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Glossary > C
Frequently used terms
Cap
Capital
Gain
Cash Out Refinance
Certificate
of Eligibility
Certificate of Occupancy
(CO)
Certified Residential Specialist
(CRS)
Chain of Title
Closing Costs
Cloud
on Title
COFI Index (Cost of Funds Index)
Commitment Fee
Common
Area Assessments
Convertible
Adjustable Rate Mortgage
Credit Report
California Real Estate Inspection Association
A trade organization of home inspectors whose members must meet
defined education and performance requirements (Also known as
CREIA)
Call option
A loan clause allowing a lender to ask for repayment of the
entire balance at any time.
Can light
An incandescent light inside a metal can that is mounted flush
with the surface.
Can lights
Cylindrical chambers with bulbs recessed into the ceiling.
Cancellation clause
A clause detailing the conditions under which each party may
terminate the agreement.
Cantilever
A projecting structure supported on one end.
Cap
A limit on the amount the interest rate or monthly payment can
increase in an adjustable rate mortgage.
Cape Cod style
A wood-frame or shingled house with a steep roof and several
windows projecting from the second floor.
Capital
Money used to create income. For example, the funds used
to purchase investment property.
Capital
The decorative top of a column or pilaster.
Capital expenditure
The costs of making improvements on a property.
Capital gain
Profit an investor makes from the sale of real estate or investments.
Capital gains tax
A tax placed on profits from the sale of real estate or investments.
Capital improvement
Any improvement that extends the life or increases the value
of a piece of property.
Capitalization
A mathematical formula investors use to calculate property value
based on net income.
Capitalization rate
The rate of return estimated from the net income of a piece
of property, expressed as a percentage.
Caps (Interest Rate Caps)
Consumer safeguards which limit the amount the interest rate
on an adjustable rate mortgage which may change per year and/or
the life of the loan.
Carport
A roof that covers a driveway or other parking area.
Carryback financing
Financing in which a seller agrees to hold back a note for a
set amount of the sales price.
Casement window
A window hinged on its sides to allow it to swing open vertically.
Cash flow
The amount of cash a rental property investor receives after
deducting operating expenses and loan payments from gross income.
Cash-out refinance
The refinancing of a mortgage in which the money received
from the new loan is greater than the amount due on the old
loan.
Cashier's check
A check the bank draws on itself rather than on a depositor's
account.
Casing
The trim that encircles a window or door opening. Used
for hiding gaps between the door or window jamb and the wall's
surface.
Cathedral ceiling
A high, open ceiling formed by exposed roof rafters.
Caulk
An acrylic or silicon sealant used to fill cracks, crevices
and holes.
Caveat
A formal notice asking a court to suspend action until the filing
party can be heard.
Caveat emptor
A legal principle stating that a buyer is responsible for
ensuring the quality of goods purchased. From Latin, "let
the buyer beware."
Cavedium
A courtyard or atrium.
Ceiling fan
A large, ceiling-mounted paddle fan. Sometimes referred
to as a "Casablanca fan".
Center mullion
A cabinetry term referring to the vertical piece of wood on
the front that divides an opening into two parts.
Central air conditioning
A device that generates cold air through an outside unit connected
to ductwork inside the house.
Certificate of deposit index (CODI)
An index based on interest rates of six-month CDs.
Commonly used to determine interest rates for some adjustable
rate mortgages.
Certificate of eligibility
A document issued by the Veterans Administration that verifies
the eligibility of a veteran for a loan program.
Certificate of occupancy (CO)
A document stating that a home or other building has met all
building codes and is suitable for habitation.
Certificate of Reasonable Value (CRV)
An appraisal issued by the Veterans Administration showing
a property's current market value
Certificate of sale
A document issued at a judicial sale that entitles the buyer
to receive a deed after court confirmation of the purchase
of the property.
Certificate of veteran status
The document given to veterans or reservists who have served
90 days of continuous active duty (including training time).
Certified International Property Specialist (CIPS)
An advanced designation issued by the National Association of
Realtors (NAR) to members who meet specific performance and
education requirements for handling international real estate
transactions.
Certified Real Estate Brokerage Manager (CRB)
An advanced designation issued by the National Association
of Realtors (NAR) to members who meet specific performance
and education requirements for real estate office management.
Certified Residential Specialist (CRS)
An advanced designation issued by the National Association of
Realtors (NAR) to members who meet specific performance and
education requirements for handling residential real estate
transactions.
Chain of title
The official record that details the ownership history of
a piece of property.
Chair railing
Decorative trim installed on a wall about 32 inches above the
floor to protect against scuffs from furniture.
Change frequency
The adjustment schedule for interest rates on an adjustable
rate mortgage.
Change order
A modification of a construction contract to authorize a change
in the work, an adjustment in the amount of the contract or
a change in the contract time.
Chase
A shielded vertical shaft that houses various pipes, drains,
ducts and flues.
Chattel
Personal property such as furniture, clothing or jewelry.
Chattel mortgage
A lien on personal property used as collateral for a loan.
Chimney back
The back wall or lining of a fireplace or furnace chimney.
Chimney cap
A concrete cap that surrounds the top of the chimney brick.
This cap protects the masonry from rain and other natural
elements.
Chimney flue
The passage inside a chimney that channels smoke and heat to
the outside.
Chimney pot
A short pipe at the top of a chimney used to increase ventilation
and reduce smoke.
Chipboard
A board made of wood chips glued together under pressure.
Cinder block
A block made of ash and cement. Commonly used in construction.
Cinder fill
Cinders used below a basement or around a foundation to promote
drainage.
Circuit breaker
A switch-like device designed to shut down the circuit in
the event of an electrical overload or short circuit.
Circuit breakers can be usually be found in main electrical
panels.
Cistern
A tank used to store rainwater.
Clapboard
A type of siding, typically cedar, composed of overlapping
horizontal boards.
Classified property tax
A tax that varies in rate depending on the use of the property.
Cleanout
An opening in the drainage system for the removal of obstructions.
(Also commonly refers to the part of a fireplace from which
ashes can be removed)
Cleanout
A Y-shaped fitting with a cap or plug on one of the arms of
the Y that can be removed in the event of a drain clog to snake
out the drain line.
Clear title
A title to property that does not have liens, defects or other
legal encumbrances.
Clevis
Part of the assembly needed to raise and lower a sink or tub
pop-up. The clevis is a pin that connects to a pivot rod.
Closing
The final procedure in which loan and title documents are
signed between the buyer and seller and their respective representation.
Closing costs
Expenses related to the sale of real estate including loan,
title, and appraisal fees. These costs are above and beyond
the price of the property and are paid at closing. Most
closing costs are one-time expenses however a few are recurring.
Closing statement
A document which details the final financial details of a
property sale between a buyer and seller and the costs paid
by each party.
Cloud on title
An invalid encumbrance on real property.
Cluster development
A method of squeezing more homes into less space.
Co-housing
Individual housing units clustered around a common area building.
Co-insurance
Insurance coverage that involves the use of two or more insurers.
Co-maker
A person who signs a promissory note with the main borrower
and assumes responsibility for the loan.
Co-signer
A second party who also signs a promissory note and takes
responsibility for the debt.
CO/ALR
A designation on special light switches and outlets intended
to be installed with aluminum wiring.
Codicil
A change to a will that adds or subtracts provisions or clarifies
portions of the document.
COFI Index (Cost of Funds Index)
This index reflects the weighted-average interest rate paid
by 11th Federal Home Loan Bank District savings institutions
for savings and checking accounts, advances from the FHLB,
and other sources of funds. The 11th District represents
the savings institutions (savings & loan associations
and savings banks) headquartered in Arizona, California and
Nevada. The COFI index is a popular index used for determining
interest rates on adjustable rate mortgages.
Collar beam
The structural element that connects roof rafters.
Collateral security
Additional security that a borrower supplies or pledges to
obtain a loan.
Collection
The series of steps a lender takes to collect payments on a
delinquent mortgage.
Collusion
The action of two or more people to break the law.
Commercial Mortgage
A mortgage used to buy a commercial piece of property or commercial
building.
Commercial Mortgage Broker
A mortgage broker who specializes in commercial mortgage applications.
Commercial Mortgage Lender
A mortgage lender who specializes in the funding of commercial
mortgage loans.
Colonia
Unincorporated communities along the border between the United
States and Mexico.
Column
A slender upright structure that consists of a base, a round
or square shaft and a capital.
Column footing
The support base for a load-bearing column (usually made of
reinforced concrete).
Combination door
An outer door with interchangeable screen and glass panels.
Combination window
A window with interchangeable screen and glass panels.
Combustion gases
The fumes or exhaust from a gas or oil burning appliance such
as a water heater or furnace.
Commercial bank
An institution that provides financial services such as checking
and savings accounts, business loans and credit cards.
Commercial property
An area that is zoned for businesses.
Commingling
The mixing of money held in trust with other funds.
Commission
A negotiable percentage of a property's sales price paid to
the agents of the buyer and seller.
Commitment
A promise by a lender to make a loan with specific terms for
a specified period.
Commitment fee
A fee charged by the lender to guarantee a specific set of
loan terms to be honored at some future date.
Common area
An area inside a housing development that is owned and accessible
by all residents.
Common law
A body of laws based on custom, usage and rulings by courts
in various jurisdictions.
Common-area assessments
Fees paid by the owners of a planned-unit development or condominium
to maintain, repair, improve, or operate common areas.
Common-interest development
A project composed of individually owned units that share
usage and financial responsibility for common areas.
Community property
Property accumulated through the joint efforts of husband and
wife.
Community Reinvestment Act
A federal law that encourages financial institutions to loan
money in the neighborhoods where minorities live.
Comparables
Properties used as comparisons to determine the value of a
certain property.
Comparative market analysis
An estimate of the value of a property based on an analysis
of sales of properties with similar characteristics.
Competent
A term for a buyer who is legally fit to enter into a sales
contract.
Compound interest
The interest paid on the principal balance of a mortgage plus
accrued interest.
Compressor
Motorized equipment in a refrigeration (or air conditioning)
system that circulates coolant through the system.
Concrete tilt-up
The process of pouring concrete into forms on the ground, allowing
the forms to harden and then raising the material to a vertical
position to form walls.
Condemnation
The process the government uses to take private property for
public use without the consent of the owner.
Condensate drain
A drain required by a dehumidifier, high-efficiency furnace
or similar appliance to carry away condensation.
Condensate pump
A small pump used with high-efficiency furnaces or other appliances
that create significant condensation. It activates when
water collects to a certain level and pumps it out to a drain.
Condenser
Part of a refrigeration (or air conditioning) system that
pressurizes refrigerant to cool it by changing it from a vapor
to a liquid. On a refrigerator, the condenser is the
coil on the outside of the unit whereas an air conditioners
condenser is usually outside the house.
Conditional commitment
A promise by a lender to make a loan if the borrower meets
certain conditions.
Conditional sale
A contract for property sale stating that the title will remain
invested in the seller until all the conditions of the contract
have been fulfilled.
Condominium
Individual units in a building or development in which owners
hold title to the interior space while common areas such as
parking lots, community rooms and recreational areas are owned
by all the residents.
Condominium conversion
The change in title from a single owner of an entire project
or building to multiple owners of individual units.
Conduit
A metal pipe housing electrical wiring.
Conforming loan
A home loan that meets qualifications to be purchased by Fannie
Mae or Freddie Mac.
Consent judgment
A written agreement between two (2) parties to have a judgment
entered and recorded.
Conservator
A court appointed guardian.
Consideration
Anything that is legal, has value and induces a person to
enter into a contract.
Construction budget
Funding arranged by an owner for the construction of a project.
Construction documents
Drawings and specifications from an architect and/or engineer
providing detailed requirements for the construction of a
project.
Construction loan
A short term loan for construction. Lenders usually disburse
funds from construction loans in draws according to completion
of defined stages throughout the construction process.
Construction-to-permanent loan
A construction loan that is converted to a longer term traditional
mortgage after construction has been completed.
Consumer Credit Counseling Service (CCCS)
A nationwide, nonprofit organization that helps consumers get
out of debt and improve their credit rating.
Contiguous lots
Pieces of property that are adjoined.
Contingency
Conditions specified in a purchase contract, such as a satisfactory
home inspection.
Contingency listing
A property listing with a special condition attached.
Contingent fee
A fee that must be paid if a certain event occurs.
Continuity tester
A simple, battery-powered tool that indicates whether an electrical
circuit is complete or incomplete by lighting or buzzing when
you touch its two probes to the wires.
Contract
An agreement between two or more parties that creates or modifies
an existing relationship.
Contract for deed
A contract in which the seller agrees to defer all or part of
the purchase price for a specified period of time.
Contract to purchase
A contract the buyer initiates which details the purchase
price and conditions of the transaction. Also known as an
agreement of sale.
Contractor
The individual who contracts for the construction of a home
or project.
Contractual lien
A voluntary obligation such as a mortgage or trust deed.
Controlled growth
Any restrictions imposed on the amount or type of new development
in an area.
Conventional loan
A long term loan a lender makes for the purchase of a home.
Conversion
The exchange of personal or real property of one character for
another.
Convertible adjustable-rate
mortgage
A mortgage which starts as an adjustable rate loan, but contains
a provision that allows the borrower to convert the loan to
a fixed-rate mortgage during a specified period of time.
Conveyance
The transfer of title of property.
Conveyance tax
A tax imposed on the transfer of real property.
Cooperating broker
A real estate broker who finds a buyer for a property listed
by another broker.
Cooperative corporation
A business trust that holds the title to a cooperative residential
building and grants occupancy rights to shareholders in the
corporation.
Cooperative mortgage
Any loan related to a cooperative residential project.
Cooperative project
A project in which a corporation holds title and sells shares
representing individual units to buyers who then receive a
proprietary lease as their title.
Corbel
A short block or bracket projecting from a wall and providing
support for a horizontal member.
Corner bead
A reinforcement placed in the corner where two walls intersect.
Corner influence
The effect on the value of a property because it is situated
on a corner or near a corner.
Cornice
A horizontal molding that projects from the top of a structure
or wall.
Corrective work
Repairs made to fix problems identified by a home inspection.
Cost-plus contract
A construction contract that determines the builders profit
based on a percentage of the cost of labor and materials.
Cottage
A small, one-story house.
Counterbore
A hole drilled to recess the head of a screw.
Counteroffer
A response to an offer.
Courier fee
Fee charged at closing to cover the delivery of documents between
lenders, escrow companies, and other third parties during a
real estate transaction.
Covenant
A legal assurance or promise in a deed or other document,
or implied by law.
Covenants, conditions, and restrictions (CC&Rs)
Rules and regulations for a development, such as those pertaining
to acceptable landscaping or improvements that can be made to
individual units.
Craftsman style
An architectural style that evolved as part of the Arts and
Crafts movement near the turn of the century.
Crawl space
The space between the ground and the first floor of a home -
usually no higher than four feet.
Credit
Money a lender extends to a buyer for a commitment to repay
the loan within a certain time period.
Credit history
A file detailing an individual's current and past debt payments
and financial obligations.
Credit life insurance
Insurance that pays off a mortgage in the event of the borrower's
death.
Credit rating
The degree of creditworthiness assigned to a person based
on their credit history and financial status.
Credit report
A detailed account of an individual's credit, employment, and
residence history. A lender uses this report to determine
a loan applicant's creditworthiness. The three largest
credit bureaus are Trans Union, Equifax and Experian.
Credit repository
Large companies that gather financial and credit information
from various sources about individuals who have applied for
credit.
Credit Risk Score
A credit risk score is a statistical summary of the information
contained in a consumer's credit report. The most well
known type of credit risk score is the Fair Isaac or FICO
score. This score represents the answer from a mathematical
formula that assigns numerical values to various pieces of
information in a credit report.
Credit Score
A credit score is a statistical summary of the information
contained in a consumer's credit report. The most well
known type of credit score is the Fair Isaac or FICO score.
This score represents the answer from a mathematical formula
that assigns numerical values to various pieces of information
in a credit report.
Credit union
A nonprofit cooperative organization that provides banking and
financial services such as mortgages, home improvement loans
and auto loans to its members.
Creditor
An individual or institution to whom a debt is owed.
CREIA
Abbreviation for "California Real Estate Inspection Association"
A trade organization of home inspectors whose members must meet
defined education and performance requirements.
Cross-bridging
The strengthening of a structure by bracing cross members
between beams.
Crown
A piece of molding around the top of a room.
CU/AL
A designation on standard light switches and outlets that
intended to be installed with copper wiring.
Cul-de-sac
A street or alley that is closed at one end.
Cupola
A dome-like structure that sits on top of a roof.
Curable defect
A deficiency in a property that is easy or inexpensive to fix
(i.e. chipping paint)
Curb appeal
The first impression of a home or property as viewed from
the street.
Current value
The value of a home at the time of appraisal.
Curtain wall
An exterior wall that encloses a yard or other area but does
not provide any structural support to a home.
Custom builder
A builder who constructs a home or building based on plans created
by the owner.
Custom home
A home designed by an architect hired by the owner.
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