Corner Molding to Cost of Funds Index (COFI)

 

Corner Molding

The corner molding refers to the trim work placed in both inside and outside wall corners.

Cornice

The cornice is a horizontal roof element that projects above and beyond the wall, often a decorative top course or trim that crowns buildings, walls or other architectural element.

Corporate Real Estate

The term corporate real estate refers to a form of ownership in which the real estate property is owned by a corporation. Compare the corporate real estate method of title ownership with the Tenancy in Partnership entry.

Corporate Relocation

In the real estate industry, a corporate relocation is a long-distance move by an employee, necessitated by a new job or a job-related transfer. This is an important market segment for real estate agents, as employers often subsidize such moves.

Corporation

A corporation is an artificial person legally established by a charter. Corporations exist forever until they are dissolved. They are run by a board of directors elected by its shareholders (investors who have purchased stock in the company). Liability for the corporation’s debt is limited to the amount invested by each shareholder-unless the investor has pierced the corporate veil. However, shareholder’s gains are subject to double taxation, while the corporation’s losses cannot be claimed by the individual shareholder. Compare with limited liability companies, S-corporations, partnerships and sole proprietorship.

Corporation Franchise Tax Lien

The corporation franchise tax lien is a property tax lien levied by some states on out-of-state corporations who want to operate in that state. These liens are general, involuntary and statutory. The corporation franchise tax lien can be recorded against the corporation’s real property, as well as its personal property.

Correction Line

Sometimes called a standard parallel line, east-to-west correction lines are used with the rectangular survey system to compensate for the curvature of the earth. Every fourth township line is a correction line that is shorter than the standard township line.

Corrective Maintenance

Corrective maintenance refers to any repairs required to keep the building functioning, without necessarily improving the value, design or improvements. Compare with preventive and routine maintenance.

Corrective Work

With home purchases or new home construction, corrective work refers to any necessary repairs or upgrades. Homebuyers should always conduct a property inspection, as such inspections will uncover issues that the buyer can demand be repaired by the seller. By the same token, new home buyers or owners will want the builder to fix any problems that may arise after taking possession of the property.

Correlative Water Rights

The correlative water rights theory is a groundwater rights approach used primarily in California, which limits the riparian water rights of owners, preventing them from taking an unlimited amount of water. Such owners may only take water for beneficial uses and to a reasonable limit. Compare with appropriative and basic riparian rights.

Correspondent Lender

The correspondent lender is a mortgage banker who has a relationship with a wholesale lender and immediately assigns the closed and funded loans to the wholesale lender. Correspondent lenders may also be mortgage brokers who close loans in their own names (as lender) but use the funds of a wholesale lender and immediately assign the closed loans to the wholesale lender.

Corrosion

In real estate, the term corrosion refers to the degradation and dissolution caused by a chemical reaction. Rust is the most visible form of corrosion, as iron reacts with water and oxygen.

Co-Signer

With debts and liabilities, a co-signer is an official co-borrower on the debt’s promissory note. However, the co-signer is usually a secondary borrower. With mortgage loans, co-signer normally applies specifically to co-borrowers who do not occupy the subject property and usually do not contribute toward the mortgage payments. The co-signer is still responsible for the loan account. However, co-signers can reduce the effect of loans they co-sign by documenting that the other borrowers are responsible for the loan (normally with canceled checks). For example, an applicant who co-signed on a sibling’s loan may have some difficulty qualifying for a loan when the co-signed loan shows up on his or her credit report-unless the applicant can provide copies of canceled checks that he or she has NOT been responsible for making any of the payments.

Cost Approach to Property Value

The cost approach to property value is one of three primary methods of calculating the value of a property, used by the appraiser. This approach calculates the cost of purchasing the land and building a similar property as the subject. Compare with “comparison” and “rental income” approaches.

Cost Basis

The cost basis is a subset of an investment’s basis, which focuses on the purchase price and the investor’s capitalized closing costs. See also the Basis entry.

Cost of Capital

The cost of capital refers to the total price of raising capital funds, both debt (borrowed funds) and equity (common or preferred shares). When undertaking new projects, investors calculate the cost of capital as the base amount that investors would need to break even on their investment. The cost of debt is basically the interest charges, plus all finance and closing related expenses involved with obtaining the financing. Calculating the cost of equity is more complicated, because there is no set rate and one has to consider the probable return those equity funds would make with other projects or investment.

With real estate investment trusts (REITs), the cost of equity typically looks at the expected growth in stock prices and the dividend rate.

Cost of Debt

See the Cost of Capital entry.

Cost of Equity

See the Cost of Capital entry.

Cost of Funds Index

The Cost of Funds Index (COFI) is the index that is based on average cost that participating banks must pay for its funds (deposits, CDs, etc.). The different Federal Reserve Bank districts are responsible for surveying, calculating and publishing the Cost of Funds Index for their respective geographic areas. Many ARM loan shoppers have flocked to this index, because of its relative stability as compared to other indices such as Treasury Bills and the prime rate.