Call Option - Duplex

CALL OPTION (PROVISIONS, RIGHTS):
Means the right of a lender to be paid with the loan balance at a time stated in the contract.

CANCELLATION CLAUSE:
Means a statement in a contract that will allow any of the parties involved in the said contract to put an end to the contract given the existence of a particular event.

CAP:
Means a boundary. In mortgage lingo, this is the boundary given to increase in sporadic payments or changes to the interest during the lifetime of a mortgage. 

CAP RATE:
 Means Capitalization Rate.

CAPITAL ASSET:
Means a possession that is bound to taxation guidelines.

CAPITAL EXPENDITURE:
Means the money used to rehabilitating a property that its value may increase and which one could add to the base value of the said property if one plans to sell or auction off the property in the future.

CAPITAL GAIN:
Means the added value of a primary possession other than one’s home that is subject to tax once the owner disposes of the property or when the property is said to have been dispossessed.

CAPITAL IMPROVEMENT:
Means work done on a primary possession that its value may be enhanced.

CAPITAL LOSS:
 Means the negated values of a primary possession other than one’s home that one could use to set off one’s regular income or capital gains, however taxation guidelines apply.

CAPITAL:
Means the money being utilized in a business undertaking.

CARRYING CHARGES (COSTS):
Means the various costs to be incurred when maintaining a real estate property for a certain length of time such as property taxes, interest charges on financing, and the likes.

CASH FLOW:
Means a real estate property’s gains after all other property-related expenses have been paid or settled.

CASH RESERVE:
Means cash that a real estate owner still has after purchasing a property.

CASH-OUT REFINANCE:
Means cash that a real estate property owner still has after settling an old mortgage using a new mortgage grant.

CAUTION:
Means a statement in the title of a real estate property that disallows other kinds of dealings with the said property.

CAVEAT EMPTOR:
Is a Latin statement that means: “Let the Buyer beware”. This is a statement that is simply translated to mean in English as the property’s seller not being obligated to share to the property’s buyer the current condition of the property involved unless the problems involved could never be discovered even if the prospective buyer conducts a thorough investigation of the said property.

CC&R'S:
Means “Covenants, Conditions, and Restrictions”, terms usually found in a title, which are guidelines said to govern the relations that landowners should have while a subdivision or condominium building they co-own is still being developed.

CEILING:
Means the boundary placed on the interest rate of a mortgage while the latter is alive. 

CERTIFICATE OF INSURANCE:
 Is a document that a real estate property’s insurance company sends to the property’s owners as proof that the company has been insured. The same document also sets the terms and conditions under the insurance coverage.

CERTIFICATE OF OCCUPANCY:
Is a document that a local government unit issues to the public showing that the real estate property is safe for dwelling.

CERTIFICATE OF TITLE:
Is a document that a real estate property owner shows to prove that he owns the property mentioned in the document.

CHAIN OF TITLE:
Is a document that lists out the various owners of the real estate property mentioned in the title.

CHANGE FREQUENCY:
Means the time period when changes to the interest rate of a loan or mortgage occur.

CLEAR TITLE:
Means that a real estate property’s title is free of other claims and other such encumbrances and that the property mentioned can be sold.

CLAIM:
Is one’s right declared against another person.

CLOSED MORTGAGE:
Refers to a loan that has a fixed payment scheme, which means that one cannot pay for the mortgage ahead of its schedule, unless the borrower pays the corresponding penalty for breaching the scheme.

CLOSED-END MORTGAGE:
Refers to a mortgage that has a fixed principal amount that one can neither increase nor extend while the mortgage is alive.

CLOSING:
Means the end of a deal. Here, documents and funds are exchanged.

CLOSING COSTS:
 Refers to expenses that parties incur while a deal is being closed such as legal fees, taxes, registration fees, and other related fees.

CLOSING DATE:
Refers to the date when the deal was closed, the purchase expenses paid, and the new title registered.

CLOUD (ON TITLE):
Is the opposite of a Clear Title; means there is some doubt as to the ownership of the real estate property involved.

COLLATERAL:
 Refers to a possession used to safeguard a mortgage or a loan. If the borrower fails to pay off the loan, the lender could take away from him the possession involved that the loan may be paid off.

COLLATERAL MORTGAGE:
Refers to a loan that has been safeguarded with a document declaring the indebtedness of the borrower and has for a secondary safeguard a mortgage listed against the possession involved.

COMMERCIAL BROKER:
Is a professional working in the real estate industry that has the right and capabilities to transact properties of a commercial nature.

COMMERCIAL PROPERTY:
Refers to a property that could be utilized for commercial purposes such as offices, stores, and other related properties.

COMMISSION:
Is the term used to refer to the cash paid to a real estate professional after the successful sale of a property.

COMMISSION SPLIT:
Refers to the commission being divided between the real estate professional who was able to sell the property and the other parties involved in the successful sale.

COMMITMENT FEE:
Refers to the fee that a lender asks a borrower to pay as proof that he is committed to the loan being taken.

COMMON AREA ASSESSMENTS:
Refers to fees that owners of a condominium building or development have to pay for the repair and maintenance of the common areas of the said property. The charges are also known as Common Element Fees.

COMMON AREAS:
Refer to those parts in a condominium building that are open to the use of all occupants.

COMMUNITY ASSOCIATION:
Refers to an organized group of homeowners put up for the sole purpose of representing the members in transactions with government and non-government bodies.

COMPARABLES:
Are properties of the same nature to the property in question that are used to assess the value of the latter property that its market price could be determined.

COMPONENT DEPRECIATION:
Refers to the depreciated value of the cost of renovation of each component (plumbing, electrical works, etc.) and is done in compliance with certain tax regulations.

COMPOUND INTEREST:
Happens when a borrower is unable to follow through with the agreed loan payment scheme and is now forced to pay for the interest incurred by the loan's interest after missing several payments.

CONCESSIONS:
Refers to necessary acts that a person has to make that he may persuade another person to sign a contract.

CONDEMNATION:
Is a notice coming from the authorities condemning an unsafe property from ever being used again.

CONDITION(S):
Are terms and statements in a contract that have to be satisfied for the document to become final and executory.

CONDITIONAL OFFER:
Refers to "Conditional Sales Contract", which means that a sale has only been made following the execution of certain conditions in the agreement.

CONDOMINIUM:
Refers to a building that is owned by several people but who live in separate units of the same building yet share the use of areas designed for the utilization of all unit occupants.

CONFORMING:
Refers to a person’s compliance with specific laws and regulations.

CONSIDERATION:
Refers to a person’s act of offering another person something or some form of service in order that the latter would agree to enter into a contract with him.

CONSTANT PAYMENT LOAN:
Refers to a loan that needs to be paid regularly using the same amount for a specific length of time until such time that the entire loan amount has been paid off.

CONSTRUCTION LIEN:
Is a statement in the contract that will protect the person who provides the necessary materials and services needed to improve a real estate property in case of a lawsuit.

CONSTRUCTION LOAN:
Refers to a kind of loan lent to a construction specialist that he may be able to develop the property assigned to him.

CONSUMER REPORTING AGENCY (OR BUREAU):
Is also referred to as “Credit Bureau”. Banks and lenders approach this bureau to get to know a prospective borrower’s credit history.

CONTINGENCY:
Refers to any event in the future that needs to be satisfied in order for an agreement to become final and executory.

CONTRACT:
Refers to an agreement whether oral or written that two or more people enter into or sign because they have agreed to do so.

CONVENTIONAL LOAN:
Refers to any kind of loan minus the government intervention. It is any kind of loan with a set interest rate and payment scheme.

CONVERSION CLAUSE:
Refers to a statement in a mortgage agreement that will allow a borrower to change the terms in the agreement such as converting the mortgage to a fixed rate kind given specific events are satisfied.

CONVERSION:
Refers to a change in how a particular property is utilized such as converting a personal home to a commercial building.

CONVEY:
Is what happens when a person transfers his rights to a property to another person.

CONVEYANCE:
Refers to the notice that conveys the transfer of rights to a property from one person to another.

CO-OP:
Is short for Cooperative, which means that the ownership of a real estate property belongs to all people occupying the said property.

COOPERATING BROKER:
Refers to a person who was instrumental to the closing of a transaction, which means that he has a claim to the closed deal’s commission.

COST APPROACH:
Refers to the act of a real estate professional assessing the value of a specific property including repair and maintenance costs but less the depreciated value.

COST ESTIMATING:
Is the act of foreseeing beforehand the various expenses that one will probably incur once construction begins.

COST PLUS CONTRACT:
Refers to the contract that a contractor enters into that will set how much he will be paid with upon completion of the construction project, which is just a portion of the entire cost of all labor and materials.

CO-TENANCY:
Happens when a real estate property is owned by two or more persons. So what happens is either they have equal rights to the involved property or each owns a certain percentage of the same property.

COUNTER OFFER:
Is a person’s answer to an offer that another person has made.

COUNTY:
Is a term used to call divisions in land areas.

COVENANT:
Refers to a commitment stated in an agreement.

COVENANT RUNNING WITH THE LAND:
Refers to a commitment stated in a contract that is attached to the land and whoever becomes the owner of the property involved is bound to follow to the letter whatever is written in the commitment.

CREATIVE FINANCING:
Refers to a special kind of financing for the sole purpose of the borrower being able to buy a real estate property.

CREDIT HISTORY:
Refers to a document that illustrates a person’s past and current obligations, which document should help lenders evaluate if the prospective borrower is a good or bad debtor.

CREDIT RATING:
Refers to a person’s ability to manage his past and current obligations, as illustrated in his credit history.

CREDIT RISK:
Is a borrower or any person who is incapable of meeting his obligations or paying off his debts.

CREDITOR:
Refers to a person who is able to let other people borrow cash from.

CUMULATIVE INTEREST:
Is the sum of a loan’s interest.

CUSTOM BUILDER:
Is a company that is capable of making homes according to a person’s taste and preference, specifications and requirements.

DATE OF INSTRUMENT:
Refers to the date a document of legal nature was created or approved.

DATE OF REGISTRATION:
Refers to the date a legal document became titled.

DEBT COVERAGE RATIO (DCR):
Happens when real estate professionals try to compare a property’s income with the amount needed to pay off the loan on the real estate property and is utilized to evaluate whether the said property is capable or incapable of paying for itself.

DEBT EQUITY RATIO:
Happens when real estate agents try to compare the property’s equity with the mortgage on the property.

DEBT RATIO:
 Is the ratio between a borrower’s gross monthly income and his various obligations.

DEBT SERVICE:
Refers to the loan’s payment scheme.

DEBTOR:
Refers to a person who borrows from a Creditor.

DEED:
Refers to a legal document used to convey a real estate property’s title.

DEFAULT:
Happens when a borrower fails to follow through with the agreed loan payment scheme.

DEFAULT JUDGMENT:
Happens when a court of law gives out a decision just because the defendant was unable to provide an answer to a claim.

DEFEASANCE CLAUSE:
Happens when the borrower successfully pays off the loan as well as its interest and because of such a circumstance the lender’s rights to the property die out.

DEFECTIVE TITLE:
Happens to a title whose ownership is in question.

DEFERRED INTEREST:
Refers to a loan’s interest that the borrower was unable to pay and will thus be added to the principal loan amount.

DEFERRED INTEREST MORTGAGE:
Happens when a borrower tries to reduce the amount he has to pay on a loan by paying only a percentage of the loan’s interest for a certain period of time and when the time comes to pay off the entire loan amount the unpaid interest is added to the principal loan amount.

DEFICIENCY JUDGMENT:
Refers to a court request asking the borrower to pay his lender the amount needed to cover the deficiency between the borrowed amount and the amount the lender received from the mortgaged property he sold.

DELINQUENCY:
Refers to a situation when a borrower paid late his obligations.

DEMAND LOAN:
Refers to a kind of loan wherein the lender has the right to demand from the borrower the loan’s full payment including interest anytime he desires.

DENSITY:
Is the term used to call the measure of things within a designated space.

DEPOSIT:
Refers to the cash that a purchaser hands the vendor as proof that he is going to complete the transaction.

DEPOSIT OF TITLE DEEDS:
Happens when a lender requests a borrower to give him titles to lands he owns to further safeguard the loan.

DEPRECIABLE BASIS:
Refers to the value of the first acquisition of an improvement made on a specific land per tax regulations.

DEPRECIABLE LIFE:
Refers to an estimate given on an asset’s valuable life.

DEPRECIATION:
Is the lowering of the price of a real estate property after some time. It is also the amount of tax adjusted due to the decreased worth of a possession after a certain period of time.

DESCRIPTION:
Refers to how a specific land is recognized.

DETACHED SINGLE-FAMILY HOME:
Refers to a house that has been created in such a way that it could only accommodate one family unit.

DEVELOPER:
Refers to a business man or corporation that is in the industry of developing portions of lands into subdivisions or commercial spaces.

DEVELOPMENT RIGHTS:
Refers to a person or corporation’s rights to develop a piece of land.

DEVISE:
Happens when a person leaves his land to another person conducted through the land owner’s will and testament.

DEVISEE:
Refers to a person who received a real estate property through a devise.

DEVISOR:
Refers to person who died but was able to leave his real estate property to a devisee.

DIRECT COSTS:
Refers to the cash that had to be disbursed that a property be given a facelift or other such improvements.

DIRECT REDUCTION MORTGAGE:
Is simply an amortized loan.

DISBURSEMENT:
Refers to cash spent.

DISCHARGE:
Means meeting one’s debts.

DISCLAIMER:
Refers to a statement in a contract that means a rebuttal of responsibility or legal right.

DISCLOSED PRINCIPAL:
Happens when a real estate agent finally reveals to another person the identity of the person he has been representing all this time.

DISCLOSURE:
Refers to a statement in an agreement that will reveal to the Vendee the various problems the property he is about to purchase has. It is the Vendor who reveals this information through the written agreement.

DISCOUNT REAL ESTATE BROKER:
Refers to a real estate broker who has the right to charge commissions at friendlier rates.

DISTRESS:
Refers to the legal right of a person to vend a possession of another person who has an outstanding loan with the former.

DISTRESSED PROPERTY:
Refers to a possession that is going to be used to pay off the unpaid sum involved in a mortgage.

DISTRICT:
Is a name utilized to describe locations according to how the areas are being used whether residential, commercial, or industrial.

DOWN PAYMENT:
Refers to the initial payment that a Purchaser makes.

DRAGNET CLAUSE:
Refers to a statement in the contract stating that the property being purchased could be used to pay the borrower’s mortgage in case he becomes unable to pay his loan obligations.

DRY MORTGAGE:
Is a non-recourse loan.

DUAL AGENCY:
Happens when a real estate professional represents both the Vendor and Vendee and a conflict of interest is thus created. This should then be made known to the parties involved, as this is in violation of certain real estate rules and regulations.

DUE ON SALE CLAUSE:
Is a statement in the contract that requires a borrower to pay in full his mortgage obligations once the real estate property used to secure the loan is sold.

DUPLEX:
Refers to an establishment that has two separate housing units.

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