Snohomish County Real Estate Glossary

Real estate, and/or home buying/selling, has many industry specific terms that can be confusing or have very little meaning to folks outside the industry. However, it always important to know definitions to these industry terms.

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• Abandonment: The voluntary relinquishment of rights of ownership or another interest (such as a an easement) by failure to use the property, coupled with an intent to abandon (give up the interest).
• Abatement: A reduction or decrease. Usually applies to a decrease of assessed valuation of ad valorem taxes after the assessment and levy.
• Acceleration Clause: Clause used in an installment note and mortgage (or deed of trust), which gives the lender the right to demand payment in full upon the happening of a certain event, such as failure to pay an installment by a certain date, change of ownership without the lender's consent, deconstruction of the property (see Waste), or other event which endangers the security of the loan. (see also: Alienation Clause).
• Acceptance: Voluntarily agreeing to the price and terms of an offer. Offer and acceptance create a contract.
• Accession: The right of an owner to increase in his property by natural means (such as riparian owner's right to an abandoned river bed, rights of alluvion and reliction, etc) or artificially, by improvements.
• Addendum: An attachment to a purchase and sale agreement or other contract that contains additional provisions that applies to that transaction. Appraisal – An estimate or opinion of the value of a piece of property on that particular date.
• Afforestation: The growing of a forest where none previously existed, as opposed to reforestation (the planting of a harvested or destroyed forest).
• Agency: Any relationship in which one party (agent) acts for or represents another (principal) under the authority of the latter. Agency involving real property should be in writing, such as listings, trusts, powers of attorney, etc.
• Agency Agreement: in some states, the term describing a listing under which the broker's commission is protected against a sale by other agents but not by a sale by the principal . Called a "non-exclusive" listing in some states.
• Agency by Estoppel: An agency created by operation of law when an agent oversteps his or her authority by the action (or failure to act) by the principal leads one to believe the authority exists. (See also: Apparent Authority).
• Agrarian: Relating to Land, or to a division or distribution of land.
• Agricultural Lien: a lien against crops (only), to secure money or payment for materials used to grow the crop.
• Agricultural Property: (1) Land which is zoned agricultural, (2) Land used for growing of agricultural products or raising of livestock.
• Annex: To add or attach. Usually to join a smaller or subordinate thing to a larger or more dominant thing.
• Annual: By the year.
• Annuity: Is a sum of money received in a series of payments at regular intervals (example: mortgage payment).
• Annuity Method: Appraisal method determining present value by the future anticipated net income before depreciation, which is then discounted.
• Aquatic Rights: Individual rights to the use of the sea and rivers, for the purpose of fishing or navigation, and to the soil in the sea and rivers.
• Arable: Land capable of being cultivated for farming.
• Arbitration Clause: A clause in a lease calling for the decision of a third party (arbiter) regarding disputes over future rents based on negotiation. Also used in construction contracts, disputes between brokers, etc.
• Backwater: Water in a stream or river which, because of a dam or other obstruction, is stopped in its course or flows back toward its source.
• Baltimore Rule: An appraisal method for setting a value on a corner lot. The lot is appraised as an inside lot for its front footage on both streets. The two values are then added to find the value of the corner lot. For example: Lot 1 fronts 100' on street A and 100' on street B. The value of a 100' inside lot on a street A is added to the value of a 100' inside lot on street B to find the value of Lot 1. Also called the Bernard Rule.
• Bank (Land): The elevated land on each side of a river or stream which keeps the water in its natural channel.
• Beneficial Estate: An estate, the right to possession of which has been postponed, such as a devise under a will. More commonly, an estate, the legal ownership of which has not yet vested, as under a land contract. An equitable estate.
• Beneficial Interest: The equitable, rather than legal ownership of property, such as under a land contract.
• Beneficial Use: the doctrine, applicable in some areas, pertains to water rights, giving priority to those who would use the water most beneficially.
• Betterment: An improvement to a structure which is not a repair, restoration, or enlargement. For example: the addition of aluminum siding over a frame wall; paving a street adjoining the structure; adding a fireplace or some similar improvement which increase the value of the property.
• Bill of Sale: An instrument by which one transfer personal property.
• Blighted Area: A term once popular in urban renewal, referring to a run-down area.
• Block Busting: An illegal method of obtaining houses at below fair market value by telling the inhabitants that people of a different race or religion, moving into the area, will cause property values to fall.
• Boarding House: A house where one can rent a room and receive board (meals), the cost of which is included in the rent. Not common today.
• Board of Aldermen: The governing body of municipal corporation. Equivalent to a city council.
• Book Value: The value of a property as a capital asset (cost plus additions to value, less depreciation).
• Breach of Contract: Failure to perform a contract, in while or part, without legal excuse.
• Breezeway: 1. In construction of a house with no garage, a canopy which extends from the house over the driveway as a protection from the weather for an automobile and for those people going between the house and the automobile. 2. A covering over a porch or patio, connecting two sections of a house or a house and garage. Open on two sides, allowing air circulation (breeze).
• Bridge Financing: A form of interim loan, generally made between a short term loan and a permanent (long term) loan, when the borrower needs to have more time before taking the long term financing.
• Buffer Strip (Buffer Zone): A parcel of land separating two other parcels or areas, such as a strip of land between an industrial and residential area.
• Candle Hour: a measure of light, equal to one candle burning for one hour.
• Capital Gains: Gains realized from the sale of capital assets. Generally, the difference between cost and selling price, less certain deductible expenses. Used mainly for income tax purposes.
• Capitalization: Determining a present value of income property by taking the annual net income (either known or estimated) and discounting by using a rate of return commonly acceptable to buyers of similar properties. For example: Net income of a property is $10,000 per year. Capitalizing at a rate of 10%, the property would be worth $100,000.
• Capitalization Approach: See Income Approach.
• Capitalization Rate: the percentage (acceptable to an average buyer) used to determine the value of income property through capitalization.
• Capitalize: to determine the present money value of future income, whether estimated or fixed.
• Capitalized Value: The value of the property after use of the capitalization approach of appraisal.
• Capital Stock: A general term referring to the stock a corporation may issue, the amount actually subscribed by shareholders, the value of the company, liability to the shareholders etc.
• Cap Rate: See Capitalization Rate.
• Capricious Value: In an appraisal, a value based on whim or emotion and not reflective of the fair market value.
• Carport: A roof supported by pillars or cantilevered which shelters a car. May either extend from a structure (usually a house) or a be constructed separately (often to accommodate several vehicles).
• Carrying Charges: The costs involved in keeping a property which is intended to produce income (either by sale or rent) but has not yet done so.
• Casement Window: A window hinge at its sides, allowing it to swing open vertically.
• Central Assessment: An assessment of property under one ownership but located in more than one assessment district. Used for railroads and public utilities to stabilize the assessment value.
• Certificate Backed Mortgage: A variation of the buydown. The seller purchases a savings certification (usually with the proceeds of a the sale) from the lender. The lender sets the buyer's interest rate below market (generally 2 percent above the certificate rate). Should the seller withdraw the certificate funds, the buyer's rate goes to market rate.
• Certificate of Eligibility: A certificate obtained by a veteran from a Veteran's Administration office which states that the veteran is eligible for a V.A. insured loan. There is a list of requirements (when and how long the veteran served, type of discharge, etc.) which also may be obtained from the V.A. office.
• Competitive Market Analysis – A comparison of property that are similar in location, style and attributes to the subject property in order to set a realistic price.
• Congruous: Suitable or appropriate. In an appraisal, a property which conforms to the area.
• Consanguinity: Blood relationship, rather than legal relations (through marriage).
• Consequential Damages: Damages created by a change in other property. An owner's right to compensation varies with state statues.
• Conveyance: Transfer of title to land. Includes most instruments by which an interest in real estate is created, mortgage, or assigned.
• Cooperating Broker: The broker who finds the buyer and so shares in the commission with the listing broker.
• Cooperative Apartment: Also called a stick cooperative or co-op. A structure of two or more units in which the right to occupy a unit is obtained by the purchase of stock in the corporation which owns the building. Difficult to obtain financing because there is not individual ownership of each unit. A forerunner of the condominium.
• Devise: Real estate left by will.
• Devisee: one to whom real estate is given by will.
• Devisor: A testator who leaves real estate.
• Direct Reduction Mortgage: An amortized mortgage. One on which principal and interest payments are paid at the same time (usually monthly) with interest being computed on the remaining balance.
• Dominant Tenement: A parcel of land which benefits from an easement. For example: An easement exists over parcel A for access to parcel B. Parcel B is dominant tenement; parcel A is the servient tenement.
• Donee: One who receives a gift.
• Donor: One who gives a gift.
• Easement: An irrevocable right to use some part another person’s real property for a particular purpose (example: a part of a driveway, pathway, or trail).
• Environmental Impact Report (Study): A report of the probable effect of a development on the surrounding area (environment). The report is prepared by an independent company to federal , state, or local local guide lines.
• Environmental Protection Agency (EPA) The federal agency concerned with the protection of our resources of land, water, and air.
• Equal Credit Opportunity Act: Federal law granting women certain independent status, and preventing lenders from considering such negative credit aspects as the possibility of a woman having children and dropping out of the labor market.
• Escrow: An arrangement in which something of value, such as money or a deed, is held on behalf of the parties to a transaction by a disinterested third party (an escrow agent) until specified conditions have been fulfilled.
• Fire Insurance: Insurance against loss or damage by fire to specific property. May also include other coverage.
• Fireproof Construction: Having all exposed and load-bearing members a noncombustible material, and structural members which can be injured by fire (such as iron or steel) protected by non combustible materials.
• Foreclosure: A proceeding in or out of court, to extinguish all rights, title, and interest, of the owner(s) of property in order to sell the property to satisfy a lien against it - Foreclosure Guide.
• Frostline: The depth to which the soil freezes.
• Functional Obsolescence: The need for replacement because a structure or equipment has become inefficient because of improvements discovered or invented since its construction.
• Gable: The exterior wall surface, triangular in shape, formed by the inclined edges of a ridged roof (gable roof).
• Garden Apartments: An apartment development consisting of two or more structures, surrounded by an abundance of lawns, plants flower, etc., giving a garden-like atmosphere.
• Georgian Architecture: A colonial style of architecture dating back to the eighteenth century. Characterized by first floor windows extending to the ground, its exterior placements (windows, doors, etc.) are simple and well balanced, yet formal in appearance.
• Gerrymander: to divide an area into districts, against the obvious natural divisions, in order to accomplish an unlawful purpose. For example: to divide a school district to keep our certain people for reasons of race or religion, to divide a political voting district so as to give power to a political party.
• Gift Deed: A deed for nominal consideration.
• Gift Letter: A letter to HUD from the donor (giver) stating that a gift of money has been made to the buyer in order to purchase specific property. The relationship of the donor and donee is stated, as well as the amount of the gift.
• Gift Tax" A federal and sometimes a state tax on inter vivos transfers without consideration.
• Gingerbread Work: Use of ornamentation in architecture, especially residential, which adds to emotional appeal, rather than functional value.
• Good Faith: Something done with good intentions, without knowledge of fraudulent circumstances, or reason to inquire further.
• Hard Money Mortgage: A mortgage given in return for cash, rather than secure a portion of the purchase price, as with a purchase money mortgage.
• Hardpan:  A compacted layer of soil, usually containing clay, through which it is difficult to drain or dig.
• Hazard Insurance: Real estate insurance protecting against loss caused by fire, some natural causes, vandalism, etc., depending upon the terms of the policy.
• Historical Cost: The cost of a building when first constructed, as opposed to the original cost (cost to the present owner), although they may be the same.
• Holdback: Portion of a loan held back by the lender until a contingency is met. In the sale of a home insured by VA or FHA, funds may be held back to make necessary improvements to bring the property to VA or FHA standards. The money to make "these" repairs may not be available until closing. One and one half to double the estimated amount necessary is held back. If repairs are not made in the time allowed, the funds are used to make the repairs. In construction financing, funds are held back until, for example, a certain percentage of the a subdivision has been sold, or a certain portion of a building has been completed.
• Homestead:The dwelling (house and contiguous land) of the head of a family. Some states grant statutory exemptions, protecting homestead property (usually to set a maximum amount) against the rights of creditors. Property tax exemptions (for all or part of the tax) are also available in some states. Statutory requirements to establish a homestead may include a forma declaration to be recorded.
• Home Owner's Association: (1) An association of people who own homes in a given area, formed for the purpose of improving or maintaining the quality of the area. (2) An association formed by the builder of condominiums or planned developments, and required by statute by some states. The builder's participation as well as the duties of the association are controlled by statue.
• Housing and Home Finance Agency: A federal agency created in 1947. A forerunner of HUD, having many of the same powers and duties.
• Implied Agency: An agency which is not expressly set out buy must be deduced from the circumstances and other facts. It is an actual agency as opposed to an ostensible agency or agency by estoppel.
• Impound Account: Account held by a lender for payment of taxes insurance or other periodic debts against real property. The mortgagor of trustor pays a portion of, for example., the yearly taxes, with each monthly payment. The lender pays the tax bill from the accumulated funds.
• Income Approach: An appraisal method to determine the value of a rental property by use of the estimated net income over the life of the structure, discounted to determine its present value.
• Incumbrance (Encumbrance): A claim, lien, charge, or liability attached to and binding real property. Any right to, or interest in, land which may exist in one other than the owner, but which will not prevent the transfer of fee title.
• Indemnity Agreement: An agreement by which one party agrees to repay another for any loss or damage the latter may suffer.
• Indexing: To alter mortgage term, payment, or rate according to inflation and/or a suitable mortgage rate index.
• Ingress and Egress: A right to enter upon and pass through land.
• Insurance, Homeowner’s: Is insurance against damage to the real property and the homeowner’s personal property.
• Insurance, Mortgage: Is insurance that protects a lender against losses resulting form the borrower’s default.
• Insurance, Title: Protects the buyer from any hidden or past defects in the title.
• Judicial Foreclosure: Foreclosure through court action rather by a power of sale. Judicial foreclosure is sometimes necessary to remove certain tax liens - Foreclosure Guide.
• Lis Pendens: A legal notice recorded to show pending litigation relating to real property, and giving notice that anyone acquiring an interest in said property subsequent to the date of the notice may be bound by the outcome of the litigation.
• Listing: A written agency contract between a seller and a real estate broker, stipulating that the broker will be paid a commission for finding (or attempting to find) a buyer for the seller’s property. Also called a listing agreement.
• Listing Agent: A real estate agent obtaining a listing (see which), as opposed to the selling agent.
• Littoral: Concerning the shore of lakes and oceans, as opposed to rivers and streams, for which the word riparian is used.
• Loan, Fixed Rate: A loan on which the interest rate will remain the same throughout the entire loan term.
• Loan, Variable Rate: A loan on which the interest rate will fluctuate to the market rate for the term of the loan.
• Mortgage: An instrument that creates a voluntary lien on real property to secure repayment of a debt.
• Mortgage Servicing: Controlling the necessary duties of a mortgagee, such as collecting payments, releasing the lien upon payment in full, foreclosing if in default, and making sure the taxes are paid, insurance is in force, etc. Servicing may be done by the lender or a company acting for the lender, for a servicing fee.
• Mortgagor: The party who borrows the money and gives the mortgage.
• Mullion: A vertical bar separating panes of a window or panels of a door. Also an upright framing member of panels or wainscoating.
• NonJudicial Foreclosure: Sale by a trustee under a deed of trust, or mortgagee under a power of sale of a mortgage. There is no court (judicial) proceeding - Foreclosure Guide.
• Notice of Action: A recorded notice that property may be subject to a lien, or even that the title is defective, due to pending litigation. Notice of a pending suit. Also called "Lis Pendens".
• Notice of Cessation: A notice stating that work has stopped on a construction project. Done to accelerate the period for filing a mechanic's lien.
• Notice of Completion: A notice, recorded to show that a construction job is finished. The length of time in which mechanic's lien maybe filed depends upon when and if a notice of completion is recorded.
• Notice of Default: A notice filed to show that the borro0wer under a mortgage or deed of trust is in default (behind in payments).
• Nuncupative Will: A verbal "death bed" will. Not vaild in all states and restricted to personal property of limited value.
• Obligation Bond: A bond secured by a mortgage but over the mortgage amount. It creates a personal obligation on the part of the mortgagor.
• Obsolescence: An appraisal term meaning that the age of a structure may cause it to become undesirable in use or appearance (old fashioned)and consequently lose income and value.
• Perpetuity: Continuing forever, Legally, pertaining to real property, any condition extending the inalienability of property beyond the time of a life or lives in being plus twenty-one years.
• Personal Property: Any property which is not designated by law as real property.
• Planning Commission: A board of a city, county, or similar local government, which must approve proposed building projects. Often must be confirmed by a higher board, such as a council.
• Pre-Approved: Where the buyer has funding secured by a lender to purchase a home.
• Pre-Qualified: A process that allows the prospective buyer to submit a loan application to a lender before the home buying process.
• Puffer: One hired to make false bids at an auction in order to raise the price of the property being sold.
• Puffing An opinion not made as a representative of face, but intended to enhance the value of the property.
• Purchase and Sale Agreement: A contract in which a seller promises to convey title to real property to a buyer in exchange for the purchase price.
• Quickclaim Deed: A deed operating as release; intended to pass any title, interest, or claim which the grantor may have in the property, but not containing any warranty of a valid interest or title in the grantor.
• Recording: filing documents affecting real property as a matter of public record, giving notice to future purchasers, creditors, or other interested parties. Recording is controlled by statute and usually requires the witnessing and notarizing of an instrument to be recorded.
• Recording Fee: The amount paid to the recorder's office in order to make a document a matter of public record.
• Red Lining: The outlining on a  map of certain "high risk" areas for real estate loan purposes. This means lenders will not extend credit in these areas for real property loans, regardless of the qualifications of the applicant. Some states have passed laws against this practice (Washington State has). The use of a red pen or pencil of the outlining gave rise to the term.
• Reformation: An action to correct a deed or other document which, through mistake or fraud, does not express the real agreement or intent of the parties.
• Registrar of Deeds: A term in some states to describe the person in charge of recorded instruments. More commonly call a recorder.
• Riparian Owner: One who owns land along the bank of a river or stream.
• Rule Against Perpetuities: Principle that a property interest is void unless it must vest not later than the remaining time of a life or lives in being, plus gestation time, plus twenty-one years. (The time has been modified by statute and should be checked in each state).
• Selling Agent: The real estate agent obtaining the buyer rather than listing the property. The listing and selling agent maybe the same person or company.
• Sepia: A master of construction plan, from which prints are made. Called a sepia because of its brown color.
• Septic System: A sewage system, whereby waste is drained from pipes and a tile field into a septic tank. Found in areas where city or county sewers have not yet been installed.
• Signed, Sealed, and Delivered: A phrase indicating that everything necessary to convey has been done by the grantor. Modernly, signed and delivered are still necessary, but the only seals are commonly used are by governments, corporations, and notaries.
• Silo: Generally, a tall, cylindrical structure, used for storage of corn, etc.
• Simple Interest: Interested computed on principal alone, as opposed to compound interest.
• Squatter: One who lives on another's land without authority or claim of right to possession. The land may either be private or public.
• Squatter's Rights: Commonly confused with adverse possession. A squatter has no ownership right and cannot, under the definition of a squatter, acquire any since he claims no interest adverse to the owner.
• Standard Depth: Depth of a lot considered to be the normal depth for appraisal purposes. Traditionally, one hundred feet for a residential lot.
• Standard Parallels: East-West survey lines, establishing township boundaries at twenty-four mile intervals, and correcting inaccuracies in the government survey, due to the curvature of the Earth.
• Stock Cooperative: A corporation formed for the purchase of hold title to real estate, physically similar to an apartment house. Each shareholder receives the right to exclusive occupancy of a dwelling unit. A forerunner of the condominium.
• Storm Sash (Storm Window): An extra window on the outside of an existing window, as additional protection against cold weather.
• Storm Sewer: A sewer carrying off rainwater. May also carry off industrial waste, such as chemicals, although many areas now forbid this.
• Subordinate: To make subject or junior to.
• Subordination Agreement: An agreement by which an encumbrance is made subject (junior) to a junior encumbrance. For example: a loan on vacant land is made subject to a subsequent construction loan.
• Suburban: The area around a city. Usually residential with small businesses, although modernly an attraction for large industrial and commercial complexes.
• Tacking: 1) Annexing a lien to one superior to it in order to gain the priority off the superior lien and defeat an intermediate lien. Generally not allowed. 2) Annexing periods of possession to add up to enough time for successful adverse possession. For example: A begins adverse possession. A dies and A's son takes up possession, adding A's time to his own. Not always allowed.
• Tax Lien: 1) A lien for nonpayment of property taxes. Attaches only to the property upon which the taxes are unpaid 2) A federal income tax lien. May attach to all property of the one owing the taxes.
• Tax Rate: Traditionally the ratio of dollars of tax per hundred or per thousand dollars of valuation. Modernly, has become to be expressed as a percentage of valuation.
• Tax Roll: A list, usually published by a county, containing the descriptions of all parcels in said county, the names of the owners (or those receiving the tax bill), the assessed value, and tax amount.
• Title: Lawful ownership of real property. Also, the deed or other document that is evidence of that ownership.
• Two Hour Door: A door with a resistance to fire, so that it would take a fire two hours to burn through it.
• Unavoidable Cause: A cause which reasonable prudence and care could not have prevented, such as death, illness, papers lost in a the mail, etc.
• Unbalanced Improvement: An appraisal term describing an improvement no in conformity with the surrounding area, and so, not suited to its location. Ma be an underimprovement or overimprovement.
• Underlying Financing: A mortgage, deed of trust, etc., prior to (underlying) a land contract, mortgage, etc., on the same property.
• Underwriter: One who insures another. A small title company buy insurance from a larger one (the underwriter) for all or part of the liability of its policies. A larger title company may buy part of the insurance from another company on high liability policies.
• Undivided Interest: A partial interest by two or more people in the same property, whether the interest of each is equal or unequal.
• Undue Influence: influence used to destroy the will of another so that his decision is not his free act.
• Undulating Land: Rolling land composed of compound slopes (two or more slopes of different grade).
• Unearned Premium: That unused portion of an insurance premium which is returned to the policy holder upon cancellation.
• Unearned Increment: An increase in value to real property due to some change in the area rather than an improvement in the property itself.
• Unity of Interest: In joint tenancy, the joint tenants must acquire their interest by the same conveyance and said interest be equal.
• Unity of Title: in joint tenancy, the holding by the joint tenants under the same title.
• Unlawful Detainer: The unjustifiable possession of property by one whose original entry was lawful whose right to possession has terminated; usually a tenant.
• Unmarketable Title: Not saleable. A title which has serious defects.
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• Working Capital: Cash, or assets which are readily convertible to cash, used to carry on a business.
• Zoning Ordinance: A law (generally at the city of county level) controlling the use of land and construction of improvements in a given area (zone).
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• Zygocephalum: In civil law an inaccurate measure of land. The area of land a yoke of oxen could plow in one day.