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R

radon

A colorless and odorless gas produced from the decay of radioactive minerals in the ground. It is responsible for thousands of lung cancer deaths each year. In most states, brokers have to disclose any radon problems.


ready, willing, and able buyers

one who is prepared to buy property on the seller's terms and is ready to take positive steps to consummate the transaction.

real estate

is the land and the improvements - all that is permanently attached to it - either naturally (such as a tree) or by people (such as a building).

Although the land is commonly thought of as being the surface of the earth, it also includes the space above as well as everything below the surface. Theoretically, land extends from the center of the earth, through the surface of the earth and upward to infinity above the earth’s surface. As a practical matter though, the law imposes limitations and recognizes that land consists of the surface of the earth and everything below the surface to a reasonable depth; and everything above the surface to a reasonable height.


real estate cooperative

is a form of ownership where individuals or members form a business entity to acquire the ownership of the land and building. Although the physical appearance of the real estate is the same, the ownership interests are distinguished from other forms of ownership by the following:

  • Members of the coop own stock in the corporation – they do not own the real estate directly.
  • Taxes are assessed on the entire piece of real estate not on the individual units.
  • Mortgage or financing of the property is on the entire property not on the individual units.
  • Shareholders may experience difficulty obtaining a 'share' loan to finance equity using their stock and proprietary lease as security.
  • Members are obligated under Fair housing laws but can maintain control of new members by 'first right of refusal' on the sale of shares.

real estate education, research, and recovery fund

A state fund, supported either by part of the real estate licensing fees or by a special fee, used to promote real estate education and provide a source of financial relief for people injured by the fraudulent practices of a judgement-proof licensee.


Real Estate Settlement Procedures Act (RESPA)

a federal law, originally enacted in 1974, designed to fully advise buyers and sellers involved a real estate purchase of the full settlement costs. These disclosures prevented any participants in the transaction from charging kickbacks, fee-splitting, or referral fees that would elevate the costs for home buyers without their prior knowledge.


real property

refers to the “rights of ownership” in real estate. Often used interchangeably with real estate – and normally the distinction is not significant - but real estate refers to the land and improvements.

recording

is the process designed to provide a public system by which the ownership of real estate is reasonably ascertainable and thereby discourages or prevents fraudulent transfers.

For example, without a public record of real estate ownership, an unscrupulous tenant pretending to be the owner might be able to convince an unsuspecting purchaser to buy the property from him. Because of public records, the purchaser has the opportunity to examine ownership of the property and determine that the title is not held by the person claiming ownership. By examining the public records the purchaser can acquire the information and will be barred from claiming later that he did not know the seller was not the owner.

rectangular survey

method used to describe and identify large tracts of land. The need for the rectangular system arose out of the nations need to survey large public land areas that had been acquired after the nation was formed.

The rectangular survey system begins with an initial point – a fixed point with a known longitude and latitude from which all legal descriptions in that geographic area will be referenced. There are 32 such points across America – larger states may have more than one; while smaller states may not have any initial points – instead relying on one in an adjacent state. Florida, for example, has an initial point in Tallahassee – just one for the entire state.

A map of principal meridians and base lines created by the Public Land Survey System for the states which use this system can be found on the U.S. Department of the Interior - Bureau of Land Management website.

redlining

when lenders make loan decisions based on neighborhoods or locations where the residents are of a protected class. If the applicant resided in a location assessed by the lender to have high risk they were denied the loan.


Regulation Z

is issued by the Board of Governors of the Federal Reserve System to implement the federal Truth in Lending Act, which is contained in title I of the Consumer Credit Protection Act. This helps consumers uncover the true cost of obtaining credit.

The purpose of Regulation Z is to:
Promote the informed use of consumer credit by requiring disclosures about its terms and cost. The regulation also gives consumers the right to cancel certain credit transactions that involve a lien on a consumer's principal dwelling, regulates certain credit card practices, and provides a means for fair and timely resolution of credit billing disputes. The regulation does not govern charges for consumer credit. The regulation requires a maximum interest rate to be stated in variable-rate contracts secured by the consumer's dwelling. It also imposes limitations on home equity plans that are subject to the requirements of § 226.5b and mortgages that are subject to the requirements of § 226.32. The regulation prohibits certain acts or practices in connection with credit secured by a consumer's principal dwelling.

Release deed

used to give legal title from a trustee back to the trustor after a debt has been paid.


reliction

is the process which increases the size of land as a result of water receding.

For example, if a lake’s size is reduced by evaporation, the receding water leaves behind more land which becomes an extension of the original land area.

remainder

is a future interest held by anyone other than the grantor. For example, if “A transfers to B for life and then to C,” C would have a remainder interest. In that situation C would be called a remainderman.

rent analysis

close analysis of a property to see how much would be the appropriate price to rent it for.


replacement cost

is the cost to create or recreate a structure with similar utility as the original structure. The original building materials would be replaced with current construction materials which provide the same functionality.

reproduction cost

is the cost to create a replica of the structure being appraised. That is – an exact duplicate.

If the subject structure were built in 1960 with a foundation wall thickness of three feet (perhaps planning to use the basement as bomb shelter) the reproduction cost would include the current cost of a foundation wall three feet in width.

rescission

means to void, cancel, or withdraw approval of the agreement. There are two types of rescission mutual meaning both parties agree to rescind the agreement and unilateral when only one party withdrawls from a contract.

reserves for replacement

are allowances for losses occurring to short-lived components or equipment which have not yet required expenditure.

For example, in an apartment complex, each year a portion of the roof covering wears out and the annual depreciation in value from use is taken in account each year rather than the year in which the actual expenditure or replacement occurs.

retrospective appraisal

is a value estimate from a historic perspective; that signifies the effective date is in the past.

A common retrospective appraisal would be one completed for estate purposes where the value must be estimated back to the date of death.

Reverse mortgage

Mortgage that allows people 62 or older to borrow money against the equity they have built up in their real property.

Ex: " house rich - money poor" - often older individuals who may be on fixed income need or want additional supplemental income.


reversion

is future interest held by the transferor or grantor of an estate. For example, if “A transfers to B for life,” A would have a reversion in the property.

Right of redemption

borrowers have a period in which to redeem their real estate after the sale.


right of survivorship

characteristic of the form of ownership of joint tenancy where co-owners inherit property from each owner upon the death of a joint tenant.

riparian

rights afforded owners of land bordering on flowing water such as rivers or streams (and in some instances lakes) to have access to the water for reasonable uses.

risk management

Being able to look at the risk and evaluate them. Four options regarding risk are:

1.) Risk avoidance - Eliminate the risk if it does not interfere with the goals of an endeavor. For example: it would be fun to have a dog at a day care center, however, the dog may pose a risk to the children so getting rid of the dog eliminates the risk.

2.) If it can not be eliminated, it can be controlled. For example: no way to completely avoid a building from catching on fire but you can control a fire that may start by installing a sprinkler system, providing wall mounted extinguishers, practicing safe operating methods to minimize the likelihood of a fire starting.

3.) depending on potential amount of financial harm and risk takers ability to absorb the risk, it can be transferred to another party. This is where insurance comes into play.

4.) if a risk is necessary, unlikely to occur, and cost to use another method fails to justify the expense, the risk taker can simply accept the risk.


routine maintenance

day to day activities to keep up with the building and prevent future maintenance.

For example day to day activities: cleaning common areas, plumbing adjustments, also providing regular upkeep of air conditioning, heating, and landscaping.



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