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Real Estate Information
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Information For
Sellers
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Information For Buyers
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Real Estate Investors
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Royer
Ladowski & Teska
Real
Estate Team
of
Resource One Realty
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P Q R S T U VW XYZ
CC &
R ' s
Covenants, Conditions and Restrictions; or the rights and
obligations of individual owners of real property within a
subdivision (or other tract of land where there is more than one
owner of property) in relation to other owners, or to the organized
association of owners, within the same subdivision, relative to the
use and maintenance of the property commonly owned among them
Call option
A provision of a mortgage that allows the mortgagee, or lender, to
require the mortgage to be due and payable for any reason at the end
of a specified period of time
Cap
A limit placed on an adjustable-rate mortgage (ARM) as to how much
the interest rate or mortgage payments may increase or decrease
Capital expenditure
The expense incurred making an improvement to a property in order to
extend it useful life or to add to its value
Capital gain
Profit earned from the sale of an asset
Capitalization
A mathematical formula that estimates the value of a property,
utilizing the rate of return on the investment and the annual net
operating income expected
Capitalization rate
The rate of return a property will produce on the owner's investment
Cash-out refinance
A loan for refinancing a property which offers cash over and above
what is needed to repay the first mortgage, closing costs, points
and any other mortgage liens due. The additional cash can be used
for any purpose
Caveat Emptor
Translation: "buyer beware", meaning that the buyer is responsible
for inspecting any real estate or property before purchase for
defects, as the seller is not required to disclose any problems to
the buyer, though if asked outright, cannot conceal any defects
Certificate of deposit
A document provided by a bank or financial institution that is proof
of a deposit of funds with that bank or institution, also promising
to return the deposit plus earnings at a specified interest rate
within a specified time period
Certificate of Eligibility
A document issued by the U.S. government certifying a veteran's
eligibility for a VA guaranteed loan for a home or business
Certificate of occupancy
A city or county document certifying that a building is approved for
occupancy, often required by insurance companies to insure the
property
Certificate of Reasonable Value (CRV)
A document issued by the Department of Veterans Affairs (VA)
establishing the maximum loan amount for a VA mortgage
Certificate of Satisfaction
A document recorded with land records and signed by the Noteholder
of a property, showing release of a mortgage, deed of trust, or lien
on that property
Certificate of title
A statement of opinion provided by a title company or attorney,
based on examining public records, stating that the title to a piece
of real estate is legally held by the current owner; because this
certification does not cover matters not of record, it is no longer
commonly used
Chain
A unit for measuring land equaling 66 feet in length
Chain of Title
The series of all historical title documents showing the succession
of owners of a property, as evidenced in the land records, whereby
it is proven that the present owner of that property in fact holds
the title
Chattel
Personal property
Clear title
A document establishing ownership of a property that is free of any
legal questions or controversies as to the current ownership
Closing
Also known as "escrow" or "settlement". The process of finalizing
the sale of a property via a meeting of the buyer, seller and
lender, at which legally binding documents are executed, money is
dispersed, the deed is prepared, and ownership is formally
transferred from the seller to the buyer
Closing costs
Expenses over and above the price of the property that are incurred
by the buyers and sellers in transferring ownership of property,
usually including property insurance, taxes, attorney's fees, an
origination fee, an amount placed in escrow, title insurance, the
mortgage insurance premium, points, and filing fees
Closing statement
A summary financial accounting of a real estate transaction
disclosing all cash incoming, outgoing, and any charges or credits
made
Clouded Title, or Cloud on Title
Any conditions revealed by a title search, usually during the sale
of the property, that make the title to a piece of real estate
controversial; can only be removed by a quitclaim deed, release, or
court action
Coinsurance
A sharing of insurance risk between the insurer and the insured, and
it depends on the amount of the policy and the actual value of the
property insured at the time of the loss
Coinsurance
When more than one insurance company shares the risk of a particular
transaction or series of transactions; lenders may require
co-insurance on large commercial projects
Collateral
As asset pledged to secure a loan; collateral for a mortgage is
typically the property itself
Co-maker
A person who takes on equal responsibility for the repayment of a
loan by signing the promissory note along with the borrower
Commission
The fee charged by a broker or agent for negotiating a real estate
or loan transaction, usually a percentage of the selling price of
the property or amount of the loan
Commitment letter
A formal document issued by the lender, stating the terms under
which the lender agrees to lend money to a homebuyer
Common area assessments
Fees levied against individual unit owners in a condominium or
planned unit development project to generate additional capital to
defray homeowners' association expenses, and to pay for repairs,
maintenance and improvements to the common areas of the project
Common Interest Community (CIC)
An arrangement among property owners whereby they have mutual
ownership of common areas of a property (e.g., condominiums,
townhouses and planned unit developments) often through membership
in an association
Common law
An unwritten body of law or ethical agreements, originating from
general customs in England
Community Land Trust Mortgage Option
A financing option that enables lower or moderate-income buyers to
purchase housing that has been improved by a nonprofit Community
Land Trust, as well as to lease the land on which the property
stands
Community property
In some US states, a recognized right of ownership, that any
property acquired during a marriage as being jointly owned by both
spouses, except that acquired as specifically personal for either
individual
Comparables, or Comparable Properties
Properties that are similar in size, style, location and amenities
to the property under consideration in an appraisal, which are used
in the appraisal process to help determine the approximate fair
market value of the subject property
Comparative market analysis (CMA)
A comparison of the sale prices of similar properties (e.g., size,
style, location, amenities) in a given area, for the purpose of
determining the fair market value of a property
Condemnation
The County or City determination that a building is dangerous for
occupancy and must be demolished
Conditional-use permit
Written governmental permission given to allow a use of a property
that is ordinarily inconsistent with existing zoning laws, but which
is deemed necessary for the common good
Condominium
A system of individual ownership of units within a multi-unit
structure, as well as joint ownership of certain common areas; each
individual may sell or encumber his own unit within the structure
Conservator
An individual designated by the Court to protect and preserve the
property of someone who is not able to manage his or her own affairs
See "Guardian"
Construction loan
A short-term loan for financing the cost of construction of a
structure, whereby payments are made to the builder usually in
increments as the work progresses
Contingency
A condition that must be met before a contract is legally binding,
or where one event or agreement is dependent on the fulfillment or
completion of another event
Contract
An oral or written, often legally-binding, agreement between two
parties
Contract for Deed, or Land Contract
A method of financing whereby the ownership of a piece of property
or real estate remains in the seller's name as security until the
buyer pays the purchase price in full
Conventional loan, or Conventional mortgage
A real estate loan or mortgage that is not insured or guaranteed by
a government agency, such as the VA or FHA
Convertibility clause
A provision offered in some adjustable-rate mortgages giving the
borrower the option to change the ARM to a fixed-rate mortgage at a
specified point in time after the loan originated
Convertible ARM
An adjustable-rate mortgage that can be converted to a fixed-rate
mortgage under specified conditions
Conveyance
Any document by which the title to real property is transferred
Cooperative (co-op)
A system of multiple ownership in which the residents of a
multi-unit housing complex own stock in a corporation that then owns
the property, and whereby each resident is given the right to occupy
a specific unit pursuant to a lease
Cost approach
A method used by appraisers to estimate the value of a property, in
which the appraiser's estimate of the replacement cost of the
building is added to the estimated land value, minus the
depreciation
Cost of funds index (COFI)
An index used to determine changes in the interest rate for certain
adjustable-rate mortgage plans, determined by the weighted-average
cost of savings, borrowings, and advances of the 11th District
members of the Federal Home Loan Bank of San Francisco
Co-tenancy
Ownership of the same piece of property or real estate by more than
one person
Counteroffer
A new offer, with different terms and conditions, made in rejection
of an original offer received
Covenant
A clause written into mortgages, deeds or other real estate
documents that obligates or restricts the borrower's actions, and
which, if violated, can result in foreclosure of the property
Credit history, or Credit report
A record, prepared by an independent source, of an individual's
debts and status of their payment, useful to a lender in qualifying
a potential borrower for a loan
Credit life insurance
A type of insurance that can be purchased by mortgagors that will
guarantee payment of the mortgage if the mortgagor dies while
holding the policy |
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