Aceable Real Estate: Georgia Pre-Licensing

abstract of title

an abbreviated history of a property, including information on any transfers, grants, wills, conveyances, liens, and encumbrances

acceleration clause

a clause in a security instrument which makes the entire loan amount due immediately upon default

accession

is the right to all that one's own property produces, including that which is added, either naturally or by human action, to the property already owned.

accretion

the process that results in the gradual increase in land area through deposits of soil by natural forces

acre

a measurement of land equal to 43,560 square feet

actual eviction

the legal process by which someone is expelled from a property and prevented from re-entry

actual notice

when an individual actually knows of a fact

ad valorem taxes

a tax calculated according to the assessed value of a piece of real estate

adjustable-rate mortgage (ARM)

a mortgage with an interest rate that can be adjusted based on fluctuations in the cost of money

adverse possession

involuntary transfer of title from an owner who does not use or inspect their land for a number of years to another person who has some claim to the land and takes possession

agency agreement

a mutual binding understanding between two parties that authorizes another party to act on their behalf

agent

an individual with authority to act on behalf of another; a state license is required to operate as an agent in real estate

air rights

the right to use the airspace above the surface of land

air space

the area above ground that is owned along with a property. could include space above a piece of land, or the space owned inside a condominium unit.

alienation

the transfer of ownership (title) to real property. alienation may be voluntary or involuntary.

Americans with Disabilities Act

a federal civil rights law passed in 1990 which prohibits discrimination against and create standards for people with disabilities

amortization

the process of paying off a debt/mortgage in regular installments based on a fixed payment schedule

Annual Percentage Rate (APR)

how much the borrower will pay in interest over the course of a year

antitrust laws

laws designed at preventing unfair or anti-competitive practices such as price fixing, collusion, monopolies, etc.

appraised value

an estimation of property's value as of a specific date, performed by a certified appraiser

appraiser

an individual who is trained and licensed to perform appraisals, which estimate the value of real property

appreciation

the increase in value of a property

appurtenances

rights that run with real property ownership; most often transferred with the property, but possible to sell separately

asbestos

a naturally occurring mineral fiber that is commonly used in insulation but if airborne or inhaled, can cause severe respiratory health issues

assemblage

the combining of multiple contiguous pieces of real property into a single tract of land, often resulting in an increase in value

assessed value

the value placed on a property by a governmental unit for use in calculating property taxes

assessment

the determination of the value of a property for tax purposes

asset

item of value

assignment

the transference of rights and obligations in a contract from one party to another

associate broker

an individual who meets the licensure requirements to be a real estate broker but provides real estate brokerage services as an independent contractor to a real estate broker

avulsion

the sudden loss of land by flood or when a stream or river changes course.

balloon payment

a payment at the end of a loan period which includes the total outstanding balance of the loan.

bargain and sale deed

a deed without any covenants or warranties against encumbrances that only implies the grantor has possession of the property and holds the right to convey title

base line

an imaginary line of latitude used in the rectangular survey system of land description to identify townships in relation to proximity to a principal meridian

benchmark

permanent markers of known location and elevation above sea level as established by a government survey team (such as the USGS)

beneficiary

the recipient of advantage or gain from an act or instrument such as a trust, will, or insurance policy

bilateral contract

a contract wherein both parties are obligated to perform in an exchange of promises

binder

a preliminary agreement for the sale of a property secured by a valuable deposit from the potential buyer, which binds the seller to a good faith agreement to sell the subject property, provided that a sale contract meeting the conditions determined is executed within the prescribed period; also known as a Letter of Intent (LOI)

blanket mortgage

a loan for which more than one collateral property acts as security

block and lot system

a system of legal land description that identifies a piece of platted property by referring to the section, lot, and block numbers in a subdivision; a.k.a. the recorded plat method

blockbusting

the illegal act of causing owners to sell their homes by creating fear that members of a protected class are moving into the area

branch office

any office that is geographically separate from the main or home office

bridge loan

short-term loan used to transition from one loan to another; can connect borrower from construction loan to eventual mortgage loan (or current home to their new home)

broker

a person who is licensed to represent one of the parties in a real estate transaction in exchange for a commission or other valuable consideration

brownfield

real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant

building code

a set of regulations pertaining to building design, materials, safety, sanitation, and structure

bundle of rights

ownership of land with all of the legal rights of possession, control, quiet enjoyment, exclusion, transfer, and encumber

buydown

the paying of money upfront to reduce a loan's interest rate and monthly payments

buyer's market

any market that is experiencing an excess of sellers or supply, creating more favorable conditions for buyers.

capital expenditure

an expense paid in order to improve a property

capital improvement

any upgrade or improvement to a property that falls outside the scope of normal repair and maintenance, usually with the intention of increasing value

capitalization rate (cap rate)

a rate of return that calculates the percentage of expected annual income earned over a property's value; the present value for expected future income earned

carbon monoxide

an odorless, colorless gas that occurs as a by-product due to incomplete combustion when burning such fuels as wood, oil, and natural gas

cash reserve

a portion of funds allocated to pay for variable expenses

CERCLA

the Comprehensive Environmental Response, Compensation, and Liability act, aka the Superfund

certificate of occupancy (CO)

legal document from a local authority that authorizes a building to be occupied; issued after the building has passed all required inspections

certificate of title

a document prepared by a title attorney detailing the chain of title and offering an opinion on the marketability of the seller's title

chain of title

the entire chronological record of a property's ownership

chlordane

a chemical compound formerly used in pesticides that is dangerous to human health

chlorofluorocarbons (CFCs)

chemical compounds containing chlorine, fluorine, and carbon atoms that were once used in refrigerator coolant, air conditioners, and dehumidifiers

Civil Rights Act of 1866

a federal law that prohibits discrimination in housing based on race

cloud

any claim to or encumbrance on the title to a property which affects transferability

collateral

property liened by a lender in order to assure payment of the loan and protect the lender's investment

collusion

an unlawful agreement between competitors to monopolize a market, disadvantage other competitors, or otherwise undertake activities in violation of fair trade laws

color of title

a title transfer that is defective in a way that is unknown to the new owner

commingling

the illegal act of mixing personal funds with a client's funds

commission

the regulatory body responsible for regulating the brokerage industry and licensing real estate practitioners; formally known as the Georgia Real Estate Commission (GREC)

common elements

portions of a shared ownership property not controlled by any one owner or tenant. examples include parking lots, lobbies, fitness centers, elevators, etc.

common law

the side of law which arises from judgements and decisions made in courts rather than explicit legislation

community association manager

individual who provides administrative and operational services to a community association in exchange for consideration; requires specific licensure

community property

a system of property co-ownership, most commonly applied to married couples, which describes what is joint property and what is individual property

comparable (comp)

any property which has sold and is similar enough in features, location, and proximity in time to inform the value of a subject property

comparative market analysis (CMA)

a report that compares the prices of recently sold or listed homes ("comparables") in order to estimate the market value of a similar property (the "subject property") located in the same area

condominium

property where each owner has a separate interest in their own unit and undivided interest in the common areas

consideration

something of value exchanged by the parties as evidence of agreement to the terms of a contract

construction mortgage

a temporary mortgage used to finance a construction project

constructive eviction

the termination of a lease in circumstances in which the landlord defaults and acts, or fails to act, in such a way that the premises become unusable

constructive notice

when a property's ownership is recorded publicly, so everyone can know the contents of recorded documents

contingency

a provision within a contract that makes performance conditional upon the occurrence of a stated event

contract

a legally enforceable and binding agreement between parties wherein a promise to do or not do something is given in exchange for valuable consideration

contract for deed

a sales contract in which the buyer pays the seller for the property in multiple installments for a predetermined length of time, and the seller holds the title until the property has been fully paid for; also known as an installment sales contract or land contract

contribution

the amount of market value added to a property by an addition or improvement to the property; not necessarily the same as the cost of the improvement

conventional life estate

is a life estate in which the measuring life is that of the life tenant; it is an estate created by a deed that lasts for the duration of the tenant's life

conventional loan

any loan that is neither insured by the government nor guaranteed by the government

conversion

changing real property to personal property, and vice versa; also the illegal act of mixing a fiduciary's funds with an agent's personal funds

conveyance

an instrument that transfers a grantor's interest in real property

cooperating brokerage

an agency arrangement in which two brokerages collaborate to achieve a real estate transaction for a specific piece of property.

corrective maintenance

the repair or restoration of equipment after it has broken

cost approach

method of estimating the value of a property by determining how much it would cost to replace the building or other improvements, minus the cost of depreciation, plus the value of the land itself

counteroffer

a contract proposal submitted in response to a previous offer, modifying the terms of the original offer; considered a rejection of the original offer

covenant of seisin

a protection in which the grantor states they hold the title conveyed in the deed, a.k.a. covenant of seizin

covenants, conditions, and restrictions (CCRs)

private restrictions similar to deed restrictions that dictate what homeowner may do with their property

credit report

contains information regarding an individual's credit history (loan payments, etc.) as well as the present credit status of all open credit accounts

credits

sum of money that is received

curtesy/dower

the right of a spouse to inherit property held in their spouse's name after that spouse dies; dower is the word used for women, curtesy for men.

customer

an individual with whom a license holder has no agency relationship nor fiduciary duties but to whom fairness and honesty are still required

datum

a designated base reference point to elevation used by surveyors to determine the elevations of land or property in an area

debits

sum of money that is owed

debt service

current debt obligations

Debt Service Coverage Ratio

used to evaluate income-producing properties; is calculated by dividing the net operating income (cash flow after all expenses and debts are paid) by total debt service (current debt obligations)