MISSOURI RE General Glossary Definitions D-H
Terms
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- Debit
- Money owed. (Debt)
- Decree
- Court order
- Deed
- A written instrument, usually under seal, which contains an agreement to transfer some property interest from a grantor to a grantee.
- Deed in Lieu of Foreclosure
- Used by the mortgagor (borrower) who is in default to convey the property to the mortgagee (lender) in order to eliminate the need for a foreclosure.
- Deed of Release
- Given by lien holders, remainder-men or mortgages to relinquish their claims on the property.
- Deed of Trust
- A deed to real property, which serves the same purpose as a mortgage, involving three parties instead of two. The third party holds naked title for the benefit of the lender. Beneficiary (Lender), Trustor (Borrower), Trustee (Third Party)
- Defeasance Clause
- A necessary mortgage clause in title theory states. When the debt is satisfied, this clause causes title to pass automatically back to the borrower. Satisfaction of mortgage; release from records.
- Defeasible Fee Simple
- - Or FEE SIMPLE DEFEASIBLE - Ownership with conditional restrictions which, if broken, can result in title to the property reverting back to the grantor or his heirs.
- Defect in Title
- Any lien, claim or encumbrance, on a particular piece of real estate, that has been properly recorded in the public records. Recorded defects impair clear title and may result in the title being unmarketable.
- Deficiency Judgment
- A personal claim based on a judicial order against the debtor. This occurs when the property fails to bring in a price at the foreclosure sale which covers the mortgage amount.
- Depreciation
- A decrease in value due to physical deterioration, functional or economic obsolescence.
- Descent
- Refers to any passage of title to property, upon intestacy to those heirs, related by blood or marriage, whom the law designates.
- Devise
- Transferring title to real property by means of a will.
- Discount Points
- A fee charged by the lender at settlement that results in increasing the lender's effective yield on the money borrowed. One discount point equals one percent of the loan amount.
- Dominant Estate
- The tract of land in an easement appurtenant which benefits from the easement.
- Dower
- The rights that a wife acquires in her husband's fee simple property.
- Down Payment
- The amount paid by the purchaser, which when added to the mortgage amount, equals the total sales price. At time of closing this is referred to as equity.
- Due-on-Sale Clause
- A clause, included in many mortgages, permitting the lender to require the borrower to repay the outstanding balance when the property is sold. Prevents loan assumption.
- Duress
- Involves the use of force or improper actions, against a person or property, in order to induce a party to enter into a contract.
- Earnest Money
- A sum of money given to bind an offer or agreement.
- Easement
- A right to limited use or enjoyment by one or more persons in the land of another.
- Easement Appurtenant
- An easement created to benefit adjacent land.
- Easement by Implication
- Occurs because of necessity, such as the conveyance of a land-locked property.
- Easement in Gross
- A personal right to use the land of another.
- Economic Life
- The time period over which an improvement to land earns more income than the cost incurred in generating the income. Profitability.
- Economic Obsolescence
- A loss in value due to factors outside the subject property, such as changes in competition or surrounding land use. Also referred to as external obsolescence.
- Economic Rent
- The amount of rental which a building would receive, if set by the market, as opposed to contract rent set by the lease.
- Effective Age
- The difference between the theoretical economic life of a structure and its actual remaining economic life. Maintaining the property.
- Effective Gross Income
- Income received from property before the deductions for operating expenses; also called gross income. Gross Income minus vacancy.
- Emblements
- Refers to crops which require annual planting.
- Eminent Domain
- The right of government to acquire property, for a public purpose, after paying just compensation.
- Encroachment
- The extension of some improvement or object across the boundary of an adjoining tract. (Off sides).
- Encumbrance
- Any interest in or claim on, the land of another, which in some manner burdens or diminishes the value of the property.
- Equal Credit Opportunity Act. (ECOA)
- A federal act, which prohibits discrimination by lenders on the basis of sex or marital status in any aspect of a credit transaction.
- Equitable Lien
- Created when justice and fairness would require a court of equity to declare such a lien exists or when conduct of parties would imply that a lien was intended.
- Equity
- value of real estate less any liens against it.
- Escalation Clause
- (1) in finance, permits the lender to raise the interest rate upon the occurrence of certain stipulated condition, (2) in leasing, permits the lessor to raise lease payments upon the occurrence of certain stipulated condition.
- Escheat
- The right of government to ownership of property, which is left by a deceased property owner who leaves no will, and dies without descendants.
- Escrow
- The deposit of funds with a neutral third party who is instructed to carry out the provisions of an agreement.
- Estate
- A legally recognized interest in the use, possession, control and disposition that a person has in land, and defines the nature, degree, extent and duration of a person's ownership in land.
- Estate at Sufferance
- Retention of possession without the consent of the landlord after the lease has expired; also referred to as tenancy at sufferance.
- Estate at Will
- An occupation of space, for an indefinite period, which can be terminated by either the lessor or lessee at any time. Also referred to as tenancy at will.
- Estate for Years
- A conveyance of realty for a definite stated period of time. The term may be one year, one month, one week or even one day. No notice needed to terminate.
- Estate from Period to Period
- A leasehold, which is automatically renewed for the same term as in the original lease; also referred to as a periodic tenancy or an estate from period to period. Month to month rental. Notice needed to terminate.
- Estate in Fee
- The maximum possible estate one can possess in real property; also referred to as fee simple or fee simple absolute.
- Exclusive Agency Listing
- The owner employs only one broker but retains the right to personally sell the property, and thereby not pay a commission. However, if any other real estate company sells the property, the listing broker is still entitled to the commission stipulated.
- Exclusive Right to Sell Listing
- Under this listing arrangement, the broker employed is entitled to a commission no matter who sells the property during the listing period. (Even the Seller)
- Executed Contract
- One in which the obligations have been performed on both sides of the contract and nothing is left to be completed. (Closed Deal)
- Executor
- A person appointed in the will to carry out the instructions of the testator, pay the debts of the estate, and dispose of the property as instructed.
- Express Contract
- An agreement formed through the oral or written words of the parties.
- Fair Market Value
- The price negotiated for a parcel of real estate in a competitive market where both buyer and seller are free to act and under no undue pressure.
- Federal Deposit Insurance Corporation (FDIC)
- A federal agency established to insure the deposits in member commercial banks.
- Federal Fair Housing Act of 1968
- An act prohibiting discrimination in the sale or rental of housing on the basis of race, color, religion or national origin sex, handicap and familial status.
- Federal Home Loan Bank System - FHLBB
- A federal agency which oversees and regulates all federally charted savings and loan association.
- Federal Home Loan Mortgage Corporation (FHLMC)
- "Freddie Mac" is a wholly owned subsidiary of the Federal Home Loan Bank System, which serves as a secondary mortgage market for savings and loan associations, who are members of the FHLBB; also referred to as The Mortgage Corporation.
- Federal Housing Administration- (FHA)
- A federal agency established in 1943 to increase home ownership by providing an insurance program to safeguard the lender against the risk of nonpayment. Currently part of HUD.
- Federal National Mortgage Association (FNMA)
- Commonly known as "Fannie Mae", this quasi-private corporation is the largest buyer of existing mortgages in the secondary mortgage market.
- Federal Reserve System (FRS)
- A federal agency which oversees and regulates monetary policy, which in turn affects the availability of credit and interest rates. All federally chartered commercial banks must be members.
- Fee Simple Absolute
- The maximum possible estate one can possess in real property; also referred to as fee simple or fee.
- Fee Simple Determinable
- An estate which has been created to exist only until the occurrence or nonoccurrence of a particular event. Returns automatically.
- Fee Simple Subject to a Condition Subsequent
- An estate which is subject to a power in the original grantor, or the grantor's heirs, to terminate the estate upon the happening of an event. Back to court.
- Fiduciary
- A person who essentially holds the character of trustee. A fiduciary must carry out the duties in a manner which best serves the interest of the party for whom the fiduciary relationship is established. A real estate licensee has a fiduciary duty to his/her client. (Seller, landlord, buyer or tenant)
- First Lien
- Claim with highest priority against property; also known as a superior to the rights of subsequent lenders. (Recorded first)
- First Mortgage
- A mortgage on real estate in which the lender's rights are superior to the rights of subsequent lenders. (Recorded first)
- Fixture
- Broadly defined as personal property which has become realty. Examples include built-in cabinets or bathtubs.
- Foreclosure
- A legal procedure to levy on pledged property used to secure a debt under a mortgage or other lien.
- Fraud
- A misrepresentation of a material fact, which is made with knowledge of its falsity, and with intent to deceive a parry who in fact relies on the misrepresentation to his or her detriment and injury.
- Freehold Estate
- One which continues for an indefinite period of time. For as "least a lifetime or greater" (will)
- Fully Amortized Mortgage
- A method of loan repayment in which the dollar amount of each payment is the same. The first part of each payment is interest and the remainder reduced the principal. Over the life of the mortgage, the outstanding balance is reduced to zero.
- Functional Obsolescence
- A loss in value due to conditions within the structure which make the building outdated when compared with a new building. (4 bedrooms and 1 bath, insulation, narrow stairway, etc.)
- General Agent
- One authorized to transact all of the principal's affairs within the context of a broad commercial or other kind of endeavor. Property manager.
- General Lien
- A lien that attaches to all property owned by an individual. Real and personal.
- General Warranty Deed
- Contains covenants in which the grantor formally guarantees that good and marketable title is being conveyed. Highest deed - 5 covenants.
- Good Title
- One which is free from encumbrances such as liens, pending litigation and other such defects.
- Government National Mortgage Association (GNMA):
- Commonly known as "Ginnie Mae," this agency of HUD operates in the secondary mortgage market. It is involved with special government financing programs.
- Government Survey
- A method of land description based on townships and sections. (Rectangular survey system).
- Graduated Lease Provisions
- This lease provides for periodic step increases in the rental payments.
- Graduated Payment Mortgage (GPM):
- A new financing technique for residential real estate in which monthly payments start at a lower rate and increase periodically over the life of the mortgage; FHA 245.
- Grandfather Clause
- Creating an exemption from application of a new law due to previously existing circumstances; non-conforming use.
- Grant
- Transferring real estate by means of a deed.
- Grantee
- Purchaser or donee receiving title to property.
- Grantor
- Owner making conveyance of title or interest in property.
- Gross Income
- The actual income received from property before the deduction for any expenses.
- Gross Income Multiplier (GIM):
- A method of appraising income-producing property based on a multiple of the annual gross income; also called a gross rent multiplier.
- Gross Rent Multiplier (GRM):
- A method of appraising single family or duplexes based on the monthly gross income.
- Habendum clause
- That part of a deed beginning with the words, "To have and to hold", followed by the granting clause and reaffirming the extent of ownership that the grantor is transferring. The habendum clause defines or limits the extent of ownership in the estate granted as, for example, a fee simple, life estata or easement: "To have and to hold unto said Sally Smith, grantee, a life estate in the following property".
- Highest and Best Use
- The legal use of a parcel of land, which when capitalized, will generate the greatest net present value of income. The first thing an appraiser should determine.
- Housing and Urban Development (HUD)
- An agency of the federal government which oversees many federal housing programs.
- Hypothecate
- process of pledging something (house) as security, but retaining possession of it.