ADMINISTRATOR – A person appointed by the court to manage and settle the estate of a deceased person who has left no will.
AGREEMENT OF SALE – A written agreement whereby the purchaser agrees to buy certain real estate and the seller agrees to sell upon terms and conditions set forth in the agreement.
APPRAISAL – A written estimate and opinion of value; a conclusion resulting from the analysis of facts.
APPRAISER – One qualified by education, training, and experience who is hired to estimate the value of real and personal property based upon experience, judgment, facts, and the use of the formal appraisal processes.
APPRECIATION – An increased conversion value of property or mediums of exchange due to economic or related causes which may prove to be either temporary or permanent. ASSESSED VALUATION An assessment of property values, by a unit of Government, for purposes of taxation.
ASSESSMENT – A charge against real estate made by a unit of government to cover a proportionate cost of an improvement, such as street or-sewer.
ASSETS – All valuable things owned by a person, corporation, or other entity, encumbered or not. ASSIGNMENT (OF TEASE) – A transfer to another of rights, interest, or claim in or to real or personal property. The party who assigns or transfers his interest is the assignor, and the assignee is the one to whom the assignment is made.
ASSUMPTION OF MORTGAGE – The taking of title to property by a grantee wherein he assumes liability for payment of an existing note secured by a mortgage or deed of trust against the property. He becomes a co-guarantor for the payment of the mortgage or deed of trust along with the original maker of the note, who is not released from his responsibility.
ATTORNEY IN FACT – A person authorized to perform certain acts for another person, under power of attorney.
BENEFICIARY – A person who receives and benefits from the gifts or acts of another, such as one who is designated to receive the proceeds from a will or trust.
BEQUEATH – To leave personal property to another by will. To leave real property by will is to devise.
BILL OF SALE – A written instrument transferring title, right, and interest in personal property to another.
BOND – Any obligation under seal. A real estate bond is a written obligation, usually issued on security of a mortgage or a trust deed.
BREACH OF CONTRACT – Violation of any of the terms or conditions of a contract without legal excuse.
CASH VALUE – The actual money that an Asset will bring on the open market without any lengthy delay.
CERTIFICATE OF TITLE – A document stating that title to a particular property is clear. It is prepared by an attorney or qualified person who has examined the abstract of title, but is not to be confused with title insurance. It is only an opinion that title is good. Usually given to a homeowner with the deed.
CLEAR TITLE – A title free and clear of all encumbrances.
CLOSING STATEMENT – An accounting by a broker of funds in a real estate sale, made to the seller and to the retail buyer.
CLOUD ON TITLE – An outstanding claim or encumbrance which would affect or impair the owner’s title, if valid. A judgment or dower interest.
COMPARABLE – Properties listed in an appraisal report which are substantially equivalent to the subject property, comparable in selling price, rental, income or similar measure.
CONTRACT – An agreement, either oral or written to do or not to do certain things. In real estate, there are many different types of contracts, including listings, contracts of sale, options, mortgages, assignments, leases, deeds, escrow agreements, and loan commitments, among others.
CONVENTIONAL MORTGAGE – A mortgage on real estate securing a loan made by a private investor, not guaranteed by a Government agency such as FHA or VA.
CONVEYANCE – The transfer of title to real property by means of a written instrument, such as a deed.
DEED – A legal instrument in writing, duly executed, sealed, and delivered, whereby the owner of real property (grantor) conveys to another (grantee) some right, title, or interest in real estate.
EASEMENT – A privilege or right which the owner of one parcel of land may have to use or enjoy the lands of another, i.e., a right-of-way.
EARNEST MONEY – The cash deposit made by a purchaser of real estate as evidence of good faith.
ENCROACHMENT – Trespass; the building of a structure or any improvements partly or wholly intruding upon the property of another.
ENCUMBRANCE – Any claim, lien, charge or liability attached to and binding upon real property which may lessen the value of the property but will not necessarily prevent transfer of title. There are two general classifications of encumbrances: (1) those that affect the title, such as judgments, mortgages, mechanic’s liens and other liens which are charges on property used to secure a debt or obligation; and (2) those that affect the physical condition of the property such as restrictions, encroachments, and easements.
EQUITY – In real estate, the interest or value of the real estate over and above the amount of the indebtedness thereon.g.
ESCROW – In real estate, it is the state or condition of a deed which is conditionally held by a third party, called the escrow agent, pending the performance or fulfillment of some act or condition.
ESCROW AGREEMENT – A written agreement between two or more parties whereby the grantor, promisor or obligor, delivers certain instruments or property into the hands of a third party, the escrow agent, to be held by said third party until the happening of a contingency or performance of a condition, and then to be delivered to the grantee, promisee, or obligee.
ESTATE – In real estate it refers to the degree, quantity, nature, and extent of interest which a person has in real property, such as a fee simple absolute estate, an estate for years.
EXECUTOR – An individual or institution designated in a will and appointed by a court to settle the estate of the testator.
FAIR MARKET VALUE – Legal term synonymous with MARKET VALUE.
FEE – When applied to property, an inheritable estate in land.
FEE SIMPLE – The most comprehensive ownership of real property known to law; the largest bundle of ownership rights possible in real estate. Fee simple title is sometimes referred to as “the fee”.
FIRST MORTGAGE – The mortgage on property that is superior in right to any other mortgage.
FIXTURE – A chattel which is affixed to and becomes a part of real property.
FORECLOSURE – Procedure whereby property pledged as security for a debt is sold to pay the debt in event of default in payments or terms.
FREEHOLD – An estate in fee simple or for life.
GRANT – The act of conveying or transferring real property, the operative words in a conveyance of real estate are to “grant, bargain, and sell”. The grantor (the person who conveys the real estate) delivers the grant, in the form of a deed, to the grantee.
GRANTEE – Entity to whom a grant is made, or to whom real estate is conveyed. The retail buyer.
GRANTOR – Entity who makes a grant, conveys real estate by deed. The seller.
HOME STEAD – A home that is used as a personal residence. where there is homestead protection, the homeowner generally files a homestead declaration with the county recorder, setting forth his marital status, describing the land and estimating the value of the homestead. The homestead is then exempt from creditor’s claims up to the statutory amount.
IMPROVEMENTS – An addition to land which costs labor or capital (buildings, pavements, etc.), more or less permanently attached. More than repair or replacement.
INCOME PROPERTY – Property owned or purchased primarily for the monetary return it will bring. It may be classified as commercial, industrial, or residential.
INDEMNIFY – To protect against or keep free from loss/ damage. To insure. To repay for loss/damage. To compensate for loss, reimburse.
INSTRUMENT – A written legal document created to effect the rights of the parties.
INTEREST RATE – The rate of return on an investment, specifically, the rate charged on borrowed money.
INTESTATE – A person who dies having made no will, or one defective in form; in which case, his estate descends to his heirs at law or next of kin.
JOINT TENANCY – Co-ownership of real property by two or more persons, whereby the joint tenancy have equal interest, accruing by the same conveyance, commencing at the same time, and held by equal and undivided possession. Joint tenancy includes the right of survivorship, by which interest of a deceased tenant passes to survivors.
JUDGMENT – The final determination of the rights and liabilities of the parties in an action, as decreed by a court.
JUNIOR LIEN – A lien placed upon property after a previous lien has been made and recorded.
LEASE – A written document by which the owner transfers the rights of use and occupancy of land and/or structures to another person or entity for a specified period of time in return for a specified rental.
LEGAL DESCRIPTION – A statement containing a designation by which land is identified according to a system set up by law or approved by law.
LIABILITY – Any drawback, debt, or obligation. Something that acts as a disadvantage. An obligation or duty that must be performed. The opposite of asset.
LIEN – A hold or claim which one person has upon the property of another as a security for some debt or charge.
LIS PENDENS – A public notice, filed against specific lands, that an action at law is pending that may affect the title to the land.
MARKET PRICE – The price paid regardless of pressures, motives, or intelligence.
MARKET VALUE – The price at which a willing seller would sell and a willing retail buyer would buy, neither being under abnormal pressure. MARKETABLE OR MERCHANTABLE TITLE A title which is free from reasonable doubt of defect which can be readily sold or mortgaged to a reasonably prudent purchaser or mortgagee; a title free from material defects or grave doubts and reasonably free from possible litigation.
MECHANICS LIEN – A statutory lien to secure payment to materialmen and mechanics for materials and services used to repair, improve, or maintain real property.
MORTGAGE – A legal instrument pledging a described property for repayment of a loan under certain terms.
NEGOTIABLE – A promissory note, or similar instrument, is said to be negotiable if title to the instrument, and the money it represents, can be transferred by mere endorsement and delivery by the holder, or by delivery only.
NOTE – A written instrument acknowledging a debt and promising payment.
NOTICE TO QUIT – A written notice from a landlord to a tenant that the tenant must vacate the premises at the end of the term or immediately, if the lease is at will.
OBLIGATION – Legal reservation of funds based on known requirements (a contract, for example), or an a realistic estimate of costs.
OFFER – A promise by one party to act in a certain manner provided the other party will act in the manner requested. The offeror is the one who makes the offer to the offeree.
OPTION – A privilege, acquired for a consideration, of demanding within a specified time the carrying out of a transaction upon stipulated terms. The optionor grants an option to an optionee.
OWNER IN EQUITY – owner is responsible for repairing or replacing improvements to the property that are damaged (i.e., loss by fire, damages due to flood, etc.).
PERMIT – A privilege, revocable at will, granted to another Federal agency to use real property for a specific purposes; confers no possessory interest.
PERSONAL PROPERTY – All physical objects of a personal or movable nature subject to ownership, except real estate (real property). See also PROPERTY and REAL PROPERTY.
PLAT – Map of town, section, or subdivision, showing location and boundaries of individual properties.
PLOT – A piece of land.
POWER OF ATTORNEY – An instrument authorizing someone to act as another person’s agent or attorney. The agent is attorney in fact, and his power is revoked at the death of the principal by operation of law. Power of attorney may be general or special.
PREPAYMENT PENALTY – Penalty for the payment of a mortgage or deed of trust note before it actually becomes due.
PRICE – The amount paid in legal tender, goods, or services; the consideration; purchase price. The terms for which a thing is done.
PRINCIPAL – Amount of a loan balance. In a mortgage payment of principal and interest, the principal repays the loan.
PROPERTY – The rights or interests a person has in the thing he owns; not, in the technical sense, the thing itself. These rights include the right to possess, to use, to encumber, to transfer and to exclude, commonly called the bundle of rights. In modern understanding, however, property has come to mean the thing itself to which certain ownership rights are attached. Property is either real or personal.
PURCHASE MONEY MORTGAGE – A mortgage given by the grantee to the grantor, on the same land and concurrently with the conveyance, to secure the unpaid balance of the purchase price.
QUIET TITLE – Court action brought to establish title and to remove a cloud on the title.
QUITCLAIM DEED – A deed of conveyance with conveys to the grantee without warranty of title whatever interest, title, or claim the grantor possesses.
REAL ESTATE – See REAL PROPERTY.
REAL PROPERTY – Land and anything built on, growing on, or affixed to land. See also PROPERTY, PERSONAL PROPERTY.
RECAPTURE CLAUSE – A clause in leases or deeds which gives the landlord the right to terminate if certain conditions or standards are not met. In a percentage lease, the landlord has the right to cancel if a specific minimum volume of business is not maintained. Also, a clause in Government outgrants which allows the Government to reacquire (recapture) the property if needed for national defense.
REDEMPTION – The right to redeem property during the foreclosure period; the right of an owner to redeem his property after a sale for taxes. Often referred to as Equity of Redemption.
RELEASE OF LIEN – The discharge of certain property from the lien of a judgment, mortgage, or claim.
RENT – A compensation, either in money, provisions, chattels, or labor, received by the owner of real estate from the occupant.
RESIDUAL ESTATE – That which remains of a testator’s estate after deducting the debts, bequests, and devises.
RESTRICTION – A limitation upon the use or occupancy of real estate, placed by covenant in deeds or by public legislative action.
REVERSION – The residue of an estate left in the grantor to commence in possession after the determination of some particular estate granted out by him. The return of land to the grantor and his heirs after the grant is over.
REVOCATION – The recall of a power or authority conferred, or the vacating of an instrument previously made.
RIGHT OF SURVIVORSHIP – The distinctive characteristic of a joint tenancy (also tenancy by the entirety) by which the surviving joint tenants) succeeds to all right, title, and interest of the deceased joint tenant without the need for probate proceedings.
SALES CONTRACT – A contract by which retail buyer and seller agree to the terms of the sale.
SATISFACTION OF MORTGAGE – An instrument for recording and acknowledging payment for an indebtedness secured by a mortgage.
SECONDARY FINANCING – A loan secured by a second mortgage or trust deed on real property.
SEPARATE PROPERTY – Property owned by a husband or wife which is not community property; property acquired by either spouse prior to marriage or by gift or devise after marriage.
SUBORDINATE – To make subject to, or junior to.
SUBORDINATION CLAUSE – A clause in a mortgage or lease stating that rights of the holder shall be secondary or subordinate to a subsequent encumbrance.
SURETY – One who guarantees the performance of another; the guarantor.
TAX DEED – A deed given where property has been purchased at a sale to the public of property for nonpayment of taxes.
TAX LIEN – A government claim for unpaid real estate tax.
TAX SALE – A sale of property, usually at auction, for nonpayment of taxes assessed against it.
TENANCY IN COMMON – Co-ownership of real property by two or more persons, each entitled to possession according to his proportionate share. Unlike joint tenancy, there is no right of survivorship. See also JOINT TENANCY, TENANCY BY ENTIRETY, RIGHT OF SURVIVORSHIP.
TENANCY BY THE ENTIRETY – Joint ownership by husband and wife, created by conveyance to husband and wife, who possess the property jointly. The property goes entirely to the survivor and is liable only for joint debts of husband and wife, not individual debts. Divorce severs the tenancy. See also JOINT TENANCY, TENANCY IN COMMON RIGHT OF SURVIVORSHIP.
TENANT – One who holds or possesses land or tenements by any kind of title, either in fee, for ‘life, for years, or at will. In a popular sense, the one who has temporary use and occupation of lands or tenements which belong to another, the duration and other terms of whose occupations are usually defined by a lease, while the parties thereto are placed in the relationship of landlord and tenant.
TENANT AT SUFFERANCE – One who comes into possession of lands by lawful title but keeps them afterwards without any title, after his interest has ended.
TENANT AT WILL – A license to use or occupy lands and tenements at the will of owner, but for no fixed term. The tenancy can be terminated at will by the owner.
TENURE IN LAND – The mode or manner by which an estate in lands is held.
TERMINATION AT WILL – Termination of an outgrant at will by the lessor. All Army outgrants may be terminated at will.
TESTATE – The condition of one who leaves a valid will at their death.
TITLE – The right to or ownership of lands. Also, the evidence of ownership. Title to property encompasses all the bundle of rights an owner possesses.
TITLE INSURANCE – Indemnity against loss or damage resulting from defects in or liens on a title at the date of the insurance.
TOWNSHIP – A territorial subdivision, six miles long, six miles wide, and containing thirty-six sections, each one mile square.
TRADE FIXTURES – Articles of Personal property annexed to real property but which are necessary to the carrying on of a trade and are removable by the owner.
TRANSFER – Change of jurisdiction over real property from one Federal agency or department to another, including military departments and defense agencies.
TRUST DEED OR DEED OF TRUST – A deed conveying land to a trustee as collateral security for the payment of a debt; upon payment of a debt secured thereby, the deed of trust is released; upon default, the trustee has the power to sell the land and pay the debt.
TRUSTEE – One why holds property in trust for another to secure the performance of an obligation.
UNDUE INFLUENCE – Taking any fraudulent or unfair advantage of another’s weakness in mind, distress, or necessity.
USURY – On a loan, claiming a rate of interest greater than that permitted by law.
UTILITY – The usefulness of a property; its ability to satisfactorily function for the purpose for which it was intended.
VACATED PREMISES – Property from which all military personnel and missions have been vacated.
VALID – Having force, or binding force; legally sufficient and authorized by law.
VALUATION – The act or process of estimating value; the amount of estimated value.
VALUE – Ability to command goods, including money, in exchange; the quantity of goods, including money, which should be commanded or received in exchange for the thing valued; utility; desirability. As applied to a property value may be broadly defined as “the present worth of all the rights to future benefits arising from ownership”.
VENDEE – A purchaser; a retail buyer; the person to whom a thing is rendered or sold.
VENDOR – The person who transfers Property by sale.
VOID – That which is unenforceable; having no force or effect.
VOIDABLE – That which is capable of being adjudged void but is not void unless action is taken to make it so.
VOLUNTARY LIEN – Any lien placed upon property with consent of, or as a result of, the voluntary act of the owner.
WAIVER – The renunciation, abandonment, or surrender of a right, claim, or privilege.
WARRANTY DEED – A deed that contains a covenant that the grantor will protect the grantee against any claimant.
WASTE – Willful destruction of any part of the ;and which would injure or prejudice the landlord’s reversionary right.
ZONING – The public regulation, through police power, of the character and extent of real estate use. Uniform restrictions on improvements, building height, density of population, and other factors regulate the use and development of private property.