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A B C D E F G H I J K L M N O P Q R S T U V W X Y Z The Jargon of Real EstateThe real estate industry has its own unique jargon and, without some knowledge of these word, you may find yourself a bit confused when you become involved in a real estate transaction. With this in mind, following is a glossary of terms commonly used in the real estate industry. Whether you are entering the real estate market for the first time or have invested in it before, this handy reference will provide an understanding of basic real estate words and phrases...the jargon of Real Estate. A Dictionary of Real Estate Terms(Please send email requesting or suggesting other definitions to webmaster.) Abstract - A history of all transactions shown in the public records affecting a particular tract of land. Abstract Plant - See Title Plant. Access - The right to enter and leave a tract of land from a public way. "Oftentimes the right to enter and leave over the lands of another." Accretion - The slow build up of lands by natural forces such as wind, wave or water. Acknowledgement - The act by whick a party executin a legal document goes before an authorized officer or notary public and declares the same to be his voluntary act and deed. Acre - A tract of land 208.71 feet square and containing 43,560 square feet of land. Adjustable Rate Mortgage (ARM) - A type of mortgage loan whose interest rate changes periodically up or down, usually once or twice a year. Important information on this loan involves the "caps." Putting it another way, these are mortgage loans under which the interest rate is periodically adjusted, in accordance with some market indicator, to more closely coincide with the current rates. The extent and number of these adjustments are agreed to at the inception of the loan. Administrator - A person appointed by a probate court to settle the affairs of an individual dying without a will. The term is administratirix if such a person is a woman. Adverse Possession - The possession, by one person, of land belonging to another in a manner deemed adverse to the interest of the owner. 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. A claim made against the lands of another by virtue of open and notorious possession of said lands by the claimant. 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. Air Rights - The right to ownership of everything above the physical surface of the land. 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. A national association of title insurance companies, abstracters and attorneys specializing in real property law which speaks for the title insurance and abstracting industry, with headquarters in Washington, D.C. Amortization - Payment to reduce the principal of a debt in regular, periodic installments. Annual Percentage Rate (APR) - A stated interest rate that reflects all the financing costs of a mortgage. The APR includes points, origination fees and other finance charges in addition to the interest on the mortgage. It provides a benchmark for comparing different types of mortgages based on the annual cost for each loan. (The APR is usually slightly above the actual interest rate alone.) Appraisal - A report from an independent third party detailing the estimated value of real estate. Appurtenance - A right or privilege that is a part of the ownership of property, such as a right of way to a highway across the land of another. Water rights are also an example. 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 to another. Assumable Loan - A loan which the lender is willing to "transfer" from the previous home owner to the new owner, sometimes at the same interest rate, sometimes at a new rate. An assumable loan can make the purchase of the home more attractive to potential buyers depending on interest rates and fees. Attorney's Opinion - A statement by an attorney as to the validity of a title, arrived at after investigation of the history of the title as recorded in the public records. Back Title Letter - Also called "back title certificate" in some areas, and "starter" in others. When titles previously have been examined up to a certain date by reliable examiners, title companies sometimes give subsequent examiners of such titles a letter that sets forth the condition of the title at the time of the previous examination and authorizes them to begin their subsequent examination with the terminal date of the previous examination. Balloon Note - A form of promissory note that calls for the minimum payment of principal and the payment of interest at regular intervals. This type of note requires a substantial final payment, which represents all the principal. Bankruptcy - A proceeding in U.S. District Court wherein assets of an insolvent debtor are protected and distributed in an equitable manner. Binder - Sometimes called "preliminary certificate" or "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. (2) A deposit in escrow of a small part of the purchase price of real estate as evidence of good faith and to bind an agreement to purchase. Caps - Consumer safeguards for adjustable-rate mortgages that limit the amount monthly payments can increase. An interest-rate cap limits the amount the interest can change while a payment cap limits the increase in monthly payment to a specific dollar amount. Certificate of Title - A certificate issued by a title examiner stating the condition of a title. Chain - In real estate measurements (surveying), 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 successive ownerships or transfers in the history of title to a tract of land. Closing - The meeting between buyer, seller and lender where the property and funds legally change hands. Also called settlement. Closing costs - The costs associated with the official change in ownership and with obtaining the mortgage that are assessed at the closing. These include required points in obtaining the mortgage, mortgage insurance premium, certifications, mortgage insurance, home owners insurance, prepayment of property taxes, recording fees, etc. These fees are in addition to any down payment expense. Typically total between 3 percent and 6 percent of the mortgage amount. Contingency - A condition put on an offer to buy a home; such as the prospective buyer making an offer contingent on the sale of their existing home. Conventional Mortgage - A type of mortgage not insured by either the Federal Housing Authority (FHA) and/or not guaranteed by the Department of Veterans Affairs (VA), and thus usually requiring a higher down payment of 5% to 20% of the sales price. Debt-to-income ratio - The percentage that reoults when a borrower's monthly payment obligation oh long-term debts is divided by his or her net or gross monthly income. Dedication - The setting aside of certain land by the owner and declaring it to be for public use. Examples: streets, sidewalks and parks. Deed - A document through which a conveyance of property is effected. Deed Restriction - A covenant contained in a deed imposing limits on the use or occupancy of the real estate or the type, size, purpose or location of improvements to be constructed on it. Defect - A blemish, imperfection or deficiency. A defective title is one that is irregular and faulty. Depreciation - Loss in value occasioned by ordinary wear and tear, destructive action of the elements, or functional or economic obsolescence. Devise - A gift of real estate made by a will. Dominant Estate - The property for the benefit of which a right-of-way easement exists across another's adjoining piece of land is said to be the dominant estate. The land across which the easement runs is said to be the servient estate. Dower - A right that a wife has in her husband's property at the time of his death. Does not exist in all states. Earnest Money - Funds submitted by a Buyer with an offer to purchase real estate to show "good faith" to follow through with the purchase. Earnest money is placed by the broker in an escrow/trust account until the closing, when it becomes a part of the down payment or closing costs. (A credit to the Buyer.) Easement - A right to use all or part of the land owned by another for a specific purpose. An easement may, for example, entitle its holder to install and maintain sewer or utility lines. Eminent Domain - The right of a government to take privately owned property for public purposes under condemnation proceedings subject to payment of its fair market value. Encroachment - Any building, improvement or structure located on one property (such as a wall, fence or driveway) that intrudes upon the property of another. Encumbrance - Any interest, right, lien or liability attached to a parcel of land (such as unpaid taxes or an unsatisfied mortgage) that constitutes or represents a burden or charge upon the property. Equity - The market value of real property, less the amount of existing liens. Escheat - The reversion of property to the state when an owner dies leaving no legal heirs, devisees or claimants. Escrow - A method of closing a real estate transaction in which all required documents and funds are placed with a third party for processing and disbursement. A special account set up by the lender in which money is held to pay for taxes and insurance. Estoppel - A legal restraint that stops or prevents a person from contradicting or reneging on his previous position or previous assertions or commitments. Examination - The study of the instruments and muniments incident to a chain of title to determine their effect and condition in order to reach a conclusion as to the status of the title. Exception - A provision in a title insurance binder or policy that excludes liability for a specific title defect or an outstanding lien or encumbrance. Execute - To sign a legal instrument. A deed is said to be executed when it is signed, sealed, witnessed and delivered. Fannie Mae (FNMA) - Federal National Mortgage Association. A private corporation dealing in the purchase of first mortgages. Fee Simple Deed - The absolute ownership of a parcel of land. The highest degree of ownership that a person can have in real estate, which gives the owner unqualified ownership and full power of disposition. FHA (Federal Housing Administration)- A federal agency that insures first mortgages, enabling lenders to lend a very high percentage of the sale price. FHA Financing - Financing for a loan which will be insured against loss to the lender by the Federal Housing Administration (FHA) - a part of the U.S. Department of Housing and Urban Development (HUD). Such financing only requires a 3-5% down payment from the Buyer of real estate. Fixed Rate Mortgage - A mortgage having a rate of interest that remains the same for the life of the mortgage. Fixtures - Personal property that is attached to real property and is legally treated as real property while it is so attached. Examples: medicine cabinets, window blinds and chandeliers. Foreclosure - A legal proceeding in which real estate secured by a mortgage or deed of trust is sold to satisfy the underlying debt. 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 Home Loan Bank System. Ginnie Mae (GNMA) - Government 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 or confer, with or without compensation, a gift such as land or money by one having control or authority over the gift. Grantee - One to whom a grant is made. Grantor - One who makes a grant. Hereditaments - Any and all kinds of estates, interest and rights in real estate that can be inherited. Homeowners Insurance - Insurance coverage that protects the homeowner from "casuality" (losses or damage to the home or personal property) and from "liability" (damages to other people or property) depending on the terms of the policy. Required by the lender and usually included in the monthly mortgage payment and held in escrow by the mortgage holder. Also includes coverage such as personal liability and theft away from home. HUD (Department of Housing and Urban Development) - The federal department responsible for the major housing programs in the United States. Index - (1) An alphabetical listing in the public records of the names of parties to
recorded real estate instruments together with the book and page number of the record. Judgment - The determination of a court regarding the rights of parties in an action. A judgment of debt on a property owner can create a lien on all of that owner' s land within a certain jurisdiction. Junior Mortgage - A mortgage lower in lien priority than another.
Leasehold - The right to possession and use of land for a fixed period of time. The lease is the agreement that creates the right. Lessee - A tenant holding a leasehold. Lessor - A landlord; one who gives a leasehold to a lessee. License - Permission to go upon or use the land of another, the permission being a personal privilege and not constituting an interest in the land. Lien - A monetary charge imposed on a property, usually arising from some debt or obligation. Lien Waiver - Also called "waiver of liens." A waiver of mechanics' lien rights, signed by contractors or subcontractors. Link - In surveying, a length of 7.92 inches. Lis Pendens - A legal notice intending to bind third parties of litigation claiming an interest in real estate. Loan Origination Fee - The fee charged by a lender to evaluate, prepare, and submit all the documents associated with your mortgage. Loan Policy - Also called "mortgagee policy." A title insurance policy insuring a mortgagee, or beneficiary under a deed of trust, against loss caused by invalidity or unenforceability of a lien, or loss of priority of the mortgage or deed of trust. Loan-To-Value Ratio - The relationship between the amount of the mortgage loan and the appraised value of the property. Expressed as a percentage. Lot - Generally, any portion or parcel of real property. Usually refers to a portion of a subdivision. Market Value - The average of the highest price that a buyer, willing but not compelled to buy, would pay and the lowest price a seller, willing but not compelled to sell, would accept. Mechanic's Lien - A lien on real estate, created by operation of law, that secures the payment of debts due to persons who perform labor or services or furnish materials incident to the construction of buildings and improvements on the real estate. Metes and Bounds - A land description in which boundaries are described by courses, directions, distances and monuments. Mortgage - A conditional pledge of property to a creditor as security for the payment of a debt. Mortgage Insurance Premium (MIP) - An insurance policy the borrower buys to protect the lender from non-payment (sometimes as part of the closing costs, but often as an additional portion of the total mortgage payment). Private mortgage insurance policies are usually required if you make a down payment that is below 20 percent of the appraised value of the home. Insurance written by an independent mortgage insurance company protecting the mortgage lender against loss incurred by a mortgage default, thus enabling the lender to lend a higher percentage of the sale price. Mortgagee - The holder of a mortgage. The party to whom a mortgage is made, generally the lender. Mortgagee Policy - See Loan Policy. Mortgagor - A person who mortgages property. A person who executes a mortgage, generally the property owner. Multiple Listing - 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, with the agreement that any member of the group may sell the properties and, in the case of a sale, the commission will be divided between the broker making the sale and the broker who filed the listing. Muniments of Title - Written evidence (documents) that an owner possesses to prove his or her title to property. 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. Owner's Policy - A policy of title insurance insuring an owner of real estate against loss occasioned by defects in, liens against, or unmarketability of the owner' s title. PITI (Principal, Interest, Taxes and Insurance) - The four components that are included in the monthly mortgage payment. Principal and interest are the portions assigned to repay the mortgage; taxes and insurance go into the escrow account. Plat - Also called "plat map." A map dividing a parcel of land into lots, as in a subdivision. A plat book contains the plat maps for a given area. Points (Loan Discount Points) - Prepaid interest on a mortgage that is usually paid at the time of closing. Each point is equal to 1 percent of the total amount of the mortgage. Most lenders offer mortgages with several combinations of points and interest rates. Generally, the lower the interest rate, the more points you will pay at the closing. Also called "commission points" or "discount points." Interest rates can be lowered from the current available by paying points. Premium - The amount payable for an insurance policy. Prepayment Penalty - A fee charged by the lender to the borrower who pays off a loan before the original contracted term of the loan. Such a penalty is disadvantageous to the borrower and is not allowed on FHA and VA loans. Prescriptive Easement - A right to use another' s property that is not inconsistent with the owner's rights and that is acquired by an open, notorious, adverse and continuous use for the statutory period, for example 20 years. Principal - (1) A sum of money owed as a debt on which interest is payable. The face
value of the mortgage. Property Taxes - Taxes (based on the assessed value of the home) paid by homeowners for community services such as schools, public works, and other costs of local government. Paid as part of the monthly mortgage payment and held in escrow by the mortgage holder. 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. Quit Claim Deed - A deed that does not imply that the grantor holds title, but that surrenders and gives to the grantee any possible interest or rights that the grantor may have in the property. Real Estate - Also called "real property." (1)Land and anything permanently
affixed to the land, such as buildings, fences and those things attached to the buildings,
such 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 properly recorded, it is considered to be a matter of public record. Legally, that means that all subsequent purchasers are deemed to have constructive knowledge of that information. Reinsurance - A contractual relationship between two insurance companies under which one insurer assumes a portion of the risk of the insurance policy written by the other. Release -(1) To relieve from debt or security or abandon a right, such as the release
of a mortgage lien from a part or all of the land mortgaged. Restrictions - Limitations on the use of property imposed or created by deeds or other documents in the chain of title. A restriction, for example, may prohibit the placement of a trailer or the construction of a commercial structure on the property. Riparian Rights - The rights of owners of lands bordering watercourses which relate to the water and its use. Sale Agreement - A contract entered into between a buyer and seller, setting forth the terms, provisions and conditions of a 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 exploration and perusal of the public records in an effort to find all recorded instruments relating to a particular chain of title. Second Mortgage - A mortgage ranking in priority immediately below a first mortgage. Subordination - The act or process by which a person's rights are ranked below the rights of others. For example, a second mortgagee's rights are subordinate to those of the first mortgagee. Surety -(1) A person who agrees to be responsible for a debt or obligation of another. Title - (1) A combination of all the elements that constitute the highest legal right
to own, possess, use, control, enjoy and dispose of real estate or an inheritable right or
interest therein. Title Covenants - Covenants ordinarily inserted in conveyances and in transfers of title to real estate for the purpose of giving protection to the purchaser against possible insufficiency of the title received. A group of such covenants known as "common law covenants" includes: covenants against encumbrances; covenants for further assurance (in other words, to do whatever is necessary to rectify title deficiencies); covenants of good right and authority to convey; covenants of quiet enjoyment; covenants of seisin; covenants of warranty. (See Warranty or Covenant.) Title Defect - (1) Any possible or patent claim or right outstanding in a chain of
title that is adverse to the claim of ownership. Title Insurance Policy - An insurance policy which insures you against errors in the title search. Essentially guarantees your financial interest and your financial interest in the property. 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 insurance is required by the lender when the purchase is made with a mortgage, it is a recommended option for the Buyer of real estate. Title insurance is part of the total closing costs. Title Plant - Also called "abstract plant" in some areas. A geographically filed assemblage of title information that helps in expediting title examinations, such as copies of previous attorneys' opinions, abstracts, tax searches and copies or take-offs of the public records. Underwriter - An insurance company that issues insurance policies to the public or to another insurer. Variable Interest Rate - Also called "flexible interest rate." An interest rate that fluctuates as the prevailing rate moves up or down. In mortgages, there are usually maximums as to the frequency and amount of fluctuation. Veterans Administration (VA) Loans - Housing loans to veterans by banks, savings and loans, or other lenders that are guaranteed by the Department of Veterans Affairs, enabling veterans to buy a residence with little or no down payment. Waiver - The voluntary and intentional relinquishment of a known right, claim or privilege. Warranty - In a broad sense, an agreement or undertaking by a seller to be responsible for present or future losses of the purchaser occasioned by deficiency or defect in the quality, condition or quantity of the thing sold. In a stricter sense, the provision or provisions in a deed, lease or other instrument conveying or transferring an estate or interest in real estate under which the seller becomes liable to the purchaser for defects in or encumbrances on the title. (See Title Covenants.) Will - A testamentary disposition of property, usually in a form prescribed by law, that takes effect upon death.
"Y" because we like you. If you can remember this, like me you are too old. (Just kidding, I prefer to call myself "classic.") Zoning - Laws passed by local governments regulating the size, type, structure, nature and use of land or buildings. The foregoing terms are defined only in their real estate or title insurance contexts and may have completely different meanings in other contexts. For more precise definitions, you are advised to seek legal counsel.
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Contact InformationPostal Address E-mail Address: Wayne Barnes Selling Real Estate in, and aiding in relocation to, the Greater Tulsa, Oklahoma Area - Tulsa, Broken Arrow, Jenks, Owasso, Glenpool, Collinsville, Claremore, and Sand Springs in Oklahoma. Send mail to webmaster with questions or
comments about this web site.
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