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Tap fees
Tap fees are fees that are charged by most utility companies for hooking up utilities. For example, tap fees may be charged to homeowners for the installment and/or hook-up of water services, sewer services, gas services, or electrical services. Tap fees vary depending upon the location of a property. In some cases, home owners may not be required to pay tap fees, as when a home purchaser buys a property in an existing subdivision; developers of subdivisions commonly pay all relevant tap fees upfront and the cost is distributed to home owners in a development through the purchase price of a property therein.
Tax deduction
A tax deduction is a tax break that is given by the government. Tax deductions allow taxpayers, such as homeowners, to deduct a portion of the total tax amount that is due for payment by them based on certain deductible expenses for which they pay during a taxable year. For example, mortgage interest, loan points, and property taxes usually can be deducted from the taxes owed to the government by a home owner. Tax deductions are applicable as against both federal and state taxes. The United States Internal Revenue Service and state taxation authorities monitor deductions to ensure that a taxpayer claiming a deduction has not already been reimbursed for the expense being deducted.
Tax lien
A tax lien is an impediment that is placed against a property related to taxation on that property, such as back taxes. Typically, the government is responsible for placing a tax lien claim on a person´s property, limiting or relinquishing the property owner´s rights in the property until all taxes and debts associated with the property are paid in full. A tax lien imposed by a state taxation authority can typically attach only to the specific property which is unpaid. A federal tax lien may attach to all property of the person who owes back taxes. The government also offers tax liens against the property of debtors for purchase by investors.
Tax sale
A tax sale is the public sale of a property by the government for nonpayment of taxes. When a tax payer fails to pay his or her taxes over time, but owns some real or personal property, the government is able to attach a tax lien to that property. If the back taxes remain unpaid, a forced sale, known as a tax sale, is arranged. At a tax sale, the property of the delinquent tax payer is sold publicly, and any proceeds from such sale are applied against the back taxes owed by the property owner. Any excess funds gleaned from a tax sale that remain after back tax payments have been satisfied is due to the property owner.
Tax shelter
Tax shelter is a term that is often applied to investments of all kinds, including real estate investment. It refers to various tax advantages associated with various types of investments. A tax shelter is a legal way to minimize or decrease one´s taxable income, meaning that there is less income that can be taxed. Examples of tax shelters include investment accounts or real estate investments that provide favorable tax treatment, such as allowing deferral of certain income from an investment. Tax authorities monitor closely the use of tax shelters in order to ensure that taxes are not being entirely avoided or illegally evaded through the investment.
Tear-down condition
Tear-down condition refers to the condition of a house that is so dire that it requires the entire interior of the house to be rebuilt. A house may be considered to be in tear-down condition if it is so decrepit that maintenance and/or repairs would be prohibitively expensive, particularly if repair and restoration costs are projected to be equal to or greater than the cost of tearing down the house and rebuilding. Homes in tear-down condition are sometimes sold as such inexpensively on the real estate market; some buyers view tear-down homes, especially those in desirable and otherwise expensive areas, as good values, because they are willing to put in the time and money required for rehabilitation of a tear-down property in exchange for a lower purchase price.
Teaser rate
A teaser rate is a low, short-term interest rate that may be offered on a mortgage in order to entice a prospective borrower to select the offering lending institution over other alternatives. Teaser rates are almost always associated with adjustable-rate mortgages (ARMs), which offer an interest rate below the current market rate for the beginning of a home loan term, and an increase in the rate over time, usually after a few months. Teaser rates are used particularly frequently to entice borrowers when long-term interest rates become low, at which times lending institutions have the potential to make more money on ARMs if interest rates rise.
Tenancy by the entirety
Tenancy by the entirety refers to co-tenancy of a single property by a married couple. A couple who owns a home together, with the names of both spouses on the lease and on other official legal documentation related to the home and any mortgage associated therewith, is usually considered to hold title to the home in tenancy by the entirety. If the property must be sold to pay the debts of one spouse, both must agree. Upon death of one spouse, the deceased´s interest in the property is extinguished, and the surviving spouse then has sole ownership of the property. Tenancy by the entirety requires that the co-tenants be legally married at the time of the purchase of the property.
Tenants in common
Tenants in common are two or more co-owners of a single property who share an interest in the property. Tenants in common of a property are not partners and do not constitute an ownership entity, but rather are individual owners of pieces of a property. Each individual co-owner signs his or her own deed at the closing on the property for his or her own undivided percentage interest therein. When one co-tenant in a tenancy in common dies, the surviving tenant or tenants do not have a right of survivorship in the deceased´s share of the property; rather, the interest in the property of a deceased co-tenant in common passes to his or her heirs by will or by intestate succession.
Terrace
A terrace is a structural feature of a home, and can have several incarnations. A terrace may, for example, be an unroofed paved area that is located right next to a house. The word terrace may also refer to a roofed balcony extending from an exterior wall of a house, a porch, a deck, or a veranda. Terraces are commonly used for relaxation and as an extension of an indoor living area out to the exterior of a home or into a garden. A terrace may also be a raised bed of earth, which is constructed upon a property in order to enhance the property´s landscape.
The 72-hour clause
A 72-hour clause is a clause in a purchase agreement for a parcel of real property that specifies that the buyer of the property has 72 hours to remove a contingency associated with the purchase of the property or risk losing the right to purchase the property. 72-hour clauses are commonly included in real estate purchase agreements when the home buyer has a previous residence that he or she needs to sell before he or she can purchase another home; in these types of situations, most sellers insist on a 72-hour clause to avoid indefinite delays in the real estate transfer process. In the event that a better offer for purchase of the seller´s home is presented prior to the settlement of the contingency of sale of the buyer´s house is settled, the seller may opt to give the buyer 72 hours to remove the contingency or lose the house.
Third-party origination
Third-party origination refers to a real estate transaction in which the lending institution that is issuing a mortgage to the home purchaser uses another, separate institution to originate all or part of the mortgage. When a lender uses third-party origination, the third party completely or partially originates the loan, process the information provided by the borrower and discovered by either the original lender or by the third party itself regarding the prospective borrower´s financial history and credit worthiness, underwrites the loan, closes on the mortgage, funds the money sought by the borrower, and packages the mortgage, which is delivered to the secondary mortgage market.
Timeshare
A timeshare is a type of property ownership that involves the acquisition of a specific period of time, or that percentage of interest, in a vacation home or resort. A property which is considered a timeshare has two or more owners, each of whom owns a partial interest in the property and is permitted to use that property with relation to the percentage of the property he or she owns, as established by a timeshare agreement. Each part owner of a timeshare property is responsible for payment towards any loans on the property, as well as taxes and maintenance and repair expenses, in proportion to the size of the share he or she owns, typically determined by the percent of time over one calendar year during which he or she is entitled to use the property.
Title
Title refers to the actual legal document that confers ownership of a piece of real estate on a present owner. Title is passed from a property seller to a property buyer at the closing of the real estate transaction, and ownership by a new property owner is legal and official once he or she is in possession of the title. Title is usually recorded with a local authority, such as a County Recorder´s Office, promptly following closing, in order to ensure that a public record of ownership of the particular property is established. In addition, the recordation process allows a buyer to conduct, usually through a title company, a search of the chain of title, or a chronological record of ownership, to ensure that no liens or defects are associated with the title to the property he or she receives.
Title company
A title company is a firm which is responsible for ensuring that the title to a piece of real property is clear-that is, unencumbered by claims or other defects-and to provide title insurance to a property purchaser. Title companies ensure the clarity of title by conducting what is known as a title search, or an investigation of the history of the title, usually through consideration of the chain of title on the public record as recorded through a local authority such as a County Recorder. Title companies also participate in the closing process, acting as a liaison between the buyer and seller of a property and their respective agents and the lending institution that issues a mortgage to the buyer.
Title insurance
Title insurance is a policy that is issued to lending institutions and to buyers to protect against any potential losses that may result due to a dispute over the ownership of a parcel of real property. If a claim is made against a property owner´s insured title to that property, a title insurance policy typically will cover the costs of defending the title if necessary, including settlement and/or court costs associated with establishing that the property owner is entitled to full, unencumbered title. Title insurance usually requires only a single premium payment at the closing of the real estate transaction, which protects the buyer´s title for so long as he or she remains the owner of the property.
Title risk
Title risk refers to any possible impediments to the transfer of a title to a parcel of real property from one owner, the seller of the property, to another, the buyer. Title insurance is designed to protect against title risk to a buyer of real estate. The major risks associated with a transfer of title to real property, and which most title insurance policies expressly cover in the event that they result in a loss to the new property owner, include: a title which is for any reason not vested in the buyer´s name; a defect or lien against the title; lack of marketability of the title; and absence of legal access to a property.
Title search
A title search is a check of public title records to ascertain that the seller is the legal owner and that there are no claims or liens against the property. A title search is typically conducted on behalf of a buyer of real property by a title company, which examines the public records that present the chronological recorded history of the property´s title that are available through a local recordation authority, such as a County Recorder´s Office. The title search is imperative to ensure that the title is in no way clouded or lacks marketability. If a title search reveals that title to a property is clear, that title can successfully be passed as full ownership of the property from the seller to the purchaser.
Top producer
The term top producer is a real state industry term that refers to agents and brokers who sell a high volume of homes in their particular geographic area. The benefit of employing an agent who is considered a top producer is that he or she likely has a good deal of experience, particularly in the area a home buyer is considering or in which a seller is listing a home, and is probably adept at finding properties or purchasers to suit his or her clients´ needs and at negotiating the best possible prices for them. On the other hand, top producers are often quite busy with numerous listings, and thus are likely to be less accessible to clients; many employ assistants to help with daily tasks and to communicate with home buyers and sellers.
Top soil
Top soil is the top layer of soil that is removed when a lot is graded in preparation for construction of a home or building thereon. Top soil, also spelled as one word, topsoil, is the layer of soil that has the highest concentration of microorganisms and various organic matter, which makes it more susceptible than packed lower layers, which exhibit less biological activity, to erosion. When erosion occurs, the topsoil layer may be blown away by wind or washed away by water. However, because of the vast reserve of nutrients in the top soil, plants, grass, and other vegetation require it to establish their roots and grow.
Total expense ratio
A total expense ratio is the percentage of monthly debt obligations owed by a debtor relative to his or her gross monthly income. Monthly debt obligations may include home mortgage payments, insurance payments, payments made on debts on other property (such as a vehicle or credit cards), educational expenses, and the like. Gross monthly income includes regular employment income, in addition to income from all other sources, such as investment payouts, trust funds and inheritances, and any other source of money. The balance of these liabilities and assets is a debtor´s total expense ratio.
Townhouse
A townhouse is an attached home that is not a condominium. For some home owners, townhouses are an attractive alternative to a traditional single-family home because they tend in many areas to be less expensive. However, in major metropolitan areas in the United States, where land is scarce and accommodating ever-growing populations is difficult, townhouses can be rather expensive, particularly in urban areas like New York City, Boston, or San Francisco. A townhouse is owned exclusively by the owner-resident, just as a detached home would be, and the townhouse owner is responsible for all payments on any outstanding mortgages associated with the property, property taxes, homeowners insurance policies, and maintenance and repairs.
Tract home
A tract home, also known as a production home, is a mass-produced house that is constructed by one builder in a project. Tract home developments are commonly found in the United States in suburban areas, where they are used to accommodate increasing populations for costs that are relatively inexpensive as compared to custom homes. Tract home in developments that are built by a single builder tend to be constructed in the same or similar style. Because the design of tract homes within a development is limited and personalization is kept to a minimum, labor costs are reduced and materials may be ordered in bulk.
Trade equity
Trade equity refers to any other real estate or assets besides the house that is the subject of a real estate transaction that a buyer gives to a seller of property as part of the down payment on the real estate that is the subject of the transaction. Trade equity is a type of insurance to the seller, securing the promise of the buyer of the seller´s property to complete the purchase of the property at the full contractually agreed-upon price. In the case of real estate that is used as equity towards the payment of another parcel of real estate, the buyer of the new property who is using his or her old property as trade equity may realize some tax advantages.
Trading down
Trading down is a reference to the act of buyers of real property in purchasing a home that is less expensive than their current house. Trading down may be done for a number of reasons. Some home owners find that their financial situation requires that they trade down in order to save on maintenance costs of a more expensive home, mortgage payments associated with their current dwelling, or property taxes imposed upon the more expensive house. Home owners may also choose to trade down on their residence when they desire to use the balance of the money saved in trading down for travel, retirement, educational costs, or investment in additional real estate.
Trading up
Trading up is a reference to the act of buyers of real property in purchasing a home that is more expensive home than their current house. Home buyers may trade up if their financial situation improves, as through an increase in income or an inheritance, the result of which is an ability to afford higher costs associated with mortgage payments, property taxes, and maintenance of a more expensive home. Trading up may also occur when other circumstances of a home buyer have changed; for example, a more expensive home may be necessary if the buyer moves because of an occupational or other change, or if family size increases to require a larger living space.
Trans-Union
Trans-Union Corporation is one of the "Big Three" credit-reporting bureaus that operate nationwide (the other two are Equifax and Experian). Trans-Union gathers financial and credit information from various sources about individuals who have applied for credit. This information is then collated, referenced, updated, and stored by the company, and is provided upon request to financial institutions who are considering lending money to an individual based on his or her loan application, to help the lending institution determine the applicant´s credit worthiness and whether or not he or she is a justifiable risk for the issuance of a loan.
Transfer of ownership
Transfer of ownership refers to any legal means by which a piece of real estate changes hands. Commonly, real estate is transferred through a real estate transaction when a willing buyer pays an agreed-upon purchase price for a parcel of property to a willing seller, and in exchange the seller confers upon the buyer title to that property. Transfer of ownership may also occur when one gives real property to another as a gift, or when property is passed to a new owner from the estate of a deceased previous owner through the decedent´s will, intestate succession, or a trust instrument.
Transfer tax
A transfer tax is a tax assessment made by state or local authorities upon a parcel of real property at the time at which the property changes hands. The amount of a transfer tax is typically some percent of the market value of the property, and is relatively small compared with the total value of the property being transferred. When property is transferred not through sale but as a gift or via will, trust, or intestate succession in the event of a property owner´s death, the transfer tax that applies is usually known as a gift tax or estate tax, respectively.
Transom
A transom is a small window that is located directly above a door. Transom windows may be hinged, to allow for ventilation, but sometimes are fixed and used to allow light into the interior of a home or for decorative purposes only. When the shape of a transom window is rectangular, arched, or fan shaped, the transom is sometimes called a fanlight. Transoms are especially common architectural details in homes and buildings that are built in the Neoclassical or Greek Revival style. Most transom windows are encased in a frame that is made of wood or decorative metal with a glass windowpane.
Tray ceiling
A tray ceiling is a ceiling style that has edges which slant toward the middle of a ceiling from the surrounding walls. The tray ceiling gets its name from the shape created by an inverted tray. It may be shallow, with only a slight slope from the walls to the flat section of the ceiling, or deep and dramatic, with long steep inclines from each wall. Tray ceilings can be used to incorporate decorative crown molding into a room at the ceiling level, and are often used to hide recessed lighting. Tray ceilings are an architectural alternative to similarly aesthetically enhancing cathedral ceilings, but are associated with fewer insulation problems.
Treasury bills
Treasury bills are a type of security, or some property that is given by a debtor to a creditor which serves as a promise by the debtor to repay an obligation or a debt. A Treasury bill is a security that is issued by the Treasury Department of the federal government, and that has the full backing of the United States government. A Treasury bill is exempt from state and local taxes, and has a maturity date of one year, which means that it is an investment that gains money for its owner over the course of the year and then may be liquidated into cash without monetary penalty.
Treasury index
A Treasury index is an index that is used for a variety of purposes, including to determine interest rate changes for adjustable rate mortgages. An index is calculated based on auctions of Treasury bills or on the daily yield of the United States Treasury, but the actual calculations vary depending on the financial institution that is doing the calculation. Numerous indices are available, including the Dow Jones Industrial Average and Standard & Poor´s. In an adjustable rate mortgage, or ARM, the amount of interest applicable to each stage of payment of interest on the loan over the term of the loan is determined based on the particular lender´s Treasury index calculation.
Trellis
A trellis is a decorative landscape structure that is usually made of thin strips of wood, metal, or plastic. Many gardens include trellises made of wood, bamboo, or metal interwoven into a decorative structure that are used to support climbing plants as they grow upward; plants supported by trellises may include, for example, ivy or grapevines. Some trellises may include an extension called a pergola, which is a roof-like structure that is similar to a trellis in that it is composed of interwoven pieces of wood, metal, or plastic; a pergola usually runs overhead above a walkway or garden outward from a trellis.
Trim work
Trim work refers to the finishing of doors, doorways, window frames, and floors in a home and on the exterior of the structure. Trim work may include finishing of baseboards, cabinetry, crown molding, ceiling molding, door and window casings, wainscoting, wooden paneling of walls, mantelpieces, and built-ins such as bookshelves and other furniture that is incorporated into the structure of a home. Exterior trim work may include brick or stone accents to a home´s façade, casing of door and window exteriors, fascia, soffits, or gutter work.
Truss
A truss is a prefabricated framework of girders, struts, and other items, incorporated into a home or other structure in order to support a roof or other load-bearing elements. A truss is a static structure, and is usually made of straight thing beams that are inter-connected at joints. In residential construction, two types of trusses are used most often. The pitched truss, also called the common truss, has a triangular shape, and is most often used for the construction of roofs. The parallel chord truss, also known as a flat truss, has a parallel truss and bottom chords, and is used for construction of floors.
Trust account
A trust account is a special account that is used by real estate brokers and escrow agents to safeguard funds for a buyer or seller. The money in a trust account is delegated for the use only of costs associated with a given real estate transaction, and must be property accounted for; the broker or agent responsible for the trust account has a fiduciary duty to the buyer or seller who is his client to use the trust account funds as directed by the client and in for the purpose of advancing a real estate transaction pursuant to applicable law. Trust accounts require accurate and complete account records that should show at all times when funds are deposited into the account, in what amount, to whom the money belongs, and when and to whom any funds from the account are distributed.
Trustee
A trustee is a person who is legally empowered to hold or controls a parcel of real property for another person or an estate. The trustee has a fiduciary duty to protect and preserve the property, always acting in the best interests of the property owner, and to enhance the value of the property to the highest and best possible use. A trustee is usually a lending institution, a trust company, or a title insurance company, and commonly acts as trustee of the property until the closing on the property that transfers the title to the property, upon satisfaction of payment conditions, from the seller to the buyer.
Truth-in-Lending Act
The Truth-in-Lending Act is a United States federal law that protects consumers in a variety of ways. One of the key provisions of the Truth-in-Lending Act, and particularly applicable in the real estate context, allows a consumer to cancel a home-improvement loan, second mortgage or other loan associated with a particular property if the home was pledged as security until midnight of the third business day after the security contract was signed. This provision does not, however, apply to a first mortgage or to a first trust deed. The Truth-in-Lending Act was enacted in 1968 by the United States Congress, and subjects violators of its regulations to sanctions by the federal government.
Tuck-point
A tuck-point is the process of removing old mortar from between bricks and replacing it with new mortar. Tuck-point masonry was popularized in England in the late 17th century, at which time it was conducted by highly skilled professionals who could point brickwork so that the mortar joint was colored to match the brick and grooved; the purpose was to create an illusion of gauged, sleek brick when the brick used was in fact handmade and often irregular. In the United States in modern times, tuck pointing is usually only used to re-point old, existing brickwork to restore or maintain a historic façade on a home or other structure, rather than to lay brick in new construction.
Two- to four-family property
A two- to four-family property is a piece of real property that is legally owned by a single person, but that provides housing for more than one household, up to four households. Such properties are often referred to as multi-family properties, and are frequently used as a real estate investment by a property owner who is not one of the tenants. In such cases, the owner of a property is responsible for payment on any mortgages associated with the property, property taxes, maintenance, and repairs, but leases the property to two or more tenants or groups of tenants and collects an income from his or her investment through tenant rent payments.
Two-step mortgage
A two-step mortgage is an adjustable mortgage that has two different interest rates, one for the first period of time for the loan and the other for the later period of repayment. The first period, which is associated with one interest rate, usually lasts for the first five or seven years of the loan. The second time period, during which a higher interest rate applies to the loan, is the remainder of the loan term. Commonly, the initial five-to-seven year period in a two-step mortgage carries a lower interest rate, with an increase in the amount of interest due on the balance of the loan in the later part of the repayment term. |
