Real Estate Terms
Real Estate
Terms
This list of Real Estate Terms are for information only.
Please check current applicable laws, rules and regulations
because they do change. If you have any comments on the list,
(inaccuracies or suggested additions), please drop me an
E-Mail.
Select the first letter of the word from the list above
to jump to the appropriate section of the glossary or just
scroll down to the appropriate section.
- A -
- Abandonment
- The voluntary relinquishment of rights of
ownership or another form of interest (an easement) by failure
to use the property over an extended period of time. (see
related subject Escheat)
- Abstract (Of Title)
- A written history of the title to a property
including every owner and every claim since its original owner.
It is the result of a title search and indicates all legal
claims to the property.
- 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 contract
conditions.
- Acceptance
- Refers to a legal term denoting acceptance
of an offer. A buyer offers to buy and the seller accepts the
offer
- Acre
- A measure of land, equal to 160 square. rods
(43,560 square.feet.). An acre is approximately 209' x
209'.
- Acknowledgment
- A formal declaration before an authorized
official (usually a notary public) by a person who has executed
a document, that he did in fact execute (sign) the
document
- Addendum
- Something added. A list or other items added
to a document, letter, contract, escrow instructions,
etc.
- Alienation Clause
- A clause within a loan instrument calling
for a debt in its entirety upon the transfer of ownership of
the secured property. Also called a "due on sale"
clause.
- Agent
- Acts of behalf of another, representing that
person's interests and serving as an intermediary.
- Amortization
- A payment plan which enables the borrower to
reduce their debt gradually through monthly payments of
principal.
- Annual Percentage Rate
(APR)
- The total cost or finance charge for a loan
per year, expressed as a percentage of the loan amount. It is
the sum of the interest and any other fees, such as discount
points, compared to the amount of the loan. The lender is
required by the Truth-In-Lending Act to disclose the APR using
a procedure prescribed by the federal government.
- Appraisal
- A report made by a qualified person (or
appraiser) which states their opinion of the estimated value
and quality of the property as of a given date.
- Appraised Value
- An estimate of property value, made by a
qualified expert.
- Assessed Value
- Value placed on property by the tax
assessor. Usually not the same value figure as the
"Appraised Value".
- Assessment
- The valuation of property for the purpose of
levying a tax, or the amount of the tax levied.
- Assessor
- One appointed by the local government entity
to assess property for taxation.
- Assignment
- A transfer or making over to another the
whole of any property, real or personal, or of any estate or
right therein. To assign is to transfer.
- Assumable Mortgage
- A mortgage that can be assumed by another
without changing any conditions or interest rates of the
original contract.
- Assumption of Mortgage
- An obligation undertaken by the purchaser of
property to be personally liable for payment of an existing
mortgage. In an assumption, the purchaser is substituted for
the original mortgagor in the mortgage instrument and the
original mortgagor is to be released from further liability in
the assumption, the mortgage lender consent is usually
required.
- Attachment
- Seizure of property by court order, usually
done in pending law suit to make property available in case of
judgment.
Select Another Letter
- B -
- Balloon Payment
- The final installment paid at the end of the
term of a note; used only when preceding installments were not
sufficient to pay off the note in full.
- Bill of Sale
- An instrument used to transfer personal
property
- Blanket Mortgage (Trust
Deed)
- A single mortgage or trust deed which covers
more than one piece of real estate
- Bond
- An insurance agreement by which one party is
insured against loss or default by a third party. In the
construction business a performance bond ensures the interested
party that the contractor will complete the project. A bond can
also be a method of financing debt by a government or
corporation which is interest-bearing and has priority over
stock in terms of security.
- Breach
- Violation of an obligation in a
contract
- Binder or "Offer to
Purchase"
- A preliminary agreement, secured by the
payment of earnest money, between a buyer and seller as an
offer to purchase real estate. A binder secures the right to
purchase real estate upon agreed terms for a limited period of
time. If the buyer changes their mind or is unable to purchase,
the earnest money is forfeited unless the binder expressly
provides that it is to be refunded.
- Broker, Associate
- Each real estate business or brokage must
have a licensed Broker who is responsible for the operation of
the business. Since there can only be a single Broker for each
brokage those real estate agents that have satisfied the
licensing requirements for a Broker are listed as Associate
Brokers.
- Broker, Real Estate
- An individual licensed by the state to
conduct the business of buying, selling and managing real
estate properties and land. He/She normally receives a
commission for their services of bringing together buyers and
sellers, owners and tenants, in exchange agreements. Each Real
Estate business must be headed by a Real Estate Broker. Real
Estate Agents must "hang their license" with a Broker
in order to conduct business.
- Building Code
- A set of stringent local municipal, state
and national laws that control the construction of buildings,
design, materials and other similar factors
- Building Line or Setback
- Distances from the ends and/or sides of the
lot beyond which construction may not extend. The building line
may be established by a filed plat of subdivision, by
restrictive covenants in deeds or leases, by building codes, or
by zoning ordinances.
- Built-Ins
- Items that are not movable, such a stoves,
ovens, microwave ovens, dishwashers.
- Buydown
- A reduction in the interest rate or monthly
payments accomplished by payment of an additional fee. The
reduced interest rate may hold for all or part of the loan
term.
- Buyers Market
- When sellers have more homes for sale than
there are interested buyers
Select Another Letter
- Capital Gains
- A term used for income tax purposes which
represents the gain realized from the sale of an asset less the
purchase price and deductible expense.
- Capitalization
- An appraising term used in determining value
by considering net operating income and a percentage of
reasonable return on investment.
- Cash Flow
- The owner's spendable income after operating
expenses and debt service is deducted
- Chain Of Title
- A history of conveyances and encumbrances
affecting the title as far back as records are
available
- Certificate of Reasonable
Value
- Issued by the Veterans Administration (VA)
to qualifying veterans, the document states the maximum amount
of principal it will guarantee for a mortgage loan.
- Client
- One who employs another's services, as in an
attorney, real estate agent, insurance agent, etc.
- Closing
- In the sale of real estate it is the final
moment when all documents are executed and recorded and the
sale is complete. Also a general selling term where a sales
person is attempting to sell something and the buyer agrees to
purchase
- Certificate of Title
- A certificate issued by a title company or a
written opinion rendered by an attorney that the seller has
good marketable and insurable title to the property which he is
offering for sale. A certificate of title offers no protection
against any hidden defects in the title which an examination of
the records could not reveal. The issuer of a certificate of
title is liable only for damages due to negligence. The
protection offered a homeowner under a certificate of title is
not as great as that offered in a title insurance policy. (See
Clear Title)
- Clear Title
- When the seller holds the only legal claim
to the property and no one holds any demands on that seller for
the property (i.e. there are no defects or encumbrances), he
has a clear title. In contrast, a marketable title and an
insurable title may include some minor claims on the property,
but they are insignificant to the transfer of the
property.
- Closing (or Day Of
Closing)
- The final step of the sale transaction in
which the title to, or ownership of, real estate is transferred
from the owner to the buyer.
- Closing Costs
- Costs, in addition to the price of the
property itself, that are due at closing. They normally include
origination fees, discount points, attorney's fees, costs for
title insurance, surveys, recording documents and prepayments
of real estate taxes and/or insurance premiums held by the
lender.These costs are in addition to price of the property and
are items prepaid at the closing.
- Closing Statement
- A list of the final accounting of all Moines
of both buyer and seller prepared by an escrow agent which
notes all costs each must pay at the completion of a real
estate transaction.
- Cloud (On Title)
- An outstanding claim or encumbrance which
adversely affects the marketability of title.
- Commission
- Money paid to a real estate agent or broker
by the seller as compensation for finding a buyer and
completing the sale. Usually it is a negotiated percentage of
the sale price- - normally, 6 to 7 percent on houses, 10
percent on land.
- Common Area
- That area owned in common by owners of
condominiums and planned sight development homes within a
subdivision.
- Community Property
- Both real and personal property accumulated
by a husband and wife after marriage through joint efforts of
both living together.
- Condemnation
- A declaration by governing powers that a
structure is unfit for use.
- Conditional Sales
Contract
- A contract for the sale of property where
the buyer has possession and use, but the seller retains title
until the conditions of the contract have been fulfilled. Also
known as a land contract.
- Co-Op Housing
- An apartment building or a group of
dwellings owned by a corporation, the stockholders of which are
the residents of the dwellings. It is operated for their
benefit by their elected board of directors. In a cooperative,
the corporation or association owns title to the real estate. A
resident purchases stock in the corporation which entitles him
to occupy a unit in the building or property owned by the
cooperative. While the resident does not own their unit, he has
an absolute right to occupy their unit for as long as he owns
the stock.
- Condominium
- Individual ownership of a dwelling unit and
an individual interest in the common areas and facilities which
serve the multi- unit project.
- Consideration
- Anything of value given to induce someone
into entering into a contract.
- Construction Loan
- The short-term financing of improvements on
real estate. Once the improvements are completed a 'take
out" loan for a longer term is usually issued.
- Contingency
- A condition upon which a valid contract is
dependent. For example; the sale of a house is contingent upon
the buyer obtaining adequate financing.
- Contract
- An agreement between two or more parties,
written or oral, to do or not to do certain things. It is
strongly recommended that all contracts and/or agreements be
only in written. Oral contracts and/or agreements are difficult
to enforce.
- Convey or Conveyance
- To transfer an interest in real estate to
another party (usually the conveyance involves a transfer of
property taxes paid by the corporation from your income
tax).
- 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,
etc.
- 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.
- Counter Offer
- An offer in direct response to an offer and
may contain any proposed set of conditions that would modify
the original offer to make it acceptable.
- Covenants
- Agreements written into deeds and other
instruments stating performance or non-performance of certain
acts or noting certain uses or non-uses of
property.
Select Another Letter
- D -
- Deed
- A formal written document by which title to
real property is transferred from one owner to another.
Sometimes the deed is also called a title document. The deed
should contain an accurate description of the property being
conveyed, should be signed and witnessed and should be
delivered to the purchaser at recording. There are two parties
to a deed: the grantor and the grantee. (See also deed of
trust, general warranty deed, quitclaim deed, and special
warranty deed.)
- Deed of Trust
- Deed of Trust is used in place of a mortgage
or a deed to secure debt. While there are only two people
involved in a mortgage, the borrower and the lender, there are
three people involved in a deed of trust: the borrower, the
lender and the trustee. Here, the borrower transfers the legal
title for the property to the trustee who holds the properly as
a security for the debt. If the borrower pays the mortgage as
agreed, the trustee gives the legal title to the owner. If the
borrower does not pay the mortgage as agreed, the trustee can
sell the property.
- Default
- Failure to make mortgage payments as agreed
to in a commitment based on the terms and at the designated
time set forth in the mortgage or deed of trust.In the event of
default, the Mortgage may give the lender the right to
accelerate payments, take possession and receive rents, and
start foreclosure. Defaults may also come about by the failure
to observe other conditions in the mortgage or deed of
trust.
- Depreciation
- Decline in value of a house due to wear and
tear, adverse changes in the neighborhood, or any other
reason.
- Down Payment
- The amount of money to be paid by the
purchaser at closing and is applied against the purchase
price.
Select Another Letter
- E -
- Earnest Money
- The deposit money given to the seller or
their agent by the potential buyer upon the signing of the
sales agreement to show that they are serious about buying the
property. If the sale goes through, the earnest money is
applied against the down payment. If the sale does not go
through, the earnest money will be returned or forfeited
depending upon the circumstances and the written sales
agreement.
- Easement Rights
- A right- of- way granted to a person or
company authorizing access to or over the owner's land. An
electric or water company obtaining a right- of- way across
private property to install overhead lines or underground pipe
are common examples. They now can enter the easement area to
perform maintenance etc.
- Economic Obsolescence
- Loss of useful life and desirability of a
property through economic forces, such as change in zoning,
changes in traffic flow, etc., rather than
deterioration.
- Encroachment
- An obstruction, building, or part of a
building that intrudes beyond a legal boundary onto neighboring
private or public land, or a building extending beyond the
building line.
- Encumbrance
- A legal right or interest in land that
affects a good or clear title, and diminishes the land's value.
It can take numerous forms, such as zoning ordinances, easement
rights, claims, mortgages, liens, charges, a pending legal
action, unpaid taxes, or restrictive covenants. An encumbrance
does not legally prevent transfer of the property to another. A
title search should reveal the existence of such encumbrances,
and it is up to the buyer to determine whether they want to
purchase with the encumbrance, or what can be done to remove
it.
- Equity
- The value of a homeowner's unencumbered
interest in real estate. Equity is computed by subtracting from
the property's fair market value the total of the unpaid
mortgage balance and any outstanding liens or other debts
against the property. A homeowner's equity increases as they
pay off their mortgage or as the property appreciates in value.
When the mortgage and all other debts against the property are
paid in full the homeowner has 100% equity in their
property.
- Escalation Clause
- A clause in a lease providing for an
increased rent at a future time due to increased costs to
lessor, as in cost of living index, tax increases,
etc.
- Escheat
- The reverting of property to the state in
the absence of heirs.
- Escrow
- Funds paid by one party to another (the
escrow agent) to hold until the occurrence of a specified
event, after which the funds are released.
- Escrow Account
- A special bank account maintained by the
tender or an escrow agent. Funds are set aside so that the
lender can pay the taxes, hazard and mortgage insurance, HOA
rents and other special costs on the mortgage or property as
they come due. Each month a certain portion, called the escrow
payment, of the monthly mortgage payment goes into this
account.
- Escrow Payment
- Payments made to an escrow
account.
- Estate
- The ownership interest of a person in real
property. Is also used to refer to a deceased person's
property. And often used to describe a large house with
spacious grounds
- Examination of Title
- A review which reveals the previous owners
and the encumbrances on a piece of real estate. To conduct this
review, a settlement agent must search the public records or
examine an abstract of title.
Select Another Letter
- F -
- Fair Market Value
- An appraisal term. It is the price that you,
the buyer, are willing to pay and that the seller is willing to
accept for a piece of property. In arriving at the price, both
you and the seller must be reasonably aware of the pertinent
facts and be under no obligation to buy or sell.
- Fee Simple
- The largest possible interest in real
estate. When you own property in fee simple, you enjoy
substantial rights to it, and may dispose of it as you see fit.
This may includes selling it, using it for any lawful purpose
and leaving it to your heirs.
- Fixtures
- Items affixed to buildings or land usually
in such a way that they cannot be moved without damage to
themselves or the property, such as plumbing, electrical
fixtures, trees, etc.
- Foreclosure
- A legal term applied to any of the various
methods of enforcing payment of the debt secured by a mortgage,
or deed of trust, by taking and selling the mortgaged property,
and depriving the mortgagor of possession.
- Front Footage
- The linear measurement along the front of a
parcel. That portion of the parcel which fronts the street or
walkway.
- Functional Obsolescence
- Loss in value due to out-of-date or poorly
designed equipment while newer equipment and structures have
been invented since it's construction.
Select Another Letter
- G -
- 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.
- Grantee
- That party in the deed who is the buyer or
recipient.
- Grantor
- That party in the deed who is the seller or
giver.
- Ground Lease
- A lease of vacant land
Select Another Letter
- H -
- Hazard Insurance
- Protects against damages caused to property
by fire, windstorms, and other common hazards.
- Home Owners Association
(HOA)
- An association of homeowners within a
community formed to improve and maintain the quality of the
community. An association formed by the developer of
condominiums or planned developments.
- 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.
Select Another Letter
- I -
- Interest
- A charge paid for borrowing money. (See
mortgage note)
- Intestate
- A person who dies without leaving a
will
- Involuntary Lien
- A lien which attaches to property without
the consent of the owner such as tax liens as opposed to
voluntary liens such as mortgages.
Select Another Letter
- J -
- Joint Tenancy
- Joint ownership by two or more persons with
right of survivorship. Upon the death of a joint tenant, their
interest does not go to their heirs, but to the remaining joint
tenants.
Select Another Letter
- K -
Select Another Letter
- L -
- Lease
- A contract between the owner of real
property, called the lessor, and another person referred to as
the lessee, covering all conditions by which the lessee may
occupy and use the property.
- Lease With Option To
Purchase
- A lease where the lessee has the option to
purchase the leased property. The terms of the purchase option
must be set forth in the lease.
- Legal Description
- The surveyed geographical identification of
a parcel of land
- Lessee
- One who contracts to rent property under a
specified lease agreement.
- Lessor
- An owner who contracts to lease to a
lessee.
- Lien
- A claim by one person on the property of
another as security for money owed. Such claims may include
obligations not met or satisfied, judgments, unpaid taxes,
materials, or labor.
- Life Estate
- A estate in real property for the life of a
person
- Listing
- A contract between the property owner and a
Real Estate Broker to sell the owner's property
Select Another Letter
- M -
- Marketable Title
- A title that is free and clear of
objectionable liens, clouds, or other title defects. A title
which enables an owner to sell their property freely to others
and which others will accept without objection.
- Mechanic's Lien
- A lien created by statute on a specific
property for labor or materials contributed to an improvement
on that property.
- Mortgage
- A contract, lien or claim against real
property given by the buyer to the lender as security for money
borrowed.
- 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
property.
- Mortgage Insurance Premium
(MIP)
- The amount the borrower is required by the
lender to pay for mortgage insurance. It helps protect the
lender in cases of default. It is required by lenders when the
down payment is less than 20% (or some other specified
percentage) for conventional loans and for all FHA loans. The
premium is paid periodically either to a private mortgage
insurance company or to the FHA which insures residential
mortgage loans. Currently FHA insured mortgages require a
payment that represents an annual rate of one- half of one
percent paid by the mortgagor on a monthly basis. The payment
is normally a portion of the mortgage payment that is set aside
in the escrow account.
- 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.
- Mortgage (Open- End)
- 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.
- Mortgagee
- The lender in a mortgage
agreement.
- Mortgagor
- The borrower in a mortgage
agreement.
- Multiple Listing Service
(MLS)
- An organization of brokers, whereby all
members have an equal opportunity to find a buyer for the
listed properties.
Select Another Letter
- N -
- Negative Amortization
- When monthly payments are not enough to
cover interests costs, they are added to the principal balance,
and you may end up owing more than when you started. This is
most likely to occur with ARMsthat have
payment caps.
- Notary Public
- One who is authorized by federal or local
government to attest authentic signatures and administer
oaths.
- Note
- A written instrument acknowledging a debt
and promising payment
Select Another Letter
- O -
- Offer
- A presentation of a proposed contract,
agreement or offer to purchase.
- Option
- A right given, for consideration, to
purchase or lease property upon stipulated terms within a
specific period of time
- Origination Fee
- Application fee(s) for processing a proposed
mortgage.
Select Another Letter
- P -
- 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.
- Points
- Sometimes called "discount
points." A point is one percent of the amount of the
mortgage loan. For example, if a loan is for $25,000, one point
is $250. Points are charged by a lender to raise the yield on
their loan at a time when money is tight, interest rates are
high, and there is a legal limit to the interest rate that can
be charged on a mortgage. Buyers are prohibited from paying
points on HUD or Veterans Administration guaranteed loans
(sellers can pay, however). On a conventional mortgage, points
may be paid by either buyer or seller or split between
them.
- Power of Attorney
- A document that gives the authority to act
in another person's behalf, at their request. The person
granted such authority is called the
attorney-in-fact.
- Preliminary Title Search
- A title search conducted by a title
insurance company before it commits itself to insure the rights
in property ownership.
- Prepayment
- Payment of mortgage loan, or part of it,
before due date.
- Prepayment Penalty
- 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.
- Principal
- The basic element of the loan as distinguished from
interest and mortgage insurance premium. In other words,
principal is the amount upon which interest is paid.
- Private Mortgage Insurance
(PMI)
- Insurance provided by a private company helping to protect
the mortgage lender against mortgage default. Generally, the
insurance is required by the lender when the down payment is
less than 20'% of the properly value. The tender requires the
borrower to pay the insurance premiums.
- Purchase Agreement
- An agreement between buyer and seller
denoting price and terms of the sale. (see Sales
Agreement)
Select Another Letter
- Q -
Select Another Letter
- R -
- Real Estate Agent
- A state licensed person who works under the direction of a
Real Estate Broker selling and renting real estate.
- Real Estate Broker
- An individual licensed by the state to
conduct the business of buying, selling and managing real
estate properties and land. He/She normally receives a
commission for their services of bringing together buyers and
sellers, owners and tenants, in exchange agreements. Each Real
Estate business must be headed by a Real Estate Broker. Real
Estate Agents must "hang their license" with a Broker
in order to conduct business.
- Realtor®
- A Real Estate Agent or Broker holding membership in a real
estate board affiliated with the National Association Of
Realtors®.
- Recording
- A legal document that identifies the ownership of real
property that is recorded in a book of public records. When
property is sold, the deed is recorded. This gives notice of
home ownership to all other interested parties.
- Refinancing
- The process of the same mortgagor paying off one loan with
the proceeds from another loan.
- Restrictive Covenants
- Private restrictions limiting the use of real property.
Restrictive covenants are created by deed and may "run
with the land," binding all subsequent purchasers of the
land, or may be "personal" and binding only between
the original seller and buyer. The determination whether a
covenant runs with the land or is personal is governed by the
language of the covenant, the intent of the parties, and the
law in the State where the land is situated. Restrictive
covenants that run with the land are encumbrances and may
affect the value and marketability of title. Restrictive
covenants may limit the density of buildings per acre, regulate
size, style or price range of buildings to be erected, or
prevent particular businesses from operating or minority groups
from owning or occupying homes in a given area. (This latter
discriminatory covenant is unconstitutional and has been
declared unenforceable by the U.S. Supreme Court.)
Select Another Letter
- S -
- Sales Agreement
- Sometimes called a Purchase Agreement 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.
- Seller's Market
- When there are more buyers looking for more houses than
sellers have offered for sale.
- Setback or Building Line
- Distances from the ends and/or sides of the
lot beyond which construction may not extend. The building line
may be established by a filed plat of subdivision, by
restrictive covenants in deeds or leases, by building codes, or
by zoning ordinances. IE: A setback may state that no
structures may exist closer than 30 feet of a
roadway.
- 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.
- Special Lien
- A lien that binds a specified piece of property, unlike a
general lien, which is levied against all one's assets. It
creates a right to retain something of value belonging to
another person as compensation for labor, material, or money
expended in that person's behalf. In some localities it is
called "particular" lien or "specific"
lien. (See lien.)
- Special Warranty Deed
- A deed in which the grantor conveys title to the grantee
and agrees to protect the grantee against title defects or
claims asserted by the grantor and those persons whose right to
assert a claim against the title arose during the period the
grantor held title to the property. In a special warranty deed
the grantor guarantees to the grantee that they have done
nothing during the time that they have held title to the
property which has, or which might in the future, impair the
grantee's title.
- Survey
- A map or plat made 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 required by the lender to assure
that a building is actually sited on the land according to its
legal description.
Select Another Letter
- T -
- Tenancy by the Entirety
- The co-ownership of real estate by a married couple. Upon
the death of one spouse, the other automatically owns the
entire property.
- Tenancy in Common
- When two or more people are legally granted interest in the
same property, they hold a tenancy in common. The interest need
not be equal nor created at the same time as in joint tenancy.
If one of them dies, the others do not automatically own their
interest, as they would in a joint tenancy. their interest
passes to their heirs.
- Title
- 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 Defect
- Any legal right to a property claimed by a person other
than the owner. Examples may include unpaid real estate taxes
or claims to the property such as those of an unknown
heir.
- Title Insurance
- Protects the insured up to a specified amount against
losses arising from claims against the property due to a title
defect. A mortgagee's (e.g. lender's) title insurance policy
does not protect the owner. Owner's coverage may be purchased
to protect the owner's equity interest.Protects lenders or
homeowners against loss of their interest in property due to
legal defects in title. Title insurance may be issued to a
"mortgagee's title policy." Insurance benefits will
be paid only to the "named insured" in the title
policy, so it is important that an owner purchase an
"owner's title policy", if he desires the protection
of title insurance.
- Title Search or
Examination
- An examination of public records, laws and court actions to
make sure that the seller is the legal owner and to disclose
all other claims or encumbrances on the property affecting its
ownership.
- Trustee
- A party who is given legal responsibility to hold property
in the best interest of or "for the benefit of"
another. The trustee is one placed in a position of
responsibility for another, a responsibility enforceable in a
court of law. (See deed of trust.)
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- U -
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- V -
- Variable Interest Rate
- A fluctuating interest rate which can go up or down
depending on the going market rate.
- Voluntary Lien
- A voluntary lien by the owner such as a mortgage, as
opposed to involuntary liens (taxes).
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- W -
- Waive
- To relinquish, or abandon. To forego a right to enforce or
require anything.
- Wrap-Around Mortgage
- A second mortgage which is subordinate to but includes the
face value of the first mortgage.
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- X -
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- Y -
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- Z -
- Zoning Ordinances
- Local governments establish and can sometimes change the
types of land usage that affect any property in their area. The
basic zoning categories are: residential, commercial and
industrial. To build a business on property zoned for
residences, you must request and wait until the property is
re-zoned for business use.
Real Estate Terms
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