Real Estate Definitions A B C D E F G H I J K L M N O P Q R S T U V W X Y Z M.A.I. - Designates a person who is a member of the American Institute of Real Estate Appraisers Marketable Title Merchantable title; one free and clear of objectionable liens or encumbrances. Market Price - The price the property brings in a given market. Market Value - The price a willing buyer would pay and a willing seller would accept, both being fully informed and the property being exposed for sale for a reasonable time period. Mechanic's Lien - A lien created by statute for the purpose of securing priority of payment for the price or value of work performed and materials furnished in construction or repair of improvements to land, and which attaches to the land as well as the improvements. Moratorium - Temporary suspension, usually by statute, of the enforcement of liability for an obligation. Mortgage - An instrument by which property is hypothecated to secure the payment of a debt. Mortgage Broker One who, for a fee, brings together a borrower and lender, and handles the necessary applications for the borrower to obtain a loan against real property by giving a mortgage or deed of trust as security. Mortgagor - One who borrows money on his property and gives a mortgage as security.  top of page Negotiable - Capable of being negotiated; assignable or transferable in the ordinary course of business. Net Listing - A listing which provides that the agent may retain, as compensation for his services all sums received over and above a net price to the owner. Net Worth - Value remaining after subtracting the liabilities from the assets of a company or an individual. Nonconforming Use - A use that was lawfully established and maintained, but no longer conforms to the use regulations of the zone in which it is located because of a subsequent change in a zoning ordinance. Notary Public - An official authorized by law to witness or attest to an acknowledgment by a person who has executed an instrument. Note - A signed written instrument acknowledging a debt and promising payment. Notice of Default - A notice filed to show that the borrower under a mortgage or deed of trust is in default (behind on the payments). Notice of Non-Responsibility - A notice provided by law designed to relieve a property owner from responsibility for the cost of improvements ordered by another person Notice of Rescission - A recorded notice to rescind a notice of default of a mortgage or deed of trust. top of page Obsolescence - Loss in value due to reduced desirability and usefulness of a structure because it has become old fashioned and not in keeping with modern needs or because of adverse social or economic influences. Offer and Acceptance - A contract used in the sale of real property; a deposit receipt or exchange agreement. Offer to Buy - An agreement between owner and purchaser as to the price, terms, conditions and date of occupancy. Usually prepared by a Realtor or attorney. Open-End Mortgage - One which provides that the outstanding balance can be increased in order to advance additional loan funds to the borrower, up to the original sum of the note. Open Listing - An authorization given by a property owner to a real estate agent wherein said agent is given the non-exclusive right to secure a purchaser; open listings may be given to any number of agents without liability to compensate any except the one who first secures a buyer ready, willing and able to meet the terms of the listing, or secures the acceptance by the seller of a satisfactory offer. Option - A right given for a consideration to purchase or lease a property upon specified terms within a specified time. Oral Contract - A verbal agreement; one which is not reduced to writing. Percolation - The seepage of water through soil; the soil's ability to absorb to water or other liquid. Personal Property - Any property which is not real property. Planned Development - Five or more individually owned lots where one or more other parcels are owned in common or there are reciprocal rights in one or more other parcels. A subdivision. Plat - A map or plan of a certain parcel of land. Plat Book - A book showing the lots and legal subdivisions of an area. Pocket Listing - A trade term. An open listing that a real estate salesperson "pockets" or keeps hidden from his/her associates. Possessory Interest - Right to possess. Power of Attorney - An instrument authorizing a person to act as the agent of the person granting it. Preliminary Title Report - A report showing the condition of title before a sale or loan transaction. After completion of the transaction, a title insurance policy is issued. Prepayment Penalty - The percentage a lender may require to be paid in addition to the unpaid principal balance when a loan is paid off ahead of schedule. Prescription - Obtaining title to property by adverse possession by occupying it for the period determined by law to bar action for recovery. Prima Facie - Presumptive on its face; true, valid, or sufficient at first impression. Principal - The employer of an agent. Promissory Note The document signed by the borrower promising repayment of the loan showing the amount of monthly payments, interest rate, first payment date, last payment date, and the late charge and prepayment provisions. Proration of Taxes - To divide or prorate the taxes equally or proportionately to time of use. Puffing - The sometimes exaggerated buildup a salesperson or the seller may give to property. It is recognized in law as an opinion and not necessarily representing the facts Purchase Money Encumbrance - (1) A trust deed or mortgage given by the buyer to the seller as part or all of the purchase price of the property. (2) A trust deed or mortgage given to a third party as security for the borrowing of money used to purchase less than five residential units, one of which is to be occupied by the purchaser.