Glossary of Real Estate Terms
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
ACCELERATION CLAUSE
Stipulation in a mortgage that the entire unpaid balance of the debt may become due & payable if a default of expressed conditions should occur.
ACCRETION
Gradual addition of land caused by natural forces, such as wind,tide,flood and water course deposits.
ADJUSTABLE RATE MORTGAGE
A financing technique in which the lender can raise or lower the interest rate according to a set index.
AD VALOREM
According to the value; in proportion to worth.
ADVERSE POSSESSION
A method of obtaining title to real property by occupying it in an open and hostile manner contrary to the interests of the owner.
AGENT
A representative, one who is authorized to act on behalf of another.
ANNUAL PERCENTAGE RATE (APR)
Total yearly cost of credit
APPRAISED VALUE
Estimated worth of a property determined by someone qualified in valuation.
ASSEMBLAGE
The combining of two or more adjoining properties into one tract.
ASSIGNEE
Person to whom a right or interest is transferred
ASSIGNOR
Person who gives his or her legal rights or interests to another person.
ASSOCIATE
Person working for a broker
ASSUMPTION OF MORTGAGE
The taking over of an existing mortgage by a buyer.
ATTORNEY- IN- FACT
One who is authorized to perform certain acts for another under a power of attorney.
BALLOON PAYMENT
A single, large payment made at maturity of a partially amortized mortgage to pay off the debt in full.
BLANKET MORTGAGE
One debt instrument covering two or more parcels.
BUYDOWN
A financing technique in which points are paid to the lender by the seller or builder that lowers (buys down) the effective interest rate paid by the buyer/borrower, thus reducing the amount of the monthly payment for a set period of time.
CAPITAL GAIN
The profit from the sale of an asset, including real property.
CAVEAT EMPTOR
Let the buyer beware.
CHAIN OF TITLE
A successive listing of all previous holders of title (owners) back to an acceptable starting point.
CLOSING
Final settlement between the buyer and seller; the date on which title passes from the seller to the buyer
CLOUD ON TITLE
Any defect, valid claim, or encumbrance that serves to impair the title or curtail an owner’s rights.
COMPARABLE PROPERTY
A recently sold property similar to one being evaluated.
CONDOMINIUM
A multi unit project consisting of individual ownership of a dwelling unit and undivided ownership of common areas.
CONVENTIONAL MORTGAGE
A real estate loan granted that is neither FHA or VA guaranteed. (see FHA/VA)
COUNTER OFFER
A rejection of the original offer by proposing a new offer, thereby terminating the original offer.
COVENANT
A warranty, guarantee, or promise formally given in a legal document.
DEED
A type of conveyance; a written instrument to transfer title to real property from one party to another.
DEED RESTRICTIONS
Provision placed in deeds to control future uses of the property.
DEFEASANCE CLAUSE
A provision in a mortgage that specifies the terms and conditions to be met in order to avoid default and thereby defeat the mortgage.
DEPOSIT
Earnest money or some other valuable consideration given as evidence of good faith to accompany an offer to purchase or rent.
DISCOUNT POINTS
A method for increasing a lenders yield, normally paid at closing, approx 1% of the total loan, these points are paid to decrease the interest rate on the loan.
DOWN PAYMENT
A portion of a purchase price paid prior to closing, not part of the mortgage loan.
DUE ON SALE CLAUSE
A provision in a conventional mortgage that entitles the lender to require the entire loan balance to be paid in full if the property is sold.
EARNEST MONEY DEPOSIT
Money put down by a buyer to show he /she is serious about buying the property. This would be returned if an offer is rejected by the seller; it may be forfeited depending on circumstances if the buyer pulls out.
EMINENT DOMAIN
The right given to a unit of government to take private property involuntarily if taken for public use and a fair price is paid to the owner.
ESCROW ACCOUNT
An account in a bank created to hold money in trust.
Mortgage escrow accounts are set up to hold money for property taxes and insurance, normally paid monthly to the escrow account. The taxes and insurance are then paid by the mortgage company when they become due.
FAIR HOUSING ACT
An act contained in Title V111 of the Civil Rights Act of 1968 that created protected classes of people and prohibits discrimination when selling or renting residential property when based on race, color, religion, sex, national origin, familial status or handicap status.
FANNIE MAE
A federally chartered enterprise owned by private stockholders, they buy residential mortgages and convert them to securities for sale to investors. Fannie Mae provides funds so lenders can loan to potential home buyers.
FDIC
Federal Deposit Insurance Corp, a Federal agency that insures deposits of members banks & savings associations.
FEE SIMPLE
The most comprehensive and complete interest one can hold in real property; freehold estate.
FHA
Federal Housing Assoc.
Established in 1934 to increase home ownership opportunities, they assist home buyers by providing mortgage insurance to lenders to cover losses when a borrower defaults on the loan.
FREDDIE MAC
A secondary mortgage market institution that buys & sells conventional, FHA & VA loans, this is a federally chartered corporation.
FREE AND CLEAR
Title to real property that is absolute & unencumbered.
GENERAL WARRANTY DEED
An instrument of conveyance containing the strongest and most comprehensive promises of further assurance possible from the seller to convey to a buyer.
GRANTOR
Party who signs and gives a deed; seller.
HOME INSPECTION
A full examination of the structure and mechanics of the home, this makes a buyer aware of any repairs or problems with the home. Some sale contracts will stipulate ‘with right to inspect’.
HOME WARRANTY
Protection for appliances and anything mechanical in the home, this does not cover the structure, this would cover items in the home not covered by the homes insurance. Normally paid annually.
HUD 1 STATEMENT
Closing statement or settlement sheet showing all closing costs, must be given to borrower before closing or at the closing.
INTEREST RATE
The price paid for the use of borrowed money.
JUDGEMENT
Decree of a court that not only declares that one party owes another party a debt but also fixes the debt amount.
JUST VALUE
The fair market value.
KEY LOT
A lot that has added value because of its strategic location.
LIEN
A claim on property for payment of a debt.
LIS PENDENS
A pending legal action.
LOAN TO VALUE RATIO (LTV)
Relationship between amount borrowed and appraised value (or sale price) of a property.
MILLAGE
A tax rate, expressed as the number of mills to be applied.
MORTGAGE BROKER
A person who finds a lender for a potential borrower and vice versa.
MORTGAGE BANKER
A person or company who makes loans with the expectation of reselling them
to institutional lenders.
NOTE
Legal evidence of a debt that must accompany a mortgage in FLORIDA; a legally executed pledge to pay a stipulated sum of money. Also known as a Promissory Note.
PRE APPROVE
A lender commits to lend funds to a borrower under certain conditions; normally the pre approval letter is good for 30 days from the date it was written.
PUD
Planned unit development
A residential project with mixed land uses and high residential density.
PREPAYMENT CLAUSE
A provision in a mortgage that allows the borrower to pay the mortgage debt ahead of time without penalty.
PRIVATE MORTGAGE INSURANCE (PMI)
Needed to insure the entire mortgage representing more than 80 percent of appraised value or purchase price.
QUIT CLAIM DEED
A deed that will convey any present interest, claim or title to real property that the seller may own.
QUIET TITLE
A suit or action in a court to remove a defect, cloud or claim against the title to real property.
RADON
A radioactive gas found in some properties than can cause health problems over time.
RESPA-
REAL ESTATE SETTLEMENT PROCEDURES ACT
A law protecting consumers during the loan and real estate process by requiring lenders to disclose all costs, practices.
REALTOR®
A real estate agent or broker who is a member of the National Assoc. of Realtors.®
RESTRICTIVE COVENANTS
Conditions placed by developers that effect how the land can be used in an entire subdivision.
SPECIAL ASSESSMENTS
Taxes levied against properties to pay for all or part of improvements that will benefit the properties.
STATUTE OF FRAUDS
An act that requires certain real estate contracts affecting title to real property be in writing in order to be enforceable
STEERING
Discriminatory acts against buyers.
SUBJECT PROPERTY
The property under discussion or appraisal.
SUBDIVISION PLAT MAP
A plan of a tract of land subdivided into lots and showing required or planned amenities.
SURVIVORSHIP (right of)
A legal concept where the surviving owners of a joint interest in real property are entitled to the interest formally owned by one or more deceased owners.
TAX CERTIFICATE
A document sold by a local tax authority granting the person who buys the certificate the right to receive delinquent taxes plus interest when paid by the legal property owner.
TITLE INSURANCE
A policy of insurance that protects the holder from loss resulting from defects in the title, normally paid by the seller.
TRANSACTION BROKER
A broker who provides limited representation to a buyer, a seller, or both in real estate transaction, but does not represent either in a fiduciary capacity or as a single agent.
VA, DEPT. OF VETERANS AFFAIRS
Guarantees mortgage loans to encourage private lending agencies to give liberal mortgages to Veterans and their spouses.
WRAPAROUND MORTGAGE
A finance technique in which the payment of the existing mortgage is continued by the seller and a new, higher interest rate mortgage, which is larger than the existing mortgage, is paid by the buyer.
