C

Capital Expenditure
A capital expenditure is an improvement that will have a life of one year or more and will increase the value of the property.

Capital Gain
Capital gain is the seller’s gain on an asset used in a trade or business or for investment, including real estate. This gain is taxed at varying rates depending on whether the asset was held for more or less than one year.

Capital Improvement
Capital improvement is an item that adds value to the property, adapts the property to new uses, or prolongs the life of property. Maintenance is not a capital improvement.

Capitalization Rate (Cap Rate)
The percentage of the investment the investor will receive back each year from the net income from the property. If you were to purchase the property all cash this would be your return on that investment.

Cash Flow
Cash flow is the income produced by an investment property after deducting operating expenses and debt. Simple put the cash that’s left over after all your expenses including debt servicing is paid.

Cash Reserve
In a mortgage commitment, some lenders require that the borrower have on deposit in their bank accounts at the time of the closing an amount equal to a predetermined number of months of the cost of principal, interest, taxes, and insurance, which is referred to as a cash reserve.

Certificate of Occupancy (C of O)
The Certificate of Occupancy is a certificate issued by a local governmental entity responsible for the use of land in the community where the property is located stating that the structures on the property or any improvements made to these structures comply with the codes, ordinances and regulations of that governmental entity and that they may be occupied.

Certificate of Title Opinion
Certificate of Title Opinion is a report based on a title examination, which states the examiner’s opinion of the quality of a title to real property.

Cession Deed
A cession deed is used to relinquish real property to a municipality for a road or other public work project.

Chain
A chain in land measurement is a distance of 66 feet.

Chain of Title
Chain of Title is a successive conveyance of title to a specific parcel of land.

Chattel
Chattel is personal property.

Commitment Letter
A letter issued by the lender to the applicant that states funds will be provided subject to written terms and conditions.

Common Area or Common Elements
The common area is the area in the property or in the building that is available for use by all owners and tenants.

Comparables (Comps) or Comparative Market Analysis
Comps are used in assessing or establishing the fair market value of a property, a property which has been sold recently that is similar in size, condition, location and amenities.

Condemnation
Condemnation is the exercise of the power of eminent domain or taking private property for public use.

Consideration
Consideration is anything of value, as recognized by law, offered as an inducement to contract.

Contingency
Contingency is a condition in a contract relieving a party of liability if a specified event occurs or fails to occur.

Contract for Deed
Contract for deed is a contract of sale and a financing instrument wherein the seller agrees to convey title when the buyer completes the purchase price installment payments. It is also called installment land contract and installment plan.

Conveyance
Conveyance is the transfer of title to real property.

Cost Approach
Cost approach is an appraisal method for estimating the value of properties that have few, if any, comparables and are not income-producing.

Counter-offer
A counter-offer is a new offer made by either the buyer or seller when rejecting a previous offer.

Covenant
A covenant is a promise made in writing.