Capital Gains: Profit earned from
the sale of real estate. A seller may defer taxes
on the capital gain of his/her primary residence by
buying a higher priced residence within 2 years.
Cash Flow: The amount of cash derived
overt a certain period of time from an income-producing
property. The cash flow should be large enough to
pay for the expenses of the income producing property
(i.e. mortgage payment, taxes, insurance, and maintenance).
Caveat Emptor: A legal term meaning "let
buyer beware". The buyer must examine the property
and buy at his/her own risk.
Covenants, Conditions, and Restrictions (CC
and Rs): The basic rules establishing the
rights and obligations of owners of real property
within a condominium, townhouse, PUD, subdivision
or other tract of land. An association is organized
for the purpose of operating and maintaining property
commonly owned by the individual owners. The association
is normally made up of property owners.
Certificate of Eligibility: The document
issued by the Veterans Administration to those that
qualify for a VA loan which may be used to buy a house
with 0 down. Certificates of eligibility may be obtained
by sending the form DD-214 to the local VA office
along with VA form 1880.
Certificate of Reasonable Value (CRV) An appraisal
performed by an VA approved appraiser which establishes
the property's current market value. This value establishes
the ceiling on the maximum VA mortgage loan principal.
Certificate of Occupancy: Document
issued by a local governmental agency that states
a property meets the local building standards for
occupancy and is in compliance with public health
and building codes. This document is normally required
by a lender prior to closing the loan.
Certificate of Title: An opinion rendered
by an attorney as to the status of title to a property,
according to the public records. This certificate
does not the same level of protection as title insurance.
Chain of Title: The chronological
order of conveyance of a parcel of land from the original
owner to the present owner.
Clear Title: A marketable title,
free of clouds and disputed interest. Most lenders
require a clear title prior to closing on the mortgage.
Closing: The act of transferring
ownership of a property from seller to buyer in accordance
with a sales contract.
Closing Costs: Closing costs are
the charges and fees that are incurred by the buyer
and seller in a real estate transaction. Costs come
in two different categories, recurring and non-recurring.
Non-recurring costs are one time fees associated
with the transaction which often include:
* Discount and origination points
* Lender fees - underwriting, processing, document
preparation, tax service, flood certificate, wire
transfers, courier fees (mail delivery), and others.
* Title insurance
* Escrow, closing agent and attorney fees
* Recording fees
* Inspection and appraisal fees
* Brokerage commissions (real estate and mortgage)
Recurring fees are costs that you incur as a result
of owning the property, they typically recur every
month. These fees may include homeowner's insurance,
interest, mortgage payments, mortgage insurance, taxes,
and any association fees. A pro-rated amount of these
fees may have to be paid when you close.
Cloud on Title: Any outstanding claims
or encumbrances that would impair the owner's title,
if they are valid. A person typically gets title insurance
to protect them from this.
Commitment: A written document provided
by a lender in which they agree to make a loan on
specific terms to the borrower.
Condemnation Definition #1: Taking
of private property for public use with compensation
to the owner under eminent domain. Used by governments
to acquire land for schools, streets, and other public
functions. Can also be used by utilities to acquire
property for construction of the necessary infrastructure.
Condemnation Definition #2: The
declaration of a structure as being unfit for use
due to violations in local housing codes or other
reasons.
Conditional Commitment: A commitment
that hinges upon a set of conditions defined by the
borrower under which they will make the loan.
Condominium: A form of property where
the unit is a part of a larger structure. The owner
owns only the part that they occupy, plus they have
a shared interest in the common areas.
Construction Loan: This is a short term loan
that is used to provide money for new construction.
Usually this is giving to the builder in portions
over time as the construction progresses.
Consideration: Anything of value
given to induce another to enter into a contract.
Contingency: Conditions which must
be satisfied before the buyer can close on the purchase
of a property. These are generally determined before
hand and are outlined in the purchase contract.
Contract: An agreement between competent
parties to either do, or not do certain thing in return
for consideration of some sort.
Contract of Sale: See Agreement
of Sale.
Contract Sale or Deed: A real estate
installment selling arrangement where the buyer may
occupy the property but the seller retains the title
until the agreed upon sales price has been paid. Also
known as an installment land contract.
Conventional Loan: Any mortgage
loan other than an FHA or VA loan. A conventional
loan may be conforming, or non-conforming.
Conveyance: The transfer of title
from one party to the other.
Cooperative (Co-op): An apartment
building or a group of dwellings owned by a corporation,
the stockholders of which are the residents of the
dwellings. It is operated for their benefit by their
elected board of directors. In a cooperative, the
corporation or association owns title to the real
estate. A resident purchases stock in the corporation
which entitles him to occupy a unit in the building
or property owned by the cooperative. While the resident
does not own his unit, he has an absolute right to
occupy his unit for as long as he owns the stock.
Convertible ARMs: Some variable loans
come with options to convert them to a fixed loan
based on a pre-determined formula, during a given
time period. For example the 1-year T-Bill adjustable
may be converted to a fixed during the first five
years on the adjustment date. The means that you could
convert during the 13th, 25th, 37th, 49th and 61th
months of the loan.
Credit Report A report detailing
a borrowers credit history including payment history
on revolving accounts (e.g.. credit cards) and installment
accounts (e.g.. car loan). A credit report also includes
information found from public records including tax
liens and judgments.
