Real Estate Glossary of Terms

 

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z


abstract of title
A condensed version of the history of title to a piece of land that lists any transfers in ownership, as well as any liabilities attached to it, such as mortgages.

 

abutting
The joining, reaching, or touching of adjoining land. Abutting pieces of land have a common boundary.


acceleration clause
A provision in a written mortgage, note, bond or conditional sales contract that, in the event of default, the whole amount of principal and interest may be declared to be due and payable at once.
 

accretion
An addition to land through natural causes.
 

acre
A measure of land equal to 43,560 square feet.


adverse possession
The right of an occupant of land to acquire title against the real owner, where possession has been actual, continuous, hostile, visible, and distinct for the statutory period.


agency
The legal relationship between a principal and an agent.


agent
A person authorized to act for and under the direction of another person when dealing with third parties.


amenities
Non monetary benefits and satisfactions derived from property ownership, such as a pleasant view, pride in home ownership, etc.
 

amendment
A modification to an existing contract, mutually agreed to by all parties. Examples might include a change in the purchase price due to a low appraisal, or a change in the closing date.


amortization
The operation of paying off indebtedness, such as a mortgage, by installments. The conventional amortization periods are15 or 30 years.


application fee
Fees that are paid upon application. Charges for property appraisal and a credit report are usually included in the application fee.


appraisal
A determination of the value of something, such as a house.


appraised value
An estimate of the present worth.


appreciation
An increase in value or worth of property. Opposite of depreciation.


assessor
A local government official who determines the value of the property for taxation purposes.

attachment
Method by which a debtor's property is placed in the custody of the law and held as security.

attractive nuisance
Something on a piece of property that attracts children but also endangers their safety. For example, unfenced swimming pools, trampolines and abandoned refrigerators have qualified as attractive nuisances.


auction
A public sale of property to the highest bidder.


back to top

*************************************************


blockbusting
The illegal practice of inducing panic selling in a neighborhood by making representations of the entry, or prospective entry, of members of a minority group.

breach of contract
Failure, without legal excuse, of one of the parties to a contract to perform according to the contract.


brokerage
For a commission or fee, bringing together parties interested in buying, selling, exchanging, or leasing real property.


buyer's broker (Buyer's Agent)
A licensee who has declared to represent only the buyer in a transaction. The designated agent owes the buyer or seller undivided loyalty, reasonable care, disclosure, obedience to lawful instruction, confidentiality and accountability.


back to top
*************************************************


capital gains
The profit on the sale of a capital asset, such as stock or real estate.


cash out
Receiving money back when refinancing your present mortgage.


census
An official count of the number of people living in a certain area, such as a district, city, county, state, or nation.


chain of title
A history of conveyances and encumbrances of a property from some starting point, whereby the present owner

derives title.


clear title
A land title that doesn't have any liens (including a mortgage) against it.


closing
The conclusion of the sales transaction when the seller transfers title to the buyer in exchange for consideration.


closing costs
Costs the buyer must pay at the time of the closing in addition to the down payment which may include points, title charges, credit report fee, document preparation fee, mortgage insurance premium, inspections, appraisals, prepayments for property taxes, deed recording fee, and homeowners insurance.


closing statement (The HUD Statement)
A detailed written summary of the financial settlement of a real estate transaction, showing all charges and credits made, and all cash received and paid out.


cloud on title
A claim or encumbrance that may effect title to land.


commingling
The illegal practice of combining or mixing clients' funds with the agent's own funds.


commission
The compensation paid to a licensed real estate broker or by the broker to the salesman for services rendered. Usually a percentage of the selling price of the property.


comparables
Properties which are similar to a particular property and are used to compare and establish a value for that property.


condominium
A form of real estate, usually a dwelling with individual ownership of separate portions of the building plus shared ownership of the common areas.


consideration
The price or subject matter, which induces a contract; may be in money, commodity, exchange, or a transfer of personal effort.
 
contingency
A provision in a contract stating that some or all of the terms of the contract will be altered or voided by the occurrence of a specific event.


contract
A legally enforceable agreement to do, or not to do, a particular thing for a consideration.


conveyance
Written instrument, such as a deed or lease, that evidences transfer of some ownership interest in real property from one person to another.


counter offer
The rejection of an offer to buy or sell that simultaneously makes a different offer, changing the terms in some way.
 
covenant
A restriction on the use of real estate that governs its use, such as a requirement that the property will be used only for residential purposes.
 
credit report
An account of your credit history, prepared by a credit bureau.

creditor
A person or entity to whom a debt is owed.


cul-de-sac
A dead end street which widens sufficiently at the end.


back to top
*************************************************

default
Non-performance of a duty arising under a contract or otherwise.


depreciation
A loss in value.

disclosure
The making known of a fact that may be hidden.

down payment
An amount of money the buyer pays which is the difference between the purchase price and the mortgage amount.

dual agency
Representing the buyer and the seller in the same transaction by the same agent.

back to top
*************************************************

earnest money
A deposit made by the buyer as evidence of good faith in offering to purchase real estate and to secure performance of the contract.

easement
A right to use another person's real estate for a specific purpose. The most common type of easement is the right to travel over another person's land, known as a right of way. In addition, property owners commonly grant easements for the placement of utility poles, utility trenches, water lines or sewer lines.

easement by prescription
A right to use property, acquired by a long tradition of open and obvious use.

eminent domain
The right of government to take private property for public use, through court action known as condemnation.

encroachment
A fixture, or structure, such as a wall or fence, which invades a portion of a property belonging to another.

encumbrance
A cloud against clear, free title to the property which does not prevent conveyance, such as unpaid taxes, easements, deed restrictions, etc.

escrow account
A third party account that holds money safely while a sale is in progress.

back to top
*************************************************

fiduciary
The relationship of trust, honesty and confidence between agent and principal; the faithful relationship owed by an agent to the principal.

first mortgage
A mortgage which is in first lien position, taking priority over all other liens.

fixed rate mortgage
A mortgage with an interest rate and monthly payment that doesn't vary for the term of the loan.

flood insurance
A special and separate type of homeowner's insurance the provides coverage for damages resulting from flooding. Flood insurance is required by most lenders only if the property is located within a designated flood plain.

flood plain
Flood plains are by definition subject to periodic flooding. They are generally characterized by relatively flat topography and soil types that were laid down during past inundations by flood waters.

foreclosure
A legal process instituted by a mortgagee or lien creditor after the debtor's default.

back to top
*************************************************

good faith estimate
A written estimate of closing costs which a lender must provide.

grantee
A person to whom real estate is conveyed; the buyer.

grantor
A person conveying real estate by deed; the seller.

back to top
*************************************************

hazard insurance
A contract between purchaser and an insurer, to compensate the insured for loss of property due to hazards (fire, damage, etc.), for a premium.

HOA
Acronym - home owner's association.

home equity loan
A fixed or adjustable rate loan obtained for a variety of purposes, secured by the equity in your home. Interest paid is usually tax-deductible.

homeowners' association (HOA)
An organization comprising of residents who manage the common areas of a subdivision or condominium complex.

homeowners' insurance
A type of insurance policy designed to protect homeowners from financial losses related the ownership of real property.

Housing and Urban Development (HUD)
The U.S. Department of Housing and Urban Development. This is the agency responsible for enforcing the federal Fair Housing Act.

HUD
Acronym - Housing and Urban Development.

back to top
*************************************************

improvements
Valuable additions to the land, such as buildings, fences, roads, etc., which increase the value of the property.

inspection clause
A stipulation in an offer to purchase that makes the sale contingent on the findings of a home inspector.

interest
The sum paid in return for the use of money; could be considered rent for the use of money.

interest rate
The periodic charge, expressed as a percentage, for use of credit.

back to top
*************************************************

joint tenancy
A way for two or more people to share ownership of real estate or other property. When two or more people own property as joint tenants and one owner dies, the other owners automatically own the deceased owner's share.

back to top
*************************************************

landlord
The owner of any real estate, such as a house, apartment building or land, that is leased or rented to another person, called the tenant.
.
lease
An oral or written agreement (a contract) between two people concerning the use by one of the property of the other.

legal description
A description of a specific parcel of real estate which is acceptable to the courts in that state, and which will allows an independent surveyor to locate and identify it.

lessee
Tenant leasing property.

lessor
One who leases property to a tenant.

lien
A monetary claim against a property.
 
loan-to-value ratio (LTV)
The ratio of the amount being loaned in respect to the appraised value of the property, usually expressed as a percentage.

back to top
*************************************************

manufactured home
A structure built in a factory, that is later shipped to, and placed on, the home site. The term can apply to both mobile homes and prefab homes.

market value
The price that a willing buyer and a willing seller, both given full information, and neither under pressure to act, would agree upon. Also known as Fair Market Value.

mobile home
A type of manufactured home, that is transported to the home site using wheels attached to the structure.

month-to-month tenancy
A rental agreement that provides for a one-month tenancy that is automatically renewed each month unless either tenant or landlord gives the other the proper amount of written notice (usually 30 days) to terminate the agreement.

mortgage
A contract providing security for the repayment of a loan, registered against property, with stated rights and remedies in the event of default.

mortgage banker
Originates mortgage loans, loaning you their funds and closing the loan in their name.

mortgage broker
A person or company having contacts with financial institutions or individuals wishing to invest in mortgages.

mortgagee
The lender in a mortgage loan transaction.

mortgagor
The borrower in a mortgage loan transaction.

back to top
*************************************************

nuisance
Something that interferes with the use of property by being irritating, offensive, obstructive or dangerous.

back to top
*************************************************

obsolescence
A loss in value of real property caused by changes either internal or external to the property.

offer
A proposal to enter into an agreement with another person. An offer must express the intent of the person making the offer to form a contract, must contain some essential terms - including the price and subject matter of the contract - and must be communicated by the person making the offer. A legally valid acceptance of the offer will create a binding contract.

open house
An opportunity for prospective buyers to view a house in a low pressure environment.

ordinance
A law adopted by a town or city council, county board of supervisors or other municipal governing board.

origination fee
A fee charged by lenders, in addition to interest, for services in connection with granting of a loan.

back to top
*************************************************

personal property
Property which is tangible, movable, and not fixed to the land.

physical deterioration
The loss of value to real property from all causes due to the action of the elements and old age. Physical deterioration can be either curable or incurable.

PITI
Principal, Interest, Taxes and Insurance.

PMI
Acronym - private mortgage insurance.

points
Fees paid to induce lenders to make mortgage loans at a particular interest rate. Each point is equal to one percent (1%) of the loan principal.

power of attorney
A written authorization by a person to another person to act for him on his behalf.

prepayment
Paying off all or part of the mortgage before the scheduled date.

prepayment clause in a mortgage
Statement of the terms upon which the mortgagor (borrower) may pay the entire or stated amount on the mortgage principal at some time prior to the due date.

prepayment penalty
A fee paid to the lending institution for paying a loan prior to the scheduled maturity date.

prime rate
The interest, or discount rate charged by a commercial bank to its largest and strongest customers.

principal
The amount of money owed to the lender not including interest.

private mortgage insurance (PMI)
Default insurance on conventional loans, normally insuring the top 20%-25% of the loan and not the whole loan.

property taxes
Taxes that are paid yearly on real property.

pro-rate
To divide or distribute proportionally. At closing, various expenses such as taxes, insurance, interest, rents, etc. are prorated between the seller and buyer.

purchase offer (offer to purchase)
A document that lists the price, terms and conditions under which a buyer is willing to purchase a property.

back to top
*************************************************

qualify
To meet a mortgage lender's approval requirements.

quiet enjoyment
The right of a property owner or tenant to enjoy his or her property without interference.

quitclaim deed
A deed that transfers whatever ownership interest the transferor has in a particular property.

back to top
*************************************************

ready, willing and able
A buyer who is prepared to buy and has the financial capacity to do so.

real estate
Refers to land and improvements and the rights to own or use them.

Real Estate Appraiser
A person licensed to legally appraise real estate property for a fee.

real property
Refers to the right to own land and improvements.

refinancing
To apply for a new mortgage, usually either at a lower interest rate or a different principal amount.

restrictions
Limitations on the use or occupancy of real estate contained in a deed or in local ordinances pertaining to land use.

right of survivorship
The right of a surviving joint tenant to take ownership of a deceased joint tenant's share of the property.

back to top
*************************************************

sales contract
A written agreement stating the terms of the sale agreed to by both buyer and seller.

secondary mortgage market
Buying and selling of existing mortgage loans, designed to provide additional liquidity for lenders.

self amortized loan
A loan which will retire the debt by systematic payments of principal and interest, so that at the end of the loan period, the balance will be zero.

setback
The distance a building must be set back from the property lines in accordance with local zoning ordinances or deed restrictions.

single-family home
A free-standing, residential structure, designed to accommodate one family.

specific performance
Carrying out of the precise terms agreed upon in a contract.

spite fence
An unsightly fence erected for no other purpose than to irritate a neighbor.

back to top
*************************************************

tenancy in common
A type of ownership in which two or more people have an undivided interest in property, without the right of survivorship. Upon death of one of the owners, his/her interest passes to his/her heirs or devises.

time is of the essence
A clause in a contract which makes failure to perform by a specified date a material breach or violation of the contract.

timeshare
An arrangement under which a purchaser receives an interest in real property and the right to use an accommodation or amenities, or both, for a specified period and on a recurring basis. Used primarily for selling vacation properties.

title
The right of ownership of a property.

title insurance
Protection for lenders or homeowners against financial loss resulting from legal defects in the title.

title search
Checks all the records relating to the property to determine whether the seller can sell the property, and can do so free of liens.

townhouse
A dwelling unit usually with two, three or four floors, and shared structural walls.

back to top
*************************************************

underwriting
The process of verifying data and approving a loan.

back to top
*************************************************

VA
The Veterans Administration, a federal agency which guarantees loans made to qualified veterans on approved property.

variable rate
An interest rate that changes periodically in relation to an index. Payments may increase or decrease accordingly.

variance
An exception to a zoning ordinance, usually granted by a local government.

back to top
*************************************************

waiver
The intentional or voluntary relinquishment of a known claim or right.

walk through
A Buyer's on-site inspection of the property being purchased, just prior to closing.

warranty deed
A type of deed that contains express assurances about the legal validity of the title being transferred.

back to top
*************************************************

 
zero lot line
A term generally used to describe the positioning of a structure on a lot so that one side rests directly on the lot's boundary line (no set back).

zoning
Exercise of police power of city in regulating and controlling the character or use of property.

back to top

 

 

*****************
enHancedMLS.com