Capital- Accumulated wealth. A portion of wealth which is set aside for the production of additional wealth; specifically, the funds belonging to the partners or shareholders of a business, invested with the expressed intention of their remaining permanently in the business.
Capital Gain- Taxable profit on the sale of an appreciated asset.
Caps- Caps are used on adjustable rate mortgages (ARM's) to limit the interest rate and/or the payment. Most ARMs have a periodic cap that is around 2% per year and a life cap of around 5%-6% over the life of the loan. "Payment only" caps sometimes create negative amortization where the principal balance of the loan increases rather than decreases over time.
Caveat Emptor- A legal term meaning "let buyer beware".
Certificate of Eligibility- A certificate obtained by a veteran from a Veteran's Administration office which states that the veteran is eligible for a VA insured loan.
Certificate of Occupancy- Document issued by a local governmental agency that states a property meets the local building standards for occupancy.
Certificate of Reasonable Value (CRV)- An appraisal of property for the purpose of insurance by the Veteran's Administration.
Certificate of Title- A certification issued by a title company or a written opinion rendered by an attorney that the seller has good marketable and insurable title to the property which he is offering for sale. A certificate of title offers no protection against any hidden defects in the title which an examination of the public records could not reveal. The issuer of a certificate of title is liable only for damages due to negligence. The protection offered a homeowner under a certificate of title is not as great as that offered in a title insurance policy.
Certified Copy- A true copy, attested to be true by the officer holding the original.
Cestui Que Trust- One having an equitable interest in property with the legal title being vested to the trustee.
Chain of Title- The chronological order of conveyance of a parcel of land from the original owner to the present owner.
Chattel - Personal property.
Client - Person who employs the agent. Typically the seller is a client. The buyer can be a client (buyer's broker) or customer (seller's broker).
Closing- Conclusion of a real estate sale where the title of the property is transferred to the new owners and funds are transferred to the appropriate parties ( seller, old lender, real estate broker, etc.).
Closing Agent- A neutral third party that facilities the closing of a real estate transaction. The closing agent can be an escrow company, title company or attorney.
Closing Costs- Expenses incurred by the buyer/borrower and the seller in a real estate or mortgage transaction. There can be non-recurring costs that include a one time charge for points, appraisal fees, etc. or a prorating of recurring costs such as taxes and insurance incurred while the new buyer/borrower owns the real estate.
Closing Statement- Statement prepared for the buyer and seller itemizing all of the costs of a real estate transaction.
Closing Day- The day on which the formalities of a real estate sale are concluded. The buyer signs the mortgage, and closing costs are paid. The final closing merely confirms the original agreement reached in the agreement of sale.
Cloud on Title - An outstanding claim or encumbrance which, if valid, adversely affects the marketability of title.
Code of Ethics- Standards subscribed to by members of the National Association of Realtors.
Co-Maker- Equally responsible for repayment as the borrower.
Commercial Property- Property intended for use by all types of retail and wholesale stores, office buildings, hotels and service establishments.
Commission- Fee paid to a broker or other entity for services rendered. Real estate brokers and mortgage brokers receive a commission for the services they provide; a real estate broker secures a buyer for a property that is for sale and a mortgage broker secures a mortgage loan for the buyer to finance the purchase of a property. Commissions are generally paid as a percentage of the sales price in a real estate transaction or the loan amount in a mortgage transaction.
Commitment- A written promise to make or insure a loan for a specified amount and on specified items.
Common Law- Rules based on usage as demonstrated by decrees and judgments from the courts.
Community Property- Property owned jointly by husband and wife.
Comparables- Properties which are similar in value to a particular property and are used as comparisons to determine the fair market value of a specified property.
Condemnation- The taking of private property for public use by a government unit, against the will of the owner, but with payment of just compensation under the government's power of eminent domain. Condemnation may also be a determination by a governmental agency that a particular building is unsafe or unfit for use.
Conditional Commitment- A lenders promise to issue a loan subject to certain conditions. Generally, the lender will not fund the loan until the conditions have been met.
Conditional Offer- Purchase offer in which the buyer proposes to purchase property only after certain events (sale of another home, finding a loan commitment, etc.) occur.
Condominium (or Condo)- A structure of two or more units, the interior space of which are individually owned.
Consideration- Anything of value given to induce another to enter into a contract. Earnest money deposit on a sales contract is consideration.
Construction Loan- Short-term financing for real estate construction. Generally followed by long term financing called a "take out" loan issued upon completion of construction.
Contingency- Condition which must be satisfied before the buyer can consummate the purchase of a property. Contingencies are generally outlined in the purchase contract between the buyer and seller.
Contract of Purchase- An agreement between parties for the sale of real estate. In some states it is synonymous with a Purchase Agreement, Sales Agreement, or Land Contract. In Texas it is known as an Earnest Money Contract.
Contract of Sale- A purchase transaction in which the buyer receives possession of the property, but the seller retains title.
Contract Sales Price- The full purchase price as stated in the contract.
Conventional Loan- A mortgage loan that is not guaranteed or insured by the government. FHA and VA loans are not conventional loans.
Convertible ARMs- ARMs that have a provision allowing the borrower to convert the mortgage to a fixed rate term. The conversion feature is outlined in the mortgage note and has certain restrictions.
Conventional Mortgage- A loan neither insured by the FHA nor guaranteed by the VA.
Cooperative Housing- 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 purchase 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.
Cost Plus Contract - A building contract setting the builder's profit at a set percentage of actual cost of labor and materials.
Cost Basis- Accounting figure that includes original cost of property plus certain expenses to purchase, money spent on permanent improvements and other costs, minus any depreciation claimed on tax returns over the years.
Counteroffer- A new offer made as a result of another offer, which cancels the original offer
County- A division within a state, usually encompassing one or more cities or towns.
Covenant- An agreement written into deeds and other instruments promising performance or nonperformance of certain acts or stipulating certain uses or non users of the property.
Customer- Typically, the buyer (before buyer agency laws), as opposed to the principal (seller).
