Abstract of Title: A summary of the public records relating to the title of a property, including a history of ownership and any encumbrances, liens, or legal actions.
Acceleration Clause: A clause in a mortgage or loan agreement that allows the lender to demand full repayment if certain conditions are met, such as default by the borrower.
Amortization: The process of gradually paying off a debt over time through regular payments of principal and interest.
Appraisal: An evaluation of a property's value conducted by a certified appraiser, often used for mortgage approval and tax assessments.
As-Is Condition: A term indicating that a property is being sold in its current state, with no repairs or improvements made by the seller.
Assessed Value: The value assigned to a property by a public tax assessor for the purpose of determining property taxes.
Assumption of Mortgage: The transfer of a mortgage from the seller to the buyer, with the buyer agreeing to take over the remaining payments.
Balloon Payment: A large, lump-sum payment due at the end of a loan term, often used in loans with lower initial payments.
Bill of Sale: A document that transfers ownership of personal property from one party to another.
Bridge Loan: A short-term loan used to bridge the gap between the purchase of a new property and the sale of an existing property.
Broker: A licensed individual or firm that acts as an intermediary between buyers and sellers of real estate.
Building Code: Regulations established by local governments detailing the standards for construction and safety of buildings.
Capital Gains Tax: A tax on the profit realized from the sale of a property or investment.
Certificate of Occupancy: A document issued by a local government certifying that a building complies with building codes and is habitable.
Chain of Title: The sequence of historical transfers of title to a property, showing the ownership history.
Closing: The final step in a real estate transaction where the title is transferred from the seller to the buyer, and the sale is completed.
Closing Costs: Fees and expenses incurred in the final stages of a real estate transaction, including lender fees, title insurance, and escrow charges.
Cloud on Title: Any claim, lien, or encumbrance that may impair the title to a property.
Commission: The fee paid to a real estate agent or broker for their services, usually a percentage of the property's sale price.
Comparative Market Analysis (CMA): An evaluation of similar, recently sold properties to determine the fair market value of a property.
Condominium: A type of property ownership where individuals own their units and share common areas, with a homeowners association managing the property.
Contingency: A condition that must be met before a contract is legally binding, such as financing or home inspection contingencies.
Conventional Loan: A mortgage not insured or guaranteed by the government, typically offered by private lenders.
Convertible ARM: An adjustable-rate mortgage that can be converted to a fixed-rate mortgage under specified conditions.
Cooperative (Co-op): A type of ownership where residents own shares in a corporation that owns the building and lease their units from the corporation.
Covenants, Conditions, and Restrictions (CC&Rs): Rules governing the use of property within a homeowners association or condominium community.
Deed: A legal document that transfers ownership of real property from one person to another.
Deed in Lieu of Foreclosure: A process where a borrower voluntarily transfers ownership of a property to the lender to avoid foreclosure.
Deed of Trust: A legal document similar to a mortgage, used in some states to secure a loan on real property.
Default: Failure to fulfill a contractual obligation, such as missing mortgage payments.
Depreciation: The decrease in the value of a property over time due to wear and tear, age, or obsolescence.
Disclosure: The act of making information known, such as disclosing known defects in a property to potential buyers.
Down Payment: The initial payment made by a buyer towards the purchase price of a property, typically expressed as a percentage.
Due Diligence: The investigation and evaluation of a property by a potential buyer to assess its condition and value before completing a purchase.
Easement: A legal right to use another person's land for a specific purpose, such as a driveway or utility line.
Earnest Money: A deposit made by a buyer to demonstrate their commitment to purchasing a property, typically held in escrow until closing.
Encroachment: A situation where a structure or improvement extends onto another person's property without permission.
Encumbrance: Any claim, lien, or liability attached to a property that may affect its transferability or value.
Equity: The difference between the market value of a property and the amount owed on it, representing the owner's financial interest.
Escrow: A neutral third party that holds funds or documents on behalf of the buyer and seller during a real estate transaction until all conditions are met.
Escrow Account: An account held by a lender to collect and disburse funds for property taxes and insurance on behalf of the borrower.
Fair Market Value: The price a property would sell for on the open market, based on comparable sales and market conditions.
Fannie Mae (Federal National Mortgage Association): A government-sponsored enterprise that buys mortgages from lenders to provide liquidity in the mortgage market.
Federal Housing Administration (FHA) Loan: A government-insured mortgage designed to help low- to moderate-income buyers with lower down payments and more flexible credit requirements.
Fee Simple: The highest form of property ownership, granting the owner full rights to the property, including the land and any structures on it.
Fixed-Rate Mortgage: A mortgage with an interest rate that remains constant for the entire term of the loan.
Foreclosure: The legal process by which a lender takes possession of a property due to the borrower's default on the mortgage.
For Sale By Owner (FSBO): A property being sold directly by the owner without the assistance of a real estate agent or broker.
Freddie Mac (Federal Home Loan Mortgage Corporation): A government-sponsored enterprise that buys mortgages from lenders to provide liquidity in the mortgage market.
Grantee: The person or entity receiving the ownership of a property through a deed.
Grantor: The person or entity transferring the ownership of a property through a deed.
Home Equity Line of Credit (HELOC): A revolving line of credit secured by the equity in a home, allowing homeowners to borrow against the value of their property.
Home Inspection: An examination of the condition of a property by a professional inspector, typically conducted before the sale is finalized.
Homeowners Association (HOA): An organization that manages common areas and enforces rules for properties within a condominium or planned community.
Homeowners Insurance: A policy that provides financial protection against losses and damages to a home and its contents.
Interest Rate: The percentage charged by a lender on the amount borrowed, typically expressed as an annual percentage rate (APR).
Joint Tenancy: A form of property co-ownership where two or more people hold equal shares and have the right of survivorship.
Judgment Lien: A lien placed on a property as a result of a court judgment, typically for unpaid debts.
Jumbo Loan: A mortgage that exceeds the conforming loan limits set by Fannie Mae and Freddie Mac, typically used for high-value properties.
Lease: A contract granting use or occupation of property during a specified period in exchange for a specified rent.
Lease Option: A lease agreement that gives the tenant the option to purchase the property at a specified price within a certain period.
Lien: A legal claim against a property for the payment of a debt or obligation, such as a mortgage or tax lien.
Listing Agreement: A contract between a property owner and a real estate broker authorizing the broker to market and sell the property.
Loan-to-Value (LTV) Ratio: A measure of the amount of a loan relative to the value of the property, expressed as a percentage.
Market Value: The estimated price that a property would sell for in the current market, based on comparable sales and other factors.
Mortgage: A loan used to purchase real estate, with the property serving as collateral for the loan.
Mortgage Broker: A licensed professional who acts as an intermediary between borrowers and lenders, helping borrowers find and secure mortgage loans.
Mortgage Insurance: Insurance that protects the lender in case the borrower defaults on the mortgage, typically required for loans with a down payment of less than 20%.
Multiple Listing Service (MLS): A database used by real estate agents and brokers to share information about properties for sale.
Offer: A formal proposal to purchase a property, typically made in writing by the buyer to the seller.
Open House: A scheduled period during which a property for sale is open to the public for viewing.
Origination Fee: A fee charged by a lender for processing a new mortgage loan application.
Pending: The status of a property when an offer has been accepted but the sale has not yet closed.
Pre-Approval: A preliminary evaluation by a lender indicating that a borrower qualifies for a mortgage up to a certain amount.
Principal: The amount of money borrowed in a loan, excluding interest.
Private Mortgage Insurance (PMI): Insurance required by lenders for conventional loans with down payments less than 20% of the home’s purchase price. PMI protects the lender in case the borrower defaults on the loan.
Property Tax: Taxes levied by local government entities based on the assessed value of a property. These taxes fund community services like schools, roads, and public safety.
Purchase Agreement: A legally binding contract between a buyer and a seller outlining the terms and conditions of the property sale.
Quitclaim Deed: A deed that transfers any interest the grantor may have in a property without making any guarantees or warranties regarding the title.
Rate Lock: An agreement between a borrower and a lender guaranteeing a specific interest rate for a set period, protecting the borrower from rate fluctuations during the loan approval process.
Real Estate Agent: A licensed professional who represents buyers or sellers in real estate transactions.
Real Estate Investment Trust (REIT): A company that owns, operates, or finances income-producing real estate and offers shares to investors.
Real Estate Owned (REO): Properties that have been foreclosed and are owned by a lender, typically a bank.
Refinancing: The process of obtaining a new mortgage to replace an existing one, usually to take advantage of lower interest rates or to access home equity.
Right of First Refusal: A contractual right giving a party the first opportunity to purchase a property before the seller offers it to others.
Right of Survivorship: A feature of joint tenancy where the surviving co-owners automatically inherit a deceased owner’s share.
Sales Contract: A written agreement between buyer and seller detailing the terms of the sale of real estate.
Second Mortgage: A loan taken out against a property that is already mortgaged. Second mortgages are subordinate to the first mortgage and often have higher interest rates.
Short Sale: A sale of real estate in which the proceeds from the sale fall short of the balance owed on the property's loan. The lender agrees to accept less than the owed amount.
Special Assessment: A fee charged by a local government or HOA for specific projects that benefit the community, such as road repairs or infrastructure improvements.
Title: The legal document proving ownership of a property.
Title Insurance: Insurance that protects the lender or buyer against losses due to disputes over property ownership or defects in the title.
Title Search: An examination of public records to verify a property’s legal ownership and determine if there are any claims or liens against it.
Trustee: A person or entity that holds and manages property or assets for the benefit of another.
Underwriting: The process by which a lender evaluates the risk of a mortgage loan application, including reviewing the borrower’s credit history, income, and the value of the property.
VA Loan: A mortgage loan guaranteed by the U.S. Department of Veterans Affairs, available to military veterans and active-duty service members with favorable terms and no down payment requirement.
Variable Rate Mortgage: A mortgage with an interest rate that can change periodically based on changes in a corresponding financial index.
Walk-Through: A final inspection of a property by the buyer before closing to ensure that it is in the agreed-upon condition.
Warranty Deed: A deed in which the seller guarantees that they hold clear title to a piece of real estate and have the right to sell it, offering the greatest amount of protection to the buyer.
Zoning: Regulations established by local governments that dictate how properties can be used in different areas, such as residential, commercial, or industrial zones.
Acceleration Clause: A clause in a loan agreement that allows the lender to demand full repayment if the borrower defaults on the loan.
Adjusted Basis: The original cost of a property, plus improvements and minus depreciation, used to calculate capital gains for tax purposes.
Affidavit: A sworn statement in writing, often used in legal proceedings, including real estate transactions.
Amenity: A feature or facility of a property or building that enhances its attractiveness and value, such as a swimming pool, gym, or landscaped garden.
Annual Percentage Rate (APR): The annual rate charged for borrowing or earned through an investment, which includes any fees or additional costs associated with the transaction.
Assessment: The determination of a property's value for the purpose of levying taxes.
Assessor: A public official who evaluates property for the purpose of taxation.
Assumable Mortgage: A mortgage that can be transferred from the current owner to a new buyer, who assumes the existing loan.
Balloon Mortgage: A mortgage with regular payments that do not fully amortize the loan, requiring a large final payment (balloon payment) at the end of the term.
Binder: A preliminary agreement, often accompanied by a payment, to show good faith in a real estate transaction.
Blanket Mortgage: A single mortgage that covers multiple properties, typically used by developers or investors.
Breach of Contract: The violation of any terms or conditions in a contract without legal excuse.
Building Permit: An official approval issued by a local government agency that allows the construction or renovation of a property.
Certificate of Title: A document issued by a title company or attorney stating that the title to a property is clear and marketable.
Chattel: Personal property, such as furniture, appliances, or vehicles, that is not permanently attached to real estate.
Clear Title: A title to property that is free from liens, encumbrances, or other legal defects.
Closing Statement: A document that details the fees, costs, and adjustments associated with the closing of a real estate transaction.
Commercial Real Estate: Property used for business purposes, such as offices, retail spaces, warehouses, and industrial buildings.
Conforming Loan: A mortgage that meets the underwriting guidelines of Fannie Mae and Freddie Mac, including loan limits.
Conveyance: The act of transferring ownership of property from one party to another.
Counteroffer: A response to an offer in a negotiation, where the original terms are rejected and new terms are proposed.
Credit Report: A detailed report of an individual’s credit history, used by lenders to determine creditworthiness.
Debt-to-Income Ratio (DTI): A measure of an individual's monthly debt payments relative to their monthly gross income, used by lenders to assess borrowing risk.
Deed Restriction: A clause in a deed that limits how the property can be used or what can be built on it.
Default: Failure to fulfill a legal obligation, particularly the failure to make timely payments on a loan.
Due-on-Sale Clause: A provision in a mortgage allowing the lender to demand full repayment if the borrower sells the property.
Easement by Prescription: The right to use another's property, acquired by continuous use over a period of time as defined by law.
Eminent Domain: The right of a government to take private property for public use, with compensation to the owner.
Equitable Title: The interest held by a buyer who has signed a contract to purchase real estate but has not yet closed.
Escrow Agent: A neutral third party responsible for holding funds or documents on behalf of the buyer and seller during a transaction.
Eviction: The legal process by which a landlord removes a tenant from a rental property for violating lease terms or other reasons.
Exclusive Listing: A real estate listing agreement that gives one broker the exclusive right to sell a property for a specified period.
Fair Housing Act: A federal law that prohibits discrimination in housing based on race, color, religion, sex, national origin, familial status, or disability.
Fixture: Personal property that is permanently attached to real property, such as light fixtures, plumbing, and built-in appliances.
Forbearance: A temporary postponement or reduction of mortgage payments granted by a lender to a borrower facing financial hardship.
Graduated Payment Mortgage: A mortgage with initial low payments that gradually increase over time according to a predetermined schedule.
Gross Income: The total income received before any deductions or expenses are subtracted.
Hazard Insurance: Insurance that covers property damage caused by fire, storms, and other hazards.
Holding Deposit: A deposit paid by a potential buyer to show intent to purchase a property, which may be forfeited if the buyer does not follow through with the purchase.
Housing Ratio: The ratio of a borrower’s housing expenses to their gross income, used by lenders to determine affordability.
Interest-Only Loan: A loan where the borrower pays only the interest for a set period, after which they must repay the principal.
Interim Financing: Short-term financing used until permanent financing is available or the property is sold.
Lien Waiver: A document from a contractor or subcontractor stating they have been paid and waive any future lien rights to the property.
Lis Pendens: A legal notice indicating that a lawsuit involving a property has been filed, potentially affecting the property's title.
Lot: A parcel of land intended for sale or development.
Mechanic’s Lien: A lien placed on property by a contractor or supplier who has provided labor or materials but has not been paid.
Metes and Bounds: A system of land description using boundary lines with terminal points and angles.
Modular Home: A home constructed in sections in a factory and then transported to the site for assembly.
Moratorium: A temporary suspension of loan payments granted to a borrower facing financial difficulties.
Multiple Listing Service (MLS): A database used by real estate professionals to share information about properties for sale.
Net Operating Income (NOI): The income from a property after deducting operating expenses but before deducting taxes and financing costs.
Non-Conforming Loan: A loan that does not meet the guidelines set by Fannie Mae and Freddie Mac, often due to the loan size or credit standards.
Notary Public: A public official authorized to witness and certify the signing of documents, administer oaths, and take affidavits.
Obsolescence: The decrease in a property's value due to outdated features, design, or technology.
Option to Purchase: A contract granting the buyer the right to purchase a property at a specified price within a certain time frame.
Parcel: A specific portion of land that is identified for legal purposes.
Partially Amortized Loan: A loan that requires periodic payments of principal and interest but does not fully amortize by the end of the term, leaving a balloon payment due.
Payment Cap: A limit on how much a borrower's monthly payment can increase on an adjustable-rate mortgage.
Per Diem: A daily rate of interest or other charges that may accrue on a loan or other financial obligation.
Personal Property: Movable items not permanently attached to real property, such as furniture, vehicles, and equipment.
PITI: An acronym for Principal, Interest, Taxes, and Insurance, which are the components of a monthly mortgage payment.
Planned Unit Development (PUD): A type of residential development that includes a mix of housing types and land uses, often with shared common areas and amenities.
Plat: A map showing the divisions of a piece of land, including lot boundaries, streets, and easements.
Point: A fee equal to 1% of the loan amount, often charged by lenders to increase their yield on a loan.
Power of Attorney: A legal document authorizing one person to act on behalf of another in legal or financial matters.
Prepayment Penalty: A fee charged by a lender if the borrower pays off the loan before the end of the term.
Principal Balance: The remaining amount of the original loan amount that has not yet been repaid.
Probate: The legal process of administering the estate of a deceased person, including the distribution of assets and payment of debts.
Promissory Note: A written promise to repay a specified amount of money at a certain time, often used in real estate transactions as evidence of debt.
Property Management: The operation, control, and oversight of real estate, including the maintenance and leasing of properties.
Proration: The division of expenses or income between the buyer and seller based on the period of ownership or use, such as property taxes or rent.
Public Records: Documents or pieces of information that are not considered confidential and are available to the general public, such as property deeds and tax records.
Quiet Title Action: A legal proceeding to resolve disputes over property ownership and clear any clouds on the title.
Real Property: Land and anything permanently attached to it, such as buildings and structures.
Recapture: The process of reclaiming funds or benefits previously granted, such as depreciation recapture on the sale of a property.
Reconveyance: The transfer of property back to the original owner after the debt secured by the property has been paid off.
Recording: The process of filing a document with the appropriate government office to make it part of the public record, such as recording a deed or mortgage.
Redemption Period: The period during which a property owner can reclaim foreclosed property by paying the outstanding debt and associated costs.
Rehabilitation Loan: A loan used to finance the repair and improvement of a property, often provided by government programs like the FHA 203(k) loan.
Restrictive Covenants: Provisions in a deed or lease that limit how a property can be used or developed.
Reverse Mortgage: A loan available to homeowners age 62 or older that allows them to convert part of the equity in their home into cash without selling the property.
Right of Redemption: The legal right of a borrower to reclaim a foreclosed property by paying the outstanding debt and associated costs within a specified period.
Sale-Leaseback: A transaction in which the seller of a property leases it back from the buyer, often used by businesses to free up capital.
Secondary Mortgage Market: The market where existing mortgages are bought and sold, often by government-sponsored entities like Fannie Mae and Freddie Mac.
Security Deposit: A sum of money held by a landlord to cover potential damages or unpaid rent, returned to the tenant at the end of the lease if there are no issues.
Seller Financing: A financing arrangement where the seller of a property provides a loan to the buyer, often used when traditional financing is not available.
Settlement Statement: A document that details the final financial transactions and adjustments involved in the sale of a property, also known as a HUD-1.
Subordinate Loan: A loan that is secondary to a primary loan, meaning it will be paid after the primary loan in case of default.
Survey: A detailed map or description of a property’s boundaries, dimensions, and features, often required for legal or financing purposes.
Tax Lien: A lien imposed by the government to secure payment of taxes owed, which can result in foreclosure if unpaid.
Tenant: An individual or entity that occupies and uses property owned by another, typically in exchange for rent.
Title Commitment: A document issued by a title insurance company that outlines the conditions under which a title policy will be issued.
Transfer Tax: A tax imposed by the state or local government on the transfer of property ownership.
Trust Account: A separate account held by a third party, such as a real estate broker, to manage funds related to a real estate transaction.
Trustor: The borrower in a deed of trust arrangement, who conveys title to a trustee as security for a loan.
Underwriting Fee: A fee charged by lenders to cover the cost of evaluating and processing a loan application.
Usury: The practice of charging an illegally high interest rate on a loan.
Vacancy Rate: The percentage of all available rental units that are unoccupied at a given time.
Warranty: A guarantee provided by the seller or builder regarding the condition of a property or its components.
Yield: The return on investment from a property, typically expressed as a percentage.
Acceptance: The act of agreeing to the terms of an offer, thereby creating a binding contract.
Addendum: An addition or supplement to a contract that modifies its terms or conditions.
Arbitration: A method of resolving disputes outside the court system, where an arbitrator makes a binding decision.
Bilateral Contract: A contract in which both parties make promises to each other, such as a purchase agreement.
Breach of Contract: The failure to perform as stipulated in a contract without a legal excuse.
Consideration: Something of value exchanged between parties in a contract, such as money, goods, or services.
Contingency Clause: A provision in a contract that requires certain conditions to be met before the contract becomes binding.
Earnest Money Deposit (EMD): A deposit made by a buyer to show good faith in a transaction, which may be forfeited if the buyer fails to complete the purchase.
Escalation Clause: A clause in a contract that allows for an increase in price under certain conditions, often used in competitive bidding situations.
Force Majeure: A clause in a contract that frees both parties from liability or obligation when an extraordinary event or circumstance beyond their control occurs.
Indemnification: An agreement in which one party agrees to compensate the other for any loss or damage that arises from a specific situation.
Liquidated Damages: A predetermined amount of money that must be paid as compensation for failing to perform certain obligations under a contract.
Mediation: A method of dispute resolution involving a neutral third party who helps the disputing parties reach a mutually agreeable solution.
Mutual Assent: The agreement of all parties to the terms of a contract, often referred to as a "meeting of the minds."
Novation: The act of replacing an existing contract with a new one, with the consent of all parties involved.
Option Contract: A contract in which the buyer pays for the right to purchase a property at a specified price within a certain time frame.
Performance Bond: A bond issued to one party in a contract as a guarantee against the failure of the other party to meet obligations specified in the contract.
Rescission: The act of canceling a contract and returning the parties to their original positions, often due to misrepresentation or mistake.
Specific Performance: A legal remedy that compels a party to perform their contractual obligations, typically used in real estate transactions.
Time is of the Essence: A clause in a contract that requires all agreed-upon actions to be completed within specified time frames.
Unilateral Contract: A contract in which only one party makes a promise or undertakes a performance.
Waiver: The voluntary relinquishment of a known right, claim, or privilege.
Warranty of Title: A guarantee in a deed that the seller has the right to transfer ownership and that the property is free of encumbrances.
