CeRER key terms

The most complete form of private property ownership, giving the holder unlimited duration, free transferability, and no conditions on use beyond lawful government restrictions.

An ownership interest lasting only for the lifetime of a named person. The holder may use the property but cannot leave it to heirs, since it ends at death.

A future interest held by a person who receives the property after a prior interest ends, such as after a life tenant dies.

Co-ownership by two or more people in undivided shares, with no right of survivorship. Each owner may sell or will their share to heirs.

Co-ownership with equal undivided shares and a right of survivorship, so a deceased owner's share passes automatically to the surviving owners rather than to heirs.

An act that breaks a joint tenancy, such as one owner conveying their share or a partition action, converting it into a tenancy in common.

A right to use a neighboring parcel that benefits the owner's land and passes automatically with that land when it is sold.

A right to use another's land that benefits a person or entity rather than a parcel, such as a utility company's line right, and is not tied to ownership of adjacent land.

Any claim, lien, easement, or restriction that burdens a property and may reduce its value or limit how the owner can use it.

A doctrine allowing a person who openly, exclusively, continuously, and hostilely occupies another's land for the statutory period to gain title to it.

The ranking that determines which lien or mortgage is paid first from sale proceeds, generally set by recording date or by special statutory rules.

A recorded notice that a lawsuit affecting title to a property is pending, warning buyers and lenders that ownership may change.

A court case brought to settle conflicting ownership claims and confirm who holds valid title, often used to clear defects or adverse claims.

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

A valuation method that estimates value by analyzing recent arm's-length sales of similar properties and adjusting for differences in features, size, condition, and location.

The reasonably probable use of a property that is legally permitted, physically possible, financially feasible, and produces the greatest value.

A valuation method that converts a property's expected net operating income into an indicated value by dividing it by a market-derived capitalization rate.

A property's effective gross income minus operating expenses, excluding debt service and income taxes, used to measure the property's earning power.

A dollar or percentage change applied to a comparable sale's price to account for differences between that property and the subject property being valued.

A written contract between a buyer and a broker setting out the scope of services, compensation terms, duration, and any exclusivity of the relationship.

A buyer agency arrangement in which the broker is entitled to compensation regardless of who finds the property, even if the buyer locates it independently.

The uninterrupted series of events that leads to a completed transaction, used to decide which broker is entitled to a commission.

Compensation paid to a broker for services in a transaction, typically a percentage of price or a flat fee, and always negotiable between the parties.

An arrangement where the seller sets a minimum net amount and the broker keeps any sale proceeds above it; many jurisdictions restrict or prohibit it because of conflict-of-interest risk.

Funds a buyer deposits to show good faith and commitment, usually held in trust and applied to the purchase price or returned under contract terms.

A contract condition that must be satisfied for the sale to proceed, such as financing, inspection, or appraisal, and whose failure may let a party cancel.

A negotiated window after contract acceptance during which the buyer may inspect the property, review records, and cancel or renegotiate under stated terms.

A neutral third party's holding of funds or documents until stated conditions are met, protecting both sides during a transaction.

A closing document itemizing all debits and credits to the buyer and seller, including price, loan charges, prorations, and fees.

The division of ongoing costs such as property taxes, rent, or association dues between buyer and seller based on the closing date.

The loan amount divided by the property's appraised value or purchase price, used by lenders to gauge risk and set mortgage insurance requirements.

Coverage that protects a lender against loss if a borrower defaults, typically required when the loan-to-value ratio exceeds a set threshold.

The gradual repayment of a loan through scheduled payments that cover interest first and increasingly reduce principal over the loan term.

A standardized measure of credit cost that combines the interest rate with certain fees and points, expressed as a yearly percentage for comparison.

The legal obligation of a broker to act in the client's best interest, including loyalty, confidentiality, disclosure, obedience, and accounting for funds.

A situation where one broker represents both buyer and seller in the same transaction, permitted only with informed written consent where law allows.

A required written notice explaining whom the broker represents and the duties owed, given to consumers before or at the start of representation.

Directing buyers toward or away from neighborhoods based on protected characteristics rather than their stated needs, a fair housing violation.

Inducing owners to sell by suggesting that members of a protected group are moving into the area and will lower property values, which is unlawful.

Laws barring discrimination in the sale, rental, advertising, and financing of housing based on protected characteristics such as race, religion, sex, disability, and familial status.

Refusing or limiting loans, insurance, or services in certain neighborhoods based on their demographics rather than economic risk, which is illegal.