Glossary of Real Estate Terms
A
0-Bedroom Dwelling
Any residential dwelling in which the living area is not separated from
the sleeping area.
Abstract of Title
A condensed history of the title to a particular piece of real estate
showing (in chronological sequence) matters such as conveyances, liens,
and encumbrances which have been recorded against the title in the
office of the register of deeds or other public recording place.
Acceleration Clause
A clause within a mortgage permitting the lender to accelerate the
amount due upon default and declare the entire balance due.
Acceptance
Acceptance occurs when all buyers and sellers have signed an identical
copy of the offer, including signature on separate, but identical,
copies of the offer.
Accession
The right of the property owner to become entitled to all which the
property produces and to all that is added to it, either naturally or
artificially. For example: the owner of an office building would
acquire the abandoned trade fixtures of a tenant as real property.
Active Property
Property currently for sale.
Actual Notice
The actual knowledge a person has about the existence of a particular
fact; notice expressly and actually given.
Ad Valorem
Latin for "according to valuation." It refers to a type of tax, such as
property tax, which is based on the property’s value, not the personal
income of the person owning the property.
Addenda
Additional material attached to and made part of a document.
Adjustable Rate Loan
A loan with a fluctuating interest rate. There are a set number of
maximum increases over the life of the loan, with the fluctuating rate
based on a national index.
Advance Fee
A fee paid to a broker before any services are rendered.
Adverse Fact
Something that significantly and adversely affects the value of the
property; significantly reduces the structural integrity of
improvements to real estate; presents a health risk to occupants of the
property; or information that indicates that a party to a transaction
is not able to or does not intend to meet the obligations under a
contract made concerning a transaction.
Age
A protected class under the fair housing laws that refers to any person
at least 18 years of age.
Agency
A relationship in which one person acts for or represents another.
Agent
A person who is authorized by another to act on his/her behalf.
Amendment
An amendment is used to change the term of a contract.
Amenities
Features of a property that add value or desirability. Amenities can be
either tangible, such as a skylight, or intangible, such as an ocean
view.
American with Disabilities Act (ADA)
A federal law designed to eliminate discrimination against individuals
with disabilities by mandating equal access to jobs, public
accommodations, government services, public transportation, and
telecommunications.
Amortization
The gradual paying of a debt through the systematic payments of
principal and interest over a predetermined period of time.
Ancestry
A person's racial and ethnic background.
Annexation
An addition to property by the act of joining one thing to another;
changing personal property to real property.
Annual Percentage Rate (APR)
The relationship of the total finance charge to the total amount to be
financed, as required under the federal Truth-In-Lending Act.
Anticipation
Future physical, economic, social, or political changes which may
affect present value of property.
Antitrust Laws
Laws that make it illegal to conspire to restrain trade or the free
flow of goods and services in a market place.
Appraisal
An estimate or opinion of value based on supportable evidence and
approved methods.
Appraiser
An independent person trained to provide an unbiased estimate of value
for a fee.
Approved Form
A contractual or conveyance form which is prepared and approved by the
Department of Regulation and Licensing.
Appurtenant Easement
An appurtenant easement exists between two adjacent land owners, one
being the dominant tenement and the other being the servient tenement.
The easement attaches to the land and transfers to future owners.
Arbitration
The non-judicial submission of a controversy to selected third parties
for their determination in a manner provided by agreement of by law.
Arsenic
An element found in soil and rock which is thought to increase the
likelihood of several types of cancer.
Asbestos
A mineral fiber which has been used in a variety of ways within the
home, but generally as an insulator around plumbing. Asbestos can be
friable or non-friable, and may be hazardous to health.
Assessed Value
The determination of a property's worth for property tax purposes.
Assessed value is usually a percentage of the appraised value.
Assumable Loan
A financing instrument whose terms are transferable to a party wishing
to purchase the property holding the assumable loan.
Atrazine
A popular corn herbicide that has been used in Wisconsin for more than
25 years to control weeds in cornfields.
B
Balloon Loan
A loan originated with a short term of three to seven years, while
being fully amortized for 30 years.
Balloon Payment
A lump-sum payment due at the end of a mortgage contract period.
Bilateral Contract
A contract which binds two parties. Two promises are given, one in
exchange for another.
Bill of Sale
A legal document used to transfer the ownership of personal property.
Binding Acceptance
Creates an enforceable contract between the parties. The offer is
binding upon both parties, only if a copy of the accepted offer is
delivered to the party making the offer prior to the date established
for binding acceptance.
Blockbusting
The practice of exploiting racial prejudices and the fear of a general
decline in a neighborhood's real estate values to induce homeowners to
sell their properties at a low price.
Breach
A failure to perform as promised in a contract.
Bridge Loan
A residential financing arrangement in which the buyer of a new home
borrows money and gives a second mortgage on the buyer's unsold home to
fund the acquisition of a new home.
Broker
One who for another person and for commission, money, or other thing of
value, negotiates, offers, or attempts to negotiate a sale, exchange,
purchase, or rental of or granting or acceptance of an option to sell,
exchange, purchase, or rent and interest or estate in real estate; who
shows real estate or a business or its inventory; or promotes the sale,
exchange, purchase, option, rental, or leasing of a real estate, a time
share, or a business or its goodwill, inventory or fixtures.
Brokerage
The business of bringing buyers and sellers together in the marketplace.
Building Codes
Ordinances specifying minimum standards of construction.
Building Permits
Written governmental permission for the construction of a new building
or an improvement to an existing structure. The purpose of the building
permit is to show compliance with the zoning code to local authorities.
Bundle of Rights
Real property ownership includes rights regarding the ownership of
land, improvements to land, and the use of land. These rights generally
include: the right to quiet enjoyment, possession, disposal, exclusion,
control, and the right to encumber. Also referred to as "the six
sticks."
Business Sale
The sale or lease of the business and goodwill of an existing business,
enterprise, or opportunity, including a sale of the majority of assets
or stocks of the business.
Buyer Agency Agreement
A written employment agreement that creates an agency relationship
between a broker and a buyer. The buyer employs the broker to put forth
a reasonable effort to find a property for the buyer to purchase and to
negotiate on behalf of the buyer.
Buyer's Broker/Agent
The firm that has entered into a buyer agency agreement with the buyer
indicating that the broker will be representing the interests of the
buyer. The buyer's agent is the actual person, within the buyer broker
firm that procured the buyer.
C
Cancellation and Mutual Release
A contract used to terminate a contract of sale, or agency agreement,
when the parties mutually agree to terminate their original statement.
Certificate of Eligibility
The document a veteran receives from the Veterans Administration that
establishes the maximum guarantee to which the veteran is entitled.
Certificate of Reasonable Value
Prepared by an appraiser on VA loans. It states the market value of a
property.
Chain of Title
Chronological record of a property's ownership. Each owner should be
linked to subsequent owners.
Change
An appraisal theory that a value placed on a property is good for only
one snapshot in time because no physical or economic condition ever
remains the same.
Chattel
An item of moveable property, such as furniture and drapes; personal
property.
Client
The person who employs an agent to perform a service on his/her behalf.
Client Funds
All down payments, advanced fees, earnest money deposits, or other
money related to a conveyance of real estate that is received by a
broker, salesperson, or timeshare salesperson on behalf of the
broker's, salesperson's, or timeshare salesperson's principal or any
other person.
Closing Costs
Expenses of the sale (or loan refinancing) that must be paid in
addition to the purchase price (in the case of the buyer's expenses)
and be deducted from the proceeds of the sale (in the case of the
seller's expenses).
Closing (Settlement)
Consummation of the real estate transaction. It is where the mortgage
funds are given to the buyer and the legal title is exchanged for
payment of the purchase price.
Cloud on Title
A claim or encumbrance that would affect or burden an owner's title to
real estate.
Coliform Bacteria
Microorganisms found in the intestines and feces of humans and other
warm-blooded animals, as well as in soil, on vegetation, and in surface
water runoff.
Color
A protected class under the fair housing laws that refers to a person's
skin color.
Commercial Easement in Gross
An easement between a landowner and a company and binds subsequent
owners.
Commission
The amount owed to a broker as payment for services rendered in
connection with the listing contract or buyer agency agreement.
Common Elements
All real property in a condominium development that is not described as
a unit.
Common Law
A body of law based on usage, general acceptance, and custom, as
manifested in decrees and judgments of the courts case law.
Comparable Property
A benchmark used in the Market Data Approach to make a property value
estimate based on other properties which have recently sold and are
similar to the subject property terms of location, physical features,
price, and date of sale.
Competent Parties
To be considered a competent party. It is required that all persons
involved in a valid contract be of legal age and sound mind.
Condemnation
A judicial or administrative proceeding to exercise the power of
eminent domain.
Conditional Use Permit
Land uses allowed if certain conditions are met. Land uses which the
government has decided are not necessarily well suited to all locations
within the zoning district. They are used to allow for flexibility in
land-use regulations.
Condominium Ownership
Fee simple unit ownership of real property. Residents own their unit,
plus a share of common elements.
Condominium Unit
The part of the condominium development that is intended for individual
use.
Conformity
The maximum value of a property that is realized when the other
properties in the neighborhood are similar.
Consideration
One of the elements necessary to form a valid contract. It may take the
form of good (love or affection) or valuable (anything relating to
money).
Constructive Notice
Knowledge which the law presumes a person has, as in the case of
documents which have been recorded as a matter of public record.
Contingency
A provision in a contract that requires the completion of a certain act
or the happening of a particular event before the contract is binding.
Contract
A legally enforceable promise or set of promises that must be
performed, and for which, if a breach occurs, the law provides a remedy.
Contract for Sale
An agreement between buyer and seller for the sale and purchase of the
seller's property.
Contribution
Any component to a property is worth only what it adds to the
property's value, regardless of the cost of the improvement.
Control
The right to use a property within the boundaries of the law.
Conventional Financing
Financing that does not give the lender the added security of a
government guarantee or insurance.
Conveyance
An instrument by which some estate or interest in land is transferred
from one person to another, such as a deed, mortgage, lease, or
contract for sale.
Cooperating Broker
A broker who works in conjunction with another broker in procuring a
buyer for the seller's property.
Cooperative Lease
A written lease in a cooperative apartment building between the
owner/corporation and the tenant/stockholder, in which the tenant is
given the right to occupy a particular unit.
Cooperative Ownership
A multi-unit building which is owned by a corporation. Residents living
in the building own stock (as shareholders) in the corporation and have
a lease (tenant).
Cost
The current reproduction cost of a building, plus the value of the land
tends to set the upper limit of a property's value.
Counter-Offer
An offer which essentially terminates a prior offer and states only the
new terms to be negotiated.
Covenant
A promise contained in a deed by which one of the parties agrees or
pledges to the other that something will be done or shall not be done.
Also known as "deed restriction."
Creditor
As defined by Regulation Z, a party who arranges for or extends credit
more than 25 times a year or more than five times a year, if the
transaction is secured by a dwelling.
Credit Score
A statistical method of assessing the credit risk of a loan applicant.
Customer
A person who receives services given on behalf of and for the benefit
of a client.
D
Damages
Compensation recoverable in a lawsuit by a party who sustained an
injury.
Deed
A document which transfers ownership of title.
Deed Conditions
Stipulations imposed from grantor to grantee, such as imposed in a
defeasible fee estate.
Deed in Lieu of Foreclosure
A borrower deeds the property to the lender in full or partial payment
of the mortgage debt. The title to be transferred must be free of all
encumbrances. Also referred to as a "friendly foreclosure."
Deed Restrictions (Restrictive
Covenants)
Clauses in a deed which limit the future use of the property, such as
the type of structure that can be erected or the purpose for which a
structure may be erected.
Defeasance Clause
A clause within a mortgage that legally binds the lender to release the
lien from the title once the mortgage has been satisfied.
Deficiency Judgment
A lien placed on a mortgagor's real and personal property when a
foreclosure sale does not satisfy the mortgage debt.
Delivery
A component of binding acceptance. Delivery can occur by fax, by mail,
or personally.
Depreciation
A loss of value in property.
Designated Agency
A multiple representation relationship (both buyer and seller are
clients of the broker) in which each client is receiving negotiation
services from the agent of the broker, but who are not providing
negotiation services to any other client of the broker in the
transaction.
Developer
One who transfers undeveloped land into parcels ready for construction.
Disability
A physical or mental impairment that substantially limits one or more
major life activities; a record of having such an impairment or being
regarded as having such an impairment.
Dominant Tenement
The party of an easement who has asked for the right to use the land.
The owner of the easement right.
Downzoning
A change in zoning from a more active to a less active classification,
such as commercial to residential.
Dual Compensation
Receiving compensation related to the real estate transaction from
someone other than the licensee's client without prior written consent
from all parties to the transaction.
Dwelling
Any building or part of a building designed for occupancy as a
residence by one or more families.
E
Earnest Money
Up-front cash or item of value from the potential buyer which indicates
their intention to make good on his/her Offer to Purchase.
Easement
An incorporeal right held by one party to make use of the land of
another for a limited purpose.
Easement by Condemnation
Easement acquired through operation of law by the government for a
public use.
Easement by Necessity
An easement which is acquired through the operation of law allowing a
purchaser of land ingress and egress.
Easement by Prescription
An easement between a landowner and another party created for a
personal benefit of the easement holder instead of being created for a
particular parcel.
Easement in Gross
A personal easement in gross is an interest to use another's land,
which usually ends with the death of the grantee or transfer of
property. A commercial easement in gross is an interest granted to a
company and binds successive owners.
Eminent Domain
Grants the government the right to take private land for public use.
Encroachment
To advance upon or trespass upon the property of another, as in the
extension of some improvement or object across the boundary of a
neighboring tract.
Encumbrance
Any claim against a property that may diminish its value.
Equitable Title
The right to obtain absolute ownership to property when legal title is
held in another's name.
Equity
The excess of a property's fair market value over the outstanding debts.
Escheat
The reversion of property to the state or county, as provided by state
law, in cases where a decedent dies intestate and there are no heirs.
Escrows
The process by which money and/or documents are held by a disinterested
third party until satisfaction or the terms and conditions of the
escrow instructions have been achieved.
Escrow Agent
A disinterested or neutral third party who coordinates the closing
activities.
Estate in Land
A recognized interest in the use, possession, control, and disposition
a person has in land.
Exchange
A way to defer capital gains tax by exchanging like property for like
property.
Exclusion
The right held by a property owner or lessee to keep others from using
a property.
Exclusive Agency Listing Contract
An agency agreement giving the listing broker the exclusive right to
market the seller's property. The seller promises to pay a commission
to the listing broker if the terms of the contract are fulfilled,
except if the buyer is procured by the seller.
Exclusive Right to Sell Listing
Contract
An agency agreement giving the listing broker the exclusive right to
market the seller's property. The seller promises to pay a commission
to the listing broker if the terms of the contract are fulfilled, no
matter who procures the buyer.
Expired Property
A property that was listed for sale, but that did not sell during the
term of the listing contract.
Express Agency
An agency relationship created through words, written, or orally spoken.
Express Agreement (Express Contract)
A contract created by the parties stating their intentions either
verbally or in writing.
F
Familial Status
Whether persons are members of families in which one or more children
under 18 years old lives with a parent, a person who has legal custody,
or the designee of the parent or legal custodian. Also, a person whose
household includes one or more minor or adult relatives.
Federal Housing Administration (FHA)
A government agency that insures mortgage loans for financial
institutions again loss in the event of foreclosure.
Fee Estates
An estate of inheritance in land that is absolute or without limitation.
Fee Simple Absolute (Fee Simple)
The largest estate of ownership which automatically passes upon death
to the owner's heirs and devisees, either by will or by descent. The
estate includes the complete bundle of legal rights.
Fee Simple Defeasible Estate
An estate of inheritance which may be nullified upon the occurrence or
non-occurrence of a particular event.
Fee Splitting
A fee or commission paid to an unlicensed person for performing
brokerage activity.
Fiduciary
One who is placed in a position of trust and confidence, normally
responsible for the money and/or property of another.
Finance Charge
The total cost of consumer credit as a dollar amount.
Fixed Rate Loan
A loan with a rate that does no change over the life of the loan.
Fixture
An article that was once personal property, but has been so affixed to
real estate that it has become real property.
Floodplain
The flat portions of land located along watercourses and streams, which
are subject to overflow and flooding.
Foreclosure
A legal process used when a borrower defaults on a debt. The court
sells the encumbered property to satisfy the debt.
Fraud
An intentional distortion of the truth, a false representation, or
nondisclosure where disclosure should have been made.
Freehold Estate
An estate in land characterized by an interest in something, which is
immobile, and of an indefinite duration.
G
Gap Endorsement
Clears the gap exception, causing the title company to provide coverage
for liens that occur between the title commitment and the recording of
the deed.
Gap in Title
A break in the chain of title, such as when the records do not reflect
any transfer to a particular grantor.
Gap Period
Title defects which appear of record after the effective date of the
title commitment and before the interest of the buyer is recorded.
General Agent
One who is authorized to conduct all of a principal's affairs within
the context of one specific contract.
General Lien
A claim on all property, both real and personal, owned by an individual.
Government Financing
Loan programs that are either insured or guaranteed by the federal
government.
Government Powers
The rights the government has to limit the private ownership of
property for the general welfare of the community.
Grant
The transfer of real estate by means of a deed.
Grantee
A party who is receiving an interest in real property (the buyer).
Grantor
A party who is conveying an interest in real property (the seller).
Group Boycott
Competitors conspiring against another business or agreeing to withhold
their patronage to limit competition.
H
Highest and Best Use
The use, which earns the property the most profits.
Homestead
The home or dwelling of a married person; so much of the land
surrounding it as is reasonably necessary for use of the dwelling as a
home, but not less than one-fourth acre, if available, and not
exceeding 40 acres.
I
Implied Agency
An agency relationship created between parties as evidenced by their
actions.
Improvement
Valuable additions made to property that mount to more than repairs,
costing labor and capital, and are intended to enhance the value of the
property.
Increasing and Decreasing Returns
Increasing returns are demonstrated when improvements are made to the
property and the costs of those improvements are recovered upon sale,
due to the increased value of the property. Decreasing returns are
demonstrated by an over-improved property, when the costs of the
improvements are not likely to be recoverable upon sale.
Individual Property
Property of married persons that was acquired prior to marriage, income
that has been designated as individual property, appreciation of value
form individual property, or gifts and inheritance received during
marriage.
In-House Sale
A sale in which the listing broker is the only broker in the
transaction.
Interest
A charge for the use of money.
J
Joint Tenancy
Two or more persons holding title to real property who are named on the
same deed, hold an equal interest which was obtained at the same time,
and share an undivided possession of the property. Joint tenants
benefit by the "right of survivorship".
Judgment
The official decision of a court regarding the rights and obligations
of the parties of a law suit.
Judgment Lien
A lien binding the real estate of one who is in debt to the holder of a
judgment, giving the holder a right to foreclose on the land for the
satisfaction of his judgment.
Judicial Foreclosure
A method of foreclosure where a mortgagee files suit to have the
property sold by court order in an advertised public sale.
Junior Lien
A lien that is subordinate to other existing liens.
L
Land Contract (Contract for Sale or
Installment Contract)
A type of seller financing in which title does not transfer from seller
to buyer until the mortgage has been paid in full. Under a land
contract, the buyer gains equitable title and seller maintains legal
title.
Latent Defect
A property defect which is known by the seller and is not discoverable
by an ordinary inspection of the property by an agent or the buyer.
Lawful Source of Income
The source of a person's income, provided that it is legal.
Laws of Agency
The body of law that determines the rights and duties owed by an agent
to a principal.
Lead-Based Paint Hazard
Any condition that causes exposure from lead-contaminated dust, soil,
or paint that is deteriorated or present on accessible, friction, or
impact surfaces that would result in adverse human health effects.
Lead Poisoning
An illness caused by a toxic mineral, which may be found in the home in
paint or water pipes.
Leasehold
A personal property interest in land acquired under a lease.
Lessee
A tenant.
Lessor
A landlord.
Licensee
A term used by the Wisconsin Department of Regulation and Licensing to
refer to any person licensed or registered under state law to practice
real estate.
Lien
A legal right to place a claim or encumbrance on property, or have it
sold for payment of a debt.
Lien Theory
Lien theory views the buyer as the owner of the property, even though
the lender has not received payment in full. The mortgage creates a
lien on the real estate, which is used as collateral for a loan.
Life Estate
An estate with a duration limited to the life of the party holding it
or of some other person.
Life Tenant
One who holds an estate in land for the period of his/her own life or
that of another person.
Limited Common Element
Common elements of the condominium, which are identified in the
declaration or plat as reserved for the exclusive use of one or more
unit owners.
Liquidation
A remedy for breach of contract, which is available only to the seller,
whereby he/she retains the buyer's earnest money as liquidated damages.
Lis Pendens
Translated means "litigation pending"; a notice filed on public record
to give constructive notice that the property is in litigation and
there may be a forthcoming lien.
Listing Broker/Agent
The listing broker is the firm that the seller has employed under a
listing contract. The listing agent is the agent within the employing
firm who actually acquired the listing.
Listing Contract
A written employment agreement that creates an agency relationship
between a broker and a seller.
Loan-to-Value Ratio
The relationship between the loan amount and the selling price.
M
Management and Control
The ability that a married person has, under Wisconsin's martial
property laws, to control marital property.
Marital Property
A classification of property ownership recognized in Wisconsin. Each
spouse has an undivided one-half interest in each item of marital
property.
Marital Status
Whether a person is single, married, divorced, separated, or widowed.
Market Analysis (Market Data
Approach)
A study of a property by a real estate agent (or appraiser) to
establish a likely selling price of the property. It involves a study
of recent sales in the market area, which are similar to the subject
property on the basis of location, terms, physical features, and date
of sale.
Market Price
The price a ready, willing, and able buyer actually pays for a property.
Market Value
The price at which a property would sell on the open market to a buyer
who is under no duress, is not related to the seller, is well-informed
about the property, and who has been found within a reasonable amount
of time.
Marketable Title
A title which is free from defects and encumbrances and may be
transferred to another party.
Master Plan
A comprehensive plan used to guide the development of an area. It takes
into consideration growth and the expansion of public service,
transportation, etc.
Material Adverse Fact
An adverse fact that a party indicates is of such significance, or that
is generally recognized by a competent licensee as being of such
significance to a reasonable party; that it affects the party's
decision to enter into a contract or the terms of a contract.
Material Fact
Any fact that is relevant to a person making a decision. Agents must
disclose all material facts to their clients.
Mechanic's Lien (Construction Lien)
A specific, involuntary lien placed against real property for the
purpose of securing a debt. The lien may be placed by those who perform
labor, furnish material, or suply professional services in the
improvement of real estate.
Meeting of the Minds
Mutual assent or agreement between the parties to a contract regarding
the substance of the contract. There can be no contract unless there is
a meeting of the minds.
Mirror Image Offer
An Offer to Purchase that is written at the price and on substantial
terms that set forth in the listing. Even if the seller does not accept
this offer, the broker may be owed a commission. This is a cash,
contingency-free offer written for the list price or greater.
Misrepresentation
Any statement of fact by one person to another, either by words or
actions, which is not in accordance with the actual facts.
Mixed Property
A classification of property ownership recognized in Wisconsin. A
combination of both individual and marital property that will always be
treated as marital.
Mobile Home
Considered personal property for property tax purposes, unless it is
permanently attached to the ground, receiving utilities, and lie upon
land owned by the mobile home owner.
Mold
Any of various fungous growths often causing disintegration of organic
matter.
Mortgage
Financing instrument used to purchase property comprised of the
mortgage document and mortgage note.
Mortgagee
A lender.
Mortgage Document
The document pledging real estate as security for the repayment of debt.
Mortgage Lien
Lien rights given to the lender by the borrower in exchange for the
loan.
Mortgage Note
A document signed by the borrower of a loan and stating the loan
amount, the interest rate, the time and method of repayment, and the
obligation to repay.
Mortgagor
A borrower.
Multiple Counter Proposal
A way for a seller to negotiate with more than one buyer at a time. The
seller is not bound to a particular buyer until the seller accepts the
buyer's approval of the multiple counter proposal.
Multiple Listing Service (MLS)
An agreement whereby brokers pool their listings and offer to cooperate
and compensate other brokers. Voluntary organization where members
agree to market their properties and offer subagency to other agents.
Multiple Representation Relationship
A relationship between a broker and two or more of the broker's
clients, in which the clients are parties in the same transaction.
N
National Origin
The country where a person or his or her ancestors' originated or came
from.
Navigable Waterway
A waterway with a bed and various banks, where it is possible to float
a small water craft at some point during the year.
Net Listing
An employment contract in which the broker receives, as commission, all
excess monies over and above the minimum sales price agreed on by
broker and seller.
Nirates
A natural constituent of plants found in vegetables at varying levels,
depending on the amount of fertilizer applied and on other growing
conditions.
Nonconforming Loans
Loans that do no conform to the strict guidelines of conventional loans.
Nonconforming Use
Given when a building does not conform to zoning because of a change in
the zoning ordinance. The use of the building will be allowed to
continue until the improvements are destroyed or the current use is
discontinued.
Notice Relating to the Offer to
Purchase
A form used by the parties to a purchase contract, whereby one party is
unilaterally giving notice to the other party.
O
Offer to Purchase
A promise made, usually by a buyer, to purchase a seller's property
under certain terms.
Open House
A showing of real estate open to the public for viewing without an
individual appointment.
One-Party Listing Contract
The broker will earn their commission only if they procure a buyer
specified in the listing contract.
Open Listing Contract
An agency contract between several brokers and a seller. The only
broker entitled to a commission is the one that procured the buyer.
Operation of Law
A term that describes the way rights belong to a person by the
application of established rules of law.
Opinion of Title
An opinion by a person competent in examining title, usually an
attorney, as to the status of the record title of a property.
Option to Purchase
An agreement to keep open, for a set period, an offer to sell or lease
real estate.
Optionee
The purchaser under an option contract.
Optionor
The seller under an option contract.
Ordinary High Water Mark
The point on the bank or shore where water is present often enough so
that the upland begins to look different from the lake or stream bed.
Origination Fee
The dollar amount charged by the lender to cover the time and expenses
incurred to arrange a loan. The fee covers the lender's overhead for
the processing of the loan throughout the loan term.
P
Parol Evidence Rule
Prevents the admission into court any evidence of any oral negotiations
or agreements that vary or contradict the terms of the written contract.
Partition Suit
A court process that divides co-tenants' interests in real property
when the parties do not all voluntarily agree to terminate the
co-ownership.
Party Wall Easement
A wall that is located on a boundary line between two adjoining parcels
of land.
Pattern of Sales
Presumptive evidence that a broker's license is required because one
has participated in five sales in one year or 10 sales in five years.
Pending Property
A property that has an accepted Offer to Purchase with all the
contingencies removed.
Percentage Interests
Determines the extent of the condominium unit owner's undivided
ownership interest in the common elements, their responsibilities for
common expenses, their voting power, and the amount of proceeds in the
event that the condominium is terminated.
Permitted Use
Uses that are permitted for a particular zoning classification.
Personal Easement in Gross
An easement that exists between a landowner and another person, which
typically ends upon the death of the easement holder or transfer of
title.
Personal Property
Property that is portable or unattached to the real estate.
Personal Representative's Deed
A deed most likely to be used by a personal representative when
conveying property in settlement of a probate estate. The deed does not
contain warranties.
Planned Unit Development (PUD)
A type of zoning that allows a developer to cluster buildings together,
thereby creating housing and more park and recreation space.
Plat
A map showing the specific location and boundaries of land that has
been subdivided into lots.
Plot Plan
A plan showing the layout of improvements on a property site. It
usually includes location, dimensions, parking areas, and landscaping.
Points
Prepaid interest that is collected at closing. This money is used to
buy-down the interest rate of a mortgage.
Police Power
The power the government has to preserve order and protect the public
health and general welfare.
Possession
The act of occupying a property.
Power of Attorney
A written instrument giving a person the authority to act on behalf of
another (the principal).
Predetermined Date Property
A classification of property ownership recognized in Wisconsin.
Property of married couples that is acquired prior to Wisconsin
becoming a marital property state.
Prepayment Penalty
A charge imposed against a borrower for paying their loan off early.
Price-Fixing
Competitors conspiring together to eliminate competition by agreeing on
the prices they will charge consumers.
Primary Market
The market where loans generally are originated and sold.
Principal
1. One who has permitted or directed another to act for his/her benefit
and subject to his/her direction and control.
2. The amount of money which is borrowed, not including the payment of
interest.
Priority of Liens
The order in which liens are paid in a foreclosure sale.
Private Mortgage Insurance (PMI)
An insurance policy written to insure a portion of a mortgage amount
for a borrower.
Probate
Formal judicial proceedings to prove or confirm the validity of a will,
to collect the assets of a descendant's estate, to pay debts and taxes,
and to determine the persons to whom the remainder of the estate is to
pass.
Procure
Uninterrupted chain of events which lead to the sale. The WB-1
Exclusive-Right-To-Sell listing contract states a buyer is procured
when a valid and binding contract of sale is entered into between the
seller and the buyer, or when a ready, willing, and able buyer submits
a written offer at the price and on substantial terms specified in the
listing contract.
Promissory Note
An unconditional promise of one person to pay a certain sum of money to
another at a future specified time.
Property Taxes
Taxes levied by the government against real estate.
Puffing
The common practice of exaggerating a property's benefits in
advertising.
Purchase Money Mortgage
A form of seller financing where the seller acts as a lender in
granting a loan to the buyer for a portion of the purchasing price.
Q
Quiet Enjoyment
The right a property owner has to the uninterrupted use of the property
from third-party claims.
Quitclaim Deed
A deed which conveys title to real property without making any
warranties or representations regarding the quality of the deed.
R
Race
A person's membership in a group possessing characteristics and traits
transmitted by descent.
Radium
A naturally occurring radioactive metal that is usually found at low
levels in soil, rocks, water, and plants.
Radon Gas
An odorless, radioactive gas which may enter a home through cracks in
the foundation or drains in the floor.
Ready, Willing, and Able Buyer
A prospective buyer of property who is legally capable and financially
able to consummate the deal.
Real Estate Condition Report (RECR)
A report used by the seller to disclose to the buyer any known adverse
facts.
Real Estate Settlement Procedures
Act (RESPA)
A law enforced by HUD created to insure that borrowers in mortgage loan
transactions have knowledge of all settlements costs.
Recording
Written instruments affecting any estate, right, title, or interest in
land that is recorded in the book of public records in the county where
the land is located.
Redlining
A lender's refusal to mortgage, or an insurance company's refusal to
insure property within a geographic area on the belief those loans or
insurance writing in the area would be of high risk.
Regression
The value of a lesser property decreases the value of a better property.
Religion
A person's religious or spiritual beliefs and practices, or his or her
denominational affiliations.
Recission
A way of terminating the rights of the parties under a contract,
whereby the parties act as if the contract never existed and forfeit
their right to sue.
Reverse-Annuity Loan
A loan program established to meet the needs of cash-tight individuals,
generally the elderly. Monthly payments are made by the lender to the
borrower, based on the equity on the borrower's home. The loan is
usually paid off from the sale of the property upon the borrower's
death.
Revocation
The act of terminating, canceling, or annulling.
Right of First Refusal
The right of a person to have the first opportunity either to purchase
or lease real property.
Right of Redemption
A timeframe in which the borrower can pay the lender off in full, stop
the foreclosure proceeding, and keep possession of the property.
Riparian Right
The right that governs running waters, such as rivers and streams, but
may also include lakes. Property owners who have riparian rights own
the land to the center of the navigable water.
Rural Housing Service
A loan program under the Department of Agriculture designed to meet the
needs of low-income and moderate-income rural residents to purchase,
construct, repair, or relocate a dwelling and related facilities.
S
Salesperson
Any person, other than a broker, who is employed by a broker to perform
any act authorized by Chapter 452 to be performed by a broker.
Satisfaction of Mortgage
A certificate issued by the mortgagee when a mortgage is paid in full,
which removes the lien from public records.
Secondary Market
A market for the purchase and sale of existing mortgages.
Selling Broker/Agent
The selling broker is the firm which procured the buyer for a seller.
The selling agent is the actual person, within the selling broker's
firm, who actually procured the buyer.
Servient Tenement
The landowner who grants or serves the right to use their land to
another in an appurtenant easement.
Setback Lines
The amount of space required by zoning restrictions between the lot
line and any improvements on the lots.
Severalty
Sole ownership of real property.
Sex
A class protected under fair housing laws referring to gender.
Sexual Orientation
Having a preference for heterosexuality, homosexuality, or bisexuality;
having a history of such a preference or being identified with such a
preference.
Single Agency
The practice of representing either the buyer or the seller, but never
both in the same transaction.
Special Agent
One who is authorized by a principal to perform one particular act or
transaction.
Special Assessment
A tax placed against property owners in the area of the improvement,
such as new curbs and gutters.
Specific Lien
A claim against a particular piece of property, instead of a claim
against all of the property.
Specific Performance
An action brought by a court to force a party to carry out the terms of
a contract.
Spot Zoning
Occurs when a single parcel is granted special privileges which are not
extended to other land which is similarly situated. Is permissible only
when in the public interest.
Statute of Frauds
The statute requiring all contracts which transfer an interest in real
estate to be in writing, state the date, describe the property, state
the terms of payment, and be signed by the party incurring the debt.
Statute of Limitations
The law pertaining to the period of time during which certain actions
must be brought to court or the right to sue is lost.
Statutory
Authorized by statue or state law.
Statutory Lien
A lien created by the enactment of a law established by legislation.
Steering
The illegal practice of channeling home seekers to or away from certain
areas.
Stigmatized Property
A property defect which is more psychological than material.
Strict Foreclosure
A method of foreclosure where the seller sues the defaulted buyer for
possession of the property. Used only in Wisconsin under land contracts.
Subagent
A broker who is engaged by another broker to provide brokerage services
in a transaction, but who is not the other broker's employee.
Subject Property
A reference to the real property under an appraisal.
Substitution
Properties tend to be worth what an equally desirable or substitute
property sold for.
Sue for Damages
A remedy for breach of contract whereby a party sues the breaching
party for cash damages.
Suit to Quiet Title
A court action intended to establish the title to a particular property
where there is a cloud on title.
Supply and Demand
Economic theory of pricing stating that the demand increases price and
that over-supply reduces price.
Survey
A process by which the physical boundaries of a property are measured.
Survivorship Marital Property
A classification of property ownership in Wisconsin. Upon death of a
spouse, all property passes to the surviving spouse without going
through probate.
T
Target Housing
Housing constructed prior to 1978, which under the Lead-Based Paint
Disclosure Law, requires a Lead-Base Paint Addendum included with the
Offer to Purchase. The exemptions to this law include housing for the
elderly, housing for the disabled, or 0-bedroom dwellings. If there was
a building permit obtained or the construction was started prior to
January 1, 1978, then it is considered target housing.
Taxation
The right the government has to place a charge on real estate to raise
funds to meet the public need.
Tenant in Common
A form of ownership where two or more people hold title on the same
property. Each person’s interest is held in severalty and each person
retains the right to will away his/her interest.
Tie-In Agreement
Selling one product, only if the buyer agrees to purchase another
product as well.
Time is of the Essence
The specified date in the contract by which agreed-upon acts must be
completely performed, or the non-performing party will breach the
contract.
Time Share Ownership
A type of ownership that permits several individuals to hold legal
title to a property. Timeshares are distinguished by the fact that each
unit is sold in time intervals.
Title
The legal right to the possession of property. It implies that the
title owner has acquired the property and the bundle of legal rights
which accompany ownership.
Title Insurance Policy
An insurance policy which protects the insured against the loss of
defects, which may occur in the title.
Total Unity
A requirement for joint tenancy. Joint tenancy requires unity of
possession, interest time, and title.
Trade Fixtures (Chattel Fixtures)
Items of personal property, which have become permanently attached to
leasehold property, used for the purpose of operating a trade or
business.
Trade Name
The name appearing on the broker's license under which the broker
advertises or does business.
Transfer Fee
A state-imposed fee on the sale of property. The rate of the transfer
fee is 30 cents for each $100 of value.
Triggering Terms
Advertising phrases that may not be used unless all of the terms of the
loan are disclosed in the advertisement.
Truth in Lending Act
A law enforced by the FTC requiring lenders to disclose to borrowers
the true cost of the obtaining credit. Includes Consumer Credit
Protection Act, TILA, and Regulation Z.
U
Underground Storage Tank (UST)
Tanks used in the storage of fuel or heating of oil for noncommercial
purposes or consumptive use.
Unenforceable Contract
A contract whereby neither party can sue the other for performance.
However, an unenforceable contract may be valid between the parties by
their mutual agreement.
Unilateral Contract
A one-sided agreement where one party makes a promise to another and is
bound by the promise. The second party is not bound.
Unlicensed Personal Assistant
Person not licensed under Chapter 452 or licensed, but not employed for
the purpose of providing services for which a license is required.
Use-value Assessment
A method of assessing Wisconsin agricultural land for property tax
purposes. The land is assessed based upon its agricultural productivity
rather than its potential for development or fair market value.
V
Valid Contract
A contract that contains all of the necessary elements and is
enforceable in a court of law.
Variance
Grants permission to deviate from a zoning restriction.
Vendee
The purchaser of realty (buyer) under a land contract.
Vendor
The seller of realty under a land contract.
Veteran's Administration Loans (VA)
A government-sponsored mortgage assistance program, where eligible
veterans or un-remarried spouses of veterans who died in service may
obtain partially guaranteed loans for the purchase or construction of a
home.
VOC
Widely used as cleaning and liquefying agents in fuels, paints,
degreasers, solvents, polishes, cosmetics, and dry cleaning solutions.
Void Contract
An unenforceable contract that lacks legal purpose or essential
requirements.
Voidable Contract
A contract that can be voided by an injured party.
Voluntary Lien
A lien created by the debtor's action.
W
Warranty Deed
A deed in which the grantor warrants clear title to the property. The
warranty deed is the most protective of all deeds and offers the
grantee five covenants: seisin, against encumbrances, further
assurance, quiet enjoyment, and warranty forever.
Wetland
An area where water is at, near, or above the land surface long enough
to be capable of supporting aquatic or hydrophytic vegetation.
Writ of Attachment
The method by which the court gains custody of a deed to assure that
the collateral will not be sold without satisfaction of a court ordered
judgment.
Writ of Execution
A court order instructing the officer of the court to carry out the
decision of the court.
Z
Zoning
The laws that determine how land may be used, so that an area has
orderly development and a minimization of conflicts between
incompatible land uses.
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