Real Estate Glossary

A clause in a mortgage which allows the lender to demand payment of the outstanding balance at a specific time.

Associated with Adjustable Rate Mortgages. A limit on how high monthly payments or how much interest rates may change within a certain time period or the life of the mortgage.

A single-story house style made popular in New England. Often characterized by a steep roof with gables.

Accumulated goods and money which is most often used to generate additional income.

An outlay of funds designed to improve the income-producing capabilities of an asset or to extend its economic life.

The percentage (acceptable to an average buyer) used to determine the value of income property through capitalization.

Refinancing a mortgage at a higher amount than the current balance in order to transform a portion of the equity into cash.

A pliable material used to seal cracks or openings such as around windows.

Literally translated: ''Let the buyer beware.'' A common business tenet whereby the buyer is responsible for verifying any and all claims by the seller of property.

A document showing that the bearer has a certain amount of money, at a particular amount interest, on deposit with a financial institution.

An index based on the interest rate of six month CD's. Used to set interest rates on some Adjustable Rate Mortgages.

A document issued by the Veterans Administration that certifies eligibility for a VA loan.

Issued by an appropriate jurisdictional entity, this document certifies that a building complies with all building codes and is safe for use or habitation.

Usually based on an independent appraisal, a CRV for a particular property establishes the maximum amount which can be secured by a VA mortgage.

A document designating the legal owner of a parcel of real estate. Usually provided by a title or abstract company.

In areas where attorneys examine abstracts or chains of title, a written opinion, executed by the examining attorney, stating that title is vested as stated in the abstract.

Generally, any professional who has met the local or state requirements, and passed the appropriate certification exam, and is capable of appraising any type of property.

A sub-classification of appraiser who is only licensed to appraise residential property, usually up to four units.

The complete history of ownership of a piece of property.

Any personal property which is not attached to or an integral part of a property. Chattel is not commonly taken into consideration when appraising the value of real property.

Electrical devices which automatically open electrical circuits if they are overloaded.

Ownership of property that is not encumbered by any counter-claim or lien.

The date the documents are recorded and title passes from Seller to Buyer. On this date, the Buyer becomes the legal owner, and title insurance becomes effective.

A torturous process designed to induce cramping in a home buyer's hands by requiring signature on countless pieces of documentation that nobody has ever read. Or, the process whereby the sale of a property is consummated with the buyer completing all applicable documentation, including signing the mortgage obligation and paying all appropriate costs associated with the sale (CLOSING COSTS).

All appropriate costs generated by the sale of property which the parties must pay to complete the transaction. Costs may include appraisal fees, origination fees, title insurance, taxes and any points negotiated in the deal.

The document detailing the final financial arrangement between a buyer and seller and the costs paid by each.

The final procedure in the real estate sales process, where the sale and pertinent loan are completed by the execution of documents for recording. In some areas, this procedure is known as the closing of escrow.

An irregularity, possible claim, or encumbrance which, if valid, would adversely affect or impair the title.

A second person sharing obligation on the loan and title on the property.

A second party who signs a loan, along with the borrower, and becomes liable for the debt should the borrower default.

Ordinary coinsurance is defined as a transaction under which each of two or more insurers assumes a designated portion of the liability for the total risk and is liable for only such portion of any loss beginning at the first dollar of loss. (See Reinsurance.)

An asset which is placed at risk to secure the repayment of a loan.

Most commonly used to mean some security in addition to the personal obligation of the borrower.

By or at the side, additional or auxiliary. Mistakenly used to mean collateral security.

The process a lender takes to pursue a borrower who is delinquent on his payments in order to bring the mortgage current again. Includes documentation that may be used in foreclosure.

A percentage of the sales price or a fixed fee negotiated by an agent to compensate for the effort expended to sell or purchase property.

A binding contract with a title company to issue a specific title policy, showing only those exceptions contained in the commitment and any intervening matters after the date of the commitment and prior to the effective date of the policy. The commitment contains all information included in the preliminary title report, plus a list of the title company's requirements to insure the transaction. It also includes the standard exceptions from coverage that will appear in the policy.

Fees which are charged to the tenets or owners of properties to cover the costs of maintaining areas shared with other tenets or owners. Commonly found in condominium, PUD or office spaces.

Any areas, such as entryways, foyers, pools, recreational facilities or the like, which are shared by the tenets or owners of property near by. Commonly found in condominium, PUD or office spaces.

As opposed to statute law. Laws that have been established by custom, usage and courts over many years.

A driveway which is jointly owned, used and maintained by two or more persons. Usually, a portion of each owner's property is burdened by the driveway.

In many jurisdictions, any property which has been acquired by a married couple. The ownership of the property is considered equal unless stipulated otherwise by both parties.

Property acquired by husband, wife or both during marriage which gives each spouse an interest in the property whether each appears in title or not.

Sales that have similar characteristics as the subject property, used for analysis in the appraisal. Commonly called "comps."

An abbreviated term used by appraisers to describe properties which are similar in size, condition, location and amenities to a subject property who's value is being determined. The Uniform Standards of Professional Appraisal Practice (USPAP) establish clear guidelines for determining a comparable property.

Interest paid on the principal amount, as well as any accumulated interest.

Additional value granted by a buyer or seller to entice another party to complete a deal.

The official process by which a property is deemed to be uninhabitable or unusable due to internal damage or other external conditions.

The taking of private property by the government for public use - as for a street or a storm drain - upon making just compensation to the owner. This right or power of government to take property for a necessary public use is called "eminent domain."

The transition of water vapor to liquid. Typically forms in areas of high humidity.

A development where individual units are owned, but common areas and amenities are shared equally by all owners.

Commonly, the conversion of a rental property such as an apartment complex into a CONDOMINIUM-style complex where each unit is owned rather than leased.

The pipe through which electric wiring is run.

A person appointed by the court to care for the person and/or property of an incompetent adult or an adult unable to care for their person or property because of health.

A loan made to a builder or home owner that finances the initial construction of a property, but is replaced by a traditional mortgage one the property is completed.

Notice imparted by the public records of the county when documents entitled to recording are recorded.

Connected to or touching along an unbroken boundary.

Something that must occur before something else happens. Often used in real estate sales when a buyer must sell a current home before purchasing a new one. Or, when a buyer makes an offer the requires a complete home inspection before it becomes official.

A legally binding agreement, oral or written, between two parties.

A traditional, real estate financing mechanism that is not backed by any government or other agency (FHA, VA, etc.).

A mortgage that begins as and adjustable, that allows the borrower to convert the loan to a fixed rate within a specific timeframe.

An instrument in writng, such as a deed or trust deed, used to transfer (convey) title to property from one person to another.

A form of ownership where each resident of a multiunit property owns a share in a cooperative corporation that owns the building. With each resident having rights to a specific unit within the building.

A situation where a person's employer pays all or some of the expenses associated with moving from one location to another, usually over a substantial distance. Relocation expenses often include the amounts, such as brokerage fees, incurred in the selling and buying of the employee's primary residence.

An entity authorized by law and established by a group of people, the stockholders, which is endowed with certain rights, privileges and duties similar to an individual.

An index of financial institutions costs used to set interest rates for some Adjustable Rate Mortgages.

A stipulation in any mortgage that, if not met, can be cause for the lender to foreclose.

(1) A formal agreement or contract between two parties in which one party gives the other certain promises and assurances, such as the covenant of warranty in a warranty deed. (2) Agreements or promises contained in deeds and other instruments for performance or nonperformance of certain acts, or use or nonuse of property in a certain manner.

Commonly called CC & R's the term usually refers to a written recorded declaration which sets forth certain covenants, conditions, restrictions, rules or regulations established by a subdivider or other landowner to create uniformity of buildings and use within tracts of land or groups of lots. The restrictions also can be established by deed. CC & R's are sometimes referred to as private zoning.

A loan of money for the purchase of property, real or personal. Credit is either secured by an asset, such as a home, or unsecured.

A record of debt payments, past and present. Used by mortgage lenders in determining credit worthiness of individuals.

A detailed report of an individuals credit, employment and residence history prepared by a credit bureau. Used by lenders to determine credit worthiness of individuals.

Large companies that gather and store financial and credit information about individuals who apply for credit.

A person to whom money is owed.

A dead-end street. One with only one entrance/exit.