Real Estate Glossary - Letter C

Cancellation clause

A provision in a legal document or contract that gives each party the right to terminate the agreement based on stipulated conditions.

Cap

A limit placed to safeguard against excessive adjustments in the interest rates of an adjustable rate mortgage.

Capital gain

Income gained by an investor from the sale of a real property; taxed lower than ordinary income.

Cash flow

The net income a rental property investor gets after deducting operating costs and loan payments and before deducting non-cash expenses and depreciation.

Cash-out refinance

A type of refinancing in which the cash loan amount exceeds the amount due on the old mortgage leaving the borrower with extra cash.

Certificate of Deposit

A document that proves a specified amount of money is deposited in a bank, stock brokerage firm or other financial institution .

Certificate of Title

A document prepared by a lawyer that defines the state or condition of a property’s title based on public record.

Chattel

Any personal property that is not a real property.

Chattel Mortgage

A claim or lien on a personal property used as loan collateral.

Clear Title

The title of a property that is free from any defect, liens or legal encumbrances.

Closing

The conclusion of a real estate transaction wherein the seller and buyer sign documents that transfers the property to the buyer.

Closing costs

All miscellaneous costs, including lawyers, appraisal and insurance fees, pertaining to the sale of the property.

Closing statement

A document that accounts all costs between the buyer and seller in the conclusion of a real estate transaction.

Commercial property

Any real property that is used for business or zoned in a business area.

Commission

The amount paid to the agents for the sale of a property usually computed at a certain percentage of the properties selling price.

Commitment fee

The fee charged by a lender for promising to take a loan in effect locking in specific loan terms.

Co-maker

A person who assumes responsibility for a loan by signing together with the principal borrower; also called endorser.

Collateral security

A separate obligation or additional security that a borrower provides to guarantee performance of the contract.

Commencement Date

Date when lease of a property begins even when lease was signed and negotiated at a different date.

Community property

Any property acquired by husband wife during marriage entitling them to equal rights on the property.

Compound interest

The interest paid on a loan amount accumulated over a period of time calculated not only on the principal amount but also on the accrued interest.

Contractor

Person responsible for the construction of a home or development of a land.

Contract of Sale

An agreement made between buyer and seller that details the purchase of a real estate property.

Contractual lien

A financial obligation entered into voluntarily such as trust deed or mortgage.

Convertible ARM

A loan that began as an adjustable rate mortgage but permits the borrower to convert it to a fixed-rate mortgage at a specified period of time.

Credit report

A report prepared by a credit bureau that details credit history of a person.