Amendment - A change
(either to alter, add to, or correct) a part of an agreement without changing
the principal or essence.
Amortized Loan - A loan
that is paid off (both interest and principal) by regular payments that are
equal or nearly equal.
Appraisal A professional
opinion of the value of a property based on a factual analysis.
Methods There are 3 appraisal methods used on residential property:
cost approach which determines the cost to build a new structure
replacement approach which determines the cost to replace the existing
market value approach which uses the sales price of comparable properties
An increase in the value of a piece of real estate
of a Mortgage Some loans are assumable.
This means that on taking title to a property, the new owner can assume
the existing loan on the property and become liable for this lien against the
Beneficiary - The recipient of benefits,
often from a deed of trust (usually the lender).
of Escrow (Closing) The final settlement of the real estate transaction
between the buyer and seller. This
is usually the recording of the title to the property in the buyers name.
Comparable Sales - Sales that have similar
characteristics as the subject property, used for analysis in the appraisal.
Commonly called "comps".
Mortgage A mortgage securing a loan made by investors without government
underwriting; i.e., non-FHA or VA insured or guaranteed.
Offer A response to an offer or a preceding counter offer, which changes
or adds terms that supercede the terms offered in the preceding offer or counter
Written instrument which, when properly executed and delivered, conveys
Deed Restrictions - Limitations in the dead
to a property that dictate certain uses that may or may not be made of the
Points Additional charges made by a lender at the time the loan is
generated. Points are measured as a
percent of the loan with each point being equal to one percent.
A buyer may pay more points and assume a lower interest rate for their
Money Deposit A down payment made by the buyer as a statement of intent
and good faith.
A right, privilege, or interest which one party has in the land of another
(such as with right of way).
The interest or value which the owner of a piece of real estate has over and
above the value of all the liens on that property.
The deposit of instruments and funds with instructions with a neutral third
party, the escrow agent, to carry out the provisions of an agreement or contract.
Loan (Federal Housing Administration) A loan which has been insured by
the federal government guaranteeing its payment in case of default by the owner.
Loan Similar to F.H.A. but for residential property in rural areas
Hazard Insurance - Real estate insurance
protecting against fire, some natural causes, vandalism, etc., depending upon
the policy. Buyer often adds liability insurance and extended coverage for
Account An account held by the lender on behalf of the owner in order to
pay annual tax and insurance costs. The
owner contributes monthly to this account along with the payment of the
principal and interest on the loan.
Tenancy A form of joint ownership which insures right of survivorship
in the event of the death of one of the owners.
All owners have equal ownership and equal rights to the property.
Legal Description - A description of land
recognized by law, based upon government surveys, spelling out the exact
boundaries of the entire piece of land. It should so thoroughly identify a
parcel of land that it cannot be confused with any other.
This is an encumbrance or debt levied against the property and makes the
property security for its discharge or payment.
Title A title free and clear of liens or encumbrances which would
prevent its being transferred to a buyer.
An instrument recognized by law by which property is hypothecated to secure
the payment of a debt or obligation.
Insurance 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 sales price.
(Sometimes referred as Private Mortgage Insurance or "PMI".)
Fee A fee charged by a lender to create a loan.
Property Any property which is not real property and would not be
considered part of a real estate transaction such as furniture.
PITI - A payment that combines Principal,
Interest, Taxes and Insurance.
Power of Attorney - A written instrument
whereby a principal gives authority to an agent.
Agreement An agreement between a buyer and seller for the purchase of
Deed A deed that releases a party from the title of a property.
Property Land and whatever by nature or artificial annexation is part of
Recording - Filing documents affecting real
property with the County Recorder as a matter of public record.
Assessment A legal charge against real estate by a public authority to
pay the cost of a public improvement, such as street lighting.
A part of a parcel of land that has been divided into smaller parts.
of Mortgage The period through which a mortgage is payable.
Account An account separate and apart from the brokers own funds,
into which the broker is required to deposit all funds collected on behalf of
clients, such as earnest deposits.
Loan A loan guaranteed by the Veterans Administration.
Deed A deed used to convey real property which contains warranties of
title and quiet possession and wherein the grantor agrees to defend the premises
against the lawful claims of third persons.
Exchange Also referred to as a nontaxable sale. Enables property owner
to trade one investment property for another "like" investment property without paying
capital gains tax on the transaction.