Real Estate Glossary

A

Abstract of Title

A condensed history of the title to a particular parcel of real estate, consisting of a summary of the links in the chain of title along with a record of all liens, charges, or encumbrances.

Adjustable Rate Mortgage (ARM)

A mortgage loan with an interest rate that adjusts periodically based on a pre-selected index.

Amortization

The gradual repayment of a debt through scheduled, periodic payments of principal and interest.

Appraisal

An estimate of the value of property made by a qualified professional appraiser.

Assessment

A charge against real estate made by a unit of government to cover the cost of improvements such as streets, sidewalks, and sewers.

B

Binder

A preliminary agreement securing the right to purchase real estate upon agreed terms for a limited period of time.

Blanket Mortgage

A single mortgage that covers more than one piece of real estate.

Block and Lot

A method of locating a parcel of land using the tax map block and lot numbers assigned by the municipality.

C

Certificate of Occupancy (CO)

A document issued by a local government certifying that a building is suitable for occupancy.

Chain of Title

The history of all conveyances and encumbrances affecting a title from the original government grant to the present.

Closing

The final step in a real estate transaction where the title is transferred from the seller to the buyer.

Cloud on Title

Any condition revealed by a title search that adversely affects the marketability of the title.

Conveyance

A written instrument that transfers title to or an interest in real property from one person to another.

D

Deed

A written instrument that transfers title to real property from one party to another.

Defect in Title

Any recorded instrument that would prevent a buyer from receiving a clear title.

Due Diligence

The process of investigation and evaluation performed before a transaction to assess risks and verify information.

E

Easement

A right to use the land of another for a specific purpose, such as a right of way or utilities.

Encroachment

A building, fence, or other improvement that extends beyond the boundary of a property onto a neighboring property.

Encumbrance

Any claim, lien, or liability attached to real property that may lessen its value or burden the title.

Escrow

A neutral third party holds funds and documents until all conditions of a transaction are met.

F

Fee Simple

The greatest possible estate or interest in real property, granting the owner full rights of use, enjoyment, and disposal.

First Mortgage

A mortgage having priority over all other liens or claims on a property except taxes and assessments.

G

Grant

The transfer of real property by deed.

Grantee

The person to whom real property is conveyed (the buyer).

Grantor

The person who conveys real property by deed (the seller).

H

Homeowner's Insurance

Insurance that protects the homeowner against damage to the property and liability claims.

HUD-1 Settlement Statement

A standard form used to itemize all charges imposed on the borrower and seller in a real estate transaction.

I

Indemnity

Protection against loss or damage through insurance or a guarantee.

Instrument

A formal legal document such as a deed, mortgage, or contract.

J

Judgment

A court order establishing a debt owed by one party to another, which becomes a lien on real property owned by the debtor.

Junior Lien

A lien that is subordinate to a prior lien on the same property.

K

Kick-out Clause

A provision in a sales contract that allows the seller to continue marketing the property and accept a backup offer.

L

Lien

A claim or charge on property for payment of a debt, obligation, or duty.

Lis Pendens

A recorded notice that a lawsuit has been filed concerning real property, serving as a warning to potential buyers.

M

Mansion Tax

A tax imposed on the purchase of residential real property where the consideration is $1 million or more.

Mortgage

A lien on property created by a borrower as security for a loan.

Mortgage Recording Tax

A tax imposed by the state and/or city on the recording of a new mortgage.

N

Notary Public

An official authorized to certify documents, administer oaths, and perform other formal functions.

Note

A written promise to pay a specified amount to a certain entity on demand or on a specific date.

O

Owner's Policy

A title insurance policy protecting the buyer against title defects.

P

Power of Attorney

A legal document authorizing one person to act on behalf of another.

Premium

The amount paid for a title insurance policy, typically a one-time payment at closing.

Q

Quiet Title

A court action to establish ownership of real property and remove any cloud on the title.

Quitclaim Deed

A deed that transfers whatever interest the grantor has in the property without any warranties.

R

Recording

The act of filing documents with the county clerk to make them part of the public record.

Refinance

Obtaining a new mortgage to replace an existing one, typically to get better terms or access equity.

RESPA

Real Estate Settlement Procedures Act — federal law governing the closing process for residential transactions.

S

Satisfaction of Mortgage

A document recorded to indicate that a mortgage has been fully paid and the lien is released.

Survey

A drawing showing the exact boundaries of a property, the location of improvements, and any encroachments.

T

Title

The legal right to ownership of property, evidenced by a deed.

Title Insurance

Insurance protecting property owners and lenders against loss due to defects in title.

Title Search

An examination of public records to determine the legal ownership and condition of a property's title.

Transfer Tax

A tax imposed on the transfer of real property from one person to another.

U

UCC (Uniform Commercial Code)

A set of laws governing commercial transactions, including security interests in personal property.

Underwriter

A title insurance company that issues title insurance policies and assumes the risk of loss.

V

Variance

Permission granted by a zoning authority to deviate from zoning requirements.

Vesting

The manner in which title to real property is held (e.g., sole ownership, joint tenancy, tenancy in common).

W

Warranty Deed

A deed in which the grantor guarantees clear title and the right to convey the property.

X

No terms available for this letter.

Y

No terms available for this letter.

Z

Zoning

Municipal regulations governing the use of land and buildings within designated areas.

Zoning Exhibit

A report detailing the zoning classification and permitted uses for a specific property.