MAJOR DEFICIENCY:
A deficiency that strongly impacts the usability and habitability of a house. Or a deficiency that may be very expensive to repair.

MANUFACTURED HOUSING:
Once known as ''mobile homes,'' manufactured housing is any building which has been constructed off site, then moved onto a piece of real property.

MARGIN:
The difference between the interest rate and the index on an adjustable rate mortgage.

MARGINAL LAND:
Land whose value has been diminished due to some internal defect or external condition. In most cases, the cost to correct the flaw or condition is as much or more than the expected return from the property.

Marketable Title:
Title which is free from defects which would allow a p u r chaser to be released from his obligation to purchase.

Market Value :
An appraisal term denoting the highest price that a buyer, willing but not compelled to buy, would pay, and the lowest a seller, willing but not compelled to sell, would accept.

MASTER ASSOCIATION:
An umbrella organization that is made up of multiple, smaller home owner's associations. Often found in very large developments or condominium projects.

MATURITY:
The date on which the principal balance of a financial instrument becomes due and payable.

Mechanic's Lien:
A lien on real estate which secures the payment of debts due to persons who perform labor or services or furnish materials incident to the construction of buildings and improvement on real estate.

MERGED CREDIT REPORT:
A credit report derived from data obtained from multiple credit agencies.

METROPOLITAN AREA:
The accumulated land in and around a city or other municipality which falls under the political and economic influence of that entity.

MINERAL RIGHTS:
The legal right to exploit and enjoy the benefits of any minerals located below the surface of a parcel of land.

MISREPRESENTATION:
A statement by one party in a transaction that is incorrect or misleading. Most misrepresentations are deemed to be intentional and thus may constitute fraud. Others, however, some are rendered through simple mistakes, oversights or negligence.

Mortgage:
A legal document used to secure the performance of an obligation.

MORTGAGE:
A financial arrangement wherein an individual borrows money to purchase real property and secures the loan with the property as collateral.

MORTGAGE BROKER:
A person or organization that serves as a middleman to facilitate the mortgage process. Brokers often represent multiple mortgage bankers and offer the most appropriate deal to each buyer.

MORTGAGEE:
The entity that lends money in a real estate transaction.

MORTGAGE INSURANCE:
A policy that fulfills that obligations of a mortgage when the policy holder defaults or is no longer able to make payments.

MORTGAGE INSURANCE PREMIUM (MIP):
An fee that is often included in mortgage payments that pays for mortgage insurance coverage.

MORTGAGE LIFE INSURANCE:
A policy that fulfills the obligations of a mortgage when the policy holder dies.

MORTGAGOR:
The entity that borrows money in a real estate transaction.

MULTI-FAMILY PROPERTIES:
Any collection of buildings that are designed and built to support the habitation of more than four families.

NATIONAL ASSOCIATION OF MASTER APPRAISERS (NAMA):
A non profit professional association organized in 1982, dedicated to the advancement of professionalism in real estate appraisal.

NATIONAL SOCIETY OF REAL ESTATE APPRAISERS:
An organization founded in 1956 which promotes standards of professionalism in its members.

NATURAL VACANCY RATE:
The percentage of vacant properties in a given area that is the result of natural turnover and market forces.

NEGATIVE AMORTIZATION:
When the balance of a loan increases instead of decreases. Usually due to a borrower making a minimum payment on an Adjustable Rate Mortgage during a period when the rate fluctuates to a high enough point that the minimum payment does not cover all of the interest.

NEIGHBORHOOD LIFE-CYCLE:
The evolution of neighborhood use and demographics over time. Economic fluctuations, municipal zoning changes and population shifts can effect the life cycle.

NEIGHBORHOOD:
A subsection of a municipality that has been designated by a developer, economic forces or physical formations.

NET LEASABLE AREA:
The space in a development, outside of the common areas, that can be rented to tenants.

NEW ENGLAND COLONIAL:
An architectural style dating from early American history typified by a two-story building with clapboard siding.

NO-COST LOAN:
Many lenders offer loans that you can obtain at "no cost." You should inquire whether this means there are no "lender" costs associated with the loan, or if it also covers the other costs you would normally have in a purchase or refinance transactions, such as title insurance, escrow fees, settlement fees, appraisal, recording fees, notary fees, and others. These are fees and costs which may be associated with buying a home or obtaining a loan, but not charged directly by the lender. Keep in mind that, like a "no-point" loan, the interest rate will be higher than if you obtain a loan that has costs associated with it.

NO-POINT LOAN:
A loan with no "points". The interest rate on such a loan will be higher than a loan with points paid. Also sometimes refers to a refinance loan where closing costs are included in the loan.

NON-CONFORMING USE:
The use of land for purposes contrary to the applicable municipal zoning specifications. Often occurs when zoning changes after a property is in use.

NONLIQUID ASSET:
Any asset which can not be quickly converted into cash at little or no cost.

Notarization:
The certification by a Notary Public that a person signing a document has been properly identified. Notarization does not certify the content of a document, only validity of signature.

NOTE:
A legal document that obligates a borrower to repay a mortgage loan at a stated interest rate during a specified period of time.

NOTE RATE:
The interest rate stated on a mortgage note.

NOTICE OF DEFAULT:
Formal written notice from a lender to a borrower that default has occurred.

OBSOLESCENCE:
The process of an assets value diminishing due to the development of more desirable alternatives or because of the degradation of its capabilities.

OCCUPANCY:
A physical presence within and control of a property.

OCCUPANCY RATE:
The percentage of properties in a given area that are occupied.

OCTOPUS RECEPTACLE:
An outlet with too many devices plugged into it, using a power strip or other device to multiply the outlets.

OFF-SITE IMPROVEMENTS:
Buildings, structures or other amenities which are not located on a piece of property, but are necessary to maximize the use of the property or in some way contribute to the value of the property.

OFF-STREET PARKING:
Designated parking spaces associated with a particular building or other structure which are not located on public streets.

OLD TERMITE ACTIVITY:
Where no termites are currently active, but indications of past activity can be seen.

ON-SITE IMPROVEMENTS:
Buildings, structures or other amenities that are erected on a piece of property and contribute to its value.

OPEN SPACE:
Any land which has not had any significant buildings or structures erected on it. Most often used to describe desirable neighborhood features like parks.

OPEN SPLICE:
An uncovered electrical connection.

ORIGINAL EQUITY:
The amount of cash a home buyer initially invests in the home.

ORIGINAL PRINCIPAL BALANCE:
The total amount of principal owed on a mortgage loan at the time of closing.

ORIGINATION FEE:
Refers to the total number of points paid by a borrower at closing.

OWNER FINANCING:
A transaction where the property owner provides all or part of the financing.

OWNER OCCUPIED:
The state of property wherein the owner occupies at least some portion of the property.

PARGING:
The cement coat applied to block foundations.

PARTIAL INTEREST:
A shared ownership in a piece of property. May be divided among two or more parties.

PARTIAL PAYMENT:
A payment of less than the regular monthly amount. Usually, a lender will not accept partial payments.

Perfecting Title:
Process involving the elimination of any adverse claims against a title.

PERIODIC PAYMENT CAP:
The limit on how much regular monthly payments on an Adjustable Rate Mortgage can change during one adjustment period.

PERIODIC RATE CAP:
The limit on how much the interest rate on an Adjustable Rate Mortgage can change during any one adjustment period.

PERSONAL PROPERTY:
Owned items which are not permanently affixed to the land.

PERSONAL RESIDENCE:
The primary domicile of a person or family.

PITI:
Refers to principal, interest, taxes and insurance, the four major components of a usual monthly mortgage payment.

PITI Ratio:
The principal, interest, tax and insurance payment to income ratio. Used in mortgage lending decisions.

PLANNED UNIT DEVELOPMENT (PUD):
A coordinated, real estate development where common areas are shared and maintained by an owner's association or other entity.

PLAT:
A plan or chart of a piece of land which lays out existing or planned streets, lots or other improvements.

Points:
A fee charged by the lender to fund a loan, in addition to and separate from other fees charged. One point equals one percent of the amount of the loan.

PRE-APPROVAL:
The process of applying for a mortgage loan and becoming approved for a certain amount at a certain interest rate before a property has been chosen. Pre-approval allows the borrower greater freedom in negotiations with sellers.

PREFABRICATED:
Any building or portion thereof which is manufactured and assembled off site, then erected on a property.

PREPAYMENT:
Payment made that reduces the principal balance of a loan before the due date and before the loan has become fully amortized.

PREPAYMENT PENALTY:
A fee that may be charged to a borrower who pays off a loan before it is due.

PRE-QUALIFICATION:
Less formal that pre-approval, pre-qualification usually means a written statement from a loan officer indicating his or her opinion that the borrower will be able to become approved for a mortgage loan.

PRIME RATE:
The interest rate that banks and other lending institutions charge other banks or preferred customers.

Principal:
The sum of money outstanding upon which interest is payable. Also refers to one who is served by an agent.

PRINCIPAL, INTEREST, TAXES, AND INSURANCE (PITI):
The most common constituents of a monthly mortgage payment.

Private Mortgage Insurance (PMI):
Insurance written by a private mortgage insurance company protecting the mortgage lender against loss occasioned by a mortgage default and foreclosure. Normally required when the LOAN TO VALUE RATIO is less that 20%.

Proration:
The method used in dividing charges into that portion which applies only to a party?s ownership up to a particular date.

PROPERTY:
Any item which is owned or possessed.

PURCHASE AGREEMENT:
A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.

QUADRAPLEX:
Any building designed to accommodate four families.

Qualification:
The process of reviewing a prospective borrower?s credit and payment capacity prior to approving a loan.

Quitclaim Deed:
A deed relinquishing all interest, title or claim in a property by a grantor. Accomplished without representing that such title is valid, nor containing any warranty or covenants of title.

RAFTER:
A structural element of the roof, sloping from the peak to the outer walls.

RANCH HOUSE:
An architectural style typified by a single-story, low-roof construction. Popular in the western U.S.

RATE LOCK:
A guarantee from a lender of a specific interest rate for a period of time.

RAW LAND:
Any land which has not been developed.

REAL ESTATE:
A piece of land and any improvements or fixtures located on that land.

REAL ESTATE AGENT:
A licensed professional who facilitates the buying and selling of real estate.

Real Estate Settlement Procedures Act (RESPA):
A federal statute requiring disclosure of certain costs in the sale of residential, improved property which is to be financed by a federally insured lender.

REAL PROPERTY:
Land, improvements and appurtenances, and the interest and benefits thereof.

REALTOR:
A real estate agent or broker who is a member of the National Association of Realtors.

RECEPTACLE:
An electrical outlet to plug into.

Reconveyance:
The conveyance to the landowner of the title, held by a trustee under a deed of trust, when the performance of the debt is satisfied.

Recordation (Recording):
Involves filing for record in the office of the county recorder for the purpose of giving constructive notice of title, claim or interest in real property.

RECORDER:
A local government employee whose role it is to keep records of all real estate transactions within the jurisdiction.

Record Owner:
The owner of property as shown by an examination of the public record.

REFINANCE TRANSACTION:
A new loan to pay off an existing loan. Typically to gain a lower interest rate or convert equity into cash.

REGISTER:
Where air from a furnace or air conditioning system enters the room.

RELOCATION SERVICE:
Any company or agency that assists corporate employees in relocating from one place to another. Services may include hiring and coordinating real estate agents, moving companies, utilizes and the like.

REMAINING BALANCE:
The amount of principal, interest and other costs that has not yet been repaid.

REMAINING TERM:
The amount of time remaining on the original amortization schedule.

REMODEL:
An activity designed to improve the value or desirability of a property through rebuilding, refurbishing, redecorating or adding on to it.

REPAYMENT PLAN:
A plan to repay delinquent payments, agreed upon between a lender and borrower, in an effort to avoid foreclosure.

REPLACEMENT RESERVE FUND:
An account, or fund, setup for the replacement of short life items , such as carpeting, in the common areas of a cooperative property.

RESIDENTIAL PROPERTY:
A piece of property whose highest and best use is the maintenance of a residence.

REVOLVING DEBT:
A type of credit that allows the borrower/customer to make charges against a predetermined line of credit. The customer then pays monthly installments on the amount borrowed, plus interest.

RIDGE BOARD:
The structural member of a roof where the rafters join at the top.

RIGHT OF FIRST REFUSAL:
An agreement giving a person the first opportunity to buy or lease a property before the owner offers it for sale to others.

RURAL:
An area outside of an established urban area or metropolitan district.

SALE PRICE:
The actual price a property sells for, exclusive of any special financing concessions.

SALES COMPARISON APPROACH:
An appraisal practice which estimates the value of a property by comparing it to comparable properties which have sold recently.

SCARCITY:
An economic principal that dictates the price of a good or service through the interaction of supply and demand. When an item is scarce, its price tends to rise, given a constant demand. Real Estate is a classic example of scarcity.

SECOND MORTGAGE:
A loan secured by the equity in a home, when a primary mortgage already exists.

SECONDARY MORTGAGE MARKET:
An economic marketplace where mortgage bankers buy and sell existing mortgages.

SECURED LOAN:
A loan that is backed by collateral. In the case of a mortgage loan, the collateral is the house.

SECURITY:
The property used as collateral for a loan.

SEMIDETACHED HOUSING:
Two residences which share a common wall.

SERVICER:
A financial institution which collects mortgage payments from borrowers and applies the appropriate portions to principal, interest and any escrow accounts.

SERVICING:
The processing of payments, mailing of monthly statements, management and disbursement of escrow funds etc Typically carried out by the company you make payments to.

SHEATHING:
The covering on outside walls beneath the siding or exterior finish such as stucco.

SHEETROCK:
Also called drywall, the gypsum board commonly used on interior walls.

SILL PLATE:
The lumber used around the foundation to support exterior wall framing.

SILL COCK:
Garden hose pipe connection.

SINGLE-FAMILY PROPERTY:
A property designed and built to support the habitation of one family.

SOFFIT:
The underside of a cornice at the eaves.

Statement of Information (SI):
A confidential information statement completed by the buyer, seller and borrower in every transaction where a policy or policies of title insurance are requested. Allows the title company to competently search documents affecting the property to be insured, documents which may not refer to said property. Allows title companies to differentiate between parties with similar names when searching matters such as liens and court decrees.

STUCCO:
A textured plaster exterior (and occasionally interior) wall finish.

STUD:
A vertical framing piece in a wall, generally 2x4 lumber in interior walls.

SUBDIVISION:
A residential development that is created from a piece of land which has been subdivided into individual lots.

SUBJECT PROPERTY:
A term which indicates a property which is being appraised.

Subject To Clause:
A clause in a contract of sale setting forth any contingencies or special conditions of purchase and sale, such as an offer made and accepted subject to financing, securing certain zoning or similar requirements.

Subordination Agreement:
An agreement under which a prior or superior lien is made inferior or subject to an otherwise junior lien.

SUMP:
A basin into which water drains and from which the water is pumped out.

SURVEY:
A specific map of a piece of property which includes the legal boundaries and any improvements or features of the land. Surveys also depict any rights-of-way, encroachments or easements.

TAX-EXEMPT PROPERTY:
Any property which is not taxed.

Tax Lien:
A statutory lien imposed against real property for nonpayment of taxes.

TENANCY:
The right to occupy a building or unit.

Tenancy in Common:
Co-ownership in a property by two or more persons, each of whom has an undivided interest in the whole property.

Title Plant:
The information warehouse of a title company in which it has accumulated and is constantly updating title records of properties in its area which it can use to search title to real property.

THIRD PARTY ORIGINATION:
When a lender uses a third party to originate and package loans for sale to the secondary market (Fannie Mae, Freddie Mac).

TITLE:
A specific document which serves as proof of ownership.

TITLE COMPANY:
An organization which researches and certifies ownership of real estate before it is bought or sold. Title companies also act at the facilitator ensures all parties are paid during the real estate transaction.

TITLE INSURANCE:
A policy which insures a property owner should a prior claim arise against the property after the purchase has been completed. This also covers a lender should a question of ownership arise.

TITLE SEARCH:
The process whereby the TITLE COMPANY researches a properties title history and ensures that no outstanding claims exist.

TRANSFER OF OWNERSHIP:
Any means by which the ownership of a property changes hands.

TRANSFER OF TAX:
Taxes payable when title passes from one owner to another.

TRAP:
A bend in water pipe.

Trustee:
A person who holds title in trust for the benefit of another. In a deed of trust, the trustee is the person named to hold title in trust for the benefit of the lender until the loan is paid off.

Trustor:
The borrower under a deed of trust. One who deeds their property to a trustee as security for repayment of a loan.

TRUTH IN LENDING:
A federal law requiring full disclosure by lenders to borrowers of all terms, conditions and costs of a mortgage.

UNDER IMPROVED LAND:
A piece of land which has been improved, but not to the full extent of its potential.

UNENCUMBERED PROPERTY:
Any property which has no outstanding claims or liens against it.

Uniform Settlement Statement:
The standard HUD Form 1 required to be given to the borrower, lender and seller at, or prior to, settlement.

UNIFORM STANDARDS OF PROFESSIONAL APPRAISAL PRACTICE (USPAP):
Developed in 1986 by the Ad Hoc Committee on Uniform Standards and copyrighted in 1987 by The Appraisal Foundation, USPAP forms the guidelines followed by every licensed and certified real estate appraiser in the United States. The purpose of these Standards is to establish requirements for professional appraisal practice, which includes appraisal, appraisal review, and appraisal consulting. The intent of these Standards is to promote and maintain a high level of public trust in professional appraisal practice.

Unmarkable Title:
Title which contains defects that would allow a purchaser to be released from his obligation to purchase.

USEFUL LIFE:
The span of time over which a property can be used or can provide benefits to its owner.

VACANCY RATE:
The current percentage of vacant properties in a given area, regardless of why they are vacant.

VA MORTGAGE:
A mortgage that is guaranteed by the Department of Veterans Affairs (VA).

VARIANCE:
An exception to municipal zoning regulations granted for a specific time period to allow for non-conforming use of the land.

VENT PIPE:
A pipe allowing gas to escape.

VESTED:
Having the right to use a portion of a fund such as an IRA. Typically vesting occurs over time. If you are 100% vested, you have a right to 100% of the fund.

Vesting:
Denotes the manner in which title is held. Examples of common vesting are: Community Property, Joint Tenancy and Tenancy in Common. Veterans Administration (VA): VA has power and authority to guarantee or insure payment of loans made to veterans by private lending institutions. This function is similar to that of FHA. VA also makes direct loans to veterans in non-urban areas where private loan funds are not available.

VETERANS AFFAIRS, DEPARTMENT OF (VA):
The successor to the Veteran's Administration, this government agency is responsible for ensuring the rights and welfare of our nation's veterans and their dependents. Among other duties, the VA insures home loans made to veterans.

VOLTAGE:
An expression of electric force, or pressure. One volt being the force needed to move one amp against one ohm resistance.

WALK-THROUGH INSPECTION
A process whereby an appraiser examines a property in preparation for estimating its value. Also, the process of inspecting a property for any damage prior to that property being bought or sold.

WARRANTY:
An affidavit given to stipulate the condition of a property. The person giving the warranty assumes liability if the condition turns out to be untrue.

WATT:
An expression of amount of electrical power. Volt times amps equals watts.

WEAR AND TEAR:
A term used to indicate the normal damage inflicted on a property through every-day use.

WEATHER STRIPPING:
Material used around windows and doors to prevent drafts.

WEEP HOLE:
Drainage hole that allows water to escape.

ZERO LOT LINE:
A municipal zoning category wherein a building or other fixture may abut the property line.

ZONE:
A specific area within a municipality or other jurisdiction which conforms to certain guidelines regarding the use of property in the zone. Typical zones include single-family, multi-family, industrial, commercial and mixed-use.