Abstract - A history of all transactions shown in the public records affecting a particular piece of land.

Abstract of Title - A collection of all recorded documents relating to a parcel of land.

Acceleration Clause - A condition in a mortgage that may require the balance of the loan to become due immediately if the regular payments aren’t made or for violation of other conditions of the mortgage.

Adjustable Rate Mortgage - Mortgages under which the interest rate is periodically adjusted to more closely coincide with current rates. The extent and number of adjustments is agreed to at the beginning of the loan process.

Adverse Possession - A means by which one can legally take another’s property without paying for it. In most states, by operation of law, title to the land becomes vested in such person after a fixed number of years if the owner fails to assert his or her rights.

Affidavit - A written statement made under oath before a notary public or other judicial officer.

Agreement - A legally binding contract made between two or more persons.

ALTA (American Land Title Association - The trade association of the Title insurance industry, which has adopted certain insurance policy forms to standardize coverage on a national basis.

Amortization - Payment made to reduce the principle of a debt in regular, periodic, installments.

Appraisal - A report from an independent third party detailing the estimated value of real estate.

Appurtenance - A right or privilege that is part of the ownership of property, such as a right of way to a highway across the land of another.

Assessment - (1) The valuation of real estate for purposes of taxes or special improvement charges. (2) The amount of taxes or special improvement charges. Special improvement charges are usually for the costs of streets, sidewalks, sewers, etc.

Assignment - (1) The act of transferring an interest, such as a loan secured by a mortgage, from one person or lender to another. (2) The instrument or paper by which one person or lender transfers such ownership to another.

Assumption of Mortgage - A commitment undertaken by the buyer of a property to be personally liable for payment of an existing mortgage. In an assumption, the purchaser is substituted for the original mortgager in the mortgage instrument and the original mortgager is to be released from further liability. In the assumption, the mortgagee’s consent is generally required. The original mortgager should always get a written release from further reliability if he desires to be fully released under the assumption. Failure to obtain such a release makes the original mortgager liable if the person assuming the mortgage fails to make the monthly payments.

Attorney’s Opinion - After searching the title history in the public records, a statement will be issued by an attorney as to the validity of a title.

Back to Top

B

Balloon Note - A form of promissory note that calls for the minimum payment of principle and the payment of interest at regular intervals. This type of note requires a substantial final payment, which represents all the principle.

Bankruptcy - A proceeding in the U.S. District Court where the assets of an insolvent debtor are protected and distributed in an equitable manner.

Binder - Sometimes called a Commitment. (1) A preliminary report as to the condition of a title and a commitment to issue a title insurance policy in a certain manner when certain conditions are met.

Blanket Mortgage - A mortgage encumbering more than one property of the mortgager.

Broker - Also known as Real Estate Broker. A person who buys and sells real estate for a company, firm, or individual on a commission basis. The broker does not hold title to the property, but generally represents the owner.

Building Line or Setback - Distances from the ends and/or sides of the lot beyond which building may not extend. The line may be established by a subdivision plat, restrictive covenants, building codes, or zoning ordinances.

Back to Top

C

Chain - In real estate measurements, a chain is 66 feet long or 100 links, each link being 7.92 inches. The measurement may change when used in fields other than surveying.

Chain of Title - The uninterrupted ownership of transfer in the history of title to a tract of land.

Claim - An adverse right or interest declared by one party against another or against an insurer or indemnitor. Claims may arise from unpaid debts or taxes, as well as from hidden title defects such as fraud, forgery, missing heirs, etc.

Clear Title - Real property ownership free of liens, defects, encumbrances or claims.

Closing - A meeting of all parties involved in a property transaction during which the transaction is completed.

Closing Costs - The expenses which buyers and sellers normally incur to complete a transaction in the transfer of ownership of real estate. These costs are in addition to price of the property and are items prepaid at the closing day.

Buyer’s Expenses Recording Deed & Mortgage Attorney’s Fees Appraisal and Inspection Survey Charge

Seller’s Expenses Cost of Abstract or Title Insurance Transfer Tax Real Estate Commission Recording Satisfaction Fees Survey Charge Attorney’s Fees

The agreement of sale negotiated previously between the buyer and seller may state in writing who will pay each of the above costs.

Closing Day - The day on which the formalities of a real estate sale are finished. The deed is generally prepared for the closing day by an attorney and this cost is charged to the buyer. The buyer signs the mortgage, and closing costs are paid. The final closing merely confirms the original agreement reached in the offer to purchase.

Clouded Title - An irregularity, possible claim or encumbrance that, if valid, would adversely affect the title.

Coinsurance - Two or more policies of title insurance issued by different companies, each covering a portion of the same risk, which together provide total coverage of the risks.

Commission - Money paid to a real estate agent by the seller as payment for finding a buyer and completing the sale. (Generally it’s a percentage of the sales price – 6 to 7 % on houses, 10% on land).

Condemnation - (1) The taking of private property for a public purpose, with compensation to the owner under the right of eminent domain. Governmental units, railroads and utility companies have the right to condemn and take private property under the right of eminent domain. (2) The destruction by government of private property that imperils the life, health or safety of the public.

Condominium - Individual ownership of a dwelling unit and an individual interest in the common areas and facilities which serve the multi-unit project.

Conventional Mortgage - A mortgage loan not insured by HUD or guaranteed by the Veteran’s Administration. It is subject to conditions established by the lending institution and State statutes.

Conveyance - The transfer of title to property from one person to another.

Covenant - A formal agreement or contract between two parties in which one party gives the other certain promises, such as covenants of warranty in a warranty deed.

Back to Top

D

Dedication - The setting aside of certain land by the owner and declaring it to be for public use.

Deed - A formal written instrument by which title to real property is transferred from one owner to another. The deed should contain an accurate description of the property being conveyed, should be signed and witnessed according to the laws of the state where the property is located, and should be delivered to the buyer at time of closing. There are two parties to a deed: the grantor (seller) and the grantee (buyer).

Deed Restriction - A covenant contained in a deed imposing restrictions on the use or occupancy of the real estate or the type, size, purpose or location of improvements to be constructed on it.

Default - Failure to make mortgage payments as agreed to based on the terms set forth in the mortgage.

Defect - An irregular and faulty title. A Blemish, imperfection, or deficiency.

Devise - A gift of real estate made by a will.

Down Payment - The amount of money to be paid by the purchaser to the seller upon the signing of the offer to purchase. The offer to purchase will refer to the down payment amount and will acknowledge receipt of the down payment.

Back to Top

E

Back to Top

F

Foreclosure - A legal term applied to the various methods of enforcing payment of the debt secured by a mortgage, by taking and selling the mortgaged property, and depriving the mortgager of possession.

First Refusal Right - A right given by an owner to a second party, which gives the second party first chance to buy the property if the owner decides to sell. The owner must have a legitimate offer which the second party can match or refuse. If the second party refuses, the property can then be sold to the offeror.

Forgery - The fraudulent signing of another’s name to an instrument such as a deed, mortgage or check.

Freddie Mac (FHLMC) - Federal Home Loan Mortgage Corporation. A federal agency that purchases both conventional and federally insured first mortgages from members of the Federal Reserve System and the Federal Loan Bank System.

Back to Top

G

Ginnie Mae - Governmental National Mortgage Association. A federal association working with the FHA that offers special assistance in obtaining mortgages and purchases mortgages in the secondary market.

Grant - To bestow, with or without compensation, a gift such as land or money by the person having control over the gift.

Grantee - One to whom a grant is made.

Grantor - One who makes a grant.

Grantee-Grantor Index - The record of the passing of title to all the properties in a county as kept by the county recorder’s office. Property is checked by tracing the names of the sellers and buyers (chain of title).

Back to Top

H

Hereditaments - Any and all kinds of rights and interest in real estate that can be inherited.

Homestead - The home and land occupied (not exceeding 40 acres) by a family.

Homeowners Insurance - Real Estate insurance protecting against loss caused by fire, some natural causes , vandalism, etc, depending on the limitations of the policy.

HUD - Department of Housing and Urban Development. The federal department responsible for the major housing programs in the United States.

Back to Top

I

Index - An alphabetical listing of the public real estate records located in the County Registry office.

Inheritance Tax - Tax on a descendants net estate that is levied after the estate is transferred to the heirs.

Installment Contract - A legally enforceable agreement between two parties regarding the sale of real property.

Instrument - Any written document having a legal effect.

Interest - A charge paid for borrowing money.

Back to Top

J

Joint Tenancy - An undivided interest in property, taken by two or more individuals. Upon the death of a joint tenant, the interest passes to the survivors in the tenancy, rather than the heirs of the descendant.

Judgment - Court determination of a civil or money action. A judgment of debt on a property owner can create a lien on the real estate owned for a statute determined amount of time.

Junior Mortgage - A mortgage lawyer in lien priority than another.

Back to Top

K

Back to Top

L

Lessee - The tenant holding a leasehold.

Lessor - The Landlord. One who gives a leasehold to a lessee.

License - Permission to go upon or use the land of another. The permission is a personal privilege and does not constitute an interest in the land.

Lien - A claim by a person or entity on the property of another as security for monies owed. (Judgments, unpaid taxes, material, labor, mortgages, etc.)

Lien Waver - A waiver of mechanics lien rights signed by contractors or subcontractors.

Link - In surveying , a link is 7.92 inches.

Loan Policy - Also called a “mortgage policy”. A title insurance policy insuring a mortgage against loss caused by invalidity or unenforceability of a lien or loss of priority of the mortgage.

Lis Pendens - A legal notice intending to bind third parties of litigation who claim an interest in real estate.

Lot - A portion of a parcel of real property. Usually refers to a portion of a subdivision.

Back to Top

M

Market Value - The average or highest price that a willing buyer would pay and the lowest price a willing seller would accept.

Marketable Title - A title that is free and clear of liens, clouds or other defects. A title tat an owner can freely sell, and which a buyer will willingly accept.

Mechanic’s Lien - A lien of real estate that secures the payment of debts due to persons who perform labor or services or furnish materials for the construction of buildings and improvements on the real estate.

Metes and Bounds - A land description in which the boundaries are described by courses, directions, distances and monuments.

Mile - A linear measurement of 5280 feet.

Mortgage - A 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 lending institution saying it will advance mortgage funds in a specified amount to enable a purchaser to buy a house.

Mortgage Insurance - Insurance written by an independent mortgage insurance company protecting the mortgage lender against loss incurred by mortgage default, enabling the lender to lend a higher percentage of the sales price.

Mortgage Note - A written agreement to repay a loan. The agreement is secured by a mortgage, serves as proof the indebtedness and states the manner in which it shall be paid.

Mortgagee - The party to whom a mortgage is made, generally the lender.

Mortgagee Policy - See Loan Policy.

Mortgager - A person who mortgages property.

Multiple Listing Service (MLS) - The pooling in a central bureau of listings of properties for sale. These listings are held individually by members of a group of real estate brokers.

Back to Top

N

Note - Also called “promissory note”. A written promise to pay a sum of money, usually at a specified interest rate, at a stated time to a named payee.

Back to Top

O

Back to Top

P

Partial Release - A release of a portion of property covered by a mortgage.

Payoff - The payment in full of an existing loan or other lien.

Plaintiff - The party brining a civil action against a defendant.

Planned (Unit) Development - A subdivision of five or more individually owned lots with one or more other parcels owned in common, or with reciprocal rights in one or more other parcels.

Plat - Also called a Plat Map. A map dividing a parcel of land into Map as in a subdivision. A plat book contains the plat maps of a given area.

Points - Sometimes called “discount points”. A point is one percent of the amount of the mortgage loan.

Power of Attorney - An authority by which one person (principal) enables another (attorney in fact) to act for him.

Premium - The amount payable for an insurance policy.

Prepayment - Payment of mortgage loan or part of it, before its due date.

Prescriptive Easements - A right to use another’s property that is not inconsistent with the owner’s rights, and acquired by open, notorious, adverse and continuous use for the statutory period.

Purchase Money Mortgage - A mortgage given by a purchaser to a seller on the subject property to secure payment of a part of the purchase price.

Back to Top

Q

Quarter Section - One quarter of a section. A quarter section contains 160 acres.

Quit Claim Deed - A deed which transfers whatever interest a maker of the deed may have in a particular parcel of land. By accepting such a deed, the buyer assumes all risks. Such a deed makes no warranties as to title, but simply transfers to the buyer whatever interest the grantor has.

Back to Top

R

Real Estate - Also called real property. Land and anything permanently affixed to the land.

Real Estate Broker - See Broker.

Recording - The noting in a public office of the details of a legal document – such as a deed or mortgage – affecting the title to real estate. When such an instrument is recorded, it is considered to be a matter of public record. Legally, that means that all subsequent purchasers are deemed to have constrictive knowledge of that information.

Refinancing - The process of the same mortgager paying off one loan with the proceeds from another loan.

Release - The public notification, recorded in the County Registry, that a lien has been released.

Restrictions - A limitation on the use or enjoyment of property.

Restrictive Covenants - Restrictive covenants are private restrictions limiting the use of real property. They 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.

Riparian Rights - The rights of owners of lands bordering watercourses which relate to the water and its use.

Right of Way - A strip of land which is used as a roadbed, either for a street or railway. The land is set aside as an easement or in fee either by agreement or condemnation. May also be used to describe the right itself to pass over the land of another.

Back to Top

S

Sales Agreement - Also known as offer to purchase. A contract entered into between a buyer and seller, setting forth the terms, provision, and conditions of the sale of real estate.

Sale and Leaseback - The sale of an asset to a buyer who immediately leases it back to the seller.

Search - A careful study of the public records in an effort to find all recorded instruments relating to a particular chain of title.

Subordination - The act by which a person’s rights are ranked below the rights of others.

Surface Rights - The rights to use the surface of the land.

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.

Back to Top

T

Tax - As applied to real estate, an enforced charge imposed on person, property, or income, to be used to support the state. The governing body utilizes the funds in the best interests of the general public.

Title - The rights of ownership recognized and protected by law.

Title Covenant - Covenants ordinarily inserted in conveyance and in transfers of title to real estate for the purpose of giving protection to the purchaser against possible insufficiency of the title received.

Title Defect Any possible claim to right outstanding in a chain of title that is adverse to the claim of ownership.

Title Insurance Policy - A contract of title insurance under which the insurer, in keeping with the terms of the policy, agrees to indemnify the insured against loss arising from claims against the insured interest.

Title Plant - A geographically fixed assemblage of title information that helps in expediting title examinations.

Title Search or Examination - A check of the title records to make sure the buyer is purchasing a house from the legal owner and there are no liens, assessments, other claims or outstanding restrictive covenants which would adversely affect the marketability or value of title.

Trustee - A party who is given legal responsibility to hold property in the best interest of or “for the benefit” of another.

Tax Deed - Deed from tax collector to government body after a period of non-payment of taxes according to statute.

Tenancy in Common - An undivided ownership in real estate by two or more persons. The interests need not be equal and in the event of the death of one of the owners, no right of survivorship in the other owners exists.

Time Sharing - The purchaser of an undivided interest for a fixed or variable time period.

Transfer Tax - State tax on the transfer of real property. Based on purchase price.

U

Underwriter - An insurance company that issues insurance policies to the public or to another insurer.

Back to Top

V

Variable Interest Rate - An interest rate that fluctuates as the prevailing rate moves up or down.

Veterans Administration (VA) Loans - Housing loans to veterans by banks that are guaranteed by the Veterans

Administration. Vital Statistics - Data recording births, deaths, marriages, etc. and usually kept by a government bureau.

W

Waiver - The voluntary and intentional relinquishment of known rights, claim or privilege.

Will - An act by which a person determines the disposition of his or her property after death.

Without Recourse - A finance term. A mortgage or deed of trust securing a note without recourse allowing the lender to look only to the property for repayment in the event of default, and not personally to the borrower.

Back to Top

X

Back to Top

Y

Yard - (1) A measure of 36” (2) The area between the building and the property line of a residential property.

Back to Top

Z

Zero Lot Line - The construction of a building on any of the boundary lines pf a lot.

Zero Side Yard - The building of a subdivision with each house built on a side boundary line.

Zoning - Laws passed by local governments regulating the size, type, structure, nature and use of land or buildings.

Zoning Ordinances - The acts of a local government establishing building codes, and setting forth regulations for property and usage.

Back to Top