Archives: Glossary Terms

Nearby but not necessarily adjoining.

Contiguous; attaching; sharing a common border.

A person who has been declared by the courts to be incapable of handling his or her own affairs.

A general term for any mortgage in which the interest rate and generally the payments change over the life of the loan. Your interest rate will be adjusted to match the rise or fall of a preselected interest rate index and your regular payments will increase or decrease accordingly.

Different types of ARMs have different frequencies for these adjustments. Some ARMs have limits on payment and interest rate changes and the maximum interest rate over the life of your loan.

To your advantage, the initial rate of an ARM is usually low, permitting you to buy real estate that would be unaffordable with a fixed rate mortgage. But you risk higher payments later on.

To limit the borrower’s risk, the ARM may have a payment or rate cap.

Same as draw.

The institutional investor’s prior agreement to provide long-term financing upon the completion of a construction project. Also known as a “take-out” loan commitment.

1. A fee paid in advance of any services rendered such as in obtaining a loan. 2. Sometimes unlawfully charged in connection with the illegal practice of obtaining a fee in advance for the advertising of property or businesses for sale, with no intent to obtain a buyer, by a person representing himself as a real estate licensee or a representative of a licensed real estate firm.

A statement or declaration reduced to writing and sworn to or affirmed before a public official who has authority to administer an oath or affirmation.

A comprehensive term applied to the efforts of the public and private sector to help low- and moderate-income people purchase homes through programs that offer lower down payments, easier loan-qualifying rules, and/or below-market interest rates.

Pursuant to Tenn. Code Ann. Section 62-13-401:
A real estate licensee may provide real estate services to any party in a prospective transaction, with or without an agency relationship to one (1) or more parties to the transaction. 

Until such time as a licensee enters into a specific written agreement to establish an agency relationship with one (1) or more parties to a transaction, such licensee shall be considered a facilitator and shall not be considered an agent or advocate of any party to the transaction. 

An agency or subagency relationship shall not be assumed, implied or created without a written bilateral agreement that establishes the terms and conditions of such agency or subagency relationship. 

The negotiation and execution of either an exclusive agency listing agreement or an exclusive right to sell listing agreement with a prospective seller shall establish an agency relationship with the seller.