REAL ESTATE DICTIONARY


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I D I E I F I G I H I I I J I K I L I M I N I O I P I Q I R I S I T I U I V I W I X I Y I Z

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California Real Estate Inspection Association
Also known as CREIA. A trade organization of home inspectors whose members must meet the group's education and performance requirements. Call (800) 388-8443 for list of CREIA-certified inspectors in your area.
call option
A clause in a loan agreement that allows a lender to ask for the 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 that details the conditions under which each party may terminate the agreement.
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cantilever
A projecting structure supported on one end, such as a balcony.
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, such as funds invested in rental property.
capital
The decorative top of a column or pilaster.
capital expenditure
The cost of making improvements on a property.
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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 that investors use to compute the value of a property based on net income.
capitalization rate
The percentage rate of return estimated from the net income of a piece of property.
caravan
A group of real estate agents who tour a house that has been recently listed for sale.
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carport
A roof that covers a driveway or other parking area.
carryback financing
Financing in which a seller agrees to take back a note for a set amount of the sale of the home.
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. The borrower can use the extra funds in any manner.
cashier's check
A check the bank draws on itself rather than on a depositor's account.
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casing
The trim that encircles a window or door opening, hiding the gap between the door or window jamb and the wall's surface.
cathedral ceiling
A high, open ceiling formed by finishing exposed roof rafters.
caulk
An acrylic or silicon sealant used to fill cracks, crevices, and holes in a home.
caveat
A formal notice asking a court to suspend action until the party that filed the challenge 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.
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CD (certificate of deposit)
A document showing that the bearer has a specified amount of money on deposit with a bank, stock-brokerage firm, or other financial institution.
ceiling fan
A large, ceiling-mounted paddle fan. Also known as a Casablanca fan.
ceiling height
The standard height of a ceiling is eight feet.
center mullion
A cabinetry term referring to the vertical piece of wood on the front that divides the opening into two parts.
central air conditioning
A device that generates cold air through an outside unit connected to ductwork inside the house.
central business district
The area of a city where most large businesses are located.
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certificate of deposit (CD)
A document showing that the bearer has a specified amount of money on deposit with a bank, stock-brokerage firm, or other financial institution.
certificate of deposit index
An index based on the interest rates on six-month CDs. It used to determine the interest rate 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
A document stating that a home or other building has met all building codes and is suitable for habitation.
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.
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.
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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 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. The owner, architect, and contractor must sign the change.
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chase
A shielded vertical shaft that houses various pipes, drains, ducts, and flues.
chattel
Personal property such as furniture, clothing, or a car.
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. The cap protects the masonry from rain and other elements.
chimney flue
The passage inside a chimney that channels smoke and heat to the outside.
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chimney pot
A short pipe at the top of a chimney that increases ventilation to the fireplace and reduces smoke.
chipboard
A board made of wood chips glued together under pressure.
cinder block
A block made of ash and cement, used in construction.
cinder fill
Cinders used below a basement or around a foundation to promote drainage.
circuit
Short for electrical circuit, a complete circuit requires two electrical conductors (wires), an electrical source, and an electrical device such as a light. Electricity travels through one "hot" wire from the source to the device where it is converted into light, heat, or energy, then it returns along the other "neutral" wire to the source.
circuit breaker
A switch-like device in an electrical circuit that is designed to shut down the circuit in the event of an electrical overload or short circuit. Circuit breakers are normally installed in main electrical panels or subpanels.
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circuit breaker
A switch-like device in an electrical circuit that is designed to shut down the circuit in the event of an electrical overload or short circuit. Circuit breakers are normally installed in main electrical panels or subpanels.
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. It also 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.
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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 documents are signed and recorded and the property is transferred.
closing costs
Expenses incidental to the sale of real estate, including loan, title, and appraisal fees. These costs exist in addition to the price of the property and are paid at closing. Some are one-time expenses and some are recurring.
closing statement
A document which details the final financial settlement between a buyer and seller and the costs paid by each party.
cloud on title
An invalid encumbrance on real property.
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cluster development
A method of squeezing more homes into less space.
co-housing
Individual housing units that are clustered around a common building where residents share cooking and other activities.
co-insurance
Coverage that involves the use of two or more insurers.
co-maker
A person who signs a promissory note with the borrower and assumes responsibility for the loan.
co-signer
A second party who 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.
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codicil
A change to a will that adds or subtracts provisions or clarifies portions of the document.
collar beam
The structural element that connects roof rafters.
collateral security
Additional security that a borrower supplies to obtain a loan.
collection
The series of steps a lender takes to bring a delinquent mortgage up to date.
collusion
The action of two or more people to break the law.
colonia
Unincorporated communities along the border between the United States and Mexico.
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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. The footing is 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. Combustion gases are usually vented through a flue.
commercial bank
A financial institution that provides a broad range of services, from checking and savings accounts to business loans and credit cards.
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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 the sales price of a home, 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 by all residents.
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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 condominium project or planned-unit development 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. It is a classification of property peculiar to certain states.
Community Reinvestment Act
A federal law that encourages financial institutions to loan money in the neighborhoods where minority depositors live.
commute
The distance and time it takes a person to reach his or her workplace.
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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.
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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; an air conditioner's 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 the sale of property stating that the title will remain invested in the seller until the conditions of the contract have been fulfilled.
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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 that houses electrical wiring.
conforming loan
Any loan that meets the qualifications to be purchased by Fannie Mae or Freddie Mac. The current conforming loan limit is $252,700.
consent judgment
A binding written agreement between two parties to have a judgment entered and recorded.
conservator
A court-appointed guardian.
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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 that provide detailed requirements for the construction of a project.
construction loan
A short-term loan for home or building construction. The lender disburses the funds in stages.
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 profile. National headquarters: 8701 Georgia Avenue., Suite 507, Silver Springs, MD 20910. Phone: (800) 388-2227.
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contemporary style
A design that features streamlined shapes, large unadorned windows, and industrial materials.
contiguous lots
Pieces of property that are adjoined.
contingency
A condition 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.
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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 and is accepted by the seller. 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.
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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 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.
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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.
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cornice
A horizontal molding that projects from the top of a structure or wall.
corporate relocation
An arrangement by which employers pay to transfer and move employees.
corrective work
Necessary or desired repairs to remedy problems uncovered by a home or specialized inspection.
cost-plus contract
A construction contract that determines the builder's 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.
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counteroffer
A response to an offer.
courier fee
Fee charged at closing to cover the delivery of documents between lenders, escrow companies, and other 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.
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creative financing
Innovative home-financing arrangements that help sell a property.
credit
The money a lender extends to a buyer for a commitment to repay the loan within a certain time frame.
credit history
A record of an individual's current and past debt payments.
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 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 Corp., Equifax, and Experian (formerly TRW).
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credit repository
Large companies that gather financial and credit information from various sources about individuals who have applied for credit.
credit union
A nonprofit cooperative organization that provides banking and financial services such as mortgages, home improvement loans, and home equity loans to its members.
creditor
An individual or institution to whom a debt is owed.
CREIA
Abbreviation of California Real Estate Inspection Association, a trade organization of home inspectors whose members must meet the group's education and performance requirements. Call (800) 388-8443 for list of CREIA-certified inspectors in your area.
cross-bridging
The strengthening of a structure by bracing cross members between beams.
crown
A piece of molding around the top of a room.
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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, such as chipping paint.
curb appeal
The first impression of a house as seen from the street.
current value
The value of a home at the time of appraisal.
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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 structure designed by an architect hired by the owner.
cylindrical lockset
The familiar type of doorknob mechanism found on most interior (and some exterior) doors, designed to fit into a large hole bored through the face of a door's stile.