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CAI – See Community Associations Institute.

Calendar year – A 12-month period starting on January l and continuing through December 31 of a specific year.

California bungalow – An early twentieth-century small, compact, one-story house.

California ranch house – A sprawling one-story house that is easily adapted to floor plan variations.

Call provision – A loan clause that gives the lender the right to accelerate the debt upon the occurrence of a specific event which is normally an attempt to sell. See Acceleration clause and Alienation clause.

Called loan – A loan that is due and payable at the demand of the lender usually as a result of an acceleration or alienation clause becoming effective. See Acceleration clause and Alienation clause.

CAM – See Common Area Maintenance.

Cancellation clause – A provision in a contract that gives a party the right to terminate his or her obligations upon the occurrence of specified conditions or events.

Cap (interest rate) – The maximum interest rate increase allowable on an adjustable rate mortgage placed on the adjustments to protect the borrower from large increases in the interest rate or the payment level and which does not result in negative amortization. See Annual cap, Payment cap and Negative amortization.

Cap (payment rate) – The maximum payment amount increase allowable on an adjustable rate mortgage which may result in negative amortization. See Annual cap, Payment cap and Negative amortization.

Cap rate – See Capitalization rate.

Capacity – The legal ability of a person or entity to enter into a legally binding contract and to perform certain other civil acts such as making a will.

Capacity of parties – A requirement of a valid contract. Parties having less than full capacity include minors, persons adjudged mentally incompetent or are intoxicated.

Cape Cod architecture – A style featuring a steeply sloped gable roof with dormer windows for the second-story rooms, windows with shutters, a square chimney and usually having Early American decor.

Capital – 1. A sum of money used to purchase long-term assets. 2. Stocks, bonds, or mortgages that were sold to raise money to purchase assets, as well as retained earnings. 3. Assets, other than land, used to generate income.

Capital appreciation – That increase in value accruing to the benefit of a capital improvement to the real estate.

Capital assets – Any asset of a permanent nature used for the production of income (land, buildings, machinery, equipment, etc.) which under income tax law, is normally distinguishable from inventory which are assets held for sale to customers in the ordinary course of the taxpayer’s trade or business.

Capital expenditure – The cost of a capital improvement such as investments in land, buildings, machinery, and equipment.

Capital gain – The income earned from a capital item that resulted from the sale of an asset and not in the usual course of business, the amount by which, the net sale proceeds exceeds the adjusted cost basis or its book value and is used for income tax computations and are taxed at a lower rate than ordinary income. See Capital loss.

Capital improvement – A structure erected as a permanent improvement to real estate, usually extending its useful life and the value of a property like a roof replacement.

Capital loss – A tax-deductible loss on real property which has been held for more than six months. See Capital gain.

Capital market – That portion of the funds’ market where equities, mortgages, and bonds are traded.

Capital market – The current activities of all lenders and borrowers of equity and long-term debt funds.

Capital recapture – The manner in which the investment in a property is to be returned to investors which is normally stated as a rate or a dollar amount over a unit of time.

Capitalism – An economic system based on the principles of ownership of private property, equality and personal rights.

Capitalization – A process of reflecting future income as present value by dividing annual net operating income by its capitalization rate which is the most reasonable percentage of return on the investment.

Capitalization in perpetuity – A capitalization without any time limit.

Capitalization rate – The rate made up of the return on the investment plus the return of the original investment that would be considered to be a reasonable return on the investment and which is used in the process of determining value based upon net income.

Capitalize – An estimation of an income stream to determine its present lump sum value. See Capitalization rate.

Carryback Financing – A financing arrangement in which the seller takes back a note for part of the purchase price which is secured by a junior mortgage, a wraparound mortgage or a land contract.

Carrying charges – The charges involved in holding property like the property tax expense paid on vacant land or on property under construction.

Carryover – The adjusted tax basis of the surrendered property in a tax-deferred exchange that is used to determine the tax basis of the property acquired. See Basis.

Casement window – A wood or metal window having frames which swing outward.

Cash disbursements journal – A record of all cash payments actually made.

Cash equivalent – The conversion of the price a piece of property sold for, with either favorable or unfavorable financing, into the price the property would have sold for had the seller accepted an all cash transaction.

Cash flow – The net income generated by a property before depreciation and other non-cash expenses.

Cash method – An accounting method that calls for income and expenses to be booked when the funds are received or the obligation is paid. See Accrual method.

Cash receipts journal – A record of all funds received.

Cash rent – The amount of money given to the landowner as rent under an agricultural lease at the beginning of the lease as opposed to sharecropping.

Casualty insurance – A type of insurance that protects a property owner from claims arising from damage to his or her own property such as fire or theft. See Liability insurance.

Caveat emptor – A common law concept which from the Latin means let the buyer beware which is no longer in use which expresses the general concept that in the absence of any misrepresentation, the buyer must examine the goods or property and purchase at his or her risk and that no express nor implied warranties are being made by the seller.

Cavity wall – A thin, non-load-bearing wall supported by the structure

CC&Rs – See Covenants, Conditions and Restrictions.

CD – Certificate of Deposit.

Cease and desist order – An order by a court or administrative agency prohibiting a person or business from continuing an activity such as when used in real estate brokerage to prevent antitrust behavior among firms or in illegal discrimination.

Census tract – A geographical area mapped by the U.S. government for which demographic information is available for use by retailers, real estate developers, and brokers to estimate consumer purchasing power in a market area.

Central business district – The downtown office and shopping area of a city.

Central city – 1. The downtown area of a city. 2. A city that is the center of a geographic trade area for which it performs certain market and service functions.

Certificate of clearance – A certificate obtained from the state showing that no sales tax is due from the seller of a business and protects the buyer from successor’s liability. Also called a clearance receipt.

Certificate of Deposit, CD – A type of savings account that carries a specified minimum deposit and term and generally provides a higher yield than passbook-type savings accounts.

Certificate of eligibility –The evidence issued by the Department of Veterans Affairs of a veteran’s eligibility to obtain VA loan.

Certificate of insurance – A document issued by an insurance company to verify the existence of coverage.

Certificate of no defense – An instrument executed by the mortgagor – borrower – upon the sale of the mortgage, to the assignee as to the validity of the full mortgage debt. See Estoppel certificate.

Certificate of Occupancy, COO – A document issued by a local government to a developer or in some cases others which permits a structure to be occupied by the general public and generally indicates that the building is in compliance with public health and building codes.

Certificate of Reasonable Value, CRV – A Federal VA appraiser’s written opinion as to the value of a property.

Certificate of sale – A document issued to the highest bidder at a tax foreclosure sale to indicate ownership but which does not convey actual title but indicating that all past due taxes have been paid and that title will pass upon the expiration of thestatutory redemption period.

Certificate of taxes due – A written statement or guaranty of the condition of the taxes on a certain property made by the Treasurer of the county in which the property is located and any loss sustained due to an error in the tax certificate will be paid by the reporting county.

Certificate of title – In areas where attorneys examine abstracts or chains of title, a written document issued by an attorney or a qualified person who has examined the record of the real estate title and stating that the seller has clear legal title and that it is vested as stated in the abstract.

Certificates of beneficial interest – A written document that identifies an owners shares in a business, trust or mutual fund.

Certified general appraiser – A person qualified to appraise any property under the appraiser certification law adopted by most states which requires at least two years of general appraisal experience, specified hours of education and the passing of a state examination.

Certified Property Manager, CPM – A designation granted by the Institute of Real Estate Management that shows competency in the management of real property.

Certified residential appraiser – A person qualified under appraiser certification law to appraise residences of up to four housing units and which requires less education, less experience and a less comprehensive examination than the certified general appraiser.

Certified Residential Specialist, CRS – The designation awarded by the Residential Sales Council based on education and experience in residential sales to candidates holding the GR1 designation.

Certiorari – An appellate court proceeding to reexamination the action of an inferior tribunal or an auxiliary process to enable the appellate court to obtain further information in a pending cause.

Cestui que use – A party who has the right to receive the profits and benefits of the lands or tenements, the legal title and possession of which are held by another person as trustee.

Chain – 1. A chain is composed of interconnected wire links. 2. A surveyor’s chain measures 66 feet in length with each link being 7.92 inches One acre is 10 square chains. An engineer’s chain consists of 100 interconnected wire links each being one foot in length.

Chain of title – A history of all conveyances and encumbrances affecting the title from the time the original patent was granted or as far back as records are available and identifies how title came to be vested in current owner.

Chancellor – The name given in some states to the judge of a court of chancery or equity.

Chancery – A court of equity in which the system of jurisdiction is administered.

Change order – The instructions which can be costly to revise completed construction plans.

Character of soil – The nature of land which may be sandy, adobe, rocky, fertile, etc.

Characteristics – The distinguishing features of a property.

Chattel mortgage – A claim on personal property rather than on real property used to secure or guarantee a promissory note used to acquire personal property.

Chattel real – An intangible personal property right which is attached to or annexed to real estate of which a lease on real property is an excellent example.

Chattel –The goods or every type of personal property that is movable or immovable and which are not real property. See Personal property or Chattel real.

Chose – A French word meaning thing and sometimgs used as a legal term for an article of personal property. See Chose in possession and Chose in action.

Chose in action – An intangible personal right to something not presently in the owner’s possession but would be recoverable by a legal action for possession.

Chose in possession – A tangible article of personal property in the owner’s possession.

Chronological age – The age of a something as determined by the number of years it has been in existence.

Circuit breaker – 1. An electrical device replacing fuses that is used to protect electrical circuits and which automatically breaks the circuit when an overload occurs and which can be reset. 2. A method for granting property tax relief to the elderly and disadvantaged qualified taxpayers by rebate, tax credits or cash payments which is usually limited to homeowners and renters.

Circulating fireplace – A type of fireplace which is built around a metal form, containing air ducts to distribute heat by convection.

Circumference – The distance around the exterior boundary of a circle.

Civil action – Any lawsuit between private parties.

Civil Rights Act of 1866 – An Act that prohibits racial discrimination in the sale and rental of housing.

Claim of right – An aspect of adverse possession or easement by prescription whereby a person occupies property even though having no legal right to title but still claiming such a right under a claim of right such as when the adverse user or possessor treats the land as his or her own, or under a color of title such as when they have some reason to believe that they hold title. See Color of title.

Clapboard – The boards used as house siding which are usually thicker one one edge.

Class A building – An attractive and efficient building of high quality that is sought by investors and prestigious tenants and is well designed and constructed with above-average material, workmanship and finishs and is excellently maintained and managed especially and are the most desirable in their markets.

Class B building – An building that offers useful space without special features and has a functional layout and design although not unique and maintenance and management average to good which is usually from 10 to 50 years old.

Class C building – A typically older building that offers space without amenities with average to below-average maintenance and management and having average to poor mechanical, electrical, ventilation systems that attracts moderate- to low-income tenants who need affordable space.

Class of property – A subjective division of buildings as to their desirability to tenants and investors which is based on age, location, construction quality, attractiveness of style, level of maintenance, etc.

Clear title – A title free of any encumbrances or defects.

Clearance receipt –See Certificate of clearance.

Client – A principal.

Close – 1. A parcel of land enclosed by a fence, hedge or visual enclosure. 2. The completing of a transaction at which time real estate formally changes ownership.

Close of Escrow – The date the documents are recorded and title passes from grantor to grantee and becomes the legal owner and when the title insurance becomes effective.

Closed-end loan – A mortgage loan that does not permit additional principal payments during the loan period and is the opposite of an open-end loan.

Closing – 1. A meeting at which all the parties to a real estate transaction conclude their details and deliver the title to real estate and the disburse funds pursuant to the sales contract. 2. The final step in the real estate sales process where the sales and loan process is completed by the execution of documents for recording. In states which use the escrow process, it is known as the closing of escrow. 3. Sometimes referred to as funding the loan. 4 A point in the description of real property by courses and distances at the boundary lines where the lines meet to include the entire tract of land.

Closing costs – The miscellaneous expenses buyers and sellers normally incur at settlement in the transfer of ownership of real property over and above the cost of the property such as recording fees, attorney fees, title insurance premium, etc.

Closing date – See Date of closing.

Closing statement – 1. A separate accounting of funds to the buyer and seller as required by law at the completion of every real estate transaction. 2. In almost all residential loan closings, a HUD-1 statement serves as the closing statement.

Cloud on the title – Any outstanding claim, lien, encumbrance, document or condition usually revealed by a title search which if valid, adversely impairs the title and the marketability of a property until it is removed by a quitclaim deed or quiet title court action.

Cluster development – A housing arrangement in which units are placed close together to allow for larger common or recreational areas.

Clustering – The grouping of home sites within a subdivision on smaller than normal lots where the remaining land is used as common areas.

Code of ethics – A writing of a professional group setting forth a standard of acceptable conduct about the relationship of its members to each other, to the general public and to the organization which the members agree to abide by.

Codicil – An addition to or amendment of a person’s last will and testament.

Cognovit clause – A waiver of any defense to the claim in which the borrower confesses judgment or gives written authority to the lender to secure a judgment that can be attached to the borrower’s property as a lien.

Cognovit note – A note which authorizes a confession of judgment and admission of the validity of a claim for money. See Confession of judgment.

Coinsurance – A clause in a real property fire insurance policy under which each of two or more insurers, one of whom can be the owner, assumes a stated portion of the liability for the actual replacement cost of the property and assumes liability for only their portion of any loss.

Collar beam – A beam that joins together the pairs of opposite roof rafters above the attic floor.

Collateral security – An additional separate obligation of real or personal property having marketable value that in addition to the personal obligation of the borrower is attached to a contract to guarantee its performance such as by agreeing to transfer certain property or valuables to insure the performance of the contractual agreement.

Collusion – A secret agreement or conspiracy between two or more parties to defraud another of his or her lawful rights or to obtain a forbidden lawful object.

Colonial architecture – The traditional design, usually using the characteristics of New England homes that is usually a two-story house with balanced openings along the main facade, with windows constructed of small panes, shutters and dormer windows on the third floor with attention to small detail.

Color of title – A written document that appears to be good title but which in fact is not, usually because the grantor either did not hold title or the document given was a defective mode of conveyance.

Combed plywood – A type of building plywood that is grooved and used mainly for interior finish.

Combination door – A permanent door that uses a screened panel in summer and glass panel in winter.

Commercial acre – A term applied to the remainder of an acre of newly subdivided land after the area devoted to streets, sidewalks and curbs, etc. has been deducted from the original acre.

Commercial bank – A national or state-chartered bank which operates on a basis of stock ownership and where the dividends are distributed to the shareholders and where the depositors have no share in the management.

Commercial broker – A party who lists and sells commercial property such as shopping centers, office buildings, industrial complexes and apartment projects. See Residential broker.

Commercial loan – A short-term, unsecured personal loan from a commercial bank for purposes other than a mortgage.

Commercial mortgage banker – A person who works for a bank who is in the business of making commercial mortgage loans and who is typically paid a commission based on a small percentage such as less than one percent of the loan.

Commercial paper – A negotiable instrument such as a promissory note, letter of credit and bills of exchange used in place of money and developed under merchant law.

Commercial property – The land or real property improvements intended for use in a business area.

Commingle – An illegal mix of the of a client’s or customer’s funds with a broker’s own personal funds.

Commingling – An illegal act by a real estate broker of mixing the funds of a client or customer with the broker’s personal funds rather than in a separate trust or escrow account.

Commission – The compensation or fee for services that a broker receives for performing the agreed-upon terms under a brokerage contract which in the practice of real estate is usually a percentage of the selling price of a property, a percentage of rentals, or a flat fee.

Commission split – 1. A previously-agreed upon sharing of funds by a listing broker with one or more cooperating brokers when a commission or funds have been received as a result of a sale. 2. A previously-agreed upon sharing of funds between a broker and a sales-associate when the brokerage office receives a commission or funds as a result of a sale made by an sales associate.

Commitment – A binding contract with a title company to issue a specific title policy showing only those exceptions contained in the commitment and any intervening matters after the date of the commitment and prior to the effective date of the policy which contains all information in the preliminary title report, plus a list of the title company’s requirements to insure as well as the standard exceptions from coverage that will appear in the policy.

Commitment – A pledge or a promise or firm agreement to do something in the future, such as a loan company giving a written commitment with specific terms of mortgage loan it will make. See conditional mortgage commitment and firm commitment.

Commitment fee – A charge made at the time of a loan application by a lender to lock in or guaranty specific terms.

Commitment letter – An official notification by a lender of the intent to grant a loan to a borrower which specifies the terms of the loan and a closing date.

Common area – The entire common interest in a subdivision except for its separately-owned interests.

Common Area Maintenance, CAM – An amount charged to tenants to pay for maintainance expenses such as hallways, restrooms, parking lots and other common areas.

Common elements – The parts of a property that are normally used in common by all of the property’s occupants and which are necessary or convenient to the existence, maintenance, and safety of the peoperty and in which each owner, resident or occupant has an undivided ownership interest. See Common property.

Common interest developments – A project with individual ownership of buildings or units but common ownership of the land as found in condominiums and planned unit developments.

Common interest subdivision – A development with subdivided land such as condominiums and stock cooperatives which include a separate interest in real property as well as an interest in common with other owners which can be through membership in an association.

Common law – 1. The body of law that grew out of the customs and practices and court decisions developed and used in England from as long ago as people can remember. 2. The rules developed by usage and often thought of as judge-made law.

Common property – 1. Land considered to be public property. 2. A legal term denoting an incorporeal hereditament consisting of a right of one person in the land of another such as a right to fish.

Common stock – A class of corporate stock to which ordinarily there is no attached preference as to the receipt of dividends or the distribution of assets on corporate dissolution.

Common wall – A wall which simultaneously serves two dwellings.

Community apartment project – An unincorporated apartment building with multiple owners who each is a tenant in common and who has the right to occupy one of the apartments.

Community association – A general name for an organization of property owners established to manage some common interest subdivision such as a condominium or planned unit development association and is responsible for managing the common elements.

Community association management – A company consisting of property managers, office and bookkeeping staff and consultants formed to manage association type property.

Community Associations Institute, CAI – A national association of homeowners’ associations.

Community driveway – A driveway which is jointly owned, used and maintained by two or more persons where typically a portion of each owner’s property is burdened by it.

Community property – In eight western states, the property acquired by husband and/or wife or both during a marriage which gives each spouse an equal interest in the property whether the other spouse’s name appears in title or not and which was not acquired with the intention of being the separate property of either spouse.

Community Reinvestment Act of 1977, CRA – An Act where financial institutions are charged to meet the deposit and credit needs of their communities; participate in loan programs for housing, small businesses, etc. and invest in local community development and rehabilitation projects. See Financial Institutions Reform, Recovery, and Enforcement Act, FIRREA

Compaction – The act of adding pressure to soil that has been added to fill in low places or to raise the level of the lot so that it will be able to bear the weight of buildings without the danger of their settling, tilting or cracking.

Comparable sales – See Comparables.

Comparables – The properties which are commonly called comps that are used in the appraisal process that have recently sold which have substantially equivalent characteristics and are situated in a similar market as the subject property which are used for value analysis to determine the selling prices of the subject property.

Comparative Market Analysis, CMA – A comparison of recently-sold homes that are substantially equivalent to each other in terms of selling price, location, style and amenities. Also know as a Competitive Market Analysis.

Comparison approach – A real estate method that compares a particular property with similar or comparable surrounding properties in order to determine value of the subject property. Also called market comparison.

Compensating balance – A requirement of a commercial bank for a borrower to keep a specified amount of funds on deposit in the institution as a loan condition or for a line of credit.

Compensation – The money or an equivalent to money that is received for services rendered.

Competence – Something under the law of evidence that is of such form as to be admissible in court for use as evidence.

Competent party – A legal or natural person who is legally qualified and mentally capable to transact business.

Competitive Market Analysis, CMA – See Comparative Market Analysis.

Complainant – The party who instigates or starts a legal action.

Complete appraisal – A professional opinion of value without invoking the departure provision of USPAP because all relevant appraisal approaches have been included and which may be a self-contained appraisal report, a summary appraisal report or a restricted appraisal report and which is different than a limited appraisal.

Completion bond – A bond guaranteeing that the proposed construction of an improvement for which a lender has advanced money to an owner will be completed according to its specifications and be free and clear of all mechanics liens.

Compound interest – The interest paid on original principal and on the accrued and unpaid interest that has accumulated as the debt matures until the time it becomes due.

Comprehensive Environmental Response, Compensation and Liability Act, CERCLA – An act which established the Superfund to clean up uncontrolled hazardous waste sites.

Comprehensive plan – See Master plan.

Comps – An appraisal term meaning comparables.

Computerized loan origination, CLO – A system of electronic loan application networks where computers linked to the remote computers of many lenders.

Concentric circle hypothesis – A belief that transportation is the central force in community growth, thus producing the highest land values where mobility is the greatest.

Concentric circle theory – The rings that go around a nucleus which in real estate are the rings of neighborhoods or business properties surrounding the city center.

Concession – A benefit granted by a seller to induce a buyer to make an offer.

Conclusion – An appraiser’s certified conclusion set out in an appraisal of the final estimate of value realized from facts, data, experience and judgment.

Conclusive evidence – That evidence that is incontrovertible and cannot be disproven.

Condemnation – 1. The act by which property of a private owner is taken for public use by a political subdivision without the owner’s consent but with the owner’s awareness and with the payment of just compensation. 2. A declaration that a structure is unfit for use. See eminent domain.

Condition – 1. In contracts, a future and uncertain event that must happen to create an obligation or which extinguishes an existing obligation. 2. In conveyances of real property, those conditions in the conveyance that may cause an interest to be vested or defeated.

Condition precedent – A qualification of a contract or transfer of property, providing that before which, unless and until a given event occurs, the full effect of a contract or transfer will not take place.

Condition subsequent – A condition attached to an already-vested estate or to a contract whereby the estate is defeated or the contract extinguished through the failure or non-performance of the condition.

Conditional commitment – A promise of a definite loan amount for some future unknown purchaser with a satisfactory credit standing.

Conditional estate – Often called a fee simple defeasible estate that is granted subject to a condition subsequent or after transfer of title and which terminates upon the happening of the stated condition.

Conditional mortgage commitment – A written statement by a lender that funds will be provided if certain terms and conditions are met and which permits an owner or developer to begin construction.

Conditional offer – A purchase contract presented to a seller that demands that one or more items be satisfied before the buyer is obligated to buy.

Conditional sale – A sale in which a seller continues to hold title to the goods and where possession is delivered to the buyer and the title is transferred only when the purchase price has been paid in full.

Conditional sales contract – See Land contract.

Conditional use permit – The written governmental permission that allows a use that is inconsistent with current zoning such as allowing a medical office in a predominantly residential area so it can serve the common good.

Conditional vendee – The buyer under a conditional sales contract or land contract.

Conditional vendor – The seller under a conditional sales contract or land contract.

Condo – A short name for a condominium.

Condominium – An estate in real property where there is an undivided interest in common in a portion of the real property that is coupled with a separate interest in space called a unit, the boundaries of which are described on a recorded final map, parcel map or condominium plan and may be filled with air, earth or water or any combination and need not be attached to land except by easements for access and support.

Condominium conversion – A process by which rental units are turned into individually owned condominium units.

Condominium declaration – A legal document used to create and establishe a condominium which includes a description of the property and the uses to which it is restricted, a description of individual ownership units, common elements and procedures for amending the declaration and describes the property rights of the unit owners.

Conduit – A metal pipe through which electrical wiring is installed.

Confession of judgment – A judgment resulting from a legal proceeding that is placed on a debtor as as result of his or her voluntary admission and without presenting any defense. See Cognovit note.

Confirmation – The ratification of a transaction that is able to be voidable.

Confirmation of sale – A court approval of the sale of property by an executor, administrator, guardian or conservator of an estate.

Confiscation – The seizure of property without compensation.

Conflict of interest – A situation in which an official or fiduciary decision maker is faced with a possible decision from which he or she stands to personally gain and so the decision maker must step down from one role or the other.

Conforming loan – A mortgage that is eligible to be purchased by FMNA or FHLMC.

Consent – 1. An agreement to do or not to do something. 2. Mutual consent of all parties is one of the four essential elements of any valid contract.

Consent decree – A judgment whereby the defendant agrees to stop the aledged illegal activity without admitting any wrongdoing or guilt.

Consequential damage – The impairment of value arising out of an indirect act.

Conservation – The process of saving resources or of using them in such a way that minimizes their depletion.

Conservator A person appointed by the court to administer and care for the person and property of an incompetent adult or an adult unable to care for themselves because of health to ensure that the property will be properly managed.

Consideration – 1. Anything necessary for a contract to be enforceable that is promised or given of value such as money by one party to induce another party to enter into a contract for real property, personal property or personal services which could be a benefit conferred upon one party or a detriment suffered by the other party. 2. That received by the grantor in exchange for his or her deed.

Consolidation loan – A new loan that pays off one or more existing loan and usually provides better repayment terms.

Conspicuousness – A factor of publicity value that is of great importance to a business which is typically dependent upon advertising.

Constant – The percentage which, when applied directly to the face value of a debt, develops the annual amount of money necessary to pay a specified net rate of interest on the reducing balance and to liquidate the debt over a specified period of time.

Constant payment loan – A loan reduction plan whereby the borrower pays a fixed amount each month, a part of which is applied to the payment of interest and the remainder to the repayment of the principal.

Construction lender – A party that makes loans to build improvement. See Permanent lender.

Construction loan – A loan that is made to finance the actual construction of improvements on land and the funds are usually dispersed in three payments as the construction progresses.

Constructive eviction – A breach of a covenant or a warranty or quiet enjoyment like the inability of a lessee to obtain possession because of a major defect in title or a condition making occupancy hazardous or unfit for its intended use.

Constructive fraud – 1. A breach of duty without any fraudulent intent such as when a person in a fiduciary capacity takes advantage of another person by misleading them to into a prejudiced position. 2. Any act of omission declared by law to be fraudulent and not being actual fraud. 3. Also known as passive fraud.

Constructive notice – 1. A fact, imputed or knowable to a person under law which a person could have discovered if the person had actual notice or that a prudent person’s inquiry into the public records of a county would have revealed. 2. Notice of the condition of title to real property given by governmental official records and which does not require actual knowledge of the recorded information.

Constructive severance – A way of separating land from fixtures by contract or from appurtenances such as by selling or mortgaging crops before they are harvested, severed, which converts them into personal property.

Constructive trustee – A trustee by operation of law that is the result of the unlawful possession of someone else’s property.

Consultant – An advisor on matters who receives a fee for his or her services and advice.

Consumer goods – The goods used or purchased primarily for personal, family or household purposes.

Consumer Price Index, CPI – The most widely known of many such measures of price levels and inflation that are reported to the U.S. government it measures and compares, from month to month, the total cost of a statistically determined typical market basket of goods and services consumed by U.S. households.

Contaminant – A hazardous substance, element or compound such as asbestos, benzene, radon, PCBs, perchloroethylene, and lead-based paint that is above acceptable levels and/or in locations where they should not be found that may be harmful to humans or other forms of life if released into the environment.

Contemporary architecture – A modern design being differentiated from traditional functional design.

Contiguous – Something that is adjacent; touching, adjoining or in close proximity.

Contingency – A contractual clause that provides for an uncertain future event to happen or to occur in order for the contract to be binding.

Contingent depreciation – A loss in property value because of expectations of a decline in property services.

Contingent fees – The payment to be made upon future occurrences, conclusions or results of services to be performed.

Contour – The surface configuration of land which is shown on maps as a line through points of equal elevation.

Contour map – A map that shows the topography of an area and the contour lines indicating the various elevations.

Contract – 1. A written or oral agreement to do or not to do certain obligations which has four essential elements (1) Parties who have the capacity or legal ability to contract, (2) Consent of the parties, (3) Consideration and (4) A lawful object. 2. A contract for the sale of real property must also be in writing and signed by the party or parties who have agreed to perform to be enforceable.

Contract broker – See Facilatator.

Contract for deed – See Land contract.

Contract of sale – See Land contract.

Contract rent – The amount of rent called for in a lease agreement.

Contractor – A party who has the responsibility for and who supervises the improvement of land.

Contractual intent – An intent to be bound by an agreement therefore preventing things like jokes from becoming valid contracts.

Contribution – A payment by each or any of several entities having a common interest or liability for his or her share in the loss suffered or in the money necessarily paid by one of the parties in behalf of the others.

Control data – The means of using real properties transactions to adjust the market data used in the comparative appraisal approach in order to segregate certain influences which have caused changes in real estate values, either generally or specifically.

Controlled business arrangement – An arrangement where a package of services such as a real estate firm, title insurance company, mortgage broker and home inspection company is offered to consumers who must buy the entire package to get one.

Controller’s deed – A deed issued by the state, usually when property is sold due to tax delinquency.

Convenience factor – The commonly recognized and easily understood quality offering advantages and values to a particular parcel of real property over other properties as a result of its location.

Conventional home – A home that is constructed totally at the site and which is the opposite of a factory-built, manufactured or mobile home.

Conventional loan – A type of mortgage loan that is customarily made by a bank or other financial institution that is without any governmental underwriting such as FHA insurance, VA guarantee or funded by a government authorized bond sale or grant which conforms to the lender’s own standards and has been modified within legal bounds by the mutual consent of the parties involved.

Conversion – 1. The unlawful appropriation or taking of another’s property such as in the conversion of trust funds to personal use. 2. Change from one legal form or use to another such as converting an apartment building to condominium use.

Conversion value – The value that is created by converting something from one state or use to another.

Convertible ARM – An adjustable rate mortgage that allows the borrower the option to convert at a specified point in time to a fixed-rate schedule for a nominal fee and at a rate that is determined according to the loan documents.

Convey – The title transfer of a real property from one person to another.

Conveyance – A written instrument such as a deed or trust deed, used to transfer the title to land or an interest therein from one party to another.

Cooperating broker – See Listing broker.

Cooperative – Any building, but usually an apartment building, where the property is owned in severalty by a corporation often called a stock cooperative in which ownership of a specific apartment unit is acquired by purchasing shares of the stock of the corporation which places substantial restraints on the alienation, sale, of the units and where their permitted use and occupancy occurs by entering into a proprietary lease with the corporation.

Co-ownership – The ownership of the same property by two or more parties.

Corner influence – The effect a street intersection has upon its adjoining property.

Corner influence table – A statistical table that attempts to reflect the additional value accorded to a lot having a corner location.

Corner lot – A lot located at the intersection of two streets and having frontage on at least two sides.

Corporate securities dealer – A person authorized to engage in the sale of common stock, preferred stock or bonds of a corporation.

Corporation – A legal entity established by a group of people called the stockholders which is endowed with certain rights, privileges, duties and liabilities similar to an individual but is distinct and apart from those natural persons composing it and which under law may continue for any legal length of time.

Corporeal rights – The rights to possess and alter visible or tangible real or personal property.

Correction deed – A written instrument which corrects an error in a recorded deed.

Correction lines – A system for compensating for the inaccuracies in the government survey or the rectangular survey system due to the curvature of the earth in which every fourth township line at 24-mile intervals is used as a correction line on which the intervals between the north and south range lines are remeasured and corrected to a full 6 miles.

Correlate the findings – The interpretation of the data and value estimates so as to bring them together to a final conclusion of appraised value.

Correlation – See Reconciliation.

Cosigner – A second party who signs a promissory note along with a primary borrower.

Cost – That which must be given up to obtain property and which is usually money.

Cost approach – A value estimate of a property by one of three appraisal methods which is arrived at by estimating the replacement cost of the improvements and then deducting the estimated accrued depreciation from it and then adding back the market value of the land.

Cost basis – The dollar value amount assigned to property under provisions of the Internal Revenue Code at the time of acquisition for the purpose of determining gain, loss and depreciation in calculating the income tax to be paid upon the sale or exchange of the property. See Adjusted cost basis.

Cost of capital – That which must be paid to attract money into an investment project.

Cost per front foot – The cost of a parcel of real estate that is expressed in terms of the number of front foot units and where the total sales price is divided by its number of front feet to state the cost per front foot.

Cost recovery – An Internal Revenue Service term for depreciation.

Cost-benefit ratio – The present value of the anticipated investment returns divided by the present value of the capital outlay or cost.

Cost-plus-fixed-fee contract – A construction project agreement in which the contractor is paid a named fixed fee as profit over and above the actual costs of construction.

Cost-plus-percentage contract – A construction project agreement in which the contractor is paid a named percentage as profit over and above the actual costs of construction.

Cotenancy – The ownership of an interest in a particular parcel of land by more than one party as in tenancy in common or joint tenancy.

Council of Real Estate Brokerage Managers, CRB – Their course work emphasizes effective real estate office management practices as well as market trend analyses and awards the Certified Residential Brokerage Manager, CRB designation.

Council of Residential Specialists, CRS – A designation earned by real estate agents who specialize in residential real estate.

Counseling – The act of advising clients on a variety of real estate investment or development matters.

Counselor – A party who assists clients and provides them with advice regarding the use and management of their assets.

Counselor of Real Estate, CRE – A member of and a designation conferred by the American Society of Real Estate Counselors.

Counter flashing – The metal material used on chimneys at the roof line to cover the shingle flashing to prevent moisture from entering.

Counteroffer – A response to an offer to enter into a contract which acts as a rejection of the original offer and introduces a new offer or one with different terms and conditions.

County – A civil division of a territory organized for political and judicial purposes.

Court – 1. A government institution or facility used to decide civil conflicts and disputes or to try criminal prosecution cases brought before it. 2. A place to play a sport which might be located within a subdivision or housing complex. 3. An open area next to or within buildings or other structures such as a courtyard.

Covenant – 1. A contractual promise that may be positive by agreeing to do or negative by agreeing not to do a particular act such as a promising to build a house of a particular size or to not use property in a certain way. 2. Agreements or promises contained in deeds and other instruments for performance or nonperformance of certain acts, or use or nonuse of property in a certain manner.

Covenant for further assurance – An undertaking in the form of a covenant on the part of the vendor of real estate to perform such further acts for the purpose of perfecting the purchaser’s title as the latter may reasonably require.

Covenant not to compete – See Noncompete clause.

Covenant of quiet enjoyment – A covenant implied by law by which a landlord guarantees that a tenant may take possession and use of leased premises and that the landlord will not interfere in the tenant’s enjoyment of the property.

Covenants, Conditions and Restrictions, CC&Rs – A term that refers to a written recorded declaration which establishes certain basic rules established by a subdivider or other landowner to create uniformity of buildings and use within tracts of land or groups of lots which are sometimes thought of as private zoning. The restrictions can be spelled out in the deed.

Co-venture loan – A loan where the lender gets a share of ownership or income from the property.

CPM – See Certified Property Manager

Crawl hole – An exterior or interior opening that permits access to underneath a building as is required by building codes.

Crawl space – A narrow opening between the ground and the underside of a structure which is not tall enough to permit a person to stand but is sufficient to give necessary access to wiring, plumbing and other utilities.

Creative financing – Any financing arrangement other than a traditional mortgage from a third-parry lending institution which include loans from a seller; balloon payment loans; wraparound mortgages, mortgage assumptions, sale-leasebacks, land contracts, and alternative mortgage instruments.

Credit – 1. In lending, the power of an individual to secure money or obtain goods on time, in consequence of the favorable opinion held by the community or by the particular lender, as to his or her solvency and reliability; a debt considered from the creditor’s standpoint or that which is to be incoming or due to one. 2. In accounting, a bookkeeping entry on the right side of a bookkeeping account that records the reduction or the elimination of an asset or an expense or the creation of or addition to a liability or item of equity or revenue.

Credit report – An evaluation of a person’s history or capacity of debt repayment which is generally available for individuals from one of the three retail credit associations and to which individuals have access and for businesses by companies such as Dunn & Bradstreet and for publicly held bonds by Moody’s, Standard & Poors.

Credit scoring – The process of evaluating and rating a mortgage loan applicant according to the quality of his or her credit worthiness based on past use of credit, current indebtedness and frequency of application for credit and where a person’s score may determine whether he or she is eligible for standard conventional loan terms or must obtain a sub-prime loan with less favorable terms.

Creditor – A party who is owed money such as mortgage lenders, credit card companies and bond holders.

Crossroad development – Pattern of city growth characterized by fingerlike extensions moving out along the main transportation routes.

Cube – To cube a number is to take it to its third power or by multiplying it by the square of that number. For example, to cube 2, one would multiply 2 by 2 which equals 4 and then multiply that by 2 which equals 8 (2 x 2 = 4 x 2 = 8). The cube root of 8 is 2.828

Cubic foot – A volume of 1,728 cubic inches which is equivalent to a cube whose length, width and height are each one foot.

Cubic yard – A volume of 27 cubic feet which is equivalent to a cube whose length, width and height are each one yard.

Cubical content – The actual space within the outer surfaces of outside walls and contained between the outer surfaces of the roof and the finished surface of the lowest basement or cellar floor; the actual space that lies within the interior dimensions of a structure.

Cul-de-sac – A dead-end street with a widened circular area at the end enabling a car to make a U-turn.

Curable depreciation – An item of physical deterioration or functional obsolescence which customarily gets corrected by repair or replacement by a prudent property owner and is thus considered to be cured.

Curable penalty – An element of depreciation whose cost of repair or correction is offset by the increase in value of the property resulting from the repair or correction.

Curb appeal – The attractiveness of a property or other land improvement when viewed from the sheet.

Current assets – An asset such as cash, accounts receivable and merchandise inventories that are liquid or can easily be sold and converted to cash.

Current index – An easily-recognized indicator that changes periodically that is published nationally or regionally that is used in adjustable rate mortgages to calculate the new note rate as of each rate adjustment date.

Current liabilities – A short-term debt that is generally a debt due within one year.

Current yield – A measurement of investment returns based on the percentage relationship of annual cash income to the investment cost whose formula is current income divided by investment cost equals current yield.

Curtail schedule – A listing of the amounts by which the principal sum of an obligation is to be reduced by partial payments and of the dates when each payment will become payable.

Curtesy – The right a husband has in his wife’s real estate as of her death.

Custodian – A person who is entrusted with the care of something such as a public building.

Custom builder – A party who builds unique houses. See opposite Tract home.

Custom-built home – A house built to an owner’s specifications and sold before the construction begins. See opposite Tract home.

Customer – A third party for whom an agent provides some level of informational service.

Cyclical fluctuation – The variations around a trend in activity that recur from time to time or fluctuations remaining after the removal of the trend or seasonal factors that recur regularly.

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Categories: Real Estate Words Glossary