Glossary
M
Mandatory
Requiring strict conformity or obedience.
Market Allocation
An agreement between members of a trade to refrain from competition in specific market areas.
Market Price
The actual selling price of a property.
Market Value
The most probable price that a property should bring if exposed for sale in the open market for a reasonable period of time, with both the buyer and seller aware of current market conditions, neither being under duress.
Marketable Title
A title which a court of equity considers to be so free from defect that it will enforce its acceptance by a purchaser.
Mechanic’s Lien
A lien given by law upon a building or other improvement upon land, and upon the land itself, to secure the price of labor done upon, and materials furnished for, the improvement.
Meeting of the Minds
Whenever all parties to a contract agree to the substance and terms thereof.
Metes and Bounds
A term used in describing the boundary lines of land, seeing forth all the boundary lines together with their terminal points and angles.
Minor
A person under an age specified by law; usually under 18 years of age.
Monument
A fixed object and point established by surveyors to establish land locations.
Mortgage
An instrument in writing, duly executed and delivered, that creates a lien upon real estate as security for the payment of a specified debt, which is usually in the form of a bond.
Mortgage Commitment
A formal indication by a lending institution that it will grant a mortgage loan on property in a certain specified amount and on certain specified terms.
Mortgage Forbearance
Mortgage Forbearance is a temporary agreement between a borrower and their lender that allows the borrower to pause or reduce mortgage payments for a specified period of time due to financial hardship. During forbearance, the borrower is not required to make full monthly payments, but the missed or reduced payments are not forgiven and must be repaid later, often through a repayment plan, loan modification, or by extending the loan term.
Mortgage Reduction Certificate
An instrument executed by the mortgagee, setting forth the present status and the balance due on the mortgage as of the date of the execution of the instrument.
Mortgagee
The party who lends money and takes mortgage to secure the payment thereof.
Mortgagor
A person who borrows money and gives a mortgage on the person’s property as security for the payment of the debt.
Multiple Listing
An arrangement among Real Estate Board of Exchange Members, whereby each broker presents the broker’s listings to the attention of the other members so that if a sale results, the commission is divided between the broker bringing the listing and the broker making the sale. (See Rule 175.24)
N
Net Listing –
A price below which an owner will not sell the property, and at which price a broker will not receive a commission; the broker receives the excess over and above the net listing as the broker’s commission.
(See Rule 175.19)
Nonsolicitation Order
A rule adopted by the Secretary of State which prohibits any or all types of solicitation directed towards homeowners within a defined geographic area. Such rule may be adopted after a public hearing and upon the Secretary’s determination that homeowners within the subject area have been subject to intense and repeated solicitations by real estate brokers or salespersons and that such solicitations have caused owners to reasonably believe that property values may decrease because persons of different race, ethnic, religious or social backgrounds are moving or about to move into such area.
Notary Public
A public officer who is authorized to take acknowledgments to certain classes of documents, such as deeds, contracts, mortgages, and before whom affidavits may be sworn.
O
Obligee
The person in whose favor an obligation is entered into.
Obligor
The person who binds himself/herself to another; one who has engaged to perform some obligation; one who makes a bond.
Obsolescence
Loss in value due to reduced desirability and usefulness of a structure because its design and construction become obsolete; loss because of becoming old fashioned, and not in keeping with modern means, with consequent loss of income.
Open Listing
A listing given to any number of brokers 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; the sale of the property automatically terminates the listing.
Option
A right given for a consideration to purchase or lease a property upon specified terms within a specified time; if the right is not exercised the option holder is not subject to liability for damages; if exercised, the grantor of option must perform.
P
Partition
The division which is made of real property between those who own it in undivided shares
Party Wall
A wall built along the line separating two properties, partly on each, which wall either owner, the owner’s heirs and assigns has the right to use; such right constituting an easement over so much of the adjoining owner’s land as is covered by the wall.
Percentage Lease
A lease of property in which the rental is based upon the percentage of the volume of sales made upon the leased premises, usually provides for minimum rental.
Performance Bond
A bond used to guarantee the specific completion of an endeavor in accordance with a contract.
Personal Property
Any property which is not real property.
Plat Book
A public record containing maps of land showing the division of such land into streets, blocks and lots and indicating the measurements of the Individual parcels.
Plottage
Increment in unity value of a plot of land created by assembling smaller ownerships into one ownership
Points
In the context of loans and mortgages, points are up front fees paid to the lender at closing in exchange for a lower interest rate. They are also known as discount points or loan points and are expressed as a percentage of the loan amount.
Types of Points:
- Discount Points:
- Used to lower the loan’s interest rate (also called “buying down the rate”).
- Typically, one point costs 1% of the loan amount (e.g., $2,000 on a $200,000 loan).
- Each point typically reduces the interest rate by 25%, though this varies.
- Origination Points:
- Fees charged by the lender to process the loan.
- Unlike discount points, they do not reduce the interest rate.
When Buying Points Makes Sense:
- If you plan to stay in the home long enough to recoup the upfront cost through lower monthly payments.
- If you want to reduce long-term interest costs on a mortgage.
Police Power
The right of any political body to enact laws and enforce them, for the order, safety, health, morals and general welfare of the public.
Power of Attorney
A written instrument duly signed and executed by a person which authorizes an agent to act on his/her behalf to the extent indicated in the instrument.
Prepayment Clause
A clause in a mortgage which gives a mortgagor the privilege of paying the mortgage indebtedness before it becomes due.
Price Fixing
Conspiring to establish fixed fees or prices for services or products.
Principal
(1)The original loan amount borrowed from the lender, excluding interest and other fees. It is the amount that a borrower must repay over time, with each mortgage payment typically covering a portion of the principal along with interest. As payments are made, the principal balance decreases.
(2)The employer of an agent or broker; the broker’s or agent’s client.
Probate
To establish the will of a deceased person
Proration
Allocation of closing costs and credits to buyers and sellers.
Purchase Money Mortgage
A mortgage given by a grantee in part payment of the purchase price of real estate
