Real Estate Glossary

Radon:

An invisible, odorless radioactive gas found in some homes that in sufficient concentrations may cause health problems.



Rate lock:

A commitment issued by a lender to a borrower or other mortgage originator guaranteeing a specified interest rate for a specified period of time. A rate lock guarantees the rate will not change between the time the lock is initiated and when the loan closes. See lock-in.



Rate-improvement mortgage:

A fixed-rate mortgage that includes a rate reduction provision that gives the borrower a one-time option to reduce the interest rate (without refinancing) during the early years of the mortgage term.



Real estate agent/broker:

A person licensed to list, advertise and aid in the sale of real estate on behalf of the property owner.



Real Estate Owned (REO):

Real estate owned by a lending institution as a result of default by borrowers and subsequent foreclosure by the institution. This is property that the lender has directly taken title to, usually as the result of being the successful bidder at the foreclosure sale by bidding up to the loan amount and there being no higher bids. 



Real Estate Settlement Procedures Act (RESPA):

A federal consumer protection law that requires lenders to give borrowers notice and disclosure of closing costs.



Real property:

Land and improvements, including anything of a permanent nature such as structures, trees, and minerals, as well as the interest, benefits, and inherent rights associated there.



Realtor®:

A registered trademark referencing a real estate broker or an associate who holds active membership in a local real estate board that is affiliated with the National Association of Realtors.



Recorder:

The public official or agency that keeps records of transactions that affect real property in a specific geographical area. Sometimes known as a "Registrar of Deeds" or "County Clerk."



Recording:

The filing of documents with the recorder's office or clerk’s office of the details of a properly executed legal document and/or transaction such as a deed, mortgage note, satisfaction of mortgage, or an extension of mortgage, thereby making it a part of public record.



Redemption period:

The amount of time given to a foreclosed borrower to effectuate the use of the statutory right to redemption and reclaim the property after the payment of all defaulted sums, costs and fees.



Refinance transaction:

The process of paying off one loan with the proceeds from a new loan that uses the same property as security. A rate/term refinance involves obtaining a more favorable interest rate or term on the new mortgage. A cash out refinance involves borrowing more money than the underlying and existing loan.



Rehabilitation mortgage:

A mortgage obtained to cover the costs of repairing, improving, and sometimes acquiring an existing property.



Release fees:

A fee charged by a lien holder to discharge a secured property from a lien. May include UCC termination fees or discharge of mortgage recording costs.



Remaining balance:

The amount of principal that has not yet been repaid under the loan amortization schedule. See principal balance.



Remaining term:

The original amortization term less the number of payments that have been applied.



Rent with option to buy:

A lease transaction in which a portion of lease payments are credited to a subsequent purchase transaction. See lease-purchase agreement.



Repayment plan:

An arrangement made to repay delinquent loan installments or advances. Lenders' formal repayment plans are called "relief provisions" or "workouts."



Replacement reserve fund:

A fund set aside for replacement of common property in a condominium, PUD or cooperative project – particularly that which has a short life expectancy such as carpeting, furniture, etc. In a commercial conduit loan transaction, funds escrowed to replace or repair depreciable assets, components or real property.



Rescission:

The cancellation or annulment of a transaction or contract by the operation of a law, notice or by mutual consent. Borrowers usually have the option to cancel a refinance transaction within three (3) business days after it has closed.



Reserves:

Money accumulated and set aside to cover recurring, periodic expenses such as property repairs, T&I, leasing commissions or taxes. Also includes funds set aside to be used to make monthly mortgage payments in the case of financial difficulty or to cover interest costs during construction.



Residential trust property:

A reference classification to residential property (as opposed to commercial property) secured by a deed of trust. The procedural requirements to foreclose residential trust property are different than commercial property in some states.



Reverse mortgage:

A mortgage that enables homeowners to convert the equity they have in their homes into cash using a variety of payment options to address their specific financial needs. Unlike traditional home equity loans, a borrower does not qualify on the basis of income but on the value of his or her home. The borrower is paid a set amount of funds, which has the effect of reducing the equity in the home. In addition, the loan does not have to be repaid until the borrower no longer occupies the property. Sometimes called a home equity conversion mortgage, this product is usually attractive to older homeowners who have accumulated substantial equity in their homes.



Revolving liability:

A credit arrangement such as a credit card or revolving line of credit, which allows a consumer or other party to borrow against a preapproved line of credit when purchasing goods and services. The borrower is billed for the amount that is actually borrowed plus any interest due.



Right of first refusal:

A provision in an agreement that requires the owner of a property to give another party the first opportunity to purchase or lease the property before it is offered for sale or lease to others.



Right of ingress or egress:

The access right to enter or leave the designated premises.



Right of redemption:

The right of a property owner to redeem – or reclaim – real estate from a foreclosure or tax sale by paying off the amount owed, plus costs and fees of any foreclosure sale.



Right of survivorship:

In joint tenancy, the right of a survivor to acquire the remainder interest of a deceased joint tenant.


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