Glossary of Real Estate Terms by CENTURY 21 Future Builders

	Real Estate Glossary
	♦ M ♦ N ♦ O ♦ P ♦ Q ♦ R ♦ S ♦ T ♦ U ♦ V ♦ W ♦ Y ♦ Z ♦
	M Market Data Method An appraisal method where similar, recently sold properties are compared with the subject property in order to estimate its value. If applied technically, value adjustments are made for differences between the various comparables and the subject property. See also Comparative market Analysis and Competitive market Analysis. Market Price The actual price at which a real estate property is sold. Market Value The highest price, estimated in terms of money, which real estate property will bring if exposed for sale in the open market. Master Deed The instrument that legally establishes a condominium; also called condominium declaration. Meander Line An artificial line used by the surveyors to measure the natural, uneven, winding property line formed by rivers, streams and other watercourses bordering a property Meeting Of The Minds Agreement by buyer and seller on the provisions of a contract. Meridian North-south lines used in rectangular survey system. Under the U.S. Government Survey System, property is described in reference to this imaginary North-South line of longitude. The principal meridian assigned to a state intersects its base line which is based on a East-West line of latitude. Metes And Bounds A common method of land description that identifies a property by specifying the shape and boundary dimensions of the parcel, using terminal points and angles. Michigan Condominium Act Details rights of condominium purchasers in Michigan. Michigan Right to Farm Act A law designed to protect farmers from lawsuits involving the operation of their farms. It protects the vital interest the state has in farming operations. Michigan State Housing Development Authority (MSHDA) Makes loans at below-market interest rates to developers of rental housing, to low- and moderate-income purchasers of single-family homes, and to low-and moderate-income borrowers for home improvement. Michigan's Sellers Disclosure Act Mandates that the seller complete a disclosure form regarding the condition of the property. Michigan's Wetland Protection Act Defines and regulates use of Michigan's wetlands. Mineral Rights Rights to subsurface land and profits. MLS Multiple Listing Service. An organized method of sharing or pooling listings by member brokers. Monuments Visible markers, both natural and artificial objects, which are used to establish the lines and boundaries of a survey. Mortgage A legal agreement pledging a property to a lender as security for the payment of a debt. MSHDA Acronym fro Michigan State Housing Development Authority. Multiple Offers Offers submitted simultaneously from several buyers for the same property. Mutual Assent The voluntary agreement of all parties to a contract as evidenced by an offer and acceptance. BACK TO TOP N National Association Of Real Estate Brokers (NAREB) The nations oldest and most effective minority-owned trade association. Members are known by the membership mark, REALTIST® National Association Of REALTORS® (NAR) A national trade organization comprised of real estate brokers, salespersons, and affiliated professions. The primary goal of the NAR is to promote the private property rights of individuals and to act as the spokesman for the real estate industry through legislative and education activities. Negligent Misrepresentation Occurs when a seller's broker conceals a defect in the property from the buyer or misrepresents the existence of a defect. Negotiation The transaction of business aimed at reaching a meeting of minds among the parties; bargaining. Normal Wear And Tear That physical deterioration which occurs in the normal course of the use for which a property is intended, without negligence, carelessness, accident or abuse of the premises (or equipment or chattels) by the occupant, members of household, or their invitees or guests. Nuisance Conduct or activity which results in an actual physical interference with another person's reasonable use or enjoyment of his property for any lawful purpose. Null & Void Having no legal force or effect; of no worth; unenforceable; not binding. BACK TO TOP O Obsolescence A type of depreciation of real estate property. Offer A bargain. A promise by one party to act or perform in a specified manner provided the other party will act or perform in the manner requested. Offsite Costs Costs such as for sewers, streets, utilities, etc., which are incurred in the development of raw land, but are not connected with the actual construction of the buildings (onsite costs). Open House The common real estate practice of showing a listed home to the public during established hours, frequently on Sunday afternoons. Option A contract whereby a property owner sells a right to purchase his or her property to a prospective buyer. Over-Improvement Addition or improvement in which the cost is greater than the increased value of the house. Owner's Policy A policy insuring an owner of real property against financial loss resulting from a title defect. Ownership A legal fiction created to establish private rights to personal and real property in one person vis-à-vis another. It includes the entire bundle of rights associated with real property including the right to possess, enjoy, control, encumber, and transfer by deed or will. BACK TO TOP P Parcel A specific portion of a larger tract; a lot. Perc Test (Percolation) The test to determine the capability of the soil to absorb liquid, both for construction and septic systems. Personal Property All property that is not land and is not permanently attached to land; everything that is movable; chattel. Personal Representative In Michigan, a person appointed by a court to distribute the property of a person dying intestate. Planned Unit Development (PUD) A modern concept in housing designed to produce a high density of dwellings and maximum utilization of open spaces. Plat A map or chart of a lot, subdivision, or community, showing boundary lines, buildings, and easements. Plottage The merging or consolidating of adjacent lots into one larger lot, with the consequent result of improved usability and increased value; also called assemblage. Pocket Listing A listing which is retained by the listing broker or salesperson, who does not make it available to other brokers in the office or to other Multiple Listing Service members. Point Of Beginning The starting point in a metes and bounds description of property, which is usually a street intersection or a specific monument. Police Power The power of government to regulate the use of real estate property for the benefit of the public. Possession The act of either actually or constructively possessing or occupying property. Pre-Qualification The process of determining how much a homebuyer will be eligible to borrow before he or she applies for a loan. Profit A Prendre The right one person acquires in the soil of another including the right to remove items produced from the soil; e.g., farming, logging, mining, or drilling. Property The rights or interests a person has in the thing owned; not, in the technical sense, the thing itself. These rights include the right to possess, to use, to encumber, to transfer and to exclude, commonly called the "bundle of rights." Property Description An accurate legal description of land. Property Tax The annual state, county, and local assessment against a certain piece of property. Prorate To divide in proportionate shares, such as taxes, insurance, rent, or other items. Prospect A person or corporation who may be interested in buying or selling real estate property. The prospect does not become a client until the parties establish a fiduciary relationship, such as upon signing a listing contract or upon executing a DROA. Puffing Exaggerated or superlative comments or opinions not made as representations of fact and thus not a grounds for misrepresentation. A statement such as "the apartment has a fantastic view," is puffing because the prospective buyer can clearly assess the view in each case. Purchase Agreement An agreement between a buyer and seller for the purchase of real estate. BACK TO TOP Q Qualify Ability to meet a lender's mortgage approval requirements. Quarter-Section One-fourth of a section, containing 160 acres. Quiet Enjoyment The right of a new owner legally in possession to uninterrupted use of the real estate property without interference from the former owner, or any third party claiming superior title. Quitclaim Deed A deed operating as a release; intended to pass any title, interest, or claim which the grantor may have in the property. BACK TO TOP R Ready, Willing, And Able Describes a buyer who is ready to buy, willing to buy, and financially able to pay the asking price. Real Estate Land and everything permanently attached to land; sometimes used interchangeably with the terms real property and realty. Real Estate Agent See Agent. Real Estate Settlement Procedures Act (RESPA) Federal law that requires lenders to provide certain information regarding the nature and costs of the settlement process to anyone who borrows money to finance the purchase of real estate. Real Property All land and appurtenances to land, including buildings, structures, fixtures, fences, and improvements erected upon or affixed to the same; excluding, however, growing crops. Realtist® A member in good standing of the National Association of Real Estate Brokers. See also National Association of Real Estate Brokers. REALTOR® Registered trademark of the National Association of REALTORS®. Real estate brokers and salesperson who hold active membership may be referred to as REALTORS® and REALTOR®-ASSOCIATES. See also National Association of REALTORS® Realty See Real Estate. Rectangular Survey System A type of land description utilizing townships and sections. Redlining The refusal of lending institutions to make loans for the purchase, construction, or repair of a dwelling because the area in which the dwelling is located is integrated or populated by minorities. Refinance The act of obtaining a new loan to pay off an existing loan; the process of paying off one loan with the proceeds from another. REIT Real Estate Investment Trusts. A method in investing in real estate in a group, with certain tax advantages. Relocation Specialist An agent who exclusively deals with individuals who are moving from one area to another. Replacement Cost The amount of money required to replace a structure with another structure of comparable utility. Reproduction Cost The amount of money required to build an exact duplicate of a structure. Restrictions Limitations on the use of property. Private restrictions are created by means of restrictive covenants written into real property instruments, such as deeds and leases. Restrictive Covenants Restriction placed on a private owner's use of land by a nongovernmental entity or individual. Right Of First Refusal Clause A statement in a lease or condominium articles of association that provides for a lessee or an association to have the first opportunity to purchase the property before it is offered to anyone else. Riparian Rights The rights of an owner of property adjoining a watercourse such as a river, including access to, and use of, the water. Contrast with Littoral Rights. Running With The Land Rights or covenants which bind or benefit successive owners of a property are said to run with the land, such as restrictive building covenants in a recorded deed which would affect all future owners of the property. BACK TO TOP S Salesperson A person who for compensation is employed wither directly or indirectly by a licensed real estate broker to perform any number of real estate-related activities as an agent for the broker. Section A 1-mile-square area of land described by the rectangular survey system, consisting of 640 acres. Security The property that is pledge as collateral for a "secured" loan. Seller's Broker Agent who takes the seller as a client, is legally obligated to a set of fiduciary duties, and is required to put the seller's interest above all others. Seller's Disclosure Statement The actual form used by a seller when disclosing the physical condition of this property to a prospective buyer. In Michigan, the statement contains several warning to the buyer along with a comprehensive checklist and several "yes/no" questions designed to cover al like problem areas. Seller's Market Situation in which demand for homes exceeds the supply offered for sale. Septic System A sewage system, whereby waste is drained through pipes and a tile field into a septic tank. Set Back Ordinance Regulates the distance from the lot line to the point where improvements may be constructed. Settlement Disclosure Statement A list giving a complete breakdown of costs involved in a real estate transaction, prepared by the lender's agent at closing. Shoreline The dividing line between private land and public beach on beachfront property. Single-Family Home A detached house where the owner owns the whole house and has rights to or owns the land on which the house sits. Site Condominium Condominium unit composed of only vacant land with surface improvements or with air space within which a building is to be constructed. Special Agent An agent employed to act on behalf of a principal in a single transaction not involving a continuing level of service, e.g., a real estate broker hired to market the home of a seller to potential buyers. Services are also typically limited in nature. Special Assessment A levy by a local government against real property for part of the cost of making an improvement to the property, such as street paving, installing water lines, or putting in sidewalks. Spot Zoning Rezoning of a certain property in a zoned area to permit a different type of use than that authorized for the rest of the area; may be valid or invalid. Steering The practice of directing prospective purchasers toward or away from certain neighborhoods to avoid altering the racial/ethnic make-up of these areas. Subdivision Control Act Sets out the objectives and conditions for subdividing land in Michigan. Supply And Demand The principle stating that the greater the supply of any commodity in comparison to demand, the lower the value; conversely, the smaller the supply and the greater the demand, the higher the value. Survey A drawing of the boundaries that separate one piece of real estate from another. Map made by a licensed surveyor who measures the land charts its boundaries, improvement, and relationships to the property surrounding it. BACK TO TOP T Tax Lien A general statutory lien imposed against real estate property for failure to pay taxes. There are federal tax liens and state tax liens. Termite Inspection A specific inspection of the property for damage due to termite infestation. Third Party A stranger to the principal-agent contract; the party with whom an agent interacts on behalf of his principal. Time Is Of The Essence Legal phrase in a contract, requiring punctual performance of all obligations. Time Sharing A modern approach to communal ownership and use of real estate which permits multiple purchasers to buy undivided interests in real property (which is usually in a resort condominium or hotel) with a right to use the facility for a fixed or variable time period. Title A document that indicates ownership of a specific real estate property. Title Insurance A comprehensive contract of indemnity under which the title company agrees to reimburse the insured for any loss if title is not as represented in the policy. Title Search An examination of the public records to determine what, if any, defects there are in the chain of title. Townhouse A type of dwelling unit normally having two floors, with the living area and kitchen on the base floor and the bedrooms located on the second floor. Township A piece of property, used in the government survey system of land description, which is 6 miles square, and contains36 sections, each 1 mile square; and consists of 23,040 acres. Transaction Coordinator A real estate licensee who acts in a strictly non-agency capacity while working with buyers or sellers. No traditional agency-related services are involved such as the providing of advice, advocacy, or negotiation. Transfer Of Ownership Any means by which the ownership of the real estate changes hands. BACK TO TOP U Undue Influence Any improper or wrongful influence by one party over another whereby the will of a person is overpowered so that he or she is induced to act or prevented from acting according to free will. Uniform Vendor And Purchasers Risk Act Michigan law stating that if the property is being destroyed, is partially destroyed, or is being taken by eminent domain, the buyer may, at the buyer's option, declare the transaction null and void. Universal Agent An agent who is empowered to conduct every lawful transaction that a principal can delegate including the right to represent, negotiate, and sign contracts on behalf of his employer; e.g., an attorney-in-fact. BACK TO TOP V VA Department of Veterans Affairs (formerly Veterans Administration), which guarantees a veteran's mortgage so that a lender is willing to make the loan with little or no down payment. Valid Contract An agreement that is legally binding and enforceable. Variance Permission obtained from governmental zoning authorities to build a structure or conduct a use which is expressly prohibited by the current zoning laws; an exception from the zoning laws. Void Having no legal force or binding effect; a nullity; not enforceable. A contract for an illegal purpose (i.e. gambling) is void. BACK TO TOP W Walk-Through Inspection Final inspection of a property's condition by the buyer, usually to ensure that all conditions noted in the offer-to-purchase have been met. Wear And Tear The gradual physical deterioration of real estate property, resulting from use, passage of time and weather. Only property subject to wear and tear is depreciable. Well And Septic Report A report usually provided by a local municipality health department to determine the portability of water and to ascertain that the septic system is running free. BACK TO TOP Y Z Yield The return on an investment or the amount of profit, stated as a percentage of the amount invested. Zoning The division of a local municipality into districts of prescribed use. Zoning is mandated by state law and is generally exercised on the local government level through the state’s delegation of police power. Zoning Ordinance Laws or policies of city or county authorities specifying how property may be used in specific area. 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Real Estate Glossary