800 number call-capture service A toll-free call response service which allows your calls to be serviced 24/7 without you through voice mail information blurbs, fax back, and on-the-spot paging.

access easement An access easement is the right to use someone else’s property for access only.

adverse possession The acquisition of property through prolonged and unauthorized use of someone else’s property.

agency relationship In real estate, this is a relationship where your client, the principal, is represented by you, the agent, to act on her behalf.

amortization A process by which you gradually pay off a debt by making periodic payments to the lender.

appraiser This person’s job is to estimate the value of property as of a particular date.

arbitration, binding A legal process that replaces the court system and the appeal process if the parties so agree in writing.

asset protection The sheltering of assets from excessive taxation and personal liability by the use of irrevocable trusts, family limited partnerships, house trusts, and limited liability companies, to name a few.

bridge loan A short-term loan made in expectation of a permanent, longer-term loan. Also known as a swing loan.

broker’s open house This is the property showing for the agent community as opposed to the open house, which is the showing for the public.

campaign-driven contacts database A contacts database which allows you to program it to automatically send marketing materials by e-mail to targeted prospect groups.

capital gains tax rates The tax rate you pay when you profit on a long-term real estate investment. This rate is far lower than ordinary income tax rates.

capitalization rates These represent the relationship between the value of the property and the income it produces.

CC&Rs See covenants, conditions, and restrictions.

closing professional The escrow agent or closing attorney (depending upon which handles transactions in your state). The closing professional serves as a neutral intermediary facilitating the transaction to closing.

closing statement (a.k.a. settlement statement) A detailed accounting of buyer and seller debits and credits in the transaction. This is one of the last steps the closing professional performs in a transaction.

community property A way of holding a title by married persons in states that have community property laws.

community property with right of survivorship A way of holding a title by married persons in some states that have community property laws, which allows the surviving spouse to receive a deceased spouse’s interest without probate.

comparables Similar properties recently sold, which are located in the same proximity as the subject property.

comparative market analysis (CMA) A summary of comparable properties in the area that are currently listed, in escrow, have expired, or have sold recently.

conditional contract A contract that has conditions that make it nonbinding until the conditions are removed.

condominium A property developed for concurrent ownership where each owner has a separate interest in a unit combined with an undivided interest in the common areas of the property.

contingencies Conditions that are built into a purchase offer to make it conditional. The offer is conditional until such time as the contingencies are removed. The most common contingencies in the real estate transaction are loans, physical inspections, and reviews of title.

contingency release A contingency is released either by satisfaction or waiver. There is a specified time period for this to happen.

cooperatives The ownership of property by a corporation in which each resident owns a percentage share of the corporation, but does not hold title to the property.

counteroffer A response to an offer that changes or adds terms, such as a change in price or closing date.

covenants, conditions, and restrictions (CC&Rs) Rules that govern how a property looks and/or is used. They are common with condominiums and multiuse properties, but also sometimes pertain to single-family homes.

deed of trust A document used in some states, while mortgages are used in others, to secure a lender’s interest in a property.

default This occurs when you do not meet a legal obligation.

depreciation Allocation of the cost of an improvement over the life of the asset in the form of a tax deduction.

dual agent An agent who acts for both the seller and the buyer.

E&O insurance See errors and omissions insurance.

easements Rights to use the property of another person for a specific purpose. Easements are recorded on the title on both the property enjoying the right and the property burdened by the right.

eminent domain The governmental right to take private property for public use as long as it fairly compensates the owner.

equity The difference between the value of the property and the loans against it.

equity sharing A real estate co-ownership strategy whereby one party, the occupier, lives in the property and pays its expenses, while the other party, the investor, puts up the down-payment funds. They share tax deductions and profit. Many other structures are also possible, but this is the most popular.

errors and omissions insurance (E&O insurance) Insurance that covers you for any claim made against you for your real estate services.

escrow The independent third party that holds the funds and distributes them according to buyer and seller instructions and processes and prepares the transaction documents. Depending upon your location, escrow is either an escrow company or a closing attorney.

exchange (also known as tax-free exchanges and § 1031 exchange) Tax-free exchanges, which are also known as 1031 exchanges, allow tax on profits to be deferred for real estate owners selling investment, rental, business, or vacation real estate and investing in other real estate.

exchange intermediary A professional who facilitates an exchange of real estate property under IRC § 1031.

exclusive right to sell listing agreement A type of listing agreement between an owner and agent that pays the agent a commission even if the property is sold by someone else during the listing term.

extrovert A person who directs much of his or her energy to the outer world of people and things. An overwhelming number of real estate sales agents fall into this category.

family limited partnership A specially designed limited partnership, consisting of one or more general partners and one or more limited partners, which can provide asset protection from personal liability and discount valuation for estate tax purposes.

farm A prospect-rich group you target and consistently drive marketing materials toward.

fee simple The highest and most complete ownership one can have in a property.

feng shui The ancient Chinese science of balancing the elements within the environment. Feng shui means “wind and water.”

fiduciary duty A requirement to act on behalf of your client with the utmost care, integrity, honesty, confidentiality, and loyalty.

floor time The rotation of agents to respond to inquiries that come from advertisements and signs. These agents get the walk-in traffic and phone calls to the office when no particular agent is requested.

for sale by owner (FSBO) A property put on market by an owner working without an agent.

foreclosure To liquidate the property for payment of a debt secured by it.

franchising The licensing of others to use your business name and/or business format in return for a fee.

goodwill The value of the advantages that a business has developed as a result of intangibles such as business name, reputation, and length of operation.

grant deed A deed that transfers title to a property and makes certain title guarantees.

handheld organizer A minicomputer of sorts that fits in your hand and holds your contacts, MLS database, calendar, and e-mail, referred to in this book generically as a PDA.

home sale/purchase contingencies Sellers accept offers contingent upon finding a new home. Buyers make offers contingent upon selling their current home.

independent contractor A worker with the right to direct and control the way he works, including the details of when, where, and how he does his job.

inspection contingency The right for the buyer to perform inspections he feels necessary to discover the condition of the property. Often this period is 15 days in a fast market.

joint tenancy A way co-owners hold title in nearly all states if they want a surviving co-owner to receive the deceased co-owner’s interest without probate. The co-owners do not have to be married.

lead-generating system A fairly automated system that captures prospects, usually at an internet intersection, and drives them your way.

lead projector An analysis that tells you exactly how many leads you need to meet your financial goals.

lease option Allows the buyer to occupy the property with a right to buy it at a later date.

limited liability company A company that affords its members limited liability similar to a corporation and pass-through taxation similar to a sole-proprietorship or partnership. It can provide asset protection and discount valuation for estate tax purposes.

limited partnership A partnership consisting of one or more general partners and limited partners, often used as an investment vehicle. Limited partners have no personal liability. This structure provides asset protection.

liquidated damages agreement A provision in the purchase agreement where the seller retains the buyer’s deposit if the buyer defaults on the purchase.

listing A contract between broker and owner that gives the broker the right to sell or lease the property.

listing agent The broker who acts for the seller according to the terms of the listing agreement.

listing agreement The contract between the seller and broker, which outlines what the broker will do for the seller and how much the agent will be paid.

living trust A written agreement that appoints a trustee to take charge of assets, thereby sidestepping the probate process at death.

loan approval The full and final process whereby the lender approves of the loan and the property that will secure it.

loan contingency The period during which the buyer obtains loan approval. The loan contingency often expires 30 days prior to closing.

lockbox An attachment to a door that holds the key to that door. Agents have a key to the lockbox so that they can obtain the key to the property on site.

locked in loan The status of a loan when the lender guarantees its rate and terms.

Master Marketing Model A marketing model created for this book which gives you a multimedia system incorporating the most cutting edge forms of advertising into one streamlined 24/7 lead-generating package.

mechanics liens Recorded liens that contractors and suppliers may record on a property if they have provided services or materials to the property.

median home price The price of the home in the middle. Of all the homes sold during a particular period, precisely half sold for more than the median price and half sold for less.

mediation A settlement process that precedes legal proceedings and is often agreed to in the purchase agreement.

metes and bounds A method of identifying a parcel by reference to its boundaries and its shape.

mortgage Used in some states, while deeds of trust are used in others, to secure a lender’s interest in a property.

multimedia marketing Lead generating marketing that appeals to many different senses through multiple types of media such as video, audio, print, and graphics.

multiple listing service A database of properties listed for sale and rent within a certain locale.

net proceeds sheet A document that helps sellers understand what their closing costs will be and how much they will net from the sale.

open house An open house is a set date and time when a home for sale is opened to interested buyers to tour.

option agreement The right of a buyer to buy a property at a later specified time and price.

passive loss Loss in excess of income on a rental property.

personal property Anything on the land that is moveable.

physical inspection contingency See inspection contingency.

preapproval The lender takes all the confirmation steps it would for full loan approval with the exception of appraisal of the property (since the property has not yet been located).

prequalification A lender takes the potential buyer’s application and prequalifies them for a loan based on the information provided, but undertakes no confirmation of the buyer’s information, as it does in preapproval.

property profile The report a title company provides that includes a property’s title vesting, loan, tax information, legal description, and information on surrounding properties.

prorations The division of a property’s expenses between the buyer and seller as of the property’s transfer date.

quitclaim deed A deed that transfers any interest someone has in a property, and contains no warranty of good title.

real property The land, its rights, and anything attached to it.

recording The act of entering instruments affecting title to a property in the public record.

referral fee A fee paid for referral of a client.

section I conditions, pest control report Conditions that have existing damage.

section II conditions, pest control report Conditions that do not have existing damage, but if not corrected in the future, they could lead to damage.

self-directed retirement account custodian A fiduciary who holds retirement funds for a client to be invested pursuant to the client’s instructions. These accounts are most commonly used for real estate investments.

self-employment tax Social Security and Medicare tax paid by self-employed taxpayers on the net income from their trade or business.

self-generating system An automated marketing system that generates leads from actions it takes or responses it draws.

seller financing When the seller agrees to make a loan to a buyer.

seller-only services The single agency representation of the seller only.

selling agent The agent who brings in the successful buyer.

set back A requirement that is established by zoning law or agreement between neighbors as to how far an improvement may be situated from a certain marker.

settlement statement Also known as a closing statement, this is a detailed accounting of buyer and seller debits and credits in the transaction.

sphere of influence The first group you will market to, which should be heavily weighted with current contacts but also include people from the past.

stager A designer or decorator versed in staging properties for sale.

staging A specialized service entailing specific proven steps that make a home for sale more appealing to your typical homebuyer.

survivorship A right whereby a co-owner automatically receives full title without the need for probate when a co-owner dies.

tenants by the entirety The way husband and wife hold title in 27 states if they want the surviving spouse to receive the deceased spouse’s interest without probate. It is similar to joint tenancy used in other states.

tenants in common A way for co-owners to own property together without survivorship rights. Their interests pass to their heirs, not to one another when they die.

title company A company that performs a title search to make sure all rights and obligations affecting a property are set forth in one report for the buyer’s review.

title insurance A policy guaranteeing that title is clear and the property is legally owned by the seller.

title report The report issued by a title company or closing attorney reporting the condition of title to a property as disclosed by a search of the public record.

transaction coordinator A person who facilitates the steps in a transaction from offer through closing.

transaction management program A software program, online or offline, that identifies transaction steps and calendar dates for accomplishing them. These programs often integrate transaction forms and are accessible online to any number of transaction participants.

transaction timeline A timeline that details the dates by which the steps in a transaction must be taken.

trust account A bank account that holds funds that clients have entrusted to an agent to be used on the client’s behalf.

virtual assistant A support professional providing administrative, creative, or technical services on a contractual basis.

virtual tour A 360 degree depiction of a property as if it were photographed with a video camera.

warranty deed A deed that transfers title and guarantees that title is free and clear.

zoning A governmental regulation regarding the use of a property. For instance, a property may be zoned for use as a single family residence.