CA Real Estate key terms

The most complete form of property ownership, giving the owner unlimited rights to use, sell, lease, or give away the property, with no time limit, and inheritable by heirs.

Ownership that lasts only for the lifetime of a named person. The life tenant may use the property but generally cannot sell it outright or leave it to heirs.

A legal right to use another person's land for a specific purpose, such as a driveway or utility line, without owning the land itself.

Any claim, lien, easement, or restriction that affects title to or limits the use of real property, potentially reducing its value or marketability.

Local government rules that divide land into districts and specify allowed uses, building heights, lot sizes, and density within each district.

A special permission from a local zoning board allowing a property owner to deviate from a zoning rule because of unusual hardship or site conditions.

A way to gain ownership of another's land by openly occupying it without permission for a statutory period, meeting specific legal requirements.

A legal relationship in which one person, the agent, is authorized to act on behalf of another, the principal, and owes that principal fiduciary duties.

The legal obligation of an agent to act in the principal's best interest, including loyalty, confidentiality, disclosure, obedience, reasonable care, and accounting for money.

A situation where one brokerage represents both buyer and seller in the same transaction, requiring written disclosure and consent from both parties in California.

A written contract in which a buyer hires a broker to represent them, setting out the broker's duties, the term, and how compensation will be paid.

A fact that could affect a reasonable person's decision to buy, sell, or lease property; agents must disclose known material facts to their clients and, in some cases, to others.

The most probable price a property would bring in a competitive, open market under fair sale conditions, with both buyer and seller acting knowledgeably and without undue pressure.

An independent, written estimate of a property's value prepared by a licensed appraiser using accepted methods such as sales comparison, cost, and income approaches.

A real estate agent's informal estimate of a property's likely selling price, based on recent sales and active listings of similar nearby properties; it is not a licensed appraisal.

A valuation shortcut found by dividing a property's price or value by its gross annual rental income; used mainly for quick comparisons of income properties.

The annual net operating income of an income property divided by its price or value, expressed as a percentage; used to compare investment returns and estimate value.

The loan amount divided by the property's appraised value or purchase price, whichever is lower, shown as a percentage; lenders use it to measure risk.

The gradual repayment of a loan through scheduled payments that cover interest and reduce the principal balance over time until the loan is fully paid.

A loan whose interest rate can change at set intervals based on an index plus a margin, so the monthly payment may go up or down over the loan term.

A security instrument used in California instead of a mortgage; it conveys title to a trustee to hold until the borrower repays the loan, with a lender as beneficiary.

A written promise by a borrower to repay a loan on specified terms, including the principal amount, interest rate, payment schedule, and any prepayment or default provisions.

A California deed containing implied promises that the grantor has not already conveyed the property to someone else and that there are no undisclosed encumbrances created by the grantor.

A deed that transfers whatever interest the grantor may have in the property, with no promises or warranties about the quality of title.

A policy that protects a buyer or lender against financial loss from defects in title that existed before the policy date and were not found in the title search.

The process of filing a deed or other document with the county recorder to give public notice of an interest in real property and establish priority.

A nonjudicial foreclosure sale conducted by a trustee under a deed of trust after the borrower defaults, without going through court.

A written contract between a seller and a broker that authorizes the broker to market the property and sets the listing term, commission, and type of listing.

A cooperative database used by participating brokers to share listings, enabling broader exposure for sellers and access for buyer agents.

A neutral third party holds funds and documents and carries out instructions only when all conditions of the transaction are satisfied, then distributes money and records documents.

A payment from one licensed real estate broker to another for sending a client; only licensed brokers may pay or receive it, and it must be disclosed.

A written statement given to a consumer explaining who the agent represents and the duties owed, required in California before certain agency relationships are formed.

A written contract for the sale of real property that states the price, terms, closing date, contingencies, and the parties' promises and obligations.

A condition in a contract that must be met or waived before the parties are obligated to complete the transaction, such as a loan, appraisal, or inspection contingency.

Money a buyer gives at the start of a transaction to show good faith; it is held in escrow and usually applied to the purchase price or forfeited if the buyer defaults.

A law requiring certain contracts, including real estate sale agreements and leases over one year, to be in writing and signed to be enforceable in court.

A response to an offer that changes its terms; it rejects the original offer and becomes a new offer that the other party may accept or reject.