Real Estate Vocabulary (D-F)

Debit

A bookkeeping entry on the left side of an account, recording the creation of or addition to an asset or an expense, or the reduction or elimination of a liability or item of equity or revenue.

Escalator Clause

A clause in a contract providing for the upward or downward adjustment of certain items to cover the specified contingencies, usually tied to some index or event. Often used in long term leases to provide rent adjustments, to cover tax and maintenance increases.

Executory Contract

A contract in which something remains to be done by one or both of the parties.

Deed in Lieu of Foreclosure

A deed to real property accepted by a lender from a defaulting borrower to avoid the necessity of foreclosure proceedings by the lender.

Devise

A gift or disposal of real property by last will and testament

Deficiency Judgement

A judgement given by a court when the value of security pledged for a loan is insufficient to pay off the debt of the defaulting borrower.

Estoppel

A legal theory under which a person is barred from asserting or denying a fact because of the person's previous acts or words.

Exclusive Agency Listing

A listing agreement employing a broker as the sole agent for the seller of real property under the terms of which the broker is entitled to a commission if the property is sold through any other broker, but not if a sale is negotiated by the owner without the services of an agent.

Exclusive Right to Sell Listing

A listing agreement employing a broker to act as agent for the seller of real property under the terms of which the broker is entitled to a commission if the property is sold during the duration of the listing through another broker or by the owner without the services of an agent.

Economic Obsolescence

A loss in value due to factors outside the subject property, such as changes in competition or surrounding land use. Also referred to as external obsolescence.

Executor

A man named in a will to carry out its provisions as to the disposition of the estate of a deceased person. (A woman is executrix.)

Exchange

A means of trading equities in two or more real properties, treated as a single transaction through a single escrow.

Declining Balance Depreciation

A method of accelerated depreciation allowed by the IRS in certain circumstances. Double Declining Balance Depreciation is its most common form and is computed by using double the rate used for straight line depreciation.

Equity Participation

A mortgage transaction in which the lender, in addition to receiving a fixed rate of interest on the loan acquires an interest in the borrower's real property, and shares in the profits derived from the real property.

Defendant

A person against whom legal action is initiated for the purpose of obtaining criminal sanctions (criminal defendant) or damages or other appropriate judicial relief (civil defendant).

Devisor

A person who disposes of real property by will.

Debtor

A person who is in debt; the one owing money to another.

Estate for Life

A possessory, freehold estate in land held by a person only for the duration of his or her life or the life or lives of another.

Estimate

A preliminary opinion of value. Appraise, set a value.

Easement

A right, privilege or interest limited to a specific purpose which one party has in the land of another.

Documentary Transfer Tax

A state enabling act allows a county to adopt a documentary transfer tax to apply on all transfers of real property located in the county. Notice of payment is entered on face of the deed or on a separate paper filed with the deed.

Depth Table

A statistical table that may be used to estimate the value of the added depth of a lot.

Deposit Receipt

A term used by the real estate industry to describe the written offer to purchase real property upon stated term and conditions, accompanied by a deposit toward the purchase price, which becomes the contract for the sale of the property upon acceptance by the owner.

Federal Deposit Insurance Corporation (FDIC)

Agency of the federal government which insures deposits at commercial banks, savings banks and savings and loans.

Due on Sale Clause

An acceleration clause granting the lender the right to demand full payment of the mortgage upon a sale of the property.

Fannie Mae

An acronymic nickname for Federal National Mortgage Association (FNMA).

Farmers Home Administration

An agency of the Department of Agriculture. Primary responsibility is to provide financial assistance for farmers and others living in rural areas where financing is not available on reasonable terms from private sources.

Federal Housing Administration (FHA)

An agency of the federal government that insures private mortgage loans for financing of new and existing homes and home repairs.

Duel Agency

An agency relationship in which the agent acts concurrently for both the principals in a transaction.

Data Plant

An appraiser's file of information on real estate.

Estate at Sufferance

An estate arising when the tenant wrongfully holds over after the expiration of the term. The landlord has the choice of evicting the tenant as a trespasser or accepting such tenant for a similar term and under the conditions of the tenant's previous holding. Also called a tenancy at sufferance.

Fee Simple Defeasible

An estate in fee subject to the occurrence of a condition subsequent whereby the estate may be terminated.

Fee

An estate of inheritance in real property.

Estate of Inheritance

An estate which may descend to heirs. All freehold estates are estates of inheritance, except estates for life.

Determinable Fee

An estate which may end on the happening of an event that may or may not occur.

Federal Home Loan Mortgage Corporation (FHLMC)

An independent stock company which creates a secondary market in conventional residential loans and in FHA and VA loans by purchasing mortgages.

Estate from Period to Period

An interest in land where there is no definite termination date but the rental period is fixed at a certain sum per week, month, or year. Also called a periodic tenancy.

Estate for the Years

An interest in lands by virtue of a contract for the possession of them for a definite and limited period of time. May be for a year or less. A lease may be said to be an estate for years.

Desist and Refrain Order

An order directing a person to stop from committing an act in violation of the Real Estate Law.

Encroachment

An unlawful intrusion onto another's adjacent property by improvements to real property, e.g. a swimming pool built across a property line.

Encumbrance

Anything that affects or limits the fee simple title to a property, such as mortgages, leases, easements, or restrictions.

Estate

As applied to real estate, the term signifies the quantity of interest, share, right, equity, of which riches or fortune may consist in real property. The degree, quantity, nature, and extent of interest which a person has in real property.

Debenture

Bonds issued without security, an obligation not secured by a specific lien on property.

Expenses

Certain items which appear on a closing statement in connection with a real estate sale.

Federal National Mortgage Association (FNMA)

Commonly known as "Fannie Mae", this quasi-private corporation whose primary function is to buy and sell FHA and VA mortgages in the secondary market.

Decree of Foreclosure

Decree by a court ordering the sale of mortgaged property and the payment of the debt owing to the lender out of the proceeds.

Eviction

Dispossession by process of law. The act of depriving a person of the possession of lands in pursuance of the judgment of a court.

Earnest Money

Down payment made by a purchaser of real estate as evidence of good faith. A deposit or partial payment.

Deferred Maintenance

Existing but unfulfilled requirements for repairs and rehabilitation. Postponed or delayed maintenance causing decline in a building's physical condition.

Default

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

Federal Land Bank System

Federal government agency making long term loans to farmers.

Exclusion

General matters affecting title to real property excluded from coverage of a title insurance policy.

Et Ux

Latin for "and wife."

Documents

Legal instruments such as mortgages, contracts, deeds, options, wills, bills of sale, etc.

Deed Restrictions

Limitations in the deed to a property that dictate certain uses that may or may not be made of the property.

Depreciation

Loss of value of property brought about by age, physical deterioration or functional or economic obsolescence. The term is also used in accounting to identify the amount of the decrease in value of an asset that is allowed in computing the value of property for tax purposes.

Exceptions

Matters affecting title to a particular parcel of real property which are included from coverage of a title insurance policy.

Devisee

One who receives real property through a will

Defeasible Fee

Sometimes called a base fee or qualified fee; a fee simple absolute interest in land that is capable of being defeated or terminated upon the happening of a specified event.

Ethics

That branch of moral science, idealism, justness, and fairness, which treats the duties which a member of a profession or craft owes to the public, client or partner, and to professional brethren or members. Accepted standards of right and wrong.

Debt

That which is due from one person or another; obligation, liability.

Disposable Income

The after-tax income a household receives to spend on personal consumption.

Discount Points

The amount of money the borrower or seller must pay the lender to get a mortgage at the stated interest rate. This amount is equal to the difference between the principle balance on the note and the lesser amount which a purchaser of the note would pay the original lender for it under market conditions. A point equals one percent of the loan.

Defeasance Clause

The clause in a mortgage that gives the mortgagor the right to redeem mortgagor's property upon the payment of mortgagor's obligation to the mortgagee.

Delegation of Powers

The conferring by an agent upon another of all or certain of the powers that have been conferred upon the agent by the principal.

Emblements

The crops and other annual plantings considered to be personal property of the cultivator.

Escrow

The deposit of instruments and/or funds with instructions with a third neutral party to carry out the provisions of an agreement or contract.

Federal Reserve System

The federal banking system of the United States under the control of the central board of governors (Federal Reserve Board) involving a central bank in each of twelve geographical districts with broad powers in controlling credit and the amount of money in circulation.

Facade

The front of a building, often used to refer to a false front as a metaphor

Dedication

The giving of land by its owner to a public use and the acceptance for such use by authorized officials on behalf of the public.

Equity Build-up

The increase of owner's equity in property due to mortgage principal reduction and value appreciation.

Damages

The indemnity recoverable by a person who has sustained an injury, either in his or her person, property, or relative rights, through the act or default of another. Loss sustained or harm done to a person or property.

Equity

The interest or value that an owner has in real estate over an above the liens against it. Branch of remedial justice by and through which relief is afforded to suitors in courts of equity.

Directional Growth

The location or direction toward which the residential sections of a city are destined or determined to grow.

Fee Simple

The maximum possible estate in land in which the owner holds unconditional power of disposition; an estate freely transferable and inheritable.

Escrow Agent

The neutral third party holding funds or something of value in trust for another or others.

Effective Age of Improvement

The number of years of age that is indicated by the condition of the structure, distinct from chronological age.

Estate at Will

The occupation of lands and tenements by a tenant for an indefinite period, terminable by one or both parties.

Effective Interest Rate

The percentage of interest that is actually being paid by the borrower for the use of money, distinct from nominal interest.

Estimated Remaining Life

The period of time (years) it takes for the improvements to become valueless.

Economic Life

The period over which a property will yield a return on the investment over and above the economic or ground rent due to land.

Deferred payment options

The privilege of deferring income payments to take advantage of statutes affording tax benefits.

Economic Rent

The reasonable rental expectancy if the property were available for renting at the time of its valuation.

Disintermediation

The relatively sudden withdrawal of substantial sums of money savers have deposited with savings and loan associations, commercial banks, and mutual savings banks. This term can also be considered to include life insurance policy purchasers borrowing against the value of their policies. The essence of this phenomenon is financial intermediaries losing within a short period of time billions of dollars as owners of funds held by those institutional lenders exercise their prerogative of taking them out of the hands of these financial institutions.

Escheat

The reverting of property to the State when heirs capable of inheriting are lacking.

Eminent Domain

The right of government to acquire property, for a public purpose, after paying just compensation.

Escalation

The right reserved by the lender to increase the amount of the payments and/or interest upon the happening of a certain event.

Equity of Redemption

The right to redeem property during the foreclosure period, such as a mortgagor's right to redeem within either 3 months or 1 year as may be permitted after foreclosure sale.

Effective Date of Value

The specific day the conclusion of value applies.

Erosion

The wearing away of land by the act of water, wind or glacial ice.

Fair Market Value

This is the amount of money that would be paid for a property offered on the open market for a reasonable period of time with both buyer and seller knowing all the uses to which the property could be put and with neither party being under pressure to buy or sell.

Discretionary Powers of Agency

Those powers conferred upon an agent by the principal which empower the agent in certain circumstances to make decisions based on the agent's own judgment.

Execute

To complete, to make, to perform, to do, to follow out; to execute a deed, to make a deed, including especially signing, sealing and delivery; to execute a contract is to perform the contract, to follow out to the end, to complete.

Dispossess

To deprive one of the use of real estate.

Discount

To sell a promissory note before maturity at a price less than the outstanding principle balance of the note at the time of sale. Also an amount deducted in advance by the lender from the nominal principle of a loan as part of the cost to the borrower of obtaining the loan.

Duress

Unlawful constraint exercised upon a person whereby he is forced to do some act against his will.

Draw

Usually applies to construction loans when disbursement of a portion of the mortgage is made in advance, as improvements to the property are made.

Deed

Written instrument that which when properly executed and delivered conveys title to a real property from one person (grantor) to another (grantee).

Donor

one who gives something

Donee

person receiving a gift