Real Estate Terms C-D
CALL OPTION
A clause in a mortgage which allows the lender to demand payment of the outstanding balance at a specific time.
CAP
Associated with Adjustable Rate Mortgages. A limit on how high monthly payments or how much interest rates may change within a certain time period or the life of the mortgage.
CAPE COD COLONIAL
A single-story house style made popular in New England. Often characterized by a steep roof with gables.
CAPITAL
Accumulated goods and money which is most often used to generate additional income.
CAPITAL EXPENDITURE
An outlay of funds designed to improve the income-producing capabilities of an asset or to extend its economic life.
CASH-OUT REFINANCE
Refinancing a mortgage at a higher amount than the current balance in order to transform a portion of the equity into cash.
CAULKING
A pliable material used to seal cracks or openings such as around windows.
CAVEAT EMPTOR
Literally translated: ”Let the buyer beware.” A common business tenet whereby the buyer is responsible for verifying any and all claims by the seller of property.
CERTIFICATE OF DEPOSIT
A document showing that the bearer has a certain amount of money, at a particular amount interest, on deposit with a financial institution.
CERTIFICATE OF DEPOSIT INDEX
An index based on the interest rate of six month CD’s. Used to set interest rates on some Adjustable Rate Mortgages.
CERTIFICATE OF ELIGIBILITY
A document issued by the Veterans Administration that certifies eligibility for a VA loan.
CERTIFICATE OF OCCUPANCY
Issued by an appropriate jurisdictional entity, this document certifies that a building complies with all building codes and is safe for use or habitation.
CERTIFICATE OF REASONABLE VALUE (CRV)
Usually based on an independent appraisal, a CRV for a particular property establishes the maximum amount which can be secured by a VA mortgage.
CERTIFICATE OF TITLE
A document designating the legal owner of a parcel of real estate. Usually provided by a title or abstract company.
CERTIFIED GENERAL APPRAISER
Generally, any professional who has met the local or state requirements, and passed the appropriate certification exam, and is capable of appraising any type of property.
CERTIFIED RESIDENTIAL APPRAISER
A sub-classification of appraiser who is only licensed to appraise residential property, usually up to four units.
CHAIN OF TITLE
The complete history of ownership of a piece of property.
CHATTEL
Any personal property which is not attached to or an integral part of a property. Chattel is not commonly taken into consideration when appraising the value of real property.
CIRCUIT BREAKERS
Electrical devices which automatically open electrical circuits if they are overloaded.
CLEAR TITLE
Ownership of property that is not encumbered by any counter-claim or lien.
CLOSING
A torturous process designed to induce cramping in a home buyer’s hands by requiring signature on countless pieces of documentation that nobody has ever read. Or, the process whereby the sale of a property is consummated with the buyer completing all applicable documentation, including signing the mortgage obligation and paying all appropriate costs associated with the sale (CLOSING COSTS).
CLOSING COSTS
All appropriate costs generated by the sale of property which the parties must pay to complete the transaction. Costs may include appraisal fees, origination fees, title insurance, taxes and any points negotiated in the deal.
CLOSING STATEMENT
The document detailing the final financial arrangement between a buyer and seller and the costs paid by each.
CO-BORROWER
A second person sharing obligation on the loan and title on the property.
COLLATERAL
An asset which is placed at risk to secure the repayment of a loan.
COLLECTION
The process a lender takes to pursue a borrower who is delinquent on his payments in order to bring the mortgage current again. Includes documentation that may be used in foreclosure.
CO-MAKER
A second party who signs a loan, along with the borrower, and becomes liable for the debt should the borrower default.
COMMON LAW
As opposed to statute law. Laws that have been established by custom, usage and courts over many years.
COMMISSION
A percentage of the sales price or a fixed fee negotiated by an agent to compensate for the effort expended to sell or purchase property.
COMMON AREA ASSESSMENTS
Fees which are charged to the tenets or owners of properties to cover the costs of maintaining areas shared with other tenets or owners. Commonly found in condominium, PUD or office spaces.
COMMON AREAS
Any areas, such as entryways, foyers, pools, recreational facilities or the like, which are shared by the tenets or owners of property near by. Commonly found in condominium, PUD or office spaces.
COMMUNITY PROPERTY
In many jurisdictions, any property which has been acquired by a married couple. The ownership of the property is considered equal unless stipulated otherwise by both parties.
COMPARABLES
An abbreviated term used by appraisers to describe properties which are similar in size, condition, location and amenities to a subject property whose value is being determined. The Uniform Standards of Professional Appraisal Practice (USPAP) establish clear guidelines for determining a comparable property.
COMPOUND INTEREST
Interest paid on the principal amount, as well as any accumulated interest.
CONCESSIONS
Additional value granted by a buyer or seller to entice another party to complete a deal.
CONDEMNATION
The official process by which a property is deemed to be uninhabitable or unusable due to internal damage or other external conditions.
CONDENSATION
The transition of water vapor to liquid. Typically forms in areas of high humidity.
CONDOMINIUM
A development where individual units are owned, but common areas and amenities are shared equally by all owners.
CONDOMINIUM CONVERSION
Commonly, the conversion of a rental property such as an apartment complex into a CONDOMINIUM-style complex where each unit is owned rather than leased.
CONDUIT
The pipe through which electric wiring is run.
CONSTRUCTION LOAN
A loan made to a builder or home owner that finances the initial construction of a property, but is replaced by a traditional mortgage one the property is completed.
CONTIGUOUS
Connected to or touching along an unbroken boundary.
CONTINGENCY
Something that must occur before something else happens. Often used in real estate sales when a buyer must sell a current home before purchasing a new one. Or, when a buyer makes an offer that requires a complete home inspection before it becomes official.
CONTRACT
A legally binding agreement, oral or written, between two parties.
CONVENTIONAL MORTGAGE
A traditional, real estate financing mechanism that is not backed by any government or other agency (FHA, VA, etc.).
CONVERTIBLE ARM
A mortgage that begins as an adjustable, that allows the borrower to convert the loan to a fixed rate within a specific timeframe.
COOPERATIVE (CO-OP)
A form of ownership where each resident of a multiunit property owns a share in a cooperative corporation that owns the building. With each resident having rights to a specific unit within the building.
CORPORATE RELOCATION
A situation where a person’s employer pays all or some of the expenses associated with moving from one location to another, usually over a substantial distance. Relocation expenses often include the amounts, such as brokerage fees, incurred in the selling and buying of the employee’s primary residence.
COST OF FUNDS INDEX (COFI)
An index of financial institutions costs used to set interest rates for some Adjustable Rate Mortgages.
COVENANT
A stipulation in any mortgage that, if not met, can be cause for the lender to foreclose.
CREDIT
A loan of money for the purchase of property, real or personal. Credit is either secured by an asset, such as a home, or unsecured.
CREDIT HISTORY
A record of debt payments, past and present. Used by mortgage lenders in determining credit worthiness of individuals.
CREDITOR
A person to whom money is owed.
CREDIT REPORT
A detailed report of an individuals credit, employment and residence history prepared by a credit bureau. Used by lenders to determine credit worthiness of individuals.
CREDIT REPOSITORY
Large companies that gather and store financial and credit information about individuals who apply for credit.
CUL-DE-SAC
A dead-end street. One with only one entrance/exit.
DATE OF APPRAISAL
The specific point in time as of which an appraiser designates the value of a home. Often stipulated as the date of inspection.
DEBT
An obligation to repay some amount owed. This may or may not be monetary.
DEBT EQUITY RATIO
The ratio of the amount a mortgagor still owes on a property to the amount of equity they have in the home. Equity is calculated at the fair-market value of the home, less any outstanding mortgage debt.
DEED
A document indicating the ownership of a property.
DEED-IN-LIEU (OF FORECLOSURE)
A document given by a borrower to a lender, transferring title of the property. Often used to avoid credit-damaging foreclosure procedures.
DEED OF TRUST
A document which transfers title in a property to a trustee, whose obligations and powers are stipulated. Often used in mortgage transactions.
DEED OF RECONVEYANCE
A document which transfers ownership of a property from a Trustee back to a borrower who has fulfilled the obligations of a mortgage.
DEED OF RELEASE
A document which dismisses a lien or other claim on a property.
DEED OF SURRENDER
A document used to surrender any claim a person has to a property.
DEFAULT
The condition in which a borrower has failed to meet the obligations of a loan or mortgage.
DELINQUENCY
The state in which a borrow has failed to meet payment obligations on time.
DEPOSIT
Cash given along with an offer to purchase property, Also called EARNEST MONEY.
DEPRECIATION
The natural decline in property value due to market forces or depletion of resources.
DETACHED SINGLE-FAMILY HOME
A single building improvement intended to serve as a home for one family.
DISCOUNT POINTS
Points paid in addition to the loan origination fee to get a lower interest rate. One point is equal to one percent of the loan amount.
DISTRESSED PROPERTY
A mortgaged property which has been foreclosed on.
DOWNSPOUT
The pipe that water moves through to reach the ground from the rain gutter.
DUE-ON-SALE PROVISION
A clause in a mortgage giving the lender the right to demand payment of the full balance when the borrower sells the property.
DUPLEX
A single-building improvement which is divided and provides two units which serve as homes to two families.
DWELLING
A house or other building which serves as a home.
DOWN PAYMENT
An amount paid in cash for a property, with the intent to mortgage the remaining amount due.