Real Estate Glossary R

R

Rate reduction option

A fixed-rate mortgage that includes a provision that gives the borrower an option to reduce the interest rate (without refinancing) at a later date. It is similar to a prearranged refinancing agreement, except that it does not require re-qualifying. See eEasy rate Reduction Option.

rate lock

A commitment issued by a lender to a borrower guaranteeing a specified interest rate for a specified period of time. See lock-in.

Real Estate Agent (California)

A person who is normally licensed by the state and who, for a commission or a fee, assists in negotiating a real estate transaction. When a person first becomes licensed to become a real estate agent, he/she obtains a real estate salesperson's license from the state in which he/she will practice. If you want to obtain a real estate license, the candidate must take specific coursework (of between 40 and 90 hours) and then pass a state exam on real estate law and practice. In order to work, salespersons must then be associated with (and act under the authority of) a real estate broker..

Real Estate Broker (California)

In order to own, manage or operate his/her own brokerage one must be licensed as a real estate broker. California allows licensed attorneys to become brokers upon passing the broker exam, without having to take the requisite courses required of agent. Education in lieu of experience Commonly more course work and a broker's state exam on real estate law must be passed. Upon obtaining a broker's license, a real estate agent may continue to work for another broker in a similar capacity as before (often referred to as a broker associate or associate broker) or take charge of his/her own brokerage and hire other salespersons (or broker) licensees. *note: real estate and real estate broker license requirements apply to California, other states may have different laws and requirements.

Real Estate Settlement Procedures Act (RESPA)

RESPA is a consumer protection law that, among other things, requires advance disclosure of settlement costs to home buyers and sellers, prohibits certain types of referral and other fees, sets rules for escrow accounts, and requires notice to borrowers when servicing of a home loan is transferred.

real property

Real property is land and appurtenances, including anything of a permanent nature such as structures, trees, minerals, and the interest, benefits, and inherent rights thereof.

Real Estate Transfer Tax

California and many states and localities including Stockton have imposed a tax on the transfer of property located within the city. The tax, known as the documentary transfer tax or real property transfer tax (hereinafter, the "transfer tax"), is largely based on the federal documentary stamp tax, which was repealed in 1976. In California, counties and cities have been authorized to impose a tax on deeds of transfer of realty located within such county or city. The amount of the tax is based on the consideration or value of the realty transferred

Realtor®

A Realtor is 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.

Reduced Documentation

A method used to determine income when qualifying a borrower(s) for a loan. Borrower(s) provide their income, however no verification documentation is typically required.

REO (Real Estate Owned)

Real estate owned or REO is a class of property owned by a lender, typically a bank, after an unsuccessful sale at a foreclosure auction. A bank will typically set the opening bid at a foreclosure auction for at least the outstanding loan amount. If there are no bidders that are interested, then the bank will legally repossess the property. As soon as the bank repossess the property, it is listed on their books as REO

rescission

The act of cancellation or annulment of a transaction or contract by the operation of a law. Borrowers usually have the option to cancel certain credit transactions, including a refinance or home equity transaction, within three business days after consummation (when the consumer becomes contractually obligated by, for example, signing the loan documents).

recorder

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

recording

Recording is the noting in a book of public record of the terms of a legal document affecting title to real property, such as a deed, a mortgage note, a satisfaction of mortgage, or an extension of mortgage.

refinance transaction

The process of paying off one loan with the proceeds from a new loan, typically using the same property as security for the new loan.

rehabilitation mortgage

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

remaining balance

The amount of principal that has not yet been repaid. See principal balance.

remaining term

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

repayment plan

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

Reverse Mortgage

A reverse mortgage (or lifetime mortgage) is a loan available to seniors, and is used to release the home equity in the property as one lump sum or multiple payments. The homeowner's obligation to repay the loan is deferred until the owner dies, the home is sold, or the owner leaves (e.g., into aged care).

revolving liability

A credit arrangement, such as a credit card or HELOC, that allows a customer to borrow against a predetermined line of credit when purchasing goods and services. The borrower makes payments on the amount that is actually borrowed plus any interest due.

Request for Notice of Default

A recorded document that obligates the holder of the first mortgage lien to notify subordinate lien holders in the event of default by the borrower.

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 he or she offers it for sale or lease to others.

right of ingress or egress

The right to enter or leave designated premises.

right of survivorship

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

Roof Inspection

A lot of the roof covering works are often not completed by specialist experts. Many local builders will try to save money & do it themselves rather than employing dedicated tilers and roofing specialists. From 30 feet away the roof probably looks well constructed to the untrained eye but it normally has some in built long term defects if it has not been installed correctly that may be expose shortly after the main contractor has been paid and gone. If you are in doubt as to the quality of your new extension roof then give your roofing inspector a call.

Rural Housing Service (RHS)

An agency within the Department of Agriculture. This agency provides financing to farmers and other qualified borrowers buying property in rural areas who are unable to obtain loans elsewhere. Funds are borrowed from the U.S. Treasury.