Real Estate and Auction Glossary

Absentee Bid ^top A procedure which allows a bidder to participate in the bidding process without being physically present. Generally, a bidder submits an offer on an item prior to the auction. Absentee bids are usually handled under an established set of guidelines by the auctioneer or his representative. The particular rules and procedures of absentee bids are unique to each auction company.

Absentee Bidder ^top A person (or entity) who does not attend the sale but submits, in advance, a written or oral bid that is the top price he or she will pay for a given property.

Absolute Auction ^top An auction where the property is sold to the highest qualified bidder with no limiting conditions or amount. The seller may not bid personally or through an agent. Also known as an auction without reserve.

Abstract of Title ^top A summary of the conveyances, transfers, and any other facts relied on as evidence of title, together with any other elements of record which may impair the title to real property.

Acceleration Clause ^top A clause in trust deed or mortgage giving the lender the right to call all sums owing him to be immediately due and payable upon the happening of a certain stated event.

Acceptance ^top A legal term referring to the acceptance of an offer. A buyer offers to buy and the seller accepts the offer.

Accession ^top Acquiring title to additions or improvements to real property as a result of the annexation of fixtures or the accretion of alluvial deposits along the banks of streams.

Accounting of Sale ^top A report issued to the seller by the auctioneer detailing the financial aspects of the auction.

Accredited Auctioneer of Real Estate (AARE) ^top The professional designation awarded by the NAA Education Institute to qualified real estate auctioneers who meet the educational and experiential requirements of the Institute and who adhere to a strict code of ethics and standards of practice.

Accretion ^top The increase or addition of land by the deposit of sand or soil washed up naturally from a river, lake, or sea.

Accrued Items ^top On a closing statement, items of expense that are incurred but not yet payable, such as interest on a mortgage loan or taxes on real property.

Acknowledgment ^top A formal declaration before a duly authorized officer by a person who has executed an instrument that such execution is his act and deed.

Ad Valorem ^top According to value. A method of imposing a tax on the ownership of real property."

Adverse Possession ^top The open and notorious possession and occupancy under an evident claim or right, in denial or opposition to the title of another claimant.

Affidavit ^top A statement or declaration reduced to writing and sworn to or affirmed before some officer who has authority to administer an oath or affirmation.

Affirmation ^top A solemn declaration made under the penalties of perjury by a person who conscientiously declines taking an oath. This is equivalent to an oath.

Agency ^top The relationship between an agent and principal. One who represents another from whom he has derived authority.

Agent ^top A person who acts for or in the place of another individual or entity by authority from them.

Agreement of Sale ^top A written contract between seller and buyer in which they reach a meeting of minds on the terms and conditions of the sale.

Amortization ^top The liquidation of a financial obligation on an installment basis; also recovery, over a period, of cost or value.

Appraisal ^top An estimate of value of property resulting from an analysis of facts about the property. An opinion of value. The act or process of estimating value.

Apprentice Auctioneer ^top An auctioneer who is in training, operating under the supervision of a licensed or experienced auctioneer.

Appurtenance ^top Something belonging to the land and transferred with it, such as buildings, fixtures, rights

As Is ^top Selling the property without warranties as to the condition and/or the fitness of the property for a particular use. Buyers are solely responsible for examining and judging the property for their own protection. Otherwise known as As Is Where Is and In Its Present Condition.

Assemblage ^top Putting together two or more lots to form a large parcel.

Assessed Value ^top A value placed upon property by the tax assessor

Assessment ^top The valuation of property for the purpose of levying a tax, or the amount of the tax levied.

Assessor ^top One appointed to assess property for taxation.

Assignment ^top A transfer or making over to another of the whole of any property, real or personal, or of any estate or right therein. To assign - to transfer or make over to another.

Assumption of Mortgage ^top When a grantee takes a title to real property and the deed contains an assumption agreement, or grantee executes a separate assumption agreement, the grantee becomes the principal guarantor for unpaid portions of the note and is primarily liable for the amount of any deficiency judgment.

Attachment ^top Seizure of property by court order, usually done to have it available in event a judgment is obtained in a pending suit.

Attorney-in-Fact ^top One who is authorized to perform certain acts for another under a Power of Attorney; may be limited to a specific act or acts, or be general.

Auction ^top A method of selling property in a public forum through open and competitive bidding. Also referred to as: public auction, auction sale or sale.

Auction Block ^top The podium or raised platform where the auctioneer stands while conducting the auction. Placing (an item) on the auction block means to sell something at auction."

Auction Listing Agreement ^top A contract executed by the auctioneer and the seller which authorizes the auctioneer to conduct the auction and sets out the terms of the agreement and the rights and responsibilities of each party.

Auction Marketer ^top An individual who contracts with sellers for the auction method of marketing property. In the case of real property, he or she may not actually conduct the sale but is directly responsible for all aspects of marketing the property.

Auction Marketing ^top The method of marketing property utilizing the auction method of sale.

Auction Plan ^top The plan for pre-auction, auction day and post auction activities.

Auction Price ^top The price of a property obtained through the auction method of marketing.

Auction Value ^top The price which a particular property brings in open competitive bidding at public auction.

Auction With Reserve ^top An auction in which the seller or his agent reserves the right to accept or decline any and all bids. A minimum acceptable price may or may not be disclosed and the seller reserves the right to accept or decline any bid within a specified time.

Auctioneer ^top The person whom the seller engages to direct, conduct, or be responsible for a sale by auction. This person may or may not actually call or cry the auction.

Auctioneer Subcontractor ^top An auctioneer hired by the principal auctioneer.

Balloon Payment ^top Where the final installment payment on a note is greater than the preceding installment payments and it pays the note in full, such final installment is termed a balloon payment.

Ballroom Auction ^top An auction of one or more properties conducted in a meeting room facility.

Bank Letter of Credit ^top A letter from a bank certifying that a named person is worthy of a given level of credit. Often requested from prospective bidders or buyers who are not paying with currency at auctions.

Beneficiary ^top (1) One entitled to the benefit of a trust; (2) One who receives profit from an estate, the title of which is vested in a trustee; (3) The lender on the security of a note and deed of trust.

Bid ^top A prospective buyer's indication or offer of a price he or she will pay to purchase property at auction. Bids are usually in standardized increments established by the auctioneer.

Bid Acknowledgment ^top A form executed by the high bidder confirming and acknowledging the bidder's identify, the bid price and the description of the property. Also known as Memorandum.

Bid Assistants ^top Individuals who are positioned throughout the attendees at the auction to assist the auctioneer, spot bidders and assist prospective bidders with information to help them in their buying decision. Also known as ringmen, bid consultants, bid spotters, or groundsmen.

Bid Caller ^top The person who actually calls, cries or auctions the property at an auction recognizing bidders and acknowledging the highest bidder. Commonly known as the auctioneer.

Bidder Number ^top The number issued to each person who registers at an auction.

Bidder Package ^top The package of information and instructions pertaining to the property to be sold at an auction event obtained by prospective bidders at an auction. Sometimes called a bidder packet or due diligence package.

Bidder's Choice ^top A method of sale whereby the successful high bidder wins the right to choose a property or properties from a grouping of similar or like-kind properties. After the high bidder's selection, the property is deleted from the group, and the se

Blanket Encumbrance ^top A single mortgage or trust deed which covers more than one piece of real estate.

Bona Fide ^top Violation of an obligation in a contract.

Bookkeeper or Clerk ^top The person who is responsible for the accounting and paperwork at an auction sale.

BPO ^top An opinion of property value prepared by a licensed real estate agent.

Broker Participation ^top An arrangement for third-party brokers to register potential bidders for properties being sold at auction for a commission paid by the owner of the property or the auction firm.

Buyer's Broker ^top A real estate broker who represents the buyer and, as the agent of the buyer, is normally paid for his/her services by the buyer.

Buyer's Premium ^top An advertised percentage of the high bid or flat fee added to the high bid to determine the total contract price to be paid by the buyer.

CAI ^top Certified Auctioneers Institute. The professional designation awarded to practicing auctioneers who meet the experiential, educational and ethical standards set by the Auction Marketing Institute, Inc.

Capitalization ^top In appraising it is a method of determining the value of property by interpreting the property's net income with a percentage which represents a reasonable return on invested capital.

Capitalization Rate ^top The rate of interest which is considered a reasonable return on the investment. It is used in the process of determining value based upon net income.

Caravan Auctions ^top A series of on site auctions advertised through a common promotional campaign.

Carrying Charges ^top The costs involved in holding a property which is intended to produce income (either by sale or rent) but has not yet done so, i.e., insurance, taxes, maintenance, management.

Cash Flow ^top Income generated by a property which is determined by subtracting vacancy allowances and collection costs, operating expenses and debt-servicing costs from the property's scheduled gross income.

Catalog or Brochure ^top A publication advertising and describing the property(ies) available for sale at public auction, often including photographs, property descriptions, and the terms and conditions of the sale.

Caveat Emptor ^top A Latin term meaning let the buyer beware. A legal maxim stating that the buyer takes the risk regarding quality or condition of the property purchased unless protected by warranty. The buyer must examine the goods or property and buy at his own risk.

Chain of Title ^top A history of conveyances and encumbrances affecting the title from the time it passed from government ownership, or as far back as records are available.

Clerk ^top The person employed by the principal auctioneer or auction firm to record what is sold and to whom and for what price.

Closing Statement ^top The written statement provided by the escrow company to each of the parties to the loan transaction showing the amounts received and the amounts paid out for various items.

Cloud on Title ^top Any conditions revealed by a title search which affect the title to property; usually relatively unimportant items but which cannot be removed without a quitclaim deed or court action.

Codes ^top A systematic collection of laws in writing.

Collateral Security ^top A separate obligation attached to another contract to guarantee performance of the contract.

Collusion ^top The unlawful practice whereby two or more people agree not to bid against one another so as to deflate value or when the auctioneer accepts a fictitious bid on behalf of the seller so as to manipulate or inflate the price of the property. An illegal agreement between two or more persons to defraud another of his rights by the forms of law.

Color of Title ^top That which appears to be good title but which is not title in fact.

Commingling ^top The broker's unauthorized and improper mixing of office funds, which are personal or business monies, with trust funds, which are client customer monies.

Commission ^top The fee charged to the seller by the auctioneer for providing services, usually a percentage of the gross selling price of the property established by contract (the listing agreement) prior to the auction. A payment for the performance of specific duties that can be a percentage of the selling price of property, percentage of rentals, etc.

Compound Interest ^top Interest paid on the original principal and on interest accrued from time it became due.

Condemnation ^top The act of taking private property for public use by the sovereign powers; a declaration that a structure is unfit for use.

Conditions of Sale ^top The legal terms that govern the conduct of an auction, including acceptable methods of payment, terms, buyer's premiums, possession, reserves and any other limiting factors of an auction. Usually included in published advertisements or announced by the auctioneer prior to the start of the auction.

Contract ^top An agreement between two or more persons or entities which creates or modifies a legal relationship.

Conventional Loan ^top A loan that's neither guaranteed nor insured by the Federal Housing Administration (FHA) or Veterans' Administration (VA).

Conveyance ^top The transfer of title to land. Includes most instruments by which an interest in real estate is created, mortgaged, or assigned.

Cooperating Broker ^top A real estate broker who registers a prospective buyer with the auction company, in accordance with the terms and conditions for that auction. The broker is paid a commission only if his prospect is the high bidder and successfully closes on the property. Also known as a participating broker.

Covenants ^top Agreements written into deeds and other instruments promising performance or non-performance of certain acts or stipulating certain uses or non-uses of the property.

Critical Path ^top Sequence of key tasks to be done by auction contractor or other designated parties on specified dates, leading to desired goals.

Damages ^top The indemnity recoverable by a person who has sustained an injury either in his person, property or relative rights, through the act or default of another.

Deed ^top A written instrument which, when properly executed and delivered, conveys title to real property.

Deed in Lieu of Foreclosure ^top A deed to real property accepted by a lender from a defaulting borrower to avoid the necessity of foreclosure proceedings by the lender.

Default ^top Failure to fulfill a duty or promise or to discharge an obligation, or to perform any act in an instrument in writing, that has been agreed upon.

Deferred Maintenance ^top Existing but unfulfilled requirements for repairs and rehabilitation.

Deficiency Judgment ^top A judgment given when the security pledged for a loan does not satisfy the debt upon its default.

Depreciation ^top Loss of value in real property brought about by age, physical deterioration or functional or economic obsolescence.

Deterioration ^top Reflecting the loss in value brought about by wear and tear, disintegration, use in service, and the actions of the elements.

Discount Fee ^top Sometimes referred to as points a fee charged by the lender in order to obtain a higher earning than the interest stated in the mortgage note.

Documentary Transfer Tax ^top A state enabling act allows cities and counties to adopt a documentary transfer tax to apply on all transfers of real property located within their jurisdictions.

Dual Agency ^top The representation of opposing principals (buyers and seller) at the same time.

Due Diligence ^top The process of gathering information about the condition and legal status of assets to be sold.

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

Easement ^top Created by grant or agreement for a specific purpose, an easement is the right privilege or interest which one party has in the land of another. (Example: right of way.)

Economic Life ^top The period over which a property will yield a return on the investment, over and above the economic or ground rent due the land.

Eminent Domain ^top The right of the government to acquire private property for public use by condemnation. The owner must be compensated fully.

Encroachment ^top Trespass; the building of a structure or construction of any improvements partly or wholly on the property of another.

Encumbrance ^top Anything which affects or limits the fee simple title to property, such as mortgages, trust deeds, easements or restrictions of any kind which do not prevent alienation of the fee title by the owner. Liens are special encumbrances which make the property security for the debt.

Enforceable ^top That which can be made to effective; to cause to take effect. An agreement or contract between persons in which one or other party can legally compel the performance of another or other parties.

Equity ^top The interest or value which an owner has in real estate over and above the liens against it.

Escrow ^top The deposit of instruments and funds with instructions to a third party to carry out the provisions of an agreement or contract; when everything is deposited to enable carrying out the instructions, it is called a complete or perfect escrow.

Estate ^top The degree, quantity, nature and extent of interest which a person owns in real property.

Estate Sale ^top The sale of property left by a person at his or her death. An estate auction can involve the sale of personal and/or real property.

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

Exchange ^top A means of trading equities in two or more real properties, treated as a single transaction through a single escrow or as a deferred exchange through two or more escrows.

Exclusive Agency Listing ^top A written instrument giving one agent the right for a specified time to sell a property, but reserving the right of the owner to sell the property himself without payment of a commission to the agent.

Exclusive Right to Sell Listing ^top A written agreement between an owner and an agent giving the agent the right to collect a commission if the property is sold by anyone during the term of his agreement.

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

Executed Contract ^top A contract that is fully performed.

Execution of Contract ^top To sign a contract.

Executor ^top A person named in a will to carry out its provisions as to the disposition of the estate of a deceased person.

Executor's Deed ^top A legal deed to real property given by an executor of an estate

Executory Contract ^top A contract not yet fully performed.

Fee Simple ^top The terms fee and fee simple are substantially synonymous. The term fee is of old English derivation. Fee simple absolute is an estate in real property by which the owner has the greatest power over the title which it is possible to have being an absolute estate. In modern use being an absolute estate. In modern use it expressly established the title of real property in the owner without limitation or end. They may dispose of it by sale or trade or will as he chooses.

FHA Loan ^top A loan that is underwritten to the standards of the Federal Housing Administration, which grants approval of the loan and insures the lender against financial loss.

FHLMC (Freddie Mac) ^top A private corporation dealing in the purchase of first or second mortgages, at discounts.

Fiduciary ^top A person in a position of trust and confidence, as between principal and broker; broker as fiduciary owes certain loyalty which cannot be breached under rules of agency.

Fixtures ^top Appurtenances affixed to buildings or land, usually in such a way that they cannot be moved without damage to themselves or the property; plumbing, electrical fixtures, fences, trees, shrubbery, etc. Fixtures are real property.

FNMA (Fannie Mae) ^top A private corporation dealing in the purchase of first or second mortgages, at discounts.

Foreclosure ^top Legal procedure whereby property pledged as security for a debt is sold to pay the debt in event of default in payments or terms.

Forfeiture ^top Loss of money or anything of value due to failure to perform, such as a deposit given to insure performance

Fraud ^top The intentional and successful employment of cunning, deception, collusion; or artifice used to cheat or deceive another person whereby that person acts upon it to the loss of his property and to his legal injury.

GI Loan ^top Analyzed by - and approval granted by - Veterans' Administration. Also called VA loan. Only eligible veterans may apply. Veterans' Administration guarantees a portion of the loan to the lender against loss.

Gift Deed ^top A deed for which the consideration is love and affection and where there is no material consideration.

Graduate Personal Property Appraiser (GPPA) ^top The professional designation awarded by the NAA Education Institute (formerly American Marketing Institute) to qualified property appraisers who meet the educational and experiential requirements of the Institute and who adhere to a strict code of ethics and standards of practice.

Graduated Lease ^top A type of long-term lease agreement, which provides for a fixed rental fee during the initial period of the lease with increases and/or decreases in rental amount at stated times during the balance of the contract term.

Grant Deed ^top A technical legal term in a deed of conveyance bestowing an interest in real property on another. The words convey and transfer have the same effect."

Grantee ^top The purchaser; the person to whom a grant is made.

Grantor ^top Seller of property; one who signs a deed.

Gross Income ^top Total income from property before any expenses are deducted.

Guarantee of Title ^top The opinion of a title company backed by its assets as to the true condition of the title to a certain piece of land at a particular time, as shown by the public records in the recording office.

Hammer Price ^top Price established by the last bidder and acknowledged by the auctioneer before dropping the hammer or gavel.

Homestead ^top A home upon which the owner or owners have recorded a Declaration of Homestead, as provided by California statutes; protects home against judgments up to specified amounts.

Hypothecate ^top To give a thing as security without the necessity of giving up possession of it. To mortgage real property.

Implied ^top Not expressed in writing; presumed or inferred.

Income Property ^top Property which produces income from residential or commercial rentals and profits attributable to real estate other than rent

Incompetent ^top One who is mentally incompetent, incapable; any person who, though not insane, is, by reason of old age, disease, weakness of mind, or any other cause, unable unassisted to properly manage and take care of himself or his property.

Injunction ^top A writ or order issued under the seal of a court to restrain one or more parties to a suit or proceeding from doing an act which is deemed to be inequitable or unjust in regard to the rights of some other party or parties to the suit.

Installment Note ^top A note which provides that payments of a certain sum or amount be paid on the dates specified in the instrument.

Instrument ^top A legal document in writing to create, alter, modify or terminate a right.

Interest Rate ^top The percentage of a sum of money charged for its use.

Investment ^top Money put in property or other ventures with the expectation of making a profit, with sufficient security to return and protect the capital; not speculation.

Involuntary Conveyance ^top Sheriff's deed; tax deed; an instrument against the will of the owner.

Involuntary Lien ^top A lien imposed against property without consent of owner. Examples: taxes, assessments, federal income tax liens, judgments, etc.

Joint Tenancy ^top Joint ownership by two or more persons with right of survivorship.

Judgment ^top An agreement for the purchase or sale of real property. (See agreement of sale, conditional sales contract.)

Kickback ^top Payment made secretly by a seller to someone instrumental in awarding a contract or making a sale; an illegal payoff.

Lease ^top A contract between the owner of real property, called the lessor, and another person, called the lessee, covering conditions under which the lessee may occupy and use the property.

Legal Description ^top A written description by which property can be located definitely by reference to government surveys or approved recorded maps.

Leverage ^top The use of a small amount of cash to control a large amount of property values.

Lien ^top A charge or encumbrance upon property for the payment or discharge of a debt.

Life Estate ^top An interest in real property, which is held for the duration of the life of some certain person. It may be limited by the life of the person holding it or by the life of some other person.

Liquidate ^top Disposal of property or settlement of debts.

Liquidity ^top The ability of property to be exchanged for cash.

Lis Pendens ^top A notice recorded for the purpose of warning all persons that the title or right of possession of certain real property is in litigation. Gives constructive notice of such litigation.

Listing ^top An employment contract between owner and broker authorizing broker to perform services involving the principal's property.

Listing Broker ^top A real estate broker who has a listing on a property and cooperates with the auction company by allowing the auction agreement to supersede his/her listing agreement.

Loan Costs ^top The actual expense for services rendered in obtaining a loan. Includes appraisal fees, attorney fees, survey fees, loan commissions. Usually itemized for the benefit of the borrower.

M.A.I. ^top Designates a person who is a member of the American Institute of Real Estate Appraisers

Market Price ^top The price the property brings in a given market.

Market Value ^top The highest price in terms of money which a property will bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. The price a willing buyer would pay and a willing seller would accept, both being fully informed and the property being exposed for sale for a reasonable time period.

Marketable Title ^top Merchantable title; one free and clear of objectionable liens or encumbrances.

Mechanic's Lien ^top A lien created by statute for the purpose of securing priority of payment for the price or value of work performed and materials furnished in construction or repair of improvements to land, and which attaches to the land as well as the improvements.

Memorandum ^top Sometimes also referred to as a Bidder Acknowledgment or Broker Acknowledgment the memorandum is signed by those parties either on the auction floor or in the contract room.

Minimum Bid Auction ^top An auction in which the auctioneer will accept bids at or above a disclosed price. The minimum price is always stated in the brochure and advertisements and is announced at the auctions.

Moratorium ^top Temporary suspension, usually by statute, of the enforcement of liability for an obligation.

Mortgage ^top An instrument by which property is hypothecated to secure the payment of a debt.

Mortgage Broker ^top One who, for a fee, brings together a borrower and lender, and handles the necessary applications for the borrower to obtain a loan against real property by giving a mortgage or deed of trust as security.

Mortgagor ^top One who borrows money on his property and gives a mortgage as security.

Multi-Property Auction ^top A group of properties offered through a common promotional campaign. The properties to be auctioned may be owned by one seller or multiple sellers.

Multi-Seller Auction ^top Properties owned by many sellers, offered through a common promotional campaign are auctioned in a single event.

National Auctioneers Association ^top An association of individual auctioneers united to promote the mutual interests of its members; formulate and maintain ethical standards for the auction profession; promote the enactment of just and reasonable laws, ordinances and regulations affecting auction selling; make the public more aware of the advantages of auction selling; and generally improve the business conditions affecting the auction profession.

National Real Estate Auction Committee ^top A national committee developed by the National Association of Realtors in April, 1990 to provide education to members concerning real estate auctions, identify issues and monitor, review and analyze trends affecting the real estate auction industry. It also is charged with formulating policies for consideration by other policy-making NAR Committees, its Executive Committee and Board of Directors.

Negotiable ^top Capable of being negotiated; assignable or transferable in the ordinary course of business.

Net Listing ^top A listing which provides that the agent may retain, as compensation for his services all sums received over and above a net price to the owner.

Net Worth ^top Value remaining after subtracting the liabilities from the assets of a company or an individual.

Nonconforming Use ^top A use that was lawfully established and maintained, but no longer conforms to the use regulations of the zone in which it is located because of a subsequent change in a zoning ordinance.

Notary Public ^top An official authorized by law to witness or attest to an acknowledgment by a person who has executed an instrument.

Note ^top A signed written instrument acknowledging a debt and promising payment.

Notice of Default ^top A notice filed to show that the borrower under a mortgage or deed of trust is in default (behind on the payments).

Notice of Non-Responsibility ^top A notice provided by law designed to relieve a property owner from responsibility for the cost of improvements ordered by another person.

Notice of Rescission ^top Loss in value due to reduced desirability and usefulness of a structure because it has become old fashioned and not in keeping with modern needs or because of adverse social or economic influences.

Offer and Acceptance ^top A contract used in the sale of real property; a deposit receipt or exchange agreement.

Offer to Buy ^top An agreement between owner and purchaser as to the price, terms, conditions and date of occupancy. Usually prepared by a Realtor or attorney.

On-site Auction ^top An auction conducted on the premises of the property being sold.

Open Listing ^top An authorization given by a property owner to a real estate agent wherein said agent is given the non-exclusive right to secure a purchaser; open listings may be given to any number of agents without liability to compensate any except the one who first secures a buyer ready, willing and able to meet the terms of the listing, or secures the acceptance by the seller of a satisfactory offer.

Open-End Mortgage ^top One which provides that the outstanding balance can be increased in order to advance additional loan funds to the borrower, up to the original sum of the note.

Opening Bid ^top The first bid offered by a bidder at an auction or the lowest acceptable amount at which the bidding must commence.

Option ^top A right given for a consideration to purchase or lease a property upon specified terms within a specified time.

Oral Contract ^top A verbal agreement; one which is not reduced to writing.

Percolation ^top The seepage of water through soil; the soil's ability to absorb to water or other liquid.

Personal Property ^top Any property which is not real property.

Planned Development ^top Five or more individually owned lots where one or more other parcels are owned in common or there are reciprocal rights in one or more other parcels. A subdivision.

Plat ^top A map or plan of a certain parcel of land.

Plat Book ^top A book showing the lots and legal subdivisions of an area.

Pocket Listing ^top A trade term. An open listing that a real estate salesperson pockets or keeps hidden from his/her associates."

Possessory Interest ^top Right to possess.

Power of Attorney ^top An instrument authorizing a person to act as the agent of the person granting it.

Preliminary Title Report ^top A report showing the condition of title before a sale or loan transaction. After completion of the transaction, a title insurance policy is issued.

Prepayment Penalty ^top The percentage a lender may require to be paid in addition to the unpaid principal balance when a loan is paid off ahead of schedule.

Prescription ^top Obtaining title to property by adverse possession by occupying it for the period determined by law to bar action for recovery.

Preview ^top Specified date and time property is available for prospective buyer viewing and audits. Also known as Open House or Inspection.

Prima Facie ^top Presumptive on its face; true, valid, or sufficient at first impression.

Principal ^top The employer of an agent.

Promissory Note ^top The document signed by the borrower promising repayment of the loan showing the amount of monthly payments, interest rate, first payment date, last payment date, and the late charge and prepayment provisions..

Proration of Taxes ^top To divide or prorate the taxes equally or proportionately to time of use.

Puffing ^top The sometimes exaggerated buildup a salesperson or the seller may give to property. It is recognized in law as an opinion and not necessarily representing the facts.

Purchase Money Encumbrance ^top (1) A trust deed or mortgage given by the buyer to the seller as part or all of the purchase price of the property. (2) A trust deed or mortgage given to a third party as security for the borrowing of money used to purchase less than five residential units, one of which is to be occupied by the purchaser.

Quiet Title ^top A court action brought to establish title; to remove a cloud on title.

Quitclaim Deed ^top A deed used to remove clouds on title by relinquishing any right, title or interest that the grantor may have.

Ratification ^top The adoption or approval of an act performed on behalf of a person without previous authorization.

Real Estate Investment Trust ^top A special arrangement under Federal and State law whereby investors may pool funds for investments in real estate and mortgages and yet escape corporation taxes; requires one hundred persons or more.

Realtor ^top A real estate broker holding active membership in a real estate board affiliated with the National Association of Realtors.

Reconveyance ^top The transfer of the title of land from one person to the immediately preceding owner. This instrument is commonly used in California when the performance or debt is satisfied under a deed of trust and the trustee conveys the title he has held back to the owner.

Redemption ^top The buying back of one's property after it has been lost through foreclosure. Payment of delinquent taxes after sale to the State.

Referring Broker ^top A real estate broker who does not have a listing on a property, but refers the auction company to a potential seller for an auction. Usually earns a flat fee commission for referring product to an auction company.

Regroup ^top A process used in real estate auctions where a bidder has the opportunity to combine several parcels of land previously selected by other bidders, thereby creating one larger parcel out of several smaller parcels. This process is often used in conjunction with bidder's choice.

REO ^top Real Estate Owned. Institutional owned real estate typically acquired by foreclosure or deed in lieu of foreclosure.

Rescission of Contract ^top The annulling, revocation or repealing of a contract by mutual consent of the parties to the contract or for cause by either party to the contract.

Reserve ^top The minimum price that a seller is willing to accept for a property to be sold at auction. Also known as the reserve price.

Reserve Auction ^top An auction in which the seller reserves the right to establish a reserve price, to accept or decline any and all bids or to withdraw the property at any time prior to the announcement of the completion of the sale by the auctioneer. This auction type may also referred to as Subject to Confirmation."

Restriction ^top The term, as used in relation to real property, means that the owner of real property is restricted or prohibited from doing certain things relating to the property or using the property for certain purposes.

Reversion ^top The right to future possession or enjoyment by the person or his heirs, creating the preceding estate.

Reversionary Interest ^top A type of interest a person may have in lands or other property upon the termination of the preceding estate.

Right of Survivorship ^top Right to acquire the interest of a deceased joint owner. Distinguishing characteristic of a Joint Tenancy Deed.

Right-of-Way ^top A privilege operating as an easement upon land, whereby the owner does, by grant or by agreement, give to another the right to pass over his land.

S.R.E.A. ^top Designates a person who is a member of the Society of Real Estate Appraisers.

Sale Manager ^top The person designated by the auction company who is responsible for organizing the details of an auction. Also known as project manager.

Sales Contract ^top A contract by which buyer and seller agree to terms of a sale.

Sales Tax Exemption ^top The need to provide a tax exemption certificate will vary from state to state in the U.S. If you are a dealer, call to ask what will be needed. If you have a dealer number for tax exemption purposes, carry it with you when you attend auctions.

Sandwich Lease ^top A leasehold interest which lies between the primary lease and the operating lease. It is created when the lessee enters into a sublease.

Satisfaction ^top In real estate practice, an instrument to be recorded on the county recorder's books when a mortgage has been paid in full. it is signed by the mortgagee and recites that the debt has been satisfied.

Sealed Bid ^top A method of sale utilized where confidential bids are submitted to be opened at a predetermined place and time. Not a true auction in that it does not allow for reaction from the competitive market place.

Seller ^top Entity that has legal possession, (ownership) of any interests, benefits or rights inherent to the real or personal property.

Separate Property ^top Property owned by a husband or wife which is not community property; property acquired by either prior to marriage or by gift, will or inheritance, and all of the rents, issues and profits thereof.

Sheriff's Deed ^top Deed given by court order in connection with the sale of property to satisfy a judgment.

Simple Interest ^top Interest computed on principal alone, as opposed to compound interest.

Situs ^top Location.

Specific Performance ^top An action at law to compel the performance of a contract according to its terms.

Statute of Frauds ^top State law which provides that certain contracts must be in writing in order to be enforceable at law.

Statutory Law ^top Rules formulated into law by legislative action.

Straight Line Depreciation ^top Definite sum set aside annually from income to pay cost of replacing improvements without reference to interest it earns.

Subject to Mortgage ^top When a grantee takes title to a real property subject to mortgage he is not responsible to the holder of the promissory note for the payment of any portion of the amount due. The most he can lose in the event of a foreclosure is his equity in the property.

Sublease ^top A lease given by a lessee.

Subordination Clause ^top Used in a first or senior lien permitting it to be subordinated to a subsequent lien, such as a construction loan. it converts a senior trust deed into a junior trust deed (second, third, etc.).

Subrogation ^top The substitution of another person in place of the creditor to whose rights he succeeds in relation to the debt. The doctrine is often used when one person agrees to stand surety for the performance of a contract by another person.

Surety ^top One who guarantees the performance of another. Guarantor.

Survey ^top The process by which boundaries are measured and land areas are determined; the on-site measurement of lot lines, dimensions, and position of a house on a lot, including the determination of any existing encroachments or easements.

Tax Sale ^top A public sale of property, usually at auction, by governmental authority due to non-payment of taxes assessed against it.

Taxes ^top A forced contribution of wealth to meet the public need for government.

Tenancy at Sufferance ^top A tenancy which arises when a tenant holds over after the termination of a lease without consent.

Tenancy at Will ^top A tenancy for an indefinite period which may be terminated at the will of either the lessee or the lessor.

Tenancy in Common ^top Ownership by two or more persons who hold undivided interests without right of survivorship.

Tender ^top An offer of money, usually in satisfaction of a claim or demand.

Terms ^top The period of time that an agreement is in effect.

Terms and Condition ^top Terms and Conditions are something you will likely see at every auction you attend. They will vary a according to the type of commodity being sold and the auction company. What we are showing you here are some things that are typical and that you should know. Please be sure to check the Web site or on-site glossary for each individual auction."

Tie Bids ^top When two or more bidders bid exactly the same amount at the same time and must be resolved by the auctioneer.

Time Is Of The Essence ^top A clause in a contract contemplating performance by the date specified therein.

Title ^top The rights of ownership.

Title Insurance ^top Insurance written by a title company to protect the property owner against loss if title is imperfect.

Tort ^top A wrongful act; wrong; injury; violation of a legal right.

Townhouse ^top A single family attached dwelling unit with party walls; usually an individual unit in a series of five to ten houses, with common walls between the units and side yards on the end units only; may have one to three stories and all necessary facilities and amenities.

Trust Deed ^top An instrument which transfers (conveys) the bare legal title of a property to a trustee to be held pending fulfillment of an obligation, usually the repayment of a loan to a beneficiary.

Trustee ^top One who holds bare legal title to a property in trust for another to secure the performance of an obligation.

Trustee's Sale ^top A sale at auction by a trustee under a deed of trust, pursuant to foreclosure proceedings.

Trustor ^top The borrower of money secured by a trust deed. One who transfers his bare legal title to a trustee to be held as security until he has performed his obligation to a lender under terms of a note secured by a deed of trust.

Undue Influence ^top Taking any fraudulent or unfair advantage of another's weakness of mind, or distress or necessity.

Unearned Increment ^top An increase in value of real estate due to no effort on the part of the owner.

Unit Cost-in-Place Method ^top A method for determining cost or cost of reproducing an improvement.

Unlawful Detainer ^top An action at law to evict a person or persons occupying real property unlawfully.

Upset Price ^top Commonly known as the reserve price.

Usury ^top On a loan, claiming a rate of interest greater than that permitted by law.

Valid ^top Having force or binding force legally sufficient and authorized by law; enforceable.

Valuation ^top Estimated worth or price. The act of valuing by appraisal.

Variable Interest Rate ^top An interest rate which fluctuates as the prevailing rate moves up or down. In mortgages there are usually maximums as to the frequency and the amount of fluctuation.

Vested ^top Bestowed upon someone; secured by someone, such as title to property.

Void ^top To have no force or effect; that which is unenforceable.

Voidable ^top That which is capable of being adjudged void, but is not void unless action is taken to make it so.

Voluntary Lien ^top Any lien placed on property with the consent of, or as a result of the voluntary act of, the owner.

Waive ^top To relinquish or abandon; to forego a right to enforce or require anything.

Warranty Deed ^top A deed used to convey real property which contains warranties of title and quiet possession and the grantor thus agrees to defend the premises against the lawful claims of third persons. It is used commonly in other states but not in California where it has been supplanted by the grant deed. The modern practice of securing title insurance has reduced the importance of express and implied warranty in deeds.

Withdrawal ^top Failure to reach the reserve price or insufficient bidding.

Wrap-Around Mortgage ^top The wrap-around mortgage is a purchase money mortgage which is subordinate to, but yet includes the encumbrance or encumbrances to which it is subordinated. Also called the all-inclusive mortgage or all inclusive trust deed.

Zoning ^top Act of city or county authorities specifying type of use to which property may be put in specific areas.