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Acknowledge
A declaration by someone that something is true.
Affidavit
A sworn statement; written oath such as acknowledgment.
Affirmation
A solemn declaration; a non-religious oath.
Agency
The legal relationship between a principal and his agent
arising from a contract in which the principal engages the
agent to perform certain acts on the principals behalf.
Agency Disclosure
A written explanation to be signed by a prospective buyer or
seller, explaining to the client the role that the broker
plays in the transaction. The purpose of disclosure is to
explain whether the broker represents the buyer or seller or
is a dual agent (representing both) or a subagent (an agent
of the sellers broker). This allows the customer to
understand to which party the broker owes loyalty.
Agent
A person (natural), corporation, society, association or
partnership (legal persons) acting by authority of a
principal in a realty transaction for compensation.
Agreement of Sale
A bilateral contract whereby buyer promises to buy and
seller promises to sell by execution and delivery of deed;
also know as Purchase and Sale Agreement (P&S).
Agreement means the same as Contract.
Amortization
Act of liquidating an indebtedness by equal and periodic
payments usually monthly; this direct reduction method means
each payment remains constant but ratio of principal and
interest changes with an increasing larger portion credited
to reducing debt; savings and loan associations popularized
method.
Appraisal
An estimate of value.
Appreciation
Increase in value resulting from market forces such as
demand stronger than supply.
Attachment
A writ issued, beginning or during a legal action commanding
sheriff to attach (seize) property, rights and effects of
defendant to satisfy possible credit demands of plaintiff if
judgment comes out in plaintiffs favor.
Attorney-in-Fact
Anyone who is authorized in writing to perform certain acts
for another under written power of attorney; valid only
during lifetime of party giving this power.
Bill
of Sale
A written instrument which is the evidence of transfer of
one persons right in personal property to another.
Capital
Expenditures
Investments of cash for improvements to remain competitive
in a business.
Capitalized Items
Have an economic life of one year or more and the cost is
moved to the balance sheet, and then these costs can be
written down by depreciation or amortization over time.
Cash Flow
Profit after principal and interest are deducted from net
operating income (NOI).
Closing Costs
Costs of seller and buyer at conveyance of realty.
Closing Statement
A written accounting of funds to seller and buyer at passing
of papers.
Collateral
A security, such as a mortgage, given to protect debt.
Commingling
The mixing of funds held for the benefit of others with the
brokers personal or business funds.
Commission
Money or other valuable consideration given to broker by
principal for services rendered; amount is by agreement.
Conditional Sales Contract
A contract in which owner retains title until buyer has met
all terms and conditions; a familiar device in land sales;
also called land contract or installment contract. Buyer
acquires equitable title until final payment; after delivery
of deed, buyer has legal title.
Consideration
Something of value exchanged between parties of a contract;
money, services, goods or promises.
Contract
A legal instrument between two parties to do or not to do
something; in reality, it must be in writing to be
enforceable.
Counter Offer: voids first offer and creates new offer.
Covenant
A promise in an agreement or contract agreeing to
performance or nonperformance of certain acts, or requiring
or preventing certain acts or uses.
Confidentiality Agreement
A pact that forbids buyers, sellers, and their agents in a
given business deal from disclosing information about the
transaction to others.
Deficiency Judgment
Court award to lender if sale at public auction does not
equal mortgage debt.
Depreciation
Decrease in value for various reasons
Due Diligence
Due diligence is often performed on the acquirer as well as
the target
Earnest
Money
Deposit or binder given with Agreement to Buy.
Equity
Value or interest an owner of realty has above ay debt on
property; difference between value and mortgage debt.
Escrow
The holding of something of value by a person (escrowee or
escrow agent) for the benefit of other parties.
Exclusive Right to Sell
An employment agreement and contract giving the broker the
right to receive a commission if the property or business is
sold by anyone including the seller during the term of the
agreement.
Expense
Anything that a company buys that has an economic life of
less than one year. It shows up immediately on the income
statement.
Fiduciary
A position of trust (e.g. broker to principal).
Finders Fee
Fee to broker for arranging loan for client; can also mean
fee to broker for locating a property for client
Gross Lease
Owner receives rent and pays out expenses such as in
apartment leasing; Net Lease: owner receives rent and tenant
also pays out expenses normally paid by owner such as taxes,
etc.
Irrevocable
Unchangeable.
Judgment
A court action describing indebtedness of one to another.
Lease
Contract between lessor (landlord) and lessee (tenant) for
exclusive possession of realty for specified period under
specific terms after which property reverts to lessor.
Leaseback
The purchase of improved property and the leasing of it back
to seller; creates capital and favored tax treatment for
seller.
Leasehold
The interest which a lessee has in realty.
Letter of Intent
A document agreement between a buyer and a seller used in
connection with the acquisition of a company. The letter of
intent describes the basic terms and conditions of the
transaction between the buyer and the seller, including
price, due diligence periods, exclusivity or no-shops, and
the basic conditions to closing the deal. Customarily
presented before a definitive purchase agreement is entered
into, the letter of intent provides a road map for the
parties involved in the transaction.
Lien
A debt; a claim against property for payment of some debt.
Lis Pendens
Notice filed in a registry of deeds warning all persons that
title to certain property is in litigation.
Listing
A written engagement (contract) between a principal and an
agent authorizing the agent to perform services for the
principal involving the principals property (business).
Generally the services provided by the agent involve the
proposed sale of the principals property or business. Also,
the property or business listed by the agent is called a
Listing.
List
To obtain a Listing Agreement
Procuring
Cause
A legal term that means the cause resulting in accomplishing
a goal. Used in real estate [or business brokerage] to
determine whether a broker is entitled to a commission.
Representation
A statement or condition made that something is true or
accurate.
CLP
(Certified Lender Program)
This process is for the more sophisticated and experienced
lenders who have graduated beyond GP status. Typically, the
lender now submits a complete package to the SBA and as a
CLP Lender they are guaranteed a 3-day turnaround from the
SBA.
GP (General Program)
This is the lowest rating and is given to lenders who know
little about the SBA process. These lenders must submit each
loan application to the SBA for additional underwriting and
ultimate approval. This process can take up to two weeks
with multiple requests for additional information.
PLP (Preferred Lender Program)
This is the top designation and enables the respective
lenders to approve their own loans with no additional
underwriting by the SBA. Typically, this designation means
that the lender has sufficient experience and track history
to adhere to SBA standards and make quality loans.
Stipulation
To make a special demand for something as a condition of an
agreement.
Warranty
An expressed or implied statement that a situation or thing
is as it appears to be or is represented to be.
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