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Glossary of Real Estate Terms

A

Abandonment: Voluntarily giving up a right or interest in real property without conveying those rights/interests to anyone else.

Abstract of Title: An historical summary of the chain of title to a piece of property, including conveyances and encumbrances, back to the original grantor.

Abstractor: The person or firm that prepares an Abstract of Title.

Abutting Land: Parcels that join, reach or touch each other at a common point.

Accelerated Depreciation: A tax deduction whereby an investor could "write off" more depreciation than straight line would allow. Accelerated Depreciation was eliminated by the Tax Reform Act of 1986.

Acceleration Clause: (Call Provision) A loan contract clause that calls the entire principle and interest immediately due and payable upon default.

Accession: The legal process by which a real property owner acquires title to soil or fixtures added to his property.

Accretion: The physical process of the addition of soil to real property by act of water.

Acknowledgment: A formal declaration by a person signing a document that he is who he says he is. Acknowledgment, which is done before a notary or otherwise qualified person, is required for recording documents in Oregon and Washington.

Acre: 43,560 square feet of land.

Activity Sheet: A list maintained by a Broker that shows the date and time every property listed with that firm is advertised, shown, offers presented, etc.

Actual Notice: Hearing, being told or actually knowing that a situation exists.(opposite of Constructive Notice)

Ad Valorem: A Latin term used in property taxation meaning, tax according to value, true cash value or market value.

Administrator: A person named by a court to handle the estate of a deceased person when that person died without leaving a proper will.

Adult: A person is recognized as adult upon reaching the age of 18 years. In Oregon only, a 17 year-old who is married is also an adult.

Advance Fee: A fee charged by a Broker to pay for the cost of advertising a listed property. The fee is deducted from the commission if the property sells, but will not be refunded if the property does not sell.

Adverse Possession: The acquisition of title to someone else's property by means of continuous, open, hostile use for a period of time defined by state law.

Affidavit: A written statement signed and sworn to before a person authorized to administer an oath.

Affiliated Corporation: Two or more corporations whose stock is owned by a single owner.

Agency: A legal situation where one person (the principal) delegates another (the agent) to handle some business in his behalf.

Agency Coupled With An Interest: An agency relationship where the agent holds a financial relationship with his principal as well as an agent relationship.

Agent: A person who is authorized to represent another; a Fiduciary.

Agricultural Fixtures: Improvements on a farm that appear to be fixed real property but can be used at any farming location. One of the types of fixtures that are not real property. They are personal property, chattel fixtures, and can be removed by the seller.

Air Lot: The airspace over a parcel of land. It can be transferred with or without the underlying surface rights.

Air Space Lease: A lease of an Air Lot only.

Alienation: Transferring ownership of real property to another, either voluntarily or involuntarily. (L-3)

Alienation Clause: (Due On Sale Clause) A clause in a contract that effectively bars any assignment of that contract because it calls the entire debt due and payable at the time of sale.

Alluvion: The soil added to property by accretion.

ALTA Title Insurance Policy: The American Land Title Association form of the title insurance policy. It is broader than the Standard Form in that it covers unrecorded interests and flaws that could only be found by physical inspection and survey.

Amenity: Any attractive or desirable feature of real property.

Amortization: The regularly scheduled repayment of a debt whereby equal payments include both principal and interest and continue until the principal is paid. (You are slowly "killing off" the principal debt.)

Annexation: The addition to property by the act of joining or uniting one thing to another as in fixtures. Also the process by which a municipality expands it's physical boundaries.

Annual Percentage Rate: A figure lenders are required to disclose under the terms of Truth-in-Lending. It is calculated by figuring the total of all interest charges against the total amount loaned.

Appraisal: A professional estimate of market value of real property.

Appraisal Fee: The fee charged by an appraiser for making an appraisal.

Appraised Value: (Market Value) The highest price that a buyer will pay and the lowest price that a seller would accept in a free, competitive market place both being knowledgeable and under no external pressures.

Appreciation: An increase in a property's value due mainly to the passage of time.

Appropriation Doctrine: The water rights concept adopted in most Western States. Most water is owned by the state and citizens may only use it for a beneficial purpose if unused water is available and they receive a permit.

appurtenance: An item or right that is real property and must pass with the land at the time of sale. Appurtenances appertain to the land and may not be severed from it without the approval of those holding the rights. For example: Easements, improvements and houses.

ARM: (See Variable Rate Loan)

Assessed Value: The taxable value of real property as appraised by the County Tax Assessor.

Assessment: The imposition of a tax, charge or levy usually according to established law and rates.

Assignment: The transfer of rights from one person (the assignor) to another person (the assignee) as done in mortgages, contracts, leases, etc.

Assignment By Novation: An assumption whereby the assignee fully replaces the assignor. The original debtor is fully released from any obligation under the contract. It will also therefore reinstate his future loan rights on certain loans. It is also called Assumption and Release or Assumption and Full Release.

Assignment Of Rents Provision: A loan clause often inserted in loans on rental properties which allows the lender to collect the rental income and apply it against loan payments if the owner becomes delinquent.

Associate Real Estate Broker: A licensed person who qualifies identically to the Broker but who does not want to be the person in charge of a Firm. They work for their employing Broker just as a sales agent does. In Washington (not Oregon) a branch manager must be an associate broker or a broker.

Assumption Fee: The paperwork charge paid to the lender by the purchaser when the purchaser is assuming an existing loan on a property.

Assumption of Mortgage/ Trust Deed: When a buyer takes responsibility for the seller's existing mortgage, he assumes and agrees to pay" it, thereby placing himself primarily liable for it's repayment. True assumptions were common place before the recession of 1980-1983. Now few lenders will allow this, choosing instead to call the note due upon sale.

Attachment: The method by which an apparent debtor's property is placed in the custody of the law and held as security pending the outcome of a creditor's lawsuit.

Audit: The financial checking of a firm's accounts, books and records.

Avulsion: The sudden violent loss of real property by act of nature. If it happens slowly, it is called erosion.

B

Balloon Payment: A payment that is larger than the normal payment amount as scheduled in an otherwise equal-payment amortized loan. It is normally, but not necessarily, a larger last payment. (See Partially Amortizing Loan)

Bancrofting: (Oregon only) The financing by the local government of the cost of local improvements charged to private property owners under the Bancroft Bonding Act, usually at a lower than market interest rate.

Band Of Investment: An appraisal technique which uses capitalization rates from similar income properties to establish the capitalization rate for evaluating the subject property.

Bankruptcy: A legal process of partial payment and forgiving of debts at a given point in time when a debtor's liabilities exceed his assets.

Bargain And Sale Deed: A deed form whereby the grantor conveys title without warranties. It differs from a Quitclaim in that does imply ownership.

Base Line: The East-West line of latitude used in the Governmental or Rectangular Survey System. The Base Line used for Oregon and Washington lies in Oregon, just south of the Washington/Oregon State line.

Basis: (cost basis, tax basis) The monetary value attributed to an asset for income tax purposes. The dollar amount of a property's basis is depreciated over time as a tax deduction. It is also used when determining the profit or loss when the asset is sold.

Benchmark: A permanent reference point established for use by surveyors in measuring differences in elevation. They are set by the U.S. Geological and Geodetic Survey; are usually marked by brass caps, and are often used by surveyors as reference points.

Beneficiary: The lender under a Trust Deed.

Beneficiary's Statement: The lender's statement of the unpaid balance owing on a Trust Deed debt.

Bilateral Contract: A contract where one party promises to perform an act in exchange for the other party's promise to perform an act.

Bill Of Sale: A written instrument used to convey the ownership of personal property.

Blanket Loan: One loan that is secured by two or more parcels of real property.

Blind Pool: An investment system whereby investors give money to an investment manager who is free to invest in any type of investment without seeking the investor's permission. A blind pool is an example of a security.

Blockbusting: The illegal practice of inducing homeowners to sell their property at reduced value by making representations regarding the actions or possible entry of persons covered by the Federal Fair Housing Act into a neighborhood.

Boot: The difference between the values of property that are involved in an exchange, over and above "like for like".

Branch Office: A secondary real estate office apart from the Broker's Main Office.

Bridge Loan: A high risk, high interest rate loan that is necessary to fund the borrower from one situation to the time when another loan becomes payable.

Broker: A licensed person capable of contracting with the public without supervision to buy or sell real property for a commission.

Budget Loan: A loan where the payments include principle, interest, tax and insurance reserves. Also called a PITI Loan or a budget mortgage.

Buffer: Any natural or man-made area that serves to "soften" the transition from one use zone to a different use zone.

Building Codes: A printed set of government construction standards that are applicable throughout the governed area. They establish the minimum standards. (They are an exercise of police power)

Building Line: The locally imposed distance beyond which one cannot place a structure on a parcel of land. Also known as "Set Back Line". (See Setbacks)

Bulk Transfer: The sale of a major part of a business's personal property stock and inventory. Such sales are subject to the Bulk Transfer Section of the Uniform Commercial Code.

Business Chance Broker: A Broker who markets business opportunities exclusively or at least primarily. Such person would be required to have a Broker's license (or salesperson's)- there is no such thing as a Business Chance Broker's License.

business opportunity: A business, including it's goodwill, even though it may not include any real property. Marketing such interests requires a Real Estate license in most States, including Oregon and Texas. Washington State does not require a real estate license of a person marketing businesses for sale.

Buyer's agent: Licensee that represents the buyer (only) in an agency transaction.

C

Capital Gain: An income tax advantage which was eliminated by the Tax Reform Act of 1986.

Capitalization Rate: A number that expresses the quality and quantity of return on an investment. It is the "return on the investment" plus the "return of your investment".

Cash Flow: An investment term for the net spendable income from an investment, determined by deducting all operating expenses from the gross income.

Cash-In, Cash-Out Method: A process used by escrow closers to check the entries on the Buyer's and Seller's closing Statement. All cash amounts leaving the transaction should be equal to all cash amounts entering the transaction.

Caveat Emptor: A Latin phrase meaning "Let the buyer beware". This phrase has only limited importance in modern Real Estate because of the disclosure requirements placed on the licensee and the statutory protections offered to renters and buyers of residential property.

CCR: An acronym for Covenants, Conditions, and Restrictions, as commonly found in subdivision deeds.

Cease And Desist Order: A legal order from a court or Government Authority demanding that the receiver stop some stated activity deemed to be a violation.

Certificate Of No Defense: A lending institution's statement of the amount owing on a specific loan. Once given, the lender can not change the amount even if it is in error. It is also called an Estoppel Certificate, Lender's Statement, Mortgagee's Statement, an Offset Statement or Beneficiary's Statement.

Certificate Of Reasonable Value: (CRV) An appraisal done by the VA.

Certificate Of Sale: The document the high bidder receives at a Sheriff's Sale.

Chain Of Title: A history of Title showing all of the previous owners of a given property.

Chattel: Personal property. (This is an old common law term.)

Chattel Mortgage: Chattel Mortgage is an old name for a mortgage on personal property. Since the enactment of the Uniform Commercial Code, they are called Security Agreements.

Chattel Real: A lease on real property.

Checks: (See Correction Lines)

Civil Rights Act of 1866: A Federal Law that makes it illegal to discriminate on the basis of race.

Civil Rights Act of 1968, Title VIII: (Federal Fair Housing Law) A Federal Law that makes it illegal in most real estate transactions to discriminate on the basis of race, color, creed, sex or national origin. There are some exceptions.

Client's Trust Account: A separate account at a proper depository maintained by a Broker for the placement of other people's money pending the completion of a sale, option or lease.

Closing: (Title Closing, Escrow Closing) The meeting at the end of Escrow where the documents are signed and the sale is actually finalized. The money involved is summarized on the Closing Statement.

Cloud on Title: An apparent but unclear claim or encumbrance that may impair the passage of title to land.

Code: A collection of all the laws in a given state that deal with a given subject such as the Real Estate Code.

Commingling: Mixing of personal money with money held in trust. Illegal intent is not necessary for this to be a violation.

Common Elements: Common areas, such as hallways, parking lots or swimming pools in a condominium that are owned and shared by all owners of condominium units as Tenants in Common.

Community Property: A type of ownership by husband and wife that is recognized only in a few States including Washington, Idaho and California. The husband and wife each own 50% of the property they gain by their mutual effort and have the right to name the heir of their choice at their death. Oregon is not a community property state.

Comprehensive Plan: (See Master Plan)

Concealment: Not revealing a known material fact to an involved party before they enter into a contract. (See Misrepresentation)

Concurrent Ownership: Co-Tenancy, any time two or more people together own the same parcel of real property. (L-1)

Concurrent Tenancy: Concurrent Ownership or Co-Tenancy.

Condemnation: The legal process of exercising the right of Eminent Domain.

Conditional Sales Contract: Another name for a Land Sales Contract.

Condominium: An ownership interest in real property consisting of individual ownership of a unit ("a cube of airspace") and tenancy in common ownership of common elements consisting of the land, building itself and various other amenities.

Consideration: A necessary element of a valid contract. (See "Good" and "Valuable")

Constructive Eviction: Acts done by the landlord that so materially disturb or impair the tenant's enjoyment of the leased premises that the tenant is effectively forced to move out and terminate the lease without liability for any further rent.

Constructive Notice: The existence of evidence of a fact which a reasonable person should have been able to find. Properly recording an interest in the County records or taking possession of the property gives the world constructive notice of interest being claimed.

Consulting Fee: A fee charged by a Licensed person for performing some professional service such as advising a property owner on how to appeal a tax assessment. It is a fully earned fee and can not be placed in the Client's Trust Account because it would constitute commingling.

Consumer Credit Protection Act: A Federal law that requires any business which regularly extends credit to the public to disclose the true cost of borrowing. (See Truth-In- Lending)

contingency: A specified event that has to occur in order to make a contract binding

Contract For Deed: Another name for a Land Sales Contract.

Contract Rent: The rental income currently being produced by real property under the current rental contract. It is usually less than the Economic Rent, the maximum rental income that could be earned if the property were developed to it's Highest and Best Use.

Conversion: Illegally using another person's money that you are holding in trust. It differs from commingling because the funds are used, not just mixed.

Cooperative: A form of co-ownership where the "tenants" in an apartment buy stock in the corporation that owns the real property and gain a Proprietary Lease by virtue of their ownership of the stock.

Corporation: A business owned by stockholders. Corporations afford some protection against lawsuits against corporate officers and stockholders, but are taxed as a separate legal entity.

Correction Deed: (Reformation Deed) A deed used to correct an error on a previous deed in the County records. It is not a deed form: the Quitclaim Deed form is normally used.

Correction Lines: Lines used in the Governmental or Rectangular Survey System to compensate for the curvature of the Earth. Correction lines form the boundaries of 24-mile-square units called "checks".

Cost Approach: An appraisal method which considers value to be the replacement value of the depreciated cost of the improvements plus the comparable value of the land. (Depreciation is never taken on raw land.)

Counteroffer: The rejection of the original offer when the offeree wants to make some changes to an offer that he receives. The original offer is canceled by the counter-offer. The offeree then becomes the offeror.

County Appeal Board: In Washington, the proper body to which a property owner can appeal his tax assessment. Its decisions are final.

County Board Of Equalization: In Oregon, a County Board that allows a tax payer to challenge the assessed value assigned to his property. If the property owner is still unhappy, he has other options.

Covenant: A promise in a deed that, if broken, can lead to an injunction or a law suit for money damages but not to the actual loss of ownership. One of the "C's" in the acronym "CCR".

Covenant of Further Assurance: A promise in a Warranty Deed whereby the seller will bear the cost of any legal action necessary to make the title good.

Covenant of Quiet Enjoyment: A promise in a Warranty Deed whereby the seller is stating that no other person shall interfere with the new owner's rights by claiming superior title.

Covenant of Seizen: A promise in a Warranty Deed whereby the seller states he is the owner and has the right to convey.

cpi - consumer price indes: This is the federal index that measures the prices of consumer goods. It gives indications of price increases and inflation.

cpi - consumer price index: This is the federal index that measures the prices of consumer goods. It gives indications of price increases and inflation.

Cul-De-Sac: A dead end street which usually ends in a circular turn-around.

Curable: An appraisal term meaning that the cost to repair depreciation is less than the value will increase once the repair is made. It is economically feasible to make such repairs.

Curtesy: The husband's Legal Life estate interest in those States (not Oregon or Washington) that recognize Curtesy rights. (See Dower and Curtesy.)

Customer: The party with whom an Agent is dealing on behalf of his principal. The agent only owes normal honesty to the customer. He does not owe him the Fiduciary Obligation that he owes to his Principal.

D

Datum: A horizontal plane from which heights and depths are measured. Datum varies from place to place in the U.S. but is most often sea level.

Declining Balance Depreciation: An accelerated method of calculating depreciation which takes heavy amounts of depreciation in the early years. All accelerated depreciation was eliminated by the Tax Reform Act of 1986.

Deed: A written document used to convey the ownership or an interest in real property.

Deed In Lieu Of Foreclosure: Used when the lender and debtor agree that the debtor will deed the property over to the lender instead of having the lender pursue foreclosure once a debtor becomes delinquent on his debt.

Deed Restriction: A clause in a deed that limits the owner's rights.

Defeasance Clause: A clause in a mortgage or trust deed which states that the mortgage/trust deed is defeated when the note is timely paid.

Defeasible Fee Estate: Another name for a Qualified Fee Estate. The Fee may be "defeated" if an owner breaks a condition stated in the deed.

Deficiency Judgment: A judgment given to the lender against the borrower for the short fall amount if the high bid at a foreclosure sale is not enough to pay off the amount owed.

Deflation: An economic condition where prices are falling. The opposite of inflation.

Delivery: The legal act of transferring ownership. Documents such as deeds and mortgages must be delivered and accepted to be valid.

Demise: Conveyance of a rental estate. A synonym for the verb "Rent".

Department of Licensing: The real estate license regulatory body in Washington.

Deposit Agreement: The written agreement in the Earnest Money Receipt that forms the instructions on how to handle any Earnest Money deposit in the case of certain contingencies ..whether the buyer gets it back or whether the seller receives it.

Deposit Reserves: A percentage of deposits that a bank or savings and loan association must hold back and not lend. The Federal Reserve System notifies lenders of the current reserve requirement.

Depreciation: Any loss in value whether it be obsolescence or physical deterioration that happens to man-made objects.

Depth Table: (Atwood Table) A table used by appraisers to value land. The further from the street, the less valuable the land.

Designated Broker: A person who is qualified as a Broker and is in charge of a Real Estate Brokerage. This person is held liable for the actions of the salespersons he hires.

Devise: The passing of ownership of real property by way of a will.

Devisee: The receiver of real property from a will.

Devisor: The giver of real property by way of a will; a Testator; a deceased owner of real property who left a valid will.

Dominant Estate: The interest of the party who has the right to use an Easement Appurtenant across the land of another.

Dower: The wife's right to a legal life estate in the property of the deceased husband. Many states including Oregon and Washington do not recognize Dower Rights. (See Dower and Curtesy)

Dower and Curtsey: An estate created by law for husbands and wives. Washington has replaced this with Community Property Law and Oregon has replaced it with Tenancy By Entirety.

Dual Agency: Representing the best interests of both parties in a transaction. In real estate it can only be done after full disclosure to both parties.

Duress: Using violence to force someone into a contract against their will. The injured party can claim a voidable contract for lack of voluntary agreement.

E

Earned Increment: A gain in value due to the effort of the owner.

Earnest Money: A good faith deposit of anything of value.

Earnest Money Agreement: (Purchase and Sale Agreement) A written document that serves as the offer to purchase a property and a receipt for any good faith deposit that was tendered with that offer. If signed by the seller, it becomes the controlling document for closing the sale.

Easement: The right to use a specific part of another's land for a specific purpose. Easements are a real property interest but not an estate because only use and not possession are being granted.

Easement Appurtenant: An easement that involves at least two separate properties under different ownership. The properties do not necessarily need to be adjacent or abutting each other. The Dominant Estate has the right of use and the easement passes over the Servient Estate. The easement right is appurtenant to the Dominant Estate and will pass with its title. (L-2)

Easement In Gross: An easement wherein only Servient Estates are present. Typically, utility company easements.

Economic Life: The remaining period of time during which a property can be expected to produce an income.

Economic Obsolescence: Becoming out-of-date due to the economic conditions that surround the property. An incurable form of depreciation.

Economic Rent: The perfect rent; the rental income that would be received if the property were developed to its Highest and Best Use.

Effective Gross Income: An appraisal term used in the income / capitalization approach. Gross Income less estimated losses due to vacancy and uncollectible rents.

Emblements: (Fructus Industriales) Growing annual crops. A tenant farmer or the seller of property that has growing annual crops on it has the right to harvest that crop for one crop season. Emblements are personal property, even though the crop is growing in the soil, because it was planted with the intent of harvesting.

Eminent Domain: The government's right to take private property for some public use after they pay the owner "just compensation". The exercise of this right is called condemnation. This right can some times be given to a utility, school district, etc. (See Quasi-Public)

Encroachment: The unauthorized intrusion by an object onto another person's land. Simply put, it's trespass by a structure.

Encumbrance: Any lien, charge, or restriction which burdens title to real property rights.

Endorsement: The act of writing one's name, either with or without additional words, on a negotiable instrument. Sometimes also called execution.

Equal Credit Opportunity Act: A 1974 Federal law which makes it illegal to discriminate based on sex or marital status when making loans or offering credit.

Equitable Title: The right to receive Legal Title to real property in the future. Examples; the Vendee in a Land Sales Contract; the Debtor during the Statutory Right of Redemption.

Equity: The excess property value belonging to the owner after all liens are deducted.

Escalator Clause: A clause in a Variable Rate Loan Contract that allows the interest rate to be increased or decreased based on certain conditions.

Escape Clause: A slang term for any clause which allows one or more of the parties to a contract to get out of the agreement for some stated reason. Both FHA and VA require the inclusion of their pre-printed escape clause in all loan applications. It allows a complete refund of any Earnest Money Deposit if the FHA/VA loan is not granted.

Escheat: If a real property owner dies and leaves no heirs or devisees, the ownership of that property reverts ("Escheats") to the State after a Statutory period of time.

Escrow: The process whereby money and documents are placed with a neutral third party prior to actual Closing.

Escrow Agent: A person licensed by the State to handle Escrows for a fee.

Escrow Fee: The fee charged by a professional Escrow Agent for the Escrow service.

Estate: The degree, quantity and quality of interest one has in real property. To be an estate, one's interest must include possession and some degree of duration.

Estate at Sufferance: An improper rental estate. An illegal holdover after a lease right has expired. (A Holdover Tenant)

Estate At Will: A rental estate with permission but without an agreement of rental. The landlord and tenant mutually agree to "put up" with each other for an indefinite period of time. Unlike a tenant at sufferance, this tenant is entitled to proper notice.

Estate For Years: Any Rental Estate that has a definite calendar ending date.

Estate From Period To Period: (Periodic Tenancy) A rental estate by which the tenant may remain for an indefinite period of time. Usually, month-to-month rentals. Either the landlord or the tenant may terminate with proper advance notice to the other party.

Estoppel: A legal principle which holds that once a party has waived, voluntarily, a legal right, they may lose the right to assert that right later.

Estoppel Certificate: (See Certificate Of No Defense)

Estovers: The right of a Life Estate holder to use a reasonable amount of timber from the Life Estate Property for lumber, fencing, heat or cooking on that property, but not for profit. Violation of Estovers rights is called "waste".

Et Al.: A Latin contract term meaning "And Others".

Et Ux.: A Latin contract term meaning "And Wife".

Et Vir.: A Latin contract term meaning "And Husband".

Eviction: Properly serving a tenant with notice to return possession of the premises to the landlord usually because of violation of the lease.

Exchange: Trading real property for someone's real property.

Excise Tax: A tax imposed by some States (including Washington but not Oregon) on the conveyance or transfer of an interest in real property. A form of Sales Tax which is collected at the county level and includes a county portion

Exclusive Agency Listing: A listing agreement giving only one broker (the agent) the right to receive the commission upon the sale of the listed property, but the seller (the principal) retains the right to sell the property himself and thereby avoid paying any commission.

Exclusive Right to Sell Listing: A listing agreement whereby only one broker has the right to receive the commission if the property sells regardless of who, including the seller, actually created the sale.

Execute: To formalize a document, usually by signing it.

Executed Contract: A fully completed contract when both parties have fully tendered performance.

Executor (male) / Executrix (female): A person designated in a valid will to handle the estate of the deceased Testator. With the increasing awareness of sexism in the U.S., many states are substituting the term "Personal Representative".

Executory Contract: A contract that has something remaining to be done by one or more of the parties to that contract.

Exposure: The direction that the front of the property faces (as in "Southern exposure". (F-4)

Express Contract: An oral or written contract in which the parties state their terms and express their intentions in words.

F

fannie mae: Fannie Mae is a government-sponsored enterprise (GSE) chartered by Congress with a mission to provide liquidity, stability and affordability to the U.S. housing and mortgage markets. Its function is purchase and sell existing mortgages for lenders. The purpose is to stabilize the value of the real estate market.

Farmer's Home Administration: (FmHA) An agency of the U.S. Dept. of Agriculture that makes real estate loans in rural areas having a population of 20,000 or less.

Federal Discount Rate: The interest rate that the Federal Reserve System charges to member banks if they wish to borrow money from the Federal Reserve system.

Federal Fair Housing Law: (See Civil Rights Act of 1968)

Federal Monetary Controls: A group of actions that the President, Treasury Department and Federal Reserve System can take to either increase or decrease the supply of money available at banks for lending. The hoped for result is to either increase or decrease the interest rate and therefore turn the economy toward a desired goal.

Fee: Ownership of real estate: "Who holds the title holds the fee".

Fee Simple Absolute Estate: (Fee Simple Estate) The maximum possible estate one can own. A Freehold (ownership) Estate where the owner has the right of use and possession for at least a lifetime and the right to pass the ownership on to his heirs at the time of his death. No conditions are present that limit these rights.

Fee Simple Determinable Estate: A form of Qualified (Defeasible) fee in which the termination of the estate is automatic if the land is used in a way contrary to the limitations stated in the deed. Also called a "Base Fee".

Fee Simple Subject to Condition Precedent: (Delayed transfer of title) A form of Qualified fee in which the deed states that title will not pass until the fulfillment of a condition or conditions included on the deed.

Fee Simple Subject to Condition Subsequent: (Conditional fee) A form of Qualified fee in which the grantor has the right to terminate the estate if the land is used in a way contrary to the limitations stated in the deed.

Fee Tail: A form of Qualified fee no longer allowed in Oregon or Washington. It caused title to revert if the first Fee Tail estate holder's heirs all die out.

fee-for-service brokers: Fee-for-service brokers offer home sellers the option to purchase less than the full bundle of services traditional brokers provide. Different fee-for-service brokers may offer different arrays of services and home sellers can pick and choose the services they wish to procure from the provider or providers of their choice.

FHA Loans: The FHA insures lenders on certain loans they make under this program. FHA loans are available for any type of residential property. These loans are arranged by lenders that are authorized to offer FHA insurance.

FHLMC: (The Federal Home Loan Mortgage Corporation, or "Freddie Mac") A government Agency that buys FHA, VA and Conventional Loan paper from primary market lenders. major participant in the secondary mortgage market.

Fiduciary Capacity: The relationship of utmost good faith and loyalty that an agent owes to his principal.

Financing Statement: The short form of a security agreement; the document which is recorded to create a personal property lien.

Finder's Fee: (Kickback) A fee paid to a person who sends a licensee real estate business or for some other real estate service that they rendered. When that person is not licensed or legally entitled to such fees, the practice is illegal.

Fixed Lease: (Flat or Straight Lease) A Gross Lease under which the rental payments are the same amount each rental period.

Fixture: An item of personal property that has become part of the real property by the way it is permanently attached to and intended to be annexed to the real property. Such attachment can be done physically or by law.

Floor Loan: A loan whereby only a part of the approved loan amount is currently issued and the balance will be issued when a certain condition is met by the borrower. If the condition is not met, expensive "Gap" or "Bridge" financing will be required.

FNMA: (Federal National Mortgage Association, AKA "Fannie Mae") A private corporation, formerly a government agency, which forms the "backbone" of the secondary mortgage market.

Forcible Entry and Detainer: (F.E.D.) A court action for restoring possession of land to one (usually a landlord) who is wrongfully kept out or has been wrongfully deprived of the possession.

Foreclosure: A legal procedure whereby property used as security for a debt is sold to satisfy the debt in the event of default in payment or default of other loan terms. The foreclosure process brings the rights of all parties to a conclusion and passes the title to either the holder of the loan or a high bidder who may purchase the realty at the foreclosure sale.

Foreclosure By Advertisement And Sale: Trustee's Sale, one of the two options that the lender has for foreclosure of a Trust Deed.

Fractional Section: Any Section that contains less than 640 acres.

Franchise: A business arrangement whereby individuals own their own business but they have also purchased the rights to use the name of a national or regional organization. The organization exercises some controls over the individually owned businesses and usually provides mass-media advertising.

Fraud: A misstatement of a material fact made with the intent to deceive or made with reckless disregard of the truth, with the purpose of enticing an individual to enter into a contract that is against their best interest.

freddie mac: (The Federal Home Loan Mortgage Corporation or "Freddie Mac") Freddie Mac is a private corporation that conducts business in the U.S. secondary mortgage market – meaning they do NOT originate/issue loans. It works with a national network of mortgage lending to purchase and sell mortgages in the secondary market. They have three business lines: a Single Family Credit Guarantee business for home loans; a Multifamily business for apartment financing; and an investment portfolio.

Freehold Estate: An estate of ownership. Both Fee Estates and Life Estates are Freehold Estates.

frontage: The front part of the property that faces the street.

FSBO: (For Sale By Owner) A property offered for sale by an owner who has not employed a Broker.

Functional Obsolescence: An appraisal term regarding obsolescence due to a structural condition, floor plan or appliances. Something within the property boundaries that is not worn out but is not socially valuable to a potential buyer.

G

General Agency: A fiduciary relationship whereby the agent is given the power to bind (sign for) the principal for certain business purposes. Most real estate sales agents are the general agent of their broker.

General Lien: A monetary claim which gives the creditor the right to recourse against all real and personal property that a debtor owns.

General Partnership: An unincorporated business where all partners have a voice in management and have exposure to lawsuits coming through the business and attacking their personal assets.

GNMA: ("Ginnie Mae") The Government National Mortgage Association, a federal agency that purchases FHA and VA loan paper from lenders. GNMA specializes in purchasing FHA subsidized loan paper.

gnma - ginnie mae: This is a federal government agency know as the Government National Mortgage Association, it is a federal agency that purchases FHA and VA loan paper from lenders. GNMA specializes in purchasing and selling FHA subsidized loan paper among lenders in the Secondary Market.

Good Consideration: "Love and Affection" used as consideration in a contract. Not always sufficient for enforcement of a deed or contract.

Government (Rectangular) Survey System: A form of land description based on a Principal or Prime Meridian, a Baseline, and using Townships and Sections to describe parcels of land.

Government Lots: Fractional sections in the Rectangular (Government) Survey system that are less than one full quarter-section of land. They are assigned a lot number for legal description purposes.

Graduated Lease: (Graded or Step-Up Lease) A form of Gross Lease where the rental payments can increase based on an agreement in the lease. Often the lease payments are tied to an Index such as the Consumer Price Index, or they are tied to an increase in the appraised value of the property. The clause defining the terms of the increases is called an Escalator Clause.

Grant: The act of transferring or conveying an interest in real property.

Grantee: The receiver of title by grant in a deed; the buyer in most cases.

Granting Clause: A clause in a deed that states the intent to convey the interest that is being conveyed in the deed.

Grantor: The giver of title by grant in a deed; usually the seller but also the borrower under a Trust Deed.

Gross Income: The income a property produces before any expenses are deducted.

Gross Lease: Any lease wherein the landlord receives the rent and has to pay all the expenses of operation from that income. The landlord is receiving Gross Income when he receives the rent check. Fixed, Percentage, and Graduated Leases are all Gross Leases.

Gross Misdemeanor: A legal offense short of being a felony crime.

Gross Rent Multiplier: A system of evaluation that some investors and appraisers use in valuing single-family rental homes. Value is equal to so many times its rental income.

Ground Lease: A lease of land only, on which the tenant is usually required to build a building. Such leases are usually long term Net Leases.

Groundwater: Water below the surface of the Earth that forms the water table and is reachable by way of a well. The opposite of Surface water.

H

Habendum Clause: A clause in a deed that states the duration and defines the quality of the interest that is being conveyed. It has the words "to have and to hold" ..such as, "I hereby convey a Fee Simple Absolute Estate to have and to hold". Literally, in Latin, the word Habendum translates to mean "to have.

Hearing: An administrative preceding where, if held by the real estate division, a licensee must appear to answer some question about his professional activities.

Hereditaments: Inheritable property, both real and personal.

Holdover Tenant: (See Estate At Sufferance)

Holographic Will: A handwritten will without witnesses. The absence of witnesses makes holographic wills unusable for the transfer of real property.

Home Escrow Accounts: An Oregon law that requires lenders to offer certain buyers the option to pay their own taxes. Interest on the tax and insurance reserves that they do hold must be a matter of negotiation.

Homestead Exemption: A law that exempts a specified amount of equity from judgement liens on a personal residence at the time of foreclosure. The exemption is only against Judgments (not secured liens) if any money is left at that point.

Horizontal Property Regimes Act: The statute governing the creation of condominiums in Washington.

Hypothecation: Pledging real or personal property as security for a loan without giving up possession of it.

I

Implied Contract: A contract where the agreement of the parties is demonstrated by their acts and conduct but is not formally expressed.

Inactive License: A license held at the Real Estate Division and not currently with a Broker. It is important to realize that "inactive" is a license status, subject to division rules. (P-4)

Inchoate: An incomplete right that will occur only if certain events happen. A Dower Interest, a Curtesy Interest, a Remainderman's Interest and a Reversionary Interest are all waiting for a future event.

Income Approach: An appraisal method based on the assumption that the value of a property is a reflection of its income producing power. Value is equal to Net Operating Income divided by its Capitalization Rate.

Income Tax Shelter: An investment that takes advantage of the Tax Laws so as to defer the payment of tax on current income to later years where it will either be taxed at a lower amount or lower rate.

Incurable: An appraisal term meaning that the cost to cure depreciation is more than the amount of increase in value that would result from such repair. An unwise investment.

Index Lease: (Escalator Lease) (See Graduated Lease)

Inflation: An economic condition where the money in circulation is excessive for the commodities on sale.

Inheritance: The right to pass property to your heirs at your death.

Injunction: A court order compelling a person to stop some stated action.

Installment Land Contract: (See Land Sales Contract)

Institutional Lender: A lender that receives its loan funds from depositors instead of investing its own funds.

Intangible Property: (Incorporeal Property) Property that has no size, shape or physical being, such as rights.

Interest: An estate (ownership right) in real property.

Interim Loan: (Construction Loan) A loan to a builder during the course of construction. Typically funds are disbursed in stages drawn at certain points of completion. It is a short term, high interest rate loan expected to be replaced by a permanent loan ("take out loan") when the property is completed.

Interlocutory Decree: A court order giving a person a specified number of days to cure a problem or suffer specific consequences. It is used in the place of the Statutory Right of Redemption in the foreclosure of a Land Sales Contract.

Intestate: Dying with an invalid will or no will.

J

Joint and Several Note: A note clause which allows the lender to collect the entire owed amount from any one party or all parties to the loan, in any combination.

Joint Tenancy: A form of Concurrent ownership allowed in Washington but not in Oregon. It requires four Unities and the co-tenants have the right of Survivorship.

Joint Venture: A form of partnership which is limited to one specific project. It differs from a partnership in that there is no intention to form a continuing relationship of the parties.

Judgment: The court awarded damages following a lawsuit. A ruling by a Judge.

Judicial Foreclosure and Sale: The only way to foreclose a mortgage and one of the ways to foreclose a Trust Deed. It involves a judgment, Sheriff's Sale and the right of the mortgage lender to a deficiency judgment.

Junior Lien: Any lien recorded after the first current lien on a property.

K

KilgoreHomes.com: The best place to search for a home in Kilgore Texas. 

L

Land Conservation And Development Commission: (LCDC) An Oregon State Agency that checks local government Master Plans (long range comprehensive zoning) and assures that local governments are complying with their Master Plans. They also exercise planning power over certain areas of special public concern.

Land Development Representative: A person specifically registered with the department of licensing and the broker for a Land Development project in Washington to perform minor tasks for that broker, but not to act as a licensed Agent.

Land Sales Contract: A sales contract for real property by which the seller (Vendor) is carrying the loan for the buyer (Vendee) instead of having the buyer arrange for a loan with a lending institution. It is also called a Land Contract, Contract for Deed or Installment Contract. In Washington the preferred term is a Real Estate Contract. It differs from a mortgage/trust deed in that title does not pass until the contract is fully paid.

Landlord Tenant Act: An Oregon law that states the rights and the responsibilities of residential landlords and tenants.

Latches: Failure to assert one's rights in a timely manner. If the delay is dilatory or unwarranted the claimant could lose his right to act.

Late Payment Clause: A clause in a loan stating that if the borrower is late in making his payments, the lender can charge a specific penalty: a flat dollar amount or a percentage of the payment.

Lateral & Subjacent Support: The physical support a parcel of real property receives from the land adjoining and underlying it. Persons disturbing this support can be held liable by the damaged property owner.

Lease: A contract where the owner has granted (by demise) the "Use and Possession" stick from his "Bundle of Rights" to a tenant.

Legacy: (Bequest) Personal property given through a will. The counterpart of "Devise".

Legal Age: (See Adult)

Legal Life Estate: A type of Life Estate allowable in a few States that is created automatically, by law. Dower and Curtesy are Legal Life Estates.

Legatee: The receiver of personal property by way of a will.

Legator: The giver of personal property by way of a will; the deceased person.

Less-Than-Freehold Estate: A rental estate or leasehold estate. The possessory right of a tenant in a landlord's real property. Also called Rental Estate, Leasehold Estate, or Chattels Real.

Lessee's Title Insurance Policy: A Title Insurance policy in favor of the tenant. Typically used in a long-term lease to protect the tenant by helping to assure that the landlord can legally convey long term possession.

Leverage: The use of borrowed money to finance the bulk of an investment.

Levy: To assess real property and set the rate of taxation.

License: Revocable permission to use the land of another.

Lien: An Encumbrance on a specific property securing an amount of money owed.

Lien Theory States: The mortgage theory in Oregon and Washington. When you borrow money on your property, the lender is only entitled to a lien on your property, you do not have to convey title to him.

Life Estate: A Freehold Estate where the holder is the owner for a lifetime only. During the ownership, the Life Tenant has all rights and responsibilities, but he can only sell, lease, or mortgage that which he owns (a life estate).

Limited Common Elements: Common areas in which ownership is shared by some, but not all, of the owners of a Condominium as Tenants in Common.

Limited Partnership: An unincorporated business having both General and Limited Partners. General Partners manage the investment and their personal assets are vulnerable to suit upon the partnership. Limited Partners have no voice in management but can only lose their investment; their personal assets can not be attacked.

Limited Security Offering: An Oregon security term where an investment is offered to no more than 10 investors within a 12 month period and under specified conditions. Securities which meet these specifications are exempted from much of the lengthy process of full registration with the state.

liquidated damages clause: A clause in a contract such as the Listing Agreement and the Earnest Money Receipt. The Listing Agreement specifies the procedures. The Earnest Money Receipt specifies the conditions under which the buyer will forfeit his deposit if he wrongfully backs out of the agreement.

Liquidity: The ability to sell an asset and convert it into cash quickly at a price close to its true cash value.

Lis Pendens: A written and recorded notice that a lawsuit affecting title to or possession, use and enjoyment of a parcel of real estate has been filed in either state or federal court.

Listing Agreement: A written contract entitling a Broker to seek a "willing, capable purchaser for terms equal to the listed sale terms and to accept earnest money deposits on pending sales" in exchange for the possibility of earning a commission.

Listing Broker: The Broker given employment and marketing rights under a written Listing Agreement.

Littoral Rights: The right to use still water that abuts your property, such as water from lakes, reservoirs or the ocean. (See Riparian)

Loan Correspondent: (See Mortgage Banker)

Loan Origination Fee: A variable fee for doing the paperwork costs of a lender when they issue a new loan. Generally 1% to 2% of the loan amount.

Loan Reserves: 1/12th of the annual property tax and/or 1/12th of the annual insurance premiums on a property that are built into and collected as part of the monthly loan payments by the lender. The lender holds the reserves in an account until the annual bill is presented.

Lock-In Clause: A special type of Prepayment Penalty clause found in loans. It specifically forbids the borrower from making any payment amount over that called for in the regular installment amount.

Lot And Block Description: (Subdivision Method, Plat Map Method) A method of describing parcels of real property called Lots that refers to a recorded Plat Map of a recorded subdivision.

LVR: Loan to Value Ratio, a percentage of the appraised value or sales price that a lender will loan on that property.

M

Major Partition: (Oregon) The division of property into 2 or 3 parcels, including the creation of a road.

Market Data Approach: (Comparison Approach; Comparable Sales Approach) An appraisal method whereby value is estimated based on comparing the property to recently sold comparable properties.

Marketable Title: Title free of defects which would force the receiver to defend the title or prevent him from freely transferring it to another. It allows for minor defects that are not serious enough to represent a claim that will result in measurable damage.

Master Plan: (Comprehensive Plan) A long range plan over and above current zoning, for the development of a given geographic area. A favorite of zoning departments.

Material Fact: A contract term meaning, "had I known the truth I would not have entered into the contract". Something important enough that, if it is misrepresented, destroys the mutual consent requirement in a contract.

Meander Line: An artificially approximated line following along a water course in a Metes and Bounds Legal Description. Used by surveyors to define the area of parcels whose true boundary is a stream or water way.

Mechanic's/Materialman's Lien: (Construction Lien) A specific lien allowed against real property when either material was delivered to and/or work was performed on a property and was not paid for. These liens can supercede previously recorded liens if filed correctly, and on time.

Menace: Getting a person to enter into a contract by undue influence, or fear, but short of actual violence as in Duress. The contract is voidable by the injured party as it lacks Voluntary Agreement.

Metes And Bounds Descriptions: The oldest form of legal land description. It describes a parcel by distances and directions, angles and terminal points from a known starting point or monument. Metes and Bounds means Measurements and Boundaries.

MGIC: ("Magic") The Mortgage Guarantee Insurance Corporation, the largest of the private mortgage insurance companies. They offer private mortgage insurance on certain conventional loans to insure the lender against loss at the time of foreclosure.

Mil: (Mill, Millage Rate) One tenth of one cent. Both Oregon and Washington have abandoned the use of millage on property tax statements. They now use dollars-per-thousand.

Mineral Lease: A contract leasing out the right to search for subsurface minerals. The exploration company typically pays a small flat rental fee in advance and promises to pay the land owner a specific percentage royalty for any minerals that are extracted. The owner keeps the Freehold interests of air rights, surface rights and all other subsurface rights.

Minor Partition: (Oregon) The division of property into 2 or 3 parcels, without the creation of a road.

Misrepresentation: The concealment (omission) of or false statement (commission) of a material fact done to induce another party to act.

Mobile Home: A wheeled vehicle intended for permanent residency or use. Some States consider a Mobile Home to be personal property at all times, while other States consider then to be personal property if they are situated on rented land but real property if situated on owned land.

Monument: A natural or artificial marker, such as a stake, river or tree, used by a surveyor to establish lines and boundaries in a survey.

Moral Turpitude: Conduct contrary to a reasonable person's conception of justice, honesty, modesty or morals.

Mortgage: The document which makes real property security for a debt. A hypothecation device; the document creating a mortgage lien.

Mortgage Banker: Similar to mortgage brokers except that they do invest their own funds.

Mortgage Broker: A "middle man" who puts people who need loans together with people who have money to lend. They charge a fee for the service. They rarely use their own money on a long term basis. They may service the loan after it is placed. Also known as Loan Correspondents.

Mortgage Insurance Premium: (MIP) The portion of a monthly loan payment that is paid to FHA or MGIC which represents the mortgage insurance premium on a residential property.

Mortgagee: The lender under a Mortgage.

Mortgagee's Statement: (See Certificate Of No Defense)

Mortgagee's Title Insurance Policy: (Lender's Title Insurance Policy) A Title Insurance policy purchased by the borrower (buyer) at the time of closing as a condition of receiving the loan. It protects the lender, up to the outstanding loan amount, if the property is lost due to certain covered flaws in the title.

Multiple Listing: An Exclusive Right To Sell Listing in which the seller authorizes the broker to share the listing with other member brokers for marketing purposes.

Mutual Mortgage Insurance: (MMI) FHA's required insurance. It is paid for by the borrower to protect the lender in case of deficiency. It is the prototype for private mortgage insurance.

N

Narrative Appraisal Report: The most complete (and most expensive) form of appraisal report typically running 10 to 100 pages or more. Thorough enough to allow the customer to follow the appraiser's reasoning and examine the supporting documentation.

National Housing Act of 1934: The federal law which created FHA.

Negotiable Instrument: A written instrument which may be transferred or assigned by endorsement and delivery so that the legal right to receive its value are transferred. They usually represent a promise to pay as in a check, shares of stock, or a promissory note.

Net Lease: A lease where the tenant pays building operating expenses and a small rent check to the landlord. To the landlord, the rent received represents Net Income; he does not have to pay certain expenses out of his rental income because the tenant paid them for him.

Net Listing: A Listing Agreement where the Broker receives any mount that is paid for the property over a stipulated amount that the seller insists on Netting or clearing from the sale. The seller is saying, "Add your commission on top of my minimum price."

Net Operating Income: (NOI) Gross Income less certain Expenses. The amount left over after expenses are deducted. This is an appraisal term, used in the calculation of the capitalization (income) approach. (F-4)

Net-Net Lease: A lease where the tenant pays all building operating expenses and the landlord's mortgage payment on the property plus pays a small rental amount to the landlord. To the landlord, the small rental amount is true net income because he has no expenses to pay.

Nolo Contendere: A Latin term meaning "No Contest". A plea in a criminal case whereby a defendant tactfully admits his guilt and throws himself to the mercy of the court.

Non-Agricultural Proviso: A clause inserted in a Washington mortgage stating that the mortgaged property is not used for agricultural purposes and therefore enjoys no advantage in foreclosure redemption rights.

Non-Conforming Use Permit: A permit issued by the local government body to allow a use to continue that was originally legal but now is technically illegal because the zoning of the land has changed.

Non-Conventional Loan: Any loan guaranteed or insured by an agency of the federal government, such as FHA and VA loans.

Non-Resident License: A real estate license issued to a person who is not a resident of that State. Neither Oregon nor Washington requires residency. Therefore, this type of license is not issued.

Normal, Recurring Expenses: The type of expenses that a Property Manager can pay for from the operating budget of a property after first receiving the permission from the owner.

Novation: A new agreement that entirely replaces an old agreement. Also called Assignment and Release or Assignment with Full Release.

Nuncupative Will: An oral death bed will stated before witnesses. Valid for the conveyance of personal property but not real property because it is not in writing.

O

OAR: Oregon Administrative Rule, a rule or regulation issued by a State Agency. The type of rules which govern licensees' actions.

Obsolescence: Becoming out-of-date either functionally or economically. In appraisal, obsolescence is either curable or incurable.

ODVA Loan: (Oregon only) A loan issued to eligible veterans by the Oregon Department of Veteran's Affairs.

Offset Statement: (Estoppel Certificate) A special type of Lender's Statement showing the net amount owing on the loan after tax and insurance reserves are deducted.

One Hundred Percent Location: The Southwest corner of an intersection: the ideal location for a business.

Open End Loan: A loan in which the borrower has established a maximum line of credit with the lender. The borrower can borrow additional amounts, as needed, without rewriting the loan each time.

Open Listing: A listing agreement that is open to several different Brokers. Each must have a written agreement and the Broker who is the "procuring cause" of a sale is the only Broker who will receive a commission.

Operating Budget: The written schedule of the operating expenses of a given property.

Operating Expenses: In appraisal, those normal recurring costs that apply to a given property. Mortgage payments are not an operating expense because they are personal to the current owner. (The owner could have paid cash.) Depreciation is not an operating expense because you do not actually spend those dollars.

Option: A written, unilateral contract where one party purchases the exclusive right, for a stated period of time, to be able to buy or lease a specific property.

Option Fee: The fee paid for the option right. It is not refundable and is fully earned by the property owner whether or not the option is exercised. It is a form of liquidated damages.

Oregon Real Estate Board: An appointed Board that causes to be prepared the Real Estate exam, the Pass-Fail List, and advises the Commissioner on how best the Real Estate Agency can serve the public.

Oregon Subdivision Control Law: An Oregon law that allows the Real Estate Commissioner to control the advertising used when selling certain subdivision lots.

Oregon Subdivision Regulation: An Oregon law that allows local governments to approve the creation of subdivisions and partitions that occur in their community.

ORS: Oregon Revised Statute, Statutory Law passed by the Oregon State Legislature.

Owner's Title Insurance Policy: A standard Title Insurance Policy purchased by the seller at the time of closing. It insures the buyer or his heirs for as long as they have an ownership interest, up to the purchase price, for certain flaws in title that arise from records that were claimed to have been searched.

P

Parol Evidence: (Oral statements) A rule of legal evidence which states that if a written contract is present, the written portion is considered to be the entire agreement. Oral statements not reduced to writing will not be heard by the court unless one of the parties can prove material misrepresentation or fraud.

Partial Release Clause: (Release Clause) A Clause in a Blanket Loan which allows one part of the property to be released from the lien which originally applied to several parcels of land. Typical of a loan a developer has against all the lots in a subdivision. When he sells one lot, that lot is released from that lien. It then only applies to the unsold lots.

Partially Amortizing Loan: A loan which amortizes by a normal, equal-payment schedule, until some agreed-upon date when the entire remaining principal balance must be paid in full. (See Balloon Payment)

Participation Loan: A loan where the lender requires a percentage of the profits as a condition of granting the loan. This increases the security and acts as increased interest if the venture succeeds.

Partition Action: A court action where the Judge physically divides property between co-owners.

Patent: The document given to a private party when land is being conveyed to them by a government body.

Percentage Lease: A lease in which the rental charge is based entirely or in part on a percentage of Gross Receipts of the tenant.

Performance: (Tendering Performance) A contract law term meaning that a party stands ready to fulfill or has fulfilled their promises under a contract.

Personal Aspect: A contract term meaning that part of the consideration is based on the high regard that one party holds for the other. Death of that party will terminate the contract because part of the consideration has been removed. Agent-Principal relationships such as Listing Agreements are based on Personal Aspect.

Personal Property: Movable property, all property that is not Real Property, Also called Personalty or Chattel.

Physical Deterioration: Wear and tear, wearing out, a form of depreciation.

pledge: The transfer and delivery of an item as security for a debt. Pledge differs from Hypothecation in that Hypothecation is using property as collateral for a loan, giving foreclosure rights, but it does not include the physical delivery of that property to the lender. A Note offered by a buyer to the seller is a pledge to pay in the future. However, the seller cannot foreclose on the property; only to sue for non-performance.

Plottage Increment: (Plottage) An appraisal term referring to the earned increment of the owner realized by merging 2 or more parcels of real property, thereby increasing the value by more than the individual values each parcel had prior to the merger.

Pocketcard: A wallet or purse sized summary of a real estate license that is issued to a licensee. It is evidence of licensure and must be carried by Washington licensees at all times. Oregon did away with pocket cards in 1981.

Point of Beginning: (POB) Reference to a monument that forms the true beginning of a parcel in a Metes and Bounds Description.

Points: A form of prepaid interest charged by a lender to increase the effective yield of the loan. On VA loans points can only be paid by the seller. On FHA and conventional loans, they can be paid by anyone.

Police Powers: The government's right to regulate the use of private property for the safety, health, welfare and morals of society. No compensation need be paid for exercising a Police power, regardless of the damage suffered, as long as they are "merely regulating" the property and not "taking" it. Exception: Eminent Domain, which is a taking and must be compensated for.

Power of Attorney: A written instrument authorizing a person (the attorney-in-fact) to act on behalf of the maker to the extent indicated in the document.

Power of Sale Clause: A clause in a Trust Deed that allows the Trustee to hold a Trustee's Sale to foreclose. It waives the borrower's right to Judicial Foreclosure and Sale of the property.

Preliminary Title Report: A report issued by a Title Insurer into the Escrow concerning the tentative findings in Title Search. No liability is assumed by the Insurer at this point. It states only probable findings and the possibility of issuing a Policy at closing.

Prepayment Clause: A clause in a loan document that allows the lender to charge a penalty in the form of a flat dollar amount or a percentage of the monthly payment if the borrower pays more than a named percentage of the original note amount in any given year.

Prescription: A legal process by which an easement can be gained by open, hostile and notorious use of another person's real property for a Statutory continuous period of time. During the holding period it is an illegal trespass. After the holding period (10 years in Oregon and Washington) an Easement By Prescription can be legally gained either by a Quiet Title Action or getting the land owner to execute a Quitclaim Deed.

Primary Mortgage Market: The banks, savings and loans and mortgage brokerages at which loans are first made. The loans are then usually sold on the Secondary Mortgage Market.

Prime Meridian: A longitudinal line used as the principal North-South line in a Government or Rectangular Survey System. The Willamette Meridian for Oregon and Washington.

Principal (person): A person in a buyer/tenant or seller/landlord who appoints an agent to transact some business on his behalf.

Principle (money): The amount of money borrowed or invested on which interest is charged or paid.

Principle of Anticipation: An economic principle which states that value is a buyer's concept of the present and future use and enjoyment of the property.

Principle of Balance: An economic principle which states that value is maximized if all the parts, land, labor, capital and improvements are in balanced relationship to each other.

Principle of Change: An economic principle that states which land use is not static, the Highest and Best Use will change over time.

Principle of Conformity: An economic principle which states that value is increased if the surrounding area is being used at the same use as is your property.

Principle of Diminishing Returns: An economic principle which states that if the dollar you invest in an improvement does not increase the total value of the property by one dollar or more, you have passed the point of wise investment.

Principle of Highest and Best Use: This is an appraisal principle which seeks to establish the use that will produce the greatest Net Income from a property at a given point in time.

Principle of Progression: A lesser valued property will increase in value if it is surrounded by higher valued properties.

Principle of Regression: A high valued property will decrease in value if it is surrounded by lower valued properties.

Principle of Substitution: No reasonable person will pay more for a property than the price they would have to pay for an equally desirable property.

Principle of Supply and Demand: The value of any good or commodity is established in a free, competitive market place by the supply of comparable properties and the demand of buyers for that type of property.

Principles of Value: Appraisal theories such as the eleven listed above.

Probate: The formal judicial proceeding to prove or confirm the validity of a will.

Professional Real Estate Activity: Charging a fee for such services as: selling, renting, listing, optioning or exchanging property of others. Such activity requires, with few exceptions, a real estate license.

Promissory Note: A written document where one party promises to pay specific payments at a stated interest rate for a stated period of time on specific dates. The promise to pay.

Property Manager: A person who offers professional management services to property owners and will charge a fee for those services.

Property Tax: The Ad Valorem tax on the assessed value of real property. It is the major source of income for most local governmental units.

Proration: The fair division of an on-going expense item between the buyer and seller, as part of the closing of a real estate sale.

Prospectus: (Offering Circular) The primary document (brochure) to be used by those selling a real estate security. The State must approve a Prospectus before it can be distributed. It must reveal all material and investment aspects of the offering.

Puffing: Exaggeration; over-statement of an obvious condition. It is not a misrepresentation because it is only a personal opinion not a statement of fact.

Purchase Money Mortgage or Trust Deed: A mortgage whereby the seller, instead of a lending institution, carries all or part of the purchase price of the property. In Oregon any Mortgage/Trust Deed of $50,000 or less is treated as a purchase money mortgage.

Purchaser's Title Insurance Policy: (Vendee's Policy) The name of the Title Insurance Policy issued in favor of the buyer when the property is financed under a Land Sales Contract.

Q

Qualified Endorsement: Signing the back of a bill or note followed by the words "without recourse". The receiver has no right to collect the note from the signer.

Qualified Fee: (A Defeasible Estate) Fee Simple which is subject to some certain limitations established by the person creating the estate. There are three types of Qualified Fees: Fee Simple Determinable; Fee Simple Subject to Condition Subsequent; and Fee Simple Subject to Condition Precedent. (Please refer to these terms)

Quasi-Public: A name given to non-government entities which have condemnation rights. For example: Railroads and utility companies.

Quiet Enjoyment: The right of a new owner or tenant to possession without interference.

Quiet Title Action: A court action used to extinguish easements, remove clouds on title, transfer title without warranties, clear tax titles, perfect a claim of adverse possession or prescriptive easement.

Quitclaim Deed: A deed without warranties, whereby the signer is giving up any interest he may or may not have. Often used to clear mistakes or remove title clouds.

R

Range Lines: North-South Lines that are parallel to an every 6 mile interval moving East and West of the Prime Meridian in a Governmental (Rectangular) Survey System. The ranges themselves are therefore numbered eastward and westward of the prime meridian.

RCW: Revised Code of Washington, laws passed by the Washington Legislature.

Real Estate Agency: The real estate licensing body in Oregon. (Formerly called the Real Estate Division)

Real Estate Contract: (See Land Sales Contract)

Real Estate Investment Trust: An unincorporated real estate investment group having at least 100 members and that receives special treatment under tax laws.

Real Estate Security: When real estate offered for sale is coupled with management by someone other than the buyer, a security exists. Persons selling real estate securities must have a real estate license and a securities dealer license.

real estate settlement procedures act: (RESPA) A federal law regarding standardized escrow/settlement procedures for closing a transaction. This includes standardized forms and requiring lenders to disclose closing costs before making mortgage loans on residential property.

Real Property: Land, rights that belong to the land, and things permanently attached to the land. A right or object not intended for movement. Also called Real Estate or Realty.

Receivership: The court appointed custodianship of property involved in litigation pending final disposition of the matter before the court.

Reciprocal Agreement: In license law, generally between Agencies of different States, to recognize the qualifications of license holders in that other State.

Reconveyance Deed: (Deed of Reconveyance) The document the borrower receives to show that he has paid a Trust Deed debt in full. In theory, the Trustee is conveying back to the borrower the "power of sale clause" also known as "Naked Title".

Recording: Entering an item in the County records to give the world Constructive Notice of that possible legal right. Recording, however, has nothing to do with the validity of the claim.

Red-Lining: Under the Civil Rights Act of 1968 and Federal Reserve regulations a practice whereby a lender refuses to make loans or restricts the loans made in a geographic area. This amounts to illegal discrimination if the Red-Lining is done because of minority integration.

Reduction Certificate: (See Offset Statement)

Regulation Z: (Truth-In-Lending) A Federal Law that requires any person who normally extends credit to disclose the true cost of borrowing.

Reinstatement Of Loan Rights: Veteran's loans, such as VA , generally allow a borrower to only have one outstanding loan at a given time. A current loan must be fully paid off or assumed by novation before the veteran's right to receive another loan is reinstated.

Reliction: (Dereliction) A gain in surface area of land because of the permanent receding of a water course or the drying up of a lake.

Remainderman's Interest: The future interest that a person has when a current estate, such as a Life Estate, is ended. The person is not the person who granted the original Estate. The Remainderman will receive ownership of a Fee Simple Estate.

Rental Pool: A rental arrangement whereby participating owners allow their units to be rented through a rental agent, and then share in the proceeds of the pool.

Replacement Cost: The current cost to replace one building with another which offers the same function ability.

Reproduction Cost: The current cost to produce an exact duplication of a building.

Rescission: A legal term meaning to rescind or call off the contract. Each party must be returned to the original position they had before entering the contract.

Reserves: (Impounds) Taxes and insurance premiums paid in advance as a part of the loan payments. They are collected by the lender and the lender pays those bills when they are received.

Restricted Real Estate Security: An Oregon security term where the seller of certain securities only needs to file a Short Form Filing because the chance of the investors losing their money is "restricted".

Restriction: Limitations on the use of property. They can be public, such as zoning, or private, such as in condominium uses. The 'R' in the acronym "CCR's".

Retainer Fee: A fee paid to a license holder for some service that they render or have rendered, such as an appraisal fee or consulting fee. It is fully earned when received and therefore may not be placed in the Clients Trust Account or it would be commingling of funds.

Revenue Stamps: Documentary Stamps, purchased from a State, that must be affixed, before recording, to most deeds or instruments whereby land or other realty is sold or conveyed. Neither Washington nor Oregon requires Revenue Stamps.

Reversionary Interest: The future interest that the original grantor has in a current estate. EG: title will revert back to the original grantor in Fee Simple at the end of a Life Estate. A landlord also has a reversionary interest in the possessory rights he will receive back at the end of a lease.

Right of Redemption: (See Statutory Right of Redemption)

Riparian Rights: The Common Law concept that an owner has rights of access to and use of running water that borders his property. His right is restricted in that he can not pollute the water or deprive down stream owners of their rights. In most Western or water-short States, this law has been replaced by a system known as the Doctrine of Prior Appropriation, under which the water is owned by the public and the landowner seeks permission to use it.

Roof Top Lease: A lease for the right to use the roof top of a building, usually for the purpose of a billboard.

S

Sale and Leaseback: One contract where an owner sells the property and agrees to rent it back as the tenant. The method used for rapid expansion by Montgomery Ward and Sears, Roebuck companies. A contract whereby a person goes from a Freehold (ownership) Estate to a Non-Freehold (rental) Estate under the same document.

Salesperson: In real estate, a licensee who works for a Broker.

Satisfaction of Mortgage: A written instrument given by the mortgagee to the mortgagor when the mortgage debt is fully paid. If recorded it will remove that lien from the County records.

Scarcity: An economic term referring to the relative supply of and demand for a given commodity.

Second Lien: (A Junior Lien) The loan that is recorded on a property after the first current, recorded loan.

Secondary Mortgage Market: A confusing name for a group of government agencies and private entities which purchase existing mortgages or trust deeds (loan paper) from lending institutions. GNMA, FNMA and FHLMC are among the major entities but they have absolutely nothing to do with "second mortgages".

Section: A square parcel of land 1 mile on each side and containing 1 square mile of land area or 640 acres. The basic division of land under the Government or Rectangular Survey System.

Security: (1) Collateral: pledging or hypothecating an asset as security for the repayment of a loan. (2) (See Real Estate Security) An investment scheme wherein the investor's profits are dependent upon the control and actions of a third party such as a general partner or promoter. Sales of such investments must be registered with the state. Persons selling them must have a securities dealer license.

Security Agreement: The written document that creates a lien on personal property under the Bulk Transfer Section of the Uniform Commercial Code. This was known as a Chattel Mortgage before the adoption of the code.

Security Broker-Dealer: A person licensed dually to transact sales of Real Estate and Real Estate Securities properties.

Security Device: A hypothecation device to secure the repayment of a debt. The document used to give foreclosure rights, as in a Mortgage or Trust Deed.

Seller's Agent: A licensee who represents a seller or landlord (only) in an agency transaction

Senior Citizen's Property Tax Deferral: An Oregon law that allows certain senior citizens to defer the property taxes on their residences until some future date.

Separate Property: In Community Property States, property that was owned before marriage or was received by just the husband or just the wife by way of gift or inheritance. It is owned by just that one person and, if maintained with separate funds, is not included as Community Property of both.

Servient Estate: The property across which an easement appurtenant crosses.

Setbacks: (Setback Line; Building Line) A distance required by a local government or private restriction that buildings be "setback" from the street, sides or back lines of a parcel.

Settlement: (See Closing)

Severalty: Property ownership by one person. One person has ownership "severed" from all others.

Severance: Cutting down or selling an item of real property. When severed it might become personal property if it is movable.

Sheriff's Deed: The Deed given by the Sheriff to the high bidder of a foreclosed property after the Statutory Right of Redemption has expired. It conveys title without warranties.

Sheriff's Sale: The sale at which a property is sold under Judicial Foreclosure and Sale. The Sheriff is empowered to sell by a Writ of Execution.

Six Percent Limitation: An Oregon property tax law precluding a local government body from increasing their budget by more than 6% over their budgets of the past 3 years without first receiving voter approval.

Special Warranty Deed: A deed where the grantor warrants only against defects arising against the property during his term of ownership.

Specific Agency: (Special Agency) A fiduciary relationship wherein the agent is hired for a specific purpose instead of an on-going relationship. Most listings create a Specific Agency.

Specific Lien: (Special Lien) A monetary encumbrance (Lien) that only applies to one specific property and not to any other property the owner may have. The opposite of a General Lien.

Spot Zone: The zoning of a small area for a use inconsistent with the zoning of the general area.

Standard Title Insurance Policy: The type of policy usually received by a purchaser or a long term tenant. It is not as broad in coverage as is the ALTA form. Generally, it covers losses stemming from matters of record, forgeries and lack of capacity.

Statute Of Frauds: A law that states that certain contracts, notably real estate contracts, must be in writing to be valid.

Statute of Limitations: A law that lists specific time periods that a person has to seek legal action for a specific wrong. Failure to pursue legal action within the stated time frame results in forfeiting your right to do so.

Statutory Deed Forms: Oregon recognizes only four Deed forms. Their wording is mandated by State law. The forms are: Warranty, Statutory Warranty, Bargain & Sale, and Quit-claim. For Washington, see Washington Deed Law.

Statutory Right Of Redemption: The State-imposed time period that allows a mortgagor to reclaim his real property after the property has been sold at a Sheriff's Sale under Judicial Foreclosure and Sale.

Steering: The act of suggesting or directing people to seek housing in a given area. Steering amounts to illegal discrimination if it is done because of the presence or absence of legally protected minorities.

Step-Up Lease: (See Graduated Lease)

Straight Line Depreciation: A method whereby an equal amount of depreciation loss is taken over the life span of the property. The percentage will depend upon the estimated Economic Life of that property in relationship to its value.

Straight Note: (See Term Loan)

Strict Foreclosure: A breach remedy allowed under Land Sales Contracts. A Judge rules a breach has occurred and the lender is allowed to keep all payments currently received and gets the property back.

Subjacent Support: A real property right an owner has not to lose support from below. If your neighbor's activity caused your property to sink or cave in, you have lost your Subjacent Support and your neighbor has gained a legal problem.

Subordination Clause: A clause in loan documents that literally means "number below" or changing position. In a 1st lien document, it states that at some later date this 1st lien will trade places with a 2nd lien. The 1st will become the 2nd in pay-off priority and the 2nd will become the 1st.

Subsidiary Corporation: A corporation who's stock is owned by a parent corporation. Owned by or "below" another corporation.

Sum Of The Year's Digits: A method of calculating accelerated depreciation. All accelerated depreciation was eliminated by the Tax Reform Act of 1986. (F-4)

Superior Lien: The first recorded security device (mortgage, trust deed, etc.) against the current title. All subsequent recorded liens are said to be "Junior Liens".

Surface Water: Water that naturally occurs on the surface of the Earth, such as rivers, lakes and streams.

Survivorship: Concurrent Tenancies have either the right of Inheritance or Survivorship. Under survivorship, the ownership of a co-owned property automatically passes to the surviving partner(s) at the time of death of a partner.

Syndicate: A combination of 2 or more persons or firms to accomplish a joint venture of mutual interest. Syndicates dissolve when the specific purpose for which they were created has been accomplished. The sale of interests in a syndicate is a security sale.

T

Take Out Loan: A permanent, long-term loan. When a house is built under a Construction Loan, the lender expects the buyer to secure his own permanent financing and that new permanent loan will "take out" the short term construction loan.

Tangible Property: (Corporeal Property) Property having a body, touchable property as opposed to rights, which are intangible.

Tax Lot Number: A number assigned to each parcel of land in the County by the County Tax Assessor. Can not be used as a legal description in a deed.

Temporary Broker's Permit: A temporary Broker's license issued to the chosen representative of a designated Broker who is incapacitated or deceased.

Tenancy: 1) Possession as coupled with a freehold estate such as Tenancy in Common, Tenancy in Severalty and Life Tenancy.2) Possession as coupled with a less-than-freehold estate such as Tenancy-at-Will and Periodic Tenancy.

Tenancy By The Entirety: The form of ownership for married people in Oregon. Tenancy by the Entirety has an undivided 100% interest vested in each partner during their lifetime. Washington uses community property law for married people.

Tenancy In Common: A form of co-ownership that allows for equal or unequal ownership interests, allows any partner to sell, mortgage his interest separately from his partners and has the right of inheritance. Possessory rights, however, must be equal and undivided.

Tenancy In Severalty: Property owned by one person. It has the right of inheritance.

Tenements: A word in a deed referring to any buildings on the property.

Term Loan: (Straight Note) A loan wherein the debtor repays entire principle in a lump sum at the end of the loan period. The definition applies whether or not the interest on the loan is paid as insured. The opposite of an amortized loan.

Testate: Leaving a valid will at your death.

Testator: A deceased person leaving a valid will.

Tiers: Rows of townships extending east and west of the meridian in a Governmental (Rectangular) Survey System.

Time Is Of The Essence Clause: A clause placed in a contract that requires both parties to act promptly. It makes the time frames of the document material facts.

Timeshare: A form of condominium ownership where the unit owner shares possessory rights for only part of the year on a scheduled basis.

Title: The situation of ownership. Who ever holds title is also the holder of the "Bundle of Rights". (Remember title is not a piece of paper)

Title Insurance: An insurance policy issued by a company that searches the public records on land. A Title Insurance Policy covers loss arising from defects in the title records they claimed to have searched.

Title Search: The searching of records on a parcel of land preparatory to the issuance of a title policy.

Title Theory State: A few States require the borrower to convey actual legal title to the lender in exchange for granting a loan, instead of keeping title and giving the lender a lien. (See Lien Theory State)

Torrens System: A system of land title registration used in a few States (including Washington but not Oregon) whereby a judge rules that any claim on a property that is properly recorded is valid and any claim that is not properly recorded is hereby extinguished.

Township: The principle land unit in a Government (Rectangular) Survey System. A square unit of land 6 miles on each side and containing 36 square miles of land. Formed by the intersection of township and range lines.

Township Lines: East/west latitudinal lines used to indicate the 6 mile intervals between Townships in the Government (Rectangular) Survey System. The townships themselves are therefore numbered northward and southward of the Baseline.

Trade Fixtures: An item that appears to be permanently affixed to the real property like a fixture, but is used in a person's trade and occupation. Removal is allowed if damage caused by its removal is repaired by the tenant.

Transactional File: ("Deal File") A file or folder where all the documents concerning any offer or sale of one certain property are kept by the selling and listing Broker. In Oregon (but not Washington) such files must be consecutively numbered.

True Cash Value: (See Ad Valorem)

True Point Of Beginning: The first corner of a property to be described under a Metes and Bounds Legal description. Not necessarily the place where the survey itself began.

Trust Deed: (Deed of Trust) A security device which hypothecates real property to secure the repayment of a loan. A Trust Deed has three parties; Beneficiary (the lender), Grantor/Trustor (the Borrower) and a neutral 3rd party called the Trustee.

Trustee: The neutral 3rd person who holds the Power of Sale under a Trust Deed. The Trustee can only follow the legal instructions of either the lender or the borrower. The Trustee can not be or represent only the borrower or the lender. Although the Trustee is not "in title" unless a default is declared, he is said to hold "naked title" which means the power to sell upon default.

Trustee's Deed: The deed given to the high bidder at a Trustee's Foreclosure Sale.

Trustee's Sale: Another name for Foreclosure By Advertisement and Sale under a Trust Deed.

Trustor: The borrower under a Trust Deed. (He is also called the Grantor because he is granting a Trust Deed to the Trustee).

Truth-In-Lending: Part of the Federal Consumer Credit Protection Act which is implemented by Regulation Z. Among other things, it created the APR (Annual Percentage Rate) as a system to standardize disclosure by lenders of the true cost of credit.

U

Undisclosed Principal: Acting secretly for yourself or some other person without announcing that interest to the seller. A violation of your agency duty.

Unearned Increment: Any gain in value that occurs without the owners effort.

Unilateral Contract: A one-sided contract in that one party must perform IF the other party exercises their option to act.

Unit Ownership Act: The statutes governing the creation of condominiums in Oregon.

Unity: Something that must be concurrent and equal. In Tenancy, there are four possible Unities; Time, Title, Interest and Possession. The four Unities are required in Joint Tenancy and Tenancy by the Entirety.

Universal Agency: A fiduciary relationship wherein the agent is given full legal power to transact all types of matters for his principal. For obvious reasons, this agency is rare. An unlimited power of attorney would create a universal agency.

Usury: A State set maximum interest rate that can be charged on certain loans. To charge more than this rate is illegal.

Utility: An economic term meaning usability or usefulness. There is no value if there is no use and enjoyment in the property.

V

v.o.w. brokerage: VOW stands for virtual office website brokers. Internet websites through which brokers offer brokerage services online to their "registered" clients.

VA Loan: A Federal loan program available to qualified military service veterans. It is issued by qualified banks and savings and loans. The VA guarantees the lender against loss at in the event of foreclosure.

Valuable Consideration: A legal right, promise, or act that has value or can be assigned a monetary value that one party offers the other as an inducement to enter into a contract.

Value: In appraisal, value is the present worth of future benefits rising from the ownership of property. To have value, a property must have utility, scarcity, effective demand and transferability.

Variable Rate Loan: (Adjustable Rate Mortgage) A loan with an Escalator Clause that allows the interest rate to go up or down over time.

Variance: The permission obtained from zoning authorities to conduct a use that is expressly prohibited by the current zoning laws. An exception from zoning ordinances.

Vendee: The borrower/buyer under a Land Sales Contract. Generally, legal title remains with the seller/vendor and the vendee has only "Equitable Title" in the property until the debt is paid.

Vendor: The seller who is also the lender under a Land Sales Contract. Generally, the Vendor keeps Legal Title as added security until all payments have been made on the debt.

Veteran's Housing Act Of 1970: A federal law which extended veteran's loan rights indefinitely and for the first time allowed VA loans to be placed on mobile homes used as a personal residence.

Veteran's Property Tax Exemption: An Oregon property tax law that allows the first $7,500 of assessed value of residential property to be excluded from taxation for qualifying veterans or their non-remarried spouses.

Void: The status of a document which is unenforceable as a contract because no contract exists. The document lacks some element required to be a contract.

Voidable Contract: A flawed contract which appeared valid but now is in question. The injured party has the right of either holding the other party to the contract or terminating the contract. It is enforceable, valid and legal until the injured party exercises their right of avoidance. Lack of Mutual Consent or Competent Parties often creates a Voidable Contract.

vow brokerage: VOW stands for virtual office website broker. Internet websites through which brokers offer brokerage services online to their "registered" clients.

W

WAC: Washington Administrative Code; the administrative rules and regulations passed by the Real Estate Commissioner in Washington.

Warehousing: The act of putting several loans together as a package investment and then selling that package to an investor. When mortgage brokers do this they often charge a "Warehousing Fee" to their borrowers.

Warranty Against Encumbrances: (Covenant Against Encumbrances) A promise in a Warranty Deed that there are no encumbrances against the property other than those that the buyer knows about and is willing to accept.

Warranty Deed: (General Warranty Deed or Full Covenant and Warranty Deed) The best deed from the grantee's standpoint. The grantor is promising that there are no unrevealed flaws against the title and warrants to clear any that prove to have been existent.

Washington Deed Law: The Warranty, Bargain and Sale, and Quitclaim Deeds have a statutory (State required) form in Washington. Their Warranty Deed is a combination of the General Warranty and Special Warranty Deeds that only contains 3 warranties or covenants

Washington Real Estate Commission: An appointed Advisory Commission that prepares licensing exams, approves educational courses and advises the director of licensing regarding rules and regulations.

Waste: Damage, misuse, or abuse, beyond normal wear and tear of an estate in which someone other than the user holds a Reversionary interest.

Witnessed Will: A written, signed and witnessed document that is capable of legally conveying both real and personal property at the person's death. A will is an Inchoate, incomplete future interest, and is subject to change by the Testator during his lifetime. A will is not an encumbrance on property during the lifetime because it only goes into effect at death.

Wrap-Around Loan: (All Inclusive Loan) A junior loan that includes and usually covers the payments on the preceding loan or loans.

Writ of Assistance: A court order enabling the sheriff to remove a problem tenant from a property.

Writ Of Attachment: A writ filed during a lawsuit which prevents the debtor from transferring a specific property involved in that lawsuit.

Writ Of Execution: The court document a judge issues to empower the Sheriff to legally sell a foreclosed property at a Sheriff's Sale.

Writ Of Mandamus: A writ from a judge in a higher court compelling a person in a lower court to perform some act or tender some information.

X

Y

Year To Year Tenancy: A periodic leasehold tenancy in which rent is collected from year to year. Do not confuse with Estate For Years.

Yield: The return on an investment (the profit) stated as a percentage of the amount invested.

Z

Zone: An area set off by proper authorities for specific use, subject to certain restrictions or restraints.

Zoning: An exercise of police power by government to regulate & control the character and use of property.

Zoning Ordinance: The written description of allowable uses and regulations that apply to land in a specific zone.

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