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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