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Real Estate Glossary |
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Acknowledgement: A formal declaration before a
public official that one has signed a specific document. Adjustable rate loan: Adjustable rate mortgage, ARM; a loan that allows adjustments in the interest rate at specified times based on a named index. Adjusted basis: The original cost plus capital improvements minus depreciation. Use adjusted basis to compute taxable gain or loss on the sale of a home. Agent: A person authorized by another, the principle, to act for him or her in dealing with third parties. Annual percentage rate: APR; an interest rate that includes interest, discount points, origination fees, and loan broker's commission. Appraisal: An examination of a property by a qualified professional to estimate the property's market value as of a specific date. APR: See Annual Percentage Rate. Arbitration: Taking of a controversy to an unbiased third person. This person holds a hearing wt which both parties may speak and then issues an opinion. Assessment: Tax or charge by governmental body for a specific public improvement covering the property owner's portion of costs. Assessments are in addition to normal property taxes. Assign: Transfer. Assignee: The person to whom interest is transferred. Assignment: Transfer of any property to another. Delegation of duties and rights to another. Assignor: The person from whom interest is transferred. Assume: Buyers taking over primary responsibility for payment of existing loan. Sellers then become secondarily liable for the loan and for any deficiency judgment. Assumption fee: Transfer fee; the fee a lender may charge for work involved in allowing buyers to assume primary liability for payment on an existing loan. Attorney: A person licensed to practice law by giving legal advice or assistance, as well as prosecuting and defending cases in courts. Authorization to sell: a listing contract allowing a real estate professional to act as an agent in the sale of property. Bankruptcy: Relief by a court of an obligation to pay money owed after turning over all property to a court-appointed trustee. Basis: The cost of a home when purchased, including down payment, loans, and closing costs. Beneficiary: The lender of money on a property used in a trust deed type of loan. Bid Down: This is where you "Bid Down" the interest rate to the amount of interest you are willing to accept. (Example: if the interest starts at 18% and you "bid it down" to 14% to secure the Tax Lien Certificate, you will receive 14% and the county will receive the balance of the 18%, which is 4%). Binder: An informal contract listing an agreement's main points, later replaced by a formal, detailed written contract. Broker: See Real estate broker. Buyer's fees: Chargers that are paid for the buyers. Buyer's market: A condition in which there are more sellers than buyers; prices generally decrease. Call: Demand payment on debt. Capital asset: Property, both real and personal, held by a taxpayer and not excluded by tax laws. Capital gain: Profit from selling or exchanging a capital asset in excess of the cost. Capital improvements: Additions to property that are permanent, increase property value, and have a useful life of more than one year. Capitalization rate: The rate of return an investment receives. Capital loss: Loss from selling or exchanging property other than a personal residence at less than its cost. Cashier's check: A bank's own check guaranteed to be good by the bank at which it is drawn. Casualty: Loss of or damage to structures or personal property. Casualty insurance: See Hazard insurance. Certificate of title: A report, produced by a party providing abstracts of titles, stating that based on an examination of public records, the title is properly vested in the present owner. Classified advertisements: Advertisements that are separated by type and listed accordingly. Closing: Closing escrow, settlement; the final phase of a real estate transaction that involves signing loan documents, paying closing costs, and delivering the deed. (See also Escrow). Closing costs: Costs of sale; the additional expenses over and above the purchase price of buying and selling real estate. Closing escrow: See Closing. Closing fee: See Closing. Due-on-sale clause: Alienation clause; an acceleration clause in a loan giving the lender the right to demand all sums owed due at once and payable if the property owner transfers title. Equity: The part of a property's current value that is owned and on which no money is owed; the property's value minus the liens owed against the property. Escrow: A process in the transfer of real property in which buyers and sellers deposit documents or money with a neutral third party (the escrow holder). Buyers and sellers give instructions to the escrow holder to hold and deliver documents and money if certain conditions are met. Escrow instructions: A written agreement between seller and buyer that extrapolates the purchase contract into a form used as directions on how to conduct and close the escrow. Fire insurance: See Hazard insurance. Foreclosure: The process by which a property on which a borrower has not paid is sold to satisfy a loan against the property. Fraud: Willfully concealing or misrepresenting a material fact in order to influence another person to take action. The action results in the person's loss of property or legal rights. Gift deed: A deed given for love or affection. Guarantee of title: A warranty that title is vested in the party shown on the deed. Hazard insurance: Casualty insurance, fire insurance; insurance protection against stated specific hazards such as fire, hail windstorms, earthquakes, floods, civil disturbances, explosions, riots, theft, and vandalism. Homeowner's insurance: A policy protecting a homeowner from liability and casualty hazards listed in the policy. (See also Hazard insurance). Market value: The amount buyers are willing to pay and sellers are willing to accept within a reasonable time. Marshal's deed: See Sheriff's deed. Mortgage: A contract to secure a loan by which you promise your property without giving up possession or title. Mortgagee: Lender of money on property using a mortgage. Mortgagor: Property owner who borrows money using a mortgage. Notary fee: A charge paid to a notary public to witness signatures on some of the legal documents in a transaction. Notice of default: Warning sent to a borrower on a loan cautioning the borrower that the payment is delinquent. Personal property: Items that are not permanently attached to your home or other structures on your property. Power of attorney: A document that gives one person the power to sign documents for another person. Power of sale clause: A provision in a loan allowing the lender to foreclose and sell borrower's property publicly without a court procedure. Premium Bid: This is where you Bid above the interest rate charged. In most but not all cases, you will only receive the interest on the Tax Lien. The balance is an interest free loan to the county. When the Tax Lien is redeemed you will receive the interest free loan amount plus the Tax Lien cost and interest. Principle residence: An IRS term denoting the residence wherein you spend the most time during the tax year. Promissory note: The written contract you sign promising to pay a definite amount of money by a definite future date. Property Interest Bid: This is the same as a Straight Bid; where you receive the interest rate in full and are bidding on the amount of the Tax Lien Certificate only. The winner is the investor who will accept the lowest amount of personal interest in the property. Property taxes: Taxes; taxes assessed on a property at a uniform rate so that eh amount of the tax depends on the value. Property tax statements: Documents that the county assessor's office mails to homeowners itemizing the semiannual or annual tax bill on a home and indicating the payment due date. Quitclaim deed: A deed using the word quitclaim in the clause granting ownership and thus releasing the grantor from any claim to the property. A quitclaim deed has no warranties. Real estate: See Real property. Real estate broker: A real estate agent who represents another person in dealing with third parties. This person must take required courses, pass a broker's exam, and be state licensed. A broker may employ other qualified individuals and is responsible for their actions. Real estate professional: A real estate broker or sales associate. Real estate sales agent: A person who is licensed by state and who represents a real estate broker in transactions. Real property: Real estate; land and whatever is built on, growing on, or attached to the land. Sheriff's deed: Marshal's deed; a deed used by courts in foreclosure or in carrying out a judgment. This deed transfers a debtor's title to a buyer. Straight Bids: This is where you receive the interest rate in full. You are bidding on the amount of the Tax Lien Certificate only. Sub escrow fee: A fee charged by some escrow holders for their costs when they handle money. Survey fee: A fee charged for a survey showing the exact locations and boundaries of a property. Tax deed: Controller's deed; a deed used by a state to transfer title to the buyers. Taxes: See Property taxes. Tax parcel number: The number assigned to a piece of property by the local taxing authority. Title: Evidence of one's right to a property and the extent of that right. Title insurance: The policy issued to you by the title company on completion of the final title search protecting against claims in the future based on circumstances in the past. Title insurance companies: Companies issuing title insurance policies. Title search: An examination of information recorded on your property at the county recorder's office. This examination verifies that the property has no outstanding claims or liens against it to adversely affect the buyer or lender and that you can transfer clear legal title to the property. Transfer fee: See Assumption fee. Transfer tax: Documentary transfer tax; a tax that some states allow individual counties or cities to place on the transferring of the real property. Trust deed: A document, used as a security device for the loan on your property, by which you transfer bare (naked) legal title with the power of sale to a trustee. This transfer is in effect until you have totally paid off the loan. Trust funds: Funds held by a closing agent or escrow holder for the benefit of the buyers or seller. Unconditional lien release: Waiver of liens; a release, usually signed by a contractor, after a job is complete and you made the final payments waiving and releasing all rights and claims against your home. Void: To have no effect; unenforceable at law. Waive: Unilateral voluntary relinquish of a right of which one is aware. Warranties: Printed or written documents guaranteeing the condition of property or its components. Warranty deed: A deed in which the grantor explicitly guarantees the title to be as indicated in the deed. The grantor agrees to protect buyers against all claimants to the property. Yield: The return on investment including interest and principal expressed annually. Zoning: Governmental laws establishing building codes and governing the specific uses of land and buildings. |
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