Real Estate Glossary

A B C D - E F - H I - M N - Q R - S T - Z

RADIANT HEATING: A method of heating, usually consisting of coils, or pipes placed in the floor, wall, or ceiling.
RANGE: A strip or column of land six miles wide, determined by a government survey, running in a north-south direction, lying east or west of a principal meridian.
RANGE LINES: A series of government survey lines running north and south at six-mile intervals starting with the principal meridian and forming the east and west boundaries of townships.
RATE ADJUSTMENT DATE: With respect to an adjustable rate mortgage, the date the borrower's note rate may change.
RATIFICATION: The adoption or approval of an act performed on behalf of a person without previous authorization, such as the approval by a principal of previously unauthorized acts of an agent, after the acts have been performed.
READY, WILLING AND ABLE BUYER: One who is fully prepared to enter into the contract, really wants to buy, and unquestionably meets the financing requirements of purchase.
REAL ESTATE: (See Real Property.)
REAL ESTATE BOARD: An organization whose members consist primarily of real estate brokers and salespersons.
REAL ESTATE INVESTMENT TRUST: (See REIT).
REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA): A federal law requiring the disclosure to borrowers of settlement (closing) procedures and costs by means of a pamphlet and forms prescribed by the United States Department of Housing and Urban Development.
REAL ESTATE SYNDICATE: An organization of investors usually in the form of a limited partnership who have joined together for the purpose of pooling capital for the acquisition of real property interests.
REAL ESTATE TRUST: A special arrangement under Federal and State law whereby investors may pool funds for investments in real estate and mortgages and yet escape corporation taxes, profits being passed to individual investors who are taxed.
REAL PROPERTY: Land and anything growing on, attached to, or erected on it, excluding anything that may be severed without injury to the land.
REAL PROPERTY LOAN LAW: Article 7 of Chapter 3 of the Real Estate Law under which a real estate licensee negotiating loans secured by real property within a specified range is required to give the borrower a statement disclosing the costs and terms of the loan and which also limits the amount of expenses and charges that a borrower may pay with respect to the loan.
REAL PROPERTY SALES CONTRACT: An agreement to convey title to real property upon satisfaction of specified conditions which does not require conveyance within one year of formation of the contract.
RECAPTURE: The process of recovery by an owner of money invested by employing the use of a rate of interest necessary to provide for the return of an investment; not to be confused with interest rate, which is a rate of return on an investment.
RECONVEYANCE: The transfer of the title of land from one person to the immediate preceding owner. This instrument of transfer is commonly used to transfer the legal title from the trustee to the trustor (borrower) after a trust deed debt has been paid in full.
RECORDING: The process of placing a document on file with a designated public official for public notice. This public official is usually a county officer known as the County Recorder who designates the fact that a document has been presented for recording by placing a recording stamp upon it indicating the time of day and the date when it was officially placed on file. Documents filed with the Recorder are considered to be placed on open notice to the general public of that county. Claims against property usually are given a priority on the basis of the time and the date they are recorded with the most preferred claim going to the earliest one recorded and the next claim going to the next earliest one recorded, and so on. This type of notice is called "constructive notice" or "legal notice".
REDEEM: To buy back; repurchase; recover.
REDEMPTION: Buying back one's property after a judicial sale.
REDLINING: A lending policy, illegal in California, of denying real estate loans on properties in older, changing urban areas, usually with large minority populations, because of alleged higher lending risks without due consideration being given by the lending institution to the credit worthiness of the individual loan applicant.
REFINANCING: The paying-off of an existing obligation and assuming a new obligation in its place. To finance anew, or extend or renew existing financing.
REFORMATION: An action to correct a mistake in a deed or other document.
REHABILITATION: The restoration of a property to satisfactory condition without drastically changing the plan, form or style of architecture.
REIT: A Real Estate Investment Trust is a business trust which deals principally with interest in land - generally organized to conform to the Internal Revenue Code.
RELEASE CLAUSE" A stipulation that upon the payment of a specific sum of money to the holder of a trust deed or mortgage, the lien of the instrument as to a specifically described lot or area shall be removed from the blanket lien on the whole area involved.
RELEASE DEED: An instrument executed by the mortgagee or the trustee reconveying to the mortgagor or trustor the real estate which secured the loan after the debt has been paid in full.
REMAINDER: An estate which takes effect after the termination of the prior estate, such as a life estate. A future possessory interest in real estate.
REMAINDER DEPRECIATION: The possible future loss in value of an improvement to real property.
RENEGOTIABLE RATE MORTGAGE: A loan secured by a long term mortgage which provides for renegotiation, at pre-determined intervals, of the interest rate (for a maximum variation of five percent over the life of the mortgage.)
REPLACEMENT COST: The cost to replace a structure with one having utility equivalent to that being appraised, but constructed with modern materials and according to current standards, design and layout.
REPRODUCTION COST: The cost of replacing the subject improvement with one that is the exact replica, having the same quality of workmanship, design and layout, or cost to duplicate an asset.
RESCISSION: The cancellation of a contract and restoration of the parties to the same position they held before the contract was entered into.
RESCISSION OF CONTRACT: The abrogation or annulling of contract; the revocation or repealing of contract by mutual consent by parties to the contract, or for cause by either party to the contract.
RESERVATION: A right retained by a grantor in conveying property.
RESERVES: 1) In a common interest subdivisions, an accumulation of funds collected from owners for future replacement and major maintenance of the common area and facilities. 2) With regard to mortgage loans, an accumulation of funds, collected by the lender from the borrower as part of each monthly mortgage payment, an amount allocated to pay property taxes and insurance when they are due.
RESPA: (See Real Estate Settlement Procedures Act.)
RESTRICTION: A limitation on the use of real property. Property restrictions fall into two general classifications - public and private. Zoning ordinances are examples of the former type. Restrictions may be created by private owners, typically by appropriate clauses in deeds, or in agreements, or in general plans of entire subdivisions. Usually they assume the form of a covenant, or promise to do or not to do a certain thing.
RETROSPECTIVE VALUE: The value of the property as of a previous date.
RETURN: Profit from an investment; the yield.
REVERSION: The right to future possession or enjoyment by a person, or the person's heirs, creating the preceding estate. (For example, at the end of a lease.)
REVERSIONARY INTEREST: The interest which a person has in lands or other property, upon the termination of the preceding estate. A future interest.
RIGHT OF SURVIVORSHIP: The right of a surviving tenant or tenants to succeed to the entire interest of the deceased tenant; the distinguishing feature of a joint tenancy.
RIGHT OF WAY: A privilege operating as an easement upon land, whereby the owner does by grant, or by agreement, give to another the right to pass over owner's land, to construct a roadway, or use as a roadway, a specific part of the land; or the right to construct through and over the land, telephone, telegraph, or electric power lines; or the right to place underground water mains, gas mains, or sewer mains.
RIGHT, TITLE AND INTEREST: A term used in deeds to denote that the grantor is conveying all of that to which grantor held claim.
RIPARIAN RIGHTS: The right of a landowner whose land borders on a stream or watercourse to use and enjoy the water which is adjacent to or flows over the owners land provided such use does not injure other riparian owners.
RISK ANALYSIS: A study made, usually by a lender, of the various factors that might affect the repayment of a loan.
RISK RATING: A process used by the lender to decide on the soundness of making a loan and to reduce all the various factors affecting the repayment of the loan to a qualified rating of some kind.
SALE AND LEASEBACK: A financial arrangement where at the time of sale the seller retains occupancy by concurrently agreeing to lease the property from the purchaser. The seller receives cash while the buyer is assured a tenant and a fixed return on buyer's investment.
SALE-LEASEBACK-BUY-BACK: A sale and leaseback transaction in which the leaseholder has the option to buy back the original property after a specified period of time.
SALES CONTRACT: A contract by which buyer and seller agree to terms of a sale.
SALVAGE VALUE: In computing depreciation for tax purposes, the reasonably anticipated fair market value of the property at the end of its useful life and must be considered with all but the declining balance methods of depreciation.
SANDWICH LEASE: A leasehold interest which lies between the primary lease and the operating lease.
SASH: Wood or metal frames containing one or more window panes.
SATISFACTION: Discharge of a mortgage or trust deed from the records upon payment of the debt.
SATISFACTION PIECE: An instrument for recording and acknowledging payment of an indebtedness secured by a mortgage.
SCRIBING: Fitting woodwork to an irregular surface.
SEAL: An impression made to attest the execution of an instrument.
SECONDARY FINANCING: A loan secured by a second mortgage or trust deed on real property. These can be third, fourth, fifth, sixth mortgages or trust deeds, on and on ad infinitum.
SECTION: Section of land is established by government survey, contains 640 acres and is one mile square.
SECURED PARTY: This is the party having the security interest. Thus the mortgagee, the conditional seller, the pledgee, etc., are all now referred to as the secured party. (Uniform Commercial Code.)
SECURITY AGREEMENT: An agreement between the secured party and the debtor which creates the security interest. (Uniform Commercial Code.)
SECURITY INTEREST: A term designating the interest of the creditor in the property of the debtor in all types of credit transactions. It thus replaces such terms as the following - chattel mortgage; pledge; trust receipt; chattel trust; equipment trust; conditional sale; inventory lien; etc., according to Uniform Commercial Code usage.
SEISIN (SEIZIN): Possession of real estate by one entitled thereto.
SELLER'S MARKET: The market condition which exists when a seller is in a more commanding position as to price and terms because demand exceeds supply.
SEPARATE PROPERTY: Property owned by a married person in his or her own right outside of the community interest including property acquired by the spouse (1) before marriage, (2) by gift or inheritance, (3) from rents and profits on separate property, and (4) with the proceeds from other separate property.
SEPTIC TANK: An underground tank in which sewage from the house is reduced to liquid by bacterial action and drained off.
SERVICING LOANS: Supervising and administering a loan after it has been made. This involves such things as - collecting the payments, keeping accounting records, computing the interest and principal, foreclosure of defaulted loans, and so on.
SET BACK ORDINANCE: An ordinance requiring improvements built on property to be a specified distance from the property line, street or curb.
SEVERALTY OWNERSHIP: Owned by one person only. Sole ownership.
SHARED APPRECIATION MORTGAGE: A loan having a fixed rate of interest set below the market rate for the term of the loan which also provides for contingent interest to be paid to the lender on a certain percentage of appreciation in the value of the property against which the loan is secured upon transfer or sale of the property or the repayment of the loan.
SHERIFF'S DEED: Deed given by court order in connection with sale of property to satisfy a judgment.
SIMPLE INTEREST: Interest computed on the principal amount of a loan only as distinguished from compound interest.
SINKING FUND: Fund set aside from the income from property which, with accrued interest, will eventually pay for replacement of the improvements.
SLANDER OF TITLE: False and malicious statements disparaging an owner's title to property and resulting in actual pecuniary damage to the owner.
SPECIAL ASSESSMENT: 1) Legal charge against real estate by a public authority to pay cost of public improvements such as street lights, sidewalks, street improvements. 2) In a common interest subdivision, a charge, in addition to the regular assessment, levied by the association against owners in the development, for unanticipated repairs or maintenance on the common area or capital improvement of the common area.
SPECIAL POWER OF ATTORNEY: A written instrument whereby a principal confers limited authority upon an agent to perform certain prescribed acts on behalf of the principal.
SPECIAL WARRANTY DEED: A deed in which the grantor warrants or guarantees the title only against defects arising during grantor's ownership of the property and not against defects existing before the time of grantor's ownership.
SPECIFIC PERFORMANCE: An action to compel performance of an agreement, e.g., sale of land as an alternative to damages or rescission.
SREA: Society of Real Estate Appraisers.
STANDARD DEPTH: Generally the most typical lot depth in the neighborhood.
STANDBY COMMITMENT: The mortgage banker frequently protects a builder by a "standby" agreement, under which banker agrees to make mortgage loans at an agreed price for many months into the future. The builder deposits a "standby fee" with the mortgage banker for this service. Frequently, the mortgage broker protects self by securing a "standby" from a long-term investor for the same period of time, paying a fee for this privilege.
STATUTE OF FRAUDS: A state law, based on an old English statute, requiring certain contracts to be in writing and signed before they will be enforceable at law, e.g.. contracts for the sale of real property, contracts not be performed within one year.
STATUTORY WARRANTY DEED: A short term warranty deed which warrants by inference that the seller is the undisputed owner, has the right to convey the property, and will defend the title if necessary. This type of deed protects the purchaser in that the conveyor covenants to defend all claims against the property. If conveyor fails to do so, the new owner can defend said claims and sue the former owner.
STRAIGHT LINE DEPRECIATION: A method of depreciation under which improvements are depreciated at a constant rate throughout the estimated useful life of the improvement.
STRAIGHT NOTE: A note in which a borrower repays the principal in a lump sum at maturity while interest is paid in installments or at maturity. (See Interest Only Note.)
SUBAGENT: A person upon whom the powers of an agent have been conferred, not by the principal, but by an agent as authorized by the agent's principal.
SUBDIVISION: A legal definition of those divisions of real property for the purpose of sale, lease or financing which are regulated by law. For examples see - California Business and Professions Code Sections 11000, 11000.1, 11004.5; California Government Code Section 66424; United States Code, Title 15, Section 1402(3).
"SUBJECT TO" A MORTGAGE: When a grantee takes title to real property subject to a mortgage, grantee is not responsible to the holder of the promissory note for the payment of any portion of the amount due. The most that grantee can lose in the event of a foreclosure is grantee's equity in the property. (See also "assumption of mortgage".) In neither case is the original maker of the note released from primary responsibility. If liability is to be assumed, the agreement must so state.
SUBLEASE: A lease given by a lessee.
SUBORDINATE: To make subject to, or junior or inferior to.
SUBORDINATION AGREEMENT: An agreement by the holder of an encumbrance against real property to permit that claim to take an inferior position to other encumbrances against the property.
SUBPOENA: A legal order to cause a witness to appear and give testimony.
SUBROGATION: Replacing one person with another in regard to a legal right or obligation. The substitution of another person in place of the creditor, to whose rights he or she succeeds in relation to the debt. The doctrine is used very often where one person agrees to stand surety for the performance of a contract by another person.
SUBSIDY BUYDOWN: Funds provided usually by the builder or seller to temporarily reduce the borrower's monthly principal and interest payment.
SUBSTITUTION, PRINCIPLE OF: Affirms that the maximum value of a property tends to be set by the cost of acquiring an equally desirable and valuable substitute property, assuming no costly delay is encountered in making the substitution.
SUM OF THE YEARS DIGITS: An accelerated depreciation method.
SUPPLY AND DEMAND, PRINCIPLE OF: In appraising, a valuation principle starting that market value is affected by intersection of supply and demand forces in the market as of the appraisal date.
SURETY: One who guarantees the performance of another - Guarantor.
SURPLUS PRODUCTIVITY, PRINCIPLE OF: The net income that remains after the proper costs of labor, organization and capital have been paid, which surplus is imputable to the land and tends to fix the value thereof.
SURVEY: The process by which a parcel of land is measured and its area is ascertained.
SYNDICATE: A partnership organized for participation in a real estate venture. Partners may be limited or unlimited in their liability. (See real estate syndicate.)

Source: California Department of Real Estate.