Glossary

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A - B Back to Top
Agency: Relationship wherein an agent is employed by a principal to perform certain acts on the principle's behalf.

Air Rights: The right to use the open space above a property, without the right to use the surface of the property.

Amortizated loan: A loan for which the principal and the interest are payable in monthly or other periodic installments over the term of the loan.

Appraisal: An estimate of a property's value by an appraiser who is presumed to be an expert.

Assessment: Tax charge or levy against real estate according to established rates.

Balloon Mortgage Payment: A large payment of a mortgage loan, larger than the regular required payment, often at the end of the loan term.

C Back to Top
Cancellation Clause: Proviso in contract or lease that confers the right to terminate obligations upon occurrence of the condition or contingency set forth in clause.

Capital Gain: Tax term involved with selling or exchanging a capital asset.

Capital Improvement: Any major structural improvement to real estate, which normally extends the life and value of the property.

Capital Loss: Amount by which the proceeds from the sale of a capital asset are less than the cost of acquiring it.

Caveat Emptor: Latin phrase for Let the buyer beware.

Client: The broker's employer.

Closing Date: Date on which the buyer takes ownership of the property.

Closing Statement: A detailed accounting of a real estate transaction showing all cash received, all charges and credits made, and all cash paid out in the transaction.

Cloud on the Title: Outstanding claim or encumbrance which, if valid, affects or impairs owner's title.

Commission: Payment to broker for services rendered; usually a percentage of the selling price.

Comparables: Properties listed in an appraisal report that are similar to the subject property.

Conditional Sales Contract: Contract for sale of property which states that the contract can be cancelled unless conditions of the contract have been fulfilled. A contract is usually condition for only a defined period of time.

Condominium: An apartment or other unit, held in fee ownership, in which owners pay common charges for the maintenance of common areas.

Condop: A mixed use building subdivided into two or more condominium units, one of which is a co-operative.

Co-operative: An apartment or other unit owned by a corporation specifically formed to own the building or buildings which form the co-operatives. Unit residents, called tenant shareholders, own stock and a proprietary lease which confer upon them the exclusive use of the unit they have purchased.

D - E Back to Top
Debt Service: Annual monthly amount to be paid by debtor to repay borrowed money.

Developer: One who improves land with buildings, usually on a large scale, and sells to homeowners and/or investors.

Discount Points: An added loan fee charged by a lender to make the yield on a lower-than-market-value loan competitive with higher-interest loans.

Egress: A way out.

Equity: Interest or value that an owner has in his or her property over and above any mortgage debts.

Escrow: Written agreement between two or more parties providing that property be placed with a third party to be delivered to a designated person upon fulfillment or performance of some act or condition.

Exclusive Agency Listing: Listing contract under which the owner appoints a real estate broker as his or her exclusive agent for a designated period of time to sell the property, on the owner's stated terms, for a commission. The owner reserves the right to sell without paying anyone a commission.

Exclusive Right to Sell: A listing contract under which the owner appoints a real estate broker as his or her exclusive agent for a designated period of time to sell the property, on the owner's stated terms, and agrees to pay the broker a commission when the property is sold, whether by the broker, the owner or another broker.

Executor: Person or corporate entity designated in a will to carry out its provisions.

F - G Back to Top
Fiduciary: Person who acts on behalf of another and transacts business or handles money regarding property not the persons own. The relationship is characterized by trust and confidence.

Fixtures: Personal property attached to the land or improvements that become part of the real property.

Flip Tax: An amount of money paid by either buyer or seller at closing of co-operative apartment. Often it is a percentage of sale or it can be based on a per share basis.

Foreclosure: A procedure whereby property pledged as security for a debt is sold to pay the debt in the event of default in payment or terms.

Grace Period: Additional time allowed to perform an act or make a payment before a default occurs.

Ground Lease: A lease of land only, on which the tenant usually owns a building or constructs a building as specified in the lease.

H - L Back to Top
Holdover Tenant: A tenant who remains in possession of the leased property after the expiration of the lease term, and the landlord, by continuing to accept rent, agrees to the tenant's continued occupancy.

Interest Rate: The percentage of a sum of money charged for its use.

Involuntary Lien: A lien imposed against property without the consent of the owner, such as taxes and special assessments.

Lessee: Tenant

Lessor: Landlord

Lien: Right given by law to certain creditors to have their debt paid out of the property of a defaulting debtor.

Listing: A contract between principal and agent, authorizing the agent to perform services for the principal within a given time, for which the principal agrees to pay a commission.

Litigation: The act of carrying on a lawsuit.

M Back to Top
Market Value: The probable price a ready, willing, able, and informed buyer would pay and a ready, willing, able, and informed seller would accept, neither being under any pressure to act.

Marketable Title: A title which a court of equity considers to be so free from defect that it will enforce its acceptance by a purchaser.

Meeting of the Minds: Whenever all parties to a contract agree to the exact terms thereof.

Mortgage: A conditional transfer or pledge of real estate as security for the payment of a debt. Also, the document creating a mortgage lien.

Mortgage Commitment: A formal indication, by a lending institution that it will grant a mortgage loan on property, in a certain specified amount and on certain specified terms.

Mortgagee: A lender in a mortgage transaction.

Mortgagor: A borrower who conveys his or her property as security for a loan.

N - O Back to Top
Negative Pledge: A co-operative apartment loan given in a building whose Board of Directors does not permit financing. Instead of pledging the shares to the lending institution, which requires recognition of the lien in writing by the Co-op Board, the purchaser agrees not to pledge the shares for any other purpose, hence the name "negative pledge." Other collateral may be required for a loan of this nature.

Net Listing: A price below which an owner will not sell the property and a broker will not receive a commission. Net listings are illegal in New York State. The broker keeps any amount above the net price.

Offer and Acceptance: Two essential components of a valid contract; a meeting of the minds when all parties agree to the exact terms.

Open Listing: A listing given to any number of brokers without liability to compensate any except the one who first secures a buyer ready, willing and able to meet the terms of the listing, or secures the acceptance by the seller of a satisfactory offer; the sale of the property automatically terminates the listing.

Option: An agreement to keep open for a set period of time an offer to sell or purchase property, usually for consideration.

P - Q Back to Top
Performance Bond: A bond used to guarantee the specific completion of an endeavor in accordance with a contract.

Points: Discount charges imposed by lenders to raise the yields on their loans. One point equals one percent of the amount of the loan.

Power of Attorney: A written instrument duly signed and executed by an owner of property, which authorizes an agent to act on behalf of the owner to the extent indicated in the instrument.

Prepayment Clause: A clause in a mortgage which gives a mortgagor the privilege of paying the mortgage indebtedness before it becomes due.

Principal: The employer of an agent or broker; the broker's or agent's client.

Proprietary Lease: A written lease in a cooperative apartment building, held by the tenant/shareholder, giving the right to occupy a particular unit.

Prospectus: A printed statement disclosing all material aspects of a real estate project.

Purchase Money Mortgage: A note secured by a mortgage given by a buyer, as mortgagor, to a seller, as a mortgagee, as part of the purchase price of the real estate.

Quiet Enjoyment: The right of an owner or a person legally in possession to the permitted use of property without interference of possession.

R Back to Top
Racial Steering: The unlawful practice of influencing a person's housing choice based on his race.

Ready, Willing and Able Buyer: One who is prepared to buy property on the seller's terms and is ready to take positive steps to consummate the transaction.

Real Property: Land, and generally whatever is erected upon it or affixed thereto.

Recognition Agreement: The agreement between the co-operative building and the bank lending money for purchase of shares of stock in the co-operative.

Recording: The act of recording or entering in a book of public record instruments affecting the title to real property.

Redemption: The right of a mortgagor to redeem the property by paying a debt after the expiration date and before sale at foreclosure: the right of an owner to reclaim the owner's property after the sale for taxes.

Red Herring: Preliminary offering plan for a cooperative or condominium project submitted to the attorney general and to tenants and subject to modification.

S Back to Top
Special Assessment: An assessment made against a property to pay for a general improvement by which the assessed property is supposed to be especially benefited.

Specific Performance: A legal action brought in a court of equity in special cases to compel a defendant to carry out the terms of an agreement or contract.

Sponsor: The developer or owner organizing and offering for sale a condominium or cooperative development.

Statute of Frauds: State law which provides that certain instruments, such as deeds, real estate sales contracts, and certain leases must be in writing in order to be legally binding.

Statute of Limitations: Law pertaining to period of time within which certain actions must be brought to court, in New York, 6 years for contracts.

Subletting: A leasing by a tenant to another for part of the lessee's remaining term.

Surrogate's Court (Probate Court): A court having jurisdiction over the proof of wills and the settling of estate.

T - Z
Time Is of the Essence: A phrase in a contract that requires the performance of a certain act within a stated period of time, terminating irrevocably on a certain date.

Title: Evidence that owner of land is in lawful possession thereof; evidence of ownership.

Title Search: An examination of the public records to determine the ownership and encumbrances affecting real property.

Transfer Tax: A tax charged under certain conditions on the transfer of property. Both New York State and New York City impose transfer taxes.

Unearned Increment: An increase in value of real estate due to no effort on the part of the owner; often due to increase in population.

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