ACCELERATION CLAUSE. a clause in a contract by which the time for payment of a debt is
advanced, usually making the obligation immediately due and payable, because of the breach of some condition, such as failure to pay an installment when due.
AGENCY. a legal relationship resulting from an agreement or contract, either expressed or implied, written or oral, whereby one person, the agent, is employed by another, called the principal, to do certain acts in dealing with a third party.
AGENT. any person, partnership, association, or corporation authorized or employed by another, called the principal, to act for, on behalf of, and subject to the control of the principal.
ALIENATION. transfer of real property by one person to another.
AMENITIES. in real estate, amenities are features such as location, outlook, or access to a park, lake, highway, view or the like which enhance the desirability of real estate and which contribute to the pleasure and enjoyment of the occupants.
AMORTIZATION. liquidation or gradual retirement of a financial obligation by periodic installments.
APPRAISAL. in real estate, an estimate of the quality or value of property; also refers to the report setting forth the estimate of value together with the basis for such conclusions.
ASSIGNEE. the party to whom a legal right has been assigned or transferred.
ASSIGNMENT. transfer to another of a legal right.
ASSIGNOR. the party who assigns or transfers a legal right.
ATTORNEY'S OPINION. in real estate, the written opinion of an attorney-at-law regarding the marketability of title to real property based upon an examination of the abstract of title or the records in the county clerk and recorder’s office.
BALLOON PAYMENT. a final lump-sum payment of an installment debt, much larger than all previous installments, and which pays the debt in full prior to its full amortization.
BARGAIN AND SALE DEED. any deed that recites consideration and purports to convey the real estate. A bargain and sale deed with a covenant against the grantor’s acts warrants only that he or she has done nothing to harm or cloud the title.
BENEFICIARY. the person who benefits from certain acts, e.g. a will; one receiving benefits, profits or advantage; one for whose benefit a trust is created.
BILL OF SALE. a written instrument by which a person transfers right, title or interest in personal property to another.
BLANKET MORTGAGE. a mortgage that covers more than one piece of property.
BROKER. a duly licensed person, firm, partnership, limited liability company, association, or corporation who, in consideration of compensation or with the intent of receiving such compensation, facilitates a real property transaction for another party.
BUYER AGENT. a broker engaged by and representing the buyer in a real estate transaction.
CAPITALIZATION RATE. a percentage rate of change applied in the income approach to value.
CHAPTER 7. provision of the 1978 Bankruptcy Reform Act that covers liquidations under a court appointed trustee.
CHATTEL. property other than real estate, i.e. personal property; an item of movable property.
CLOUD ON TITLE. an outstanding claim or encumbrance that affects or impairs title to the property.
COMMINGLING. mixing money belonging to others with personal or business funds. Illegal commingling is using the money of one beneficiary for the benefit of another or failing to maintain such money in identified escrow accounts.
COMMON INTEREST COMMUNITY. real estate described in a declaration which obligates an individual unit owner to pay property tax, insurance premiums, maintenance or improvement on some declared real property owned in common. Ownership does not include a leasehold interest of less than forty years, measured from the date the initial term commences, including renewal options.
COMMUNITY PROPERTY. property acquired by a husband and wife, or either, during marriage, by their industry and not by gift, belonging equally to husband and wife. Community property laws exist in only nine states: AZ, CA, ID, LA, NV, NM, OK, TX and WA.
CONDOMINIUM. a common interest community in which portions of the real estate are designated for separate ownership and the remainder of which is distributed for common ownership solely among separate owners. A common interest community is not a condominium unless the undivided interests in the common elements are vested in the unit owners.
CONSIDERATION. a promise or an act of legal value bargained for and received in return for a promise; one of the essential elements of a contract.
CONSTRUCTION MORTGAGE. a short-term loan used to finance the building of a structure.
CONTRACT. an agreement, enforceable at law, between two or more competent persons, having a legal purpose, wherein the parties agree to act in a certain manner.
CONVENTIONAL MORTGAGE. a mortgage securing a loan made by private investors without governmental participation, i.e. not F.H.A.-insured or V.A.-guaranteed.
CONVEYANCE. an instrument in writing by which a person transfers some estate, interest, or title in real estate to another, such as a deed or lease.
COVENANT. a promise or agreement, usually in writing, to do or not do certain acts; also stipulations in a real estate conveyance document governing use of the property.
DECLARATION. a recorded instrument that defines boundaries and common elements of a condominium and establishes the basic rights and obligations of the owners. It also provides for the creation of an owners’ association including a board of directors with authority to collect common expenses and otherwise act for the benefit of all owners.
DEED. a legal instrument in writing, duly executed and delivered, whereby the owner (grantor) conveys to another (grantee) some right, title or interest in or to real estate. deed restriction. a provision in a deed controlling or limiting the use of the land.
DEFAULT. omission or failure to perform a legal duty; failure to meet an obligation when due.
DEFEASIBLE FEE(base- or qualified fee). a fee interest in land that is capable of being defeated or terminated upon the happening of a specified event.
DOCUMENTARY FEE. a statutory Colorado tax of one cent per one hundred dollars (sale price x .0001) of consideration paid by a person recording an instrument of conveyance with a county clerk and recorder.
DUE-ON-SALE CLAUSE. a provision in a mortgage or trust deed which allows the lender to call a promissory note due and payable in full immediately upon the sale or transfer of a secured property; allows a lender to raise the interest rate or force other changes in terms upon assumption of the loan.
EARNEST MONEY. down payment made by a purchaser of real estate as evidence of good faith.
EASEMENT a right or interest in the real property of another; the right to use another’s land for a specific purpose, such as a right-of-way. economic life. the period of time over which improved property may be profitably used.
EQUITY. the amount of an owner’s interest in real estate exceeding its encumbrances.
ENCROACHMENT. illegal intrusion of an improvement or other real property onto another’s property.
ENCUMBRANCE. a claim, lien, charge, or liability attached to and binding upon real property, such as a judgment, mortgage, mechanic’s lien, lien for unpaid taxes, or right-of-way.
ESCROW. the state or condition of money or a deed held conditionally by a third party, called the escrow agent, pending the performance or fulfillment of some act or condition.
ESCROW ACCOUNT. any checking, demand, passbook or statement account insured by an agency of the United States government maintained in a Colorado depository for money that belongs to others.
EXCLUSIVE AGENCY LISTING. a listing whereby the owner engages a real estate brokerage as sole broker for a specified period of time, while retaining the right to sell the property to a buyer that the owner finds without paying the broker a commission.
EXCLUSIVE RIGHT-TO-SELL LISTING. a listing whereby the owner engages one real estate brokerage as sole broker for a specified period of time, entitling the broker to a commission regardless of who sells the property, including the owner.
“FANNIE MAE”. The pronunciation of “FNMA” (Federal National Mortgage Association). provides a market for government secured mortgages held by primary lenders and provides them with a ready market so as to permit a greater turnover of money for loans.
FEE SIMPLE absolute (fee or fee simple). the most comprehensive ownership of real property under law; the largest bundle of ownership rights possible.
F.H.A.-insured mortgage. a mortgage under which the Federal Housing Administration insures approved lenders against loan default.
FIDUCIARY. a person in a position of trust relative to another party; confidential, as in a fiduciary relationship between an agent and the principal.
GRANTOR. a person who conveys real estate; the seller.
INDEMNIFY. to insure; to secure against loss.
JOINT TENANCY. a type of co-ownership of real property featuring a right of survivorship and four unities (time, title, interest and possession).
LIEN. a right given by law to a creditor to have a debt or charge satisfied out of the value of real or personal property belonging to the debtor.
LISTING. an agreement or contract of employment, either oral or written, whereby the owner authorizes the real estate broker to sell, exchange or lease real estate.
MARKET VALUE. the price which a ready and able buyer, not forced to buy, would pay and which a ready and willing seller, not forced to sell, would accept, assuming that both parties are fully informed, act reasonably, and have sufficient time to consider the transaction with due care.
MILL. one-tenth of a cent; a tax rate of one mill on the dollar or one-tenth of one percent of the assessed value of a property. (assessed value x .001)
MORTGAGEE. the party (lender) to whom property is conveyed under a mortgage as security for the repayment of a loan or fulfillment of some obligation.
MORTGAGOR. the party who gives a mortgage (borrower) conveying interest in the property to the lender as security for the obligation to repay a loan or fulfill some obligation.
MULTIPLE LISTING SERVICE(MLS). a marketing arrangement among real estate brokers whereby a seller authorizes the listing broker to share information and a MUTUAL ASSENT(meeting of the minds). agreement of the parties to the contract, mutually consenting to be bound by its exact terms; an essential contract element.
NET LISTING. a listing contract whereby the owner is to receive a certain net price, with the broker receiving any excess over and above the net price as commission.
OFFER. to present for sale; or a proposal presented for acceptance or rejection which, if accepted, will form a binding contract.
OFFEROR. one who makes an offer.
OPEN LISTING. a non-exclusive employment agreement in which an owner retains the right to list the property with other brokers.
OPTION. a temporary right for a specified time, and for which a consideration is paid, during which an optionee may purchase or lease property at a set price.
PERSONAL PROPERTY. all that is not real property; items of a temporary or movable nature.
PLAT. a parcel or plot of land; also a method of land description referring to a recorded map (plat) of a subdivision or town which lays out boundaries, streets, easements etc.
POWER OF ATTORNEY. a legal instrument authorizing another person to act in place of the person drawing the instrument.
QUITCLAIM. a deed in which the grantor warrants nothing, conveying only the grantor’s present interest in the real estate, if any.
RECORDING. entering an instrument in a book of public record in the office of the county clerk and recorder. recording constitutes “constructive” notice to all persons of the rights or claims contained in the instrument.
RIGHT OF SURVIVORSHIP. a characteristic of joint-tenancy whereupon the death of one tenant triggers an automatic and immediate transfer of the decedent’s RIGHT-OF-WAY. an easement or right to pass over another’s land; also the strip of land used as roadbed by a railroad or used for a public purpose by other public utilities.
SELLER AGENT. a broker engaged by and representing the seller in a real estate transaction.
SPECIAL ASSESSMENT. a tax against real property made by a unit of government to cover the proportionate cost of an improvement, such as a street or sewer.
SPECIFIC PERFORMANCE. a remedy compelling a party to perform or carry out the terms of a valid, existing contract.
SUBORDINATION CLAUSE. a clause in a mortgage or lease stating that the rights of the holder shall be secondary to a subsequent encumbrance or right of another person.
SURVEY. the measurement of a parcel of land and its characteristics.
TIME-SHARE. an interval interest in real estate which limits ownership or occupancy rights to specified time periods. Ownership may be either fee simple (deeded) or “right-to-use” (contractual or membership). In Colorado, time-share sales are subject to license law.
TITLE. in real property, the right, or evidence of the right, to ownership.
TITLE INSURANCE. indemnification of a policyholder from loss due to a title defect, provided the loss does not result from a defect excluded by the policy provisions.
TRANSACTION BROKER. a broker who assists one or more parties throughout a contemplated real estate transaction with communication, interposition, advisement, negotiation, contract terms, and the closing without being an agent or advocate for the interests of any party.
WARRANTY DEED, (general warranty deed). a deed in which the grantor warrants or guarantees the title to real property against defects during the grantor’s ownership and as far back as a chain-of-title can be established.
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