Glossary

The following Land Banking and Real Estate terminology / nomenclature constitute the necessary terms and corresponding definitions required for a complete and proper understanding of our ACE Capital Group Land Banking business paradigm.
  • APN (ASSESSORS PARCEL NUMBER):
    • This is the reference number assigned to a given parcel of land by the county tax assessor in order to identify it for property tax assessments and imposition of the same.
  • APR (ANNUAL PERCENTAGE RATE):
    • This is not the note rate on your loan. It is a value created according to a government formula intended to reflect the true annual cost of borrowing, expressed as a percentage.
  • APPRAISAL:
    • A written justification of the price paid for a property, primarily based on an analysis of comparable sales of similar homes nearby.
  • APPRAISED VALUE:
    • An opinion of a property's fair market value, based on an appraiser's knowledge, experience, and analysis of the property. Since an appraisal is based primarily on comparable sales, and the most recent sale is the one on the property in question, the appraisal usually comes out at the purchase price.
  • APPRAISER:
    • An individual qualified by education, training, and experience to estimate the value of real property and personal property. Although some appraisers work directly for mortgage lenders, most are independent.
  • APPRECIATION:
    • The increase in the value of a property due to changes in market conditions, inflation, surrounding development, population increases, or other causes.
  • ASSESSED VALUE:
    • The valuation placed on property by a public tax assessor for purposes of taxation.
  • ASSESSMENT:
    • The placing of a value on property for the purpose of taxation.
  • ASSESSOR:
    • A public official who establishes the value of a property for taxation purposes.
  • ASSETS:
    • Items of value owned by an individual. Assets that can be quickly converted into cash are considered "liquid assets." These include bank accounts, stocks, bonds, mutual funds, and so on. Other assets include real estate, personal property, and debts owed to an individual by others.
  • BILL OF SALE:
    • A written document that transfers title to personal property.
  • BOND MARKET:
    • Usually refers to the daily buying and selling of thirty year treasury bonds. Lenders follow this market intensely because as the yields of bonds go up and down, fixed rate mortgages do approximately the same thing. The same factors that affect the Treasury Bond market also affect mortgage rates at the same time. That is why rates change daily, and in a volatile market can and do change during the day as well.
  • BROKER:
    • Broker has several meanings in different situations. Most Realtors are "agents" who work under a "broker." Some agents are brokers as well, either working for themselves or under another broker. As a normal definition, a broker is anyone who acts as an agent, bringing two parties together for any type of transaction and earns a fee for doing so.
  • CD (CERTIFICATE OF DEPOSIT):
    • A time deposit held in a bank which pays a certain amount of interest to the depositor.
  • CLEAR TITLE:
    • A title that is free of liens or legal questions as to ownership of the property.
  • CLOSING:
    • This has different meanings in different states. In some states a real estate transaction is not consider "closed" until the documents record at the local recorder’s office. In others, the "closing" is a meeting where all of the documents are signed and money changes hands.
  • CLOSING COSTS:
    • Closing costs are separated into what are called "non-recurring closing costs" and "pre-paid items." Non-recurring closing costs are any items which are paid just once as a result of buying the property. "Pre-paids" are items which recur over time, such as property taxes and insurance.
  • 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."
  • CONTINGENCY:
    • A condition that must be met before a contract is legally binding.
  • CONTRACT:
    • An oral or written agreement to do or not to do a certain thing.
  • DEED:
    • The legal document conveying title to a property.
  • DEED OF TRUST:
    • Some states, like California, do not record mortgages. Instead, they record a deed of trust which is essentially the same thing.
  • DEPOSIT:
    • A sum of money given in advance of a larger amount being expected in the future. Often called in real estate as an "earnest money deposit."
  • DEPRECIATION:
    • A decline in the value of property; the opposite of appreciation. Depreciation is also an accounting term which shows the declining monetary value of an asset and is used as an expense to reduce taxable income.
  • EASEMENT:
    • A right of way giving persons other than the owner access to or over a property.
  • EMINENT DOMAIN:
    • The right of a government to take private property for public use upon payment of its fair market value. Eminent domain is the basis for condemnation proceedings.
  • ENCROACHMENT:
    • An improvement that intrudes illegally on another's property.
  • ENCUMBRANCE:
    • Anything that affects or limits the fee simple title to a property, such as mortgages, leases, easements, or restrictions.
  • ESCROW:
    • An item of value, money, or documents deposited with a third party to be delivered upon the fulfillment of a condition. For example, the earnest money deposit is put into escrow until delivered to the seller when the transaction is closed.
  • ESCROW DISBURSEMENTS:
    • The use of escrow funds to pay real estate taxes, hazard insurance, mortgage insurance, and other property expenses as they become due.
  • ESTATE:
    • The ownership interest of an individual in real property. The sum total of all the real property and personal property owned by an individual at time of death.
  • EVICTION:
    • The lawful expulsion of an occupant from real property.
  • EXAMINATION OF TITLE:
    • The report on the title of a property from the public records or an abstract of the title.
  • EXCLUSIVE LISTING:
    • A written contract that gives a licensed real estate agent the exclusive right to sell a property for a specified time.
  • FAIR MARKET VALUE:
    • The highest price that a buyer, willing but not compelled to buy, would pay, and the lowest a seller, willing but not compelled to sell, would accept.
  • FEE SIMPLE:
    • The greatest possible interest a person can have in real estate.
  • FEE SIMPLE ESTATE:
    • An unconditional, unlimited estate of inheritance that represents the greatest estate and most extensive interest in land that can be enjoyed. It is of perpetual duration. When the real estate is in a condominium project, the unit owner is the exclusive owner only of the air space within his or her portion of the building (the unit) and is an owner in common with respect to the land and other common portions of the property.
  • GRANT DEED:
    • The legal document conveying title to a property, also referred to as a deed.
  • GRANTEE:
    • The person to whom an interest in real property is conveyed.
  • GRANTOR:
    • The person conveying an interest in real property.
  • HAZARD INSURANCE:
    • Insurance coverage that in the event of physical damage to a property from fire, wind, vandalism, or other hazards.
  • IRA (INDIVIDUAL RETIREMENT ACCOUNT):
    • An individual retirement account (IRA) that allows individuals to direct pretax income, up to specific annual limits, toward investments that can grow tax-deferred (no capital gains or dividend income is taxed). Individual taxpayers are allowed to contribute 100% of compensation up to a specified maximum dollar amount to their Traditional IRA. Contributions to the Traditional IRA may be tax-deductible depending upon the taxpayer's income, tax-filing status and other factors. Other variants of the IRA include the Roth IRA, SIMPLE IRA and SEP IRA.
  • JOINT TENANCY:
    • A form of ownership or taking title to property which means each party owns the whole property and that ownership is not separate. In the event of the death of one party, the survivor owns the property in its entirety.
  • LAND BANKING:
    • Land banking is a wealth building and protection strategy based upon the principles of supply and demand where the customer buys low and sells high. In the case of ACE Capital Group California Land Banking, the strategy is based upon purchasing very well-researched pre-developed land parcels located in the direct path of massive population growth, namely the Los Angeles megaoplis… and then waiting for the land parcels value to mature (typically 7 to 10 years), and then selling the land for a very significant profit in the future.
  • LAND PARCEL:
    • In real estate, a parcel of land is a lot, plot, or tract of land owned or meant to be owned by some owner(s). A lot is essentially considered a parcel of real property or immovable property.
  • LAND BANKING CONSULTANT:
    • This person is an experienced and knowledgeable representative of the ACE Capital Group Land Banking paradigm and has amassed a thorough understanding of the Land Banking investment strategy and the locations where it is successfully accomplished. This person is able to discuss most aspects of the Land Banking opportunity and strategy, but they are not permitted to discuss specific parcel characteristics nor negotiate price and/or transaction specifics. This person is a referral agent and as such, is not required to hold a BRE license.
  • LAND BANKING SPECIALIST:
    • This person is an experienced and knowledgeable representative of the ACE Capital Group Land Banking paradigm and has amassed a thorough understanding of the Land Banking investment strategy and the locations where it is successfully accomplished. This person holds a BRE license.
  • LEGAL DESCRIPTION:
    • A property description, recognized by law, that is sufficient to locate and identify the property without oral testimony.
  • LIEN:
    • A legal claim against a property that must be paid off when the property is sold. A mortgage or first trust deed is considered a lien.
  • POWER OF ATTORNEY:
    • A legal document that authorizes another person to act on one's behalf. A power of attorney can grant complete authority or can be limited to certain acts and/or certain periods of time.
  • PROMISSORY NOTE:
    • A written promise to repay a specified amount over a specified period of time.
  • PROPERTY TAX:
    • Property tax is levied by the County Tax Assessor of the county in which the land resides, and the property tax assessed by the county is collected annually (usually in two installments) on every parcel of land at the rate of approximately 1.25% of the initial sales price for the property. All property tax rates in California are regulated and capped by Proposition 13.
  • PURCHASE AGREEMENT:
    • A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.
  • PURCHASE MONEY TRANSACTION:
    • The acquisition of property through the payment of money or its equivalent.
  • QUITCLAIM DEED:
    • A deed that transfers without warranty whatever interest or title a grantor may have at the time the conveyance is made.
  • REAL ESTATE AGENT:
    • A person licensed to negotiate and transact the sale of real estate.
  • REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA):
    • A consumer protection law that requires lenders to give borrowers advance notice of closing costs.
  • REAL PROPERTY:
    • Land and appurtenances, including anything of a permanent nature such as structures, trees, minerals, and the interest, benefits, and inherent rights thereof.
  • REALTOR®:
    • A real estate agent, broker or an associate who holds active membership in a local real estate board that is affiliated with the National Association of Realtors.
  • 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:
    • The noting in the registrar's office of the details of a properly executed legal document, such as a deed, a mortgage note, a satisfaction of mortgage, or an extension of mortgage, thereby making it a part of the public record.
  • REMAINING BALANCE:
    • The amount of principal that has not yet been repaid.
  • RESERVATION FORM:
  • 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 SURVIVORSHIP:
    • In joint tenancy, the right of survivors to acquire the interest of a deceased joint tenant.
  • STANDARD AGREEMENT OF SALE:
  • SUBDIVISION:
    • A housing development that is created by dividing a tract of land into individual lots for sale or lease.
  • SURVEY:
    • A drawing or map showing the precise legal boundaries of a property, the location of improvements, easements, rights of way, encroachments, and other physical features.
  • TENANCY IN COMMON:
    • As opposed to joint tenancy, when there are two or more individuals on title to a piece of property, this type of ownership does not pass ownership to the others in the event of death.
  • TITLE:
    • A legal document evidencing a person's right to or ownership of a property.
  • TITLE COMPANY:
    • A company that specializes in examining and insuring titles to real estate.
  • TITLE INSURANCE:
    • Insurance that protects the lender (lender's policy) or the buyer (owner's policy) against loss arising from disputes over ownership of a property.
  • TITLE SEARCH:
    • A check of the title records to ensure that the seller is the legal owner of the property and that there are no liens or other claims outstanding.
  • TRANSACTION:
    • The transaction in Land Banking is basically the simple sales process where monies are exchanged (transacted) for a specifically defined parcel or lot of land.
  • TRANSFER OF OWNERSHIP:
    • Any means by which the ownership of a property changes hands. Lenders consider all of the following situations to be a transfer of ownership: the purchase of a property "subject to" the mortgage, the assumption of the mortgage debt by the property purchaser, and any exchange of possession of the property under a land sales contract or any other land trust device.
  • TRANSFER TAX:
    • State or local tax payable when title passes from one owner to another.
  • TRUSTEE:
    • A fiduciary who holds or controls property for the benefit of another.
  • VESTED:
    • Having the right to use a portion of a fund such as an individual retirement fund. For example, individuals who are 100 percent vested can withdraw all of the funds that are set aside for them in a retirement fund. However, taxes may be due on any funds that are actually withdrawn, unless it is accomplished via a transfer or rollover to a similar fund.
  • 401(k) / 403(b):
    • An employer-sponsored investment plan that allows individuals to set aside tax-deferred income for retirement or emergency purposes. 401(k) plans are provided by employers that are private corporations. 403(b) plans are provided by employers that are nonprofit organizations.