Taunya Fagan Real Estate Glossary and Dictionary of Real Estate Terms Beginning With "C" - Mortgage Glossary and Real Estate Terminology - Building and Construction Terms

Terms You May Need to Know When Preparing Your Bozeman Real Estate Transaction

Chromated Copper Arsenate (CCA):
A pressure-treated wood preservative widely used in residential construction before January 1, 2004.

Call option:
Similar to the acceleration clause.

Cancellation Clause:  
A clause that details the conditions under which each party may terminate the agreement.

Cap:
Adjustable Rate Mortgages have fluctuating interest rates, but those fluctuations are usually limited to a certain amount. Those limitations may apply to how much the loan may adjust over a six month period, an annual period, and over the life of the loan, and are referred to as "caps." Some ARMs, although they may have a life cap, allow the interest rate to fluctuate freely, but require a certain minimum payment which can change once a year. There is a limit on how much that payment can change each year, and that limit is also referred to as a cap.

Capital Gain:
Increase in the value of real estate between the time it was bought and the time it was sold.

Capital Gains Tax:  
A tax placed on the profits from the sale of real estate or investments.

Cash-out Refinance:
When a borrower refinances his mortgage at a higher amount than the current loan balance with the intention of pulling out money for personal use, it is referred to as a "cash out refinance."

Certificate of Deposit Index:
One of the indexes used for determining interest rate changes on some adjustable rate mortgages. It is an average of what banks are paying on certificates of deposit.

Certificate of Occupancy:  
A document which states that a home or other building has met all building codes and is suitable for habitation.

Certificate of Eligibility:
Certificate provided by the Veterans Administration (VA), which verifies the veteran's eligibility to receive a VA loan.

Certificate of Reasonable Value (CRV):
Once the appraisal has been performed on a property being bought with a VA loan, the Veterans Administration issues a CRV.

Chain of Title:
An analysis of the the ownership history and transfers of title to a piece of property over the years.

Change Orders:
Written changes or modifications to the plans or specifications defined in original construction documents, which the buyer makes after construction starts. Typically, these changes are in writing and are signed by the builder and buyer.

City-Wide Highway Traffic Pattern:
A map, plan or diagram displaying the passage of vehicles along routes of transportation.

Class "A":
The highest fire-resistance rating for roofing as per ASTM E-108. A Class "A" rating indicates the roofing can withstand severe exposure to a fire originating from a source coming from outside a building.

Class "B":
A fire-resistance rating indicating that roofing materials are able to withstand moderate exposure to a fire that originates from a source outside a building.

Class "C":
A fire-resistance rating indicating that roofing materials are able to withstand light exposure to a fire originating from a source outside a building.

Classified Property Tax:  
A tax that varies in rate depending on the use of the property.

Clear title:
A title that is free of liens, defects, legal encumbrances, or legal questions as to ownership of the property.

Client:
Home buyer or seller agreeing to the Terms of Use.

Closing:
A meeting where the sale of a property is finalized by the buyers and sellers signing certain documents to transfer the title of the property and paying closing costs. Also known as the Closing Day or Settlement.

Closing Costs:
Certain expenses (over and above the property price) incurred by both buyers and sellers when transferring ownership of real property. Typical closing costs may include: attorney's fees, a loan origination fee, various taxes, and an amount held in escrow, along with charges for obtaining title insurance and a survey as needed. The percentage of closing costs varies according to the area or jurisdiction. REALTORS® or lenders often provide estimates of closing costs to prospective home buyers.

Closing Day:
The day specified in a real estate contract when the sale of a property is finalized by the buyers and sellers signing certain documents to transfer the title of the property and paying closing costs. Also known as the Settlement or Closing.

Closing Statement:
A document which details the final financial settlement between a buyer and seller and the costs paid by each party. Also, see "Settlement Statement."

Cloud On Title:
Conditions, typically revealed by a title search, that adversely affect the title to real estate. Clouds on title can interfere with the transfer of real estate because they generally cannot be removed except by court action, quitclaim deed or release.

CMA:
Stands for competitive or comparative market analysis.

Co-borrower:
An additional individual who is both obligated on the loan and is on title to the property.

Codicil:  
A change to a will that adds or subtracts provisions or clarifies portions of the document.

Cold Joint:
A plane of weakness in concrete caused by delay or interruption of the pouring process. This action permits the first concrete batch to begin setting or hardening before the next batch is added, which results in two batches having little or no bond with each other.

Collateral:
In a home loan, the property is the collateral. The borrower risks losing the property if the loan is not repaid according to the terms of the mortgage or deed of trust.

Collection Account:
Unpaid debts turned over to a collection agency. The agency tries to get payment from the debtor.

Commission:
Most salespeople earn commissions for the work that they do and there are many sales professionals involved in each transaction, including Realtors, loan officers, title representatives, attorneys, escrow representative, and representatives for pest companies, home warranty companies, home inspection companies, insurance agents, and more. The commissions are paid out of the charges paid by the seller or buyer in the purchase transaction. Realtors generally earn the largest commissions, followed by lenders, then the others

Commitment Letter:
A written offer or notification from a lender stating the terms under which it agrees to lend money to a home buyer. Also known as a Loan Commitment.

Common area assessments:
In some areas they are called Homeowners Association Fees. They are charges paid to the Homeowners Association by the owners of the individual units in a condominium or planned unit development (PUD) and are generally used to maintain the property and common areas. (top)

Common areas:
Those portions of a building, land, and amenities owned (or managed) by a planned unit development (PUD) or condominium project's homeowners' association (or a cooperative project's cooperative corporation) that are used by all of the unit owners, who share in the common expenses of their operation and maintenance. Common areas include swimming pools, tennis courts, and other recreational facilities, as well as common corridors of buildings, parking areas, means of ingress and egress, etc.

Common law:
An unwritten body of law based on general custom in England and used to an extent in some states.

Community property:
In some states, especially the southwest, property acquired by a married couple during their marriage is considered to be owned jointly, except under special circumstances. This is an outgrowth of the Spanish and Mexican heritage of the area.

Comparables:
Recent sales of similar properties in nearby areas and used to help determine the market value of a property. Also referred to as "comps."

Competitive Market Analysis (CMA):
An estimate of the value of a property based on an analysis of property sales with similar characteristics, i.e., comparing your property to other properties in your market that were recently sold.

Complement of Services:
A quantity of real estate settlement services considered to complete a real property purchase.

Conditional Offer:
A purchase contract (offer to buy) submitted to the property seller that stipulates one or more requirements to be met before the purchaser is obligated to buy.

Condo/Condominium:
Individually owned units in a multi-unit structure. Owners hold title only to the interior space while common areas like stairs, parking lots, recreational areas, sidewalks, and hallways are common areas.

Condominium conversion:
Changing the ownership of an existing building (usually a rental project) to the condominium form of ownership.

Condominium hotel:
A condominium project that has rental or registration desks, short-term occupancy, food and telephone services, and daily cleaning services and that is operated as a commercial hotel even though the units are individually owned. These are often found in resort areas like Hawaii.

Construction Financing:
Short term funds used to pay for the building of a home.

Construction Loan:
A short-term, interim loan for financing the cost of construction. The lender makes payments to the builder at periodic intervals as the work progresses.

Contingency:
A condition that must be met before a contract is legally binding. For example, home purchasers often include a contingency that specifies that the contract is not binding until the purchaser obtains a satisfactory home inspection report from a qualified home inspector.

Contract of Purchase:
A contract in which a seller agrees to sell and a buyer agrees to buy, under specific terms and conditions specified in writing and signed by both parties. Also known as an Agreement of Sale, Purchase Agreement or Sales Agreement according to location or jurisdiction.

Contractor:
One that agrees or contracts to furnish or supply specific materials or perform services at a specified price, especially for construction work or development of a property.

Contract-to-Release:
Stage of new construction between the time the final contract is signed by the builder, and the buyer, and the time the home is released for construction.

Conventional Loan:
A loan that is not insured or guaranteed by the federal government, such as the Veterans Administration or the Federal Housing Administration. Also known as a Conventional Mortgage.

Conventional Mortgage:
A loan that is not insured or guaranteed by the federal government, such as the Veterans Administration or the Federal Housing Administration. Also known as a Conventional Loan.

Convertible ARM:
An adjustable-rate mortgage that allows the borrower to change the ARM to a fixed-rate mortgage within a specific time.

Conveyance:  
The transfer of title of property.

Co-signer:  
A second party who signs a promissory note and takes responsibility for the debt.

Cooperative (co-op):
A type of multiple ownership in which the residents of a multiunit housing complex own shares in the cooperative corporation that owns the property, giving each resident the right to occupy a specific apartment or unit.

Cost of funds index (COFI):
One of the indexes that is used to determine interest rate changes for certain adjustable-rate mortgages. It represents the weighted-average cost of savings, borrowings, and advances of the financial institutions such as banks and savings & loans, in the 11th District of the Federal Home Loan Bank.

Cottage:  
A small, one-story house.

Counter:
Rejection of an offer in written terms which a buyer or seller proposes a substitute offer to the contract terms.

Covenant:  
A legal assurance or promise in a deed or other document, or implied by the law.

Covenants, Conditions, and Restrictions (CC&Rs):  
Rules and regulations designated for a development, lfor instance acceptable landscaping conditions or specific improvements allowed for individual units.

Credit:
An agreement in which a borrower receives something of value in exchange for a promise to repay the lender at a later date. (top)

Credit History:
A historical record of an individual's repayment of debt. Credit histories are reviewed my mortgage lenders as one of the underwriting criteria in determining credit risk.

Creditor:
A person to whom money is owed.

Credit Report:
Summary of a buyer's debt, borrowing and repayment history compiled by the credit-reporting agency.

Credit repository:
An organization that gathers, records, updates, and stores financial and public records information about the payment records of individuals who are being considered for credit.

Curable Defect:  
A property's deficiency that is easy or inexpensive to remedy, such as peeling paint. 

Custom Built Home:
A personal residence designed and built to meet the requirements of a particular customer.

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