Real Estate Glossary


Terms and concepts to improve your real estate understanding.
Browse the glossary using this index

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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 the land. Although the land is commonly thought of as being the surface of the earth, it also includes the space above the surface to a reasonable height as well as everything below to a reasonable depth.

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a federal law, originally enacted in 1974, designed to fully advise buyers and sellers involved a real estate purchase of the full settlement costs.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.


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