Glossary of Terms
ABSTRACT OF TITLE: A summary of the conveyances, transfers, and any other facts relied on as evidence of title, together with any other elements of record which may affect the marketability of the title.
APPRECIATION: An increase in value of real estate.
CLOSING: The final settlement of real estate transaction between buyer and seller.
CONTRACT FOR DEED: A contract ordinarily used in connection with the sale of property in cases where the seller does not wish to convey legal title until all or a certain part of the purchase price is paid by the buyer.
CONVENTIONAL MORTGAGE: A mortgage securing a loan made by investors without governmental underwriting, i.e. which is FHA insured or VA guaranteed.
COUNTER-OFFER: A rejection of an offer by a seller along with an agreement to sell the property to the potential buyer on terms differing from the original offer.
DEED: Written instruments which, when properly executed and delivered, conveys title.
DISCOUNT POINTS: Additional charges made by a lender at the time a loan is made. Points are measured as a percent of the loan, with each point equal to one percent. These additional interest charges are paid at the time a loan is closed to increase the rate of return to the lender so as to approximate the market level.
EARNEST MONEY DEPOSIT: Down payment or something of acceptable consideration paid at the time the offer is written, as the purchaser's evidence of good faith. (A legally required element of a Purchase Agreement.)
EASEMENT: Created by grant or agreement for a specific purpose, an easement is the right, privilege or interest which one party has in the land of another. (Example: right of way)
EQUITY: The interest or value that an owner has in real estate over and above the liens against real property.
ESCROW: The deposit of funds with instructions to a third neutral party (Escrow Agent) to carry out the instructions, it is called a complete or perfect escrow.
FHA LOAN: A loan that has been insured by the federal government guaranteeing its payment in case of default by the borrower.
FMHA LOAN: A loan insured by the federal government similar to FHA loan usually used for residential properties in rural areas. Glossary of Terms
JOINT TENANCY: Joint ownership by two or more persons with right of survivorship; all joint tenants own equal interest and have equal rights in the property.
LIEN: A form of encumbrance, which usually makes property security for the payment of a debt or discharge of an obligation. Example: judgments, taxes, mortgages, deeds of trust, etc.
MARKETABLE TITLE: Title free and clear of objectionable liens or encumbrances.
MORTGAGE: An instrument recognized by law by which a secured interest in real property is granted to secure the payment of a debt or obligation.
ORIGINATION FEE: A fee charged the borrower by the lending institution, typically 1-% of the amount borrowed.
PERSONAL PROPERTY: Any property, which is not real property, e.g. money, savings account, appliances, cars, boats, etc.
PURCHASE AGREEMENT: An agreement between a buyer and seller for the purchase of real estate.
REAL PROPERTY: Land and any structure affixed to it.
SPECIAL ASSESSMENT: Legal charge against real estate by a public authority to pay cost of public improvements such as: streetlights, sidewalks, street improvements, etc.
SUBDIVISION: A parcel of land that has been divided into smaller parts.
TENANCY IN COMMON: Ownership by two or more persons who hold undivided interest; without right of survivorship; interests need not be equal.
TERM OF MORTGAGE: The period during which a mortgage must be paid.
TRUST ACCOUNT: An account separate and apart and physically segregated from the Real Estate Broker's own funds, in which broker is required by law to deposit all funds collected for clients.
VA LOAN: A loan guaranteed by the Veteran's Administration insuring payment in case of default by the borrower. Available to qualified veterans.
WARRANTY DEED: A deed to convey real property which contains warranties of title and quiet possession, and the grantor agrees to defend the premises against the lawful claims of third persons.