Real Estate Glossary

Radon - Naturally occurring by-product of the decay of uranium and other elements found in soil. Occurs as a gas in its natural state, and is believed to be one of the leading causes of lung cancer due to its radioactivity. May be a particular concern in houses with poor air circulation.

Range Line - Imaginary line used in surveying to measure distance from an established meridian and thus create the north-south lines of a grid for establishing a system of townships and sections. Each range line is six miles apart and runs from north to south, parallel to the meridian. See also, meridian and rectangular survey system.

Rate Cap - Limit on the amount that interest can increase or decrease in a mortgage allowing a change in rate. Such a loan can have either or both of a "per adjustment cap," which specifies the most that the rate can change in a given period, or a "lifetime cap," which limits the total change in rate during the life of the loan.

Rate Improvement Mortgage - Fixed-rate real estate loan that includes a provision that gives the borrower an option to reduce the interest rate one time during the early years of the mortgage—without refinancing.

Rate Lock - See lock.

Raw Land - Land in its natural state, without any improvements, and which has not been subdivided, surveyed or otherwise prepared for development.

Real Estate Agency - State government agency in Oregon responsible for the licensing and supervision of real estate brokers and the affiliated industries of escrow services, property management and real estate telemarketing (1177 Center St. NE, Salem, OR 97301; phone 503-378-4170; www.rea.state.or.us).

Real Estate Agent - In states other than Oregon, a person licensed to market and sell real estate on behalf of a licensed real estate broker, who represents consumers in real estate sales.

Real Estate Attorney - Member of the Oregon State Bar Association (a private organization) who has completed law school, passed the association's bar exam, and practices primarily in real estate law. (Because it's sometimes difficult to distinguish one lawyer from another in terms of specialty, consumers need to ask any attorney they're considering to represent them detailed questions about specialized training completed, about the percentage of the attorney's practice devoted to the desired specialty, and about how many clients the attorney has previously represented in that specialty.)

Real Estate Broker - In Oregon, any person licensed to directly represent clients in the marketing, negotiating and sale of real estate. In some other states, like California, a person licensed to supervise real estate agents in the marketing and sale of real estate. See also, agent and principal broker.

Real Estate Buyer's Agent Council - Organization subordinate to and part of the National Association of REALTORS®. A REALTOR® who has completed specialized education and experience requirements may join the council and hold the designation ABR® as long as he or she remains a dues-paying member in good standing. See also, Accredited Buyer Representative.

Real Estate Owned - See REO.

Real Estate Sale Agreement - See earnest money agreement.

Real Estate Settlement Procedures Act - Federal consumer protection law adopted in 1975 that requires disclosure of certain facts and costs relating to the purchase of a residential property with one to four units, especially an itemized listing of closing costs both at the time of loan application and at the time of signing final loan documents.

Real Estate Transfer Tax - Sales tax on real estate; any government charge imposed on the value of real property at the time of sale or transfer of title to the property to another party. See also, transfer tax.

Real Property - Land and anything of a permanent nature attached to it (such as buildings, sidewalks, trees, minerals, etc.) and the interest, benefits, and inherent rights thereof.

REALTOR® - Trademarked name for a member of the National Association of REALTORS®, an organization of business people engaged in professional real estate activity or related fields. In order to maintain their membership, members must pay annual dues and continually uphold certain professional standards. See also, National Association of REALTORS®.

Recapture Rate - Term used to express the percentage rate at which money is returned to an investor from the income that a property generates. Calculated by dividing net operating income by the price of the property.

Recision - See rescission.

Reconveyance - Written document used to transfer an interest in title from a trustee back to the owner of real estate after a debt against the property has been satisfied. Also called a "deed of reconveyance," this document is recorded with the clerk or recorder in the county where the property is, and provides public notice that the debt has been repaid.

Recorder - Public official who keeps records of important legal documents of a public nature, especially transactions affecting real property in a given area. A county clerk may serve in this capacity, or may supervise a recorder's office. Also sometimes called a "registrar of deeds." See also, county clerk.

Recording - Duplication and storage of an original record in the files of a recorder or county clerk (sometimes called a "registrar of deeds"), an official public agency created to make important records available for public viewing.

Rectangular Survey System - Method of describing land by reference to "townships," "ranges" and "sections" as related to a distance from a specified "meridian" and "base line." Established by the U.S. government in the 18th century, this system is used as the primary basis for legal descriptions of land in 30 states. Also called the "U.S. Government survey system" and the "sectional survey system."

Referral Fee - Fee or commission paid from one party to another for the finding or referral of a third-party client. In transactions involving the sale or lease of real estate in Oregon, an unlicensed person may not legally receive a fee for finding or referring a client (Oregon Revised Statutes, Chapter 696.290).

Refi - See refinance.

Refinance - To pay off a loan or loans on one property with money from a new loan using the same property as security.

Regulation Z - Federal regulation issued by the Board of Governors of the Federal Reserve System to implement the federal Truth In Lending Act, adopted in 1968. The regulation requires certain disclosures of the cost of credit in advertising and loan paperwork, especially the annual percentage rate of the financing. This applies to real estate loans, as well as other types of credit.

Rehabilitation Escrow Account - Fund established to deposit money borrowed to finance home improvements. Money is placed into the account upon funding of the loan, then payments are periodically made from the account to a contractor as construction occurs.

Rehabilitation Loan - Real estate loan to pay the costs of repairing or improving, and sometimes also acquiring an existing property.

Remaining Term - Original amortization of a loan, in months, minus the number of months of payments that have been made.

Rent Loss Insurance - Insurance that protects a landlord against loss of rent or rental value due to fire or other casualty that renders the leased property unavailable for use, subject to certain limitations.

Rent with An Option to Buy - See lease-option and lease-purchase.

REO - Literally, "real estate owned"; refers to real property owned by a lender or investor, especially that which has been acquired through forfeiture or foreclosure.

Repayment Plan - Arrangement to pay delinquent installments or advances. A lender's formal repayment plan may be called a "relief provision."

Replacement Reserve - Fund set aside for replacement of common elements in a condominium or planned unit development, particularly those that have a relatively short life expectancy.

Rescission - Cancellation or annulment of a contract by operation of law or mutual consent, where parties to the contract are placed in a position as if the contract had not existed.

Reserves - Cash amount a borrower must have after making a down payment and paying all closing costs for the purchase of a home. A lender may require reserves equal to the amount a borrower would have to pay for certain items for a predefined number of months. Depending on the lender, reserves may be required for principal, interest, taxes and insurance (PITI), or for only taxes and insurance.

RESPA - See Real Estate Settlement Procedures Act.

Restriction - Limitation on the use of property; may be imposed by deed from a former owner, by a "declaration of restrictions" from a developer or by laws passed by government agencies.

Return of Investment - Recapture of money or capital invested. See also, recapture rate.

Return on Investment - Profit from money or capital invested.

Reverse Mortgage - Loan secured by the residence of a borrower where the lender makes a payment or payments to the borrower up to a specified amount, and the loan is repaid in a lump sum—with interest—when the property ceases to be used as the borrower's primary residence. See also, Home Equity Conversion Mortgage.

Revolving Account - Credit arrangement, such as that with a department store charge card or a Visa® card, that allows a customer to borrow against a pre-approved line of credit when purchasing goods or services. The borrower is billed an amount monthly based on the amount of debt outstanding, and pays interest on the unpaid debt.

RHS - See Rural Housing Service.

Right of First Refusal - See first right of refusal.

Right of Ingress and Egress - Right to enter and leave.

Right of Survivorship - In joint tenancy, the right of a survivor, such as a spouse, to the real property interest of a deceased joint tenant, such as a deceased spouse.

Right-of-Way - Strip of land set aside to be used as a road, street or railway for vehicular or pedestrian traffic. The right-of-way may be all or part of an easement land may or may not be part of an easement

Row House - Line of similarly constructed residential dwellings joined along the sides by common walls. Each dwelling is on its own lot, and is considered a single-family home.

Rural Housing Service - Branch of the U.S. Department of Agriculture responsible for making special loans to borrowers of low to moderate incomes who have reasonable credit histories but are unable to get financing elsewhere. Also referred to as RHS. Loans are available with no down payments, and with extended amortization terms. The property being purchased must meet certain qualification standards, including being located in a specified rural area or small town.