Real Estate Definitions Arizona

Front 1

Abstract of Judgement

Back 1

• A summary of a judgement made in court in order to record the judgement in the county in which the property is situated.
• A general lien.

Front 2

Abstract of Title

Back 2

• The condensed history of the chain of title of a specific property together with a statement of all liens, charges, or encumbrances.
• no warranty, no guarantee

Front 3

Bulk Transfers

Back 3

Law regulating the sales of businesses for the purpose of protecting the interest of creditors therein.

Front 4

Bundle of Rights

Back 4

• The theory holding that ownership of real property may be compared to a bundle of sticks, each stick representing a distinct and separate right or privilege.
• They are the right to use, sell, lease, enter, give away, or refuse to take action.

Front 5

Capital Gain

Back 5

Profit from the sale of business or investment property.

Front 6

Capitalization

Back 6

• A process whereby we convert income into value.
• Income divided by rate equals investment.

Front 7

Capitalization Rate

Back 7

An interest rate on an investment and the recapture rate for return of an investment.

Front 8

Capitalization Recapture

Back 8

The return of an investment.

Front 9

Certificate of No Defense

Back 9

An instrument signed by the mortgagee, upon the sale of the mortgage, to the asignee, certifying as to the validity of the indebtness and the amount of the unpaid balance.

*see Estoppel Certificate

Front 10

Certificate of Reasonable Value (CRV)

Back 10

• VA
• A written statement by the Veterans Administration as to the maximum guaranteed loan on a specific property.

Front 11

Certificate of Sale

Back 11

Document issued to the highest bidder at a foreclosure sale.

Front 12

CPM

Back 12

• Certified Property Manager
• A member of the Institute of Real Estate Management of the National Association of Realtors (NAR)

Front 13

Certificate of Occupancy

Back 13

• Required before a new building can be occupied.
• Provided by the National Association of Realtors.

Front 14

Chain of Title

Back 14

A history of conveyance and encumbrances affecting the title from the time the original patent was granted, or as far back as records are available.

Front 15

Chattel

Back 15

personal property, such as household goods, stock, or equipment

Front 16

Chattel Mortgage

Back 16

A pledge of personal property as security.

Now known as a security agreement under the Uniform Commercial Code.

Front 17

Chattel Real

Back 17

• An estate related to real estate, such as a lease on real estate.
• A personal interest on real property.

Front 18

Check

Back 18

• A 24 x 24 mile area under the government survey method to correct for the curvature of the earth.
• outside measurement

Front 19

Cloud on the Title

Back 19

An outstanding claim or encumbrance which, if valid, would affect or impair the owner's title.

Front 20

Codicil

Back 20

A supplement to a will; becomes a part of original.

Front 21

Co-insurance Clause

Back 21

A requirement that a property be insured for a minimum coverage (usually 80%) in order to collect 100% of a loss.

Front 22

Color of Title

Back 22

That which appears to be good title but which is not in title in fact.

Front 23

Commercial Acre

Back 23

• A term applied to the remainder of an acre of newly subdivided land after the area devoted to streets, sidewalks, curbs, etc has been deducted from the acre.
• less than a full acre

Front 24

Commingle

Back 24

To mingle or mix, such as a deposit of client's funds in the broker's personal account.

Front 25

Commission

Back 25

• An agent's payment for the performance of specific duties, as the percentage of sales price paid for selling a property.
• by agreement

Front 26

Common Law

Back 26

• The body of law that grew from customs and practices developed and used in England.
• It is contrasted and opposed to Statutory Law.
• Common Law (court-made law) will prevail in Arizona unless such law has been abrogated by statutory law.

Front 27

Community Property

Back 27

• Property accumulated through joint efforts of husband and wife living together.
• 50/50 partnership

Front 28

Compound Interest

Back 28

Interest paid on the original principal and also on the accrued and unpaid interest which has accumulated.

Front 29

Condemnation

Back 29

• Taking property for public use, with compensation to the owner, under eminent domain.
• Declaration that a structure is unfit for use.

Front 30

Condition Precedent

Back 30

A condition which must happen prior to the title actually vesting.

Front 31

Condition Subsequent

Back 31

A transfer of title on a condition that the grantee must do or must not do some act.

Front 32

Condominium

Back 32

The individual ownership of a single unit in a multi-unit development with common ownership of halls, stairs, elevators, driveways, parks, etc.

Front 33

Consideration

Back 33

Anything of value given to induce entering into a contract; it may be money, personal service, or even love and affection.

Front 34

Constructive Notice

Back 34

• Notice given by the public records.
• when an estimate is recorded

Front 35

Contiguous

Back 35

An area touching upon another; properties having a common boundary.

Front 36

Contract

Back 36

• A legally enforceable agreement, either written or oral, to do or not do certain things.
• All contracts pertaining to real property must be in writing.
• a promise that the court will enforce

Front 37

Contract of Sale

Back 37

see land contract

Front 38

Conventional Loan

Back 38

A loan not insured or guaranteed by the federal government.

Front 39

Conversion

Back 39

Change from one character or use to another; change of real property or personal property.

Front 40

Convey

Back 40

The act of deeding or transferring title to another.

Front 41

Conveyance

Back 41

The means or medium by which title to real estate is transferred, another term for deed.

Front 42

Cooperative

Back 42

• A type of ownership of real property where ownership of a portion of the building equity entitles the ownertenant to a long-term lease on the apartment.
• proprietary lease

Front 43

Corporation

Back 43

• A group or body of persons established and treated by law as an individual or unit with rights and liabilities or both, distinct and apart from those of the persons composing it.
• legal person

Front 44

Corporeal

Back 44

Pertains to a right or group of rights of a visible or tangible nature.

Front 45

Correlation

Back 45

Co-relating facts and data, and bringing them together.

Front 46

Cost Approach

Back 46

• One of three appraisal methods of estimating value.
• The value is obtained by estimating value of land as if vacant, and adding cost of replacing the existing improvements less depreciation.

Front 47

Covenant

Back 47

An agreement written into deeds and other instruments promising performance or nonperformance of certain acts, or stipulating certain uses or non-uses of the property.

Front 48

Curtesy

Back 48

• The interest which, at common law, a man had in his wife's real estate upon her death.
• not in Arizona

Front 49

Datum

Back 49

A surveyor's instrument to measure the height and depth of land.

Front 50

Declaration of No Set Off

Back 50

see Certificate of No Defense

Front 51

Dedication

Back 51

• An appropriation of land by an owner to some public use together with acceptance for such use by or on behalf of the public.
• a gift of real property

Front 52

Deed

Back 52

An instrument in writing which when executed by the grantors and delivered to the grantee conveys the described real estate from the one to the other.

Front 53

Deed of Trust

Back 53

• A deed conveying property to one or more trustees as collateral security for the payment of a debt;
• upon payment it is released;
• upon default the trustees have the power to sell the property and pay the debt.
• security for the debt; a non-judicial foreclosure

Front 54

Default

Back 54

• Failure to fulfill a duty or promise or to discharge an obligation;
• omission or failure to perform an act.

Front 55

Defeasible Estate

Back 55

An estate that is subject to a condition imposed by the grantor.

Front 56

Defeasance

Back 56

The fulfillment of a condition in a legal document which has the result of nullification of that document.

Front 57

Deficiency Judgment

Back 57

A judgment of the court against the defaulting mortgagor for the difference between the indebtedness and the sale price of the real estate at the foreclosure sale.

Front 58

Demise

Back 58

The transfer of an estate to another for years, for life, or at will, or by lease.

Front 59

Depreciation

Back 59

• Loss in value brought about by deterioration through ordinary wear and tear, action of the elements, or functional or economic obsolescence;
• a loss in value from any cause.

Front 60

Depreciation, Accrued

Back 60

The actual depreciation existing in a property at a given date.

Front 61

Descent

Back 61

• In law, the passage of real estate, upon the death of the owner, to his or her heirs in law.
• when a person dies intestate

Front 62

Deterioration

Back 62

One of the causes of depreciation and reflecting the loss in value brought about by wear and tear, disintigration, use in service, and the action of the elements.

Front 63

Devise

Back 63

A gift of real property by last will and testament.

Front 64

Devisee

Back 64

One who receives real property by a will.

Front 65

Devisor

Back 65

One who gives real property by a will.

Front 66

Discount Loan

Back 66

The interest on a loan is deducted in advance from the loan. This results in a higher effective interest rate.

Front 67

Dominent Tenement

Back 67

• When the owner of an adjacent parcel of land uses another's land for ingress or egress.
• An easement appurtenant to the land.

Front 68

Donee

Back 68

One to whom property is given.

Front 69

Donor

Back 69

The giver of the property.

Front 70

Dower

Back 70

• The common law name for the interest which the widow took in the real estate of her deceased husband.
• not in Arizona

Front 71

Duplex

Back 71

a two-family house under one roof

Front 72

Duress

Back 72

Unlawful constraint exercised upon a person whereby he is forced to do some act against his will.

Front 73

Earnest Money

Back 73

Down payment made by a purchaser of real estate as evidence of good faith.

Front 74

Easement

Back 74

• The right, privilege, or interest which one party has in the land of another.
• not titled to land

Front 75

Easement, Appurtenant

Back 75

Something held in connection with an easement.

Front 76

Easement, Dominant

Back 76

The land benefitting by an easement.

Front 77

Easement in Gross

Back 77

A personal right to use land for a specific purpose in which there is no land benefitted.

(Dominent Tenement)

Front 78

Easement, Personal

Back 78

similar to a license

Front 79

Easement, Servient

Back 79

The land upon which the easement is given.

Front 80

Economic Life

Back 80

That period over which a property will yield a return on the investment.

Front 81

Economic Obsolescence

Back 81

• Loss of value due to economic causes.
• These are changes external to the property, such as social changes, property taxes, or legislation.

Front 82

Effective Age

Back 82

The age a property appears to be when compared to one that is known.

Front 83

Effective Gross Income

Back 83

The income remaining after the deduction from gross income of vacancy and credit losses.

Front 84

Egress

Back 84

• The right to leave a tract of land.
• Often used interchangeably with access.

Front 85

Emblements

Back 85

• Right of tenant farmer to go on the land to harvest crops.
• Growing crops.
• Fructus industrials.

Front 86

Eminent Domain

Back 86

• The authority of the government - local, state, or federal - in which private property may be taken for public use, and under which the owner is paid a just compensation.
• for example: building an interstate
• the first government right

Front 87

Enabling Acts

Back 87

The state's authority passed down to cities, towns, and municipalities to pass their own ordinances.

for example: zoning laws

Front 88

Encroachment

Back 88

A building, part of a building, or obstruction which intrudes upon or invades or trespasses upon property of another.

Front 89

Encumbrance

Back 89

A claim, lien, charge, or liability attached to and binding upon real property, such as a judgment, unpaid taxes, or a right of way.

Front 90

Environmental Impact Report

Back 90

A federal report required for federally related projects that could have an effect on the environment.

Front 91

Equal Credit Opportunity Act (ECOA)

Back 91

A federal law prohibiting discrimination on obtaining credit based upon sex, age, race, or marital status.

Front 92

Equity

Back 92

The dollar interest one has in real estate above the encumbrance.

Front 93

Equity of Redemption

Back 93

• A grace period, following default, in which the debtor may redeem his property if it has not been foreclosed.
• (Not to be confused with the Statutory Right of Redemption)

Front 94

Erosion

Back 94

The wearing away of land through processes of nature, such as by streams and winds.

Front 95

Escheat

Back 95

• Reversion of property to the state by reason of failure of persons legally entitled to hold, or lack of heirs.
• the second government right

Front 96

Escrow

Back 96

A deposit of instruments and funds with written instructions to a neutral third party to carry out the provisions of an agreement or contract.

Front 97

Estate

Back 97

• A right in property.
• An estate in land is the degree, nature, or extent of interest which a person has in it.

Front 98

Estate at Sufferance

Back 98

The wrongful occupation of land and tenements by a tenant after his rightful possession has expired.

Front 99

Estate for Life

Back 99

A freehold estate, not of inheritance, but which is held by the tenant for his own life, or the live or lives of one or more other persons.

Front 100

Estate of Years

Back 100

• An interest in land by virtue of a contract for the possession of the property for a definite and limited time.
• A lease may be said to be this.

Front 101

Estate in Reversion

Back 101

• The residue of an estate left in grantor to commence in possession after termination of some specific estate granted by him.
• In a lease, the lessor has this after the lease is terminated.
• the right to get the land back

Front 102

Estate of Inheritance

Back 102

• An estate, which may descent to heirs.
• All freehold estates are this, except for estates for life.

Front 103

Estate of Will

Back 103

The occupation of land and tenements by a tenant for an indefinite period, terminable by one or both parties.

Front 104

Estoppel

Back 104

A bar to one's asserting or denying a fact because of one's own previous action, by which the contrary has been admitted, implied, or determined.

Front 105

Estoppel Certificate

Back 105

A document used in the assigment of a mortgage in which the owner certifies that the mortgage is a lien for the amount stated and that there are no defenses to the mortgage.

(see Certificate of No Defense)

Front 106

Exclusive Agency Listing

Back 106

A written instrument giving one broker the right to sell property for a specified time, but reserving the right of the owner to sell the property himself without the payment of a commission.

Front 107

Exclusive Right to Sell

Back 107

• A written listing agreement wherein an agent will be paid an agreed brokerage fee if the property is sold by anyone during the term of the listing.
• the best kind of listing to have

Front 108

Execute

Back 108

To complete, make, perform, do, follow out, to execute a deed, to execute a contract is to perform the contract, to complete all its terms.

Front 109

Executed Contract

Back 109

All of the terms and conditions have been fulfilled.

Front 110

Express Contract

Back 110

A contract in writing.

Front 111

Federal Deposit Insurance Corporation (FDIC)

Back 111

Agency of the federal government that insures deposits at commercial banks and savings banks.

Front 112

Federal Home Loan Mortgage Corporation (FHLMC)

Back 112

• aka Freddie Mac
• Buys up conventional loans in the secondary mortgage market.

Front 113

Federal Reserve System

Back 113

• aka The Fed
• An agency which regulates money and interest rates.
• Sets the prime rate for lenders.

Front 114

Federal Housing Administration (FHA)

Back 114

• Insures real estate loans;
• since 1934 has encouraged improvement in housing standards and conditions;
• exerts a stabilizing influence on the mortgage market.

Front 115

Federal National Mortgage Association (FNMA)

Back 115

• aka Fannie Mae
• Operates as a quasi-public corporation with stockholders in the secondary market;
• may purchase mortgages insured or guaranteed by FHA, VA, or Farmers Home Admin. as well as conventional mortgages.

Front 116

Fee

Back 116

An estate of inheritance in real property;

the land itself.

Front 117

Fee Simple

Back 117

In modern usage the terms fee and fee simple are substantially synonymous.

Front 118

Fee Simple Absolute

Back 118

• An estate in real property by which the owner has the greatest power over the title possible to have under our system of law.
• It is the best title one can have.
• Complete ownership.
• not a conditional estate

Front 119

Fee Tail

Back 119

An estate of inheritance limited to unborn heirs.

Arizona law prohibits holding of land as an estate in this.

Front 120

Fiduciary

Back 120

• A person in a position of trust and confidence as between owner and broker;
• broker as this owes a certain loyalty which cannot be breached under rules of agency.
• Agents have a __ responsibility to other agents and the public.

Front 121

Financing Statement

Back 121

• A document prepared for filing with the County Clerk or Secretary of State indicating that personal property or fixtures is/are encumbered with a debt;
• required by the Uniform Commercial Code.

Front 122

First Mortgage

Back 122

A mortgage which has priority as a lien over all other mortgages.

Front 123

Fixtures

Back 123

• Tangible personal property attached to the land or improvements, which usually cannot be removed without agreement as they become real property.
• for example: plumbing fixtures or store fixtures built into the property

Front 124

Forcible Entry and Detainer

Back 124

• The name of an action for the prompt recovery of real property under a lease.
• a court action

Front 125

Foreclosure

Back 125

• A legal remedy to collect a debt or lien secured by real property.
• Property is sold to pay the debt in the event of default in payment or terms.

Front 126

Fraud

Back 126

The intentional act of cheating or deceiving another person, whereby that person acts upon such means to his detriment.

Front 127

Freehold

Back 127

A tenure of land held in "Absolute Fee Simple" as distinguished from a leasehold.

Front 128

Front Foot

Back 128

• Property measurement for sale, lease, or valuation purposes.
• The property measures by this on its street line, each front foot extending the depth of the lot.

Front 129

Functional Obsolescence

Back 129

• Impairment of functional capacity or efficiency.
• It is evidenced by conditions within the property such as poor plan, inadequacy or over-adequacy due to size, style, age or otherwise.

Front 130

Government National Mortgage Association (GNMA)

Back 130

• aka Ginny Mae
• A corporation without capital stock, designed to handle the special assistance, management, and liquidating funcions of HUD.
• handles HUD repo's

Front 131

Government Survey

Back 131

Rectangular system of land survey made up of 6 mile square townships and 1 mile square sections.

Front 132

GRI

Back 132

Graduate Realtors Institute

Front 133

Graduated Payment Mortgage (GPM)

Back 133

A loan where the borrowers' (first time young buyers) loan payments are lower in the early years of the loan and gradually increase as their income increases.

Front 134

Grandfather Clause

Back 134

• Allows for use of property to remain as it is before laws were passes that placed restrictions on the land use.
• zoning

Front 135

Grant

Back 135

A technical term made use of in deeds of conveyance of lands to impart a transfer.

Front 136

Grant Deed

Back 136

• The grantor only warrants to the grantee that title has not been conveyed previously and that there is nothing against the title that has not been disclosed to the grantee.
• not in Arizona

Front 137

Grantee

Back 137

• A person to whom real estate is conveyed;
• a buyer

Front 138

Grantor

Back 138

• A person who conveys real estate by deed;
• a seller

Front 139

Grantor/Grantee Index

Back 139

A system within the county recorder's office that makes searching the title easier.

Front 140

Grid Map

Back 140

Subdivision map drawn without reference to topography; usually straight lines without contours.

Front 141

Gross Income

Back 141

Total income from property before any expenses are deducted.

Front 142

Gross Lease

Back 142

A lease in which the lessee pays only the stipulated rent; all other charges such as taxes and insurance are paid by the lessor.

Front 143

Gross Rent Multiplier

Back 143

The gross rental income is multiplied by a factor.

The factor is obtained by dividing known sales prices of comparable properties by the rental income of those properties.

Front 144

Ground Lease

Back 144

An agreement for the use of the land only, sometimes secured by improvements placed on the land by the user.

Front 145

Ground Water

Back 145

All water under the surface of the earth except water flowing in underground streams with definite and ascertainable beds and banks.

Front 146

Habendum Clause

Back 146

• That clause in a deed in which the quantity of the estate is indicated,
• the "to have and to hold" clause.

Front 147

Highest and Best Use

Back 147

An appraisal phrase meaning that use which at the time of the appraisal is most likely to produce the greatest net return to the land and/or buildings over a given period of time.

Front 148

Holder in Due Course

Back 148

One who has taken a note, check, or bill of exchange before it was overdue, in good faith and for value, without knowledge that it has been previously dishonored and without notice of any defect at the time it was negotiated to him.

Front 149

Holdover Tenant

Back 149

• Tenant who remains in possession of leased property after the expiration date of the lease term.
• tenant in sufferance

Front 150

Holographic Will

Back 150

• A will written by its maker (the testator) entirely in his own handwriting.
• is legal in Arizona

Front 151

Homestead

Back 151

• A home upon which the owner or owners have this as provided by Arizona statutes;
• protects against judgments up to specified amounts.
• there is a cap on this amount

Front 152

HUD

Back 152

Department of Housing and Urban Development

Front 153

Hypothecate

Back 153

To give a thing as security without the necessity of giving up possession of it.

Front 154

Impound Account

Back 154

• an escrow account
• A reserve for taxes and insurance kept by the lender.

Front 155

Inchoate

Back 155

Recently or just begun, unfinished something begun but not completed, such as the dower or curtesy rights of living husband and wife.

Front 156

Income Approach

Back 156

• One of three appraisal methods.
• Net income divided by an interest rate equals value.

Front 157

Incurable Depreciation

Back 157

• A defect that cannot be or is not practical to cure.
• A defect in the "bone of structure" of a building.
• It is measured by age-life or life expectancy.

Front 158

Independent Contractor

Back 158

A person self-employed, or one employed by another who has no right of control over the employee except as to final results.

Front 159

Ingress

Back 159

• The right to enter a tract of land.
• Often used interchangeably with access.

Front 160

Injunction

Back 160

A court order issued to restrain one or more parties to a suit from doing an act (cease and desist).

Front 161

Interest

Back 161

• Money paid for the use of money;
• rent for the use of money;
• the return on an investment.

Front 162

Interest Rate

Back 162

A percentage of the amount of a loan paid for the use of the money and covering a specific period, usually one year.

Front 163

Interim Financing

Back 163

• Financing used during construction to be superseded by take-out financing after construction.
• construction loans

Front 164

Intestate

Back 164

• A person who dies having made no will.
• The estate descends to his heirs at law or next of kin.
• by descent

Front 165

Involuntary Lien

Back 165

• A lien imposed against property without consent of an owner.
• for example: taxes, special assessments, federal income taxes

Front 166

Joint Tenancy

Back 166

A joint holding of property by two or more persons, who as co-tenants, enjoy the property equally throughout their lives with right of survivorship to the other grantees.

Front 167

Judgment

Back 167

• The final order of a court on money owed.
• It becomes a general lien when recorded.

Front 168

Joint Venture

Back 168

A partnership formed for a specific undertaking.

Front 169

Junior Lien

Back 169

A lien secondary to a previous lien.

Front 170

Junior Mortgage

Back 170

A mortgage second in lien to a previous mortgage; having a mortgage ahead.

Front 171

Laches

Back 171

• Delay or negligence in asserting one's legal rights.
• A defense against a claim.
• the party waited too long to file an action

Front 172

Land Contract

Back 172

Sometimes referred to as an "installment __ __".

A contract ordinarily used in connection with the sale of property in cases where the seller does not wish to convey title until all or a certain part of the purchase price is paid, the deed is transferred and the balance financed by a note and mortgage.

Front 173

Lease

Back 173

• A written legal document in which possession of property is given by the owner to a second party for a specified time and for a specified rent.
• less than a freehold estate

Front 174

Leasehold

Back 174

• A property held under tenure of lease;
• a property consisting of the right of use and occupancy by virtue of a lease agreement;
• the lessee's (tenant's) interest in a lease.

Front 175

Legacy

Back 175

A gift of personal property by will.

Front 176

Legal Access

Back 176

see Permanent Access

Front 177

Legal Description

Back 177

The legal identification of real property by

1) the rectangular survey

2) metes and bounds

3) recorded plat

which a court will compell one to to give or accept.

Front 178

Legal Rate of Interest

Back 178

• The rate of interest that may be charged is governed by state law.
• The rate charged in the absence of an express contract between the parties.
• The contract rate is the hightest rate upon which the parties may agree.
• no use rate in Arizona

Front 179

Legatee

Back 179

A person who takes personal property under a will.

Front 180

Legislature

Back 180

The body charged by the constitution with the duty of enacting statutory laws for the state.

Front 181

Lessee

Back 181

• One who possessed the right to possession and use of a property under a written or oral agreement.
• has a right to quiet enjoyment

Front 182

Lessor

Back 182

A title holder who grants the right to use and occupy a property under a written or oral agreement.

Front 183

Lessor's Interest

Back 183

The right to receive rent and the right to the reversion (right to get the property back).

Front 184

Leverage

Back 184

The use of borrowed funds in financing with the anticipation that the property acquired will increase in return so that the investor will realize a profit not only on his own investment but also on the borrowed funds.

Front 185

License

Back 185

• A privilege granted by the state to an individual to operate as a real estate broker or salesperson.
• police power

Front 186

Licensee

Back 186

• One who has a license to perform a specific task or business;
• one who holds a real estate license

Front 187

Lien

Back 187

• A special encumbrance;
• a charge against property whereby the property is made security for the payment of a debt or charges such as a judgment, a mortgage or taxes;
• it is an asset and therefore may be assigned.
• money debt

Front 188

Life Estate

Back 188

• A (freehold) interest in land, the duration of which is confined to the life of one or more persons or contigent upon certain happenings.
• not less than a freehold

Front 189

Like for Like

Back 189

An exchange of similar commercial property.

Real property for real property.

Front 190

Limited Partnership

Back 190

Where the parties have liability limited to their investment.

Front 191

Liquidated Damages

Back 191

• An amount of money agreed to in advance for nonperformance of a contract.
• a default

Front 192

Lis Pendens

Back 192

• Suit pending.
• Usually recorded so as to give constructive notice of pending litigation.

Front 193

Listing

Back 193

A written employment contract between principal and agent authorizing agent to perform services for the principal.

Front 194

Littoral

Back 194

• That which belongs to the shore of a sea, large lake, or large pond.
• not moving

Front 195

Liveable Floor Area

Back 195

Measurements of all interior rooms excluding walls and closets.

Front 196

Loan-to-Value Ratio

Back 196

The ratio of the loan to the appraisal or sales price of a property.

Front 197

M.A.I.

Back 197

Designates a person who is a member of the American Institute of Real Estate Appraisers of the National Association of Realtors.

Front 198

Market Comparison Approach

Back 198

• One of three appraisal methods used in valuation.
• An estimate of value of a property is obtained by comparing it with similar properties which have been sold recently and offered for sale in the same or competing areas.

Front 199

Market Price

Back 199

• The price paid for a property in dollars.
• To be distingued from "Market Value".

Front 200

Market Value

Back 200

• The highest price which a buyer, willing but not compelled to buy, would pay, and the lowest price a seller, willing but not compelled to sell, would accept;
• and the property is exposed for sale in the open market allowing a reasonable time to find a purchaser who buys with knowledge of all the uses to which it is adapted and of which it is capable of being used.

Front 201

Marketable Title

Back 201

Merchantable title, means that the land is free from encumbrance or is title that a court would compel a purchaser to accept.

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Mechanic's Lien

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• A lien created by state law in favor of persons who have performed work or unfinished materials in the erection or repair of a building.
• HOA's

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Meridian

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In Arizona, the baseline and meridian, located at the junction of the Gila and Salt River, which is approximately 20 miles southwest of Phoenix, is known as the "Gila & Salt River Base and Meridian", which is usually abbreviated G.&S.R.B.&M.

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Metes and Bounds Description

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A legal description of a parcel of real estate that describes the boundaries by direction and measurement from a designated starting point called a monument.

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Mill

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One-tenth of one cent: the measure used to state the property tax rate: a tax rate of one mill on the dollar is the same as a rate of one-tenth of one percent of the assessed value of the property (.001).

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Minor

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All persons under 18 years of age.

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Monument

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A fixed object and point established by surveyors to establish land locations.

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Mortgage

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• A written instrument recognized by law which real property is pledged to secure a debt or obligation;
• a lien on real property.
• aka security for the debt

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Mortgage Correspondent

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• One who represents a lender of money on the security of real property;
• one who represents a potential mortgagee.
• mortgage banker

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Mortgage Guaranty Insurance

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• Insurance against financial loss available to mortgage lenders from Mortgage Guaranty Insurance Corporation, a private company organized in 1956.
• Currently a number of other private companies offer this service (PMI)
• conventional loans

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Mortgagee

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• The party who advances the capital for a mortgage loan and in whose favor the property serving as security is mortgaged.
• lender

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Mortgagor

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• The party who borrows money or mortgage security and mortgages property owned by him as security for a loan.
• borrower

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Mortgage Warehousing

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Where a lender or correspondent (mortgage banker) borrows on a stock of loans until they can be sold.

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Multiple Listing

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A listing, usually and exclusive right to sell, taken by a member of the multiple listing service composed of real estate brokers, with the provision that all members will have an opportunity to find a purchaser.

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NAR

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National Association of Realtors

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Net Income

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• Income from property or business after expenses have been deducted;
• effective gross income less operating expenses.

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Net Lease

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• A lease where, in addition to the rent stipulated, the lessee assumes payment of all property charges such as taxes, insurance, and maintenance.
• triple net lease

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Net Listing

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• A price, which must be expressly agreed upon.
• The broker receives the excess over and above the net listing as his commission.

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Non-Conforming Use

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Use made of property before zoning which does not conform to the zone uses;

it is usually permitted to continue under certain stipulation.

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Nuncupative Will

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An oral will of personal property of very low value.

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Notary Public

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A public officer, appointed by the Secretary of State, who attests or certifies deeds and other instruments to make the execution authentic.

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Note

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• A written instrument which acknowledges the debt and promises to pay.
• evidence of the debt

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Novation

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• The substitution, by agreement of a new obligation for an existing one.
• Used to transfer responsibility of an existing mortgage from the seller (original mortgagor) to the buyer.
• assumption of the mortgage

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Objective Value

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• Created in the object itself.
• Found in the cost approach to appraising where emphasis is placed on the cost of production, plus the land.

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Obsolescence

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• As applied to real estate, it is a loss in value due to physical (wear and tear) functional or economic depreciation.
• The loss of value from all causes.

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Open-End Clause

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Allows for future advances against a preset line of approved credit against the existing mortgage loan.

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Option

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• A written agreement granting the exclusive right, during a stated period of time, without creating an obligation on the grantee to buy or control the use of property.
• money paid for the use of time

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Optionee and Optionor

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The person receiving the option is the ___ and the owner is the ___.

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Package Mortgage

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• Popular form of mortgage used with new residential sales.
• The debt includes the cost of real and personal property.

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Parol Evidence Rule

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Provides that the courts will prohibit introduction of any oral testimony in a court proceeding which may be necessary to establish the meaning of a real estate contract.

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Partition

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A division made of real property between those who own it in undivided shares.

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Partnership

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A contract of two or more persons to unite their property, labor, or skill, or some of them, in prosecution of some joint and lawful business, and to share the profits in certain proportions.

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Patent

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Conveyance of title to government land.

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Per Stirpes

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• Taking property by right of representation is called "succession ___ ____".
• Distribution of shares by classes of kindred relations.

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Percentage Lease

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• A lease of property in which the rental is an amount equivalent to a stated portion of the receipts from the business conducted by the lessee;
• frequently expressed as a percentage of the gross revenues.

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Percolation Test

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• A test to determine the capacity of the soil to absorb water.
• aka Perc Test

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Periodic Tenancy

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A lease from period to period which renews itself automatically unless one of the parties gives notice to the contrary.

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Personal Property

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Any property which is not real property.

In event of question, 3 tests are applied:

1) real or constructive annexation of the article to the realty

2) adaptation of the article to the use or purpose of that part of the realty with which it is connected

3) intention of the party making the annexation to make the article a permanent part of the real property.

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Planned Development Project

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A development where individual property owners own the recreational areas in comon.