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California Real Estate Inspection Association

The California Real Estate Inspection Association is a voluntary, nonprofit public-benefit organization of real estate inspectors. Inspectors must meet the educational and performance requirements to become members. Call (800) 388-8443 for list of CREIA-certified inspectors in your area.

call option

A clause in a home loan agreement that gives the lender the right to request the balance due and payable at any time.

can light

A metal can with an incandescent light; mounted flush with a surface.

can lights

Cylindrical chambers with bulbs recessed into the ceiling.

cancellation clause

A clause in a contract which gives the right for either party to terminate the agreement upon the occurrence of specified events.

cantilever

A projecting structure that is supported at one end and carries a load at the other end.

cap

A limit in adjustable rate mortgages, on the amount the interest rate or monthly payment can increase.

Cape Cod style

A wood-frame or shingled house with a steep roof and several windows projecting from the second floor.

capitall

1. The net worth of a business or person, defined by its assets and liabilities

2. Money used to create income.

3. The decorative top of a column or pilaster.

capital expenditure

Money spent to make improvements to a property to add to its value.

capital gain

An increase in the value of a property; when the property is sold an investor makes a profit.

capital gains tax

A tax that is owed; calculated from the profits of the sale of real estate or investments.

capital improvement

Improvements to a structure or other asset that adds value.

capitalization

A formula that investors use to estimate the value of a property using the rate of return on investment and the properties annual net operating income.

capitalization rate

The estimated percentage rate of return that will be returned from the owner’s investment.

caravan

A group of real estate agents who tour a house that has been recently listed for sale.

carport

An open sided storage place, with a roof, for a vehicle.

carryback financing

Financing in which a seller agrees to take back a note for a set amount of the sale of the home.

casement window

A window that is hinged at the side and opens outward like a door.

cash flow

The net income generated from a property sale after all expenses and loan payments are paid.

cash-out refinance

Refinancing of a mortgage on the same property where the amount to be borrowed is greater than the amount owing on the previous mortgage.

cashiers check

A check drawn by a bank on itself, payable to a third party named by the customer. It is a guarantee that the funds are available.

casing

The flat, decorative molding around a window or door to cover the inside edge of the jambs and the rough openings between the window unit and the wall.

cathedral ceiling

A large, vaulted space replacing an attic between the living area and rafters.

caulk

A flexible compound used to seal joints, fill crevices around windows, chimneys, etc. Can be used prior to or after painting.

caveat

A legal document forbidding any dealings in the property being registered until the party that filed the challenge is able to be heard.

caveat emptor

Latin for “let the buyer beware” meaning that the onus is on the purchaser to ensure that the property or goods are suitable and in good condition.

cavedium

A courtyard or atrium.

CD (certificate of deposit)

A documented time deposit with a fixed maturity date, issued by a financial institution, which shows the bearer has a specified amount of money on deposit.

ceiling fan

A fan suspended from the ceiling of a room.

ceiling height

The standard height of a ceiling is eight feet; measured from the finished floor to the lowest projection from the ceiling.

center mullion

The vertical bar that divides the window lights or panels.

central air conditioning

Devices that are connected to the ductwork inside a building to provide the function of air cooling, air-circulation, air-cleaning, dehumidifying or humidifying.

central business district

Refers to the commercial heart of a city; where most of the businesses are located.

certificate of deposit (CD)

A documented time deposit with a fixed maturity date, issued by a financial institution, which shows the bearer has a specified amount of money on deposit.

certificate of deposit index

A table of interest rates paid on certificates of deposits that are used to determine the interest rates for adjustable-rate mortgage plans.

certificate of eligibility

A document that verifies that a veteran is eligible for a Department of Veterans Affairs (VA) loan.

certificate of occupancy

A document issued by the local municipality that states a building is suitable for occupancy; confirms that the dwelling complies with the safety and health by-laws.

certificate of sale

A document issued at a judicial or tax sale that entitles the buyer to the property deed after the courts confirmation.

Certified International Property Specialist (CIPS)

A designation issued by institutions to members who meet specific education, work and financial standards.

Certified Real Estate Brokerage Manager (CRB)

A designation earned as a measure of success in brokerage and real estate business management. Awarded to realtors who have completed advanced educational and professional requirements.

Certified Residential Specialist (CRS)

The highest designation awarded in the residential real estate sales industry. It is awarded in recognition of most experienced, educated and excellence in the field of residential sales.

chain of title

Part of a title search. Legal records that list, in chronological order, the ownership of a property.

chair railing

A decorative piece of molding that is installed on a wall, usually mounted 32-inches from the floor, to protect the wall from damage from the backs of chairs.

change frequency

A term used to describe the frequency of payments or interest rate changes on an adjustable rate mortgage.

change order

A document that defines alterations in construction contracts or plans; may include adjustments to the amount of the contract or a change in the timeframe.

chase

A channel for drainpipes or wiring.

chattel

A piece of personal property which is not affixed to the land or building. Chattels are generally not included in the sale of a property.

chattel mortgage

A lien on personal assets used as collateral for a loan.

chimney back

The back wall or lining of a fireplace or furnace chimney.

chimney cap

A concrete cap around the top of a chimney that protects the masonry from the elements.

chimney flue

Provides a path for channeling the smoke and gases from a fire to the outside.

chimney pot

A short, usually earthenware pipe placed on the top of a chimney to increase ventilation to the fireplace and reduce smoke.

chipboard

A medium density fiberboard made from wood waste fibers glued together with resin, heat and pressure. It is used for cabinetry and molding.

cinder block

A block made with concrete and coal cinders, usually hollow.

cinder fill

Cinders used below a basement or around a foundation to promote drainage.

circuit

An electrical source.

A closed in path capable of being followed by an electric current.

A configuration of electronic, connected components or devices.

circuit breaker

An automatic switch that is designed to stop the flow of electric current in the event of a sudden overload.

cistern

A tank that holds liquid; especially used to catching and storing rainwater.

clapboard

A type of siding. A long narrow board that has one edge thicker than the other; overlaps horizontally to cover the outer walls and frame structures.

classified property tax

Government property taxes that vary depending on the use of the property. Generally, commercial property taxes are heavier than residential property taxes.

cleanout

A pipe from the sewage system to the surface that gives easy access to the sewer for cleaning or inspection.

a Y-shaped fitting with a cap in the line that is capped off.

clear title

A title to a property that is free of all liens, disputed interests, or claims that would allow others to question the ownership of the property.

clevis

A U-shaped metal piece with holes in each end through which a pin or bolt is run,

closing

A meeting involving the seller, the buyer, the real estate broker and the lender for the finalization of the real estate transaction.

closing costs

The total of all the expenses related to the sale of a property, paid at closing; includes the loan, title and appraisal fees.

closing statement

A document which details the financial specifics related to the real estate transaction; it details fees that are paid by the seller and the buyer.

cloud on title

Conditions such as an encumbrance, a lien or a claim which is revealed when doing a title search. The condition adversely affects the title to real estate and often cannot be removed except by a quitclaim deed release or a court action.

cluster development

A method where a developer makes some areas more densely populated than others.

co-housing

A housing arrangement where all units have access to a shared space with a large kitchen, dining area, laundry and children play area.

co-insurance

A coverage technique used in larger developments. The coverage is shared between several insurance companies, each covering a certain percentage of the total value of the property.

co-maker

A person who signs the loan document along with the principal borrower; the co-makers signature guarantees equal responsibility for the loan and that the loan will be repaid should the borrower fail to make payment. Also known as a guarantor, or co-signer.

co-signer

A person who signs the loan document along with the principal borrower; the co-makers signature guarantees equal responsibility for the loan and that the loan will be repaid should the borrower fail to make payment. Also known as a co-maker or guarantor.

CO/ALR

Copper-aluminum revised. A designation on special light switches and outlets intended to be installed with aluminum wiring.

codicil

A supplement or appendix to a will that adds or subtracts provisions or makes clarifications to the document.

collar beam

A horizontal beam that connects two roof rafters to add stability.

collateral security

Additional security for a loan that the borrower provides; such as property.

collection

The process of bringing a delinquent mortgage up to date; filing notices to proceed with repossession or foreclosure when it is necessary.

collusion

The deceitful actions of two or more people to defraud others.

colonia

Hispanic communities along the U.S.-Mexico border.

column

An upright supporting pillar that consists of a base, a cylindrical shaft and a capital.

column footing

The support base for a load-bearing column. The footing is usually made of reinforced concrete.

combination door

A wood framed door with an interchangeable screen and glass panel.

combination window

A wood or clad wood frame storm window with an interchangeable screen and glass panel.

combustion gases

Small particles caused by incomplete burning of fuel from wood heaters, furnaces, wood stoves and fireplaces. The types and amounts vary depending on the type of fuel, the type of appliance, how well it has been designed, built, installed and maintained. The most common, carbon monoxide, nitrogen dioxide and carbon dioxide, are colorless and odorless.

commercial bank

A financial institution that provides a broad range of services, from checking and savings accounts to business loans and credit cards.

commercial property

Property that is designed for business or retail purposes.

commingling

The mixing of money from different sources and deposited into the same account for the use by each person.

commission

A small percentage of the sale price of the property or amount borrowed, paid to the agents of the buyer and seller.

commitment

An agreement, usually written, in which a lender promises to make a loan under specific terms for a specified period of time.

commitment fee

A sum of money that the borrower pays to the lender to guarantee the loan, the terms, and the specified period of time.

common area

The areas on a property that are used by all owners and tenants. May include swimming pools, tennis courts, recreational facilities, common corridors of a building and parking areas.

common-area assessments

Fees paid by owners of a condominium complex or a planned unit development for the repairs, maintenance and improvements to the common areas.

common-interest development

An area with individually owned units where owners belong to a homeowners association who maintain the common areas, or that share financial responsibility for the usage of common areas.

common law

Laws or legal principles that have been established by courts over the years based on custom, usage and rulings in various jurisdictions.

community property

In some states, ownership of property is presumed to be equally owned by both the husband and wife unless it was acquired as a separate property of either spouse.

Community Reinvestment Act

A federal law that required financial institutions to loan money in areas where they take deposits, this includes in poor and minority neighborhoods.

commute

The process of traveling from a residence to a place of work.

comparables

Properties that area used for comparative purposes in appraising other properties that are similar, have been sold recently and are in the same location; used to determine a fair market value for the property.

comparative market analysis

A method used to estimate property value by comparing the sale price of similar properties that were sold recently in the same location.

competent

A term that states that a person is legally fit to make decisions and enter into a contract.

compound interest

Interest that is paid on the original principal balance, plus the accumulated and unpaid interest.

compressor

Motorized equipment in a refrigeration (or air conditioning) system that circulates coolant through the system.

concrete tilt-up

The process of assembling forms and pouring large slabs of concrete at the job site. Once hardened, the panels are tilted up into position to form walls.

condemnation

The process of the government taking private property under the right of eminent domain, for public use without the owners consent. Also, a determination that a building is not fit, is dangerous and must be destroyed.

condensate drain

A drain required by a dehumidifier, high-efficiency furnace, or similar appliance to carry away condensation.

condensate pump

For use with high-efficiency furnaces or other appliances; transports or collects and transports condensation back into the system for reused or pumps it out to a drain.

condenser

An apparatus on a refrigerator or an air conditioner that is used to condense vapor.

conditional commitment

A promise by a lender to make a loan if the borrower meets certain conditions.

conditional sale

A sale that is complete only when one or more conditions are met.

condominium

A building or development where each owner has title to their own unit and joint ownership of common areas such as parking lots, recreational areas and community rooms.

condominium conversion

The change of ownership of an entire rental property to individual ownership of the units.

conduit

A tube or duct that houses electric wires or cables.

conforming loan

A loan that does not exceed the maximum loan amount for most common mortgages. The current maximum loan amount is $252,700.

consent judgment

A judge’s legally binding written agreement between two parties of a lawsuit.

conservator

A person appointed by the courts as the guardian of the property for a person who is not capable of managing his own affairs. Also known as a Committee, or a Personal Representative.

consideration

Anything of value, that is legal or that is an asset which is offered to another person in a contract in exchange for the agreement to enter into the contract.

construction budget

Money that is set for the construction of a building.

construction documents

Documents that an architect provides for the construction of a project. Includes drawings and plans (blueprints), specifications, construction work drawings, and architectural and engineering drawings.

construction loan

A short term loan that is used for financing the construction of a new home. The lender makes payments to the builder in stages and the borrower makes payments on the interest only. The loan is refinanced into a permanent loan once the home is completed.

construction-to-permanent loan

A loan that pays for the construction first, then is converted to a long-term traditional mortgage once the construction is complete.

Consumer Credit Counseling Service (CCCS)

A service that offers counseling to consumers to help them get out of debt; they help them work out a realistic budget, a repayment schedule, and works with the creditors.

contemporary style

A style that uses straight lines, sculptural elements, art, and bold colors; a design that is clean, spare and unique.

contiguous lots

Properties that share a common boundary.

contingency

A condition specified in the purchase contract that must be met before the contract can become legally binding; conditions such as a satisfactory home inspections or approved financing.

contingency listing

A property listing with a special condition attached.

contingent fee

A fee that is to be paid if a specified event occurs.

continuity tester

A simple, battery-powered tool which indicates whether an electrical circuit is complete or incomplete by lighting or buzzing when you touch its two probes to the wires.

contract

A legally binding agreement, either written or oral, between two or more persons to do an exchange of some sort for consideration.

contract for deed

A contract where the seller and buyer agree to the title remaining in the vendors name until the final payment is made to the vendor. This is usually arranged for a specified period of time.

contract to purchase

A contract where the buyer and the seller have approved the price and other terms for the transfer of title. Also known as an agreement of sale, a purchase contract or a sale contract.

contractor

A tradesperson who contracts for the construction of a home or a project.

contractual lien

A legal claim against a property due to the presence of a voluntary contract such as a mortgage.

controlled growth

A set of restrictions that are set by local government to govern the amount, type and density of any new construction developments.

conventional loan

A loan that is not insured or guaranteed with a government agency.

A loan with a fixed interest rate, fixed payments and a fixed term.

conversion

the change in the purpose for a property (i.e. from private to condominium).

the improper exchange of property.

convertible adjustable-rate mortgage

An adjustable rate mortgage (ARM) that can be converted to a fixed rate loan if certain conditions are met.

conveyance

The document that makes the transfer of the title to a property effective.

conveyance tax

A tax imposed on the transfer of real property.

cooperating broker

A real estate broker who is involved in a real estate transaction by handling the negotiations and is entitled to a commission.

cooperative corporation

A business that holds the title to a cooperative residential building and grants occupancy rights to shareholders in the corporation through leases or rental agreements.

cooperative mortgage

A loan that allows a borrower to buy shares in a cooperative residential project.

cooperative project

A building in which a corporation holds the title and sells shares of stock to individuals who receive a lease or agreement as evidence of title.

corbel

A block or bracket made of stone, wood, brick or other building material which projects from a wall and provides support to a cornice or arch.

corner bead

Used to create smooth, straight and finished corners to drywall. It is a strip of galvanized steel or PVC that is attached to the drywall and becomes part of the wall once joint compound (drywall mud) is applied over it.

corner influence

The effect on the value of a property because it is situated on a corner or near a corner.

cornice

A horizontal molding that projects from the top of a structure or wall and completes the building or wall.

corporate relocation

A situation where an employer transfers an employee and pays the moving expenses.

corrective work

Necessary repairs or maintenance work that must be completed before the transfer of title is completed.

cost-plus contract

A contract which stipulates a contractor is to receive a fee based on a percentage of the total costs paid for the labor and materials, plus a percentage of the profit.

cottage

A small, single-story vacation house situated in the country.

counterbore

Cylindrical enlargement of the mouth of a hole so that it will fit a cylindrical screw head.

counteroffer

A response to an offer.

courier fee

The fee a lender charges to cover the delivery of documents to other parties involved in the loan; such as an attorney, title company, and escrow company.

covenant

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

covenants, conditions, and restrictions (CC&Rs)

The rules and regulations that govern the use of property; such as how big your house can be, how your landscaping must be, if you can have pets, etc. Usually enforced by a homeowners association. Buyers must be advised of the existence of the rules and regulations before a sale takes place.

craftsman style

A style of architecture that evolved from the Arts and Crafts movement at the turn of the century.

crawl space

The space in a building that is between the ground floor and the first floor; usually no higher than four feet.

creative financing

Home financing arrangements that can help sell a property.

credit

The money that a lender contracts to a buyer that must be repaid within a specific timeframe and under specific conditions.

credit history

A record of an individuals debt payments, current and past.

credit life insurance

Insurance that is taken out on a mortgage to pay off the entire amount in the event of the borrower’s death.

credit rating

A record that can be accessed that relays a persons creditworthiness based on their credit history and financial status.

credit report

A report on a person’s credit, employment and residence history. Lenders use this report to determine the applicant’s creditworthiness for loan and mortgage applications.

Trans Union Corp, Equifax and Experian are the three largest credit bureaus.

credit repository

Companies that research the financial and credit information regarding individuals who have applied for credit.

credit union

A nonprofit cooperative organization that provides banking and financial services to its members.

creditor

Any individual or institution to which a debt is owed.

CREIA

California Real Estate Inspection Association.
A trade organization of home inspectors; the members must meet the education and performance requirements to qualify for membership.

cross-bridging

Bracing cross members placed between beams to strengthen a structure.

crown

A decorative molding attached at the top around a room.

CU/AL

Light switches and outlets that were intended to be installed with copper wiring.

cul-de-sac

A street that is has no exit; only one way in and out.

cupola

A dome-like structure that is on the top of a roof.

curable defect

A defect in a property that is easily and inexpensively fixed.

curb appeal

The first impression that a person has on a property.

current value

The value of a home at the time of appraisal.

curtain wall

A nonstructural exterior wall that encloses an area.

custom builder

A builder who is contracted to build a structure based on plans that were created by the owner

custom home

A building that was designed by an architect who was hired by the owner.

cylindrical lockset

The most common type of doorknob mechanism; designed to fit into a hole bored through the face of a door stile.