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Real Estate Glossary

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Abandonment - A surrender of rights; point when a broker makes no effort to service or sell listed property; failure to perform.

Absentee owner - A property holder who does not reside on the property and who usually relies on a property manager to supervise the investment.

Abstract of title - Condensed history of title to real property consisting of a summary of the links in the "chain of title" extracted from documents bearing on the title status.

Acceleration clause - Stipulation in a mortgage that the entire unpaid balance of the debt may become due and payable if a default of expressed conditions should occur.

Acceptance - Voluntary receipt of an item offered by another.

Accretion - Gradual addition of land caused by natural forces, such as wind, tide, flood, or watercourse deposits.

Acknowledgment - Formal declaration before an authorized official, by the person who executed the instrument, that it is a free act.

Actual notice - Information a person has actually learned by reading, seeing, or hearing.

Adjudication - A judicial or court decision.

Adjustable-rate mortgage (ARM) - A financing technique in which the lender can raise or lower the interest rate according to a set index.

Adjusted basis - The owner's original cost plus buying expenses plus capital improvements.

Administrative complaint - An outline of allegations of facts and charges against the licensee.

Administrative law judge - An attorney employed by the Division of Administrative Hearings, Department of Administratiion, to hear complaints and issue recommended orders.

Ad valorem - According to the value; in proportion to worth.

Advance fee - A commission or partial compensation received by a broker prior to completing the real estate service.

Adversary - Opponent; a person or group that opposes another.

Adverse interest - A purpose in opposition to the interest of another party (as, for example, with a buyer and a seller).

Adverse possession - A method of obtaining title to real property by occupying it in an open and hostile manner contrary to the interests of the owner.

Affidavit - A sworn statement written down before a notary or public official.

After-tax cash flow - (See Cash flow.)

Agency - Express or implied authorization for one person to act for another.

Agent - A representative; one who is authorized to act on behalf of another.

Agreement for deed - (See Contract for deed.)

Agricultural - Defined in Chapter 475, F.S., to mean property zoned as such, consisting of more than ten acres.

Air rights - The freedom to use the open space above a property.

Alienation - The act of transferring ownership, title, or an interest or estate in real property.

Allodial system - A theory of land ownership that individuals may own land free of the rights of an overlord.

Alluvion (alluvium) - The increase of land by the gradual and imperceptible action of natural forces (e.g., deposits of sand and mud on a riverbank).

Amortized mortgage - A loan characterized by payment of a debt by regular installment payments.

Anniversary date - Recurring each year; the date an insurance policy must be renewed to continue in effect.

Annual debt service - The amount of money required each year for the payment of all mortgage interest and principal.

Annual percentage rate (APR) - Total yearly cost of credit.

Appeal - A request to some authority for a decision or judgment.

Applicant - A person who applies for something; a candidate.

Appraisal - Professional service provided by a registered, licensed, or certified appraiser or real estate licensee to produce an estimate of value.

Appraisal plant - Copies of current statistics and publications kept by appraisers in their library or record room.

Appraised value - Estimated worth of a property determined by someone qualified in valuation.

Appraiser, real estate - One who is a registered, licensed, or certified by the DBPR and provides an estimate of value.

Appreciation - An increase in value.

Arbitration - The act of having a third party render a binding decision in a dispute between two parties.

Arrears - The state of being behind in the discharge of an obligation; paid at the end of the period for which due (the opposite of in advance).

Assemblage - The combining of two or more adjoining properties into one tract.

Assessed value - Worth established for each unit of real property for tax purposes by a county property appraiser.

Assessment - The imposition of a tax or charge according to a preset rate; the allocation of the proportionate individual share of a common expense in a condo or co-op building.

Asset - Anything of value.

Assignee - Person to whom a right or interest is transferred.

Assignment - Written instrument that serves to transfer the rights or interests of one person to another.

Assignment of mortgage - A legal instrument that states that the mortgagee assigns (transfers) the mortgage and promissory note to the purchaser.

Assignor - Person who gives his or her legal rights or interests to another person.

Associate - Person working for a broker.

Association - An organization of persons having a common interest.

Assumption of mortgage - The taking over of an existing mortgage by a buyer.

Attachment - A legal writ obtained to prevent removal of property that is expected to be used to satisfy a judgment.

Attorney-in-fact - One who is authorized to perform certain acts for another under a power of attorney.

Attorney, power of - Designation of another person to act for a principal who may not be present.

Automated underwriting - A service that enables lenders to obtain a credit risk classification using applications software in the loan underwriting process.



Balance sheet - A financial report that shows the company's financial position at a stated moment in time.

Balloon payment - A single, large payment made at maturity of a partially amortized mortgage to pay off the debt in full.

Bargain and sale deed - A type of deed in which title is transferred and a limited number of warranties are made respecting title to or use of the property.

Base industries - Businesses that attract outside money into the area; primary.

Base lines - Imaginary lines running east and west and crossing a principal meridian at a definite point; used by surveyors for reference in locating and describing land under the government survey system.

Before-tax cash flow (BTCF; cash throwoff; gross spendable income) - The resulting amount when annual debt service is subtracted from net operating income.

Biennium (biennial) - A period of two years.

Bilateral contract - An agreement wherein both parties are legally obligated to each other to perform.

Binder - A memorandum given subject to the writing of a formal contract for sale, usually acknowledging receipt of a portion of the down payment for purchase of real property.

Biweekly mortgage - A mortgage loan amortized the same way as other loans with monthly payments, except that the borrower makes a payment every two weeks.

Blanket mortgage - One debt instrument covering two or more parcels.

Blind advertisement - An advertisement of a principal's property providing only a telephone number, a post office box, and/or an address without the licensed name of the brokerage firm.

Blockbusting - The illegal practice of inducing homeowners to sell their property by making misrepresentations regarding the entry or prospective entry of minority persons in order to cause a turnover of properties in the neighborhood; discriminatory acts against sellers.

Bona fide - Without deceit or fraud; genuine; in good faith.

Boot - Money or other property that is not like-kind, which is given to make up any difference in value or equity between exchanged properties.

Borrower (debtor) - The mortgagor; one who gives a mortgage as security for a debt.

Branch office - A business location other than the real estate broker's principal place of business.

Breach - Failure to do or perform what has been promised.

Broker - A licensee who acts as an intermediary between two parties and negotiates contracts between them.

Broker associate - An individual who is qualified to be issued a broker's license but who operates as a sales associate in the employ of another.

Buffer zone - A strip of land separating one land use from another.

Building codes - Government ordinances regulating construction practices and materials.

Business brokerage - The sale, purchase, or lease of businesses that provide goods and/or services.

Business broker - Real estate licensees who engage in the sale, purchase, or lease of businesses.

Business opportunity brokerage - The real estate activity dealing in the sale, purchase, or lease of businesses.

Business trust (syndicate) - A group of people who associate with each other for the purpose of purchasing shares or units at a specified amount per unit, with the money raised to be used to purchase the real property, often for subdividing and resale.

Buydown - A financing technique in which points are paid to the lender by the seller or builder that lowers (buys down) the effective interest rate paid by the buyer/borrower, thus reducing the amount of the monthly payment for a set period of time.

Buyer brokerage agreement - An employment contract with a purchaser.

Buyer's market - The supply of available properties exceeds the demand.

Bylaws - Rules that govern the administration of the condominium.



Canceled - A license ceases to exist, effective as of the date approved by the Commission, and does not involve disciplinary action.

Capital - The collective wealth (money and property) of a person or business; the investment in a property. (See also Equity.)

Capital asset - Certain property held by a taxpayer, not including inventory for sale to customers.

Capital-deficit area - A region where the total amount of local savings is not sufficient to finance economic development already under way in that area.

Capital gain - The profit from the sale of an asset, including real property.

Capitalization rate - The relationship between the net income from a real estate investment and the present value.

Cash flow (after-tax cash flow) - The resulting amount when annual debt service, tax liability, and capital improvement costs are subtracted from net operating income.

Caveat emptor - Let the buyer beware!

Cease and desist order - An action by a government agency to require a person or business to stop an illegal or unfair practice.

Censure - An official act of strong disapproval.

Certificate of occupancy - An occupancy permit issued by the local government after construction is completed and the final inspection is approved.

Certificate of title opinion (opinion of title) - A document signed by a title examiner (attorney or title company agent) stating the judgment that, based on an examination of the public records, the seller has good title to the property being conveyed to the buyer (not to be confused with title insurance).

Certified appraiser - (See State-certified appraiser.)

Certiorari, writ of - An order to bring from a lower court to an appellate court an action or record of proceedings in a case.

Chain of title - A successive listing of all previous holders of title (owners) back to an acceptable starting point.

Chattel - Any item of personal property. (See also Personal property.)

Check - A square measuring 24 miles on each side and representing the largest unit of measure in the government survey system.

Circuit breakers - Devices that will shut off the flow of electricity if more electrical current is flowing through the wire than the wire can handle.

Citations - Statements of alleged violations and the penalties to be imposed.

Civil Rights Act of 1866 - A federal act that prohibits any type of discrimination based on race in any real estate transaction (sale or rental) without exception.

Clause - A distinct provision in a written document.

Closing - Final settlement between the buyer and seller; the date on which title passes from the seller to the buyer.

Cloud on title - Any defect, valid claim, or encumbrance that serves to impair the title or curtail an owner's rights.

Collateral - Real or personal property pledged as security on a debt.

Collusion - Two or more parties jointly attempting to defraud a third party.

Color of title - A condition in which ownership of real property appears to be good but is not good because of a defect.

Commercial - A classification of real estate that includes income-producing properties such as office buildings, gasoline stations, restaurants, shopping centers, hotels and motels, and parking lots. Commercial property usually must be zoned for business purposes.

Commingle - To mix together money or a deposit with personal funds; combine; intermingle.

Commission - Compensation paid to a broker or sales associate for successfully concluding a real estate transaction; short form for the Florida Real Estate Commission (FREC).

Common elements - The parts of a multiple-ownership property not included in the units; those parts in which each unit owner holds an undivided interest.

Common law - A system of law based on accepted customs and traditions.

Community property - Real property acquired during a marriage. (Florida is not a community property state.)

Comparable property (comparable; comp) - A recently sold property similar to one being evaluated.

Comparative market analysis (CMA) -

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