Glossary of Real Estate Terms!
Glossary of Real Estate Terms:
AMORTIZED LOAN - A loan that is completely paid off, interest and principal, by a series of regular payments that are equal or nearly equal. Also called a Level Payments Loan.
APPRAISAL - An estimate of value based upon a factual analysis of a property and comparable sales.
APPRECIATION - An increase in value of real estate.
ASSUMPTION OF MORTGAGE - The taking of title to property by a grantee, wherein he or she assumes liability for payment of an existing note secured by a mortgage or deed of trust against the property.
CLOSING - The date on which a property legally changes hands from seller to buyer.
CONVENTIONAL MORTGAGE - A mortgage securing a loan made by investors without governmental underwriting, i.e., which is not FHA insured or VA guaranteed.
COUNTER-OFFER - A rejection of an offer by a seller along with an agreement to sell the property to the potential buyer on terms differing from the original offer.
DEED - Written instrument which, when properly executed and delivered, conveys title.
EARNEST MONEY DEPOSIT - Deposit made by a purchaser of real estate as evidence of good faith.
EASEMENT - The right or privilege to use another individual’s property.
ENCROACHMENT - A structure or portion of a structure built on another individual’s property.
EQUITY - The interest or value that an owner has in real estate over and above the liens (such as the amount owed on a mortgage) against real property.
ESCROW ACCOUNT- An escrow account is one that is usually held by a mortgage company. A homeowner’s escrow account holds money that is paid by the homeowner (usually as a part of the monthly mortgage payment). The money in the escrow account is usually used to pay property taxes and homeowner’s insurance. Title companies will hold the earnest money paid by buyers in an escrow account until the home purchase is complete, at which time the earnest money is applied to the purchase price.
EXPOSURE - The degree to which a property for sale is made noticeable to potential buyers, through advertising, multiple listing services, etc.
FHA LOAN - A loan that has been insured by the federal government guaranteeing its payment in case of default by the borrower.
FEE APPRAISAL - The act or process of estimating values of real estate or any interest therein for a fee.
HOME INSPECTION - A review of the physical condition of a home by a licensed inspector.
LAND CONTRACT - A contract ordinarily used in connection with the sale of property in cases where the seller does not wish to convey title until all or a certain part of the purchase price is paid by the buyer.
LIEN - A legal claim against a property used to secure the payment of debt related to the property, such as a mortgage company’s lien, which secures payment of the mortgage.
LOAN RATIO - The ratio, expressed as a percentage, of the amount of a loan to the value or purchase price of real property.
MARKETABLE TITLE - Merchantable title; title free and clear of objectionable liens or encumbrances.
MULTIPLE LISTING SERVICE (MLS) – MLS is the name given a service performed by local boards of realtors. MLS provides necessary information to aid in the sale of listings. It is a marketing tool used by real estate agents to expose properties to a wider market base.
PERSONAL PROPERTY - Any property that is not real property (i.e. money, savings accounts, boats, etc.).
PROMISSORY NOTE - Following a loan commitment from the lender, the borrower signs a note promising to repay the loan under stipulated terms. The promissory note establishes personal liability for its repayment.
PURCHASE AGREEMENT - An agreement between a buyer and seller for the purchase of real estate.
REAL PROPERTY - Land and whatever by nature or artificial annexation is a part of it, such as a home and swimming pool, etc.
SPECIAL ASSESSMENT – A legal charge against real estate by an authority to pay the costs of improvements. Sometimes, the homeowner’s associations of condominium complexes assess the owners for things like improvements to the common areas or a new roof.
Survey – A survey is ordered by the mortgage company, usually costs about $200, and is paid for by the buyer as part of the buyer’s closing costs. The survey is a written diagram that shows the legal property lines, any easements, on the property, etc.
VA LOAN - A loan guaranteed by the Veteran’s Administration insuring payment in case of default by the borrower. Available to qualified veterans.
WARRANTY DEED - A deed used to convey real property that contains warranties of title and quiet possession. In warranty deeds, the grantor agrees to defend the premises against the lawful claims of third persons.
William Davis Realty
Joseph Hewey, ABR, AREP 214-205-6454
