Real Estate Glossary - F  

Failure to Purpose - When the intended purpose of an agreement or arrangement can no longer be achieved; in most cases, this release the parties form their obligations.

Fair Housing Act - A federal law prohibiting discrimination in the sale or lease of residential property on the basis of race, color, religion, sex, national origin, handicap, or familial status.

Fairness in Lending Act - A Washington state law that prohibits redlining.

Fannie Mae - Popular name for the Federal National Mortgage Association (FNMA).

Feasibility Study - A cost-benefit analysis of a proposed project, often required by lenders before they make a loan commitment.

Fed - The Federal Reserve.

Federal Reserve System - The government body that regulates commercial banks, and that implements monetary policy in an attempt to control the national economy.

Fee, Qualified - A fee simple estate that is subject to termination if a certain condition is not met or if a specified even occurs. It may be a fee simple determinable or a fee simple subject to condition subsequent. Also called a conditional fee or defeasible fee.

Fee Simple - The highest and most complete form of ownership, which is of potentially infinite duration. Also called a fee or a fee simple absolute.

Fee Simple Determinable - A qualified fee that ends automatically, without legal action by the grantor, if the condition is violated or the terminating even occurs.

Fee Simple Subject to a Condition Subsequent - A qualified fee that terminates only if the grantor takes legal action to terminate it after the specified condition has come to pass.

FHA - Federal Housing Administration.

Fidelity Bond - A bond to cover losses resulting from the dishonesty of an employee.

Fiduciary Relationship - A relationship to trust and confidence, where one party owes the other (or both parties owe each other) loyalty and a higher standard of good faith than is owed to third parties For example, an agent is a fiduciary in relation to the principal; husband and wife are fiduciaries in relation to one another.

Finance Charge - Any charge a borrower is assessed, directly or indirectly, in connection with a loan.

Financial Statement - A summary of facts showing the financial condition of an individual or a business, including a detailed list of assets and liabilities. Also called a balance sheet.

Financing Statement - A brief instrument that is recorded to perfect and give constructive notice of a creditor's security interest in an article of personal property.

Finder's Fee - A referral fee paid to someone for directing a buyer or a seller to a real estate agent.

FIRPTA - The Foreign Investment in Real Property Tax Act; this federal law requires an escrow agent to withhold funds from the sale of real property when the seller is not a U.S. citizen, in order to prevent tax evasion.

First Lien Position - The position held by a mortgage or deed of trust that has higher lien priority than any other mortgage or deed of trust against the property.

Fiscal Policy - The federal government's actions in raising revenue (trough taxation), spending money, and managing its debt.

Fiscal Year - Any twelve-month period used as a business year for accounting, tax, and other financial purposes, as opposed to a calendar year.

Fixed Disbursement Plan - A construction financing arrangement that calls for the loan proceeds to be disbursed in a series of predetermined installments at various stages of the construction.

Fixed Expense - A property management expense that remains the same, regardless of rental income.

Fixed Term - A period of time that has a definite beginning and ending.

Fixture - An item that used to be personal property but has been attached to or closely associated with real property in such a way that it h as legally become part of the real property.

Floor Area Ratio - A zoning requirement that controls the ratio between a building's floor space and the percentage of the lot it occupies.

FmHA - Farmer's Home Administration.

Foreclosure - When a lienholder causes property to be sold against the owner's wishes, so that the unpaid lien can be satisfied from the sale proceeds.

Foreclosure, Judicial - 1. The sale of property pursuant to court order to satisfy a lien. 2. A lawsuit filed by a mortgagee or deed of trust beneficiary to foreclose on the security property when the borrower has defaulted.

Foreclosure, Nonjudicial - Foreclosure by a trustee under the power of sale clause in a deed of trust.

Forfeiture - Loss of a right or something else of value as a result of failure to perform an obligation or fulfill a condition.

For Sale by Owner - A property that is being sold by the owner without the help of a real estate agent. Also called a FSBO.

Franchise - A right or privilege granted by a government to conduct a certain business, or a right granted by a private business to use its trade name in conduction business.

Fraud - An intentional or negligent misrepresentation or concealment of a material fact, which is relied upon by another, who is induced to enter a transaction and harmed as a result.

Fraud, Actual - Deceit or misrepresentation with the intention of cheating or defrauding another.

Fraud, Constructive - A breach of duty that misleads the person the duty was owed to, without an intention to deceive; for example, if a seller gives a buyer inaccurate information about the property without realizing that it is false, that may be constructive fraud.

Freddie Mac - Popular name for the Federal Home Loan Mortgage Corporation (FHLMC).

Free and Clear - Ownership of real property completely free of any liens.

Freehold - A possessory interest in real property that has an indeterminable duration; it can be either a fee simple or an estate for life. Someone who has a freehold estate has title to the property (as opposed to someone with a leasehold estate, who is only a tenant).

Frontage - The distance a property extends along a street or a body of water; the distance between the two side boundaries at the front of the lot.

Front Foot - A measurement of property for sale or valuation, with each foot of frontage presumed to extend the entire depth of the lot.

Front Money - The cash required getting a project or venture under way; includes initial expenses such as attorney's fees, feasibility studies, loan charges, and a downpayment.

--- Back To Top of Page ---