A loan clause allowing a lender to ask for repayment of the entire
balance at any time.
Can lights
Cylindrical chambers with bulbs recessed into the ceiling.
Cancellation clause
A clause detailing the conditions under which each party may
terminate the agreement.
Cantilever
A projecting structure supported on one end.
Cap
a limit, such as that placed on an adjustable rate mortgage, on how much a monthly payment or interest rate can increase or decrease.
Cape Cod style
A wood-frame or shingled house with a steep roof and several windows
projecting from the second floor.
Capital
Money used to create income. For example, the funds used to
purchase investment property.
Capital expenditure
The costs of making improvements on a property.
Capital gain
Profit an investor makes from the sale of real estate or
investments.
Capital gains tax
A tax placed on profits from the sale of real estate or investments.
Capital improvement
Any improvement that extends the life or increases the value of a
piece of property.
Capitalization
A mathematical formula investors use to calculate property value based on net income.
Capitalization rate
The percentage (acceptable
to an average buyer) used to determine the value of income property
through capitalization.
Caps (Interest Rate
Caps)
Consumer safeguards which
limit the amount the interest rate on an adjustable rate mortgage
which may change per year and/or the life of the loan.
Carport
A roof that covers a driveway or other parking area.
Carryback financing
Financing in which a seller agrees to hold back a note for a set
amount of the sales price.
Casement window
A window hinged on its sides to allow it to swing open vertically.
Cash flow
The amount of cash a rental property investor receives after
deducting operating expenses and loan payments from gross income.
Cash-out refinance
The refinancing of a mortgage in which the money received from the
new loan is greater than the amount due on the old loan.
Cash reserves
a cash amount sometimes required to be held in reserve in addition to the down payment and closing costs; the amount is determined by the lender.
Cashier's check
A check the bank draws on itself rather than on a depositor's
account.
Casing
The trim that encircles a window or door opening. Used for hiding gaps
between the door or window jamb and the wall's surface.
Cathedral ceiling
A high, open ceiling formed by exposed roof rafters.
Caulk
An acrylic or silicon sealant used to fill cracks, crevices and
holes.
Caveat
A formal notice asking a court to suspend action until the filing party can be heard.
Caveat emptor
A legal principle stating that a buyer is responsible for ensuring
the quality of goods purchased. From Latin, "let the buyer beware."
Cavedium
A courtyard or atrium.
Ceiling fan
A large, ceiling-mounted paddle fan. Sometimes referred to as
a "Casablanca fan".
Center mullion
A cabinetry term referring to the vertical piece of wood on the
front that divides an opening into two parts.
Central air
conditioning
A device that generates cold air through an outside unit connected
to ductwork inside the house.
Certificate of deposit index (CODI)
An index based on interest rates of six-month CDs.
Commonly used to
determine interest rates for some adjustable rate mortgages.
Certificate of eligibility
A document issued by the Veterans Administration that verifies the
eligibility of a veteran for a loan program.
Certificate of occupancy (CO)
A document stating that a home or other building has met all
building codes and is suitable for habitation.
Certificate of
Reasonable Value (CRV)
An appraisal issued by the
Veterans Administration showing a property's current market value
Certificate of sale
A document issued at a judicial sale that entitles the buyer to
receive a deed after court confirmation of the purchase of the
property.
Certificate of title
a document provided by a qualified source (such as a title company) that shows the property legally belongs to the current owner; before the title is transferred at closing, it should be clear and free of all liens or other claims.
Certificate of
veteran status
The document given to veterans
or reservists who have served 90 days of continuous active duty
(including training time).
Certified International Property Specialist (CIPS)
An advanced designation issued by the National Association of
Realtors (NAR) to members who meet specific performance and
education requirements for handling international real estate
transactions.
Certified Real Estate Brokerage Manager (CRB)
An advanced designation issued by the National Association of
Realtors (NAR) to members who meet specific performance and
education requirements for real estate office management.
Certified Residential Specialist (CRS)
An advanced designation issued by the National Association of
Realtors (NAR) to members who meet specific performance and
education requirements for handling residential real estate
transactions.
Chain of title
The official record that details the ownership history of a piece of
property.
Chair railing
Decorative trim installed on a wall about 32 inches above the floor
to protect against scuffs from furniture.
Change frequency
The adjustment schedule for interest rates on an adjustable rate mortgage.
Change order
A modification of a construction contract to authorize a change in
the work, an adjustment in the amount of the contract or a change
in the contract time.
Chase
A shielded vertical shaft that houses various pipes, drains, ducts
and flues.
Chattel
Personal property such as furniture, clothing or jewelry.
Chattel
mortgage
A lien on personal property used as collateral for a loan.
Chimney back
The back wall or lining of a fireplace or furnace chimney.
Chimney
cap
A concrete cap that surrounds the top of the chimney brick. This cap
protects the masonry from rain and other natural elements.
Chimney flue
The passage inside a chimney that channels smoke and heat to the
outside.
Chimney pot
A short pipe at the top of a chimney used to increase ventilation and reduce smoke.
Chipboard
A board made of wood chips glued together under pressure.
Cinder
block
A block made of ash and cement. Commonly used in construction.
Cinder fill
Cinders used below a basement or around a foundation to promote
drainage.
Circuit breaker
A switch-like device designed to
shut down the circuit in the event of an electrical overload or
short circuit. Circuit breakers can be usually be found in
main electrical panels.
Cistern
A tank used to store rainwater.
Clapboard
A type of siding, typically cedar, composed of overlapping
horizontal boards.
Classified property tax
A tax that varies in rate depending on the use of the property.
Cleanout
An opening in the drainage system for the removal of obstructions.
(Also commonly refers to the part of a fireplace from which ashes can be
removed)
Cleanout
A Y-shaped fitting with a cap or plug on one of the arms of the Y
that can be removed in the event of a drain clog to snake out the
drain line.
Clear title
A title to property that does not have liens, defects or other
legal encumbrances.
Clevis
Part of the assembly needed to raise and lower a sink or tub pop-up. The clevis is a pin that connects to a pivot rod.
CLOSE OF ESCROW
The date the documents are recorded and title
passes from seller to buyer. On this date, the buyer becomes the
legal owner, and title insurance becomes effective.
Closing
also known as settlement, this is the time at which the property is formally sold and transferred from the seller to the buyer; it is at this time that the borrower takes on the loan obligation, pays all closing costs, and receives title from the seller.
Closing costs
customary costs above and beyond the sale price of the property that must be paid to cover the transfer of ownership at closing; these costs generally vary by geographic location and are typically detailed to the borrower after submission of a loan application
Closing statement
A document which details the final financial details of a property
sale between a
buyer and seller and the costs paid by each party.
Cloud on title
An irregularity, possible claim, or encumbrance
which, if valid, would adversely affect or impair the title.
Cluster development
A method of squeezing more homes into less space.
Co-housing
Individual housing units clustered around a common area building.
Co-insurance
Ordinary coinsurance is defined as a transaction under which each of two or more insurers assumes a designated portion of the liability for the total risk and is liable for only such portion of any loss beginning at the first dollar of loss. (See "Reinsurance")
Co-maker
A person who signs a promissory note with the main borrower and assumes
responsibility for the loan.
Co-signer
A second party who also signs a promissory note and takes responsibility
for the debt.
CO/ALR
A designation on special light switches and outlets intended to be
installed with aluminum wiring.
Codicil
A change to a will that adds or subtracts provisions or clarifies
portions of the document.
COFI Index
(Cost of Funds Index)
This index reflects the weighted-average interest rate paid by 11th
Federal Home Loan Bank District savings institutions for savings and
checking accounts, advances from the FHLB, and other sources of
funds. The 11th District represents the savings institutions
(savings & loan associations and savings banks) headquartered in
Arizona, California and Nevada. The COFI index is a popular
index used for determining interest rates on adjustable rate
mortgages.
Collar beam
The structural element that connects roof rafters.
COLLATERAL
By or at the side, additional or auxiliary.
Mistakenly used to mean collateral security.
Collateral
security
Additional security that a borrower supplies or pledges to obtain a loan.
Collection
The series of steps a lender takes to collect payments on a
delinquent mortgage.
Collusion
The action of two or more people to break the law.
Colonia
Unincorporated communities along the border between the United
States and Mexico.
Column
A slender upright structure that consists of a base, a round or
square shaft and a capital.
Column footing
The support base for a load-bearing column (usually
made of reinforced concrete).
Combination door
An outer door with interchangeable screen and glass panels.
Combination window
A window with interchangeable screen and glass panels.
Combustion
gases
The fumes or exhaust from a gas or oil burning appliance such as a
water heater or furnace.
Commercial bank
An institution that provides financial services such as checking and savings accounts, business loans and credit
cards.
Commercial Mortgage
A mortgage used to buy a commercial piece of property or commercial
building.
Commercial Mortgage Broker
A mortgage broker who specializes in commercial mortgage
applications.
Commercial Mortgage Lender
A mortgage lender who specializes in the funding of commercial
mortgage loans.
Commercial property
An area that is zoned for businesses.
Commingling
The mixing of money held in trust with other funds.
Commission
An amount, usually a percentage of the property sales price, that is collected by a real estate professional as a fee for negotiating the transaction..
Commitment
A binding contract with a
title company to issue a specific title policy, showing only those
exceptions contained in the commitment and any intervening matters
after the date of the commitment and prior to the effective date of
the policy. The commitment contains all information included in the
preliminary title report, plus a list of the title company's
requirements to insure the transaction. It also includes the
standard exceptions from coverage that will appear in the policy.
Commitment fee
A fee charged by the lender to guarantee a specific set of loan
terms to be honored at some future date.
Common area
An area inside a housing development that is owned and accessible by all residents.
Common law
A body of laws based on custom, usage and rulings by courts in
various jurisdictions.
Common-area assessments
Fees paid by the owners of a planned-unit
development or condominium to maintain, repair, improve, or operate common areas.
Common-interest development
A project composed of individually owned units that share usage and
financial responsibility for common areas.
COMMUNITY DRIVEWAY
A driveway which is jointly owned, used and
maintained by two or more persons. Usually, a portion of each
owner's property is burdened by the driveway.
Community property
Property acquired by husband, wife or both
during marriage which gives each spouse an interest in the property
whether each appears in title or not.
Community Reinvestment Act
A federal law that encourages financial institutions to loan money
in the neighborhoods where minorities live.
Comparables
Properties used as comparisons to determine the value of a certain
property.
COMPARABLE SALES
Sales that have similar characteristics as the
subject property, used for analysis in the appraisal. Commonly
called "comps."
Comparative market analysis
An estimate of the value of a property based on an analysis of sales
of properties with similar characteristics.
Competent
A term for a buyer who is legally fit to enter into a sales
contract.
Compound interest
The interest paid on the principal balance of a mortgage plus
accrued interest.
Compressor
Motorized equipment in a refrigeration (or air conditioning) system
that circulates coolant through the system.
Concrete tilt-up
The process of pouring concrete into forms on the ground, allowing
the forms to harden and then raising the material to a vertical
position to form walls.
Condemnation
The taking of private
property by the government for public use (as for a street or a
storm drain) upon making just compensation to the owner. This right
or power of government to take property for a necessary public use
is called eminent domain.
Condensate drain
A drain required by a dehumidifier, high-efficiency furnace or
similar appliance to carry away condensation.
Condensate pump
A small pump used with high-efficiency furnaces or other appliances
that create significant condensation. It activates when water
collects to a certain level and pumps it out to a drain.
Condenser
Part of a refrigeration (or air conditioning) system that
pressurizes refrigerant to cool it by changing it from a vapor to a
liquid. On a refrigerator, the condenser is the coil on the outside
of the unit whereas an air conditioners condenser is usually outside the
house.
Conditional commitment
A promise by a lender to make a loan if the borrower meets certain
conditions.
Conditional sale
A contract for property sale stating that the title will
remain invested in the seller until all the conditions of the contract
have been fulfilled.
Condominium
a form of ownership in which individuals purchase and own a unit of housing in a multi-unit complex; the owner also shares financial responsibility for common areas.
Condominium conversion
The change in title from a single owner of an entire project or
building to multiple owners of individual units.
Conduit
A metal pipe housing electrical wiring.
Conforming loan
A home loan that meets qualifications to be purchased by Fannie Mae
or Freddie Mac.
Consent judgment
A written agreement between two (2) parties to have a judgment
entered and recorded.
Conservator
A person appointed by the court to care for the
person and/or property of an incompetent adult or an adult unable to
care for their person or property because of health.
Consideration
Anything that is legal, has value and induces a person to enter
into a contract.
Construction budget
Funding arranged by an owner for the construction of a project.
Construction documents
Drawings and specifications from an architect and/or engineer providing detailed
requirements for the construction of a project.
Construction loan
A short term loan for construction. Lenders usually disburse
funds from construction loans in draws according to completion of
defined stages throughout the construction process.
Construction-to-permanent loan
A construction loan that is converted to a longer term traditional
mortgage after construction has been completed.
CONSTRUCTIVE NOTICE
Notice imparted by the public records of
the county when documents entitled to recording are recorded.
Consumer Credit Counseling Service (CCCS)
A nationwide, nonprofit organization that helps consumers get out of
debt and improve their credit rating.
Contiguous lots
Pieces of property that are adjoined.
Contingency
Conditions specified in a purchase contract, such as a satisfactory
home inspection.
Contingency listing
A property listing with a special condition attached.
Contingent
fee
A fee that must be paid if a certain event occurs.
Continuity tester
A simple, battery-powered tool that indicates whether an electrical
circuit is complete or incomplete by lighting or buzzing when you
touch its two probes to the wires.
Contract
An agreement between two or more parties that creates or modifies an
existing relationship.
Contract for deed
A contract in which the seller agrees to defer all or part of the
purchase price for a specified period of time.
Contract to
purchase
A contract the buyer initiates which details the purchase price and
conditions of the transaction. Also
known as an agreement of sale.
Contractor
The individual who contracts for the construction of a home or
project.
Contractual lien
A voluntary obligation such as a mortgage or trust deed.
Controlled growth
Any restrictions imposed on the amount or type of new development in
an area.
Conventional loan
a private sector loan, one that is not guaranteed or insured by the U.S. government.
Conversion
The exchange of personal or real property of one character for
another.
Convertible adjustable-rate mortgage
A mortgage which starts as an adjustable rate loan, but contains a
provision that allows the
borrower to convert the loan to a fixed-rate mortgage during a
specified period of time.
Conveyance
An instrument in writing, such as a deed or trust
deed, used to transfer (convey) title to property from one person to
another.
Conveyance tax
A tax imposed on the transfer of real property.
Cooperative (Co-op)
Residents purchase stock in a cooperative corporation that owns a structure; each stockholder is then entitled to live in a specific unit of the structure and is responsible for paying a portion of the loan.
Cooperating broker
A real estate broker who finds a buyer for a property listed by
another broker.
Cooperative corporation
A business trust that holds the title to a cooperative residential
building and grants occupancy rights to shareholders in the
corporation.
Cooperative mortgage
Any loan related to a cooperative residential project.
Cooperative
project
A project in which a corporation holds title and sells shares
representing individual units to buyers who then receive a
proprietary lease as their title.
Corbel
A short block or bracket projecting from a wall and providing
support for a horizontal member.
Corner bead
A reinforcement placed in the corner where two walls intersect.
Corner influence
The effect on the value of a property because it is situated on a
corner or near a corner.
Cornice
A horizontal molding that projects from the top of a structure or
wall.
CORPORATION
An entity authorized by law and established by a
group of people, the stockholders, which is endowed with certain
rights, privileges and duties similar to an individual.
Corrective work
Repairs made to fix problems identified by a home
inspection.
Cost-plus contract
A construction contract that determines the builders profit based
on a percentage of the cost of labor and materials.
Cottage
A small, one-story house.
Counterbore
A hole drilled to recess the head of a screw.
Counteroffer
A response to an offer.
Courier fee
Fee charged at closing to cover the delivery of documents between
lenders, escrow companies, and other third parties during a real estate
transaction.
Covenant
(1) A formal agreement or contract between two parties
in which one party gives the other certain promises and assurances,
such as the covenant of warranty in a warranty deed; (2) Agreements
or promises contained in deeds and other instruments for performance
or nonperformance of certain acts, or use or non-use of property in
a certain manner.
COVENANTS, CONDITIONS AND RESTRICTIONS
Commonly called CC &
R's, the term usually refers to a written recorded declaration which
sets forth certain covenants, conditions, restrictions, rules or
regulations established by a subdivider or other landowner to create
uniformity of buildings and use within tracts of land or groups of
lots. The restrictions also can be established by deed. CC & R's are
sometimes referred to as private zoning.
Craftsman style
An architectural style that evolved as part of the Arts and Crafts
movement near the turn of the century.
Crawl space
The space between the ground and the first floor of a home
usually
no higher than four feet.
Credit
Money a lender extends to a buyer for a commitment to repay the loan
within a certain time period.
Credit history
history of an individual's debt payment; lenders use this information to gauge a potential borrower's ability to repay a loan.
Credit life insurance
Insurance that pays off a mortgage in the event of the borrower's
death.
Credit rating
The degree of creditworthiness assigned to a person based on their credit
history and financial status.
Credit report
A detailed account of an individual's credit, employment, and
residence history. A lender uses this report to determine a loan
applicant's creditworthiness. The three largest credit bureaus are
Trans Union, Equifax and Experian.
Credit repository
Large companies that gather financial and credit information from
various sources about individuals who have applied for credit.
Credit Risk
Score
A credit risk score is a
statistical summary of the information contained in a consumer's
credit report. The most well known type of credit risk score
is the Fair Isaac or FICO score. This score represents the
answer from a mathematical formula that assigns numerical values to
various pieces of information in a credit report.
Credit
Score
A credit score is a
statistical summary of the information contained in a consumer's
credit report. The most well known type of credit score
is the Fair Isaac or FICO score. This score represents the
answer from a mathematical formula that assigns numerical values to
various pieces of information in a credit report.
Credit union
A nonprofit cooperative organization that provides banking and
financial services such as mortgages, home improvement loans and
auto loans to its members.
Creditor
An individual or institution to whom a debt is owed.
CREIA
Abbreviation for "California Real Estate Inspection Association"
A
trade organization of home inspectors whose members must meet
defined education and performance requirements.
Cross-bridging
The strengthening of a structure by bracing cross members between
beams.
Crown
A piece of molding around the top of a room.
CU/AL
A designation on standard light switches and outlets that intended
to be installed with copper wiring.
Cul-de-sac
A street or alley that is closed at one end.
Cupola
A dome-like structure that sits on top of a roof.
Curable defect
A deficiency in a property that is easy or inexpensive to fix (i.e. chipping paint)
Curb appeal
The first impression of a home or property as viewed from the street.
Current value
The value of a home at the time of appraisal.
Curtain wall
An exterior wall that encloses a yard or other area but does not
provide any structural support to a home.
Custom builder
A builder who constructs a home or building based on plans created
by the owner.
Custom home
A home designed by an architect hired by the owner.