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GLOSSARY
OF
REAL ESTATE
TERMS
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COOPERATIVE:
A form of multiple ownership in which a corporation or business
trust entity holds title to a property and grants occupancy rights
to shareholders by means of proprietary leases or similar arrangements.
CRB: Certified Residential Broker. To be certified, a broker must
be a member of the National Association of Realtors, have five years
experience as a licensed broker and have completed five required
Residential Division courses.
CUE-ON-SALE CLAUSE: An acceleration clause that requires full payment
of a mortgage or deed of trust when the secured property changes
ownership.
EARNEST MONEY: The portion of the down payment delivered to the
seller or escrow agent by the purchaser with a written offer as
evidence of good faith.
ESCROW: A procedure in which a third party acts as a stakeholder
for both the buyer and the seller, carrying out both parties' instructions
and assuming responsibility for handling all of the paperwork and
distribution of funds.
FHA LOAN: A loan insured by the Insuring Office of the Department
of Housing and Urban Development; the Federal Housing Administration.
FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA): Popularly known as
Fannie Mae. A privately owned corporation created by Congress to
support the secondary mortgage market. It purchases and sells residential
mortgages insured by the FHA or guaranteed by the VA, as well as
conventional home mortgages.
FEE SIMPLE: An estate in which the owner has unrestricted power
to dispose of the property as he wishes, including leaving by will
or inheritance. It is the greatest interest a person can have in
real estate.
FINANCE CHARGE: The total cost a borrower must pay, directly or
indirectly, to obtain credit according to Regulation Z.
GRADUATED PAYMENT MORTGAGE: A residential mortgage with monthly
payments that start at a low level and increase at a predetermined
rate.
GRI: Graduate Realtors Institute. A professional designation granted
to a member of the National Association of Realtors who has successfully
completed three courses covering Law, Finance and Principles of
Real Estate.
HOME INSPECTION REPORT: A qualified inspector's report on a property's
overall condition. The report usually includes an evaluation of
both the structure and mechanical systems.
HOME WARRANTY PLAN: Protection against failure of mechanical systems
within the property. Usually includes plumbing, electrical, heating
systems and installed appliances.
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