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ABSTRACT-
A synopsis of the legal history of ownership of real property.
A summary of recorded instruments, which affect title,
arranged in the order of recording.
ACCELERATION CLAUSE-
A clause in a mortgage that provides, at the option of
the lender, the
Entire unpaid balance of the note would be due immediately
upon failure to make a required payment or upon the sale
of the property. In the later case it is known as a due-on-sale
clause.
ACCRETION- The gradual
buildup of soil by water.
ACCURED INTEREST- Accumulated
interest earned or due but not yet paid.
ACRE- A measure of land
equaling 43,560 square feet.
ADJUSTED COST BASIS-
For accounting purposes, the original cost plus improvements
minus depreciation or cost recovery taken.
AD VALORUM- A measure
of worth based on the value of something.
AFTER TAX CASH FLOW-
Effective gross income minus operating expenses and debt
service plus or minus any tax savings or tax liability.
AGENCY- A relationship
of trust whereby one party, the principal, entrusts another
party, the agent, to act in their behalf and to represent
them in doing business with other parties.
ALLIGATOR- A property
that has a negative cash flow.
ALL-INCLUSIVE TRUST DEED-
The borrower obtains a new mortgage, which is structured
to include the old mortgage. The borrower makes payments
on the new mortgage directly to the lender, who makes
payments on the old first mortgage.
AMORTIZATION- A method
of gradually paying off principal on a mortgage. Each
payment reduces or amortizes the original amount
AMORTIZED LOAN- A loan
in which the principal as well as the interest is payable
in monthly or other periodic installments over the term
of the loan.
ADMINISTRATOR- A party
appointed by a court to administer the estate of a person
who has died without leaving a will.
ANNUITY- A payment of
equal installments paid periodically for a given number
of periods.
APPRAISAL- An estimation
of value of real property at the present time or past
date, never future. Any of three methods are used where
applicable. (A) cost approach (B) income approach (C)market
data approach.
APPRAISER- A disinterested
party who evaluates a property and determines its value.
APPRECIATION- A property's
growth in value.
APPURTENANCE- Anything
attached to the land, which becomes a part of the property.
ARREARS- The payment
of money after the fact. Interest and taxes paid in arrears
would represent money paid for a period of time gone by.
ASKING PRICE- The price
an appraiser has determined for a property and the price
for which it is on the market.
ASSESSED VALUE- The value
as determined by the local tax assessor's office for the
purpose of levying local taxes.
ASSESSMENT- Value set
on property by local government for the purpose of real
estate taxes.
ASSET- Any possession
of value that an individual owns which may be used for
payment of a debt.
ASSIGN- To transfer one's
rights in a bond, mortgage, lease, or other legal instrument
to another person.
ASSUMING/MORTGAGE- Taking
of title to a property by a buyer, whereby he assumes
payment of note or bond secured by a mortgage against
the property.
ATTORNEY AT LAW- A person
who is licensed to practice law.
BALANCE
SHEET- A financial statement showing assets,
liabilities, and net worth.
BALLON PAYMENT- A large
final payment due on a note, usually after partial amortization
of the debt through installment payments.
BANKRUPTCY- Proceedings
against a debtor, who has been declared legally insolvent,
to distribute the debtor's property among the creditors.
BILL OF SALE- A document
used to transfer title to personal property.
BINDER- Small deposit
money paid with a temporary agreement to purchase property
under specified terms.
BIRD DOG- People whom
are on the lookout for properties that are for sale.
BLANKET MORTGAGE- One
mortgage that covers several different parcels of real
property.
BLENDED INTEREST RATE-
The interest rate resulting from half the difference of
the interest rate originally written for the mortgage
and the current market rate of interest.
BOILER PLATE-Preprinted
sections of a contract.
BOOK VALUE- The value
of a property carried on a company's books. It is usually
the cost less depreciation or cost recovery plus capital
additions.
BOND- The evidence of
a personal debt which is secured by a mortgage on real
estate.
BOUNDS- Boundaries that
are natural or artificial, i.e.-roads, trees, rocks, railroad
tracks, etc.
BROKER- State licensed
agent who represents buyers and sellers in real estate
proceedings.
CAPITAL-
Money used for investment purposes.
CAPITAL GAINS- The profit
realized above adjusted cost basis on the sale of property.
CASH FLOW- Effective
gross income minus operating expenses and debt service.
CAVEAT EMPTOR- Latin
for Let the buyer beware. Buyer must inspect the goods
or property and purchase at their own risk.
CHATTEL- Personal property.
CHATTEL MORTGAGE- A mortgage
on personal property.
CLOSING- Procedure whereby
property title is conveyed from seller to buyer.
COLLATERAL- Real or personal
property pledged as security for repayment of a loan or
debt.
COMMISSION- Usually a
percentage of the purchase price paid to the broker or
agent for services rendered.
COMMON LAW- Law that
is not codified-developed from common usage and custom.
COMPETENT PARTY- A person
legally able to contract being of legal age and of sound
mind.
CONCESSIONS- During negotiations,
these are the items that each party is willing to give
up in order to get the items each party really wants.
CONDEMNATION- The process
by which property of a private owner is taken, with or
without consent, for the public use. Fair compensation
must be paid.
CONDOMINIUM- Individual
ownership of an apartment and an undivided interest in
the common areas and facilities which serve the multi-unit
property.
CONSIDERATION- Something
of value exchanged by a party to influence another party
to enter into a contract.
CONTINGENCY- A possible
event based on the happening of an uncertain future event.
CONTRACT- An agreement
between competent parties in the performance of a legal
consideration, whereby each party obtains a right to what
the other owns.
CONTRACT FOR DEED- A
contract for the sale of real property wherein the seller
is obligated to provide a merchantable title after the
buyer has paid for the property, usually in installments.
CONTRACT FOR PURCHASE AND SALE-
An agreement between buyer and seller of real property
to transfer title to that property at a future time for
a specific sum of money.
CONVEYANCE- The transfer
of real estate from one party to another.
COOPERATIVE-An apartment
house or similar property owned, usually in corporate
form, by all the tenants. Each has stock in the corporation,
which owns the building.
COUNTER OFFER- A change
in price or terms of an unacceptable offer.
COVENANT- Insertion of
written agreement into deeds and other documents promising
performance of certain acts, or stating certain uses of
real estate.
COW- Term used to describe
an income property with a high positive cash flow.
CREDIT BUREAU- An agency
that complies data on an individual's credit history and,
upon request, distributes a report to potential creditors.
CREDIT BUREAU REPORT-
The compilation of an individual's credit history. Potential
creditors may request a copy from a credit bureau.
CREDIT LIMIT- Generally
found when dealing with credit cards, this is the maximum
amount the cardholder may charge to that account.
CREDITOR- The lender.
The one to whom the debt is owed.
CURE DATE- The last day
given for bringing mortgage payments current at the beginning
of the foreclosure process.
DEAD
ASSET- An asset that an investor does not want-in
the investor's eyes it has no value.
DEBT SERVICE- The sum
of the annual principal and interest payments expressed
as a percentage of the amount owed.
DEED- A legal document
which conveys real estate from seller to buyer when properly
executed.
DEFAULT- Failure to discharge
a duty or obligation.
DEFICIENCY JUDGEMENT-
A judgement rendered in court for the difference in the
amount realized at a foreclosure sale and the amount owed
by the mortgagor, if the foreclosure sale fails to completely
liquidate or satisfy the debt.
DEPRECIATION- Decline
in property value due to obsolescence, age, natural wear,
or any other conditions.
DEVISE- Disposition of
land or real property by will.
DISCOUNT- The percentage
of the original balance of the loan that is charged the
borrower. Sometimes referred to as points. Also, the difference
between the selling price of a mortgage and the amount
due.
DISCOUNTING A NOTE- The
process of offering a promissory note for less than its
face value to enhance its marketability.
DISTRESSED PROPERTY-
A bargain property that is substantially below its present
or projected renovated value.
DOWER- The legal rights
of a widow in her husband's estate. These rights have
been abolished in many states.
DUPLEX- A two family
home where the units share a common divider and are situated
either side by side or up and down.
EARNEST
MONEY- A deposit of money given by a party to
bind the contract usually credited toward the sales price.
EASEMENT- Right of way
granted by a property owner to another allowing use of
land for a specific reason.
EFFECTIVE GROSS INCOME-
The difference between the total gross income and the
vacancy allowance.
EFFECTIVE INTEREST- The
interest rate the borrower actually pays as opposed to
the nominal interest rate. The effective interest rate
is made higher than the nominal rate by addition of points
or discounting a loan.
EMINENT DOMAIN- The power
of the government to take private property for public
use in return for fair compensation. This power is exercised
through condemnation.
ENCROACHMENT- an obstruction
or building which intrudes upon or trespasses upon the
property of another.
ENCUMBRANCE- Anything
that mars title to a property, such as a mechanic's lien,
lien for back taxes, an unpaid mortgage, judgement, etc.
EQUITY- Value of property
minus the debts or liens against it. Increasing ownership
margin during the years as the mortgage is paid off.
EQUITY OF REDEMPTION-
The right of a mortgagor, borrower, to buy back a property
after foreclosure sale. While equity of redemption does
not exist in some states, in others it extends up to two
years.
ESCAPE CLAUSE- A clause
added to the contract that allows either party the option
of exiting the contract. Both parties are no longer bound
by any contractual obligations.
ESCHEAT- The reversion
of property to the state when an owner dies with no will
and no known heirs.
ESCROW- Funds held by
a third party to be released when certain conditions in
a contract are fulfilled.
ESTATE- Ownership interest
in real property.
ESTATE BY THE ENTIRETIES-
Ownership by husband and wife with the right of survivorship.
ESTIMATE ANNUAL INCOME-
The estimated total gross amount of income one will receive
in a year’s time.
ESTOPPEL LETTER- A letter
certifying the exact balance of a mortgage or other loan
at a given time.
ET AL- And others.
ET UX- And wife.
EXCHANGE- The exchange
or trade of business property you own for another trade
or business property that is like it. No taxes are due
in such an exchange under a given set of circumstances.
EXCULPATORY CLAUSE- A
clause in a contract relieving one of the parties of personal
responsibility or liability.
EXPENSES- The costs of
maintenance, repairs, and rental costs that are deducted
from a property’s gross income.
EXECUTOR- The administrator
of an estate. One who is specified in the will.
EXTENSION CLAUSE- A clause
contained within some lease option contracts that provides
for the terms under which the contract may be extended.
FACE
VALUE- In reference to a note, the face value
is the full amount for which the note has been written.
FAIR MARKET VALUE- The
appraised value of a property as compared with other property
values on the market.
FLIPPING- The turnover
of property. An investor buys a property to immediately
sell it for a profit.
FEE SIMPLE- The highest
estate in real property. The ownership of real property
without reservation or restriction.
FIDUCIARY- An agent in
the position of confidence to his principal. Also, a relationship
of trust and confidence imposed by law.
FINANCIAL ANALYSIS- An
investor's determination of the value of a property according
to their specific needs.
FINANCIAL LEVERAGE- The
use of other people's money for investment purposes.
FINANCING- The way in
which an investor obtains the capital with which to purchase
a property.
FIRST DEED OF TRUST-
A deed of trust recorded first. Equivalent to a first
mortgage.
FIXTURE- Personal property
attached permanently to real estate and thus becoming
part of it.
FLEXIBLE SELLER- A seller
who is willing to sell property in a nontraditional manner.
This person may be flexible in terms, price, or both.
FORCED SALE- The sale
of a property used as security for a loan to repay the
creditor, or others, in the event of default on the loan.
FORECLOSURE- A legal
procedure where the property is sold by the lending agency
because the borrower is in default of the payment terms
of the mortgage.
FRONT FOOT- The width
of a lot at the front, usually given as the first measurement.
GENERAL
PARTNERSHIP- A form of business where two or
more persons enter into an agreement to conduct business.
Profits and losses are shared in a predetermined fashion
and all partners are jointly and severally liable for
debts of the general partnership.
GRACE PERIOD- Additional
time granted to perform an act or make a payment before
default.
GRANDFATHER CLAUSE- Properties
that do not conform to current ordinances, codes, or regulations,
but are allowed to continue to be occupied because the
properties predate the institution of the ordinances,
codes, and regulations.
GRANTEE- A person who
conveys title to property by deed.
GROSS INCOME- The total
income from a property before the deduction of expenses.
GROSS INCOME MULTIPLIER-
That number which, when multiplied times the gross income,
would give an indication of property value. It is strictly
a guide and frequently abused.
HOMESTEAD
EXEMPTION- Protection extended by law preventing
the forced sale of an owner occupied dwelling by certain
creditors.
HOMESTEAD TAX EXEMPTION-
The credit against taxes, given in some states, to a person
who owns and occupies a dwelling and to certain other
individuals including disabled veterans, those over age
65, widowed, or handicapped.
IMPROVEMENT-
Buildings or other structures which become part of the
land.
INDENTURE- A contract.
INSTALLMENT LOAN- A loan
that must be repaid in no less than two payments. A loan
of six months or greater is preferable when establishing
credit.
INSTALLMENT NOTE- A note,
which specifies how mortgage payments, will be made, when
they will be due, and for what amount.
INSTALLMENT SALE- A sale
which, for income tax purposes. Is not taxed totally in
the first year of the sale. To be valid there must be
a minimum of two installment payments over two tax years.
INSTRUMENT- A written
legal document delineating the rights of the parties.
INTEREST RATE- An amount
a borrower must repay in addition to the full amount of
the loan.
INTESTATE- A person who
has died without leaving a valid will.
INVOLUNTARY LIEN- A lien,
like real property tax liens, which are recorded against
a property without consent of the owner.
INSTANT EQUITY- The difference
between the property's value and what you paid for it.
JOINT
TENANCY- Ownership of real estate by two or more
persons, each of whom has an undivided interest with the
right of survivorship.
JOINT VENTURE-An arrangement
where two or more individuals or corporations join together
on a single project as partners.
JOINTLY AND SEVERALLY-
A legal term indicating that a contract has been entered
into by two parties and the two parties are not only liable
together but individually as well.
JUDGEMENT- The verdict
of a court on a matter presented to it. A money judgement
dictates that a party must make payments to another to
settle a claim.
JUNIOR LIEN- A mortgage
or other encumbrance with a secondary interest. A lien
junior to another mortgage or lien.
LAND
TRUST- A form of ownership whereby property is
conveyed to a person or an institution called a trustee,
to be held and administered on behalf of another person
called the beneficiary.
LEASE- A contractual
agreement between the owner and the tenant which allows
the tenant the use and occupancy of the property for a
specified period of time. A lease is an encumbrance against
a title and gives the tenant an actual interest in the
property known as an estate for years.
LEASE OPTION- An agreement
between two parties where the party who owns the property
extends the right to purchase the property at a future
date. The second party lives in the property until the
lease option expires.
LEASE HOLD- The estate
or interest held by the lessee in the property of another.
LEGAL DESCRIPTION- The
means to identify the exact boundaries of a property.
A surveyor will use the recorded plat method, metes and
bounds method, or the government survey method to describe
real property.
LESSEE- One who contracts
to hold occupancy rights in the real property of another.
LETTER OF CREDIT- A letter,
usually from a financial institution, guaranteeing a debt
incurred by a third party.
LETTER OF INTENT- A letter
stating a buyer's intent to make an offer to acquire a
certain property. It is not a binding contract.
LEVERAGE- Obtaining a
higher return on borrowed money than the cost of borrowing
it. A situation where the smallest amount of cash is invested
to obtain the best yield, percentage wise.
LIEN- A claim lodged
against real estate to effect repayment of an indebtedness.
For example, a mechanic's lien, where the contractor records
his lien for work done and not paid for.
LIEN THEORY STATES- States
that allow the lender to collect the debt owed by selling
the property in the event of default.
LIMITED PARTNERSHIP-
A partnership composed of a limited partner(s) and a general
partner(s). The limited partner(s) contributes capital
but is not liable for any debts of the partnership, nor
can they manage or control the partnership.
LIQUIDATED DAMAGES- Damages,
usually monetary, spelled out in a contract which would
be available in the event of a default, to the party not
in default.
LIS PENDENS- A legal
instrument recorded in the county clerk's office, giving
notice that a legal action is pending in the courts affecting
the title to property.
LISTING- An agreement
whereby owner of property gives a real estate agent the
right to handle the sale or lease of property and to receive
a commission for this service.
MARKETABLE
TITLE- A title free and clear of liens and encumbrances
that might be objectionable.
MARKET VALUE- The highest
price for a property which a buyer is willing to pay,
and the lowest price which a seller agrees to accept.
MECHANICS LIEN- A lien
existing in favor of mechanics, suppliers, or other persons
who have supplied materials or performed work in connection
with the construction or repair of a building or other
improvement.
MEETING OF MINDS- A condition
whereby all parties to contract agree to its terms.
METES- Measures such
as inches, feet, yards, or miles.
METES & BOUNDS- A
description of the boundary lines of land, setting forth
the boundary lines with their terminal points and angles.
MORATORIUM OF INTEREST-
A time during the term of a loan wherein no payment of
interest due is made.
MORTGAGE- A legal instrument
or document that conveys title to real estate as collateral
for the payment of a debt.
MORTGAGEE- The lender
of money who holds a mortgage on a property as security
for repayment of the loan.
MORTGAGOR- The borrower
of money who gives a mortgage on a property as collateral
for repayment of the loan.
MORTGAGE COMMITMENT-
A formal notice from a lending institution stating the
amount it will lend for the purchase of property.
MULTIPLE LISTING SERVICE-
A multi-realty service whereby members of the local Board
of Realtors exchange their listings.
NEGATIVE
CASH FLOW- Properties that cost you money instead
of making you monthly income.
NET INCOME APPROACH-
A technique used to evaluate larger properties and determine
their value by calculating the net income they produce.
NET LISTING- A price
under which an owner will not sell the property. The broker
is entitled to the excess over the net listing as his
commission.
NET NET NET- An agreement
which specifies that the tenant pays real estate taxes,
insurance, and all maintenance costs of the property.
NET OPERATING INCOME-
Gross income minus any operating expenses. Debt service
is not deducted as an expense.
NET SPENDABLE INCOME-
Amount remaining after expenses and debt service and any
taxes due have been deducted from the gross income.
NO DOC LOAN- A loan where
the borrower is not required to present any documentation
to secure a loan.
NOMINAL INTEREST RATE-
The interest rate usually below market stated on the note.
NOTE- The legal evidence
of debt.
NOTARIZE- To have a document
signed by a notary public.
OPTION-
An instrument giving the right to a party to lease or
purchase the property over a specified time period for
a specified consideration. It is binding for the optionor
but not the optionee.
OPTIONEE- The person
who has the legal right to purchase or not to purchase
a specific property in the future.
OPTIONOR- The seller
of a property who extends an option to someone else. If
the optionee exercises the option, this person is legally
bound by the contractual obligations. If the option is
not exercised then the optionor is released from any responsibilities.
OWNERS OF RECORD- All
owners that are listed on a deed that is recorded in the
county courthouse.
OVERDRAFT PROTECTION-
An extra service that most financial institutions offer
their checking account clients. The client has a credit
limit much like that of a credit card. If the client writes
a check for an amount greater than what is in the checking
account, the bank automatically writes the client a loan.
Interest is charged on this, and usually an annual fee.
PACKAGE
MORTGAGE- A mortgage, which in addition to encumbering
real property also includes personal property such as
a refrigerator, dishwasher, or oven.
PARTNERSHIP- Two or more
people associated for the purpose of carrying on business
activities.
PAY DOWN- The amount
of principle on a loan retired through payments at a given
time
PERSONAL PROPERTY- All
property other than real property.
PLAT BOOK- A public record
containing maps of land showing the division of such land
into streets, blocks, and lots. Includes measurements
of individual parcels.
POINTS- An originating
fee or a percentage based on the amount of mortgage money
advanced, to be paid by the seller.
POSITIVE CASH FLOW- When
rental and other income exceeds all of the costs of ownership.
POWER OF ATTORNEY- A
written authorization to an agent to perform specified
acts on behalf of their principal. Beyond these acts,
the agent has no power.
PRELIMINARY TITLE SEARCH-
The first review of all previously recorded documents
regarding a specific property, to make sure that the property
may be sold.
PREMIUM- An additional
sum of money paid as an incentive for someone to do something.
PREPAYMENT CLAUSE- A
clause in a mortgage giving the mortgagor the privilege
of paying off the mortgage before its due date.
PRIME RATE- The rate
of interest charged by banks to their best corporate customers.
PRINCIPAL- The sum of
money used as funds for the investment.
PROMISSORY NOTE- Usually
a note given to the seller by the buyer, which promises
to pay back principal to the seller. It states the interest
rate and time frame for pay back.
PRO FORMA STATEMENT-
A financial statement based on anticipated, not actual,
income and expenses.
PROMULGATED RATE- A formally
and publicly stated rate.
PRO RATA-Buyers and sellers
portion of prepaid or unpaid expenses such as real estate
taxes.
PURCHASE MONEY MORTGAGE-
Funds advanced in the form of a mortgage by the owner
of real estate to the buyer for the purpose of buying
their property.
QUIT
CLAIM DEED- A deed transferring whatever interest
in the property that the grantor may have. They are usually
used to clear title.
REAL
PROPERTY- Land, and generally any improvements
added to the land.
R.E.O. (REAL ESTATE OWNED)-
Properties that financial institutions have repossessed
as a result of default on a mortgage and which these institutions
are willing to sell.
REAL ESTATE AGENT- A
salesperson associated with a broker, who acts in behalf
of a broker.
REALTOR- A broker who
is a member of the National Association of Realtors as
well as state and local real estate boards.
RECORDING- The act of
entering in the public record any instrument affecting
title to real property.
REDEMPTION- The buying
back of one's own property after a forced court sale.
RELEASE CLAUSE- A statement
in a blanket mortgage that allows a specific described
parcel to be released from under the blanket lien after
a sum of money is paid, or a period of time is up.
RENT CONTROL- The regulation
or restrictions set by government agencies on the amount
of rent that landlords may charge.
REPRODUCTION COST ANALYSIS-
A technique used to evaluate a property by estimating
the cost of building the same or similar structure, adding
the cost of land and subtracting an allowance for wear
and tear.
RESTRICTIVE COVENANT-
A clause in a deed in which there is an agreement between
buyer and seller stating certain restraints as to the
use of the property.
RIGHT OF WAY- An easement
on land whereby an owner grants or gives to another the
right of passage over their land.
RIPARIAN RIGHTS- The
landowner's right to water on, under, or next to his land.
SANDWICH
LEASE- While having the option to buy a property,
the investor subleases it to gain positive cash flow.
SATISFACTION PIECE- An
instrument for recording and acknowledging payment of
a loan secured by a mortgage.
SECURITY DEPOSIT- An
amount of money paid by a tenant before moving into the
premises to cover any damage incurred while living there,
or to protect the landlord in the event that the tenant
leaves without being current on rent payments. If the
tenant is current and the unit only has a normal amount
of wear and tear, then the deposit is generally refunded.
SERVICING A DEBT- The
act of paying the periodic principal and interest payments
on an outstanding debt obligation.
SPECIFIC PERFORMANCE-
A court order requiring a person to act or do a specific
thing that they had agreed to do.
SURVEY- A map prepared
by land engineers or surveyors indicating the location
and boundaries of the property described in the title.
TAX
CERTIFICATES- Bonds sold to recoup unpaid property
taxes by the county in which the property is located.
When the property is auctioned, the certificate holders
may either use the certificates as money to bid on the
property or redeem them for face value plus interest.
TAX SALE- Sale of property
because of a delinquency in the payment of taxes.
TAX SHELTER- An income
property that generates artificial paper losses, due to
depreciation or cost recovery, that are in excess of the
income produced by the property. These artificial losses
can be used to offset other taxable income earned by the
owners. In general a tax shelter is any deferral, reduction,
or elimination of a tax due.
TENANCY IN COMMON- The
ownership of an interest in property by two or more persons.
Their ownership interest may be equal or unequal and there
is no right of survivorship as with joint tenancy. The
interest of any joint owner passes to their heirs or assigns
after death.
TENANT- A person having
the temporary use and occupancy of real property owned
by another.
TENDER- An offer to pay
or perform.
TERMS- Exact way a property
will be purchased.
TESTATE- One who dies
leaving a will.
TIME SHARE- A piece of
property purchased by two or more parties who have set
specific times when each may use or occupy the property.
TITLE- A legal instrument
or document certifying the right of ownership of property.
TITLE INSURANCE- Insurance
issued by a guarantee company protecting the property
owner against any flaws in the title that might affect
ownership or potential losses.
TITLE INSURANCE COMPANY-
A business that reports on the status for the title on
a specific property and whether or not it has any liens
against it. After this title search has been completed,
the company will issue a deed to be signed by all the
owners of the property, which should be notarized and
recorded in the public records.
TITLE SEARCH- Investigation
of title records, history of previous ownership’s,
to ascertain if liens, encumbrances, or other outstanding
claims exist that may prevent legal conveyance of title.
TITLE THEORY STATES-
States that allow the lender to become the legal owner
at the time of making the loan. The borrower only has
possession.
TOWNSHIP- A unit of measure
used in the government survey method of land description
equal to 36 sections, which is 36 square miles.
UNILATERAL
CONTRACT- A contract in which one party is bound
by another to do something. If the second party chooses
to exercise the contract, the first party must perform
any contractual obligations that party may have. If the
second party chooses not to exercise the contract, the
first party is released from any contractual obligations.
UNSECURE LINE OF CREDIT-
A credit history developed by an individual who borrows
small amounts of money, which do not require collateral.
USURY- A rate of interest
on a loan which is greater than the law allows.
VACANCY
RATE- An estimate of the amount of time the rental
property will be vacant multiplied by the rental rate
of the unit(s). The amount is used in estimating the investor's
value of an income property.
VENDEE- A buyer.
VENDOR- A seller.
VIOLATION- An act, deed,
or creation of a condition that violates the law in the
use of property.
WARRANT-
To guarantee something to be as represented.
WIN-WIN- A solution to
both seller and buyer needs.
WRAPAROUND MORTGAGE-
A mortgage held by the seller-mortgagee. The buyer-mortgagor
pays the seller-mortgagee the debt service on the wraparound
mortgage and the seller-mortgagee continues to pay the
debt service on the underlying or original mortgage.
ZONE-
An area designated by the authorities for specific use,
subject to certain restrictions.
ZONING ORDINANCE- A ruling
act by local government officials specifying the type
and use to which property may be put in certain locations.
