Alternative Investment Real Estate,

DEPRECIATION (TAX)
For tax purposes, depreciation is an expense deduction taken for an investment in depreciable property.

DURESS
Unlawful constraint or action exercised upon a person whereby he is forced to perform some act against his will. A contract entered into under duress is void.

LIEN
A charge or claim which one person (lienor) has upon the property of another (lienee) as security for a debt or obligation. Liens can be created by agreement of the parties(mortgage) or by operation of law (tax liens).

LIFE ESTATE
Any estate in real or personal property which is limited in duration to the life of its owner or the life of some other designated person.

FIRST REFUSAL, RIGHT OF
The right of a person to have the first opportunity either to purchase or lease real property.

LIEN
A charge or claim which one person (lienor) has upon the property of another (lienee) as security for a debt or obligation. Liens can be created by agreement of the parties(mortgage) or by operation of law (tax liens).

MARKET VALUE
The highest price, estimated in terms of money, which a property will bring if exposed for sale in the open market, allowing a reasonable time to find a purchaser who buys with knowledge of all the uses to which the property is adapted and for which it is capable of being used.

GOVERNMENT SURVEY
A system of land description in which large blocks of land are divided into tracts bounded by imaginary lines conforming to the true meridian.

APPLICATION FEE
Fee charged by a lender to cover the initial costs of processing a loan application. The fee may include the cost of obtaining a property appraisal, a credit report, and a lock-in fee or other closing costs incurred during the process or the fee may be in addition to these charges.

JUNIOR MORTGAGE
A mortgage which is subordinate in right or lien priority to an existing mortgage on the same realty, such as a second mortgage.

FHA LOANS
Fixed- or adjustable-rate loans insured by the U.S. Department of Housing and Urban Development. FHA loans are designed to make housing more affordable, particularly for first-time homebuyers. FHA loans typically permit borrowers to buy a home with a lower down payment than conventional loans. With FHA insurance, eligible buyers can purchase a home with a down payment as little as 3% of the appraised value or the purchase price, whichever is lower. FHA borrowers typically are required to participate in a face-to-face meeting with their lender or a government approved mortgage counselor prior to closing on a new mortgage loan. The current FHA loan limits vary depending on home type and home location. To find the most recent limits for your home, consult the FHA Maximum Mortgage Limits web page.

CLEAR TITLE
Title to property that is free from liens, defects or other encumbrances, except those which the buyer has agreed to accept, such as mortgage to be assumed, the ground lease of record, and the like; established title; title without clouds.

RIGHT TO RESCISSION
Under the provisions of the Truth-in-Lending Act, the borrower's right, on certain kinds of loans, to cancel the loan within three days of signing a mortgage.

LIBOR (LONDON INTERBANK OFFERED RATE)
The interest rate charged among banks in the foreign market for short-term loans to one another. A common index for ARM loans.

LINE OF CREDIT
A maximum amount of money a bank will lend one of its more reliable and credit worthy customers without need for any formal loan submission.

DEED
A written instrument by which a property owner "grantor" transfers to a "grantee" an ownership in real property.

FARM AREA
A selected geographical area or one specific building to which a real estate salesperson devotes special attention and study.

EXTENDER CLAUSE
A "carry over" clause (referred to as a safety clause) contained in a listing which provides that a broker is still entitled to a commission for a set of period of time after the listing has expired if the property is sold to a former prospect of the broker.

LETTER OF INTENT
An expression of intent to invest, develop or purchase without creating any firm legal obligation to do so.

GARNISHMENT
A legal process designed to provide a means for creditors to safeguard for themselves the personal property of a debtor which is in the hands of a third party ("garnishee").

DEED OF TRUST
A legal document in which title to property is transferred to a third party trustee as security for an obligation owed by the trustor (borrower) to the beneficiary(lender).

RIGHT TO RESCISSION
Under the provisions of the Truth-in-Lending Act, the borrower's right, on certain kinds of loans, to cancel the loan within three days of signing a mortgage.

REPRODUCTION COST
The cost, on the basis of current prices, of reproducing a new replica property with the same or fairly similar material.

BREACH OF CONTRACT
Violation of any of the terms or conditions of a contract without legal excuse; default, non-performance, such as failure to make payment when due.