Real Estate Investment Book,

CLOSING STATEMENT
A detailed cash accounting of a real estate transaction prepared by an escrow officer or other person designated to process the mechanics of the sale, showing all cash that was received, all charges and credits which were made, and all cash that was paid out in the transaction; also called a settlement statement.

STATUTE OF LIMITATIONS
That law pertaining to the period of time within which certain actions must be brought to court.

GROSS AREA
The total floor area of a building measured from the exterior of the walls (excluding those unenclosed).

PRESENT VALUE OF ONE DOLLAR
A doctrine which is based on the fact that money has a time value. The present worth of a payment to be received at some time in the future is the amount of the payment less the loss of interest.

ECOA
See Equal Credit Opportunity Act.

SEVERALTY
Sole ownership of real property.

TAX SALE
Public sale of property by a government authority as a result of non-payment of taxes.

ANNUAL PERCENTAGE RATE (APR)
The cost of credit expressed as a yearly rate. The annual percentage rate is often not the same as the interest rate. It is a percentage that results from an equation considering the amount financed, the finance charges, and the term of the loan.

RECORDING
The act of entering documents concerning title to a property into the public records.

BALLOON MORTGAGE
Balloon mortgage loans are short-term fixed-rate loans with fixed monthly payments for a set number of years followed by one large final balloon payment ("the balloon") for all of the remainder of the principal. Typically, the balloon payment may be due at the end of 5, 7, or 10 years. Borrowers with balloon loans may have the right to refinance the loan when the balloon payment is due, but the right to refinance is not guaranteed.

ADHESION CONTRACT
A contract which is very one-sided and favors the party who drafted the document.

INITIAL RATE
The rate charged during the first interval of an ARM loan.

GOOD WILL
An intangible, salable asset arising from the reputation of a business.

ACCELERATED DEPRECIATION
A method of calculating the depreciation of certain property (that property which is used in a trade or business, or which is held for the production of income) at a faster rate than would be achieved from using the straight line method of depreciation.

SALE AND LEASEBACK
A transaction in which, typically, an owner sells his improved property and as part of the same transaction signs a long-term lease and remains in possession.

COURTESY TO BROKERS
The practice of sharing commissions with cooperating brokers.

LEASEHOLD
A less-than-freehold estate which a tenant possesses in real property.

NOTICE TO QUIT
A written notice given by a landlord to his tenant, stating that the landlord intends to regain possession of the leased premises and that the tenant is required to quit and remove himself from the premises either at the end of the lease term or immediately if there is a breach of lease or if the tenancy is at will or by sufferance; sometimes refers to the notice given by the tenant to the landlord that he intends to give up possession on a stated day.

TRADE FIXTURES
Articles of personal property annexed to leased premises by the tenant, as a necessary part of the tenant's trade or business.

NET LEASE
A lease, usually commercial, whereby the lessee pays not only the rent for occupancy, but also pays maintenance and operating expenses such as tax, insurance, utilities and repairs. Thus the rent paid is "net" to the lessor.

BUFFER ZONE
A strip of land separating one parcel from another.

ECOA
See Equal Credit Opportunity Act.

NEGATIVE AMORTIZATION
A loan payment schedule in which the outstanding principal balance of a loan goes up rather than down because the payments do not cover the full amount of interest due. The monthly shortfall in payment is added to the unpaid principal balance of the loan.

LATERAL AND SUBJACENT SUPPORT
The support received by a parcel of real property from the land adjoining it is called lateral support. Subjacent support is that support which the surface of the earth receives from its underlying strata.