Real Estate Investor And Investment,

REAL PROPERTY
Land and any improvements permanently affixed to it, such as buildings.

REFORMATION
A legal action to correct or modify a contract or deed which has not accurately reflected the intentions of the parties due to some mechanical error, such as a typo graphical error in the legal description.

ASSESSED VALUATION
The value of real property as established by the state government for purposes of computing real property taxes.

CAP RATE (CAPITALIZATION RATE)
The percentage selected for use in the income approach to valuation of improved property. The cap rate is designed to reflect the recapture of the original investment over the economic life of the improvement, to give the investor an acceptable rate of return (yield) on the original investment, and to provide for the return on borrowed capital.

DISCRIMINATION
The act of making a distinction against or in favor of a person on the basis of the group or class to which the person belongs; the failure to treat people equally.

BONA FIDE
In good faith.

DOWN PAYMENT
The amount of your home's purchase price you need to supply up front in cash to get your loan. For conventional loans, you should strive for a down payment that's at least 20% of your home's value, since lenders generally do not require private mortgage insurance with a down payment of at least 20% of your home's purchase price. (Note, however, that FHA and VA loans have different policies regarding insurance.)

MORTGAGE INSURANCE
Insurance to protect the lender in case you default on your loan. With conventional loans, mortgage insurance is generally not required if you make a down payment of at least 20% of the home's appraised value. (Note, however, that FHA and VA loans have different insurance guidelines.)

LAND DESCRIPTION
A description of a particular piece of real property.

DOWN PAYMENT
The amount of your home's purchase price you need to supply up front in cash to get your loan. For conventional loans, you should strive for a down payment that's at least 20% of your home's value, since lenders generally do not require private mortgage insurance with a down payment of at least 20% of your home's purchase price. (Note, however, that FHA and VA loans have different policies regarding insurance.)

ESCROW ACCOUNT
An account held by the lender to which the borrower pays monthly installments, collected as part of the monthly mortgage payment, for annual expenses such as taxes and insurance. The lender disburses escrow account funds on behalf of the borrower when they become due. Also known as Impound Account.

GROSS LEASE
A lease of property under which the lessee pays a fixed rent, and the lessor pays the taxes, insurance, and other charges regularly incurred through ownership.

TRANSFER TAX
Tax paid when title passes from one owner to another.

COVENANTS RUNNING WITH THE LAND
Covenants which become part of the property and benefit or bind successive owners of the property.

ABATEMENT
A reduction or decrease in amount, degree, intensity or worth.

REAL PROPERTY
Land and any improvements permanently affixed to it, such as buildings.

EXCHANGE
A transaction in which all or part of the consideration for the purchase of real property is the transfer of property of a like kind.

DISCOUNT POINTS (OR POINTS)
Points are an up-front fee paid to the lender at the time that you get your loan. Each point equals one percent of your total loan amount. Points and interest rates are inherently connected: in general, the more points you pay, the lower the interest rate you get. However, the more points you pay, the more cash you need up front since points are paid in cash at closing.

DUAL AGENCY
Representing both principals (buyer and seller) to a transaction.

SEPTIC TANK
A sewage settling tank in which part of the sewage is converted into gas and liquids before the remaining waste is discharged by gravity into a leaching bed underground.

VA LOANS
Fixed-rate loans guaranteed by the U.S. Department of Veterans Affairs. They are designed to make housing affordable for eligible U.S. veterans. VA loans are available to veterans, reservists, active-duty personnel, and surviving spouses of veterans with 100% entitlement. Eligible veterans may be able to purchase a home with no down payment, no cash reserve, no application fee, and lower closing costs than other financing options. The maximum VA loan amount is currently $203,000.

FORBEARANCE
The act by the lender of refraining from taking legal action on a mortgage loan that is delinquent.

MISREPRESENTATION
A false statement or concealment of a material fact made with the intent to induce some action by another party.

PREPAID INTEREST
Interest that is paid in advance of when it is due. Typically charged to a borrower at closing to cover interest on the loan between the closing date and the first payment date.

DENSITY
A term, frequently used in connection with zoning requirements, which means the maximum number of building units per acre or the number of occupants or families per unit of land area (acre, square mile, etc.); usually the ratio of land area to improvement area.

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.

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.

TRUST DEED
A real property security device (also called a deed of trust) very similar to a mortgage, except that there are three parties, the trustor, the trustee, and the beneficiary (the lender).