REAL ESTATE DICTIONARY - C
Capital
Accumulated wealth. A portion of wealth which is set
aside for the production of additional wealth; specifically,
the funds belonging to the partners or shareholders
of a business, invested with the expressed intention
of their remaining permanently in the business.
Capital Gain
Taxable profit on the sale of an appreciated asset.
Caps
Caps are used on adjustable rate mortgages (ARM's) to
limit the interest rate and/or the payment. Most ARMs
have a periodic cap that is around 2% per year and a
life cap of around 5%-6% over the life of the loan.
"Payment only" caps sometimes create negative
amortization where the principal balance of the loan
increases rather than decreases over time.
Caveat Emptor
A legal term meaning "let buyer beware".
Certificate of Eligibility
A certificate obtained by a veteran from a Veteran's
Administration office which states that the veteran
is eligible for a VA insured loan..
Certificate of Occupancy
Document issued by a local governmental agency that
states a property meets the local building standards
for occupancy.
Certificate of Reasonable Value (CRV)
An appraisal of property for the purpose of insurance
by the Veteran's Administration.
Certificate of Title
A certification issued by a title company or a written
opinion rendered by an attorney that the seller has
good marketable and insurable title to the property
which he is offering for sale. A certificate of title
offers no protection against any hidden defects in the
title which an examination of the public records could
not reveal. The issuer of a certificate of title is
liable only for damages due to negligence. The protection
offered a homeowner under a certificate of title is
not as great as that offered in a title insurance policy.
Certified Copy
A true copy, attested to be true by the officer holding
the original.
Cestui Que Trust
One having an equitable interest in property with the
legal title being vested to the trustee.
Chain of Title
The chronological order of conveyance of a parcel of
land from the original owner to the present owner.
Chattel
Personal property.
Client
Person who employs the agent. Typically the seller is
a client. The buyer can be a client (buyer's broker)
or customer (seller's broker).
Closing
Conclusion of a real estate sale where the title of
the property is transferred to the new owners and funds
are transferred to the appropriate parties ( seller,
old lender, real estate broker, etc.).
Closing Agent
A neutral third party that facilities the closing of
a real estate transaction. The closing agent can be
an escrow company, title company or attorney.
Closing Costs
Expenses incurred by the buyer/borrower and the seller
in a real estate or mortgage transaction. There can
be non-recurring costs that include a one time charge
for points, appraisal fees, etc. or a prorating of recurring
costs such as taxes and insurance incurred while the
new buyer/borrower owns the real estate.
Closing Statement
Statement prepared for the buyer and seller itemizing
all of the costs of a real estate transaction.
Closing Day
The day on which the formalities of a real estate sale
are concluded. The buyer signs the mortgage, and closing
costs are paid. The final closing merely confirms the
original agreement reached in the agreement of sale..
Cloud on Title
An outstanding claim or encumbrance which, if valid,
adversely affects the marketability of title.
Code of Ethics
Standards subscribed to by members of the National Association
of Realtors.
Co-Maker
Equally responsible for repayment as the borrower.
Commercial Property
Property intended for use by all types of retail and
wholesale stores, office buildings, hotels and service
establishments.
Commission
Fee paid to a broker or other entity for services rendered.
Real estate brokers and mortgage brokers receive a commission
for the services they provide; a real estate broker
secures a buyer for a property that is for sale and
a mortgage broker secures a mortgage loan for the buyer
to finance the purchase of a property. Commissions are
generally paid as a percentage of the sales price in
a real estate transaction or the loan amount in a mortgage
transaction.
Commitment
A written promise to make or insure a loan for a specified
amount and on specified items.
Common Law
Rules based on usage as demonstrated by decrees and
judgments from the courts.
Community Property
Property owned jointly by husband and wife.
Comparables
Properties which are similar in value to a particular
property and are used as comparisons to determine the
fair market value of a specified property.
Condemnation
The taking of private property for public use by a government
unit, against the will of the owner, but with payment
of just compensation under the government's power of
eminent domain. Condemnation may also be a determination
by a governmental agency that a particular building
is unsafe or unfit for use.
Conditional Commitment
A lenders promise to issue a loan subject to certain
conditions. Generally, the lender will not fund the
loan until the conditions have been met.
Conditional Offer
Purchase offer in which the buyer proposes to purchase
property only after certain events (sale of another
home, finding a loan commitment, etc.) occur.
Condominium
A structure of two or more units, the interior space
of which are individually owned.
Consideration
Anything of value given to induce another to enter into
a contract. Earnest money deposit on a sales contract
is consideration.
Construction Loan
Short-term financing for real estate construction. Generally
followed by long term financing called a "take
out" loan issued upon completion of construction.
Contingency
Condition which must be satisfied before the buyer can
consummate the purchase of a property. Contingencies
are generally outlined in the purchase contract between
the buyer and seller.
Contract of Purchase
An agreement between parties for the sale of real estate.
In some states it is synonymous with a Purchase Agreement,
Sales Agreement, or Land Contract. In Texas it is known
as an Earnest Money Contract.
Contract of Sale
A purchase transaction in which the buyer receives possession
of the property, but the seller retains title.
Contract Sales Price
The full purchase price as stated in the contract.
Conventional Loan
A mortgage loan that is not guaranteed or insured by
the government. FHA and VA loans are not conventional
loans.
Convertible ARMs
ARMs that have a provision allowing the borrower to
convert the mortgage to a fixed rate term. The conversion
feature is outlined in the mortgage note and has certain
restrictions.
Conventional Mortgage
A loan neither insured by the FHA nor guaranteed by
the VA.
Cooperative Housing
An apartment building or a group of dwellings owned
by a corporation, the stockholders of which are the
residents of the dwellings. It is operated for their
benefit by their elected board of directors. In a cooperative,
the corporation or association owns title to the real
estate. A resident purchase stock in the corporation
which entitles him to occupy a unit in the building
or property owned by the cooperative. While the resident
does not own his unit, he has an absolute right to occupy
his unit for as long as he owns the stock.
Cost Plus Contract
A building contract setting the builder's profit at
a set percentage of actual cost of labor and materials.
Cost Basis
Accounting figure that includes original cost of property
plus certain expenses to purchase, money spent on permanent
improvements and other costs, minus any depreciation
claimed on tax returns over the years.
Counteroffer
A new offer made as a result of another offer, which
cancels the original offer
County
A division within a state, usually encompassing one
or more cities or towns.
Covenant
An agreement written into deeds and other instruments
promising performance or nonperformance of certain acts
or stipulating certain uses or non users of the property.
Customer
Typically, the buyer (before buyer agency laws), as
opposed to the principal (seller).
|
