residence.
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CONFORMING LOAN LIMIT
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The process wherein each party to a contract makes a sacrifice and each party receives a benefit. It is an essential element of any contract.
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CONSIDERATION
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Decreases the total money supply. This is designed to "cool" the economy by increasing interest rates which slows investment in an effort to control inflation.
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CONTRACTIONARY POLICY
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A provision in a contract that requires the completion of a certain act or the happening of a particular event before that contract is binding.
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CONTINGENCY
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An open ended loan funded in installments as various portions of the work are completed.
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CONSTRUCTION LOAN
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The process of transferring a deed from the grantor to the grantee by recording the deed at the county recorder's office.
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CONSTRUCTIVE DELIVERY
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When the landlord violates the terms of the lease by not keeping the property livable or habitable, the tenant can legally vacate the property and not be held liable for further rent payments.
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CONSTRUCTIVE EVICTION
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A party misrepresents innocently, with no evil intention, but that misrepresentation could have been avoided with reasonable care.
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CONSTRUCTIVE FRAUD
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Sometimes known as a "subject to" clause, it requires completion of certain acts before the contract is fully binding.
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CONTINGENCY CLAUSE
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A requirement for licensees to complete a specified number of educational offerings as a prerequisite to license renewal or reinstatement.
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CONTINUING EDUCATION
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An agreement between two or more parties to do or not to do certain things. It may be oral or in writing.
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CONTRACT
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The appraisal principle which states that an improvement to a property must add its cost to the value.
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CONTRIBUTION
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A loan that does not exceed the monetary limits set by FNMA and FHLMC, and which is not an FHA or VA loan.
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CONVENTIONAL CONFORMING LOAN
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A broker who assists another broker in the sale of real property. Usually, the cooperating broker is the (selling) broker who found the buyer who offers to buy a piece of property that is listed with another (listing) broker
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COOPERATING BROKER
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A form of ownership in multiple unit housing where the owner purchases shares of stock in the entire development, then obtains exclusive use of a unit by means of a proprietary lease.
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COOPERATIVE
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A legal person. It cannot die or go to jail.
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CORPORATION
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Something that is physical or tangible, such as land or buildings.
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CORPOREAL
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See Reconciliation
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CORRELATION
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What you paid for the product or property when you bought it.
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COST OR COST BASIS
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An approach to appraisal which considers the price of resources necessary to build the same or a similar property. It is the only approach which places a separate value on the land.
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COST APPROACH
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A contract where payment is for material and labor, with a profit factor added.
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COST PLUS
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An income tax deduction allowed on investment property to treat the improvements as though they will waste away in a certain number of years. It cannot be applied to raw land or a personal residence. Also known as depreciation.
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COST RECOVERY
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A response to an offer wherein the offeree changes one or more of the terms of the contract, becomes the offeror, and sends the offer back to the original offeror.
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COUNTER OFFER
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This state jurisdiction differentiates base loan limits for conforming loans.
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COUNTY
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This covenant in a deed assures the grantee that the title has no liens or encumbrances except those that have been revealed by the grantor.
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COVENANT AGAINST ENCUMBRANCES
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In the event someone makes a claim against the property, the grantor has the full responsibility to defend the title against the claimant. This includes producing proper documents to substantiate the ownership of the grantee, and going to court if necessary.
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COVENANT OF FURTHER ASSURANCE
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In a deed, the guaranteed right of an owner or lessee legally in possession of property to uninterrupted use without interference from any third party claiming superior title.
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COVENANT OF QUIET ENJOYMENT
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This covenant in a deed guarantees the grantor holds title to the property and has the right to convey it to a grantee.
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COVENANT OF SEIZIN
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If the grantor were to lose in defense of the title, this covenant guarantees payment for the defense of the title and for damages caused the grantee, including buying the property back from the grantee if necessary.
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COVENANT OF WARRANTY FOREVER
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An amount of money which will reduce what the buyer has to bring to closing, or increase the amount the seller gets at closing.
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CREDIT
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Under the Cost Replacement Approach, this method determines the cost per unit of volume and then multiplies it by the number of units of volume. It is most often used with warehouses.
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CUBIC FOOT METHOD
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A money adjustment ordered by the court for actual losses suffered.
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DAMAGES
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An amount of money which will increase what the buyer brings to close, or will reduce what the seller gets at closing.
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DEBIT
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The sum of all contractual payments including hosing compared to gross income known as the back end ratio.
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DEBT RATIO
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Loan payments of principle and interest.
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DEBT SERVICE
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A private individual's gift of property for public use. It may be voluntary (giving land for a public park) or statutory (subdivider giving land for roads).
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DEDICATION
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Items which the IRS allows to be subtracted from your gross taxable income in order to determine your taxable income.
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DEDUCTIONS
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The document that serves as evidence of ownership of real property, as well as the document of conveyance.
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DEED
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The defaulting borrower conveys title to the property to the lender. In return, the lender forgives the loan on the property.
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DEED IN LIEU OF FORECLOSURE
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A fee simple estate which has conditions attached, the violation of which could cause the grantee to lose title. If written in the deed with the words "so long as," it automatically reverts back to the grantor or his heirs if the conditions are violated. It may also be referred to as "Fee Simple Qualified."
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DEFEASIBLE FEE ESTATE (DETER-MINABLE FEE ESTATE)
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A clause in most loans written in favor of the borrower. It requires the lender to reconvey all interest in the property after the loan has been paid off.
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DEFEASANCE CLAUSE
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When physical deterioration is repairable, but hasn't yet been taken care of.
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DEFERRED MAINTENANCE
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A judgment obtained when a foreclosure sale fails to completely pay off a debt.
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DEFICIENCY JUDGMENT
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The process of the grantor giving the deed to the grantee.
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DELIVERY
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A government entity which oversees mortgage lending, community planning and development, fair housing, public housing, and lead based paint compliance.
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DEPT. OF HOUSING AND URBAN DEVELOPMENT (HUD)
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A government entity that oversees such issues and loans, health care, and education for those who have been in the military.
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DEPARTMENT OF VETERANS' AFFAIRS (VA)
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A loss of value in real property, regardless of the reason for the loss. Also an accounting process used for investment property taxation, referred to by the IRS as cost recovery
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DEPRECIATION
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The laws by which the court determines ownership of property of a person who has died intestate, but who has heirs.
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DESCENT
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The principal (buyer or seller) who is hiring an agent specifies exactly which person(s) will act as agent or subagent and exercise fiduciary care in representing the principal's best interest
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DESIGNATED AGENCY
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A gift of real property given in a will.
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DEVISE
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The individuals who give and receive gifts of real property in a will.
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DEVISOR/DEVISEE
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One of the entities in the Real Estate Division. A full-time position responsible for submitting a budget for the Division's operation.
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DIRECTOR OF R.E. DIVISION
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Should be outlined in the agency agreement.
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DISBURSEMENT AUTHORITY
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Money paid when a loan is initially obtained which is considered prepaid interest and permanently lowers the interest rate. Also known as a buy down.
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DISCOUNT POINTS
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The rate charged by the Federal Reserve to member banks for money they borrow. It, along with reserve requirements, is one of the ways the Federal Reserve controls the economy.
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DISCOUNT RATE
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Selling a loan to the secondary money market for less than its face value. This increases the yield (profit) on the loan.
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DISCOUNTED LOAN OR NOTE
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A confirmation by the buyer and seller that they received a copy with all signatures.
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DOCUMENT RECEIPT
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This person is a committed in-home companion for at least one year.
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DOMESTIC PARTNER
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The name given to a property that encumbers a neighboring property with an easement.
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DOMINANT TENEMENT
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The seller pays a commission to the listing agent, as per their contract, and also a commission to the selling agent.
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DOUBLE COMMISSION
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The buyer and seller enter into a second sales contract in order to deceive the lender and enable the buyer to finance the purchase.
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DOUBLE CONTRACT
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When the agent is representing both principals in a transaction with their informed consent. (Also known as a limited agent.)
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DUAL AGENT
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An acceleration clause found in most mortgage loans, requiring the mortgagor to pay off the mortgage dept when the property is sold, resulting in automatic maturity of the note at the lender's option, effectively eliminating the possibility of the new buyer's assuming the mortgage unless the mortgagee permits the assumption.
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"DUE ON SALES" CLAUSES
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The use of force to obtain agreement. It can be physical or emotional.
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DURESS OR UNDUE INFLUENCE
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The fiduciary obligation to not disclose information to unrepresented parties that would weaken the principal's negotiating position.
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DUTY OF CONFIDENTIALITY
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The fiduciary obligation to act solely in the best interest of the principal.
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DUTY OF LOYALTY
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The fiduciary duty to provide reasonable action and care to advance the priorities of the principal.
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DUTY OF REASONABLE CARE & DILIGENCE
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Licensees must disclose their status as licensees acting under an agency agreement in the first contact with a prospective tenant or tenants' agent.
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DUTY TO DISCLOSE
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The deposit a buyer makes when submitting an offer to purchase real property. It shows he's serious in the offer and will serve as liquidated damages if he defaults on the contract.
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EARNEST MONEY DEPOSIT
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A non-possessory interest which one person has in land owned by another, allowing limited use or enjoyment of the owner's land. It may be referred to as a physical use or condition.
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EASEMENT
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An easement which attaches to the land and/or the deed, and passes from owner to owner with the deed.
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EASEMENT APPURTENANT
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An unexpressed, but legally binding understanding regarding a right of way between the parties, created by their actions.
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EASEMENT BY IMPLICATION
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Created by a court of law in situations where justice and need, not convenience, dictate the appropriateness of the easement; such as the case of land locked property.
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EASEMENT BY NECESSITY
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An easement created by adverse use. The use must be adverse, hostile, open, notorious and continuous. This type of easement can be prevented by giving permission to the user, or by ordering the user to discontinue the use before the statutory period passes. (It requires 20 years in Utah.)
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EASEMENT BY PRESCRIPTION
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An easement which is personal in nature and does not pass with the deed or the land. It runs with the persons who agreed to it for the term of their lives, or with the need for which it was created, such as a utility easement.
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EASEMENT IN GROSS
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The period of time during which improvements give a return on investment. It is generally considered to be shorter than physical life.
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ECONOMIC LIFE
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A form of depreciation caused by forces outside the property boundaries. They may be political or social factors. It is considered to be incurable.
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ECONOMIC OR EXTERNAL OBSOLESCENCE
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An age placed on property for appraisal purposes, based on the condition of the property. It may be more or less that the actual chronological age.
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EFFECTIVE AGE
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Net income that is predictable and eligible to be counted in the loan process.
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EFFECTIVE INCOME
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Leaving a property by traveling across the servient tenement property.
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EGRESS
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An index produced by the Eleventh District of the Federal Home Loan Bank reflecting the weighted average cost of home mortgage loans made by member banks.
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ELEVENTH DISTRICT COST OF FUNDS INDEX (COFI)
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Crops nurtured in the year of the transfer or sale of the property. They are considered personal property.
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EMBLEMENTS
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The right of the government to take title, at fair market value, to land owned by a private individual.
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EMINENT DOMAIN
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An eligible employer gift.
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EMPLYER ASSISTED HOUSING (EAH)
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The unauthorized intrusion of a building, tree, or other improvements onto a neighbor's property.
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ENCROACHMENT
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Anything which burdens the title to real property so as to restrict, limit, or otherwise affect an owner's rights.
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ENCUMBRANCE
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The issue of whether a contract dispute could be taken into the court to be settled.
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ENFORCEABILITY
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The government entity which deals with the impact of commercial, industrial and residential development on the environment.
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ENVIRONMENTAL PROTECTION AGENCY
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Federal act which prohibits discrimination in financing, based on race, age, sex, or marital status.
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EQUAL CREDIT OPPORTUNITY ACT OF 1974
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In foreclosure, the period of time during which the borrower can reinstate the loan before the foreclosure sales takes place. It is sometimes referred to as equity of redemption.
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EQUITABLE PERIOD OF REDEMPTION
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The legal interest held in a property by the buyer between the time the contract is signed and conveying the actual deed.
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EQUITABLE TITLE
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The market value of a property minus the debts secured by the property.
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EQUITY
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A clause written into a loan or lease that allows for payments to be increased at specified times by stated amounts.
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ESCALATION CLAUSE
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This occurs when someone dies without a will, having no heirs.
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ESCHEAT
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A depository where a neutral third party is used to hold money or documents. When a mortgage lender is holding the funds on behalf of the borrower it is frequently called Impound Account or Reserve Account.
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ESCROW
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A lender held account holding borrower funds for the property taxes and/or insurance.
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ESCROW ACCOUNT
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A leasehold estate form of interest in property that has a predetermined start and termination date.
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ESTATE OR TENANCY FOR YEARS
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A document provided by a lender which reveals all the terms of a loan as requested by the borrower or ordered by the court.
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ESTOPPEL CERTIFICATE
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The right of a tenant to use natural resources on leased land, such as timber, water, etc. when required as necessities.
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ESTOVERS
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The legal process of removing a tenant from the premises for some breach of the lease.
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EVICTION
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The person who appoints the Director of the Utah Division of Real Estate.
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EXECUTIVE DIRECTOR, DEPT. OF COMMERCE
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In a deed, it indicates rights in the real property which will not be conveyed to the grantee and is another name for the habendum clause.
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EXCEPTIONS AND RESERVATIONS CLAUSE
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One broker is named as the exclusive agent of the seller, but the seller reserves the right to locate a buyer without paying a commission.
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EXCLUSIVE AGENCY LISTING
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One principal broker is designated to represent the seller and receive a commission when the buyer is found, regardless of who finds the buyer.
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EXCLUSIVE RIGHT-TO-SELL LISTING
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To put a contract into effect by signing it.
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EXECUTE
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A contract with all of the terms completed by all parties.
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EXECUTED CONTRACT
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The title of a person named in a will to carry out the terms of the will after the death of the testator.
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EXECUTOR
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A contract that is not fully performed, but which is not in default.
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EXECUTORY CONTRACT
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Increases the total supply of money. It is used to combat high unemployment in a recession by lowering interest rates.
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EXPANSIONARY POLICY
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Agency created through words, written or oral, between the principal and the agent, such as a listing agreement.
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EXPRESS AGENCY
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Covers claims both on and off the record. It includes a site visit to give protection against unrecorded liens and encumbrances, such as mechanic's liens, as well as defects in the land itself, such as unrecorded easements, encroachments, and information based on incorrect surveys. It can be obtained by private individuals.
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EXTENDED COVERAGE TITLE INSURANCE
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Mathematical scores developed by the Fair Isaac & Company and used by credit bureaus and lenders to evaluate the risk associated in lending money; scores range from 450 to 850; the lower the score, the higher the risk.
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FAIR, ISAAC AND COMPANY (FICO)
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What a willing buyer is willing to pay, and a willing seller is willing to accept, with neither of them under duress and the property has been on the market for sufficient time to verify its value.
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FAIR MARKET VALUE
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A licensee shall not knowingly participate in any transaction in which a document is used which does not reflect the true terms of the transaction.
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FALSE DEVICES
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One of the protected classes under Fair Housing referring to families with children under 18.
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FAMILIAL STATUS
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This act is also known as Truth In Lending Act (TILA).
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FEDERAL CONSUMER CREDIT PROCTECTION ACT
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This body of law stated no discrimination based on race in the sale or lease of real estate is allowed and all people are to be treated the same as white people.
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FEDERAL FAIR HOUSING ACT OF 1866
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Extended the Federal Fair Housing Act of 1866 by adding the prohibition of discrimination according to color, sex, religion, and natural or national origin. It specifically stated that no discrimination should take place relative to sale or rental of real estate, or real estate brokerage services.
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FEDERAL FAIR HOUSING ACT OF 1968
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Added two new protected classes to Fair Housing: handicapped and familial status.
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FEDERAL FAIR HOUSING AMEND-MENT ACT OF 1988
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This organization was originally forms to provide funding for the savings and loan industry.
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FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC)
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A department under HUD that administers and insures loans designed to help low income borrowers with limited cash resources to get into homes.
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FEDERAL HOUSING ADMINISTRATION (FHA)
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Consists of the members of the Board of Governors of the Federal Reserve System and five Reserve Bank presidents.
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FEDERAL OPEN MARKET COMMITTEE (FOMC)
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The bankers' bank; it regulates the money supply by establishing discount rates (cost of money to lending institutions) and setting a reserve requirement (how much cash lenders must keep on hand).
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FEDERAL RESERVE BANK
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The nation's central bank created by the Federal Reserve Act of 1913 to help stabilize the economy through the judicious handling of the money supply and credit available in this country, functioning through a seven-member Board of Governors and 12 Federal Reserve District Banks, by setting policies and working with privately owned commercial banks.
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FEDERAL RESERVE SYSTEM
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The federal agency charged with the regulation of interstate commerce. The FTC enforces the Truth in Lending Act which affects the mortgage industry.
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FEDERAL TRADE COMMISSION (FTC)
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The highest or most complete form of ownership that can be held under the law. The ownership rights go on forever.
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FEE SIMPLE, FEE ESTATE, FEE SIMPLE ABSOLUTE
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Loans that are insured by the Federal Housing Administration that provide third-party lenders with protection against losses incurred in a foreclosure.
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FHA INSURED LOAN
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A government loan with a low down payment, insured by the borrower's payment of the Mortgage Insurance Premium (MIP).
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FHA LOAN
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The maximum loan amount that is available in a given county.
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FHA LOAN LIMITS
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This addendum would be used any time the buyer is going to apply for an FHA or VA loan to finance the purchase.
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FHA/VA ADDENDUM
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Federal Home Loan Mortgage Corporation; a privately owned secondary money market player. It is federally regulated.
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FHLMC (FREDDIE MAC)
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The word which describes the responsibility of an agent toward the principal, involving trust, loyalty, confidence, care and diligence.
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FIDUCIARY
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A comprehensive law passed in 1989 to provide guidelines for the regulation of financial institutions; created the Savings Association Insurance Fraud (SAIF) and the Bank Insurance Fund (BIF). Restructured the Federal Deposit Insurance Corporation (FDIC), created the Appraisal Foundation, and requires the use of state-certified or state-licensed appraisers to appraise properties involving a federally insured or federally regulated industry.
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FINANCIAL INSTITUTION RECOVERY, REFORM AND ENFORCEMENT ACT (FIRREA)
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$10,000 and/or 1 year in prison.
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FINE FOR VIOLATING SEC. 8 OF REPSA
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A contract where the price is established up front and there is no allowance for overruns
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FIXED COST
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A loan where the interest rate, the number of payments, and the amount of payments is established in advance and will not change over the life of the loan.
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FIXED-RATE LOAN
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A fixed-rate loan secured by real property.
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FIXED-RATE MORTGAGE
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That which is attached without losing its identity. It is always real property.
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FIXTURE
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The lessee makes periodic, equal rent payments.
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FLAT LEASE
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Federal National Mortgage Association, a major secondary money market player. It is privately owned, but Federally regulated.
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FNMA (FANNIE MAE)
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When a property is sold by an unlicensed owner of a property.
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FOR SALE BY OWNER (FSBO)
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The legal process a lender uses to recover the investment from a defaulting borrower where the loan was secured by the property.
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FORECLOSURE
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Most valid form of a will, usually prepared by an attorney. It is the least likely form of a will to be challenged.
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FORMAL WILL
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In a default situation when the lender may repossess the property, this is the effect to the borrower.
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FORFEITURE
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The private right to operate a business using a designated trade name and the operating procedures of a parent company (the franchisor).
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FRANCHISE
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An act intended to deceive or misrepresent in order to gain some unfair or dishonest advantage over another and induce someone to give up something of value.
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FRAUD
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An interest in property in which some form of ownership is held.
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FREEHOLD ESTATE
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The percentage limit a mortgage payment can be compared to the gross income of the borrower known as the Housing to Income Ratio.
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FRONT-END RATIO
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A loan that requires payments of both principal and interest. When the last payment is made, the loan is retired.
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FULLY AMORTIZED LOAN
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The "other party" knows there is a principal, knows who it is, and that there is an agent.
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FULLY DISCLOSED PRINCIPAL
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A rate bases on the index plus the margin.
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FULLY-INDEXED RATE
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The item in question is working fine, but is not what people want in their homes any more. Examples are a poor floor plan, four bedrooms and one bath, inadequate insulation, insufficient electrical outlets, etc.
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FUNCTIONAL OBSOLESCENCE
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An agent hired by contract to use the agent's expertise to fulfill the objectives of the principal.
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GENERAL AGENT
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A deed that contains all five covenants and covers the period of time from the date of transfer back to the date of the patent.
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GENERAL OR FULL WARRANTY DEED
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A partner who has full authority to make decisions, act for the partnership, and has full liability for the business dealings of the partnership.
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GENERAL PARTNER
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A partnership composed only of general partners.
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GENERAL PARTNERSHIP
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A transfer of ownership made for love and affection. Creditors of the donor could still use the property for payment of the grantor's debts if it can be shown that the donor was insolvent and transferred the property to evade creditors.
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GIFT DEED
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Government National Mortgage Association. A secondary money market player which is government owned and purchases loan pools of FHA and VA loans.
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GNMA (GINNIE MAE)
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Consideration given in the form of love, friendship, loyalty, etc.
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GOOD CONSIDERATION
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A required disclosure required under RESPA, within 3 days of application for a loan, giving details of the cost to the consumer for obtaining the loan.
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GOOD FAITH ESTIMATE (GFE)
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A lease where the rent will increase periodically in amounts specified in the lease, as contained in the escalation clause.
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GRADUATED LEASE
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Payments begin below the normal, fully amortized payment and are then increased for a set period of years. Some lead to negative amortization.
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GRADUATED PAYMENT MORTGAGE (GPM)
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A type of deed used in some states which contains limited warranties. The grantor usually also provides title insurance.
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GRANT DEED
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One who receives property or property rights from a grantor.
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GRANTEE
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One who conveys property or property rights to a grantee.
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GRANTOR
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The tenant pays a set amount of rent. From this rent, the lessor is required to pay some or all operating expenses.
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GROSS LEASE
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The total income received from an investment property after subtracting vacancies and lost rents.
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GROSS OPERATING INCOME (GOI)
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A "quick and dirty" estimate of value based only on a relationship between the value of the property and the gross rents. It is referred to as the GRM.
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GROSS RENT MULTIPLIER (GRM)
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What an investor would receive if there were no vacancies or lost rents.
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GROSS SCHEDULED INCOME (GSI)
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To multiply tax exempt income by 125%.
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GROSS-UP
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The landlord leases the land to the tenant, and the tenant builds improvements on the leased land.
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GROUND LEASE
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A loan where payments increase each year, thereby allowing the loan to be paid off many years sooner and a substantial amount of interest dollars to be saved.
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GROWING EQUITY MORTGAGE
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Includes, but is not limited to: a) any plan in which a seller's real estate is guaranteed to be sold or; b) a plan whereby a licensee will purchase the seller's real estate if it is not sold within the specified period of time.
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GUARANTEED SALES
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Known as the "to have and to hold clause," and sometimes as a "subject to" clause, it defines and limits the estate which the grantee will receive when the property is transferred.
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HABENDUM CLAUSE
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Short-term mortgage loans which require high amounts of borrower equity in the collateral in exchange for limited and/or expedited underwriting.
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HARD MONEY LOAN
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If not actually written in the lease, there is an unwritten or implied warrant of this in every lease, which says the property is livable.
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HABITABILITY CLAUSE
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An insurance policy which indemnifies real property against loss resulting from physical damage to the property such as fire, vandalism, etc. The lender will require this insurance
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HAZARD OR HOMEOWNERS' INSURANCE
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The appraisal principle which states that value should be based on the utilization of the property which will bring the greatest return to the owner. That use must be legal and feasible.
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HIGHEST AND BEST USE
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The receiver of a life estate who has the property for the duration of the grantee's own life.
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HOLDER OF LIFE ESTATE
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The lessee had an estate for years which has now terminated. The lessor accepted a rent check so now the tenant is on periodic tenancy basis.
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HOLDOVER TENANT
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A handwritten will, which must be dated, written entirely in the handwriting of the testator, and does not need witnesses in order to be valid. It can pass both real and personal property.
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HOLOGRAPHIC WILL
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An open-ended loan which can be drawn from when needed, up to the credit limit, and uses available equity in a residence as collateral.
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HOME EQUITY LINE OF CREDIT (HELOC)
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The act that requires Private Mortgage Insurance (PMI) removal.
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HOME OWNERS PROTECTION ACT (HPA)
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A nonprofit association of homeowners organized pursuant to a declaration of restrictions of protective covenants for a subdivision, PUD, or condominium.
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HOMEOWNERS ASSOCIATION (HOA)
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A law that requires lenders to make disclosures to the borrowers regarding the costs involved in high fee and high rate loans.
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HOMEOWNERSHIP AND EQUITY PROTECTION ACT OF 1994 (HOEPA)
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The required form to be used when closing a real estate transaction.
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HUD 1 SETTLEMENT STATEMENT
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Using property as collateral or security for a debt without giving up possession of the property.
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HYPOTHECATION
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Reimbursement of loss.
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INDEMNIFICATION
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Agency which is created through the actions of the parties, rather than through an express agreement. Also called implied agency.
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IMPLIED AGENCY
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A trust account established to set aside funds for future needs relating to a parcel of real property. Those needs typically include such things as property tax and hazard insurance.
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IMPOUND, RESERVE OR ESCROW ACCOUNT
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A term that refers to any additions to the land made by man. It includes buildings, roads and utilities and landscaping.
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IMPROVEMENTS
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A real estate license in inactive status.
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INACTIVE LICENSE
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An appraisal approach based on the cash flow the property produces. It addresses the question, "How much will a potential investor pay for the cash flow?"
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INCOME OR CAPITALIZATION APPROACH
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Intangible or non-possessory rights in real property, such as easements, licenses, mining claims, etc.
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INCORPOREAL RIGHTS
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Physical deterioration that cannot be repaired in a cost-effective manner.
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INCURABLE DEPRECIATION
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Brokers who choose to NOT affiliate with any real estate franchise.
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INDEPENDENT BROKER
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In an ARM loan, a financial indicator which will have the margin added to it to create the adjusted interest rate.
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INDEX/ INDICES(plural)
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Rent payments are periodically adjusted based on an economic indicator, such as the consumer price index.
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INDEX LEASE
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Entering by traveling across the servient tenement property.
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INGRESS
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The rate at which the first set of loan payments are calculated. This rate is also used to qualify the borrower for the loan requested. Do not confuse this rate with "Teaser Rates" which are an artificial rate used to market a loan product. "Teaser Rates" generally create negative amortization.
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INITIAL INTEREST RATE
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Legal action taken to enforce the restrictive covenants in the Uniform Declaration of Restrictions or to prevent a neighbor from encroaching.
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INJUNCTION
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The sum paid or accrued in return for the use of money.
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INTEREST
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Straight note.
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INTEREST-ONLY LOAN
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Money paid during the term of a loan that is profit to the lender. It represents the return, or yield, on the lender's investment.
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INTEREST RATE
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A combination of Title Theory and Lien Theory that allows the lender to sell the property in case of default, but does not allow it to keep any equity.
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INTERMEDIATE THEORY
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The condition of a person who dies and leaves no will.
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INTESTATE
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The legal process by which a private individual sues to have the property taken by eminent domain.
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INVERSE CONDEMNATION
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Property which is generating a cash flow, such as a strip mall or a single or multi-family rental property.
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INVESTMENT PROPERTY
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A form of concurrent ownership where all owners have equal rights of possession, equal interest, took title at the same time, there is one deed, and each owner has full rights of survivorship.
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JOINT TENANCY
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A "temporary" partnership between individuals and/or companies to accomplish a particular project or business activity.
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JOINT VENTURE
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The decision given by a court after a case has been heard.
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JUDGMENT
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A method of foreclosing on real property by means of a court-supervised sale.
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JUDICIAL FORECLOSURE
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A non-conforming conventional loan that exceeds the monetary limits set by FNMA and FHLMC.
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JUMBO LOAN
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Any lien or encumbrance that has a lower claim for payment than another lien or encumbrance. This condition is generally created by recording order. First recorded has higher priority over subsequently recorded liens. Two exceptions over this rule are property taxes which always are the most senior of liens and mechanics liens whose priority is not set by recording date but by beginning date of work.(see also mechanics lien).
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JUNIOR LIENS or JUNIOR LOAN
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An illegal referral fee, under RESPA, paid by a lender to a real estate agent for referring a borrower.
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KICKBACKS
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A document wherein the lender (usually the seller) retains title to the property until the debt is paid. It is known in Utah as a Uniform Real Estate Contract.
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LAND CONTRACT, INSTALLMENT SALES CONTRACT, OR CONTRACT FOR DEED
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The duty to give support to a neighbor's property, such as building a retaining wall.
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LATERAL SUPPORT
