RAM reverse annuity mortgage.
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RANCH HOUSE originally a low, rambling, one-story house typical of the western
United States; now used to describe almost any one-story house.
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RANGE LINES lines parallel to a principal meridian, marking off the land into
6-rnile strips known as ranges; they are numbered east or west of a principal meridian in
the Government Rectangular Survey
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RATE OF INTEREST same as interest rate.
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RATE OF RETURN the percentage relationship between the earnings and the cost of an
investment.
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RATE OF RETURN OF INVESTMENT same as recapture rate.
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RAW LAND acreage with no added improvements, such as landscaping, drainage,
streets, utilities, and structures.
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READY, WILLING, AND ABLE capable of an action and disposed to act
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REAL ESTATE 1. In law, land and everything more or less attached to it. Ownership
below to the center of the earth and above to the heavens
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REAL ESTATE COMMISSION state agency that enforces real estate license laws.
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REAL ESTATE EDUCATORS ASSOCIATION a professional organization primarily composed of
persons who teach real estate in junior colleges and proprietary license preparation
schools.
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REAL ESTATE INVESTMENT TRUST (REIT) a real estate mutual fund, allowed by income
tax laws to avoid the corporate income tax. It sells shares of ownership and must invest
in real estate or mortgages. It must meet certain other requirements, including minimum
number of shareholders, widely dispersed ownership, asset and income tests.
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REAL ESTATE MARKET the potential buyers and sellers of real property at the current
time, and the current transaction activity for real property. It includes markets for
various property types, such as housing market, office market, condominium market, land
market.
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REAL ESTATE MORTGAGE INVESTMENT CONDUIT (REMIC) The Tax Reform Act of 1986 created
a new entity, the REMIC. The purpose of a REMIC is to hold a fixed pool of mortgages and
issue interests in itself to mortgage investors. A REMIC may be a partnership,
corporation, trust, or separate pool of assets. REMICs are intended to become the
exclusive means for issuing multiple-class mortgage backed securities in a form that
avoids the corporate double tax.
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REAL ESTATE OWNED (REO) property acquired by a lender through foreclosure and held
in inventory. Commonly referred to as REO.
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REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA) a law that states how mortgage
lenders must treat those who apply for federally related real estate loans on property
with 1-4 dwelling units. Intended to provide borrowers with more knowledge when they
comparison shop for mortgage money.
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REALIZED GAIN in a tax-free exchange, a gain that has occurred financially, but is
not necessarily taxed.
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REAL PROPERTY the rights to use real estate. Sometimes also defined as real estate.
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REALTIST a member of the National Association of Real Estate Brokers, a group
comprised of mainly minority brokers.
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REALTOR a professional in real estate who subscribes to a strict Code of Ethics as
a member of the local and state boards and of the National Association of Realtor’s
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REALTOR'S ASSOCIATE a licensed salesperson (not broker) who is a member of the
National Association of Realtors.
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REALTORS NATIONAL MARKETING INSTITUTE (RNMI) an affiliate of the National
Association of Realtors; mainly concerned with educational programs and literature for
members. Address: Realtors National Marketing Institute 430 North Michigan Avenue Chicago,
IL 60611
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REALTY same as real estate.
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REAPPRAISAL LEASE a lease where the rental level is periodically reviewed by
independent appraisers. Often, the lessor and lessee will each select an appraiser; if
they do not agree on a value, they will choose a third appraiser.
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REASSESSMENT the process of revising or updating the value estimate of property for
ad valorem tax purposes.
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REBATE a refund resulting from a purchase or tax.
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RECAPTURE CLAUSE in a contract, a clause permitting the party who grants an
interest or right to take it back under certain conditions.
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RECAPTURE OF DEPRECIATION same as depreciation recapture.
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RECAPTURE RATE in appraisal, a term used to describe the rate of recovery of an
investment in a wasting asset. This rate is added to the discount rate to derive a
capitalization rate in appraisal terminology. May be based on the straight-line, sinking
fund, or annuity method.
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RECASTING the process of adjusting a loan arrangement, especially under the threat
of default.
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RECIPROCITY mutual agreement to accept, such as a state's acceptance, as valid the
real estate license one has earned in another state.
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RECOGNIZED GAIN in a tax-free exchange, the portion of gain that is taxable. A
realized gain will generally be recognized to the extent of boot received.
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RECONCILIATION in appraisal, the process of adjusting comparables to estimate the
value of the subject being appraised.
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RECONVEYANCE occurs when a mortgage debt is retired. The lender conveys the
property back to the equity owner, free of the debt.
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RECORDING the act of entering in a book of public records instruments affecting the
title to real property. Recording in this manner gives notice to the world of facts
recorded.
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RECOURSE the ability of a lender to claim money from a borrower in default, in
addition to the property pledged as collateral.
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RECOVERY FUND -generally administered by the Real Estate Commission. Requires
licensees to contribute, then reimburses aggrieved persons who are unable to collect from
brokers for wrong-doings.
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RECTANGULAR SURVEY same as government rectangular survey method.
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REDEMPTION, EQUITY OF same as equity of redemption.
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REDEMPTION PERIOD the period during which a former owner can reclaim foreclosed
property.
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REDEVELOP the process of demolition of the existing improvements and construction
of new improvements on a site. The new improvements are often of a different type from the
old.
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RED HERRING a proposed prospectus that has not been approved by the Securities and
Exchange Commission (SEC) or state securities commission.
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REDISCOUNT RATE the rate of interest charged to member banks when they borrow from
the Federal Reserve System. Also called discount rate.
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REDLINING the illegal practice of refusing to originate mortgage loans in certain
neighborhoods on the basis of race or ethnic composition.
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REDUCTION CERTIFICATE a document in which the mortgagee (lender) acknowledges the
sum due on the mortgage loan. Used when mortgaged property is sold and the buyer assumes
the debt.
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REEVALUTION LEASE same as reappraisal lease.
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REFERRAL the act of suggesting the use of a certain broker.
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REFINANCE to replace an old loan(s) with a new loan(s).
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REGENCY HOUSE an English-style 2- or 3-story symmetrical house with a hip roof. A
small octagonal window over the front door is traditional.
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REGIONAL SHOPPING CENTER a type of shopping center containing 300,000 to 900,000
square feet of shopping space and at least one major department store.
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REGISTRAR the person who is to maintain accurate official re cords, such as for
deeds, mortgages, and other recorded documents.
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REGRESSION a statistical technique used to estimate mathematical models of economic
and other processes. It is used to find a mathematical expression which best fits the
relationship between a group of random variables as indicated by a sample of data.
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REGULATION D a regulation of the Securities and Exchange Commission that sets forth
conditions necessary for a private offering exemption.
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REGULATION Q a federal law that specified the maximum interest rates that banks and
savings and loan associations could pay on various types of deposits. It was phased out by
the Depository Institutions De-regulations and Monetary Control Act of 1980.
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REGULATION Z a federal regulation requiring creditors to provide full disclosure of
the terms of a loan. Compliance is compulsory for anyone who arranges credit for more than
5 sales of residential real estate in a year. Terms of the loan must be disclosed. The
interest rate must be stated as an annual percentage rate (APR).
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REHABILITATE to restore a structure to a condition of good repair.
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REHABILITATION TAX CREDIT the Tax Reform Act of 1986 provides a 20% tax credit for
rehabilitating certified historic structures, and a 10% credit for other buildings that
were placed in service after 1936.
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REINVESTMENT RATE the interest rate an investor is assumed to be able to earn on
intermediate cash flow in the projection of a terminal value.
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REIT real estate investment trust
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RELEASE CLAUSE in a mortgage, a clause that gives the owner the privilege of paying
off a portion of the mortgage indebtedness, thus freeing a portion of the property from
the mortgage.
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RELEASE OF LIEN to free real estate from a mortgage. .
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RELICTION gradual subsidence of waters, leaving dry land.
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RELOCATION CLAUSE a lease stipulation that allows the landlord to move the tenant
within the building.
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RELOCATION NETWORK a geographically diversified group of independent real estate
brokerage companies, generally not members of a franchise, that share information with one
another concerning potential customers.
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RELOCATION SERVICE a company which contracts with other firms to arrange the
relocation of employees from one city to another. The service generally handles the sale
of the employee's home and purchase of a new home. Furniture-moving services may be
included also.
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REMAINDER an estate that takes effect after the termination of a prior estate, such
as a life estate.
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REMAINDERMAN the person who is to receive possession of the property after the
death of a life tenant.
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REMIC Real Estate Mortgage Investment Conduit
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REMODEL to change the appearance and functional utility of a building. This may
include painting, repairing, and replacing of fixtures and equipment.
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RENEGOTIATE to legally revise the terms of a contract
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RENEWAL OPTION the fight, but not the obligation, of a tenant to continue a lease
at specified term and rent
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RENOVATE general term applied to the process of upgrading an existing improvement.
Usually there is an attempt to keep the same general appearance of the building with new
materials or to return the building to its original appearance.
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RENT a charge for the use of space.
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RENTABLE AREA same as net leasable area.
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RENTAL RATE the periodic charge per unit for the use of a property. The period may
be a month, quarter, or year. The unit may be a dwelling unit, square foot, or other unit
of measurement.
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RENT BID MODELS a conceptual tool used to explain how land is allocated in
competitive markets. The model is based on the assumption that space is controlled by the
activity which offers the highest bid for the site.
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RENT CONTROL laws that govern the rate that may be charged for space.
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RENT-FREE PERIOD a portion of the term of a lease when no rent is required. It is
offered by a landlord as a rental concession to attract tenants.
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RENT-UP PERIOD the time it takes for newly constructed properties to be fully
occupied.
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REPAIRS work performed to return property to a former condition without extending
its useful life, as distinguished from capital improvements. In income property, repairs
are an operating expense for accounting and tax purposes.
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REPLACEMENT COST the cost of erecting a building to replace or serve the functions
of a previous structure.
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REPLACEMENT RESERVE an amount set aside from net operating income to pay for the
eventual wearing out of short-lived assets.
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REPRODUCTION COST the cost of exact duplication of a property as of a certain date.
Reproduction differs from replacement in that replacement requires the same functional
utility for a property, whereas reproduction is an exact duplication.
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RESALE PRICE in a projection of real estate investment performance, the assumed
selling price a property could fetch at the end of the projection period.
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RESALE PROCEEDS the amount a former owner receives upon a sale after paying
transaction Costs, remaining debt, and, sometimes, income taxes. Same as proceeds from
resale.
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RESCIND to withdraw an offer or contract. Regulation Z allows a 3-day period in
which to rescind certain credit transactions.
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RESCISSION the act of canceling or terminating a contract. Rescission is allowed
when the contract was induced by fraud, duress, misrepresentation, or mistake. Regulation
Z allows one to rescind certain credit transactions within 3 business days (not applicable
to first mortgages on a home); purchasers of certain land that must be registered by
Department of Housing and Urban Development (HUD) may rescind within 3 business days.
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RESERVE FUND an account maintained to provide funds for anticipated expenditures
required to maintain a building. A reserve may be required by a lender in the form of an
escrow to pay upcoming taxes and insurance costs. A replacement reserve may be maintained
to provide for replacement cost of short-lived components, such as carpets, heating
equipment or roofing. Deposit of money into such a fund does not achieve a tax deduction.
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RESERVE PRICE in an auction or other bidding procedure, an established amount below
which the seller is not obligated to accept a winning bid.
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RESIDENCE the place where one lives, particularly the dwelling in which one lives.
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RESIDENTIAL pertaining to housing.
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RESIDENTIAL BROKER one who lists and sells houses or condominiums. Contrast with
commercial broker.
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RESIDENTIAL MEMBER (RM) a professional designation once offered by the American
Institute of Real Estate Appraisers. It is being exchanged or phased out in favor of the
SRA designation offered by the Appraisal Institute.
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RESIDENTIAL PROPERTY 1. in real estate brokerage terminology, owner-occupied
housing.
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RESIDENTIAL SALES COUNCIL affiliate of the Realtors' National Marketing Institute
of the National Association of Realtors' that provides educational and promotional
materials for members, most of whom are involved in residential real estate sales or
brokerage. Address: Residential Sales Council 430 North Michigan Avenue Chicago, IL 60611
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RESIDENTIAL SERVICE CONTRACT an insurance contract or home warranty, generally for
one year, covering the plumbing, mechanical, and electrical systems of a home. It is
available in most areas upon the purchase of an existing home. Either the buyer or seller
can pay for the contract.
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RESIDENT MANAGER one who supervises the care of an apartment complex while living
in one of the units in the complex.
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RESIDUAL value or income remaining after deducting an amount necessary to meet
fixed obligations.
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RESIDUAL TECHNIQUES a method of estimating the value of a building or land, given
values of one and rate of return.
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RESOLUTION TRUST CORPORATION (RTC) a federal agency created by FIRREA to manage and
resolve insolvent savings and loan associations placed into its conservatorship or
receivership. The agency is supervised by the Federal Deposit Insurance Corporation.
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RESPA Real Estate Settlement Procedures Act.
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RESPONDEAT SUPERIOR in agency law, the doctrine that a principal is liable for the
acts of an agent
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RESTORE to return a building to its original quality and appearance. While modern
materials are used, the emphasis is on faithful reproduction of the original style.
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RESTRAINT ON ALIENATION a limiting condition on the right to transfer property. If
the condition is against public policy or is unreasonable, courts will void the condition.
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RESTRICTION a limitation placed upon the use of property, contained in the deed or
other written instrument in the chain of title or in local ordinances pertaining to land
use.
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RESTRICTIVE COVENANT a covenant or deed restriction that limits the property rights
of the owner.
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RETAIL GRAVITATION the drawing power of a shopping center; generally, the larger
the center, the greater its ability to draw from distant areas.
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RETAINAGE in a construction contract, money earned by a contractor but not paid to
the contractor until the completion of construction or some other agreed-upon date.
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RETALIATORY EVICTION the requirement that a tenant vacate a unit in response to a
complaint from the tenant concerning the condition of the buildi6g. Landlord-tenant laws
in many states forbid such evictions if proper channels are taken to lodge the complaint.
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RETIRE (A DEBT) to pay off the principal on a loan, thereby fulfilling the
obligation under the loan contract.
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REVENUE STAMPS stamps that are affixed to deeds (and, in some states, other
documents affecting real estate) and that indicate the payment of the state's deed
transfer (or other transfer) tax. Federal revenue stamps have not been used since 1968,
but many states have substituted their own.
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REVERSE ANNUITY MORTGAGE a type of mortgage, designed for elderly homeowners with
substantial equity, by which a lender periodically (monthly, for example) pays an amount
to the borrower. The loan balance increases with interest and periodic payments, causing
negative amortization.
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REVERSE LEVERAGE a situation in which financial benefits from ownership accrue at a
lower rate than the mortgage interest rate.
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REVERSION the right of a lessor to possess leased property upon the termination of
a lease.
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REVERSIONARY FACTOR the mathematical factor that indicates the present worth of one
dollar to be received in the future. Same as present value of one. The formula is
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REVERSIONARY INTEREST the interest a person has in property upon the termination of
the preceding estate.
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REVERSIONARY VALUE the value of property at the expiration of a certain time
period.
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REVOCATION an act of recalling a power of authority conferred, as a revocation of a
power of attorney, a license, an agency, etc.
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REZONING an action to change the designation of a subject parcel or group of
parcels on the zoning map. The effect of a rezoning is to change the permitted uses for
the affected parcels.
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RIDER an amendment or attachment to a contract.
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RIGHT OF FIRST REFUSAL the opportunity of a party to match the terms of a proposed
contract before the contract is executed.
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RIGHT OF REDEMPTION same as equity of redemption.
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RIGHT OF SURVIVORSHIP the right of a surviving joint tenant to acquire the interest
of a deceased joint owner.
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RIGHT-OF-WAY 1. the right to use a particular path for access or passage; a type of
easement. 2. the areas of subdivisions dedicated to government for use for streets, roads,
and other public access to lots.
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RIPARIAN OWNER one who owns land bounding upon a lake, river, or other body of
water.
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RIPARIAN RIGHTS rights pertaining to the use of water on, under, or adjacent to
one's land. May be qualified to avoid nuisance and pollution. Riparian rights are
recognized in most eastern states but rarely in western states, where they recognize
usufructory rights.
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RISK I uncertainty or variability. The possibility that returns from an investment
will be greater or less than forecast. Diversification of investments provides some
protection against risk.
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RISK-FREE RATE the interest rate on the safest investments, such as federal
government obligations.
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ROD a linear unit of measurement equal to 16@ feet.
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ROLLOVER LOAN a type of mortgage loan, commonly used in Canada, in which the
amortization of principal is based on a long term but the interest rate is established for
a much shorter term. The loan may be extended, or rolled over, at the end of the shorter
term at the current market interest rate.
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ROW HOUSE single-family dwelling units attached to one another by common walls,
generally with a common facade.
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ROYALTY money paid to a property owner for extraction of some valuable resource
from the land.
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RULE OF 72's an approximation of the time it takes for money to double when earning
compound interest. Divide the percentage rate into 72 to derive the number of years to
double the principal.
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RULE OF 78's a method for computing unearned interest used on installment loans
with add-on interest. The number 78 is based on the sum of the digits from I to 12.
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RUN WITH THE LAND an expression indicating a right or restriction that affects all
current and future owners of a property.
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RURAL pertaining to the area outside the larger and moderate- sized cities and
surrounding population concentrations. Generally characterized by farms, ranches, small
towns, and unpopulated regions. Compare with suburb.
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RURBAN AREAS on the fringe of urban development, that are in the process of being
developed for urban uses.
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R VALUE a measure of the heat conductivity of material. The higher the R value, the
better the material serves as insulation from heat transfer.
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R/W right of way.
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