Abstract of Title – a summary or digest 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
Appraisal – an opinion of value based upon of factual analysis
Appraisal Methods – Generally, there are three: cost approach, income approach, and market value (comparables) approach.
Appreciation – an increase in value of real estate
Assumption of Mortgage – the taking of title to property by a grantee, wherein he or she assumes liability for payment of an existing note secured by a mortgage or deed of trust against the property, thus becoming a co-guarantor for the payment of a mortgage or deed of trust note
Closing – the final settlement of real estate transaction between buyer and seller
Condominium – a structure of individual fee ownership of units combined with joint ownership of common area of the structure and the land
Contract for Deed – a contract ordinarily used in connection with the sale of property in cases when the seller does not wish to convey title until the buyer pays all or part of the purchase price
Conventional Loan – a mortgage securing a loan made by investors without governmental underwriting (i.e., not 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 instrument 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.
Earnest Money Deposit – down payment made by a purchaser as evidence of good faith
Easement – created by grant or agreement for a specific purpose; or, easement is the right, privilege or interest which one party has in the land of another (e.g., right of way)
Equity – the interest or value which an owner has in real estate over and above the liens against the real property
Escrow – the deposit of instruments and funds with instructions to a third neutral party (escrow agent) to carry out the provisions of an agreement or contract. When everything is deposited to enable carrying out the instructions, it is called a complete or perfect escrow.
F.H.A. Loan – a loan insured by the Federal Housing Administration, guaranteeing its payment in case of default by the owner
FMHA Loan – a loan by the federal government similar to FHA loan, usually used for residential property in rural areas
Impound Account – account held by the lender for payment of taxes, insurance, or other periodic debts against real property
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 of discharge of an obligation (e.g., judgments, taxes, mortgages, deeds of trust, etc.)
Marketable Title – merchantable title; title free and clear of objectionable liens or encumbrances
Mortgage – an instrument recognized by law by which property is hypothecated to secure the payment of a debt or obligation. Procedure for foreclosure in event of default is established by state law.
Mortgage Insurance – insurance written by an independent mortgage insurance company protecting the mortgage lender against loss incurred by a mortgage default, thus enabling the lender to lend a higher percentage on the sale price
Origination Fee – a fee charged by the lending institution
Personal Property – any property which is not real property (e.g., money, savings accounts, appliances, cars, boats, etc.)
Purchase Agreement – an agreement between a buyer and seller for the purchase of real estate
Quitclaim Deed – a deed operating as a release
Real Property – land and whatever by nature or artificial annexation is a part of it
Special Assessment – legal charge against real estate by a public authority to pay cost of public improvements (e.g., street lights, sidewalks, street improvements, etc.)
Sub-Division – a parcel of land that has been divided into smaller parts
Term of Mortgage – the period during which a mortgage must be paid
Trust Account – an account separate, apart and physically segregated from broker’s own account in which broker is required by law to deposit all funds collected for clients
V.A. Loan – a loan guaranteed by the Veterans Administration
Warranty Deed – a deed used 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
1031 Exchange – also referred to as a nontaxable sale, this enables property owners to trade an investment property for another investment property (or properties) without paying capital gain taxes on the transaction