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Glossary

A-C

Abstract Of Title

A summary of the public records relating to the title to a particular piece of land. An attorney or title insurance company reviews an abstract of title to determine whether there are any title defects which must be cleared before a buyer can purchase clear, marketable and insurable title.

Acceleration Clause

Condition in a mortgage that may require the balance of the loan to become due immediately, if regular mortgage payments are not made or for breach of other conditions of the mortgage.

Access

The right to enter and leave a tract of land from a public way. Can

Accretion

The slow build

up of lands by natural forces such as wind or water.

Acknowledgment

The act by which a party executing a legal document goes before an authorized officer or notary public and declares the same to be his or her voluntary act and deed.

Acre

A tract of land 208.71 feet square and containing 43,560 square feet of land.

Adjustable Rate Mortgages

Also called an ARM or Adjustable Mortgages, this type of mortgage usually has an interest rate that may change up or down depending on a current index. Typically there are restrictions on how many interest points an ARM can be adjusted in a single year and how high the interest rate can climb over the life of the loan.

Administrator

A person appointed by a probate court to settle the affairs of an individual dying without a will. The term is "administratrix" if such a person is a woman.

Adverse Possession

A claim made against the lands of another by virtue of open and notorious possession of said lands by the claimant.

Affidavit

A sworn statement in writing.

Agent

A person or company that has the power to act on behalf of another or to transact business for another.

Agreement of Sale

Known by various names, such as contract of purchase, purchase agreement, or sales agreement according to location or jurisdiction. A contract in which a seller agrees to sell and a buyer agrees to buy, under certain specific terms and conditions spelled out in writing and signed by both parties.

Air Rights

The right to ownership of everything above the physical surface of the land.

ALTA

American Land Title Association, a national association of title insurance companies, abstractors and attorneys specializing in real property law. Its headquarters are in Washington, D.C.

Amortization

A payment plan, which enables the borrower to reduce his debt gradually through monthly payments of principal.

Amortize

To reduce a debt by means of regular periodic payments which include amounts applicable to both principal and interest.

Appraisal

A report made by a certified or licensed expert that provides an opinion of the fair market value of the property at a given date and time. It usually requires a personal visit and examination of the property by the expert.

Appraiser

A certified or licensed expert who states his or her opinion of the fair market value and quality of the property following a physical review of the property and the market condition.

Appreciation

An increase over time in the market value of a home, further adding to the homeowner’s equity.

Appurtenance

Anything so annexed to land or used with it that it will pass with the conveyance of the land.

APR

Annual percentage rate. On some mortgages the APR is higher than your actual mortgage rate.

ARM

Adjustable Rate Mortgage.

Assessment

The imposition of a tax, charge or levy, usually according to established rates.

Assessor

A public official who evaluates property for the purpose of taxation.

Assignee

One to whom a transfer of interest is made. For example, the assignee of a mortgage or contract.

Assignor

One who makes an assignment. For example, the assignor of a mortgage or contract.

Assumable Mortgage

A type of mortgage, which by its terms, allows a new buyer to take over the owner’s obligations to the lender.

Assumption

A mortgage that allows a new owner to take over payments. The original borrower remains liable on the mortgage note.

Attachment

Legal seizure of property to force payment of a debt.

Attorney in Fact

One who holds a power of attorney from another allowing him or her to execute legal documents such as deeds, mortgages, etc., on behalf of the grantor of the power.

Balloon Mortgage

A mortgage that is amortized over a specific period of years, but requires a lump sum payment in full at an earlier date.

Bankruptcy

A federal court proceeding in which debtors are relieved of liability for their debts after surrender of their assets to a court appointed trustee.

Bill of Sale

An instrument conveying title to personal property.

Binder

An early agreement to buy a home from a seller, which is usually ensured with earnest money. The use of binders are generally not found in real estate transactions in the state of New York.

Broker

(See real estate broker.)

Bureau of Land Management

The branch of government in charge of surveying and managing public lands.

Chain

A term of land measurement that is 66 feet in length.

Chain of Title

A term applied to the past series of transactions and documents affecting the title to a particular parcel of land.

Clear Title

One which is not encumbered or burdened with defects.

Closing

Also sometime referred to as "escrow" or "settlement." It is the process of executing legally binding documents, such as deeds and mortgages most commonly associated with the purchase of real estate and the borrowing and disbursement of monies to assist in the purchase of the property.

Closing Agent (Settlement Agent)

The agent who oversees and conducts the many steps involved in the real estate transaction during the closing or “settlement” process, including controlling the down payment and all documents related to the sale.

Closing Day

The day on which the formalities of a real estate sale are concluded. The certificate of title, abstract and deed are generally prepared for the closing by an attorney and this cost charged to the buyer. The buyer signs the mortgage and closing costs are paid. The final closing merely confirms the original agreement reached in the agreement of sale.

Cloud (On Title)

An outstanding claim or encumbrance which adversely affects the marketability of title.

Clouded Title

An encumbered title.

Commitment Letter

A written promise from a lender that you will receive a mortgage of a specified amount at a specified rate, usually coupled with a requirement that the borrower meet certain conditions.

Commitment to Insure

A report issued by a title insurance company, or its agent, committing the title insurance company to issue the form of policy designated in the commitment upon compliance with and satisfaction of requirements set forth in the commitment.

Comparative Market Analysis

A written report that compares a home to comparable homes in the neighborhood that are either presently on the market or have sold in the last six months.

Condemnation

The taking of private property for public use through a court proceeding.

Condition or Conditions

A provision that, upon the happening or failure to happen of a certain events, will limit, enlarge, change or terminate a specific agreement.

Conditional Offer

An offer to buy a property, but only under certain circumstances. (For example, the buyer receives financing or sells her old home first.)

Conditions and Restrictions

A common term used to designate conditions and restrictions on the use of land. Includes penalties for failure to comply.

Condominium

A system of individual fee ownership of units in a multi

unit structure, combined with joint ownership of common areas of the structure and land.

Conservator

See "Guardian. "

Contingencies

Conditions that are inserted into agreements that if not fulfilled can make an agreement null and void or cancelable.

Contract

A legally binding document in which the buyer agrees to purchase specific property and the seller agrees to sell under stated conditions. Also called a contract for purchase and sale, purchase and sale agreement, binder, or earnest money contract.

Contract for Deed

An agreement to sell and purchase under which title is held as security by the seller until such time as the required payments to the seller have been completed.

Contractor

In the construction industry, a contractor is one who contracts to erect buildings or portions of them. There are also contractors for each phase of construction: heating, electrical, plumbing, air conditioning, road building, bridge and dam erection, and others.

Conventional Mortgage

A mortgage loan not insured by HUD or guaranteed by the Veterans' Administration. It is subject to conditions established by the lending institution and State statutes. The mortgage rates may vary with different institutions and between states.

Convey

The act of deeding or transferring title to another.

Conveyance

An instrument by which title is transferred; a deed. Also, the act of transferring title.

Cooperative

A residential multi

unit building owned by a corporation in which each unit is occupied by a member of the corporation pursuant to a lease or occupancy agreement.

Covenant

An agreement written into deeds and other instruments promising performance or non

performance of certain acts, or stipulating certain uses or non

uses of the property.

Cul-Sac

The terminus of a street or alley. Usually laid out by modern engineers to provide a circular turn around for vehicles.

Curb Appeal

The attractiveness of a home and its property to perspective buyers viewing it from the street as compared with other homes on that same street or within that same neighborhood.

 

D - F

 

Debtor

Someone or some entity that owes money to another.

Deed

A written document by which the ownership of land is transferred from one person to another.

Deed of Trust

Instrument used to secure a loan on real estate. Like a mortgage.

Default

The failure of a buyer to pay the monthly mortgage payment which includes the loan principal, interest and possibly additional charges for taxes and insurance.

Delivery

The final and absolute transfer of a deed from seller to buyer in such a manner that it cannot be recalled by the seller. A necessary requisite to the transfer of title.

Deposit or Earnest Money

Advance payment of part of the purchase price to bind a contract for property.

Devise

The disposition of real property by will.

Documentary Stamps

A State tax, in the forms of stamps, required on deeds and mortgages when real estate title passes from one owner to another. The amount of stamps required varies with each state.

Due On Sale Clause

A provision usually in a mortgage or deed of trust which requires the loan to be paid in full if a property is sold or transferred.

Earnest Money

Advance payment of part of the purchase price to bind a contract for property. Usually the deposit money paid by a buyer in trust for a seller. If the sale goes through, the earnest money is applied against the downpayment. If the sale does not go through, the earnest money will be forfeited or lost unless the binder or offer to purchase expressly provides that it is refundable.

Easement

An interest in land owned by another that entitles its holder to a specific limited use, such as laying a sewer, putting up electric power lines, or crossing the property.

Easement Rights

A right of way granted to a person or company authorizing access to or over the owner's land. An electric company obtaining a right of way across private property is a common example.

Egress

The right to leave a tract of land. Also see “Ingress”.

Eminent Domain

The power of the state to take private property for public use upon payment of just compensation.

Encroachment

A trespass or intrusion onto another’s property, usually by a structure, wall or fence.

Encumber

One who burdens a parcel of land with a lien or charge.

Encumbrance

A lien, liability or charge against a parcel of land.

Endorsements

Additional title insurance coverage that protects you from situations that are not already included in your policy.

Equity

The interest or value which an owner has in real estate over and above the debts against it. The portion of a property you own outright. Usually calculated as The market value of a home minus what the homeowner owes on it. A homeowner can sometimes borrow against their equity, taking out a home equity loan, also called a second mortgage.

Escheat

A reversion of property to the state in those cases where an individual dies without heirs or devisees, and, in some states, without a will.

Escrow

A procedure whereby a disinterested third party – the escrow agent – will hold legal documents and/or funds on behalf of either a seller or buyer. Can also refer to the money held or collected by a mortgage company to ensure that taxes, hazard, flood, mortgage insurance, and other special costs connected with owning property can be paid due. Usually this type of escrow will appear on a settlement sheet provided at closing.

Estate

A person’s possessions. The extent of a person’s interest in real property.

Examination of Title

The investigation and interpretation of the record title to real property based on the title search or abstract.

Exception

In legal descriptions, that portion of land to be deleted or excluded. The term often is used in a different sense to mean an objection to title or encumbrance on title.

Executor

A person appointed by the probate court to carry out the terms of a will. The term is "executrix" if that person is a woman.

Extended Mortgage

One in which the due date of a mortgage is extended for a longer period, often at a higher interest rate than the original mortgage.

Fair Market Value

The value of a home based on a comparison of that home with comparable homes in the same neighborhood that are either presently on the market or have sold in the last six months.

Fannie Mae

Federal National Mortgage Association (also FNMA) is a private corporation, federally chart e re d to provide financial products and services that increase the availability and affordability of housing by purchasing mortgage loans.

Federal Housing Administration (FHA) Guarantee

An insurance contract in which HUD through FHA insures that the named lender will recover a specific percentage of the loan amount from the insurer (FHA) in the event that the loan goes bad.

Fee Simple Estate

The greatest interest in a parcel of land that it is possible to own. Sometimes designated simply as "Fee."

FHA

The Federal Housing Administration, an agency of the federal government which insures private loans for financing of new and existing housing and for home repairs under government approved programs.

Financing Statement

A document filed with the Register of Deeds or Secretary of State securing the title to personal property.

Fixed Rate Mortgages

A type of mortgage in which the interest rate remains the same, or “fixed,” throughout the term of the loan. As a result, your monthly payment for principal and interest will not change for the life of the loan. However, your monthly payments may change if taxes or insurance rates change. Lenders typically charge a higher interest rate for these mortgages. The most common fixed

rate mortgages are 15 year and 30 year.

Fixtures

Any item of property so attached to real property that it becomes a part of the real property.

Flood Certification

A common term for a Federal Emergency Management Agency (FEMA) Standard Flood Hazard Determination Form (SFHDF). This determines whether land or a building is located within a Special Flood Hazard Area for purposes of flood insurance requirements under the National Flood Insurance Pro g r a m .

Foreclosure

Legal process by which a mortgagor, usually the owner of the property, is deprived of his interest in that property due to failure to comply with terms and conditions of a mortgage on the property. A foreclosure usually results in a lender getting a judgment, which orders a public sale of the property to pay off the loan.

Forfeiture of Title

Provision in a deed creating a condition, which will cause title to be passed to another, should certain circumstances occur.

Freddie Mac

Federal Home Loan Mortgage Corporation (also FHLMC) is a stockholder owned corporation chartered by Congress that purchases mortgage loans.

 

G - J

 

General Warranty Deed

A deed which conveys not only all the grantor's interests in and title to the property to the grantee, but also warrants that if the title is defective or has a "cloud" on it (such as mortgage claims, tax liens, title claims, judgments, or mechanic's liens against it) the grantee may hold the grantor liable.

Ginnie Mae

Government National Mortgage Association (also GNMA) is a wholly owned United States corporation that guarantees privately issued securities backed by mortgages insured by FHA (Federal Housing Administration), FMHA (Farmers Home Administration) or VA (Veterans Administration).

Graduated Payment Mortgage

A loan in which monthly payments are relatively small in the beginning and gradually increase in dollar amount over the life of the mortgage.

Grantee

A person who acquires an interest in land by deed, grant, or other written instrument. Usually the buyer or recipient in a transaction.

Grantor

a person, who by a written instrument transfers to another an interest in land. Usually the seller or giver in a transaction.

Guardian

One appointed by the court to administer the affairs of an individual not capable of administering his or her own affairs.

Harbor Line

An arbitrary line set by authorities on navigable rivers, beyond which wharves and other structures may not be built. Also designated as line of navigation.

Hazard insurance

The homeowner's insurance policy, that protects against damages caused to property by fire, windstorms and other common hazards.

Heir

One who might inherit or succeed to an interest in land under the rules of law applicable where an individual dies without leaving a will or more commonly known as dying intestate.

Hiatus

In real estate, a gap or space unintentionally left, when attempting to describe adjoining parcels of land.

Hidden Defect

Any claim on a property that does not appear in the public records, for example, an unknown heir or an unrecorded municipal utility lien.

Home Equity Conversion Mortgage

A reverse or reverse annuity mortgage in which HUD through FHA guarantees that the borrower will receive monthly payments from the insurer (FHA) in the event the lender is unable to make payments to the borrower.

Home Repair Loan

Used for repairs and additions to existing structures without affecting existing mort g a g e . Typically 10 years or less in length.

Homeowners Insurance

Required for all homeowners, it protects against accidents and theft that might occur on your property.

HUD

U.S. Department of Housing and Urban Development. The office of Housing/Federal Housing Administration within HUD insures home mortgage loans made by lenders and sets minimum standards for such homes.

HUD 1

A form settlement (closing) statement required by the U.S. Department of Housing and Urban Development (HUD) where federally related mortgages are being made on residential properties. It is a balance sheet showing the source of funds and the distribution of funds in connection with the purchase and/or mortgaging of residential property.

Improvements

Those additions to property tending to improve the value of the property.

In personam

Directed at specific persons rather than against property or generally for all people.

In rem

Pertaining to property or people in general.

Inchoate Dower

The imperfect interest which the law gives a wife in the lands of her husband. This is an interest which upon the death of the husband may ripen into possession and use. Most states have abolished dower rights.

Indemnify

To make payment for a loss.

Ingress

The right to enter a tract of land. Also see “Egress”.

Inspection

Examination of a property to see that it meets the standards of the contract, the lender, and the buyer.

Instrument

Usually refers to a written document.

Insurance

A contract of indemnity against specified perils.

Insurance Loan

When cash value of a life insurance policy is borrowed by the insured.

Interest

The amount charged by a lender to a borrower for borrowing money. Usually a percentage of the amount loaned.

Interest only payments

A mortgage where only the interest is paid on a monthly basis. This means that the buyer gets no equity. This is only used on some purchase money mortgages where the buyer is responsible for paying the seller the entire amount of the second mortgage at some time in the future.

Interim Financing

Temporary or short term loans. Often used with new construction. Usually replaced with a permanent long

term mortgage.

Intestate

Designates the estate or condition of failing to leave a will at death. "To die intestate."

Joint Tenancy

An estate where two or more persons hold real estate jointly for life, the survivors to take the

Judgment

A decree of a court. If for money damages and if properly recorded, will result in a lien or charge upon the property of a debtor.

Judgment Docket

The record book of a County Clerk where a judgment is entered in order that it may become a lien upon the property of the debtor.

Judgment Lien

The charge upon the lands of a debtor resulting from the decree of a court properly entered into the judgment docket.

 

K - M

 

Land Contract

See "Contract for Deed."

Landmark

Any conspicuous object that helps establish land boundaries.

Lease

A grant of the use of lands for a term of years in consideration of the payment of a monthly or annual rental.

Lender’s Policy

A form of title insurance policy, which insures the validity, enforceability and priority of a lender’s lien. This form of policy does not provide any protection for the owner of the property.

Lessee

One who takes lands under a lease. Usually a tenant.

Lessor

One who grants lands under a lease. Usually a landlord.

Lien

A legal claim on the property that acts as a security for the payment of a debt. If the debt is not repaid as promised, the lender or the lienholder can foreclose its claim on the property and force a public sale to pay the debt. Such claims may include obligations not met or satisfied, judgments, unpaid taxes, materials or labor. Some examples are mortgage liens, judgment liens, mechanics’ liens.

Lienholder

person or entity entitled to a lien on a debtor’s property.

Life Estate

A grant or reservation of the right of use, occupancy and ownership for the life of an individual.

Link

A term of land measurement being 1/100th of a chain or 66/100ths of a foot.

Lis Pendens

A notice recorded in the official records of a county to indicate that a suit is pending affecting the lands where the notice is recorded.

Loan origination fees

Money required by the lender to be paid to start the work of approving a mortgage.

Loan Policy

See " Lender’s Policy."

Lock-In

A guarantee for which you are usually charged a fee that you will receive a specific rate when you close your mortgage.

Loss Payable Clause

Provision added to a Fire and Casualty Policy which says any loss will be paid to two or more parties as their interest may appear. Usually the owner and the mortgage lender.

Lot

A part of a subdivision or block having fixed boundaries ascertainable by reference to a plat or survey.

Majority

The age at which a person is entitled to handle his or her own affairs.

Market Value

The price that a home will likely fetch on the market, based on comparisons to similar homes that have sold recently.

Marketable Title

A title that is free and clear of objectionable liens, clouds or other title defects. Property is said to have marketable title when the title, or rights to a property, have either no problems or only minor problems that any well-informed and prudent buyer would reasonable accept.

Material Defect

Defects, including any property damage, malfunctions of major systems and environmental hazards affecting the condition of a home, which should be readily disclosed to a buyer.

Mechanic’s Lien

A lien allowed by statute to contractors, laborers and material suppliers on buildings or other structures upon which work has been performed or materials supplied.

Metes and Bounds

A description of land by courses and distances.

Minor

One who because of insufficient age or status is legally incapable of making contracts.

MIP

Mortgage insurance protection that protects for the payment of a mortgage in the case of the death or sometimes the disability of the mortgagor.

Monument of Survey

Visible marks or indications left on natural or other objects indicating the lines and boundaries of a survey. May be posts, pillars, stones, cairns, and other such objects. May also be fixed natural objects, blazed trees, roads and even a water course.

Mortgage

An instrument that creates a lien or claim against real property given by the buyer to the lender as security for money borrowed. Mortgages generally run from 10 to 30 years, during which time the loan is to be paid off.

Mortgage Banker

A specialized lending institution that lends money solely with respect to real estate and secures its loans with mortgages on the real estate.

Mortgage Broker

A person or company that buys and sells mortgages for another on commission or who arranges for and negotiates mortgage contracts.

Mortgage Commitment

A written notice from the bank or other lending institution saying it will advance mortgage funds in a specified amount to enable a buyer to purchase a house.

Mortgage Insurance Premium

The payment made by a borrower to the lender for transmittal to HUD to help defray the cost of the FHA mortgage insurance program and to provide a reserve fund to protect lenders against loss in insured mortgage transactions. In FHA insured mortgages this represents an annual rate of one-half of one percent paid by the mortgagor on a monthly basis.

Mortgage Note

A written agreement to repay a loan. The agreement is secured by a mortgage, serves as proof of an indebtedness, and states the manner in which it shall be paid. The note states the actual amount of the debt that the mortgage secures and renders the mortgagor personally responsible for repayment. Sometimes referred to as a promissory note that is secured by a mortgage.

Mortgage Policy

A title insurance policy issued to the lender. It protects the lender for the amount of the mortgage loan. Also see “Lender’s Policy."

Mortgage Revenue Bonds

Issued by communities as a means of providing lower cost mortgage funds to certain qualified borrowers.

Mortgage

Backed Security

A security evidencing either the ownership of an interest in a mortgage loan or pools of mortgage loans, or a separate obligation secured by a mortgage loan or pool of mortgage loans.

Mortgagee

The mortgage lender.

Mortgagor

The mortgage borrower.

Multiple Listing Service (MLS)

A computer-based resource used by real estate agents that lists and contains descriptions of houses that are for sale in a particular area

 

N - R

 

Negative Amortization

An actual increase in the principal amount of real estate loan because of the addition of matured but unpaid interest to the loan balance. Usually the result of monthly payments which a re temporarily set at a lower than needed level.

Notary

One authorized to take acknowledgments. See "Acknowledgment."

Note

A written promise to pay a certain amount of money, at a certain time, or in a certain number of installments. It usually provides for payment of interest and is usually secured by a security instrument such as a mortgage or deed of trust, but does not require a security interest to be valid. When secured by a security instrument may sometimes be referred to as a “Secured Note”.

Open-ended Mortgage

A mortgage with a provision that permits borrowing additional money in the future without refinancing the loan or paying additional financing charges. Open-end provisions often limit such borrowing to no more than would raise the balance to the original loan figure.

Owner's Policy

A title insurance policy issued to a property's owner; it protects the owner's equity against hidden title defects.

Ownership

The right to possess and use property to the exclusion of others.

P.O.C.

Paid outside of closing. Sometimes the lender requests this money before settlement. If you pay any charges before settlement they should be written on the settlement sheet. They are written on the proper line outside of your column. They should also be marked P.O.C.

Patent

A document or grant by which the federal or state government originally transferred title to public lands to an individual. The first in the series of transfers by which title comes down to present owners.

Personal Representative

A person appointed by the probate court to administer a decedent’s estate. See also "Executor" or "Administrator."

PITI

An abbreviation for principal, interest, taxes and insurance, all of which are lumped together in your monthly mortgage payment.

Plat

A map or chart of a lot, subdivision or community drawn by a surveyor showing boundary lines, buildings, improvements on the land and easements. Sometimes also referred to as a “plot”.

PMM

Purchase money mortgage. A mortgage given by the seller simultaneously with the purchase of real estate to secure the unpaid balance of the purchase price.

Points

A one-time-only fee you pay up front to your lender, sometimes in exchange for a slightly lower mortgage rate. Usually used to compensate the lender for processing a mortgage. Expressed as a percentage of face amount of mortgage. One point equals one percent of the total amount you plan to borrow.

Policy

A written contract of title insurance.

Policyowner

The insured on a title insurance policy.

Power of Attorney

An instrument authorizing another to act on one’s behalf as his or her agent or attorney.

Power of Sale

A clause in a will, mortgage, deed of trust or trust agreement authorizing the sale or transfer of land in accordance with the terms of the clause.

Pre-Approval

Initiating the loan approval process before finding a home. Pre-approval involves providing information regarding employment, income and debts to a lender to prove the buyer is a good risk. A more complex process than pre-qualification, pre-approval sometimes involves a fee.

Prepayment

Payment of mortgage loan, or part of it, before due date. Mortgage agreements often restrict the right of prepayment either by limiting the amount that can be prepaid in any one year or charging a penalty for prepayment. The Federal Housing Administration does not permit such restrictions in FHA insured mortgages.

Pre-Qualification

Entails speaking with a lender who offers an opinion of the loan amount the buyer is eligible to borrow, without providing any supporting paperwork or credit history. There’s no charge for pre-qualification.

Principal

The amount of money borrowed in a loan upon which interest is charged.

Private Mortgage Insurance or PMI

Typically required by lenders if a down payment is less than 20% of the purchase price. It insures that the named lender will recover a specific percentage of the loan amount from the insurer in the event the loan goes bad.

Promissory Note

An instrument evidencing a promise to repay a debt.

Property

Can be either real property (ie., real estate) or personal property owned by either an individual, individuals or an entity or entities or any combination.

Property Taxes

Taxes paid by homeowners annually to local and state governments - on average, about 1.5% to 2% of the appraised value of the home, as determined by the county property appraiser.

Pro-Rate

To allocate between seller and buyer their proportionate share of an obligation paid or due.

Quiet Title

An action in a proper Court to remove record defects or possible claims of other parties named in the action.

Quitclaim Deed

A deed which transfers whatever interest the maker of the deed may have in the particular parcel of land. A quitclaim deed is often given to clear the title when the grantor's interest in a property is questionable. By accepting such a deed the buyer assumes all the risks. Such a deed makes no warranties as to the title, but simply transfers to the buyer whatever interest the grantor has.

Range

A part of the government survey, being a strip of land six miles in width, and numbered east or west of the principal meridian.

Real Estate Agent

A person tested and licensed by the state to put buyers and sellers together for a commission.

Real Estate Broker

A middle man or agent who buys and sells real estate for a company, firm or individual on a commission basis. The broker does not have title to the property, but generally represents the owner. Brokers have taken an additional test, generally following several years in the business, and are authorized to operate a private real estate firm.

Real Property

Refers to a parcel of land and any permanent improvements to it.

REALTOR®: A licensed real estate professional who is a member of the National Association of REALTORS®, a trade organization with its own educational standards and ethics in addition to those required by the state.

Realty

A brief term for real property.

Redeem

Literally "to buy back." The act of buying back lands after a mortgage foreclosure, tax foreclosure, or other execution sale.

Refinancing

The process of the same mortgagor paying off one loan with the proceeds from another loan.

 


S - Z

 

Special Assessments

A special tax imposed on property, individual lots or all property in the immediate area, for road construction, sidewalks, sewers, street lights, etc.

Registered Land

See " Torrens Ti t l e.”

Reinsurance

To insure again by transferring to another insurance company all or part of an assumed liability, thus spreading the loss risk any one company has to carry.

Reissue Rate

A reduced rate of title insurance premium applicable in cases where the owner of the land has been previously insured in an owner's policy by the insurer within a certain time.

REIT

Real Estate Investment Trust. A product of federal tax legislation formed as a business trust, under a special state REIT statute or as a corporation for the purpose of investing in real estate or mortgages on real estate.

REMIC

Real Estate Mortgage Investment Conduit. A product of 1986 federal tax legislation in which a business entity such as a corporation, partnership, or trust in which substantially all of the assets consist of qualified mortgages and permitted investments, elects to be treated as a REMIC. Qualification avoids treatment as a corporation for tax purposes.

Reverse or Reverse Annuity Mortgage

A mortgage for which the borrower pledges home equity in return for regular (monthly) payments, rather than a lump sum distribution of loan proceeds. Repayment is usually not required until the home is sold or the borrower’s estate is settled, provided the borrower continues to live in the home and keeps current all taxes and insurance. See also "Home Equity Conversion Mortgage."

Second Mortgage

A second loan on real estate that already has a mortgage. It is subordinate to the first mortgage. Usually of shorter term and often at a higher interest rate than a first mortgage and is subordinate to that of the first mortgage.

Section or Section of Land

A parcel of land comprising one square mile or 640 acres.

Seller Disclosure

Requires sellers to inform buyers about known problems with the house that would lower its value.

Set Back Lines

Those lines which delineate the required distances for the location of structures in relation to the perimeter of the property.

Sub-surface Right

The right of ownership to things lying beneath the physical surface of the property.

Survey

The process of measuring land to determine its size, location and physical description. Usually performed by a licensed surveyor showing the results of measuring the land with its elevations, improvements, boundaries and its relationship to surrounding tracts of land. A survey is often required by the lender to assure him that a building is actually sited on the land according to its legal description. Also the resulting map or drawing is referred to as a survey.

Tax

As applied to real estate, an enforced charge imposed on persons, property or income, to be used to support the State. The governing body in turn utilizes the funds in the best interest of the general public.

Tax Service Fee

A fee paid to the mortgage company to verify that they actually pay the real estate taxes.

Tenancy by the Entirety

Ownership by married persons where each owns the entire estate, with the survivor taking the whole upon the other’s death.

Tenancy in Common

An estate or interest in land held by two or more persons, each having equal rights of possession and enjoyment, but without any right of succession by survivorship between the owners.

Tenant

Any person occupying real property with the owner’s permission.

Testament

Another term for a will. Commonly referred to as "last will and testament."

Testate

The estate or condition of leaving a will at death. "To die testate."

Testator

A man who makes or has made a testament or will.

Testatrix

A woman who makes or has made a testament or will.

Title

The evidence or right a person has to the ownership and possession of land. As generally used, the rights of ownership and possession of particular property. In real estate usage, title may refer to the instruments or documents by which a right of ownership is established (title documents), or it may refer to the ownership interest one has in the real estate.

Title Agency

Similar to other insurance agents, a title agency is authorized to issue title policies and prepare documents in connection with transactions for which it issues policies.

Title Defect

Any legal right to property claimed by a person other than the owner. Examples include unpaid real estate taxes or claims to the property, such as those of an unknown heir.

Title Examination

An examination of public records, laws, and court actions to make sure that a property’s seller is the legal owner and to disclose all other claims or encumbrances on the property affecting its ownership.

Title Exception

As part of the title search, a real estate attorney will list any “exceptions” to the title.

Title Insurance

Insurance against loss or damage resulting from defects or failure of title to a particular parcel of real property. Protects lenders or homeowners against loss of their interest in property due to legal defects in title.

Title Insurance Binder or Commitment

A report issued by a title insurance company binding or committing the title insurance company to issue the form of policy designated in the commitment or binder upon compliance with and satisfaction of requirements set forth in the commitment or binder.

Title Plant

The total facilities - records, equipment, fixtures, and personnel required to function as a title insurance operation.

Title Search

An examination of public records, laws, and court decisions to disclose the current facts regarding ownership of real estate.

Title Search or Examination

A check of the title records, generally at the local courthouse, to make sure the buyer is purchasing a house from the legal owner and there are no liens, overdue special assessments or other claims or outstanding restrictive covenants filed in the record, which would adversely affect the marketability or value of title.

Torrens Title

A system whereby, after court proceedings, a certificate is issued setting forth the extent of the applicant’s estate in land subject to the exceptions shown. Most popular in the early 1900’s, the system was adopted in 19 states. It is presently used only in parts of six states.

Township

A division of territory six miles square, containing 36 sections or 36 square miles.

Tract

A particular parcel of land.

Transfer Tax

One of the expenses paid by the seller on closing day as part of the closing costs, the transfer tax is based on a property’s sale price.

Trust

A property right held by one as a fiduciary for the benefit of another.

Trust Account

Escrow account maintained usually by an attorney.

Trustee

A party who is given legal responsibility to hold property in the best interest of or "for the benefit of" another.

VA Guarantee

An insurance contract in which the Veterans Administration (VA) insures that the named lender will recover a specific percentage of the loan amount from the insurer in the event the loan goes bad.

VA Mortgage

A mortgage insured by the Veterans Administration. Since the mortgage is insured is usually available at rates better than commercial loans and is only available to veterans of the armed services.

Variable Rate Mortgage

A loan in which the interest rate fluctuates with the cost of funds or some other index.

Vendee

A purchaser of real property under a land contract.

Vendor

A seller of real property under a land contract.

Vest

To pass to a person an immediate right or interest. Title may be said to vest in John Smith.

Vestee

A nonlegal term used by title insurers to indicate the owner of real property in a policy or report.

Warranty

A promise by the grantor of real property that he or she is the owner and will be responsible to the buyer if title is other than as represented.

Will

A written document providing for the distribution of property owned by a person after his or her death.

Zoning

The right of a municipality to regulate and determine the compatible character and use of property


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