Money that accompanies an offer to purchase as evidence of good faith. It is almost always a personal check, certified check, or money order rather than cash
Limited right to cross or use for some specified purpose the property of another. It may be permanent or temporary. Water, sewage, and utility suppliers frequently hold an easement across private property.
The right or power of government to acquire private property for public use without the consent of the owner, provided fair compensation is provided.
A building or other improvement that extends beyond its boundary and intrudes upon the property of another.
Any impediment to a clear title. It can be a claim, lien, zoning restriction, or other legal right or interest in land that diminishes its value. The report of the title search usually shows all encumbrances.
Value an owner has in a piece of property less the debt against it. For example, if the market value of a house is $150,000 and the owner has paid off $10,000 of a $75,000 mortgage, the owner has $85,000 equity.
Term used to refer to the increase of one's equity in a property due to mortgage balance reduction and price appreciation.
Reversion of property to the state when the owner dies without leaving a will and has no heirs to whom the property may pass.
Money or documents held by a third party until specific conditions of an agreement or contract are fulfilled.
Special bank account into which escrow monies are deposited and from which they are disbursed. Lawyers and real estate brokers maintain escrow accounts to hold money in trust for others.
A firm that specializes in handling the closing of a transaction.
Listing where the owner reserves the right to sell his property himself, but also agrees to list with no other broker during the listing period besides the appointed real estate broker.
Listing that gives the broker the right to collect a commission no matter who sells the property during the listing period.
See market value.
Common name for the Federal National Mortgage Association, which buys and sells loans in the secondary mortgage market.
Ownership of real property that is to be used and/or sold at the owner's discretion.
Acronym for Federal Housing Authority, an agency created within the Department of Housing and Urban Development (HUD) that insures mortgages on residential property, with downpayment requirements usually lower than prevailing ones.
Person acting in a position of trust, responsibility and confidence for another, such a broker for his client.
Mortgage on a property that is superior to any other. It is the first to be paid in the event of foreclosure.
Any personal property that has been permanently attached to real property and therefore included in the transfer of real estate. The kitchen sink is a fixture.
Legal action instigated by a lender to end all ownership rights when mortgage payments have not been kept up.
Process whereby private or government-sponsored development of certain aging neighborhoods results in the displacement of low- or moderate-income families by the more affluent and leads to an increase in property values.
Specified period of time to meet a commitment after it becomes due, without penalty or default. For example, most lenders allow a two-week grace period after the due date of the mortgage payment before a late fee is imposed.
Mortgage loan for which the initial payments are low but increase over the life of the loan.
Person named in a deed who acquires ownership of real estate; the buyer.
Person named in a deed who conveys ownership of real estate; the seller.
Use of land that is most logical and productive. Refers to the greatest income it can bring the owner, as well as factors such as aesthetics and benefits to the surrounding community.
Buildings of historical or architectural significance, perhaps landmarks, that are designated by federal, state, or local historical commissions.
Packaged insurance policy for homeowners and tenants that cover property damage and public liability, such as fire, theft, and personal liability.
State and federal laws that protect against the forced sale of a person's home by creditors. Also, upon the death of one spouse, provides the other with a home for life.
Local regulations that set minimum conditions under which dwellings are considered fit for human habitation. It guards against unsanitary or unsafe conditions and overcrowding.
Acronym for the Department of Housing and Urban Development, an agency from which almost all of the federal government's housing programs flow.
Any form of land development or man-made addition, such as the erection of a building or fence, to enhance the value of private property; also an improvement to publicly owned structures, such as a sewer or road.
The act of physically examining and testing a piece of property to ascertain certain information.
Periodic payment, usually monthly, of interest and principal on a mortgage or other loan.
A fee paid for the use of money; also a share or right in something.
Short-term loan usually made during the construction phase of a building project or until a permanent, long-term loan can be obtained. Also called a construction loan.
Court decree stating that one person is indebted to another. Also specifies the amount of the debt.
Contract that conveys the right to use property for a period of time in return for a consideration, usually rent, paid to the property owner.
Opportunity to purchase a piece of property by renting for a specified period, with the provision that the lessee may choose to buy after or during the leasing period at a predetermined sale price.
Someone who rents under a lease; the tenant.
Someone who rents to another party through a lease; the landlord.
A privilege or right granted to a person by a state to operate as a real estate broker or salesperson.
A debt on a property which encumbers it until the obligation is paid; a mortgage, back taxes, or other claim.
Contract used for hiring a real estate agent to sell a piece of property. Also a piece of property that is for sale.
Paid by the borrower to get a loan; it covers expenses incurred by the lender, such as the cost of the appraisal, credit report, title search, etc.
Task of collecting monthly payments, handling insurance and tax impounds, delinquencies, early payoffs, and mortgage releases.
Relationship of a mortgage loan to the appraised value of a piece of property. Usually expressed to the buyer in terms of how much the lender will lend, i.e. - 75 percent financing.
Paid by a condominium unit owner to the owners' association for upkeep of the common areas.
Actual selling price of a property.
Generally accepted as the highest price that a ready, willing, and able buyer will pay and the lowest price a ready, willing, and able seller will accept for a property.
Good and clear title that is free from reasonable doubt as to who the owner is.
Document that converts a parcel of land into a condominium subdivision.
Long-range, comprehensive guide for the physical growth or development of a community.
Date on which principal and interest on a mortgage or other loan must be paid in full.
Legal document that creates a lien on property; it secures the repayment of a loan.
Individual or company that brings borrowers and lenders together; a loan broker.
Financial intermediary that offers mortgages to borrowers, and then resells them to various lending institutions, government agencies, or private investors.
Party or institution that lends money; the creditor.
Party or person that borrows money, giving a lien on the property as security for the loan; the borrower.
Agreement that allows real estate brokers to distribute information on the properties they have listed for sale to other members of a local real estate organization. Allows the widest possible marketing of those properties. Commissions are split by mutual agreement between the listing broker and the selling broker.
Lease requiring the tenant to pay all the costs incurred in maintaining a property, including taxes, insurance, repairs, and other expenses normally required of the owner.
Use of property that is permitted to continue after a zoning ordinance prohibiting it has been passed.
Oral or written proposal to buy a piece of property at a specified price.
Listing that gives a broker a nonexclusive right to find a buyer; the owner can still find a buyer himself and avoid a commission.
The exclusive right to purchase or lease a property at a predetermined price or rent at some future time.
A charge by the lender for granting and processing a new mortgage loan.
Acronym for ""principal, interest, taxes, and insurance."" Frequently used to describe a loan payment that combines all four items.
Individually owned houses with community ownership of common areas, such as swimming pools and tennis courts.
Map or survey showing the location and boundaries of individual properties and how they have been subdivided into lots and blocks.
Fee charged by a lender to get additional revenue over the interest rate. A point is equal to one percent of the loan amount.
Fee charged by the lender when a borrower repays the loan early.
The amount of money borrowed; the amount of money still owed.
Required by most lenders for conventional loans with a down payment of less than 20 percent. Insurance is paid by the borrower and guarantees the lender will not lose money if the borrower defaults.
A written promise to repay a debt on demand or at a stated time in the future.
Assessment levied by city and county governments on real and personal property to generate the bulk of their operating revenues to pay for such public services as schools, libraries, and roads.
The Internal Revenue Service allows homeowners to claim as itemized personal deductions money paid for state and local realty taxes, as well as interest on debt secured by their homes. It also allows for the deduction of loan prepayment penalties, and the deduction of points on new loans.
Act of determining a potential buyer's needs, abilities, and urgency to buy and matching these with available properties.
A conveyance by which the grantor transfers whatever interest he or she has in the real estate without warranties or obligations.
The land itself and everything extending below and above it, including all things permanently attached, whether by nature or by man.
Individual who has passed a state broker's test and represents others in realty transactions. Anyone having his or her own office must be a broker.
Entity that allows a very large number of investors to pool their money in the purchase of real estate, but as passive investors. The investors do not buy directly. Instead, they purchase shares in the REIT that owns the real estate investment.
Person who has passed a state examination for that position, and must work under the supervision of a broker.
See property tax.
Land and buildings and anything permanently attached to them.
A real estate broker or agent who is a member of the National Association of Realtors, a professional real estate group that subscribes to a Code of Ethics. Not every broker or agent is a Realtor, a word that is a registered trademark and always capitalized.
Entering or recording documents affecting or conveying interests in real estate in the recorder's office; until recorded a deed or mortgage generally is not effective against subsequent purchases or mortgage liens.
Practice of refusing to make loans in certain neighborhoods. Also applies to insurance companies that refuse to offer policies in certain neighborhoods.
To pay off one loan by taking out another on the same property.
Certificate from the lender stating that the loan has been repaid.
Government-imposed restrictions on the amount of rent a property owner can charge.
The cost at today's prices and using today's construction methods, of building an improvement having the same usefulness as the one being appraised.
Document required before title insurance can be issued. It states the name of the owner, a legal description of the property, and the status of taxes, liens, and anything else that might affect the marketability of the title.
An account for money collected each month by a lender to pay for property taxes and property insurance as they come due.
Clauses placed in a deed to restrict the full use of the property by controlling how future landowners may or may not use the property; also used in leases.
A person's right to have the first opportunity to either lease or purchase real property.
A feature of joint tenancy giving the surviving joint tenants the rights, title and interests of the deceased joint tenant. Right of survivorship is the basic difference between buying property as joint tenants and as tenants in common.
Contract that contains the terms of the agreement between the buyer and seller for the sale of a particular parcel or parcels of real estate.
Lien on property that is subordinate to a first mortgage. In the event of default, the second mortgage is repaid after the first. Also called a junior mortgage, and in some circumstances a home equity loan.
Market for the purchase and sale of existing mortgages, designed to provide greater liquidity for mortgages; plays an important role in getting money from those who want to lend to those who want to borrow.
One with few sellers and many buyers.
One structure containing two dwelling units separated vertically by a common wall.
The day on which title is conveyed.
See closing costs.
A special tax imposed on specific parcels of real estate that will benefit from a proposed public improvement, such as a street or sewer.
The illegal practice of directing potential home buyers to or away from certain neighborhoods either to maintain or to change the character of an area, or to create a speculative situation.
A tract of land divided by the owner into smaller lots for homesites or other use.
The leasing of premises by a lessee to a third party for part of the lessee's remaining term.
An exact measurement of the size and boundaries of a piece of land by civil engineers or surveyors.
The price paid for a property plus certain costs and expenses, such as closing costs, legal counsel, and a commission paid to help find the property.
An allowed deduction that can be subtracted from your income tax. If you are entitled to a $1,500 credit, and your income tax would otherwise be $10,000, the credit would reduce the tax due to $8,500.
The rate at which real property is taxed in a tax district or county. For example, in a certain county, real property may be taxed at a rate of 55 mills (or 0.055) per dollar of assessed valuation.
A court-ordered sale of real property to raise money to cover delinquent taxes.
A realty investment that produces income-tax deductions for its owner.
A form of joint ownership reserved for married persons; right of survivorship exists and neither spouse has a disposable interest during the lifetime of the other.
Style of ownership in which two or more persons purchase a property jointly, but with no right of survivorship and separate undivided interests. They are free to will their share to anyone they choose, a principal difference between this form of ownership and joint tenancy.
Part ownership of a property coupled with a right to exclusive use of it for a specified number of days per year.
Actual ownership; the right of possession; also the evidence of ownership such as a deed or bill of sale.
An insurance policy that protects against any losses incurred because of defects in the title not listed in the title report or abstract.
A statement of the current condition of title for a parcel of land.
A professional examination of public records to determine the chain of ownership of a particular piece of property and to note any liens, encumbrances, easements, restrictions, or other factors that might affect the title.
Usually a two- or three-story dwelling with shared walls, or a living unit operating under the condominium or townhouse form of ownership.
A document used in place of a mortgage in certain states; a third-party trustee, not the lender, holds the title to the property until the loan is paid out or defaulted. Also called a deed of trust.
One who as agent for others handles money or holds title to their land.
The acquisition of run-down city areas for purposes of redevelopment.
The period of time over which a commercial property can be depreciated for federal income-tax purposes. Also known as economic life.
Charging a higher rate of interest on a loan than is legally allowed.
Veterans Administration-backed mortgage. The VA, a federal agency, operates a loan guarantee program for honorably discharged veterans and widows of veterans who died of a service-related injury. Mortgages call for low or no down payment. Sometimes referred to as GI loan.
One that meets all requirements of law, is binding upon its parties, and is enforceable in a court of law.
Estimated or determined value; synonymous with appraising.
Market value or present worth. To have value, a property must have utility, scarcity, effective demand, and transferability.
See adjustable rate mortgage.
A permit granted as an exception to a zoning ordinance that allows a property owner to meet certain specified needs.
A deed in which the grantor guarantees that he or she is giving the grantee good title free of encumbrances. Considered to be the best deed a grantee can receive.
Depreciation or amortization an owner takes on a commercial property.
What an investment or property will return; the profit or income.
Procedure that classifies real property for a number of different uses: residential, commercial, industrial, etc. in accordance with a land-use plan.