Valley Real Estate
Phone: (330) 629 - 9200
- call option
- A provision in a mortgage that gives the mortgagee the right to call the mortgage due and payable at the end of a specified period for whatever reason. Contrast with acceleration clause.
- A provision of an adjustable-rate mortgage (ARM) that limits how much the interest rate or mortgage payments may increase or decrease. See lifetime payment cap, periodic payment cap, and periodic rate cap.
- (1) Money used to create income, either as an investment in a business or an income property.
- (2) The money or property comprising the wealth owned or used by a person or business enterprise.
- (3) The accumulated wealth of a person or business.
- (4) The net worth of a business represented by the amount by which its assets exceed liabilities.
- capital expenditure
- The cost of an improvement made to extend the useful life of a property or to add to its value.
- See ► Capital Improvement
- capital gain
- In finance, a capital gain is profit that results from the appreciation of a capital asset over its purchase price. If the price of the capital asset has declined instead of appreciated, this is called a capital loss. Capital gains occur in both real assets, such as real property, as well as financial assets, such as stocks or bonds.
A capital gain on the sale of a principal residence is afforded special treatment for Federal income tax purposes. Married sellers of a principal residence may generally exclude up to $500,000 of gain ($250,000 of gain in the case of single individuals) from gross income, provided the real estate was used as the sellers' primary residence for at least two years during the five year period ending with the date of the sale.
See also ►
- capital improvement
- Any structure or component erected as a permanent improvement to real property that adds to its value and useful life.
- cash for keys
- A deal a lender may make with a homeowner or tenant of a foreclosed property. The homeowner or tenant gets a cash settlement in exchange for vacating his/her foreclosed home and leaving the home in good condition.
- cash-out refinance
- A refinance transaction in which the amount of money received from the new loan exceeds the total of the money needed to repay the existing first mortgage, closing costs, points, and the amount required to satisfy any outstanding subordinate mortgage liens. In other words, a refinance transaction in which the borrower receives additional cash that can be used for any purpose.
- CCRs (CC&Rs)
- Real estate acronym which stands for Covenants, Conditions, and Restrictions. CCRs variously regulate the usages and aesthetics of a neighborhood or development.
CCRs are often work for the benefit of the developer who originates them and against the individual rights of the homeowner who buys into a planned community which might be a condominium or what is called a Homeowners' Association or a combination of many of these. A supermajority vote of two-thirds or more is usually needed to change the terms of this agreement.
Before buying a home controlled by CCRs, a buyer must sign a statement of acceptance of these rules. As the CCRs often run to 50 or more pages of legal jargon, a homeowner rarely has a full understanding of what he is agreeing to when he signs off on an acceptance.
- certificate of deposit
- A document written by a bank or other financial institution that is evidence of a deposit, with the issuer’s promise to return the deposit plus earnings at a specified interest rate within a specified time period.
- certificate of deposit index
- An index that is used to determine interest rate changes for certain ARM plans. It represents the weekly average of secondary market interest rates on six-month negotiable certificates of deposit.
- See ► adjustable-rate mortgage (ARM).
- certificate of eligibility
- A document issued by the federal government certifying a veteran’s eligibility for a Department of Veterans Affairs (VA) mortgage.
- certificate of occupancy
- A document issued by a local government agency or building department certifying that a building (or the leased premises / tenant's space) has been satisfactorily inspected and is in a condition suitable for occupancy.
- Certificate of Reasonable Value (CRV)
- A document issued by the Department of Veterans Affairs (VA) that establishes the maximum value and loan amount for a Department of Veterans Affairs VA mortgage.
- certificate of title
- A statement provided by an abstract company, title company, or attorney stating that the title to real estate is legally held by the current owner.
- Certified New Home Sales Professional (CSP)
- chain of title
- The history of all of the documents that transfer title to a parcel of real property, starting with the earliest existing document and ending with the most recent.
- change frequency
- The frequency (in months) of payment and/or interest rate changes in an adjustable-rate mortgage (ARM).
- Another name for personal property.
- See ► Personal Property.
- clear title
- A title that is free of liens or legal questions as to ownership of the property.
- A meeting at which a sale of a property is finalized by the buyer signing the mortgage documents and paying closing costs. Also called "settlement."
- closing cost item
- A fee or amount that a home buyer must pay at closing for a single service, tax, or product. Closing costs are made up of individual closing cost items such as origination fees and attorney's fees. Many closing cost items are included as numbered items on the HUD-1 statement.
- closing costs
- Expenses (over and above the price of the property) incurred by buyers and sellers in transferring ownership of a property. Closing costs normally include an origination fee, an attorney's fee, taxes, an amount placed in escrow, and charges for obtaining title insurance and a survey. Closing costs percentage will vary according to the area of the country. Lenders or REALTORs® often provide estimates of closing costs to prospective homebuyers.
See also ►
- Real Estate Guide: Buying a Home -
- "," , The Board of Governors, Federal Reserve System.
- Home Buyer Top Ten Tool #8 -
- closing statement
- See: HUD-1 statement.
- cloud on title
- Any conditions revealed by a title search that adversely affect the title to real estate. Usually clouds on title cannot be removed except by a quitclaim deed, release, or court action.
- See - Comprehensive Loss Underwriting Exchange.
- A sharing of insurance risk between the insurer and the insured. Coinsurance depends on the relationship between the amount of the policy and a specified percentage of the actual value of the property insured at the time of the loss.
- coinsurance clause
- A provision in a hazard insurance policy that states the amount of coverage that must be maintained -- as a percentage of the total value of the property -- for the insured to collect the full amount of a loss.
- An asset (such as a car or a home) that guarantees the repayment of a loan. The borrower risks losing the asset if the loan is not repaid according to the terms of the loan contract.
- The efforts used to bring a delinquent mortgage current, and to file the necessary notices to proceed with foreclosure when necessary.
- A person who signs a promissory note along with the borrower. A co-maker's signature guarantees that the loan will be repaid, because the borrower and the co-maker are equally responsible for the repayment.
- See ► endorser.
- The fee charged by a broker or agent for negotiating a real estate or loan transaction. A commission is generally a percentage of the price of the property or loan.
- commitment letter
- A formal offer by a lender stating the terms under which it agrees to lend money to a home buyer.
- See ► "loan commitment."
- common area assessments
- Levies against individual unit owners in a condominium or planned unit development (PUD) project for additional capital to defray homeowners' association costs and expenses and to repair, replace, maintain, improve, or operate the common areas of the project.
- common areas
- Those portions of a building, land, and amenities owned (or managed) by a planned unit development (PUD) or condominium project's homeowners' association (or a cooperative project's cooperative corporation) that are used by all of the unit owners, who share in the common expenses of their operation and maintenance. Common areas include swimming pools, tennis courts, and other recreational facilities, as well as common corridors of buildings, parking areas, means of ingress and egress, etc.
- common law
- An unwritten body of law based on general custom in England and used to an extent in the United States.
- Community Land Trust Mortgage Loan (CLT)
- An alternative financing option that enables low- and moderate-income home buyers to purchase housing that has been improved by a nonprofit Community Land Trust (CLT) and to lease the land on which the property stands.
Learn more about CLTs at the Institute for Community Economics , which offers detailed information on CLT affordable housing programs.
- community property
- In some western and southwestern states, a form of ownership under which property acquired during a marriage is presumed to be owned jointly unless acquired as separate property of either spouse.
- Community Seconds®
- An alternative financing option for low- and moderate-income households under which an investor purchases a first mortgage that has a subsidized second mortgage behind it. The second mortgage may be issued by a state, county, or local housing agency, foundation, or nonprofit organization. Payment on the second mortgage is often deferred and carries a very low interest rate (or no interest rate at all). Part of the debt may be forgiven incrementally for each year the buyer remains in the home.
- See details ►
- comparables (comparable properties)
- Used for comparative purposes in the appraisal process. Comparables are properties similar to the property under consideration (subject); they have reasonably the same size, location, and amenities and have recently been sold. Comparables help the appraiser determine the approximate fair market value of the subject property.
- comparative market analysis (CMA)
- An informal assessment of a property's market value, usually done to establish a reasonable listing price when a property is placed for sale. The price is established by comparing the property to similar properties that have sold in the area within the past year. It is used by both buyers and sellers.
The analysis is normally done by a real estate agent who has easy access to area sales records. Although it's more time-consuming, sellers in the US can find the same information by visiting their county courthouse.
- compound interest
- Interest paid on the original principal balance and on the accrued and unpaid interest
- See also ► '.'
- Comprehensive Loss Underwriting Exchange (C.L.U.E.)
- A C.L.U.E. report to be used for real estate disclosure ( ) provides loss information about a given address to potential buyers.
- See also ► ''
- The determination that a residence or building is not fit for use or is dangerous and must be destroyed; the taking of private property for a public purpose through an exercise of the right of eminent domain.
- A real estate project in which each unit owner has title to a unit in a building, an undivided interest in the common areas of the project, and sometimes the exclusive use of certain limited common areas.
- condominium association
- An organization comprised of all owners of units in a common interest development, and is given authority to enforce the covenants, conditions, and restrictions (CCR's) and managing the common amenities of the development.
- condominium conversion
- Changing the ownership of an existing building (usually a rental project) to the condominium form of ownership.
- condominium hotel
- A condominium project that has rental or registration desks, short-term occupancy, food and telephone services, and daily cleaning services and that is operated as a commercial hotel even though the units are individually owned.
- condominium restrictions
- Regulations and by-laws that govern every condominium, to ensure that the condominiums are properly maintained and operated, while defining the rights and obligations of individual owners. They may be strict or relaxed depending on the corporation of the condominium. Restrictions may include: the number of people living in each unit, pets, noise, parking and when certain amenities may be used.
- See ► CCR's
- conflict of interest
- A situation in which someone in a position of trust, such as a lawyer, real estate agent, insurance adjuster, a politician, executive or director of a corporation or a medical research scientist or physician, has competing professional or personal interests. Such competing interests can make it difficult to fulfill his or her fiduciary duties impartially.
- A conflict of interest exists even if no unethical or improper act results from it. A conflict of interest can create an appearance of impropriety that can undermine confidence in the person, profession, or court system.
- See also ► Agency
- Something that is done or promised in return for a contractual promise. For example, in a promise between A and B for the sale of A's car to B, B's payment of the price of the car (or promise to do so) is the consideration for A's promise. Consideration is a central concept in the common law of contracts. Consideration is what must be given up by each party when making an agreement; this may be by means of doing or not doing an act or just promising to do or not do an act. Consideration can be defined as being a benefit to one party while being a detriment to the other one at the same time.
- construction loan
- A short-term, interim loan for financing the cost of construction. The lender makes payments to the builder at periodic intervals as the work progresses.
- construction permit
- See ► Building permit.
- Consumer Data Industry Association (CDIA)
- is an international trade association, founded in 1906, that represents consumer information companies that provide fraud prevention and risk management products, credit and mortgage reports, tenant and employment screening services, check fraud and verification services, and collection services.
- consumer reporting agency (or bureau)
- An organization that prepares reports that are used by lenders to determine a potential borrower's credit history. The agency obtains data for these reports from a credit repository as well as from other sources.
- See ► Credit Report
- A condition that must be met before a contract is legally binding. For example, home purchasers often include a contingency that specifies that the contract is not binding until a loan is secured, or until the purchaser obtains a satisfactory home inspection report from a qualified home inspector, or a "72-hour clause."
See Also: ►
- A valid contract is a legally enforceable promise or set of promises that must be performed and for which, if a breach of the promise occurs, the law provides a remedy. A contract may be unilateral, where only one party is bound to act, or bilateral, where all parties to the instrument are legally bound to act as per the conditions specified. Contract generally may be oral or written, however contracts for the sale of real property must be in writing.
For a contract to be valid there must be:
- legally competent parties (18 years of age and mentally competent)
- offer and acceptance (a meeting of the minds or agreement)
- legality of object (purpose must legal and pro public policy
- consideration (the purchase price is consideration in a real estate contract)
- See ► real estate purchase contract. and >> Statute of Frauds.
- contract for deed
- See Land Contract.
- conventional mortgage
- A type of mortgage not insured by either the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA), and thus usually requiring a 10 - 20 percent down payment. Contrast with government mortgage.
- convertibility clause
- A provision in some adjustable-rate mortgages (ARMs) that allows the borrower to change the ARM to a fixed-rate mortgage at specified timeframes after loan origination.
- convertible ARM
- An adjustable-rate mortgage (ARM) that can be converted to a fixed-rate mortgage under specified conditions.
- cooperative (co-op)
- A type of multiple ownership in which the residents of a multiunit housing complex own shares in the cooperative corporation that owns the property, giving each resident the right to occupy a specific apartment or unit.
- co-operative corporation
- A business trust entity that holds title to a cooperative project and grants occupancy rights to particular apartments or units to shareholders through proprietary leases or similar arrangements.
- co-operative mortgages
- Mortgages related to a co-operative project. This usually refers to the multifamily mortgage covering the entire project but occasionally describes the share loans on the individual units.
- co-operative project
- A residential or mixed-use building wherein a corporation or trust holds title to the property and sells shares of stock representing the value of a single apartment unit to individuals who, in turn, receive a proprietary lease as evidence of title.
- conforming loan
- A loan that meets bank funding criteria. Because of its stake in the mortgage market and because of its history, Fannie Mae and Freddie Mac each year set the limit on what constitutes a conforming loan, based on the October-to-October changes in mean home price, above which a mortgage is considered a jumbo loan, and typically has higher rates associated with it.
Because both Fannie Mae and Freddie Mac only buy loans that are conforming, to repackage into the secondary market, the demand for a non-conforming loan is much less. By virtue of the laws of supply and demand, then, it is harder for lenders to sell non-conforming loans, thus the cost to the consumer is greater (typically 1/4 to 1/2 of a percent.)
- corporate relocation
- Arrangements under which an employer moves an employee to another area as part of the employer's normal course of business or under which it transfers a substantial part or all of its operations and employees to another area because it is relocating its headquarters or expanding its office capacity. In REALTOR® jargon it is referred to as "RELO."
- See ►
- cost basis
- Basis, as used in U. S. tax law, is the original cost of property adjusted for factors such as depreciation. When property is sold, the difference between the sale price and basis is the income or loss reported at that time on U.S. tax returns. Basis is most commonly used in the computation of capital gains.
- See ►
- cost of funds index (COFI)
- An index that is used to determine interest rate changes for certain adjustable-rate mortgage (ARM) plans. It represents the weighted-average cost of savings, borrowings, and advances of the 11th District members of the Federal Home Loan Bank of San Francisco.
- See ► adjustable-rate mortgage (ARM).
- A concept in real estate law that describes ways in which property can be owned by more than one person at the same time. If more than one person own the same property, they are called co-owners, co-tenants or joint tenants. Most states recognize 'tenancies in common' and 'joint tenancies.' Some states may still recognize a third type called 'tenancy by the entirety' (no longer recognized in Ohio). Many jurisdictions refer to a joint tenancy as a 'joint tenancy with right of survivorship,' and a few U.S. States treat the phrase 'joint tenancy' as synonymous with a 'tenancy in common.'
- A covenant, is a solemn promise to do or not do something specified. A covenant, in contrast to a contract, is a one-way agreement whereby the covenantor is the only party bound by the promise. There is no inherent agreement by any other party to fulfill this promise. Consequentially, the only party that can break a covenant is the covenantor.
A covenant typically refers to restrictions set on contracts like deeds of sale. "Covenants, Conditions, and Restrictions," (CC&Rs), are a complicated system of covenants, known generically as "deed restrictions," built into the deeds of all the homes in a common interest development, particularly in the tens of millions of American homes governed by a homeowner association (HOA) or condominium association.
Also, a clause in a mortgage that obligates or restricts the borrower and that, if violated, can result in foreclosure.
- In finance, credit (as in the term "credit card") is the granting of a loan and the creation of debt. Any movement of financial capital is normally quite dependent on credit, which in turn is dependent on the reputation or creditworthiness of the entity which takes responsibility for the funds.
- credit history
- A record of an individual's open and fully repaid debts. A credit history helps a lender to determine whether a potential borrower has a history of repaying debts in a timely manner.
- See also ► .
- credit life insurance
- A type of insurance often bought by mortgagors because it will pay off the mortgage debt if the mortgagor dies while the policy is in force.
- A person to whom money is owed.
- credit report
- A report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness Under Federal law, you have the right to receive a free copy of your credit report once every 12 months from each of the three nationwide consumer reporting companies. To request your free annual report under that law, you can go to www.annualcreditreport.com among others.
- credit repository
- An organization that gathers, records, updates, and stores financial and public records information about the payment records of individuals who are being considered for credit. The three major repositories in the U.S. are , , and .
- credit score
- A credit score is a numerical expression based on a statistical analysis of a person's credit files, to represent the creditworthiness of that person, which is the likelihood that the person will pay his or her debts. A credit score is primarily based on credit report information, typically sourced from credit bureaus / credit reference agencies.
Lenders, such as banks and credit card companies, use credit scores to evaluate the potential risk posed by lending money to consumers and to mitigate losses due to bad debt. Lenders use credit scores to determine who qualifies for a loan, at what interest rate, and what credit limits.
- See also ► .
- credit reporting agency
There are three major credit reporting agencies: , and . All use FICO as the basis of their scoring, but each uses a different algorithm so that there may a difference of 50 to 100 pts for an individual borrower among the three agencies.
- curb appeal
- The first impression of a house as seen from the street.
- See also ►