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  • Capacity: Having legal competence to sign binding contracts.

  • Capital: Assets of a permanent nature used in the production of an income, such as: land, buildings, machinery, equipment, etc.

  • Capital Gain: Profit from the sale of property.

  • Capital Loss. Loss from the sale of property.

  • Capitalization: In appraising, determining value of property by considering net income and percentage or reasonable return on investment.

  • Capitalization Rate; Cap Rate: Calculated by dividing the net operating income by the offering price of the property. The lower the rate, the higher the selling price...and the higher the rate, the lower the selling price. Selling Price = Net Operating Income/Cap Rate. Example: If the net operating income of a apartment building is $100,000 and the Cap Rate is 10%, the selling price would be $1,000,000. ($100,000/10%). Lowering the Cap Rate to 8% increases the selling price to $1,250,000 ($100,000/8%). Raising it to 12% reduces the selling price to $833,333 ($100,000/12%). It answers the question, "How much am I willing to pay for this cash flow?"

  • Cash Flow: Cash left at the end of a period of time (usually a year) from the operation of income property or a business. Do not subtract depreciation when computing cash flow.

  • Caveat Emptor: "Let the buyer beware". The buyer must research purchase and buy at her own risk.

  • Certificate of Reasonable Value (CRV); The Veterans Administration appraisal commitment of property value.

  • Certificate of Title : A certification of the ownership of land. The first step to obtaining title insurance.

  • C.C.I.M.: Certified Commercial Investment Member.

  • Chain of Title: A history of conveyances and encumbrances affecting the title from the time the original patent was granted, or as far back as records are available.

  • Change, Principle of: Holds that it is the future, not the past, which is of prime importance in estimating value.

  • Chattel: Personal property.

  • Chattel Mortgage: A personal property mortgage - Security Agreement.

  • Chattels Real: An estate related to real estate, such as a lease on real property.

  • Chattels : Goods or every species of property movable or immovable that are not real property.

  • Chose in Action: A personal right recoverable by a court suit.

  • Closing Statement: The final accounting of a sale given by escrow to the buyer and seller.

  • Cloud On The Title: Any conditions revealed by a title search that affect the title to property;usually relatively unimportant items that can be removed with a quitclaim deed or court action.

  • Code: A group of laws.

  • Collateral: The property subject to the security interest.

  • Collateral Security: A separate obligation attached to contract to guarantee its performance; the transfer of property or of other contracts, or valuables, to insure the performance of a principal agreement.

  • Collusion: An agreement between two or more persons to defraud another of his rights by the forms of law, or to obtain an object forbidden by law.

  • Color Of Title: That which appears to be good title, but which is not title in fact.

  • Commercial Paper: Bills of exchange used in commercial trade.

  • Commercial Acre: A term applied to the remainder of an acre of newly subdivided land after the area devoted to streets, sidewalks and curbs has been deducted from the acre.

  • Commingling: Mixing client's money or property with the agent's.

  • Commitment: A Pledge, or a promise, or firm agreement.

  • Common Law: The body of law that grew from customs and practices developed and used in England "since the memory of man runneth not to the contrary."

  • Community: A part of a metropolitan area that has a number of neighborhoods that have tendency toward common interests and problems.

  • Community Apartment Project: A subdivision where the buyer receives a deed to the whole property and the right to use an apartment. Each owner is a tenant in common.

  • Community Property: Property accumulated through joint efforts of husband and wife.

  • Compaction: Whenever extra soil is added to a lot to fill in low places or to raise the level of the lot, the added soil is often too loose and soft to sustain the weight of the buildings. Therefore, it is necessary to compact the added soil so that it will carry the weight without the danger of their tilting, settling or cracking.

  • Comparable Sales: Property sales that have similar characteristics as the subject property and are used for analysis in the appraisal process.

  • Comparison Approach: Appraising by comparing recent sales prices of similar properties.

  • Compound Interest: Interest paid on original principal and also on the accrued and unpaid interest that has accumulated.

  • Condemnation: The act of taking private property for public use by a political subdivision; declaration that a structure is unfit for use.

  • Condition: Provision that the transfer of property depends upon another uncertain event.

  • Condition Precedent: A condition that must be fulfilled before title can be transferred.

  • Condition Subsequent: A condition that provides that if the owner fails to do something his title may be defeated and he may lose the property.

  • Conditional Commitment: A commitment of a definite loan amount for some future unknown purchaser of satisfactory credit standing.

  • Conditional Sale Contract: A contract for the sale of property stating that delivery is to be made to the buyer, title to remain vested in the seller until the conditions of the contract have been fulfilled.

  • Condominium: Individual fee ownership of units in a multi-family structure, combined with joint ownership of common areas of the structure and the land.

  • Confirmation of Sale: A court approval of the sale of property by an executor, administrator, guardian or conservator.

  • Consideration : Anything of value given to induce entering into a contract; it may be money, personal services, or even love and affection.

  • Construction Loans : Loans made for the construction of homes or buildings disbursed to the builder during construction and after periodic inspections.

  • Constructive Eviction : A disturbance of a tenant's possession by the landlord.

  • Contiguous: Touching at any point. Contiguous lots.

  • Contingent : Dependent upon an uncertain future event.

  • Contour: The surface configuration of land.

  • Contract: An agreement to do or not to do a certain thing.

  • Contribution, Principle of: Appraising principle used when considering proposed improvements.

  • Conventional Loan: A loan made without government backing.

  • Conversion: Change from one character or use to another.

  • Conveyance: Transfer of the title of land from one to another. Denotes an instrument that carries from person to another an interest in land.

  • Corner Influence: The added value of a corner lot.

  • Correlation: To bring the indicated values developed by the three approaches used in the appraisal process into mutual relationship with each other.

  • Cost Approach: An analysis in which a value estimate of a property is derived by estimating the replacement cost of the improvements, deducting there from the estimated accrued depreciation, then adding the market value of the land.

  • Covenant: Agreements written into deeds and other instruments promising performance or nonperformance of certain acts or stipulating certain uses or non-uses of the property.

  • C.P.M.: Certified Property Manager.

  • C.R.E : Counselor of Real Estate - Member of the American Society of R.E. Counselors.

  • Cul-De-Sac: Street open at one end only.

  • Curable Depreciation: Items of physical and functional obsolescence, which are customarily repaired or replaced by a prudent property owner.

  • Curtesy: The right, which a husband has in a wife's estate at her death.

  • Damages: The indemnity recoverable by a person who has sustained an injury, either in his person, property, or relative rights, through the act or default of another.

  • Dealer Property: Property held for sale to customers. Profit is considered ordinary income for income tax.

  • Debtor: The party who "owns" the property that is subject to the security interest. Sometimes known as the mortgagor or pledgor, etc.

  • Deciduous Trees: Lose leaves in autumn and winter.

  • Declaration of Abandonment : Document recorded to terminate a homestead.

  • Declaration of Homestead : Document recorded to establish a homestead to protect the owner against judgment liens.

  • Declaration of Restrictions: Recorded list of restrictions imposed on a subdivision by a subdivider.

  • Declining Balance Depreciation: Method of computing depreciation for income tax purposes.

  • Deed: Written instrument that, when properly executed and delivered, conveys title.

  • Deed of Trust: Document by which naked, legal title is transferred to a trustee as security for a loan.

  • Default: Failure to fulfill a duty or promise or to discharge an obligation; omission or failure to perform any act.

  • Defeasance Clause: The clause in a mortgage that gives the mortgagor the right to redeem his property upon the payment of his obligations to the mortgagee.

  • Deferred Maintenance : Existing buy unfulfilled requirements for repairs and rehabilitation.

  • Deficiency Judgment: A judgment given when the security pledge for a loan does not satisfy the debt upon its default.

  • Demand: Desire for property. One of four elements that create value.

  • Demise: Transfer to another of an estate for years, for life, or at will.

  • Deposit Receipt : Document used when accepting earnest money to bind an offer. Basic contract between buyer and seller.

  • Depreciation: Loss of value in real property brought about by age, physical deterioration or functional or economic obsolescence. Broadly, a loss in value from any cause.

  • Descent: Acquiring property by inheritance when the deceased dies intestate.

  • Desist and Refrain Order: An order directing a person to desist and refrain from committing an act in violation of the law.

  • Devise: A gift of real property by will.

  • Devisee: one who receive real property by will.

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