Real Estate Dictionary
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Dictionary Real Estate 3

Dictionary Real Estate continued


DUE-ON-SALE CLAUSE (Due On Sale Clause) - A mortgage provision (clause) which allows a lender (the mortgagee) to demand the loan’s full repayment (the entire outstanding balance) if the ownership of the property securing the mortgage is transferred or sold by the borrower (the mortgagor). The clause may also require full repayment if the property is encumbered. Also see Alienation Clause.

DUPLEX - A dwelling (housing structure) that is suitable for two families, with each having separate living quarters including separate enteries, living areas, kitchens, and bathrooms.

DURESS - The forcing of either inaction or action upon a person against their will.

EARNEST MONEY CONTRACT (EMC)  - A contract for the purchase or sale of real property (real estate) in which the buyer is required to provide earnest money as evidence of good faith in securing the performance of the contract (e.g., completing the contractual obligations).

EARNEST MONEY DEPOSIT - A deposit of money that a home buyer puts towards a home purchase, demonstrating that they are committed to buying the home and securing the performance of the contract. The Earnest Money Deposit demonstrates the buyer’s good faith in completing the real estate transaction.

In most real easte transactions, if the seller agrees to accept the earnest money deposit it is held in an escrow account by a title company from the time of the offer’s acceptance of the terms of the contract until the time of settlement (e.g., the closing process).

Typically an earnest money deposit will not be refunded to the potential home buyer unless the original offer contained a contingency which was not fulfilled. Also called Deposit.

EASEMENT - A right which allows a person to use or access - but not own - land (real estate) that is owned by another. This right is typically granted for a specific purpose, such as the placement of utilities, or to provide access to a beach or trail.

EASEMENT BY NECESSITY - The right of entry and exit to a specific piece of real property as granted by a court due to the property’s condition of being landlocked.

EASEMENT BY PRESCRIPTION - The right to continue to use another person’s land (real estate) because the court prescribes this ongoing use due to the previous unpermitted use for a period of time on accordance with state law.

EASEMENT IN GROSS - A person or entity’s right to use the land (real estate) owned by another person even though they are not the adjoining neighbor. For example, a utility granted for the placement of utilities is considred an Easement in Gross.

ECONOMIC CHARACTERISTICS OF REAL ESTATE - Permanence of Investment, Improvements, Area Preference, Scarcity.

ECONOMIC LIFE - A number that a licensed professional appraiser estimates regarding how long the structure(s) (but not the land) on a particular property will have value, in excess of its salvage value.

ECONOMIC OBSOLESCENCE - A piece of real propety’s loss in value as a result of external forces or events. For example, if a landfill is suddenly located next to the property, this would cause the property to suffer a severe loss in value, or economic obsolescence. Also see Obsolescence; Functional Obsolescence; Physical Obsolescence; Incurable Depreciation.

EFFECTIVE AGE - The estimate by a professional licensed appraiser of the physical condition of a structure (e.g., building). The actual age (chronological age) of the structure may be either longer or shorter than its Effective Age.

EFFECTIVE INTEREST RATE - The cost of credit (borrowing money) on an annual basis, expressed as a percentage. The Effective Interest Rate includes the various costs that may be associated with obtaining the loan. When these up-front costs are factored in, then the true interest rate (the total cost of borrowing the money) is likely higher than the advertised interest rate on the loan as it is stipulated on the note (e.g., mortgage). For this reason the Effective Interest Rate is useful for comparing different loan options which each may have different points and stated interest rates.

EMBLEMENTS - Crops that are currently growing on land, and thus considered to be personalty (personal property) of whoever planted them on the land. Even though the crops are technically attached to and thus part of the real property, they are considered “fructus industriales” and thus are considered personal property.

ENCROACHMENT - An intrusion, without any permission or rights to do so, onto or over the property of another person. For example, if a homeowner built a home addition that was partially on the neighbor’s lot, it would be an Encroachment onto that person’s property.

ENCUMBRANCE - A lien (e.g., mortgage loan), claim, liability, easement, unpaid taxes, or any other item that places restrictions on the deed to real property (real estate) and limit’s a person’s “bundle of legal rights,” clouding the free and clear title (good title) of the real property, though not prohibiting conveyance of the property.

EFFUXION OF TIME - A normal lease expiration caused by the passage of time and not due to any specific event that might otherwise cause a lease to end (e.g., the building burning down).

EGRESS - The act of exiting or the exit itself.

EMINENT DOMAIN - The government’s right to take for public use the real property (real estate) of an individual or other entity that owns the property. Under the process of Eminent Domain, the property owner is given fair compensation for the property. The government’s right to use court action to take private property for public use is called condemnation and requires the government to pay just compensation (e.g., fair market value) for the property.

ENDORSEMENT - The writing of one’s name on a negotiable instrument or a paper attached to the negotiable instrument, with or without additional words.

EQUITY - A home’s value in excess of all liens (e.g., mortgages) against that home; market value minus mortgage debt. For example, a $500,000 home with a $300,000 mortgage has $200,000 equity.

ESCROW ACCOUNT - An account used by a loan servicer to hold (impound) funds from the borrower to use as escrow payments to pay property expenses (e.g., homeowner’s insurance, property taxes). Also called an Impound Account; Trust Account.

ESCROW ANALYSIS - The accounting of balances in an escrow account as performed by a mortage servicer in order to determine regular (e.g., monthly ) escrow payments and check for deficiencies, shortages, or surpluses in the account.

ESCROW COLLECTIONS - Monies placed in an escrow account to pay expenses incurred by a borrower (e.g., mortgage and homeowner’s insurance, property taxes, etc.). 

ESCROW PAYMENT -  A portion of a monthly payment witheld by the loan servicer in order to pay the property expenses of the borrower as these expenses come due. Some examples of expenses paid by Escrow Payments include mortgage insurance, taxes, homeowner’s insurance and lease payments. Also called Reserves; Escrow Payments.

ESTATE - An individual’s ownership interest in real property.

ESCROW - The process by which items of value (e.g., documents, money) are deposited with and held by a disinterested third party (e.g., stakeholder) to be delivered upon the fulfilment of the conditions and terms of the escrow instructions as given by the parties to the escrow.

ETHICS - Rules and standards of conduct based on moral principles.

EVICTION - Removing a tenant from a property where they have breached the lease contract; the legal act of removing a tenant from the premises.

EXCEPTION-The exclusion of some part of a piece of real property (real estate) being conveyed. The title of the excepted part of the property remains with the grantor (seller). An example of an exception is the mineral rights in subdivision developments. These rights are typically not conveyed to the buyer but instead remain as the property of the developer. Also see Reservation.

EXCLUSIVE AGENCY (EA) - An agent who represents either sellers or buyers exclusively in transactions. The party represented is the client, and is owed ficuciary duties by the agent. In a real estate transaction, a listing agreement provides the listing agent with the right to sell the property for a specified period of time. The owner of the property reserves the right to make the sale themself without paying a commission to the agent. Also see Exclusive Right To Sell.

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EXCLUSIVE AGENCY LISTING (Exclusive Agency) - A listing agreement that gives one real estate agent the authority to sell a particular property for a certain time, while the owner may also sell the property during that time without paying any commisison to the real estate agent.

EXCLUSIVE LISTING - A written listing agreement for a piece of real property with the seller giving one particular broker the right to sell the property for a certain period of time. The Exclusive Listing may be either an “Exclusive Right to Sell” or and “Exclusive Agency.”

EXCLUSIVE RIGHT-TO-SELL LISTING (Exclusive Right) - A type of listing agreement in which the seller appoints a real estate broker (the listing broker) and gives that broker the exclusive right to earn a commission by serving as the owner’s representative for a specific time and finding a buyer to purchase the property on the owner’s terms. The listing broker serves as the exclusive agent to sell the property, and will earn a commission no matter who finds a buyer, including the owner, during the listing period.

EXTERNAL OBSOLESENCE - A term used in the real estate (real property) appraisal process to describe an incurable depreciation which is not in under the control of the property owner. 

An example of external obsolesence would be a landfill opening nearby to the property, or a severe decline in the quality of the overall neighborhood or surrounding area. Also see Physical Depreciation.

FACILITATOR - A broker/agent who facilitates a business transaction yet does not work for (e.g., have as a client) either party to the transaction. 

If the business transaction is a real estate sale and/or purchase, then the agent (Facilitator) will consider both the seller and buyer as customers (not clients). Also called Transactional Broker.

FAIR MARKET VALUE - The current maximum amount of money that a particular piece of real property (real estate) would bring if offered for sale for a reasonable time period in a competitive market, to a willing seller not compelled to sell and from a willing buyer not compelled to buy (neither party is under pressure to act), and with both parties having a reasonable knowledge about all pertinent facts including all purposes to which the property is best suited and for which it is capable of being used. An appraisal is an attempt to determine the home’s fair market value. Also called Market Value.

FDIC--See Federal Deposit Insurance Corporation.

FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC) - Government agency which insures bank deposits and promotes safe and sound banking practices. FDIC insurance is offered at virtually all United States banks.

Founded in 1933, the Federal Deposit Insurance Corporation has the ultimate goal of maintaining the stability of the United States financial system, and maintaining the public’s confidence in the financial system.

FEDERAL TRUTH-IN-LENDING LAW (Federal Truth In Lending Law; Federal Truth-In-Lending Statement; Federal Truth In Lending Statement)--A regulation by the federal government of the United States (developed by the Federal Reserve System) to ensure that borrowers are fully informed. 

The Federal Truth-In-Lending Law requires complete disclore of the terms of a loan including financing interest rates espressed as an annual percentage rate (APR) that takes into account specific upfront costs associated with particular types of financing and thus represents the “true cost” of brrowing money. This helps consumers accurately compare different loan options. 

The Federal Truth-In-Lending Law specifically defines a loan’s finance charges as the total of all fees that the customer (borrower) is required to pay either indirectly or directly to obtain from a creditor (lender). 

Also addressed by the Federal Truth-In-Lending-Law are loan advertising rules and such loan features as trigger terms which are loaassociated terms (e.g., interest rate, downpayment, loan term, etc.) which, if used by a lender in advertising, will “trigger” a requirement under the Federal Truth-In-Lending Law that additional facts must be disclosed.

Also called Truth-In-Lending Law.

FEDERAL EMERGENCY MANAGEMENT AGENCY (FEMA) - A United States governmnet agency whose goal is to provide leadership for a national emergency managment system. At the direction of the President of the United States, FEMA coordinates its response activities as well as the response activities of dozens of other Federal agencies that may be involved in the effort. FEMA also helps citizens prepare for times of disaster, and operates the Federal Insurance Administration providing flood insurance to residents who consent to adopting and enforcing sound floodplain management practices.

FEE SIMPLE (Fee Simple Estate) - An unlimited and unconditional, inheritable estate (estate of inheritance) of perpetual (indefinite) duration, freely transferable. Fee simple ownership is likely the most familar type of property ownership for residential property owners in the United States.

Fee simple ownersip represents the least limited and most extensive interest in land that can be enjoyed, and the greatest estate that one may possess in real property.

Sometimes referred to as Fee Simple Absolute, Fee Simple Ownership is the most complete and absolute ownership of land, and allows the owner to possess undivided title to the home or other structure as well as the land on which the property is located.

FEMA--See Federal Emergency Management Agency.

FHA HOME LOAN - A home mortgage that is insured by the Federal Housing Administration (FHA).

FIDUCIARY - An agent who represents a client and thus owes them the Fiduciary Duties of: Skill and Care, Obedience, Loyalty, Full Disclosure, Confidentiality, and a Full Accounting of all money in addition to any obligations stated in the agent’s contract. These Fiduciary Duties are inherent in the agency relationship, and are also enforceable by law.

A Fiduciary is involved in a trust and confidence relationship with their client. For example, a real estate agent who is given the authority to manage a client’s property or money owes Fiduciary Duties to their principal (the home buyer or home seller).

FINANCE CHARGE - The total of all fees a borrower (customer) must pay, either directly or indirectly, to obtain credit from a lender (creditor). This Finance Charge calculation is defined specifically by the Federal Truth-in-Lending Law.

FINANCE FEE - A fee charged by a mortgage broker to place a mortgage with a creditor (e.g., lending institution). Some examples of Finance Fees are mortgage service charges and loan origination fees.

FINDER’S FEE (Referral Fee) - A fee paid to a person or firm for producing a buyer or seller to purchase or list a property.

REFERRAL FEE - The fee that is paid to a firm or to a person that produces either a seller or a buyer to either list or to purchase real property. Also called Finder’s Fee.

FIRM COMMITMENT - The definite willingness of a creditor (e.g., lending institution) to supply a speciic amount of money as a loan, for a stated interest rate and for a specific amount of time.

FIRST MORTGAGE - The primary (first) lien against a piece of real property (the mortgage in first lien position). The First Mortgage takes priority over all other liens (financial encumbrances) on the property.

FIXED PERIOD ADJUSTABLE RATE MORTGAGE (FixePeriod Adjustable Rate Mortgage) - An Adjustable Rate Mortgage (ARM) with a fixed interest rate for the loan’s initial period - which typically ranges from three to ten years (e.g., 3,5,7, or 10) - followed by periodic interest rate adjustments - typically once or twice each year - until the terms of the loan are completed. 

The interest rate adjustments on a Fixed Period ARM are set in accordance with a predetermined financial index.

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FIXED RATE MORTGAGE (FixeRate Mortgage) - A mortgage with an interest rate (and monthly payment) that does not vary (e.g., stays fixed) over the complete term (lifetime) of the loan.

FIXTURE - An item of personalty (personal property) that becomes attached (affixed) to real property (real estate) in a permanent manner and thus becomes real estate. 

Some examples of Fixtures include lighting, plumbing additions (e.g., sinks), built-in bookcases, door locks, stoves, and ovens. Fixtures pass with the property even if they are not specifically mentioned in the deed to the property.

FLOOD INSURANCE - Insurance that provides protection against, and compensation for, financial losses due to physical property damage (e.g., floor damage) from floods. Flood insurance is generally required on all real property located in a federally-designated flood zone.

FORECLOSURE - A legal action or process ending all the rights of a home buyer to their home because the buyer defaulted under the terms of the mortgage (e.g., failed to make timely payments on the mortgage).

A foreclosure may take place in or out of court, and the real property that serves as security for the mortgage is usually sold to satisfy the debt. 

The foreclosure process effectively extinguishes all of the mortgage holder’s rights and interest in the property as well as their title to the property.

FREE AND CLEAR TITLE - A title to a piece of real property (real estate); the title is deemed to be free of any encumbrances such as liens (e.g., mortgage loans), clouds on title, etc.). Also called good title.

FULL DISCLOSURE - 

1) A provision of fiduciary duty requiring an agent to provide a client (e.g., home buyer or home seller) with all material and/or relevant information pertaining to a particular home.

This requirment of disclosure includes information about the business transaction in general, and information about any and all potential buyers or sellers as well as any information that may potentially benefit the agent’s client including: facts that may affect the value of the real property (real estate); the bargaining position of the customer (e.g., a home seller or buyer); and anything else that may potentially benefit the agent’s client.

For example, if a potential home buyer (customer) has indicated to the real estate agent that they (the buyer) may not be able to qualify for a mortgage, or that they might be willing to pay an amount of money higher than their offer and asks the agent to keep the information confidetnial, the agent is still required to provide the information to the client (home seller).

The client may keep certain types of information confidential between the agent and client, but still must treat the customer and any other parties to the real estate transaction honestly and fairly, and must follow all laws about disclosing all material facts about a particular home (e.g., any significant problems with the home).

Also called Disclosure.

2) Revealing a previously hidden fact such as a major physical defect in a home for sale. Some examples of a such a major defect include mold, a leaking roof, an unstable foundation, potential flooding, electrical problems, etc.

Also called Disclosure.

 FULLY AMORTIZED MORTGAGE - A mortgage in which the monthly payments will completely retire the obligation (repay the loan) by the end of the mortgage term.

FUNCTIONAL OBSOLESCENCE - A piece of real propety’s loss in value as a result of some aspect of the property not presently functioning properly based on current needs, modernization, poor design issues, or perhaps changing standards or tastes.

For example, if the home is designed with only one bathroom and four bedrooms, or very little closet space, or if access to a bathroom requires going through a bedroom (e.g., a shotgun house), this may be a case of functional obsolescence.

Also see Obsolescence, Economic Obsolescence, and Physical Obsolescence. 

GENERAL CONTRACTOR - A person or company trained in and specializing in construction. A General Contractor is licensed to contract with other individuals (e.g., homeowners) or companies to either construct, demolish, or renovate real estate (real property).

GENERAL AGENT - An agent who has been given the authority to make decisions regarding a particular area for a principal (the client). 

For example, if an apartment owner hires a property manager, then the property manager is a general agent for the owner, and authorized to make decisions regarding rentals and other aspects of property management.

GENERAL LIEN - A lien in which a creditor (lender) has the right to use personalty (personal property) as well as real property (real estate) to secure the payment of a debt. The creditor may also sell the property to recover money to repay the outstanding debt.

GENERAL PARTNERSHIP - Two or more persons who co-own a business, with all persons in the partnership being potentially liable for the actions of all other partners in the business.

GENERAL WARRANTY DEED - A deed which conveys the interest of the grantor, fully warranting a clear and good title to real property. The Warrany Deed binds the grantor by the warranties and holds them liable if the title has any defects or clouds such as mechanic’s liens, tax liens, or judgments. Also called Warranty Deed.

GIFT LETTER - A letter provided by a family member as verification that a stated amount of money was given to you and does not have to be repayed. The terms of some mortgage loans allow the borrower to count a gift as money toward their down payment.

GOVERNMENT MORTGAGE - A mortgage guaranteed or insured by the federal government or a government agency such as the Federal Housing Administration or the Veterans Administration.

GOOD FAITH ESTIMATE - A form provided by lenders which is mandated by the Real Estate Settlement Procedures Act (RESPA).

The Good Faith Estimate discloses a well-considered estimate of the total of all charges for specific settlement services (the amount or range of charges) that the borrower is likely to incur and will be expected to pay in connection with the purchase of the property, in order to complete the purchase of the property. As such, the Good Faith Estiamte provides a best-effort initial estimate of closing costs.

A borrower must recieve the Good Faith Estimate from a lender within three business days of submitting the loan application.

GOOD TITLE - A title free of legal questions as to ownership and free of liens. Also called free and clear title.

GRADUATED PAYMENT MORTGAGE - A mortgage on real property (residential) that requires monthly payments starting at a low level and then gradually increasing at a predetermined rate.

GRADUATED, REALTORS INSTITUTE - Professional designation that the National Association of Realtors® awards to members who successfully complete a required set of courses that include Finances and Principles of Real Estate as well as Law.

GRANTEE - A person to whom interest in real property (real estate) is conveyed; the buyer; the person who receives the real estate. The grantee is the receiver of a grant of real property from a grantor, who is the person conveyng the interest in the property.

GRANTOR - A person who conveys an interest in real property (real estate); the seller. The grantor tranfers an interest in a title for real property and conveys that interest to a grantee. For a conveyance to be legal, the grantor must be competent.

GRI (Graduated, Realtors Institute) - Professional designation that the National Association of Realtors® awards to members who successfully complete a required set of courses that include Finances and Principles of Real Estate as well as Law.

GROSS AREA - A structure’s floor area determined by measuring the building’s exterior but not including any unenclosed areas.

GROSS LEASE - A commercial lease of real estate (real property) that requires the tenant to pay a fixed amount of rent either monthly or annually irregardless of the operating costs (e.g., taxes, insurance, maintenance) incurred by the landlord. Also see Net Lease.

GROSS LEASE WITH STOPS - A commercial lease of real estate (real property) that requires the tenant to pay a fixed amount of rent either monthly or annually irregardless of the operating costs (e.g., taxes, insurance, maintenance) incurred by the landlord until the landlord’s operating costs reach a certain level (e.g., the stop level) at which point the tenant is required to contribute more money. Also see Net Lease.

GROSS MONTHLY INCOME - The normal montly income including all regular pay from employment as well as any overtime pay that is regular or guaranteed and also other sources of regular monthly income. The Gross Monthly Income reflects the amount of money from these sources before any taxes are paid on the money.

HELOC--See Home Equity Line of Credit.

HIGHEST AND BEST USE - The optimum use of a property that will create the best net (financial) return to the property (e.g., building and/or land) over a certain time period. An appraiser considers the highest and best use at the time of appraising.

HOA--See Homeowners Association. 

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HOME EQUITY LINE OF CREDIT (HELOC) - A loan to a homeowner providing multiple advances up to a stated credit limit that is based upon the borrower’s equity in the property being used as security for the debt.

HOME EQUITY LOAN - A fixed rate loan or adjustable rate loan or line of credit secured by equity (collateral) in a home. A home equity loan allows the property owner, at their own convenience, to borrow an amount of money up to the limit of their line of credit. Because the interest paid is usually tax deductible, a home equity loan is often preferable to credit card debt, auto loans, boat loans, education loans, and other consumer loans whose interest is not tax deductible.

HOME INSPECTION - A professional inspection carried out during one or more visits to the property to evaluate the condition of the premises.

A typical home inspection evaluates the heating, cooling, plumbing, and electrical systems as well as the foundation, roof, drainage, and the status of any pest infestation (e.g. termites). At the conclusion of the inspection the inspector usually prepares a home inspection report.

Potential problems that may not be included in a standard inspection (e.g., may require a special inspection) include radon, asbestos, lead paint, and mold.

In its most general use, the term inspection also refers to title issues.

HOME INSPECTION CLAUSE -  A provision (stipulation) in a potential home buyer’s offer to purchase a home which makes the sale of the home contingent upon a home inspection report.

HOME INSPECTION REPORT - A professional inspector’s report on the overall condition of a property following a home inspection. The Home Inspection Report typically includes an evaluation of the heating, cooling, plumbing, and electrical systems as well as the foundation, roof, drainage, and the status of any pest infestation (e.g. termites). 

Potential problems that may not be included in a standard inspection (e.g., may require a special inspection) include radon, asbestos, lead paint, and mold. In its most general use, an inspection also refers to title issues.

HOMEOWNER ASSOCIATION (Homeowners Association; HOA) - A nonprofit association of homeowners (neighbors) in a particular area who share a goal of maintaining and improving their area’s overall quality by managing the common areas of the development (e.g., subdivision, condominium complex), collecting dues from the residents, and enforcing all covenants, conditions & restrictions. For some Homeowners Associations the dues are mandatory while for others the dues are voluntary.

HOUSING AND URBAN DEVELOPMENT (HUD) - The United States Department of Housing and Urban Development, which is the government agency (federal cabinet department) which is responsible for developing programs for renewal projects, administering Federal Fair Housing Laws (e.g., enforcing the provisions of the Fair Housing Act), and regulating closing costs for borrowers.

HUD (Housing and Urban Development) - The United States Department of Housing and Urban Development, which is the government agency (federal cabinet department) which is responsible for developing programs for renewal projects, administering Federal Fair Housing Laws (e.g., enforcing the provisions of the Fair Housing Act), and regulating closing costs for borrowers.

HUD 1 STATEMENT (HU1 Statement)  - A summary of a real estate transaction’s fees, costs, credits, charges, disbursements, and any other money matters required to be finalized to complete the close of the transaction.

The HUD 1 Statement is typically prepared by a broker, escrow officer, lender, closing agent, or title company. 

The HU1 is a standard form that most lenders use at closing to disclose all of the items listed above, and to make sure they are in compliance with the provisions of the Real Estate Settlement Procedures Act. (RESPA).

The HUD 1 Statement is also called the Settlement Statement or Closing Statement.

IMPOUND ACCOUNT (Escrow Account) - An account used by a loan servicer to hold (impound) funds from the borrower to use as escrow payments to pay property expenses (e.g., homeowner’s insurance, property taxes). Also called an Escrow Account; Trust Account.

IMPOUNDS - A portion of a monthly payment witheld by the loan servicer in order to pay the property expenses of the borrower as these expenses come due. 

Some examples of expenses paid by Impounds include mortgage insurance, taxes, homeowner’s insurance and lease payments. Also called Reserves; Escrow Payments.

INCOME PROPERTY - Real estate that is purchased or developed with the goal of producing income (e.g., a rental unit).

INCURABLE DEPRECIATION - A depreciation that cannot be remedied by the owner of the real property (real estate). Also see Physical Depreciation.

INDEPENDENT CONTRACTOR - A person or company retained to perform a particular act (e.g., providing goods and/or services) to another party under the specific terms of a contract, but who works independently (self-employed) and is only subject to control and direction as to the end result and not to the process of achieving that result.

INDEX - A number (e.g., percentage) used to determine future interest rate adjustments for Adjustable Rate Mortgages (ARMs; Adjustable Mortgage Loans; Variable Rate Mortgages) over the term of the loan. (See Margin.)

INHERITANCE LAWS - Laws which govern the distribution of an estate when a person dies intestate (with no will).

INSPECTION -  A professional inspection carried out during one or more visits to the property to evaluate the condition of the premises.

A typical home inspection evaluates the heating, cooling, plumbing, and electrical systems as well as the foundation, roof, drainage, and the status of any pest infestation (e.g. termites). At the conclusion of the inspection the inspector usually prepares a home inspection report.

Potential problems that may not be included in a standard inspection (e.g., may require a special inspection) include radon, asbestos, lead paint, and mold.

In its most general use, the term inspection also refers to title issues.

INSPECTION CLAUSE - A provision (stipulation) in a potential home buyer’s offer to purchase a home which makes the sale of the home contingent upon a home inspection report.

INSPECTION REPORT -  A professional inspector’s report on the overall condition of a property following a home inspection.

The Home Inspection Report typically includes an evaluation of the heating, cooling, plumbing, and electrical systems as well as the foundation, roof, drainage, and the status of any pest infestation (e.g. termites). 

Potential problems that may not be included in a standard inspection (e.g., may require a special inspection) include radon, asbestos, lead paint, and mold.

In its most general use, an inspection also refers to title issues.

INSTALLMENT - A regular payment a lender receives from a borrower toward repayment of a debt.

INSTALLMENT DEBT - A loan whose repayment is in accordance with a regular schedule of payments for a certain period of time.

INSURABLE TITLE - A real property title that an insurance company (e.g., a title insurance company) will insure against any disputes and/or defects in the title.

INTEREST - 

1) The cost of borrowing money; the sum of money that accrues and must be paid in return for the use of money. Interest is usually stated as a percentage of the total amount of money borrowed.

2) The extent of a person or firm’s ownership of property, including the particular type of ownership (e.g., joint tenancy, fee simple, etc.).

INTEREST RATE - A fee charged on a period basis for the use of credit (e.g., borrowing money). The Interest Rate is usually expressed as a percentage.

INTEREST RATE BUYDOWN (Interest Rate Buydown Plan) - Money paid toward a home loan to reduce the monthly payment either for just the initial years of the loan (a temporary buydown) or to reduce the loan’s interest rate for the complete term of the loan (permanent buydown).

INTEREST RATE CEILING - The maximum interest rate that may be charged on an Adjustable Rate Mortgage loan (ARM; Adjustable Mortgage Loan; Variable Rate Mortgage).

INTEREST RATE FLOOR - The minimum interest rate that may be charged on an Adjustable Rate Mortgage loan (ARM; Adjustable Mortgage Loan; Variable Rate Mortgage).

INTESTATE - A legal designation describing someone who passes away without leaving a valid will. In this situation the rightful heirs to the deceased are determined by state laws of descent regarding inheritance (inheritance laws).

INTRODUCTORY RATE - The starting (beginning) rate for a line of credit or equity loan. This Introductory Rate is typically discounted for an initial period of time.

Dictionary Real Estate continued

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