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Glossary

Glossary

A

A-frame design
An interior style featuring a steeply peaked roofline and a ceiling open to the top rafters.

Abatement
Often referred to as free rent or early occupancy and may occur outside or in addition to the primary term of the lease.

Absentee Owner
Landlord who lives elsewhere.

Absorption rate
The rate at which rentable space is filled, or for sale properties are sold.

Abstract of judgment
The summary of a court judgment that creates a property lien when filed with the appropriate government recording office.

Abstract or title search
The process of reviewing all publicly recorded transactions to determine whether any title defects exist that could interfere with a clear transfer of property ownership.

Accelerated cost recovery system
A tax calculation that provides greater depreciation in the early years of ownership.

Accelerated depreciation
A bookkeeping method that provides faster property depreciation in the early years of ownership.

Acceleration clause
A clause that provides the mortgagee (lender) the right to demand immediate repayment of the loan balance upon default of the mortgagor (borrower). "Acceleration" is also triggered by the Due On Sale clause (demands immediate repayment if the home is sold).

Acceptance
The seller's written approval of a buyer's offer.

Access
Any means by which a person can enter property.

Accessibility
The degree to which a building or site allows access for people with disabilities.

Accretion
The gradual addition to the shore or bank of a waterway by deposits of sand or silt.

Acre
A measurement of land equal to 43,560 square feet.

Acre-foot
The volume of material needed to cover an acre of land one foot deep.

Active solar system
A system that utilizes electric pumps or fans to transfer solar energy for storage or direct use.

Actual age
The number of years a structure has been standing.

Act of God
Action occurring without the intervention of man which could include but not be limited to hurricanes, earthquakes, floods, lightning storms etc.

Ad valorem tax
Tax based on assessed property value.

Addendum
An addition or change to an existing contract between two (2) or more parties.

Additional principal payment
Additional funds outside of the scheduled loan payment to reduce the principal balance and shorten the term of the loan.

Adjustable rate mortgage (ARM)
A home loan with an interest rate that periodically adjusts to reflect changes in a specified financial index.

Adjusted cost basis
The addition of any improvement costs a seller makes to a property. Deducting this cost figure from the original sales price will provide the realized profit or loss upon sale.

Adjustment period
The amount of time between interest rate adjustments in an adjustable-rate mortgage.

Administrator
A person given authority to administer and distribute the effects of an estate left by one who dies without a will.

Administrator's deed
A legal document that an estate administrator uses to transfer property.

Adverse possession
The acquisition of property title through possession without the owner's consent for a certain period of time.

Adverse use
The access and use of property without the owner's consent.

Aeolian soil
Soil composed of materials deposited by the wind.

Affiant
A person who makes a sworn statement.

Affirmation
A substitution for an oath granted to people based on religious reasons.

Affordability Analysis
An analysis of a consumers ability to afford the purchase of a home. This analysis usually includes the review of a potential borrower's income, liabilities and available funds.

Agency
The relationship of trust that exists between sellers, buyers and their agents.

Agency closing
When a lender uses a title company or other firm as an agent to complete a loan.

Agency disclosure
Most states require agents who act for both buyers or sellers to disclose who they are working for in the transaction.

Agreed boundary
A boundary property owners agree on in order to resolve a dispute.

Agreement of sale
A legal document the buyer and seller approve detailing the price & terms of the transaction.

Air handler
The blower equipment in a furnace, heat pump, or similar appliance designed for circulating heated or cooled air through a central heating system.

Air lot
A designated airspace over a piece of property.

Alcove
A recessed section of a room.

Alienation clause
A loan provision requiring the borrower to pay the balance of the loan in a lump sum if the property is sold or transferred.

Alkali
Mineral salt found in soil.

Alkaline soil
Soil containing a higher concentration of mineral salt than natural acid.

Alley
A lane behind a row of buildings or between two rows of buildings.

Allowance
A dollar amount offered by builders of new homes for the purchase of carpeting and fixtures.

Alternative mortgage
A home loan program that does not conform to standard fixed-rate mortgage terms.

Amenities
Enticements offered by builders of planned developments. Common amenities include swimming pools, health clubs and business centers.

American Society of Home Inspectors (ASHI)
Professional association of independent home inspectors. Members must meet defined education and performance requirements.

Americans with Disabilities Act (ADA)
A law passed in 1990 that outlaws discrimination against a person with a disability in housing, public accommodations, employment, government services, transportation and telecommunications.

Amortization
The process of paying the principal and interest on a loan through regularly scheduled payments.

Amortization tables
Mathematical tables used to calculate a borrower's monthly payment.

Amortization term
The length of time required to amortize the mortgage loan expressed as a number of months. For example, 360 months is the amortization term for a 30-year fixed-rate mortgage.

Amperage
The strength of an electrical current.

Ampere
The basic unit used to measure electric current.

Anchor bolt
A large steel bolt anchored in concrete and attached to a building to prevent the structure from moving.

Annual assessments
The process of placing a value on property for the sole purpose of taxation. Also refers to a levy against property for a special purpose, such as street lighting or sewer assessment.

Annual mortgagor statement
An annual statement to borrowers detailing the remaining principal balance and amounts paid for taxes and interest throughout the year.

Annuity
The payment of a fixed sum at regular intervals.

Anticipatory breach
A communication informing a party to a contract that one or more obligations of the original contract will not be fulfilled.

Antioxidant compound
A substance applied to aluminum wiring connections to seal and promote conduction.

Application fee
An application fee is charged by some lenders and may include charges for items such as property appraisal and/or a credit report unless those fees are reported separately.

Appraisal
A professional opinion of the value of a property by a licensed real estate appraiser.

Appraisal fee
The fee that a professional real estate appraiser charges to appraise, or estimate the market value of, a property.

Appraisal report
A written report on the value of a property based on recent sales of comparable property in the area.

Appraised value
A professional opinion of the current market value of a property.

Appreciation
An increase in the value of a home or other property.

APR (annual percentage rate)
A measure of interest that expresses the cost of a mortgage as a yearly rate on the loan balance. The APR assumes the loan is held for its full term. For adjustable-rate loans, the APR assumes the loan's index doesn't change from its initial value.

Arbitration
A method of resolving a dispute in which a third party renders a decision.

Architect
A licensed professional who designs residential and commercial property structures.

Architectural fees
The fee charged by an architect for services. A common way of billing by architects is to charge for their services by the hour, by the square foot or by a percentage of the project budget.

ARM (adjustable rate mortgage)
A home loan with an interest rate that periodically adjusts to reflect changes in a specified financial index.

ARM index
A publicly published number used as the basis for adjusting the interest rates of adjustable rate loans (ARM).

Array
A term used by tax assessors to describe a list of properties in a certain category sold within a defined period of time.

As-is condition
The purchase or sale of a property in its existing condition.

ASHI (American Society of Home Inspectors)
A professional association of independent home inspectors whose members must meet and maintain defined education and performance requirements.

Asking price
A seller's initial sales price.

Assemblage
The combining of two or more adjoining lots into one larger tract.

Assessed value
A tax assessor's determination of the value of a home in order to calculate a tax base.

Assessment
The estimated value of a piece of real estate or a special levy placed in addition to taxes.

Assessment rolls
A list of taxable property compiled by the assessor.

Assessor
An official who determines the assessed value of a property.

Assets
Items of value which include cash, real estate, securities, and investments.

Assignment
The transfer of rights to pay a debt from one party to another, with the original party remaining liable for the debt if the second party defaults.

Assignor
A person who transfers rights and interests of a property.

Assumable mortgage
A mortgage that can be transferred to another borrower.

Assumption clause
A provision that allows a buyer to take responsibility for the mortgage from a seller.

Assumption fee
A fee the lender charges to process new records for a buyer who assumes an existing loan.

Automatic extension
A clause in a listing contract stating that the agreement will automatically continue for a certain period of time after the expiration date (very rare)

Automatic flue damper
A device in the flue of a heating unit that closes to prevent heat loss when the unit is not in operation.

Avigation easement
An easement over private property near an airport that limits the height of structures and trees.

Awning windows
Single-sash windows that tilt outward and up.

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B

Back title letter
A letter that a title insurance company gives to an attorney who then examines the title for insurance purposes.

Back-end ratio
A calculation used by lenders to compare a borrower's total debt to their gross monthly income.

Back-to-back escrow
An arrangement by a property owner to oversee the sale of one property and the purchase of another at the same time.

Backfill
Soil used to solidify the foundation of a structure.

Backsplash
The area behind and above a countertop. Widely used in kitchens as these assist in preventing water from splashing onto the wallboard.

Backup offer
A secondary bid for a property that the seller may accept if the first offer fails.

Baffle
A device used as a heat shield to deflect the byproducts of combustion.

Balance sheet
A statement providing the assets, liabilities and net worth of an individual.

Ball cock
A type of inlet valve assembly inside a toilet tank that, when opened automatically, fills the tank with water.

Ball cock assembly
The toilet tank mechanism that controls flushing.

Balloon loan
A mortgage loan where the monthly payments are not large enough to repay the loan by the end of the term resulting in a lump sum due on the final payment date.

Balloon payment
The final lump sum payment due at the end of a balloon mortgage.

Balloon-frame construction
Framing used in two-story homes where studs extend from the ground to the ceiling of the second floor.

Baluster
Intermediate vertical support for a stair railing.

Balustrade
Railing held up by a set of posts on a porch or stairway.

Bankruptcy
A proceeding where an insolvent debtor (person or corporation) can obtain relief from payment of certain obligations.

Bargain sale
The sale of property for less than market value.

Base loan amount
The loan amount upon which payments are based. If the borrower chooses to finance closing costs or other fees these costs will be added to the base loan amount and payments adjusted to reflect the larger loan balance.

Baseboard
A board or molding found at the bottom of an interior wall.

Baseboard electric heat
Heating units installed in the floor controlled by a central thermostat.

Basement
The area of a home below ground level.

Basis point
A basis point is one one-hundredth of one percentage point. For example, the difference between a home loan at 5.25 percent and one at 5.37 percent is 12 basis points.

Batten
A narrow piece of material used on the outside of a house to cover joints in walls.

Bay
The opening between two columns or walls that forms a space.

Bay window
A window that projects outward in a curve.

Bearing wall
A wall that supports its own weight in addition to other parts of a structure.

Before-tax income
Total income before any taxes are deducted.

Bequest
Personal property given to a person through a will.

Betterment
An improvement that increases property value as opposed to repairs that maintain the value.

Bi-level
A home with two (2) levels.

Bi-metal coil
Part of a mechanical thermostat - consisting of two (2) different types of metal which expand and contract at two different rates according to changes in room temperature.

Bid out
The process that contractors use to estimate the cost of construction.

Bidding war
Offers from multiple buyers for a piece of property.

Bill of sale
A legal document transferring ownership of personal property.

Binder
A report detailing the condition of a property's title. Usually issued by a title insurance company to provide guidelines for issuing a title insurance policy.

Binder
A preliminary agreement between buyer and seller.

Biweekly mortgage
A mortgage that requires payments every two weeks and helps repay the loan over a shorter term.

Blanket insurance policy
An insurance policy covering more than one person or piece of property.

Blanket mortgage
A mortgage that covers more than one property owned by the same borrower. (very rare)

Blighted area
A neighborhood that has deteriorated.

Blind nailing
Nails driven into a wall and concealed with putty.

Blockbusting
The illegal practice of inducing homeowners to sell their properties by making representations regarding the entry of a particular race into the neighborhood.

Blue-ribbon condition
A house maintained close to its original condition. Also called mint condition.

Blueprint
A very detailed plan for a home or other property structure.

Board of equalization
A state board responsible for ensuring local property taxes are assessed in a uniform manner.

Bona fide
A legal term referring to actions or persons that are honest and in good faith.

Bond
An instrument that insures one party against loss by acts or defaults of another party.

Bonus room
A room with no specifically designated function - unlike a living room, bedroom, or kitchen.

Book value
The value of a property based on its cost plus any additions, minus depreciation.

Boot
A piece of sheet metal that connects a heating or cooling duct and a vent.

Boring test
An analysis of soil where holes are bored into the ground and samples removed.

Borough
A section of a city that has authority over local matters.

Borrow
Sand, gravel, or other material used for grading.

Borrow pit
The hole at a construction site that has been excavated.

Boulevard
A street lined with trees or constructed with a landscaped median.

Boundary
The dividing line between two adjacent properties.

Braced framing
A construction method in two-story homes where the frame is reinforced with posts & braces.

Bracing
The technique used to reinforce a structure.

Branch circuit
An electrical circuit with its own circuit breaker in the service panel.

Breach of contract
The failure to perform provisions of a contract without a legal excuse.

Breach of covenant
The failure to obey a legal agreement.

Breach of warranty
A seller's inability to pass clear title to a buyer.

Break-even point
The point in which the owner's rental income matches expenses and debt.

Breezeway
A roofed passageway with open sides.

Brick
Building material made from clay molded into oblong blocks and fired in a kiln.

Brick veneer
A brick facade on a wall or fireplace.

Bridge loan
A short-term loan for borrowers who need more time to find permanent financing.

Broker
Anyone who acts as a go-between between a buyer and seller. For example, a real estate broker is licensed to handle property transactions and negotiate between a buyer and seller. A mortgage broker acts as a go-between with the lender and the borrower.

Brokerage
The act of bringing together two or more parties in exchange for a fee or commission. Common brokerage companies include real estate brokerage and mortgage brokers.

Broom clean
The ideal condition of a building when it is turned over to a new owner or tenant.

Brownstone
A vintage row house constructed of red sandstone.

Buffer strip
A parcel of land that separates two or more properties.

Buildability
The feasibility of constructing a home or other structure on a piece of land.

Builder upgrades
Extra features or higher quality finishing materials offered by home builders.

Building and loan association
An organization that raises money to helps its members purchase real estate or construct a building.

Building code
A set of laws controlling the construction or remodeling of property within a defined area.

Building inspector
A government employee who is responsible for enforcing the local building codes and ensuring the work is correctly performed by the builder.

Building line or setback
Guidelines that limit how close an owner can build to the street or an adjacent property.

Building moratorium
A halt on home construction to slow the rate of development.

Building paper
A thick, water-resistant paper that serves as insulation.

Building permit
A permit issued by a local government agency that allows the construction or renovation of a house.

Building restrictions
Regulations that limit the manner in which property can be used.

Built-ins
Appliances or other items that are framed into a home or permanently attached.

Bulkhead
A retaining wall designed to hold back water from the ocean or other body of water.

Bundle of rights
The various interests or rights an owner has in a property.

Bungalow
A small one-story house or cottage.

Butt
The way in which two boards meet so that the ends touch in a continuous line.

Butterfly roof
A roof formed by two gables that dip in the middle to resemble the wings of a butterfly.

Buydown mortgage
A home loan program where the lender receives a premium as an enticement to reduce the interest rate during the early years of the mortgage.

Buyer's agent
An agent representing a buyer in a home purchase, either as a single agent or as an exclusive buyer's broker.

Buyer's broker
A real estate broker who exclusively represents the buyer's interests in a transaction and whose commission is paid either by the buyer or through the seller or listing broker at closing.

Buyer's market
A slow real estate market in which buyers have the advantage.

Buyer's remorse
An emotion felt by first-time homebuyers after signing a sales contract or closing the purchase of a house.

Bylaws
Rules and regulations that a homeowners association or corporation adopts to govern activities.

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C

California Real Estate Inspection Association
A trade organization of home inspectors whose members must meet defined education and performance requirements (Also known as CREIA).

Call option
A loan clause allowing a lender to ask for repayment of the entire balance at any time.

Can light
An incandescent light inside a metal can that is mounted flush with the surface.

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 on the amount the interest rate or monthly payment can increase in an adjustable rate mortgage.

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
The decorative top of a column or pilaster.

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 rate of return estimated from the net income of a piece of property, expressed as a percentage.

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.

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 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.

Closing
The final procedure in which loan and title documents are signed between the buyer and seller and their respective representation.

Closing costs
Expenses related to the sale of real estate including loan, title, and appraisal fees.  These costs are above and beyond the price of the property and are paid at closing.  Most closing costs are one-time expenses however a few are recurring.

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 invalid encumbrance on real property.

Cluster development
A method of squeezing more homes into less space.

Co-housing
Individual housing units clustered around a common area building.

Co-insurance
Insurance coverage that involves the use of two or more insurers.

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 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.

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.

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 property
An area that is zoned for businesses.

Commingling
The mixing of money held in trust with other funds.

Commission
A negotiable percentage of a property's sales price paid to the agents of the buyer and seller.

Commitment
A promise by a lender to make a loan with specific terms for a specified period.

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 property
Property accumulated through the joint efforts of husband and wife.

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.

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 process the government uses to take private property for public use without the consent of the owner.

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
Individual units in a building or development in which owners hold title to the interior space while common areas such as parking lots, community rooms and recreational areas are owned by all the residents.

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 court appointed guardian.

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.

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 long term loan a lender makes for the purchase of a home.

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
The transfer of title of property.

Conveyance tax
A tax imposed on the transfer of real property.

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.

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
A legal assurance or promise in a deed or other document, or implied by law.

Covenants, conditions, and restrictions (CC&Rs)
Rules and regulations for a development, such as those pertaining to acceptable landscaping or improvements that can be made to individual units.

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
A file detailing an individual's current and past debt payments and financial obligations.

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.

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D

Damper
A movable plate in a fireplace that allows smoke and fumes to travel up the chimney's flue.

Days on the market
The period of time a property is listed for sale prior to being sold or taken off the market.

Deadbolt lock
A lock that requires a key to open from the outside and a turn button from the inside.

Debt
Any amount one person owes to another.

Debt-to-Income Ratio
The ratio, expressed as a percentage, which results when a borrower's monthly payment obligation on long-term debts is divided by his or her gross monthly income.

Debt assumption letter
The formal transfer of debt from one party to another, backed by a contract of assumption signed by both parties. Also known as assignment of debt.

Deck
A roofless, floored area that adjoins a house.

Decorating allowance
An amount of money to be applied toward negotiated decorating changes. This money is supplied by the seller and held in escrow for the buyer.

Deed
The legal document that transfers property ownership from the seller to the buyer.

Deed of trust
A document that gives a lender the right to foreclose on a piece of property if the borrower defaults on the loan.

Deep-seal floor drain
A drain used to dispose of water from the basement floor to a sewer line.

Default
The failure to fulfill a duty or discharge an obligation - such as making monthly mortgage payments.

Deferred maintenance
Any repair or maintenance of a piece of property that has been postponed, resulting in a decline in property value.

Delinquency
Failure to make mortgage payments on time. Severe delinquency can lead to foreclosure.

Delinquent mortgage
A mortgage that involves a borrower who is behind on payments. If the borrower cannot bring the payments up to date within a specified number of days the lender may begin foreclosure proceedings.

Density test
An analysis of soil to determine if the surface can support the foundation of a house.

Dentils
Small rectangular blocks that project from a building.

Department of Veterans Affairs (VA)
An independent agency of the federal government which guarantees long-term, low or no down payment mortgages to eligible veterans.

Deposit
Funds provided by the buyer with an offer to purchase property. Also referred to as "earnest money".

Depreciation
The decline in value of a piece of property.

Dimension plans
Plans which show the layout of a house but are less detailed than full blueprints.

Dimensional lumber
Single pieces of lumber sawed to standard dimensions.

Dimmer
A light switch that controls the brightness of one or more lights.

Dimple
To create a slight dent with a light blow of a hammer when driving a nail.

Dip tube
An extension of the water supply line into a storage tank.

Disability insurance
An insurance policy that protects the policy holders ability to produce income.

Disclosure
A statement to a potential buyer listing information relevant to a piece of property, such as the presence of radon or lead paint.

Discount points
Fees charged by a lender to provide a lower interest rate. One discount point equals one percent (1%) of the loan amount.

Distressed property
Property that is in poor physical or financial condition.

Document needs list
A list of documents required by a lender from a potential borrower submitting a loan application. Documents requested can range from paycheck stubs to bank statements.

Documentation Preparation Fee
A fee charged by lenders, brokers and/or settlement agents to prepare the necessary documents for closing.

Domed ceiling
A hemispherical ceiling that projects upward without support.

Domicile
A persons primary or permanent home.

Dormer
A window set upright in a sloping roof.

Double-hung window
A window that consists of two sashes that slide up and down.

Dovetail joints
Joints that lock two pieces of wood together with meshed teeth.

Dowel
A length of wood that is round in profile and made of hardwood.

Dowel plug
A short piece of a wooden dowel typically fitted into a counterbored hole to hide the head of a screw.

Down payment
The difference between the purchase price and the portion financed by a mortgage lender.

Downspout
A vertical gutter that empties water from the roof to the ground.

Drain auger
Also called a snake. A long, coiled-wire tool that you can unwind and push into a drain line to free a clog.

Drain flange
The round metal trim that fits into the hole at the bottom of a sink or bathtub.

Drain valve
A valve used to drain a water storage tank in order to perform maintenance or replacement.

Drainage
A system of gutters and drainpipes that carry water away from the foundation of a house.

Drainpipe
Part of a home's plumbing system that carries waste to the sewer or septic system.

Draw
A payment made to contractors, subcontractors, home builders or suppliers from the proceeds of a construction loan.

Drip caps
Angled strips of metal flashing that are designed to protect the eaves from water damage.

Drip loop
A loop in the service conductor that minimizes the chance of water penetration.

Dropped ceiling
A flat ceiling built lower than the original ceiling.

Dry rot
A fungal decay that causes wood to become brittle and crumble.

Drywall
A construction material composed of gypsum or plaster wrapped in paper and produced in large sheets that can be nailed to wall studs.

Dual agency
A relationship in which a real estate agent or broker represents both parties (the buyer and the seller) in a transaction. (Not recommended by many attorneys)

Dual agent
An agent who represents both the buyer and the seller in a transaction.

Duct
A rigid metal or flexible insulated tube designed to deliver air to and from a furnace or other air-handling unit.

Duct
Any kind of pipe or channel that carries water, wiring or conditioned air through a house.

Ductwork
A system of large tubes, pipes or channels designed to deliver air to and from a furnace or other air-handling unit.

Due on Sale clause
Standard language in a mortgage that states the loan must be repaid upon sale.

Duplex
Inside Chicago, this typically refers to one dwelling unit which has two levels, upper and lower. Outside Chicago, a structure that consists of two (2) separate family units.

Duplex receptacle
An electrical outlet that accepts two lighting or appliance plugs.

Dutch colonial style
A design that features a barn-like gambrel roof, a ground-level front porch and dormers.

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E

Early occupancy
The condition in which buyers can occupy a property before the sale is complete.

Earnest money
Money a buyer provides with an offer to purchase a property. Also called a deposit.

Earthquake insurance
An insurance policy that provides coverage against damage to a home from an earthquake.

Easement
A right given to a third party to use a portion of the property for certain purposes, such as power lines or sewage mains.

Eaves
The projecting overhang at the lower edge of a roof.

Effective age
The age of a structure estimated by its condition rather than its actual age.

Efflorescence
White, powdery substance on concrete, stucco or other masonry caused by water-soluble salts leaching to the surface.

Electric service panel
A panel that transfers power from the utility line into a house to be distributed through fuses or circuit breakers.

Elevations
The exterior view of a home design that shows the position of the house relative to the grade of the land.

Ell
An extension or wing of a house that is at right angles to the main structure.

Eminent domain
The government's right to condemn private land for public use, such as the routing of a public highway.

Employer-assisted housing
Programs which help employees purchase homes through special plans developed with lenders.

Empty nesters
Potential buyers who have finished raising their families and want to move into a smaller home.

Encroachment
Fences or other structures that extend into the property of another owner.

Encumbrance
Any right or interest in property interfering with its use or transfer.

End loan
The conversion from a construction loan to permanent financing.

Endorser
A person who signs over ownership of property to another party.

English Tudor style
An architectural design that features stone or brick exterior walls and exposed beams.

Entitlement
The VA home loan benefit is called an entitlement and often referred to as eligibility.

Environmental impact statement
A government ordered evaluation of all aspects and effects a development will have on the environment of a proposed site.

Environmentally friendly home construction
A method of construction that utilizes recycled materials.

Equal Credit Opportunity Act (ECOA)
Federal law that prohibits a lender or other creditor from refusing to grant credit based on the applicant's sex, marital status, race, religion, national origin or age.

Equalization
A mass appraisal or reappraisal of all property within a jurisdiction for the purpose of equalizing values to assure that each taxpayer is bearing a fair share of the tax load.

Equifax
One of the main credit-reporting bureaus. Visit www.equifax.com

Equity
The value of a property after existing liens are deducted.

Errors and omissions insurance
A policy that insures against mistakes made by a builder or architect.

Escheat
A situation where the ownership of property reverts to the state when the owner dies without leaving a will.

Escrow
A neutral third party holds documents and money for a real estate transaction and ensures that all conditions of a sale are met before any disbursement of funds or articles.

Escrow account
An account that a mortgage lender or mortgage servicing company establishes to hold funds for the payment of expenses such as homeowners insurance and property taxes. Also commonly referred to as an impound account.

Escrow agent
A neutral third party who ensures that all conditions of a real estate transaction are met before any transfer of funds or property is recorded.

Escrow analysis
A periodic examination of an escrow account by mortgage lenders to determine if the lender is withholding enough funds from a borrower's monthly mortgage payment to pay for expenses such as property taxes and insurance.

Escrow closing
Escrow closes when all conditions of a real estate transaction are met and the title of the property is transferred to the buyer.

Escrow company
A firm that acts as a neutral third party to ensure that all conditions established by the buyer, seller and lender in a real estate transaction are met.

Escrow Disbursements
The use of escrow funds to pay real estate taxes, hazard insurance, mortgage insurance and other property expenses as they become due.

Escrow payment
Funds that a mortgage servicer withdraws from a borrower's escrow account to pay property taxes and insurance.

Estate
The total assets of a person, including real property, at the time of death.

Estimated closing costs
An estimate of expenses related to the sale of real estate including title and appraisal fees.

Estimated hazard insurance
An estimate of hazard insurance, also known as homeowners insurance, to cover physical risks such as fire and wind damage.

Estimated property taxes
An estimate of property taxes payable on the property according to state and county tax rates. The amount due is based on the property's assessed value which is based on the most recent sale price plus any assessment updates.

Estoppel
A bar or impediment preventing a party from asserting a fact or a claim inconsistent with a position that party previously took, either by conduct or words, esp. where a representation has been relied or acted upon by others.

European style
A cabinetry term referring to a style of cabinet without a face frame. Also known as box cabinets.

Eviction
A legal procedure to remove a tenant for reasons including failure to pay rent.

Examination of title
An inspection by a title company of public records and other documents to determine the chain of ownership of a property.

Excavation
The process of clearing trees, removing topsoil and grading land before a foundation is laid.

Exceptional depreciation
Describes damages to a building that are not the result of normal wear and tear.

Exclusive agency
An agreement to employ a particular broker. If another broker makes the sale, both agents are entitled to commissions.

Exclusive Buyers Agent (EBA)
An agent, company or franchise working exclusively for buyers as a fiduciary agent. These agents do not represent sellers or list properties for sale.

Exclusive listing
A contract that gives an agent the exclusive right to market a property for a specific period of time.

Executed contract
A contract which has been signed by all parties.

Executor
A person appointed to carry out the instructions in a will. If no executor is named in the will, a probate court will appoint an executor.

Exemption
The removal of property from the tax base. An exemption may be partial or complete.

Exfiltration
Air leakage from a building's interior to the environment.

Experian
Experian is one of the main credit reporting bureaus. Visit www.experian.com

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F

Facade
The part of a building facing a street or courtyard.

Facilitator
A real estate professional who assists in a transaction but does not have a agency relationship with that party. Also known as transaction broker or intermediary.

Fair Credit Billing Act
Federal law that governs credit and charge card billing errors.

Fair Credit Reporting Act
Federal law designed to regulate procedures and prevent old or inaccurate information from staying in consumer credit files. This act provides individuals the right to inspect their own credit files, although the credit bureau may charge a fee.

Fair Debt Collection Practices Act
Federal law outlawing debtor harassment and and regulates collection agencies, original creditors' collection offices (if separate) and creditors' lawyers.

Fair Housing Act
Federal law making it illegal to refuse to rent or sell to anyone based on race, color, religion, sex, national origin, family status or disability.

Fannie Mae
The official name of the Federal National Mortgage Association - it is a congressionally chartered, shareholder-owned company that buys mortgages from lenders and resells them as securities on the secondary mortgage market.

Farmer's Home Administration (FMHA)
A U.S. Department of Agriculture agency that provides credit to farmers and rural residents.

Fascia
A flat board that runs horizontally along the eaves of a roof, typically capping the ends of the roof rafters to give the roof edge a more finished look and provide a base for attaching gutters.

Federal Home Loan Bank Board (FHLBB)
The former name for the regulatory and supervisory agency for federally chartered savings institutions. This agency is now called the Office of Thrift Supervision

Federal Home Loan Mortgage Corporation (FHLMC)
The Federal Home Loan Mortgage Corporation is commonly known as Freddie Mac. This corporation buys mortgages from lending institutions, pools them with other loans and sells shares to investors.

Federal Housing Administration (FHA)
This government agency provides low-rate mortgages to buyers who make a down payment as small as 3 percent.

Federal National Mortgage Association (FNMA) also know as "Fannie Mae"
A tax-paying corporation created by Congress that purchases and sells conventional residential mortgages as well as those insured by FHA or guaranteed by VA.

Federal Reserve Board
A group of economists and other experts who set the nation's monetary policy. The boards most powerful tool to control inflation is the power to control interest rates.

Fee simple / Fee simple absolute
Also called fee simple absolute, this type of ownership is the maximum interest a person can have in a piece of real estate. It entitles the owner to use the property in any manner they see fit, in accordance with state and local laws.

Fenestration
A term referring to the way windows are arranged in a building.

FHA loans
Mortgages that are insured by the Federal Housing Administration (FHA). The FHA operates loan plans for investors and purchasers of rural property, and provides low-rate mortgages to buyers who make a down payment as small as 3 percent.

FHA Mortgage Insurance
Requires a fee (up to 2.25 percent of the loan amount) paid at closing to insure the loan with the Federal Housing Administration (FHA). In addition to the one time fee, the FHA also requires an additional insurance fee of up to 0.5 percent of the current loan amount, paid in monthly installments. The lower the down payment, the more years the fee must be paid.

Fiduciary duty
The relationship of trust that buyers and sellers expect and due from a real estate agent.

Field changes
Modifications made on the construction site that do not match blueprints.

Fill dirt
Soil brought in to solidify a finished foundation.

Filled land
An area where the ground has been raised by adding dirt, gravel or other fill material.

Finish grade
A finish that prepares a lot for landscaping.

Fire wall
A buffer composed of fire-resistant material.

Firm commitment
A written promise made by a lender to loan money for the purchase of property.

First mortgage
The primary mortgage on a property. As the most senior voluntary lien, the first mortgage takes priority over all other voluntary liens.

Fixed time
The specific weeks in a year that an owner of a timeshare arrangement has access to accommodations.

Fixed-rate mortgage
A home loan with an interest rate that will remain at a specific rate for the term of the loan.

Fixer-upper
A house that needs improvement and/or remodeling that usually sells at a below-market price.

Fixture
Personal property permanently attached to a house.

Flat roof
A roof with a level surface.

Flip switch
An electrical switch operated by pushing the control knob up or down.

Float arm
A wire-like device in some types of toilets that attaches a float ball to the ball cock.

Float ball
A round or oval ball that floats on top of the water inside the tank of some toilets. When it reaches its highest position it shuts off the flow of water.

Float floor drain
A drain that diverts water from the basement to a collection area. Water is then removed with a sump pump.

Floating slab
A concrete floor that is not connected to the foundation wall.

Floating wall
Walls built to withstand movement in the basement floor.

Flood certification
The process of determining whether a property is located within a known flood zone.

Flood insurance
Insurance coverage that is required in designated flood areas.

Flood plain
Flat, flood-prone areas located along waterways.

Floor area ratio
The calculation of the floor area of all homes or buildings in a project.

Florida rooms
Enclosed porches built on the side or back of a home.

Flue
A chimney designed to exhaust unwanted gasses and byproducts from a combustion appliance such as a furnace or water heater. A fireplace also has a flue to carry away smoke.

Flush valve
The passageway between a toilet tank and bowl. When you flush a toilet the water rushes through the flush valve into the bowl.

Flush valve seat
The seal in the passageway between a toilet tank and bowl. A stopper, flapper, or seat ball plugs the flush valve seat. When you flush a toilet, the seat is opened and water rushes through the flush valve into the bowl.

Footing
A concrete foundation that supports a structure.

For Sale By Owner (FSBO)
A selling method whereas the owner of the property acts as the selling agent and handles the sales process directly with the buyer or buyer's agent.

Forbearance
An action a lender may pursue to delay foreclosure or legal action against a delinquent borrower.

Foreclosure
Legal process by which a lender ends the borrower's interest in a property after a loan is defaulted. The lender may sell the property and keep the proceeds for mortgage and legal costs, using excess proceeds to satisfy other liens or return to the borrower.

Forfeiture
The relinquishing of property rights by a delinquent borrower.

Foundation
The support structure of a house.

Foyer
The entrance hall to a home or building.

Framing
The construction of the skeletal framework of a house.

Freddie Mac
A congressionally chartered institution that buys mortgages from lenders and resells them as securities on the secondary mortgage market. Freddie Mac is the common name for the Federal Home Loan Mortgage Corporation (FHLMC).

Freehold estate
An estate in which ownership is for an indeterminate length of time.

French doors
Two adjoining doors inlaid with glass that open from the middle.

Front footage
The measurement of a parcel of land by the number of feet of street frontage.

Front-end ratio
A lender calculation that compares a borrower's monthly housing expense (principal, interest, taxes, and insurance) to gross monthly income.

Frontage
The portion of property that borders a roadway or body of water.

FSBO (For Sale By Owner)
A selling method whereas the owner of the property acts as the selling agent and handles the sales process directly with the buyer or buyer's agent.

Full-service broker
A real estate broker who performs all transaction services including listing and selling.

Fully Amortized ARM
An adjustable-rate mortgage (ARM) with a monthly payment that is sufficient to amortize the remaining balance, at the interest accrual rate, over the amortization term.

Functional obsolescence
A loss in value to an improvement resulting from functional problems caused by age or poor design.

Furnace
An enclosed heating device powered by coal, oil, propane or natural gas.

Furring strips
Strips of wood used to support walls, ceilings, or floors on irregular or masonry surfaces.

Fuse
A small device in an electrical circuit that is designed to shut down the circuit in the event of an electrical overload or short circuit.

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G

Gable roof
A ridged roof that forms a triangle at each end.

Gag rule
A provision in a legal contract signed by home buyers that prohibits the publicizing of complaints about the builder.

Gambrel roof
A roof with two slopes, often seen on barns.

Gap
A missing document that raises doubt as to the true owner of the property.

General contractor
The person who hires all of the subcontractors and suppliers for a construction job.

Georgian style
Architecture distinguished by a symmetrical fa??ade, a prominent front entrance and quoins (decorative blocks of masonry or wood set in the corners of the house).

Gift
Funds a buyer receives from a relative or other source. Mortgage lenders usually require a gift letter from the giver of this "gift money" stating that the money does not have to be repaid.

Gingerbread decoration
An intricate, almost lacy, wood trim.

Ginnie Mae
See Government National Mortgage Association (below)

Girders
Crossbeams that support floor joists.

Glazed
A window that has been fitted with a glass pane. "Double glazed" refers to a window with double panes.

Glazier's point
A small pointed metal clip that helps hold a pane of glass in a window frame.

Good faith estimate
An estimate from an mortgage lender or broker showing the all the costs associated with obtaining a home loan including loan processing, title and inspection fees.

Government National Mortgage Association (GNMA)
This government agency buys home loans from lenders, pools them with other loans and sells shares to investors. However, unlike Fannie Mae and Freddie Mac, Ginnie Mae only purchases loans backed by the federal government. (Commonly known as Ginnie Mae)

Grace period
A specified amount of time in which a borrower may make a loan payment after its due date without penalty.

Grade
The elevation of land above level ground.

Grade level
The flat or sloping surface upon which a house is built.

Graduate Realtor?? Institute (GRI)
A designation issued by the National Association of Realtors (NAR) to members who meet specific performance and education requirements for residential real estate sales.

Graduated Payment Mortgage
A mortgage that requires a borrower to make larger monthly payments over the term of the loan. Payments are lower for the first few years but gradually rise until year three or five, when payments become fixed.

Granny flat
Refers to a separate unit in a house or above the garage which may have been occupied by an elderly relative in the past.

Grantee
A person to whom an interest in a piece of property is conveyed.

Grantor
The person who conveys an interest in a piece of property to another person.

Greenbelt
Any stretch of park, open space or other natural setting in a community.

Gross income
The total household income before taxes or expenses are subtracted.

Ground fault circuit interrupter
A device that detects leakage of electrical current to the ground and prevents accidental shock.

Ground rent
The amount of money paid for the use of a piece of property that is a leasehold estate.

Group home
A single family residence used as a living space for unrelated people who require special care or supervision.

Grout
A type of mortar used to fill areas between tiles, stone or marble.

Growing-equity mortgage
A fixed rate mortgage that increases payments over a specific period of time. The extra funds are applied to the principal.

Gutters
Horizontal channels installed at the edge of a roof to carry rainwater or melted snow away from the house.

Guy
A cable that guides or holds something, such as an antenna.

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H

Habendum clause
The "to have and to hold" clause that defines the quantity of the estate granted in the deed.

Half-bath
A half-bath contains a toilet and a sink but no bathtub or shower stall. (Also called a powder room)

Handyman's special
A house in fixer-upper condition.

Hardboard
A material made from wood fibers that is designed to simulate wood.

Hardwood
Wood that comes from deciduous trees such as oak, walnut and maple. Typically used for fine interior finishes.

Hazard insurance
Hazard insurance provides coverage for damage from items as fire and wind. Mortgage lenders require coverage for at least the replacement value of the home. (Also known as homeowner's insurance or fire insurance)

Head jamb
The top horizontal member in a door or window frame.

Header
A crossbeam above a window or door.

Heat anticipator
A component of a mechanical thermostat that shuts off the furnace or boiler just before the set temperature is reached to prevent overheating.

Heat pump
An electric cooling and heating system.

Hectare
The equivalent of 2.471 acres.

Hiatus
A gap between two parcels of land that is not included in the legal description of either property.

High density
The concentration of housing units in a specific area or on a specific property.

High-rise
Any building taller than six stories.

Hip roof
A pitched roof with sloping sides.

Historic preservation
The physical rehabilitation of a historic home or building to protect landmark property.

Historic structure
A home or building listed in the National Register of Historic Places and certified as historic by the U.S. Secretary of the Interior.

Hollow-core door
A door with a hollow interior.

Home equity line
An open ended line of credit based on a homeowner's accumulated equity.

Home equity loan
A loan that allows owners to borrow against the equity in their homes however unlike a home equity line this product provides a defined amount at closing without an option to redraw in the future.

Home inspection
An examination of a home's condition by a licensed inspector prior to purchase.

Home inspector
A licensed professional who evaluates the structural soundness and operating systems of a residence.

Home price
The price agreed upon by a buyer and seller, usually based on an appraisal of the house's market value.

Home rule
The power of a local government to adopt its own land-use regulations.

Homeowner's insurance
Insurance that includes coverage for any damages that may affect the value of a house, in addition to personal liability and theft coverage.

Homeowners Association (HOA)
A group that governs a subdivision, condominium or planned community. The association collects monthly fees from all owners to pay for common area maintenance, handle legal and safety issues and enforce the covenants, conditions, and restrictions set by the developer.

Homeowners Association dues
Monthly payments due to a homeowners' association to be used for maintenance and communal expenses. Condominiums, townhouse complexes, and planned unit developments (PUDs) may require monthly homeowners' association dues.

Homeowners Warranty
A special insurance policy that covers certain home repairs for a specified amount of time.

Homestead
A parcel of land used by the owner as a primary residence.

Homesteading
A document used to protect some of a home's equity from lawsuits.

Homogenous
A term used to describe an area or neighborhood where the property types and uses are similar and compatible.

Hopper window
A window that contains a single sash that tilts inward.

Hose bibb
A threaded faucet connection for devices such as a washing machine.

Hot wire
An ungrounded conductor that carries electrical current from the source.

House wrap
A polyethylene barrier wrapped around a house to save energy.

Housing discrimination
The illegal practice of denying an individual or group the right to buy or rent a home based on race, color, religion, national origin, sex, disability, or family status.

Housing expense ratio
The percentage of gross monthly income devoted to housing costs.

HUD
Abbreviation of (the U.S. Department of) Housing and Urban Development. HUD is a federal agency that oversees the Federal Housing Administration (FHA) and a variety of housing and community development programs.

HUD-1 Uniform Settlement Statement
A closing statement or settlement sheet that outlines all closing costs on a real estate transaction or refinancing for the buyer and seller.

Humidistat
Device that measures the amount of water vapor in the air and turns a humidifier or dehumidifier on and off accordingly.

HVAC
Acronym for heating, ventilation, and air conditioning.

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I

Impact fees
Fees collected from developers of new homes to pay for schools, parks and other facilities.

Implied warranty of habitability
Legal doctrine stating that all new homes are assumed to be fit for human habitation and must meet all building codes.

Impounds
A portion of the monthly mortgage payment that is placed in an account and used to pay for hazard insurance, property taxes and private mortgage insurance( if applicable).

Income property
Property that is not occupied by the owner but is used to generate income.

Incurable defect
A defect in a property that cannot be fixed or would cost too much to repair relative to the value of the property.

Independent contractor
A person hired to do a particular job, subject to the direction of a supervisor. An independent contractor pays for his or her own expenses and taxes and receives no employee benefits.

Index
Financial tables used by lenders to calculate interest rates on adjustable mortgages. Commonly used indexes are the Prime Rate, the LIBOR and Treasury bills.

Indexed Rate
The sum of the published index plus a margin. For example if the index were 5% and the margin 2.75%, the "fully indexed rate" would be 7.75%.

Infill housing
Home construction in established areas.

Infiltration
Air from the environment that penetrates a building.

Infrastructure
The utilities, roads, schools, parks and communications systems in a community.

Initial interest rate
The original interest rate on an adjustable rate mortgage. This rate may be subject to various adjustment at points throughout the mortgage.

Initial rate cap
A specific limit defined by some adjustable rate loans (ARMs) for the maximum amount the interest rate may increase at the expiration of the initial interest rate.

Initial rate duration
Most adjustable rate loans (ARMs) offer an initial interest rate below the current market rate. This initial or "teaser" rate expires after a period called the initial rate duration, which may last months or years.

Inlet valve
The mechanism inside a toilet tank that automatically fills the tank with water when the tank empties. The inlet valve is connected to the shutoff valve under the toilet.

Inspection fee
The fee paid to a licensed property inspector in order to determine the present physical condition of the property.

Inspection report
A licensed property inspector?s written report of the property's condition.

Installment contract
A purchase agreement where the buyers do not receive the title to the property until all installments are paid.

Installment sale
A real estate transaction in which the sales price is paid in installments.

Instrument
A written legal document.

Insulation
Materials that slow heat loss such as cellulose, glass fiber, rock wool, polystyrene, urethane foam, and vermiculite.

Insurable title
Title to property that a company agrees to insure against defects and disputes.

Insurance
Insurance policies guarantee compensation for specific losses and can be purchased in various forms including hazard, private mortgage, and earthquake.

Insurance binder
A temporary insurance arrangement usually put in force until a permanent policy can be obtained.

Insured Mortgage
A mortgage that is insured (guaranteed) by the Federal Housing Administration (FHA) or by private mortgage insurance (PMI).

Interest accrual rate
The rate at which interest accrues on a mortgage.

Interest paid over life of loan
The total amount paid to the lender for the use of money during the time the money is borrowed.

Interest rate
The fee, expressed as a percentage, charged for a loan.

Interest rate buy-down plans
For buyers with limited cash reserves some sellers are willing to advance funds from the sale of the home to buy down the interest rate and reduce the buyer's monthly obligation.

Interest rate cap
The maximum interest rate charge allowed on the monthly payment of an adjustable rate mortgage during an adjustment period.

Interest rate ceiling
The highest interest rate a lender can charge for an adjustable rate mortgage.

Interest Rate Floor
For an adjustable-rate mortgage (ARM), the minimum possible interest rate, as specified in the mortgage note.

Interest only loan
The borrower pays only the interest that accrues on the loan balance each month. Because each payment goes toward interest, the outstanding balance of the loan does not decline with each payment.

Interim financing
Short-term financing used by sellers to bridge the gap between the sale of one house and the purchase of another (also known as bridge or swing loans).

Investment property
Real estate that generates income, such as an apartment building or a rental home.

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J

Jack plane
A woodworker's tool designed for shaving off small amounts of wood.

Jalousie window
A window consisting of vertical rows of horizontal glass slats that operate together by a crank mechanism connecting all the slats.

Jamb
A surface that lines an opening for a door.

Joint liability
The responsibility of two or more people to fulfill the terms of a home loan or other financial debt.

Joint tenancy
Ownership by two or more people that gives equal shares to a piece of property. Rights pass to the surviving owner or owners.

Joist
Part of the framing that provides the structure for a floor.

Judgment
A decision by a court or law. If a court decides that a person must repay a debt, a lien may be placed against that person's property.

Judicial foreclosure
A way to handle foreclosure proceedings as a civil matter.

Jumbo loan
Loans that exceed the conforming limits set annually by Fannie Mae & Freddie Mac.

Junior mortgage
A loan that is subordinate to the primary loan.

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K

Key
A groove in the top of a footing.

Keys
Little fingers of plaster that squeeze through lath.

Keystone
An angular block centered over a door or window in a header or mantle.

Kick-out clause
A clause in a sales contract allowing a seller to accept one buyer's contingent offer then back out without penalty if a second buyer makes a better offer.

Kit home
A structure that contains prefabricated components and is put together by a contractor.

Knee wall
A wall-like structure that supports roof rafters.

Knob-and-tube wiring
An old fashioned wiring system that has been replaced by fuses and circuit breakers.

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L

Lally column
A circular pipe filled with concrete that supports girders and beams.

Laminate
Plastic material used to seal countertops

Lanai
A porch-like room or open-sided living room commonly found in homes in warm climates.

Landscape architect
A licensed professional who holds a degree in landscape architecture and is trained in horticulture, design and planning.

Landscape contractor
A licensed professional who carries out the plans of a landscape architect or a landscape designer.

Landscape designer
A landscape designer has training in horticulture and landscape planning but does not necessarily hold a degree.

Lap siding
A type of siding composed of horizontal boards with the bottom of one piece overlapping the top of the piece below it.

Late charge
A fee imposed by a lender when the borrower does not make a payment on time.

Late payment
A payment a lender receives after the due date has passed.

Latent defect
An invisible problem in a piece of property such as bad wiring, termite damage or lead paint.

Lead
A metallic chemical element present in older dwellings, primarily in the form of lead-based paint and lead plumbing.

Leader
A pipe that carries rainwater from the gutters to the ground, sewers and/or wells.

Lease
A binding agreement that contains the terms and conditions of a renter's occupancy.

Lease option
A lease that contains the right to purchase the property for a specific price within a certain time frame.

Lease-Purchase
The lease purchase contract sets the closing date and provides remedies to the seller if the buyer defaults. (a type of delayed closing)

Leasehold
The limited interest in a property held by a tenant; primarily the right to inhabit it for a specified period of time. At the end of the lease, the property reverts to the owner or landlord.

Leasehold estate
An arrangement in which the borrower does not own a specific piece of property but possesses a long-term lease.

Legal blemish
Blemishes on a piece of property such as a zoning violation or fraudulent title claim.

Legal description
A specific way of identifying and locating a piece of real estate that is acceptable to a court.

Lender
A bank, savings institution or mortgage company that offers home loans.

Lessee
A person to whom property is rented under a lease.

Lessor
A person who rents property to another under a lease.

Letter of intent
A formal statement from the buyer stating an intention to purchase the property for a certain price on a certain date.

Leverage
The use of a small amount of cash (for example, a 5 percent down payment) to buy a piece of property.

Levy
The amount of money a governing body certifies to be raised from the collection of property tax.

Liabilities
A borrower's debts and financial obligations.

Liability insurance
An insurance policy that protects owners against claims of negligence, personal injury or property damage.

LIBOR
Acronym for "London Interbank Offered Rate." An index used to determine interest rate changes for adjustable rate mortgages. Very popular index for interest only mortgage programs.

Lien
A claim laid by one person or company on the property of another as security for money owed.

Life cap
Limits the amount a loan's interest rate can change during the mortgage term. For example, if the rate on an adjustable-rate mortgage begins at 4 percent and has a life cap of 6 percentage points, it can not go over 10 percent.

Life-cycle cost analysis
An analysis of a building project's expected operating, maintenance and replacement costs.

Lifetime Payment Cap
For an adjustable-rate mortgage (ARM), a limit on the amount payments can increase or decrease over the life of the mortgage.

Lifetime Rate Cap
A maximum interest rate or "ceiling" that may not be exceeded under any circumstances over the entire life of the loan.

Limited partnership
Real estate syndicates and other investment groups use this type of ownership. A general partner makes the group's investment decisions, oversees the investment and is principally liable for any losses.

Lintel
A horizontal piece over a door or window that carries the weight of the structure above it.

Liquid assets
Cash and all other assets that can be converted to cash relatively quickly. Liquid assets can include money in savings and checking accounts, money-market accounts and most CD's.

Liquidated damages
A sum of money specified in the purchase contract to be paid by one party to the other in the event of a breach of contract.

Liquidity
The ability to sell an asset at a price close to its true value and convert it into cash in a short period of time.

Listing
A piece of property placed on the market by a listing agent.

Listing agent
A broker or sales agent who has contracted with a seller to handle the marketing and sale of a piece of property.

Listing broker
A real estate broker responsible for the listing of the property and representing the interest of the seller.

Listing inventories
The known number of houses for sale within a given market.

Live-in partnership
An arrangement in which two unrelated people purchase a home.

Live-work space
An officially designated dwelling in which the occupant conducts a home-based business or enterprise.

Load-bearing wall
A wall that supports not only its own weight, but the weight of other parts of a home. (also called a bearing wall)

Loan application
A document that details a borrower's income, debt and other obligations to determine credit worthiness. Also includes information on the subject property.

Loan application fee
A fee charged by lenders to cover expenses incidental to reviewing a loan application.

Loan commitment
A promise by a lender or other financial institution to make or insure a loan for a specified amount and on specific terms.

Loan officer
An official lending institution representative who is empowered to act on behalf of the lender within certain limits.

Loan origination fee
A fee charged by lenders to cover the direct costs of arranging the loan.

Loan term
The time set by a lender for a buyer to pay a mortgage. Most conforming loans have 30 or 15-year terms.

Loan-to-value ratio (LTV)
The ratio of the total loan amount to the value of the property. For lending purposes, the property value is equal to the purchase price or the appraised value, whichever is lower.

Local improvement district (LID)
A legal district established by state law to benefit a specific area. Districts issue bonds to finance improvements such as sidewalks and sewer systems, then levy assessments on real estate in the affected area to repay funds.

Lock-in
A lender's commitment to a borrower to guarantee (or "lock in") a specific interest rate for a limited amount of time.

Lock-in period
A period of time during which the borrower is guaranteed an agreed-upon interest rate, even if market rates rise. The longer the period, the higher the cost (in points) to the borrower.

Loft
A living space not partitioned into rooms or a small space built above a larger room.

Log cabin
Homes constructed of rough-hewn timbers.

Louvers
Slatted panels mounted in the upper portion of a gable wall to provide attic ventilation.

Low density
A low concentration of housing units in a specific area.

Low down-payment loan
A home loan that requires the borrower to make only a small down payment before obtaining the financing needed to purchase a house.

Low-documentation loan
A home loan that requires only minimal verification of income and assets.

Lowball offer
An offer made to a seller that is substantially below market value.

LTV (loan-to-value ratio)
The ratio of the total loan amount to the value of the property. For lending purposes, the property value is equal to the purchase price or the appraised value, whichever is lower.

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M

Main girder
The main support running between foundation walls to carry the weight of a floor.

Main water shut-off valve
The primary valve that halts the flow of water from the water meter into the home.

Maintenance fee
The monthly assessment paid by homeowners' association members for the repair and maintenance of common areas.

Managed-competition lots
Lots in which buyers choose between one of several builders.

Mansard roof
A roof with four sides that slope upward from the roof edge to a square peak.

Mantel
The facing of stone, marble or other material around a fireplace.

Manufactured housing
Prefabricated homes that can range from simple trailers to large dwellings.

Margin
A percentage added to the index and fixed for the life of the loan. When the initial interest rate on an adjustable-rate loan has expired, the interest rate moves toward the sum of its index plus a margin.

Market conditions
Factors affecting the sale and purchase of homes at a particular point in time.

Market value
The price a piece of property sells for at a particular point in time.

Marketable title
A good or clear title that is free of defects.

Masonry
The brick or stone work on a building.

Master-planned community
A suburban plan that includes homes and commercial, work, educational and community facilities.

Mastic
Construction adhesive (usually applied with a caulking gun)

Material defect
Any defect in a specific property that could either affect a buyer's decision to purchase it or affect the property's value, such as a cracked foundation.

Material fact
Any information about a specific property that could affect a buyer's decision to purchase it, such as an upcoming zoning change in the neighborhood.

Maturity
The date on which the principal balance of a loan becomes due and payable.

Mechanic's lien
A mechanic's lien is often filed by subcontractors or suppliers seeking payment for work or services performed without receipt of payment.

Mechanical systems
A home's plumbing, wiring, heating and cooling systems.

Median price
The price of the house that falls in the middle of the total number of homes for sale in an area.

Mediation
A dispute resolution process where a neutral party works to resolve contract differences.

Merged credit report
A report that draws information from the three (3) main credit-reporting agencies including: Equifax, Experian and Trans Union.

Meter
A device that measures electrical current or water flow to a property.

Meter pan
A piece of equipment through which the service conductor runs.

Metes and bounds
A time-honored land surveying method of describing land in terms of shape and boundary dimensions.

Mint condition
Mint condition refers to a house that looks as close to new as possible.

Miter
The manner in which two boards that meet at right angles are cut so that ends do not show. Miters are usually 45-degree cuts.

Mixed-income housing
A neighborhood containing homes of widely varying prices.

Mixed-use development
A project that combines several different functions, such as residential space above a commercial establishment or an entire development combining commercial, residential, and public accommodations.

MLS
MLS is an acronym for the Multiple Listing Service. This service combines the listings for all available homes in an area in one directory or database.

Modification
A change in the terms of a loan agreement.

Modified annual percentage rate (APR)
The modified APR is an index of loan cost based on the standard APR and adjusted for the time the borrower expects to hold the loan.

Molding
Decorative trim applied to walls, ceilings, window and door openings.

Monolithic slab
A slab that is part of the footings.

Monthly association dues
A payment due monthly to a homeowners' association for maintenance and communal expenses.

Mortar
Cement-based material that provides the base for brick, stone, and other masonry materials.

Mortgage
A sum of money borrowed to purchase a home using the property as collateral. A mortgage is the legal document that pledges the property as collateral for a loan.

Mortgage acceleration clause
A clause that allows a mortgage lender to demand repayment of the entire loan balance in a lump sum under certain circumstances, such as when the home is sold, title is changed, the loan is refinanced or the borrower defaults on a scheduled payment.

Mortgage banker
A company that provides home loans using its own money. The loans are usually sold to investors such as insurance companies and Fannie Mae.

Mortgage broker
An individual that matches lenders with prospective borrowers who meet the criteria of lenders the broker is approved to deal with.

Mortgage broker business
A company that matches lenders with prospective borrowers who meet the criteria of lenders the broker is approved to deal with. The mortgage broker business does not keep or make the loan, but receives payment from the lender for services.

Mortgage insurance
Required by lenders on some loans to protect lenders from a possible default. Most conventional loans with down payments or home equity percentages that are less than 20 percent of the home value require private mortgage insurance (PMI).

Mortgage life insurance
Insurance that will pay off a mortgage if the borrower dies before the debt is retired.

Mortgage-interest deduction
The tax write-off that the Internal Revenue Service allows most owners to claim for annual interest payments made on real estate loans.

Mortgagee
A bank or other financial institution that lends money to the borrower. The borrower is considered the mortgagor.

Mortgagor
The person who borrows money to purchase a house. The lender is called the mortgagee.

Mortise lockset
A doorknob and latch set designed to fit into a rectangular pocket cut into the edge of a door.

Motivated buyer
A buyer with a strong incentive to make a purchase.

Motivated seller
A property owner with a strong incentive to sell.

Move-in condition
A house that is ready for a new occupant.

Move-up buyer
A buyer who has purchased a home before and is looking for a bigger or more expensive home.

Mullion
A vertical dividing bar between window panes or panels.

Multidwelling property
A property that contains individual units for several households but carries only one mortgage.

Municipal housing inspector
Inspectors employed by cities or counties to check all construction sites and verify that contractors are meeting local building codes.

Muntin
A wooden division that separates panes of glass in a multi-paned window or door.

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N

NAHI (National Association of Home Inspectors)
A professional association of independent home inspectors whose members must meet certain education and performance requirements.

Nail pops
Nails in parts of new homes that pop out slightly due to settling of the structure.

NAR Code of Ethics
A formal code of ethics and standards of practice established by the National Association of Realtors (NAR) and by which its members must abide.

National Association of Home Inspectors (NAHI)
A professional association of independent home inspectors whose members must meet the group's education and performance requirements.

National Association of Realtors (NAR)
A trade organization for real estate agents and brokers who become members by agreeing to abide by the organization's code of ethics. Members may call themselves Realtors.

National Council of State Housing Agencies
Nonprofit clearinghouse of information on local and state housing agencies.

National Foundation for Consumer Credit
Nonprofit clearinghouse of information on nonprofit credit counseling centers nationwide.

Needs-based pricing
An asking price based on factors such as the funds required to pay off the seller's mortgage, the cost of remodeling, or the purchase of another house.

Negative amortization
Occurs when a borrower's monthly payment is too small to cover both the principal and interest of a loan, so the outstanding balance of the loan actually grows larger with each payment. Many adjustable rate mortgages are susceptible to this.

Negative-slope driveway
A driveway that drops from street level to the garage.

Net cash flow
Income from an investment property after expenses such as principal, interest, taxes and insurance are subtracted.

Net listing
A listing agreement in which the broker's commission consists of the amount above a net price set by the owner. If the net price is not met, a commission is not earned.

Net worth
The worth of a person or company based on the difference between total assets and liabilities.

Neutral bus bar
Grounded metal bar inside an electrical service panel or subpanel to which all neutral and grounding wires are connected.

Neutral wire
A grounded conductor that carries electrical current back to the source from an electrical device.

Niche
A small recessed area in a wall.

No-cash-out refinance
When the amount of the new mortgage covers the remaining balance of the first loan plus closing costs and any liens, and yields no more than 1 percent of the new loan's principal in cash.

No-competition lots
A lot in which the buyer's home will be constructed by a pre-selected builder.

No-documentation loan
A loan application that does not require verification of income or assets and is generally based on a combination of strong credit with a large down payment.

Non-assumption clause
A loan provision that prohibits the transfer of a mortgage to another borrower without lender approval.

Non-conforming loan
A non-conforming loan is any loan that doesn't meet the qualifications or is too large to be purchased by Fannie Mae or Freddie Mac.

Non-liquid asset
An asset such as a house that is not easily turned into cash.

Non-solicitation order
An order issued by the secretary of state to brokers and agents, prohibiting them from soliciting listings in a designated area.

Nonrecurring closing costs
Fees that are only payable once such as appraisal, loan points, credit report, title insurance and home inspection.

Nosing
The front edge of a stair tread that extends over the riser.

Note
A legal document that requires a borrower to repay a mortgage at a certain interest rate over a specified period of time.

Note rate
The interest rate specified in a mortgage note.

Notice of default
A lender's initial action when a mortgage payment is late and attempts to reconcile the issue out of court have failed.

Novation
A release of liability to the first borrower of a loan, and the substitution of a subsequent borrower with the lender's approval.

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O

O-ring
A small rubber ring that provides a water seal in faucets and other plumbing fittings.

Office of Thrift Supervision (OTS)
The regulatory and supervisory agency for federally chartered savings institutions. Formally known as the "Federal Home Loan Bank Board"

One-year Adjustable Rate Mortgage
A mortgage whose interest rate changes yearly. The rate is usually based on movements of a published index plus a specified margin.

Open house
A marketing tool where a listing agent opens a house to the public for viewing.

Open listing
A property given to a number of brokers to market at the same time.

Open space
Undeveloped land or common areas in a planned community reserved for parks, walking paths or other natural uses.

Option
A situation in which a buyer puts down money for the right to purchase a piece of real estate within a set time period but does not have an obligation to buy.

Option Arm Loan
A home loan where the borrower has multiple payment options each month. Some options include negative amortization.

Option listing
A listing agreement with a clause that gives the listing broker the right to purchase the property.

Orange peel
A type of wallboard finish with a texture like that of an orange peel.

Original principal balance
The amount of principal owed on a loan before a borrower makes any payments.

Origination fee
A fee charged by most mortgage lenders to cover costs of arranging the loan.

Ostensible agency
An implied agency relationship not involving a written agreement or documentation.

Outbuilding
Any barn, shop, shed or other structure located on a lot in addition to a house or other main building.

Overflow plate
A small plate that covers an outlet near the rim of a sink or tub.

Overflow prevention switch
A special air-pressure switch in a dehumidifier that turns the unit off when water in the reservoir rises to a certain level.

Overhang
A protruding structural feature.

Over Improved property
Property that could not be sold at a price high enough to recoup the costs of improvements.

Owner financing
A transaction in which the seller of a property agrees to finance all or part of the purchase.

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P

Panel
A section or division of a wall, ceiling or flat piece of building material that forms part of the surface of a wall, door or cabinet.

Panel
Electrical distribution box with circuit breakers, fuses and terminals to which household wiring is connected.

Panel door
A door with a frame of horizontal rails and vertical stiles that surround raised or recessed panels. A type of construction that allows a door to expand and contract with changes in moisture and weather without cracking or warping.

Paneling
Strips of wood or wood-like material applied as a finish to a wall.

Parcel
An officially described piece of land.

Parget
A coating applied to a foundation wall to prevent water leakage.

Parking strip
The strip of grass between the sidewalk and the street in front of a house.

Particleboard
A board composed of wood chips glued together under pressure. Particleboard is similar to chipboard but has a higher density.

Partition
Any kind of structure dividing one room or space from another.

Partnership
Unmarried individuals who buy a piece of property have several options, such as a live-in partnership (in which both buyers share the residence) or a shared-equity partnership (one buyer lives in the home and the other is an investor in the property).

Party wall
A wall built along the boundary between two properties.

Pass-through
An opening in a wall between the kitchen and breakfast or dining room used to pass dishes.

Passive loss
A tax term that refers to any loss from a passive activity, such as the ownership but not the operation of a piece of rental real estate.

Patent defect
A visible defect in a piece of property, such as a cracked basement slab or a sagging porch.

Patio
An interior courtyard or a paved backyard area.

Payment cap
A limit on the amount a monthly payment can increase on an adjustable rate mortgage.

Payment Change Date
The date when a new monthly payment amount takes effect on an adjustable-rate mortgage (ARM) or a graduated-payment mortgage (GPM). Generally, the payment change date occurs in the month immediately after the adjustment date.

Pediment
Peaked, rounded or other decorative panel above a doorway.

Per-diem interest
Interest charged or accrued daily.

Percolation test
A test used to determine the ability of soil to accommodate a septic system.

Perennial
Any plant that produces leaves, flowers and seeds from year to year.

Pergola
An arbor with an open roof of rafters supported by posts or columns.

Periodic Payment Cap
A limit on the amount that payments can increase or decrease during any single adjustment period.

Periodic Rate Cap
A limit on the amount that the interest rate can increase or decrease during any one adjustment period, regardless of how high or low the index might be.

Personal property
Any movable property in a house such as furniture or appliances.

Photoelectric switch
A switch that turns lights or other electrical devices on or off depending upon the light.

Pier
A rectangular masonry support column.

Pigtail
A short wire connected to another wire, usually with a wire nut.

Pigtail cord
A short electrical cord with an integral plug designed to be attached to an appliance.

Pilasters
Decorative vertical columns attached to the wall or frame at each side of a doorway.

Pilot
The flame or electronic control that ignites gas or oil burners.

Pilot light
A small, continually burning gas flame inside a gas-fired water heater, dryer, range or similar appliance. This flame ignites the appliance's gas burner.

Pipestem lot
A lot connected to the street by a narrow strip of land.

Pitch
The slope of a roof. Pitch is the ratio of vertical rise to horizontal run.

PITI (principal, interest, taxes, and insurance)
A payment amount calculated by a mortgage lender to include the total payment of all principal, interest, taxes and insurance due monthly.

Planned community
Any town or neighborhood built with certain guidelines or goals in mind.

Planned unit development (PUD)
A residential project that features relatively dense clusters of houses which are usually surrounded by areas of commonly owned open space maintained by a nonprofit community association.

Plaster
A labor-intensive wall finish consisting primarily of lime, sand and water.

Plat book
A public record containing maps showing the division of streets, blocks, and lots. Also indicates the measurements of the individual parcels.

Plate
The bottom or top piece of a wall.

Pledged Account Mortgage (PAM)
A type of mortgage that is tied to a pledged savings account and this fund (plus earned interest) is gradually used to reduce mortgage payments.

Plenum
A heat distribution box on a furnace or central air-handling unit.

Pocket door
A sliding door that recesses into the wall when opened.

Point
Fees charged by a lender to provide a lower interest rate. One point equals one percent (1%) of the loan amount. Also referred to as a discount point.

Porch
A structure that can be a simple covered entrance to a home or a fully enclosed room on the outside of a residence.

Porte-coch??re
A porch-like roof extending over a driveway.

Portico
A porch
 supported by a row of columns.

Possession
A buyer officially takes possession of a house upon signing the closing papers and receiving the keys.

Power of attorney
A document that authorizes an individual to act on behalf of someone else.

Pre-approval
A thorough assessment made by a lender of a potential borrower's ability to pay for a home and a confirmation of the amount to be borrowed. The completion of a loan application is necessary to close the loan.

Pre-approval letter
A letter from a lender that states the amount of money a potential buyer can obtain.

Pre-sold home
A home that is sold before it is built.

Prepaid expenses
Expenses including taxes, insurance, and assessments that are paid before the due date.

Prepaid fees
Funds collected by the lender from the borrower to pay certain recurring items in advance, including interest, property taxes, hazard insurance and, if applicable, private mortgage insurance (PMI).

Prepaid interest
Interest paid before it is due.

Prepayment penalty
A penalty that a lender may impose on a borrower who pays a loan off before its expected end date.

Prequalification
A lender's preliminary assessment of a buyer's ability to pay for a home and an estimate of how much the buyer may borrow.

Pressure relief valve
A safety vent that relieves excess pressure in a water heater.

Price range
The upper and lower limit of what a buyer is willing to pay for a home.

Primer
The initial coat of paint or sealant applied to a surface to prepare it for painting.

Principal
The amount of money originally borrowed in a mortgage, minus any payments made subsequently.

Principal paid over life of loan
The sum of scheduled principal payments calculated by the lender to equal the face amount of the loan.

Principle of conformity
The idea that a house will more likely appreciate in value if its size, age, condition and style are similar to other houses in the neighborhood.

Principle of progression
An appraisal term which states that real estate of lower value is enhanced by the proximity of higher end properties.

Principle of regression
An appraisal term which states that the value of higher-end real estate can be brought down by the proximity of lower-end properties.

Privacy fence
A structure erected between two pieces of property.

Private mortgage insurance (PMI)
A form of insurance required by a lender when the borrower's down payment or home equity percentage is less than 20 percent of the home value.

Probate
The process of establishing the validity of a will before a duly authorized court or person. Once validity is confirmed, the probate court then administers the sale of property as directed by the will or as authorized by the court to settle any financial obligations.

Processing fee
A fee charged by some lenders for gathering information necessary to process the loan.

Procuring cause
Legal term used to determine whether a broker is entitled to a commission.

Production home
Homes that are mass-produced by one builder.

Programming
A written summation by an architect of a project's design objectives, constraints, and criteria.

Project budget
A fiscal outline that includes the construction budget and all costs for land, furniture, equipment, financing, professional services, contingencies and owner-furnished goods and services.

Property line
The official dividing line between properties.

Property tax
Tax paid on privately owned property. Property taxes are usually paid semiannually, or monthly if the lender requires. The amount is based on local tax rates and assessed property value.

Property tax deduction
The U.S. tax code allows homeowners to deduct the amount they have paid in property taxes.

Property value
The value of a piece of property, based on the price a buyer will pay at a given time.

Punch list
A list compiled by a buyer prior to a sale detailing items to be fixed before closing.

Purchase agreement
A document that details the purchase price and conditions of the transaction.

Purchase contract
A legal document that binds a buyer to purchase a piece of property for a set price and also binds the seller to sell that property to the buyer.

Purchase-money mortgage (PMM)
A mortgage obtained by a borrower as partial payment for a property.

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Q

Qualifying ratio
A ratio calculated by a lender to determine how much a potential buyer can borrow.

Quiet enjoyment
The right of an owner to use his or her property without interference.

Quiet title suit
A lawsuit filed to ascertain the legal rights of an owner to a certain parcel of property.

Quitclaim deed
A document that releases a party from any interest in a piece of real estate.

Quoin
The outer corner of a building, or the rectangular stone block used to form that corner.

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R

R-value
A measure of a material's resistance to heat loss. The higher the R-value, the slower the rate of heat loss.

Radon
A ground-generated radioactive gas that seeps into some homes through sump pumps, cracks in the foundation and other inlets. A serious health hazard.

Rafter
One of a series of beams that form the slope of a pitched roof.

Rails
The horizontal structural members of a door. Most doors have a top rail, a bottom rail, and a center rail connected at both ends to vertical stiles.

Rammed-earth construction
An alternative building process in which dirt is compacted into large structural frames to create walls.

Rate cap
The maximum interest rate allowed on the monthly payment of an adjustable rate mortgage during an adjustment period.

Rate lock
A lender's commitment to a borrower to guarantee (or "lock in") a specific interest rate for a limited amount of time.

Rate-improvement mortgage
A loan with a clause that entitles a borrower to a one-time interest rate cut without going through refinancing.

Real estate
Land and anything permanently affixed to it, including buildings.

Real estate agent
A person licensed by a state to represent a buyer or a seller in a real estate transaction in exchange for a commission.

Real estate broker
A person, corporation, or partnership licensed by a state to represent a buyer or seller in a real estate transaction in exchange for a commission.

Real estate investment trust (REIT)
Publicly traded companies that own, develop and operate commercial properties.

Real estate professional
Any real estate broker, sales agent or attorney who holds a real estate license.

Real Estate Settlement Procedures Act (RESPA)
A federal law designed to make sellers and buyers aware of settlement fees and other transaction-related costs. RESPA also outlaws kickbacks in the real estate business.

Real property
Land and any permanent fixtures on it including buildings, trees and other fixtures.

Realtor
A designation for an agent or broker who is a member of the National Association of Realtors.

Reconveyance
A lender's act of conveying a property back to a borrower who has completely paid off his or her mortgage.

Recorder
A public official responsible for keeping record of all real estate transactions.

Recording
The filing of property-related documents into the public record.

Recording fee
A fee charged by real estate agents for conveying the sale of a piece of property into the public record.

Redlining
An illegal practice by a bank or insurance company that denies credit or insurance to people based on ethnic background or neighborhood.

Refinancing
The process of replacing an older mortgage with a new mortgage.

Regression
The principle that the value of a better-quality property is adversely affected by the proximity of a lesser-quality property.

Regulation Z
A federal code issued under the Truth in Lending Act that requires a borrower be advised in writing of all costs associated with the credit portion of a financial transaction.

Rehabilitation mortgage
A mortgage that provides for the costs of repairing and improving a resale home or building.

Release clause
A provision in a purchase contract that allows a seller to continue marketing their home and accept other offers.

Relocation company
A firm that administers all aspects of relocating new employees from one location to another.

Remaining balance
The amount of unpaid principal on a home loan.

Remaining term
The original loan term minus the number of payments made.

Renter's insurance
A policy for renters that covers the replacement value of possessions.

Repayment plan
When a borrower falls behind in mortgage payments many lenders will negotiate a repayment plan rather than go to court.

Replacement cost
The current cost of rebuilding a structure to its original specifications.

Replacement reserve fund
Money that is set aside from homeowners' assessments to replace common property such as furniture in a planned development's community room.

Repointing
Replacing damaged mortar in the joints between bricks or stones.

Repossess
To take back property. A lender holding a mortgage may repossess a property if the buyer fails to make payments.

Rescission
The cancellation of a contract by law or consent from the parties involved.

Reserve fund
Money set aside by a homeowners' association for major repairs or improvements.

Resilient channel
A channel run across wall studs underneath wallboard to reduce sound transmission.

Restriction
Any limitation on the use of property.

Restructured loan
A mortgage in which new terms are negotiated.

Reverse mortgage
A special type of loan available to equity-rich, older home owners. Repayment is not necessary until the borrower sells the property. Many downsides exist to these loans.

Ridge board
A horizontal board that serves as the apex of the roof structure.

Ridge vent
A vent located along the ridge board of the roof that allows moisture to escape.

Right of first refusal
An agreement by a property owner to give another person the right to buy or rent the property before it goes on the open market.

Right of way
The right to pass over or use another's land. Similar to an easement.

Right to rescission
A provision in the federal Truth in Lending Act that allows borrowers to cancel certain kinds of loans within three (3) days of signing.

Riparian rights
An owner's right to use a river, stream or lake bordering the owner's property.

Riser
Vertical boards between the steps of a stairway.

Rocker switch
An electrical switch operated by tapping the top or bottom of the control plate.

Rollback
A limitation on annual assessed value increases or a reduction in the amount of property tax paid.

Roof sheathing
Flat boards nailed to the rafters to which a covering is fastened.

Rough-in
The installation of plumbing, electrical and other mechanical systems.

Rural Housing Service
A U.S. Department of Agriculture program that provides financing to farmers and certain borrowers to purchase rural property when other funds are not available.

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S

Sale leaseback
A real estate transaction in which the buyer leases back the property to the seller for a specific period of time.

Sales concession
A cost paid by the seller even though the cost is usually paid by the buyer.

Sales contract
A contract signed by the buyer and seller detailing the terms of a property sale.

Sanitary sewer
The drain line in a house that carries away wastewater to a sewer or septic system.

Sash
One of two windows in a double-hung window.

Schematic designs
Renderings of floor plans and the exterior of a house.

Sconce
A wall-mounted light fixture.

Second mortgage
A second loan placed upon a piece of property.

Secondary mortgage market
A financial market of packaged home loans that are resold as securities to investors.

Secured loan
A loan backed by collateral.

Security
A piece of property designated as collateral.

Seller carry-back
An agreement where the seller provides financing for a home purchase.

Seller financing
The seller allows the borrower to use a portion of the equity in the property to finance the purchase.

Seller take-back
An agreement where the seller provides financing for a home purchase.

Seller's market
A real estate market in which sellers have the advantage and multiple offers are common.

Selling agent
A real estate broker or salesperson who writes the purchase offer for a buyer in a real estate transaction.

Semi-custom home
The buyer of a semi-custom home is free to make changes to some design aspects of the home but not to the home's structural plan.

Septic system
A self contained sewage treatment system that holds wastewater in an underground storage area and relies on bacterial action to decompose solid waste matter.

Service conductor
The wires extending from the home's service equipment to the utility company's line.

Servicer
A firm that collects mortgage payments and manages borrowers' escrow accounts.

Setback
The minimum distance a house or building must be from the lot line.

Settlement or closing fees
Fees paid to the escrow agent (often a title insurance company) for carrying out the written instructions of the agreement between buyer and seller and/or borrower and lender.

Settlement statement
A closing statement or settlement sheet that outlines all closing costs on a real estate transaction or refinancing for the buyer and seller.

Severance
Changing an item from real property to personal property by detaching it from the land.

Shake
A thick wood (often cedar) shingle used for roofs and siding.

Shared-appreciation mortgage
A loan that allows a lender or other party to share in the borrower's profits when the home is sold.

Shared-equity transaction
A transaction in which two buyers purchase a property, one as a resident co-owner and the other as an investor co-owner.

Sheathing
Sheets of material applied across floors, rafters or studs.

Shed ceiling
A ceiling that pitches upward at one end.

Shed roof
A roof that pitches up further on one side than the other.

Shingles
Thin, wedge-shaped pieces of wood or flat rectangular pieces of slate, mineral fiber, glass fiber or composition asphalt installed on a roof to prevent water seepage.

Shiplap
A milled pattern of siding designed to shed water when applied horizontally.

Shoe molding
An unobtrusive finish trim between the floor and the baseboard. (designed to hide any irregularities in the seam between the floor and wall or baseboard)

Shutoff valve
The small valve under a sink or behind a toilet that controls the water supply to the plumbing fixture.

Shutters
Covers mounted at either side of a window.

Sidelights
Tall, narrow windows that stand on one or both sides of a door to admit light and allow residents to see the person at the door.

Siding
A type of covering on a home's exterior walls.

Sill
The lowest horizontal member across a door or window opening. In the case of a door, the sill is often called a threshold.

Sill cock
An exterior threaded faucet connection for garden hoses that provides water outside a home.

Sill plate
A horizontal piece of wood placed on top of the foundation.

Sill sealer
A material that seals gaps between the foundation and sill plate.

Simple assumption
A type of loan assumption where the original borrower remains secondarily liable should the assumptor default.

Single agent
Any agent who represents either the buyer or the seller in a transaction.

Single-pole switch
A conventional light switch that controls one or more lights from a single location.

Sink trap
The P- or S-shaped section of drainpipe directly beneath a sink. Its shape is intended to hold a small amount of water so that it blocks sewer gasses from rising into the house.

Skylight
A window in a roof that allows natural light to illuminate a room.

Slab foundation
A foundation built directly on soil with no basement or crawl space.

Slider window
A window that is composed of two windows (or sashes) that glide open and closed on a metal track.

Snubber
A spring-like device fastened between the top of a door and the door jamb to pull the door shut.

Soffit
An external area under the overhang of a roof.

Soils test
A test of the subsoil to ensure that foundations can be safely constructed.

Sole plate
The bottom horizontal component of a frame wall on which the studs sit.

Solid-core door
A door with a solid interior.

Soundboard
A special board used beneath the wallboard to reduce the transmission of sound through the wall.

Special assessment
A charge levied upon owners in a homeowners' association for the purpose of public improvements.

Specifications
The written requirements for materials, equipment and construction systems and standards.

Speculation home (also known as a spec home)
A home that has been built without a buyer.

Splash block
A slanted block used to divert runoff water from a downspout away from the foundation.

Spline
A thin piece of wood, metal or vinyl that secures a joint.

Split-level style
A home style similar to ranch style but stacked to fit on a smaller lot and perhaps to accommodate a garage.

Square footage
The number of square feet of livable space in a home or building.

Standard metropolitan statistical area (SMSA)
A designation given by the U.S. Office of Management and Budget to cities of 50,000 or more residents.

Standard payment calculation
A calculation that is used to determine the monthly payments necessary to repay the balance of a home loan in equal installments.

Starter home
A first home that is generally of a lower-than-average price.

Steel framing
A construction method used by commercial and residential builders.

Step-rate mortgage
A loan that allows a gradual increase in the interest rate during the first few years of the loan.

Stigmatized property
Property that has an undesirable reputation because of an event that occurred on or near the site.

Stiles
The vertical members that make up a door's construction.

Stool
Part of the interior window frame that, like a shelf, extends horizontally across the lower part of the opening.

Stop
A thin strip of wood fastened to the face of a doorjamb, intended to stop the door when you close it (sometimes called a doorstop).

Storm sewer
A drain line not connected to the sewer line that removes all other wastewater from a home.

Storm window
A window installed on top of an ordinary window for additional protection in extreme weather conditions.

Straight purchase
A transaction in which a buyer gives the builder a deposit to begin building, and the balance when the sale of the house closes.

Strike plate
Flat metal plate fastened to a doorjamb that receives a lockset's latch or bolt to keep a door closed.

Stucco
A mixture of sand and cement used to cover the exterior surface or interior walls of a home or building.

Studs
The upright pieces of lumber or steel in a wall, to which panels, siding, drywall, or other coverings are attached.

Subagent
An agent who assists another agent in representing a principal, or party, in a transaction. A seller's subagent who writes the buyer's offer owes loyalty to the seller, though many states presume any agent working with a buyer is the buyer's agent.

Subcontractor
Specialty construction companies hired by the general contractor to perform certain tasks.

Subdivision
The division of a large piece of property into smaller parcels. Also, the divided property itself.

Subflooring
The plywood or boards beneath finish flooring that, nailed directly to floor joists, provides a structural base for finish materials.

Subject-to
The transfer of rights to pay a debt from one party to another, with the original party remaining liable for the debt if the second party defaults.

Subordinate loan
A second or third mortgage.

Subsequent rate adjustments
The interest rate for adjustable rate loans (ARMs) adjusts at regular intervals. This adjustment period could in some cases differ from the initial interest rate duration period.

Subsequent rate cap
A specific limit defined by most adjustable rate loans (ARMs) for the maximum amount the interest rate may increase at each regularly scheduled interest rate adjustment date. This limit may differ from the initial rate cap.

Sump pump
A pump that moves water from a basement sump pit.

Super jumbo mortgage
A mortgage that is over $650,000 or $1,000,000, depending on the lender.

Surround
The material surrounding a bathtub or shower.

Survey
A precise measurement of a piece of property by a licensed surveyor.

Swale
A wide, shallow depression in the ground designed to channel drainage of rainwater.

Sweat equity
The non-cash value added to a piece of property by the owner, such as do-it-yourself home improvements.

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T

T1-11
A hardboard exterior siding with vertical grooves to simulate boards.

Tank stopper
A rubber plug or flapper that seals the valve seat between a toilet tank and bowl. Upon flushing a toilet, the tank stopper is lifts to allow water to rush through the flush valve into the bowl.

Tap fees
A fee charged by most companies for hooking up utilities.

Tax lien
A lien placed against a property for nonpayment of taxes (property and/or personal)

Tax sale
The public sale of a property by the government for nonpayment of taxes.

Tax service fee
A fee collected to set up third-party monitoring of the borrower's property tax payments. This is done to ensure that the payments are made on time and to prevent tax liens from occurring to the detriment of the lender.

Tax shelter
A term often applied to real estate investment, referring to various tax advantages.

Tear-down
A house in such poor condition as to require complete rebuilding.

Teaser rate
A low, short-term interest rate offered on a mortgage to entice the borrower.

Tenancy by the entirety
Ownership by a husband and wife in which they together hold title to the whole property with right of survivorship.

Tenancy in common
A form of ownership in which two or more owners hold an undivided (though not necessarily equal) interest in the property, with no right of survivorship.

Tenure
A common law term referring to the way in which a piece of property is held, such as a fee simple or leasehold.

Terra cotta
A red, low-fired tile that is a popular roofing material.

Thermostat
A control that automatically turns on a heater, furnace or air conditioner when room temperature reaches a set level.

Thermostatic control
A device used to regulate the point at which the burner for the water heater is activated.

Threshold
A flat trim strip normally made of oak or aluminum that offers a durable and finished transition between the floors on both sides of a door or between indoors and out.

Throw
The distance a deadbolt extends out from the edge of a door when in its locked position.

Time is of the essence
A phrase in a purchase contract that indicates a certain period of time in which an act must be performed.

Timeshare
Ownership that involves the acquisition of a specific period of time or percentage of interest in a vacation home or resort.

Title
The legal document conferring ownership of a piece of real estate.

Title company
A firm that ensures that the property title is clear and provides title insurance.

Title Exam
An examination of the public record to determine that the seller is the legal owner and there are no encumbrances (such as claims or liens) affecting the property.

Title insurance
A policy issued to lenders and buyers to protect against loss due to disputed property ownership at a later date.

Title insurance binder
A title insurance company's written commitment to insure title to the property subject to the conditions and exclusions shown on the binder.

Title risk
Possible impediments to the transfer of a title from one owner to another.

Title search
The process of reviewing all recorded transactions in the public record to determine whether any title defects exist that could interfere with the clear transfer of ownership of the property.

Tongue and groove
Lumber with a small groove down one side of each board and a protruding piece (tongue) on the other side that fits into the groove when the boards are installed.

Top producer
Refers to agents and brokers who close a high volume of transactions.

Top rail
The horizontal structural member of a door that runs across the top of the door.

Top soil
The top layer of soil that is removed when lots are graded in preparation for construction.

Total expense ratio
The percentage of monthly debt obligations relative to gross monthly income.

Total lender fees
Fees required by the lender to obtain the loan, apart from other fees associated with transferring a property between buyer and seller.

Total loan amount
The base loan amount plus any financed closing costs.

Total monthly housing costs
The sum of principal, interest, property taxes and, if applicable, private mortgage insurance (PMI) and either hazard insurance or homeowners' association dues.

Total of all payments
The total cost of the loan including repayment of the principal amount and the sum of monthly interest payments.

Townhouse
An attached home that is not a condominium.

TPRV
Temperature/pressure relief valve. A device that releases built-up energy in a tank at a certain temperature or pressure.

Tract home
A mass produced house constructed by one builder in a project. (Another term for a production home)

Trade equity
Other real estate or assets that a buyer provides to a seller as part of the down payment.

Trading down
Buying a home that is less expensive than the one's current house.

Trading up
Buying a home that is more expensive than one's current house.

Trans Union Corporation
One of the major credit reporting bureaus. Visit www.transunion.com

Transaction broker
A real estate professional who is hired to help a buyer and seller reach an agreement. The transaction broker does not represent either the buyer or the seller.

Transfer of ownership
Any legal means by which a piece of real estate changes hands.

Transfer tax
An assessment by state or local authorities at the time a piece of property changes hands.

Transom
A small hinged window directly above a door.

Trap
A trap is the "U" or "S" shaped section of drainpipe directly beneath a plumbing fixture such as a sink or shower.

Tray ceiling
A tray ceiling has edges that slant toward the middle from the walls.

Tread
The flat part of a stair step.

Treasury Bills
Securities issued by the Treasury Department which have the full backing of the U.S. government.

Treasury Index
An index used to determine interest rate changes for adjustable rate mortgages.

Trellis
A decorative landscape structure made of thin strips of wood or plastic.

Trim work
The finishing of doors, doorways, window frames and floors.

Triple net lease
A lease that requires the tenant to pay all expenses of the property being leased in addition to rent. Typical expenses covered in such a lease include taxes, insurance, maintenance and utilities.

Truss
A prefabricated framework of girders, struts and other items used to support a roof or other load-bearing elements.

Trust account
A special account used by a broker or escrow agent to safeguard funds for a buyer or seller.

Trustee
A legally empowered person who holds or controls a piece of property for another person.

Tuck-point
The process of removing old mortar from between bricks and replacing it with new mortar.

Two to four-family property
A piece of property that is owned by one person but provides housing for up to four households.

Two-step mortgage
An adjustable mortgage with two interest rates: one for the first five or seven years of the loan, and the other for the remainder of the loan term.

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U

U-value
The amount of heat a door or window conducts between the inside air and the environment.

U.S. Department of Housing and Urban Development
Also known as HUD. This federal agency oversees the Federal Housing Administration and a variety of housing and community development programs.

Underlayment
A layer of wood between the sub-floor and the floor.

Underwriters' knot
A code-approved knot tied at the end of an electrical cord to prevent the wires from being pulled away from their connection to electrical terminals.

Underwriting
The process in which lenders evaluate the risks posed by a particular borrower and set appropriate conditions for the loan.

Underwriting fee
A fee charged by mortgage lenders to verify information on the loan application and make a final decision about whether or not to approve the loan.

Undisclosed heir
A person who claims the right to a piece of property after the death of an owner without a will.

Undisclosed spouse
A marital partner who can claim the right to a piece of property but is not identified in the owner's will.

Unilateral contract
A one-sided contract. If one party makes a promise to do something, the second party is not legally required to perform. If the second party does comply, however, the first party is obligated to keep its promise.

Unrecorded deed
A deed that transfers ownership from one party to another without being officially recorded.

Unsecured loan
Any loan that is not backed by collateral.

Upgrades
Options offered to buyers in a new-home project that go beyond the standard carpeting, lighting, finish carpentry, and other amenities.

Upzoning
The process in which a property is zoned from a lower to a higher use.

Urban sprawl
The unplanned expansion of development over a large area.

Usury
Illegally excessive interest charged on any loan.

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V

V-cap
A specially shaped piece of ceramic tile used at the edge of a counter to trap liquids.

VA (Veterans Administration)
The Veterans Administration assists veterans with purchasing a home without a down payment.

VA loan
A loan through the Veterans Administration program, which allows most veterans to purchase a house without a down payment.

Vacancy factor
The amount of gross revenue anticipated to be lost due to vacancies. Always expressed as a percentage of the total rentable square footage available.

Vacancy rate
The total amount of available space compared to the total amount of space. Always expressed as a percentage.

Vacant space
Existing tenant space currently being marketed for lease excluding space available for sublease

Vapor barrier
A material such as plastic that prevents the passage of moisture.

Variable rate
An interest rate that changes with fluctuations in such indexes as the prime rate.

Variable rate mortgage (VRM)
A mortgage with an interest rate that changes with fluctuations in such indexes as the prime rate, libor rate, or treasury bill.

Vaulted ceiling
An elongated half-cylinder that arches above the floor.

Vendee
A buyer of real property

Vendee's Lien
Legal right of a purchaser of a piece of real estate to the paid purchase price plus direct costs of acquisition, if the seller fails to render the deed to the property.

Vendor
A seller of real estate or other products.

Vendor's Lien
The seller's claim to property held by a buyer as collateral for a debt, also called a purchase money mortgage.

Veneer
A thin facing material that is applied over a structural base.

Vent
A pipe that allows air to flow in a drainage system.

Ventilation
The process of replacing stale air with fresh air, usually by circulation through a series of vents or a mechanical system such as an air conditioner.

Verification of deposit (VOD)
As part of the loan process a lender may ask a borrower's bank to sign a statement verifying the borrower's account balances and history.

Verification of employment (VOE)
As part of the loan process a lender may ask the borrower's employer for confirmation of the borrower's position and salary.

Vestibule
A small entrance hall or room.

Victorian style
An architectural style that dates from the mid-19th century.

Vinyl-clad windows
Wood windows sheathed in vinyl on the outside.

Violation
An act, deed or condition contrary to the permissible use of property.

Visqueen
A brand of polyethylene sheet used to cover the ground in a crawl space.

Visual Right
Occupant's right to see out of a window without being hindered.

Voidable contract
A contract that may seem to be valid, but can be rejected by either one of the parties.

Volt
The unit used to measure electrical force between two points in a circuit.

Volt-ohm meter
An electrical test device used for making a variety of electrical measurements including voltage and current.

Voltage
The pressure behind the flow of electricity.

Voluntary lien
A lien that a homeowner willingly gives to a lender.

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W

Waiver
A voluntary relinquishing of certain rights or claims.

Walk-out basement
A feature that allows a door to open onto ground level.

Walk-through
A buyer's final inspection of the home to determine if conditions in the purchase agreement have been satisfied. Usually happens hours before the buyer and seller meet at closing.

Wallboard
Sheets of compacted gypsum with a paper exterior. Also known as dry wall, sheetrock, gypsum board and plaster board.

Warehouse fee
A closing cost fee representing the lender's cost of holding a borrower's loan temporarily before it is sold on the secondary mortgage market.

Warranty
A legally binding promise to do something in the future.

Water table
The level at which the ground is saturated with water.

Watt
The unit used to measure the rate at which a device consumes electricity.

Weather stripping
Individual lengths of rubber or plastic used to plug air leaks around doors and window frames.

Weep holes
Spaces or small openings left in a masonry wall to allow water to drain from behind the wall.

Western style
A style of cabinet with a face frame around the front opening.

Wetlands
Watery areas such as swamps, marshes and floodplains.

Wild deed
An improperly recorded deed.

Window light
An individual pane of glass.

Window seat
A bench built under an interior window.

Window well
A curved, corrugated steel insert used to isolate basement windows from moisture if they're below the soil line.

Window well covers
Curved plastic covers designed to be installed on top of a window well to cover the opening.

Wraparound mortgage
A loan given to a buyer for the remaining balance on a seller's first mortgage and an additional amount requested by the seller. Payments on both amounts are made to the lender who holds the wraparound loan.

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X

Xeriscape
Type of landscaping which uses plants that grow successfully in arid climates and, therefore, do not use much water.

Xyst
Covered or shaded walkway.

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Y

Yield
The effective return on an investment, as paid in dividends or interest

Yield maintenance premium
A penalty designed to make investors whole in the event of early redemption of principal. Usually paid by the borrower.

Yield spread
A form of compensation some brokers receive from a lender for originating and processing a loan. The yield spread is based on the interest rate of the loan and can usually vary anywhere from zero to 6%.

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Z

Z-flashing
A special type of metal flashing that protects horizontal joints between siding panels which do not overlap. This metal flashing has a Z-shaped profile and is designed to tuck up under the upper panel and overlap the lower one.

Zero-lot line
The positioning of a house near or on top of the lot boundary, resulting in little or no space between houses.

Zero-net
When the seller receives little or no net proceeds from a property sale.

Zoning
Regulations controlling the use of land within a jurisdiction.

Zoning ordinance
The set of laws and regulations controlling the use of land and construction of improvements in a given area or zone

Zoning variance
A one-time modification of existing zoning laws.

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Contact Information

Photo of Bruce Theobald, Managing Broker Real Estate
Bruce Theobald, Managing Broker
Lakefront Realty Group Inc.
2034 N Clark St
Chicago IL 60614
312-286-7402

Bruce Theobald of Lakefront Realty Group, Inc., sells condos and townhomes in Lincoln Park, Old Town, Lakeview, Wrigleyville, DePaul, River North, Streeterville, the Gold Coast,  Sandburg Village,  the West Loop and the South Loop.  He represents first time buyers, investors, as well as home-sellers.