Free glossary of real easte words and terms you need to know to make things easier

Glossary of Real Estate Terms

ABSTRACT- A synopsis of the legal history of ownership of real property. A summary of recorded instruments, which affect title, arranged in the order of recording.

ACCELERATION CLAUSE- A clause in a mortgage that provides, at the option of the lender, the

Entire unpaid balance of the note would be due immediately upon failure to make a required payment or upon the sale of the property. In the later case it is known as a due-on-sale clause.

ACCRETION- The gradual buildup of soil by water.

ACCURED INTEREST- Accumulated interest earned or due but not yet paid.

ACRE- A measure of land equaling 43,560 square feet.

ADJUSTED COST BASIS- For accounting purposes, the original cost plus improvements minus depreciation or cost recovery taken.

AD VALORUM- A measure of worth based on the value of something.

AFTER TAX CASH FLOW- Effective gross income minus operating expenses and debt service plus or minus any tax savings or tax liability.

AGENCY- A relationship of trust whereby one party, the principal, entrusts another party, the agent, to act in their behalf and to represent them in doing business with other parties.

ALLIGATOR- A property that has a negative cash flow.

ALL-INCLUSIVE TRUST DEED- The borrower obtains a new mortgage, which is structured to include the old mortgage. The borrower makes payments on the new mortgage directly to the lender, who makes payments on the old first mortgage.

AMORTIZATION- A method of gradually paying off principal on a mortgage. Each payment reduces or amortizes the original amount

AMORTIZED LOAN- A loan in which the principal as well as the interest is payable in monthly or other periodic installments over the term of the loan.

ADMINISTRATOR- A party appointed by a court to administer the estate of a person who has died without leaving a will.

ANNUITY- A payment of equal installments paid periodically for a given number of periods.

APPRAISAL- An estimation of value of real property at the present time or past date, never future. Any of three methods are used where applicable. (A) cost approach (B) income approach (C)market data approach.

APPRAISER- A disinterested party who evaluates a property and determines its value.

APPRECIATION- A property's growth in value.

APPURTENANCE- Anything attached to the land, which becomes a part of the property.

ARREARS- The payment of money after the fact. Interest and taxes paid in arrears would represent money paid for a period of time gone by.

ASKING PRICE- The price an appraiser has determined for a property and the price for which it is on the market.

ASSESSED VALUE- The value as determined by the local tax assessor's office for the purpose of levying local taxes.

ASSESSMENT- Value set on property by local government for the purpose of real estate taxes.

ASSET- Any possession of value that an individual owns which may be used for payment of a debt.

ASSIGN- To transfer one's rights in a bond, mortgage, lease, or other legal instrument to another person.

ASSUMING/MORTGAGE- Taking of title to a property by a buyer, whereby he assumes payment of note or bond secured by a mortgage against the property.

ATTORNEY AT LAW- A person who is licensed to practice law.

BALANCE SHEET- A financial statement showing assets, liabilities, and net worth.

BALLON PAYMENT- A large final payment due on a note, usually after partial amortization of the debt through installment payments.

BANKRUPTCY- Proceedings against a debtor, who has been declared legally insolvent, to distribute the debtor's property among the creditors.

BILL OF SALE- A document used to transfer title to personal property.

BINDER- Small deposit money paid with a temporary agreement to purchase property under specified terms.

BIRD DOG- People whom are on the lookout for properties that are for sale.

BLANKET MORTGAGE- One mortgage that covers several different parcels of real property.

BLENDED INTEREST RATE- The interest rate resulting from half the difference of the interest rate originally written for the mortgage and the current market rate of interest.

BOILER PLATE-Preprinted sections of a contract.

BOOK VALUE- The value of a property carried on a company's books. It is usually the cost less depreciation or cost recovery plus capital additions.

BOND- The evidence of a personal debt which is secured by a mortgage on real estate.

BOUNDS- Boundaries that are natural or artificial, i.e.-roads, trees, rocks, railroad tracks, etc.

BROKER- State licensed agent who represents buyers and sellers in real estate proceedings.

CAPITAL- Money used for investment purposes.

CAPITAL GAINS- The profit realized above adjusted cost basis on the sale of property.

CASH FLOW- Effective gross income minus operating expenses and debt service.

CAVEAT EMPTOR- Latin for Let the buyer beware. Buyer must inspect the goods or property and purchase at their own risk.

CHATTEL- Personal property.

CHATTEL MORTGAGE- A mortgage on personal property.

CLOSING- Procedure whereby property title is conveyed from seller to buyer.

COLLATERAL- Real or personal property pledged as security for repayment of a loan or debt.

COMMISSION- Usually a percentage of the purchase price paid to the broker or agent for services rendered.

COMMON LAW- Law that is not codified-developed from common usage and custom.

COMPETENT PARTY- A person legally able to contract being of legal age and of sound mind.

CONCESSIONS- During negotiations, these are the items that each party is willing to give up in order to get the items each party really wants.

CONDEMNATION- The process by which property of a private owner is taken, with or without consent, for the public use. Fair compensation must be paid.

CONDOMINIUM- Individual ownership of an apartment and an undivided interest in the common areas and facilities which serve the multi-unit property.

CONSIDERATION- Something of value exchanged by a party to influence another party to enter into a contract.

CONTINGENCY- A possible event based on the happening of an uncertain future event.

CONTRACT- An agreement between competent parties in the performance of a legal consideration, whereby each party obtains a right to what the other owns.

CONTRACT FOR DEED- A contract for the sale of real property wherein the seller is obligated to provide a merchantable title after the buyer has paid for the property, usually in installments.

CONTRACT FOR PURCHASE AND SALE- An agreement between buyer and seller of real property to transfer title to that property at a future time for a specific sum of money.

CONVEYANCE- The transfer of real estate from one party to another.

COOPERATIVE-An apartment house or similar property owned, usually in corporate form, by all the tenants. Each has stock in the corporation, which owns the building.

COUNTER OFFER- A change in price or terms of an unacceptable offer.

COVENANT- Insertion of written agreement into deeds and other documents promising performance of certain acts, or stating certain uses of real estate.

COW- Term used to describe an income property with a high positive cash flow.

CREDIT BUREAU- An agency that complies data on an individual's credit history and, upon request, distributes a report to potential creditors.

CREDIT BUREAU REPORT- The compilation of an individual's credit history. Potential creditors may request a copy from a credit bureau.

CREDIT LIMIT- Generally found when dealing with credit cards, this is the maximum amount the cardholder may charge to that account.

CREDITOR- The lender. The one to whom the debt is owed.

CURE DATE- The last day given for bringing mortgage payments current at the beginning of the foreclosure process.

DEAD ASSET- An asset that an investor does not want-in the investor's eyes it has no value.

DEBT SERVICE- The sum of the annual principal and interest payments expressed as a percentage of the amount owed.

DEED- A legal document which conveys real estate from seller to buyer when properly executed.

DEFAULT- Failure to discharge a duty or obligation.

DEFICIENCY JUDGEMENT- A judgement rendered in court for the difference in the amount realized at a foreclosure sale and the amount owed by the mortgagor, if the foreclosure sale fails to completely liquidate or satisfy the debt.

DEPRECIATION- Decline in property value due to obsolescence, age, natural wear, or any other conditions.

DEVISE- Disposition of land or real property by will.

DISCOUNT- The percentage of the original balance of the loan that is charged the borrower. Sometimes referred to as points. Also, the difference between the selling price of a mortgage and the amount due.

DISCOUNTING A NOTE- The process of offering a promissory note for less than its face value to enhance its marketability.

DISTRESSED PROPERTY- A bargain property that is substantially below its present or projected renovated value.

DOWER- The legal rights of a widow in her husband's estate. These rights have been abolished in many states.

DUPLEX- A two family home where the units share a common divider and are situated either side by side or up and down.

EARNEST MONEY- A deposit of money given by a party to bind the contract usually credited toward the sales price.

EASEMENT- Right of way granted by a property owner to another allowing use of land for a specific reason.

EFFECTIVE GROSS INCOME- The difference between the total gross income and the vacancy allowance.

EFFECTIVE INTEREST- The interest rate the borrower actually pays as opposed to the nominal interest rate. The effective interest rate is made higher than the nominal rate by addition of points or discounting a loan.

EMINENT DOMAIN- The power of the government to take private property for public use in return for fair compensation. This power is exercised through condemnation.

ENCROACHMENT- an obstruction or building which intrudes upon or trespasses upon the property of another.

ENCUMBRANCE- Anything that mars title to a property, such as a mechanic's lien, lien for back taxes, an unpaid mortgage, judgement, etc.

EQUITY- Value of property minus the debts or liens against it. Increasing ownership margin during the years as the mortgage is paid off.

EQUITY OF REDEMPTION- The right of a mortgagor, borrower, to buy back a property after foreclosure sale. While equity of redemption does not exist in some states, in others it extends up to two years.

ESCAPE CLAUSE- A clause added to the contract that allows either party the option of exiting the contract. Both parties are no longer bound by any contractual obligations.

ESCHEAT- The reversion of property to the state when an owner dies with no will and no known heirs.

ESCROW- Funds held by a third party to be released when certain conditions in a contract are fulfilled.

ESTATE- Ownership interest in real property.

ESTATE BY THE ENTIRETIES- Ownership by husband and wife with the right of survivorship.

ESTIMATE ANNUAL INCOME- The estimated total gross amount of income one will receive in a year�s time.

ESTOPPEL LETTER- A letter certifying the exact balance of a mortgage or other loan at a given time.

ET AL- And others.

ET UX- And wife.

EXCHANGE- The exchange or trade of business property you own for another trade or business property that is like it. No taxes are due in such an exchange under a given set of circumstances.

EXCULPATORY CLAUSE- A clause in a contract relieving one of the parties of personal responsibility or liability.

EXPENSES- The costs of maintenance, repairs, and rental costs that are deducted from a property�s gross income.

EXECUTOR- The administrator of an estate. One who is specified in the will.

EXTENSION CLAUSE- A clause contained within some lease option contracts that provides for the terms under which the contract may be extended.

FACE VALUE- In reference to a note, the face value is the full amount for which the note has been written.

FAIR MARKET VALUE- The appraised value of a property as compared with other property values on the market.

FLIPPING- The turnover of property. An investor buys a property to immediately sell it for a profit.

FEE SIMPLE- The highest estate in real property. The ownership of real property without reservation or restriction.

FIDUCIARY- An agent in the position of confidence to his principal. Also, a relationship of trust and confidence imposed by law.

FINANCIAL ANALYSIS- An investor's determination of the value of a property according to their specific needs.

FINANCIAL LEVERAGE- The use of other people's money for investment purposes.

FINANCING- The way in which an investor obtains the capital with which to purchase a property.

FIRST DEED OF TRUST- A deed of trust recorded first. Equivalent to a first mortgage.

FIXTURE- Personal property attached permanently to real estate and thus becoming part of it.

FLEXIBLE SELLER- A seller who is willing to sell property in a nontraditional manner. This person may be flexible in terms, price, or both.

FORCED SALE- The sale of a property used as security for a loan to repay the creditor, or others, in the event of default on the loan.

FORECLOSURE- A legal procedure where the property is sold by the lending agency because the borrower is in default of the payment terms of the mortgage.

FRONT FOOT- The width of a lot at the front, usually given as the first measurement.

GENERAL PARTNERSHIP- A form of business where two or more persons enter into an agreement to conduct business. Profits and losses are shared in a predetermined fashion and all partners are jointly and severally liable for debts of the general partnership.

GRACE PERIOD- Additional time granted to perform an act or make a payment before default.

GRANDFATHER CLAUSE- Properties that do not conform to current ordinances, codes, or regulations, but are allowed to continue to be occupied because the properties predate the institution of the ordinances, codes, and regulations.

GRANTEE- A person who conveys title to property by deed.

GROSS INCOME- The total income from a property before the deduction of expenses.

GROSS INCOME MULTIPLIER- That number which, when multiplied times the gross income, would give an indication of property value. It is strictly a guide and frequently abused.

HOMESTEAD EXEMPTION- Protection extended by law preventing the forced sale of an owner occupied dwelling by certain creditors.

HOMESTEAD TAX EXEMPTION- The credit against taxes, given in some states, to a person who owns and occupies a dwelling and to certain other individuals including disabled veterans, those over age 65, widowed, or handicapped.

IMPROVEMENT- Buildings or other structures which become part of the land.

INDENTURE- A contract.

INSTALLMENT LOAN- A loan that must be repaid in no less than two payments. A loan of six months or greater is preferable when establishing credit.

INSTALLMENT NOTE- A note, which specifies how mortgage payments, will be made, when they will be due, and for what amount.

INSTALLMENT SALE- A sale which, for income tax purposes. Is not taxed totally in the first year of the sale. To be valid there must be a minimum of two installment payments over two tax years.

INSTRUMENT- A written legal document delineating the rights of the parties.

INTEREST RATE- An amount a borrower must repay in addition to the full amount of the loan.

INTESTATE- A person who has died without leaving a valid will.

INVOLUNTARY LIEN- A lien, like real property tax liens, which are recorded against a property without consent of the owner.

INSTANT EQUITY- The difference between the property's value and what you paid for it.

JOINT TENANCY- Ownership of real estate by two or more persons, each of whom has an undivided interest with the right of survivorship.

JOINT VENTURE-An arrangement where two or more individuals or corporations join together on a single project as partners.

JOINTLY AND SEVERALLY- A legal term indicating that a contract has been entered into by two parties and the two parties are not only liable together but individually as well.

JUDGEMENT- The verdict of a court on a matter presented to it. A money judgement dictates that a party must make payments to another to settle a claim.

JUNIOR LIEN- A mortgage or other encumbrance with a secondary interest. A lien junior to another mortgage or lien.

LAND TRUST- A form of ownership whereby property is conveyed to a person or an institution called a trustee, to be held and administered on behalf of another person called the beneficiary.

LEASE- A contractual agreement between the owner and the tenant which allows the tenant the use and occupancy of the property for a specified period of time. A lease is an encumbrance against a title and gives the tenant an actual interest in the property known as an estate for years.

LEASE OPTION- An agreement between two parties where the party who owns the property extends the right to purchase the property at a future date. The second party lives in the property until the lease option expires.

LEASE HOLD- The estate or interest held by the lessee in the property of another.

LEGAL DESCRIPTION- The means to identify the exact boundaries of a property. A surveyor will use the recorded plat method, metes and bounds method, or the government survey method to describe real property.

LESSEE- One who contracts to hold occupancy rights in the real property of another.

LETTER OF CREDIT- A letter, usually from a financial institution, guaranteeing a debt incurred by a third party.

LETTER OF INTENT- A letter stating a buyer's intent to make an offer to acquire a certain property. It is not a binding contract.

LEVERAGE- Obtaining a higher return on borrowed money than the cost of borrowing it. A situation where the smallest amount of cash is invested to obtain the best yield, percentage wise.

LIEN- A claim lodged against real estate to effect repayment of an indebtedness. For example, a mechanic's lien, where the contractor records his lien for work done and not paid for.

LIEN THEORY STATES- States that allow the lender to collect the debt owed by selling the property in the event of default.

LIMITED PARTNERSHIP- A partnership composed of a limited partner(s) and a general partner(s). The limited partner(s) contributes capital but is not liable for any debts of the partnership, nor can they manage or control the partnership.

LIQUIDATED DAMAGES- Damages, usually monetary, spelled out in a contract which would be available in the event of a default, to the party not in default.

LIS PENDENS- A legal instrument recorded in the county clerk's office, giving notice that a legal action is pending in the courts affecting the title to property.

LISTING- An agreement whereby owner of property gives a real estate agent the right to handle the sale or lease of property and to receive a commission for this service.

MARKETABLE TITLE- A title free and clear of liens and encumbrances that might be objectionable.

MARKET VALUE- The highest price for a property which a buyer is willing to pay, and the lowest price which a seller agrees to accept.

MECHANICS LIEN- A lien existing in favor of mechanics, suppliers, or other persons who have supplied materials or performed work in connection with the construction or repair of a building or other improvement.

MEETING OF MINDS- A condition whereby all parties to contract agree to its terms.

METES- Measures such as inches, feet, yards, or miles.

METES & BOUNDS- A description of the boundary lines of land, setting forth the boundary lines with their terminal points and angles.

MORATORIUM OF INTEREST- A time during the term of a loan wherein no payment of interest due is made.

MORTGAGE- A legal instrument or document that conveys title to real estate as collateral for the payment of a debt.

MORTGAGEE- The lender of money who holds a mortgage on a property as security for repayment of the loan.

MORTGAGOR- The borrower of money who gives a mortgage on a property as collateral for repayment of the loan.

MORTGAGE COMMITMENT- A formal notice from a lending institution stating the amount it will lend for the purchase of property.

MULTIPLE LISTING SERVICE- A multi-realty service whereby members of the local Board of Realtors exchange their listings.

NEGATIVE CASH FLOW- Properties that cost you money instead of making you monthly income.

NET INCOME APPROACH- A technique used to evaluate larger properties and determine their value by calculating the net income they produce.

NET LISTING- A price under which an owner will not sell the property. The broker is entitled to the excess over the net listing as his commission.

NET NET NET- An agreement which specifies that the tenant pays real estate taxes, insurance, and all maintenance costs of the property.

NET OPERATING INCOME- Gross income minus any operating expenses. Debt service is not deducted as an expense.

NET SPENDABLE INCOME- Amount remaining after expenses and debt service and any taxes due have been deducted from the gross income.

NO DOC LOAN- A loan where the borrower is not required to present any documentation to secure a loan.

NOMINAL INTEREST RATE- The interest rate usually below market stated on the note.

NOTE- The legal evidence of debt.

NOTARIZE- To have a document signed by a notary public.

OPTION- An instrument giving the right to a party to lease or purchase the property over a specified time period for a specified consideration. It is binding for the optionor but not the optionee.

OPTIONEE- The person who has the legal right to purchase or not to purchase a specific property in the future.

OPTIONOR- The seller of a property who extends an option to someone else. If the optionee exercises the option, this person is legally bound by the contractual obligations. If the option is not exercised then the optionor is released from any responsibilities.

OWNERS OF RECORD- All owners that are listed on a deed that is recorded in the county courthouse.

OVERDRAFT PROTECTION- An extra service that most financial institutions offer their checking account clients. The client has a credit limit much like that of a credit card. If the client writes a check for an amount greater than what is in the checking account, the bank automatically writes the client a loan. Interest is charged on this, and usually an annual fee.

PACKAGE MORTGAGE- A mortgage, which in addition to encumbering real property also includes personal property such as a refrigerator, dishwasher, or oven.

PARTNERSHIP- Two or more people associated for the purpose of carrying on business activities.

PAY DOWN- The amount of principle on a loan retired through payments at a given time

PERSONAL PROPERTY- All property other than real property.

PLAT BOOK- A public record containing maps of land showing the division of such land into streets, blocks, and lots. Includes measurements of individual parcels.

POINTS- An originating fee or a percentage based on the amount of mortgage money advanced, to be paid by the seller.

POSITIVE CASH FLOW- When rental and other income exceeds all of the costs of ownership.

POWER OF ATTORNEY- A written authorization to an agent to perform specified acts on behalf of their principal. Beyond these acts, the agent has no power.

PRELIMINARY TITLE SEARCH- The first review of all previously recorded documents regarding a specific property, to make sure that the property may be sold.

PREMIUM- An additional sum of money paid as an incentive for someone to do something.

PREPAYMENT CLAUSE- A clause in a mortgage giving the mortgagor the privilege of paying off the mortgage before its due date.

PRIME RATE- The rate of interest charged by banks to their best corporate customers.

PRINCIPAL- The sum of money used as funds for the investment.

PROMISSORY NOTE- Usually a note given to the seller by the buyer, which promises to pay back principal to the seller. It states the interest rate and time frame for pay back.

PRO FORMA STATEMENT- A financial statement based on anticipated, not actual, income and expenses.

PROMULGATED RATE- A formally and publicly stated rate.

PRO RATA-Buyers and sellers portion of prepaid or unpaid expenses such as real estate taxes.

PURCHASE MONEY MORTGAGE- Funds advanced in the form of a mortgage by the owner of real estate to the buyer for the purpose of buying their property.

QUIT CLAIM DEED- A deed transferring whatever interest in the property that the grantor may have. They are usually used to clear title.

REAL PROPERTY- Land, and generally any improvements added to the land.

R.E.O. (REAL ESTATE OWNED)- Properties that financial institutions have repossessed as a result of default on a mortgage and which these institutions are willing to sell.

REAL ESTATE AGENT- A salesperson associated with a broker, who acts in behalf of a broker.

REALTOR- A broker who is a member of the National Association of Realtors as well as state and local real estate boards.

RECORDING- The act of entering in the public record any instrument affecting title to real property.

REDEMPTION- The buying back of one's own property after a forced court sale.

RELEASE CLAUSE- A statement in a blanket mortgage that allows a specific described parcel to be released from under the blanket lien after a sum of money is paid, or a period of time is up.

RENT CONTROL- The regulation or restrictions set by government agencies on the amount of rent that landlords may charge.

REPRODUCTION COST ANALYSIS- A technique used to evaluate a property by estimating the cost of building the same or similar structure, adding the cost of land and subtracting an allowance for wear and tear.

RESTRICTIVE COVENANT- A clause in a deed in which there is an agreement between buyer and seller stating certain restraints as to the use of the property.

RIGHT OF WAY- An easement on land whereby an owner grants or gives to another the right of passage over their land.

RIPARIAN RIGHTS- The landowner's right to water on, under, or next to his land.

SANDWICH LEASE- While having the option to buy a property, the investor subleases it to gain positive cash flow.

SATISFACTION PIECE- An instrument for recording and acknowledging payment of a loan secured by a mortgage.

SECURITY DEPOSIT- An amount of money paid by a tenant before moving into the premises to cover any damage incurred while living there, or to protect the landlord in the event that the tenant leaves without being current on rent payments. If the tenant is current and the unit only has a normal amount of wear and tear, then the deposit is generally refunded.

SERVICING A DEBT- The act of paying the periodic principal and interest payments on an outstanding debt obligation.

SPECIFIC PERFORMANCE- A court order requiring a person to act or do a specific thing that they had agreed to do.

SURVEY- A map prepared by land engineers or surveyors indicating the location and boundaries of the property described in the title.

TAX CERTIFICATES- Bonds sold to recoup unpaid property taxes by the county in which the property is located. When the property is auctioned, the certificate holders may either use the certificates as money to bid on the property or redeem them for face value plus interest.

TAX SALE- Sale of property because of a delinquency in the payment of taxes.

TAX SHELTER- An income property that generates artificial paper losses, due to depreciation or cost recovery, that are in excess of the income produced by the property. These artificial losses can be used to offset other taxable income earned by the owners. In general a tax shelter is any deferral, reduction, or elimination of a tax due.

TENANCY IN COMMON- The ownership of an interest in property by two or more persons. Their ownership interest may be equal or unequal and there is no right of survivorship as with joint tenancy. The interest of any joint owner passes to their heirs or assigns after death.

TENANT- A person having the temporary use and occupancy of real property owned by another.

TENDER- An offer to pay or perform.

TERMS- Exact way a property will be purchased.

TESTATE- One who dies leaving a will.

TIME SHARE- A piece of property purchased by two or more parties who have set specific times when each may use or occupy the property.

TITLE- A legal instrument or document certifying the right of ownership of property.

TITLE INSURANCE- Insurance issued by a guarantee company protecting the property owner against any flaws in the title that might affect ownership or potential losses.

TITLE INSURANCE COMPANY- A business that reports on the status for the title on a specific property and whether or not it has any liens against it. After this title search has been completed, the company will issue a deed to be signed by all the owners of the property, which should be notarized and recorded in the public records.

TITLE SEARCH- Investigation of title records, history of previous ownership�s, to ascertain if liens, encumbrances, or other outstanding claims exist that may prevent legal conveyance of title.

TITLE THEORY STATES- States that allow the lender to become the legal owner at the time of making the loan. The borrower only has possession.

TOWNSHIP- A unit of measure used in the government survey method of land description equal to 36 sections, which is 36 square miles.

UNILATERAL CONTRACT- A contract in which one party is bound by another to do something. If the second party chooses to exercise the contract, the first party must perform any contractual obligations that party may have. If the second party chooses not to exercise the contract, the first party is released from any contractual obligations.

UNSECURE LINE OF CREDIT- A credit history developed by an individual who borrows small amounts of money, which do not require collateral.

USURY- A rate of interest on a loan which is greater than the law allows.

VACANCY RATE- An estimate of the amount of time the rental property will be vacant multiplied by the rental rate of the unit(s). The amount is used in estimating the investor's value of an income property.

VENDEE- A buyer.

VENDOR- A seller.

VIOLATION- An act, deed, or creation of a condition that violates the law in the use of property.

WARRANT- To guarantee something to be as represented.

WIN-WIN- A solution to both seller and buyer needs.

WRAPAROUND MORTGAGE- A mortgage held by the seller-mortgagee. The buyer-mortgagor pays the seller-mortgagee the debt service on the wraparound mortgage and the seller-mortgagee continues to pay the debt service on the underlying or original mortgage.

ZONE- An area designated by the authorities for specific use, subject to certain restrictions.

ZONING ORDINANCE- A ruling act by local government officials specifying the type and use to which property may be put in certain locations.

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