Escrow Terms & Glossary
Number -- Originated by the American
Bankers Association, it is the number (usually in the upper
right-hand portion of the check) which identifies the bank upon
which the check is drawn.
Abstract of Judgment -- A summary of
the essential provisions of a court judgment, which when
recorded in the county recorder's office, creates a lien upon
the property of the defendant in that county, both presently
owned or after acquired.
Abutting Owner -- One whose land is
contiguous to (abuts) a public right of way.
Acceleration Clause -- Clause used in
an installment note and mortgage (or deed of trust), which gives
the lender the right to demand payment in full upon the
happening of a certain event, such as failure to pay an
installment by a certain date, change of ownership without the
lender's consent, destruction of the property, or other event
which endangers the security of the loan.
Right -- A right to ingress and egress
to and from one's property. May be express or implied.
Accommodation Recording -- The
recording of documents with the county recorder by a title
without liability (no insurance) on the part of the company, but
merely as a convenience to a customer.
Acknowledgement -- A written
declaration by a person executing an instrument, given before an
officer authorized to give an oath (usually a notary public),
stating that the execution is of his own volition.
to Quiet Title -- A court action to
establish ownership to real property. Although technically not
an action to remove a cloud on title, the two actions are
usually referred to as "Quiet Title" actions.
Adjudication -- A judgment or decision
by a court.
Adjustable Mortgage Loans (AML\'92S)
-- Mortgage loans under which the interest rate is periodically
adjusted to more closely coincide with current rates. The
amounts and times of adjustment are agreed to at the inception
of the loan. Also called: Adjustable Rate Loans, Adjustable Rate
Mortgages (ARM\'92s), Flexible Rate Loans, and Variable Rate
Administrator -- A person given
authority by a proper court to manage and distribute the estate
of a deceased person when there is no will.
Adverse Possession -- A method of
acquiring title by possession under certain conditions.
Generally, possession must be actual, under claim of right,
open, continuous, notorious, exclusive and hostile (knowingly
against the rights of the owner). Exact time (years) of
possession and specific requirements (such as payment of
property taxes) vary with the statutes of each state.
Affidavit -- A written statement or
declaration, sworn to before an officer who has authority to
administer an oath.
Affirmative Easement -- An easement
described from the benefited estate (dominant tenement). Also
called a parcel 2 easement. The same easement described from the
burdened estate (servient tenement) would be a negative
Acquired Title -- Legal doctrine by
which property automatically vests in a grantee when the grantor
acquires title to the property after the deed has been executed
-- One who is authorized to act for or represent another
(principal), usually in business matters. Authority may be
expressed or implied.
-- Latin for (otherwise) commonly meaning that a person is known
by more than one name. In some states, indicated by the letters
AKA (Also Known Aliases).
Alienation Clause -- A type of
acceleration clause, calling for a debt under a mortgage or deed
of trust to be due in its entirety upon transfer of ownership of
the secured property. Also called a "due-on-transfer" clause.
A.L.T.A.(American Land Title Association)
-- An organization, composed of title insurance companies, which
has adopted certain insurance policy forms to standardize
coverage on a national basis.
Amendment -- A change, either to
correct an error or to alter a part of an agreement without
changing the principal idea or essence.
American Institute of Real Estate Appraisers
-- A trade organization designed to establish standards of
competence in the appraisal industry. The designation MAI
(competent by the institute's standards to appraise all types of
real property) and RM (one to four family residences) are
prestigious and heavily relied upon by the real estate industry,
lenders, governments, and others who utilize appraisers.
Amortization -- Payment of debt in
regular, periodic installments of principal and interest, as
opposed to interest only payments.
Amortization Schedule -- A schedule
showing each payment of a loan to be amortized and breaking down
the payment applied to principal and the amount applied to
Amortize -- To reduce debt by regular
payments of both principal and interest, as opposed to interest
Tenant -- The most reliable, and
usually the largest, tenant in a shopping center. The strength
of the anchor tenant greatly affects the availability of
financing for the shopping center. The term may also be used to
describe a tenant in an office building, industrial park, etc.
Annexation -- Permanently affixing to
real property, such as city adding additional land to increase
Loan (Accelerating Payoff Progressive Equity Loan)
-- A residential property loan which calls for a payment
increase over the first six years. Level payments are made for
the remaining years and the loan paid
off during the 15th year.
There is no prepayment penalty and P.M.I. is required.
Appraisal -- An opinion of value based
upon a factual analysis. Legally, an estimation of value by two
disinterested persons of suitable qualifications.
Appraiser -- One who is trained and
educated in the methods of determining the value of property
through analysis of various factors which determine said value.
Appropriation -- The private taking
and use of public property, such as water from a river or lake.
Not to be confused with condemnation or expropriation.
Appurtenance -- Something belonging to
something else, either attached or not, such as a barn to a
house or an easement to land. The appurtenance is part of the
property and passes with it upon sale or other transfer.
Arbitrary Map -- A map drawn by a title
company to be used in locating property in areas where legal
descriptions are difficult and complex. Areas are arbitrarily
subdivided, usually by ownership at a given time, into lots
which are numbered. Recorded documents are then posted to these
arbitrary lots by the same "arb" number.
Arbitration Clause -- A clause in a
lease calling for the decision of a third party (arbiter)
regarding disputes over future rents based on negotiation. Also
used in construction contracts, disputes between brokers, etc.
Articles of Incorporation --
Documentation filled with the state which sets forth-general
information about a corporation. More specific rules of the
corporation would be contained in the by-laws.
Is" Condition -- Premises accepted by
a buyer or tenant in the condition existing at the time of the
sale or lease, including all physical defects.
Assessed Value -- Value placed upon
property for property tax purposes by the tax assessor.
Assessment -- (1) The estimating of
value of property for tax purposes. (2) A levy against property
in addition to general taxes. Usually for improvements such as
streets, sewers, etc.
Assessment District -- An area, the
boundaries of which are set for tax assessment purposes only;
these boundaries may cross city boundaries.
-- A secondary offer to buy property, used in case the first
(primary) offer fails. A backup offer is especially useful when
the primary offer contains difficult contingencies.
-- A note calling for periodic payments which are insufficient
to fully amortize the face amount of the note prior to maturity,
so that a principal sum known as the "balloon" is due at
-- The final payment (balance due) of a balloon note.
-- Proceedings under federal bankruptcy statutes to relieve a
debtor (bankrupt) from insurmountable debt. The bankrupt's
property is distributed by the court to the creditors as full
satisfaction of the debts, in accordance with certain priorities
and exemptions. Voluntary bankruptcy is petitioned by the
debtor; involuntary by the creditors.
-- A map having background information, such as state, county,
or city boundaries, upon which more detailed data is plotted.
-- An estate, the right of possession of which has been
postponed, such as a devise under a will. More commonly, an
estate, the legal ownership of which has not yet vested, as
under a land contract. An equitable estate.
-- The equitable, rather than legal ownership of property such
as under a land contract.
-- (1)One for whose benefit trust is created. (2) In states in
which deeds of trust are commonly used instead of mortgages, the
lender (mortgagee) is called the beneficiary.
-- Written instructions by a beneficiary under a deed of trust
stating and demanding the amount necessary for issuance of a
reconveyance, whether a full or partial amount.
Statement -- A statement by a lender
under a deed of trust, setting forth the pertinent information
necessary to assume said deed of trust, such as the unpaid
balance, monthly payment, and interest rate.
-- To give personal property by will.
-- Personal property left by will.
Bill of Sale
-- An instrument by which one transfer personal property.
-- A report issued by a title insurance company setting forth
the condition of title to certain property as of certain date,
and also setting forth conditions which, if satisfied, will
cause a policy of title insurance to be issued. Also called a
commitment. A policy of title insurance (used primarily by
investors) calling for a reduced rated for a future policy if
the property is sold within a specified period.
-- (1) A mortgage covering more than one property of the
mortgagor, such as a mortgage all the lots of a builder in a
subdivision. (2) A mortgage covering all real property of the
mortgagor, both present and future. When used in this meaning,
it is also called a general mortgage.
Board of Equalization
-- State board charged with the duty to equitable uniformity to
the various local property tax assessments.
-- Something given in addition to. Generally used in exchange to
refer to something given other than the major properties to be
exchanged, in order to equalize value.
Broker, Real Estate
-- One who is licensed by the state to carry on the business of
dealing in real estate. A broker may receive a commission for
his or her part in bringing together a buyer and a seller,
landlord and tenant, or parties to an exchange.
-- A transfer in bulk, not in the ordinary course of business,
of all or substantially all of the inventory and fixtures of a
-- The sale of a business (may or may not include the sale of
real estate). Some states require a real estate license for
these sales even when real estate is not involved. The Uniform
Commercial Code, state statutes, and special laws for alcoholic
beverage licenses (when applicable) should be studied by the
business opportunities broker.
- Rules and regulations, adopted by an association or
corporation, which govern its activities.
-- Real estate loans available to armed forces from California,
at low interest rates.
-- A clause in a lease or other contract, setting forth the
conditions under which each party may cancel or terminate the
agreement. The conditions may be as simple as giving notice or
complex and require payment by the party desiring to cancel.
-- An inspection of newly listed properties, either by the
entire sales staff of an office or by sales personnel from more
than one office in conjunction with a multiple listing group.
Generally conducted on a regular basis.
-- A check drawn by a bank on itself rather than on an account
of a depositor. A cashier's check is generally acceptable to
close a sale without waiting for the check to clear.
-- "Let Him Beware" Legal maximum stating that the buyer takes
the risk regarding the quality or conditions of the item
purchased, unless protected by warranty or there is
misrepresentation. Currently, consumer protection laws have
placed more responsibility for disclosure on the seller and
Conditions, and Restrictions) -- A
term used in some areas to describe the restrictive limitations
which may be placed on property. In other areas, simply called
Certificate of Deposit
(C.D.) -- A specific sum of money
deposited into a savings institution for a specified time period
and bearing a higher rate of interest than a passbook account if
left to maturity. Does not have withdrawal privileges, as does a
passbook account. Also called a time certificate deposit (T.C.D.).
Eligibility -- A certificate obtained
by a veteran from a Veteran's Administration office which states
that the veteran is eligible for a V.A. insured loan. There is a
list of requirements (when and how long the veteran served, type
of discharge, etc.) which also may be obtained from the V.A.
Occupancy -- A certificate issued by a
local building department to a building renovator, stating that
the building is in proper condition to be occupied.
Certificate of Sale
-- Certificate issued to the buyer at a judicial sale (such as a
tax sale), which will entitle the buyer to a deed upon
confirmation of the sale by the court or if the land is not
redeemed within a specified time.
Certificate of Title
-- In areas where attorneys examine abstracts or chains of
title, a written opinion, executed by the examining attorney,
stating that the title is vested as stated in the abstract.
-- A personal check drawn by an individual, which is certified
(guaranteed) to be good. The bank holds the funds to pay the
certified check and will not pay any other checks drawn on the
account if such payments would impede payment of the certified
check. The bank also will not honor a stop payment on a
Chain of Title
-- The chronological order of conveyance of a parcel of land,
from the original owner (usually the government to the present
Chains and Links
-- Measurements. In real estate measurements (surveying) a chain
is 66" long or 100 links, each link being 7.92". The measurement
may change when used in fields other than surveying.
-- Personal property.
-- A tank used for storing rainwater for use in areas where
there is no water brought to the property by plumbing.
-- (1) In real estate sales, the final procedure in which
documents are executed and/or recorded, and the sale (or loan)
is completed. (2) A selling term in which the client or customer
is asked to agree to the sale or purchase and sign the contract.
(3) The final call in a metes and bounds legal description which
"closes" the boundaries of the property.
-- Expenses incidental to the sale of real estate, such as loan
fees, title fees, appraisal fees, etc.
-- The statement that lists the financial settlement between
buyer and seller, also the costs each must pay. A separate
statement for buyer and seller is sometimes prepared.
Cloud on Title
-- An invalid encumbrance on real property, which, if valid,
would affect the rights of the owner. For example: A sells lot
1, tract 1, to B. The deed is mistakenly drawn to read lot 2,
tract 1. A cloud is created on lot 2 by the recording of the
erroneous deed. The cloud may be removed by quitclaim deed, or,
if necessary, by court action.
-- Building houses close together with little yard space and a
large common area, rather than each house having a large yard.
The density is usually greater in the cluster project.
-- An addition to a will, which modifies the will by adding to
it, subtracting from it, or clarifying it.
Color of Title
-- That which gives the appearance of good title, but actually
contains some defect. For example: a conveyance given without
the grantor having good title.
-- Property, which is zoned "commercial" (for business use).
Property such as stores, restaurants, etc., falling between
residential and industrial.
-- An amount, usually as a percentage, paid to an agent (real
estate broker) as compensation for his services. The amount to a
real estate broker is generally a percentage of the sale price
or total rental.
-- (1) Title insurance term for the preliminary report issued
before the actual policy. Said report shows the condition of
title and the steps necessary to complete the transfer of title
as contemplated by buyer and seller. (2) A written promise to
make or insure a loan for a specified amount and on specified
-- A fee paid for a loan commitment.
-- The area owned in common by the owners of condominiums or
planned unit development homes in subdivision.
-- Property owned in common by a husband and wife, which was not
required as a separate property. A classification of property
peculiar to certain states.
-- Properties used as comparisons to determine the value of a
-- Damages to cover a loss or injury or nothing more.
-- A loan commitment given before a borrower (buyer) is obtained
and subject to approval of the buyer by the lender.
Contract -- A sale in which the title
to property or goods remains with the seller until the purchaser
has fulfilled the terms of the contract, usually payment in
-- A structure of two or more units, the interior space of which
are individually owned; the balance of the property (both land
and building) is owned in common by the owners of the individual
units. The size of each unit is measured from the interior
surfaces (exclusive of paint or other finishes) of the exterior
walls, floors, and ceiling. The balance of property is called
the common area.
-- Short term financing of real estate construction. Generally
followed by a long term financing called a "take out", issued
upon completion of improvements.
-- Notice given by publishing in a newspaper, recording, or
other method which legally notifies the parties involved, but
may not actually notify them.
-- Near or close to, whether actually touching or not. Generally
refers to actual touching or bordering on.
-- Commonly, the dependence upon a stated event, which must
occur before a contract, is binding. For example: the sale of a
house, contingent upon the buyer obtaining financing.
Contract of Sale
-- In some areas of the country, synonymous with land contract.
In some areas, synonymous with purchase agreement.
-- A mortgage or deed of trust not obtained under a
government-insured program, (such as F.H.A. or V.A.).
-- Transfer of title to land. Includes most instruments by which
an interest in real estate is created, mortgaged, or assigned.
-- A general term encompassing any group of people
"incorporating" by following certain statutory procedures. Most
common type of corporation is a private one formed to carry on a
-- One who shares the duty if trustee with one or more other
-- An offer (instead of acceptance) in response to an offer. For
example: A offers to buy B's house for X dollars. B, in response
offers to sell to A at a higher price. B's offer to A is a
-- Public recorded documents by which notice is given of changes
to title, liens, and other matters reflecting real estate.
Courtesy to Brokers
-- Willingness of a seller to pay a commission to any broker
supplying a suitable buyer; or the willingness of a listed
broker to share the commission with any broker supplying a
-- (1) The portion of the value of property, which is mortgaged,
rather than the equity. (2) The portion of the value of property
upon which a first mortgage could be obtained.
-- A report on the past ability of a loan applicant to pay
installment payments. Several national and local companies make
- (1) One who is entrusted with the care and keeping of real or
personal property. (2) A janitor.
-- The care and keeping of property (real and personal). For
example: An escrow agent has custody of documents and funds
-- One who builds for a specific owner, designing the building
to suit said owner's need, rather than building and then looking
for a buyer.
DBA (Doing Business As)
-- An identification of the owner or owners of a business and
the business name. Not a partnership or corporation.
Restrictions - A set of restrictions
filed by a subscriber to cover an entire tract or subdivision.
-- A determination by a court as to the legal rights of the
plaintiff, with no order for relief. The judgment is binding on
-- Actually, any one of many conveyance or financing
instruments, but generally a conveyance instrument, given to
pass fee title to property upon sale.
Deed in Lieu
-- A deed from the owner (debtor) to a lender to prevent
foreclosure. There are usually statutory provisions as to
fairness of value and absence of coercion, which must be recited
on the deed.
Deed in Lieu of
Foreclosure -- A deed given by an
owner/borrower to a lender to prevent the lender from beginning
foreclosure proceedings. The validity of the deed depends to
some degree on "fairness" under the circumstances, and adequacy
of consideration, which will be considered.
Deed of Trust
-- An instrument used in many states in place of a mortgage.
Property is transferred to a trustee by a borrower (trustor), in
favor of the lender (beneficiary), and reconveyed upon payment
-- Limitations on the use of property placed in conveyance deed
by the grantor, which bind all future owners.
-- (1) Title to a negotiable instrument obtained by fraud. (2)
Title to real property, which lacks some of the elements
necessary to transfer good title.
-- The person against whom a civil or criminal action is
-- A reconveyance of a deed of trust which is issued and
recorded after transfer of title and issuance of title insurance
(not showing the deed of trust). Usually occurs when the lender
is in another state and will not issue the reconveyance paid in
-- (1) The quantity of goods that can be sold at a specified
price, in a given market, at a particular time. (2) A letter
from a lender showing the amount due in order to pay off a
mortgage or trust deed.
Department of Real
Estate -- That department of the state
government responsible for the licensing and regulation of
persons engaged in the real estate business. The person heading
the department is usually called The Real Estate Commissioner.
Other names for the department are The Division of Real Estate
and the Real Estate Commission.
-- (1) Money given by the buyer with an offer to purchase. Shows
good faith. Also called earnest money. (2) A natural
accumulation of resources (oil, gold, etc.) which may be
commercially recovered and marketed.
-- (1) A builder. (2) One who prepares the raw land for
construction and then sells to a builder.
-- A planned construction project, rather than simply the
building of unrelated buildings.
-- A loan for the purchase of land or off-site improvements,
rather than building costs. The land involved is used to secure
-- (1) Statement on a publication attempting to limit liability
in event the information is inaccurate. (2) Renunciation of a
claim or right of another. (3) Refusal to accept an estate,
either as trustee or as owner.
-- A sale of property when the seller is under extreme pressure
to sell. Generally the property is sold for less than market
Documentary Tax Stamps
-- Stamps, similar to postage stamps, affixed to a deed, showing
the amount of transfer tax paid. Most states now "stamp" the
deed rather than affixing a stamp.
Tax -- A state tax on the sale of real
property, based on the sale price or equity transferred.
-- A parcel of land which benefits from an easement. For
example: An easement exists over parcel A for access to parcel
B. Parcel B is the dominant tenement; parcel A is the servient
-- Cash portion paid by a buyer from his own funds, as opposed
to that portion of the purchase price that is financed.
-- A change in the allowable use of land by the appropriate
zoning authority to a lesser (usually less available) use.
Example: Eight units per acre to four units per acre.
Dresser Drawer Title
-- The failure to record evidence of title; instead, placing it
in a "dresser drawer". Also called "Trunk Title".
-- (1) Any building containing exactly two dwelling units. Most
commonly refers to the units that are side by side, with a
common wall and roof. (2) An apartment on two floors or levels.
-- A right created by grant, reservation, agreement,
prescription, or necessary implication, which one has in the
land of another. It is either for the benefit of land
(appurtenant), such as the right to cross parcel A to get to B,
or "in gross", such as public utility easement.
-- An easement for the benefit of another parcel of land, such
as the right to cross parcel A to reach B. The easement will
pass with the transfer of property to a new owner.
Easement in Gross
-- An easement for the benefit of a person or company, rather
than for the benefit of another parcel of land. Commonly, such
easements as for public utilities.
Easement of Necessity
-- An easement granted by a court when it is determined that
said easement is absolutely necessary for the use and enjoyment
of the land. Commonly given to landlocked parcels.
-- A term concerning a right to come and go across the land
(public or private) of another. Usually part of the term ingress
-- Generally, construction onto the property of another, as of a
wall, fence, building, etc.
Incumbrance -- A claim, lien, charge
or liability attached to and binding real property. Any right
to, or interest in, land which may exist in one other than the
owner, but which will not prevent the transfer of fee title.
Report -- A report of the probable
effect of a development on the surrounding area (environment).
The report is prepared by an independent company to federal,
state, or local guidelines.
-- Ownership by one whom does not have legal title, such as
vendee under a land contract or, technically, a trustor under a
deed of trust (legal title being in the trustee). Also called
-- (1) A legal doctrine based on fairness, rather than strict
interpretation of the letter of the law. (2) The market value of
real property, less the amount of existing liens. (3) Any
ownership investment (stocks, real estate, etc.) as opposed to
investing as a lender (bonds, mortgages, etc.)
-- A reversion of property to the state in the absence of an
individual owner. Usually occurs when a property owner dies
interstate, and without heirs.
-- Delivery of a deed by a grantor to a third party for delivery
to the grantee upon the happening of a contingent event.
Contemporarily, in some states, all instruments necessary to the
sale (including funds) are delivered to a third (neutral) party,
with instructions as to their use.
-- Instructions which are signed by both buyer and seller, and
which enable an escrow agent to carry out the procedures,
necessary to transfer real property, a business, or other
-- An escrow agent. In some states, one who has, through
experience and education, gained a certain degree of expertise
in escrow matters.
-- The prevention of one from asserting a legal right because of
prior actions inconsistent with the assertion.
Evidence of Title
-- A document establishing ownership to property. Most commonly,
Listing -- A listing or agreement
protecting the listing broker's commission against the sale of
property by another agent but not against the sale of the
principal. The term is not universal, as some areas use this
term, nonexclusive listing, to describe this agreement.
-- A written contract between a property owner and a real estate
broker, whereby the owner promises to pay a fee or commission to
the broker if certain real property of the owner is sold during
a stated period, regardless of whether the broker is or is not
the cause of the sale. The broker promises to put forth his or
her best efforts to sell the property, and may make specific
promises as to advertising or other promotion in certain
-- To complete; to fulfill a purposes, such as to execute an
instrument, meaning to sign, seal (contemporarily, to notarize),
Farmer Home and
Administration (FmHA) -- The federal
agency which makes, participates, and ensures loans for rural
housing and farms.
Insurance Corporation (FDIC) -- The
federal corporation which insures against loss of deposits in
banks and, since 1989, in savings associations.
Federal Tax Lien
-- A lien attaching to property for nonpayment of a federal tax
(estate, income, etc.). A federal tax lien differs from other
liens in that it is not automatically wiped out by foreclosing
on a mortgage or trust deed recorded before the tax lien (except
by judicial foreclosure).
-- An estate under which the owner is entitled to unrestricted
powers to dispose of the property, and which can be left by will
or inherited. Commonly, a synonym for ownership.
Fee Simple Absolute
-- A term now used synonymously with fee simple.
F.H.A. (Federal Housing
Administration) -- A federal agency
which insures first mortgages, enabling lenders to loan a very
high percentage of the sale price.
FHA Escape Clause
-- A clause stating that the buyer (borrower) shall not be
obligated to buy nor shall any deposit be lost if the appraisal
is less than the agreed upon amount.
-- An instrument (usually a mortgage or deed of trust) which is
recorded not on specific property but to be incorporated by
reference into future mortgages or deeds of trust. This is done
by reference to the recording information of the fictitious
instrument in the instrument recorded against specific property.
This shortens the latter instrument and thereby cuts the cost of
printing, paper, recording, etc. The fictitious instrument
contains general language applicable to any specific property.
-- The cost and interest and other charges involved in borrowing
money to build or purchase real estate.
First Refusal Right
-- A right, usually given by an owner to a lessee, which gives
the lessee a first chance to buy the property if the owner
decides to sell. The owner must have a legitimate offer, which
the lessee can match or refuse. If the lessee refuses, the
property can then be sold to the offeror.
-- Insurance indemnifying against loss by flood damage. Required
by lenders (usually banks) in areas designated (federally) as
potential flood areas. The insurance is private but federally
-- A period during the working day when a specific salesperson
is responsible for general inquiring (walk-in or telephone)
regarding property in a brokerage office. This is generally
established as a set, rotating number of hours per week for each
salesperson. When a salesperson is "on the floor" he or she must
be in the office or make arrangements with another salesperson
to cover the floor during those hours.
FNMA (Fannie Mae)
-- A private corporation dealing in the purchase of first
mortgages at a discount.
-- FNMA (Federal National Mortgage Association) accepts loans
containing a buy down provision on single family residential,
owner occupied properties. A prepayment (points) will buy a
lower rate of interest during the first one to five years of the
loan. Restrictions apply to the amount of the buydown and rise
in payment amount as the loan progresses.
-- A sale which is not the voluntary act of the owner, such as
to satisfy a debt, whether a mortgage, judgment, etc. The
selling price of such a sale would not be considered market
-- a sale of property used as security for a debt, to satisfy
-- A deception, intended to wrongfully obtain money or property
from the reliance of another on the deceptive statements or
acts, believing them to be true.
Free and Clear
-- Real property against which there are no liens, especially
voluntary liens (mortgages).
-- The linear measurement along the front of a parcel, that is,
the portion facing a road, waterway, walkway, etc. that would be
considered the most valuable measurement of the property.
Fully Amortizing Loan
-- A loan of equal, regular payments, which cause the principal
and interest to be completely paid by the due date.
-- A member of the partnership who has authority to bind the
partnership and shares in the profits and losses. A partnership
must have at lease one general partner and may have more, as
well as limited partners.
-- A letter to HUD from the owner (giver) stating that a gift of
money has been made to the buyer in order to purchase specific
property. The relationship of the donor and recipient is stated,
as well as the amount of gift.
GNMA (Ginnie Mae)
-- Government National Mortgage Association. A federal
association, working with FHA, which offers special assistance
in obtaining mortgages and purchases mortgages in a secondary
-- One of the many types of deeds used to transfer real
property. Contains warranties against prior conveyances or
encumbrances. When title insurance is purchased, warranties in a
deed are of little practical significance.
-- One to whom a grant is made, generally the buyer.
-- One who grants property or property rights.
-- The record of the passing of title to all the properties in a
county as kept by the county recorder's office. Property is
checked, by tracing the names of the sellers and buyers (chain
and title). Title companies usually have more efficient methods
by keeping records according to property description, rather
than people's names.
-- A landscaped area surrounding a development to separate and
protect it from neighboring incompatible use, such as separating
office buildings from an industrial park.
-- A lease of vacant land, or land exclusive of any buildings on
it. Usually a net lease.
Hard Money Mortgage
-- A mortgage given in return for cash, rather than to secure a
portion of the purchase price, as with a purchase money
-- A compacted layer of soil, usually containing clay, through
which it is difficult to drain or dig.
-- Real estate insurance protecting against loss caused by fir,
some natural causes, vandalism, etc., depending upon the terms
of the policy.
-- (1) Anything which could be considered real property. (2)
Anything which may be inherited.
Association -- (1) An association of
people who own homes in a given area, formed for the purpose of
improving or maintaining the quality of the area. (2) An
association formed by the builder of condominiums or planned
developments, and required by statute in some states. The
builder's participation as well as the duties of the association
is controlled by statute.
-- The dwelling (house and contiguous land) of the head of a
family. Some states grant statutory exemptions, protecting
homestead property (usually to set a maximum amount) against the
rights of creditors. Property tax exemptions (usually to set a
maximum amount) are also available in some states. Statutory
requirements to establish a homestead may include a formal
declaration to be recorded.
Insurance -- Private insurance
insuring a buyer against defects (usually in plumbing, heating
and electrical) in the home he has purchased. The period of
insurance varies and both new and used homes may be insured.
-- To mortgage or pledge without delivery of the security to the
-- Account held by a lender for payment of taxes, insurance, or
other periodic debts against real property. The mortgagor or
beneficiary pays a portion of, for example, the yearly taxes,
with each monthly payment. The lender pays the tax bill from the
-- An agreement by which one party agrees to repay another for
any loss or damage the latter may suffer.
Ingress and Egress
-- A right to enter upon and pass through land.
-- A method of purchasing by installment (usually monthly)
payments. When referring to real property, it is usually called
a land contract.
-- Banks, savings and loan associations, and other businesses,
which make loans to the public in the ordinary course of
business, rather than individuals, or companies which may make
loans to employees.
-- A mortgage insured against loss to the mortgagee in the event
of default and a failure of the mortgaged property to satisfy
the balance owning plus costs of foreclosure. May be insured by
F.H.A, VA, or by independent mortgage insurance companies.
-- Without leaving a will, or leaving an invalid will, so that
the property of the estate passes by the laws of succession
rather than the direction of the deceased.
-- A lien, such as a tax lien, judgment lien, etc., which
attaches to property without the consent of the owner, rather
than a mortgage lien, to which the owner agrees.
-- Joining together in some legal proceeding.
Policy -- A policy of title insurance
which insures both the owners and the lender under the same
-- A person, corporation, etc., that has been awarded a money
judgment by a court. Recording an abstract of said judgment
would create a lien on real property owned by the judgment
debtor in the county where the abstract is recorded.
-- A person, corporation, etc., against whom a money judgment
has been awarded by the court.
-- The decision of a court of law. Money judgments, when
recorded, become a lien on real property of the defendant.
-- An accumulation of land held for future use.
-- A loan with collateral security of unimproved land. Usually
the loan to value ratio is less than on improved land.
-- A parcel of land surrounded entirely by private owned land,
with no access to a public right of way (road). Condemnation for
a limited access highway is a major cause of such parcels.
-- An agreement by which an owner of real property (lessor)
gives the right of possession to another (lessee), for a
specified period of time (term) and for a specific consideration
-- A method of geographically identifying a parcel of land,
which is acceptable in a court of law.
-- The term has come to be used as a technical difference from
the equitable owner, and not as opposed to an illegal owner. The
legal owner has title to the property, although the title may
actually carry no rights to the property other than a lien.
-- Usually title without ownership rights, such as the title
placed in a trustee under a deed of trust, or the title in a
vendor under a land contract.
-- Any person or entity advancing funds which are to be repaid.
A general term encompassing all mortgagees, and beneficiaries
under deeds of trust.
Letter of Credit
-- A letter, usually from a bank, requesting a person or company
to extend credit to a certain person or company and guaranteeing
payment. Most commonly used in the purchase of good from another
country. The letter may be revocable or irrevocable, but most
parties insist on the irrevocable.
Line of Credit
-- An amount of money a borrower may obtain from a bank without
special credit check. The money is generally for business
purposes and the amount would not include the borrower's own
home loan and other personal secured loans.
-- A definite amount of damages, set forth in a contract, to be
paid by the party breaching the contract. A predetermined
estimate of actual damages from a breach.
-- A legal notice recorded to show pending litigation relating
to real property, and giving notice that anyone acquiring an
interest in said property subsequent to the date of the notice
may be bound by the outcome of the litigation.
-- An agreement between an owner of real property and a real
estate agent, whereby the agent agrees to secure a buyer or
tenant for specific property at a certain price and terms in
return for a fee or commission.
-- A real estate agent obtaining a listing (see which), as
opposed to the selling agent.
Loan Origination Fee
-- A one time setup fee charged by the lender.
-- The file of all items necessary for the lender to decide to
give or not to give a loan. These items would include the
information on the prospective borrower (loan application,
credit report, financial statement, employment letters, etc.),
and information on the property (appraisal, survey, etc.,).
There may be a charge for "packaging" the loan.
-- A title insurance policy insuring a mortgagee, or beneficiary
under a deed of trust, against loss caused by invalid title in
the borrower, or loss of priority of the mortgage or deed of
-- The bookkeeping and collection of a loan. It may be done by
the lender or by another for the lender.
Loan to Value Ratio
-- The ratio, expressed as a percentage, of the amount of a loan
to the value or selling price of real property. Usually, the
higher the percentage, the greater the interest charged. Maximum
percentage for banks, savings and loans, or government insured
loans, is set by statute.
Loss Payable Clause
-- A clause in a fire insurance policy, listing the priority of
claims in the event of destruction of the property insured.
Generally, a mortgagee, or beneficiary under a deed of trust, is
the party appearing in the clause, being paid to the amount
owing under the mortgage or deed of trust before the owner is
Institute) -- The designation given to
a member of the American Institute of Real Estate Appraisers. A
designation earned through experience, education and
-- As applied to condominiums and planned developments, the
amount charged each unit owner to maintain the common area.
Usually a monthly fee paid as part of the budget.
-- The amount paid for property management or the estimated
value of such management if owner managed or the building is not
-- Title that can be readily marketed (sold) to a reasonably
prudent purchaser aware of the facts and their legal meaning
concerning liens and encumbrances.
-- The highest price a willing buyer would pay and a willing
seller accept, both being fully informed, and the property
exposed for a reasonable period of time. The market value may be
different from the price a property can actually be sold for at
a given time.
-- A lien created by statute for the purpose of securing
priority of payment for the price or value of work performed and
materials furnished in construction or repair of improvements to
land, and which attaches to the land as well as the
Metes and Bounds
-- Description of land by boundary lines, with their terminal
points and angles. Originally metes referred to distance, bounds
to direction; contemporarily, the words have no individual
meaning of practical significance.
-- The ownership of the minerals (coal, gold, iron, etc.) under
the ground, with or without ownership of the surface of the
-- In real estate terms, those minerals of value which may be
taken by mining, such as coal, iron, copper, gold, silver, etc.
Mineral rights, as well as oil rights, may be sold or leased
separately from the land itself.
-- Originally, a trailer pulled behind a car or truck cab. Now
includes large homes, which are not truly mobile but are
constructed in the same manner as trailers, as opposed to
conventional on-site construction.
-- A visible, permanent object, marked by a surveyor, to
indicate the boundaries of land. May be artificial, such as
post, or natural, such as a tree or large stone.
-- (1) To hypothecate as security, real property for the payment
of a debt. The borrower (mortgagor) retains possession and use
of the property. (2) The instrument by which real estate is
hypothecated as security for repayment of a loan.
-- A company providing mortgage financing with its own funds
rather than simply bringing together lender and borrower, as
does a mortgage broker. Although the mortgage banker uses its
own funds, these funds are generally borrowed and the financing
is either short term or, if long term, the mortgages are sold to
investors (many time's insurance companies) within a short time,
in general mortgage.
-- One who, for a fee, brings together a borrower and lender,
and handles the necessary applications for the borrower to
obtain a loan against a real property by giving a mortgage or
deed of trust as a security. Also called a loan broker.
-- A company authorized to service real estate loans, charging a
fee for this service.
Mutual Water Company
-- A company in which the owners are the customers. Stock is
issued to the users, who are the organizers of the company.
NAR (National Association
of REALTORS®) -- An association of
people engaged in the real estate business. Organized in 1908,
it currently lists over half a million members. With
headquarters in Chicago, it is dedicated to the betterment of
the real estate industry through education, legislation, and
high ethical standards for its members.
Negative Cash Flow
-- When the income from an investment property does not equal
the usual expenses, the owner must come up with cash each month
to meet these expenses.
Non Exclusive Listing
-- A listing under which the real estate broker has an exclusive
listing as opposed to other agents, but the owner may sell the
property without using an agent, and not be liable to pay a
commission. Also called an agency agreement.
Foreclosure Sale -- Sale by a trustee
under a deed of trust, or mortgage under a power of sale of a
mortgage. There is no court (judicial) proceeding.
-- One who is authorized by the state or federal government, to
administer oaths, and to attest to the authenticity of the
signatures. A federal authorization may extend the authority to
attest to the authenticity of certain documents, and to act as a
notary in foreign countries.
Notice of Action
-- A recorded notice that property may be subject to a lien, or
even that the title is defective, due to pending litigation.
Notice of a pending suit. Also called "Lis Pendens".
Notice of Completion
-- A notice, recorded to show that construction job is finished.
The length of time in which a mechanic's liens may be filed
depends upon when and if a notice of completion is recorded.
Notice of Default
-- A notice is filed to show that the borrower under a mortgage
or deed of trust is in default (behind on the payments).
-- A presentation of proposal for acceptance, in order to form a
contract. To be legally binding, an offer must be definite as to
price and terms.
-- Development of land to make adjacent property suitable for
construction. Includes sidewalks, curbs, streets, sewers,
-- A house which is open without appointment to prospective
buyers (or tenants) for inspection, during certain hours and
days of the week.
-- A written authorization to a real estate agent by a property
owner, stating that a commission will be paid to the agent upon
presentation of an offer which meets a specified price and
terms. However, the agent has no exclusive right to sell and
must bring in his offer before any other offer is presented or
-- A fee made by a lender for making a real estate loan. Usually
a percentage of the amount loaned, such as one percent.
-- Title insurance for the owner of the property, rather than a
Owner will carry
mortgage -- A term used to indicate
that the seller is willing to take back a purchase money
Parcel 2 Easement
-- A colloquial term used to describe an appurtenant easement of
the dominant tenement, because the easement is described in the
legal description. Usually, the property is described as parcel
1 and the easement as parcel 2.
-- A map allowed in some states as a substitute for a
subdivision map for 1 to 4 parcels (lots) with no common area.
The procedure is much simpler and less costly than creating
-- To divide (prorate) property taxes, insurance premiums,
rental income, etc., between buyer and seller proportionally to
time of use or the date of closing.
PI (Principal and
Interest) -- Used to indicate what is
included in a monthly payment on real property. If the payment
includes only principal and interest, property taxes and hazard
insurance would make the total payment higher.
Interest, Taxes and Insurance) -- Used
to indicate what is included in a monthly payment on real
property. Principal, interest, taxes and insurance are the four
major portions of a usual monthly payment.
Development -- A subdivision of five
or more individually owned lots with one or more other parcels
owned in common or with reciprocal rights in one or more other
parcels. The lots are generally small, being the exact size of
the improvements, or slightly larger.
Point of Beginning (POB)
-- A term used in metes and bounds descriptions. The description
will start with the words "Beginning at a point" and end with
"to the point of the beginning".
Power of Attorney
-- An authority by which one person (principal) enables another
(attorney in fact) to act for him. (1) General power --
Authorizes sale, mortgaging, etc. of all property of the
principal. Invalid in some jurisdictions. (2) Special Power --
Specifies property, buyers, price and terms. How specific it
must be varies in each state.
Report -- A report showing the
condition of title before a sale or loan transaction. After
completion of the transaction, a title insurance policy is
-- A penalty under note, mortgage, or deed of trust, imposed
when the loan is paid before it is due.
-- The granting of an easement by a court, based on the
presumption that a written easement was given (though none
existed), after a period of open and continuous use of land.
Insurance -- Insurance against a loss
by a lender in the event of default by a borrower (mortgagor).
The insurance is similar to insurance by a governmental agency
such as FHA, except that a private insurance company issues it.
The premium is paid by the borrower and is included in the
-- To divide in proportionate shares, such as taxes, insurance,
rent or other items which buyer and seller share as of the time
of closing, or other agreed upon time.
-- Usually at a county level, the records of all documents,
which are necessary to give, notice. The records are available
to the public. All transactions for real estate sales should be
-- A report given to prospective purchasers in a new
subdivision, stating the conditions of the area (costs of common
facilities, availability of schools, noise factor if near an
airport, etc.) issued by the real estate commission.
-- An agreement between a buyer and seller of real property.
-- A deed operating as a release; intended to pass any title,
interest, or claim, which the grantor may have in the property,
but not containing any warranty of a valid interest or title in
-- (1) A division of land in the government survey, being a six
mile wide row of townships, running North and South, and used in
legal descriptions. (2) Land used for grazing livestock.
-- (1) Land and anything permanently affixed to the land, such
as buildings, fences and those things attached to the buildings,
such as light fixtures, plumbing and heating fixtures, or other
such items that would be personal property if not attached. The
term is generally synonymous with real property, although in
some states a distinction may be made. (2) May refer to rights
in real property as well as the property itself.
Real Estate Board
-- A state license granted to one as a broker or salesperson,
after passing an examination. Some states have educational
requirements before the brokers' examination may be taken.
Real Estate Owned
(REO) -- Most commonly refers to
property owned by a lender from foreclosure of mortgages or
trust deeds. The property is usually for sale.
-- A designation given to a real estate broker or
sales-associate who is a member of a board associated with the
National Association of Realtors® or with the National
Association of Real Estate Boards.
-- Setting forth in a deed or other writing some explanation for
the transaction. For example: A deed may state that the property
is being transferred in lieu of foreclosure.
-- An instrument used to transfer title from a trustee to the
equitable owner of real estate, when title is held as collateral
security for a debt. Most commonly used upon payment in full of
a trust deed. Also called a deed of reconveyance or release.
-- Filing instruments for public record (and notice) with a
recorder (usually a county official).
-- A map recorded in a county recorder's office. May be a
subdivision map or describe a non-subdivided parcel. Reference
to a recorded map is commonly used in legal descriptions.
-- Subdivision map filed as a matter of public record.
-- The county office where instruments are recorded, giving
-- Filing documents affecting real property as a matter of
public record, giving notice to future purchasers, creditors, or
other interested parties. Recording is controlled by statue and
usually requires the witnessing and notarizing of an instrument
to be recorded.
-- The amount paid to the recorder's office in order to make a
document a matter of public record.
-- In real estate business, generally the act of a past client
recommending a real estate broker or agent to one currently a
buyer or seller. Also, any recommendation by one real estate
agent of another for a referral fee.
-- (1) The renewing of an existing loan with the same borrower
and lender. (2) A loan on the same property by either the same
borrower or lender. (3) The selling of loans by the original
-- Federal Reserve regulation issued under the Truth-In-Lending
Law, which requires that a credit purchaser be advised in
writing of all costs connected with the credit portion of the
-- (1) Payment of a note, mortgage, deed of trust, etc., to
bring it from default to good standing. (2) Restoring the
previously used entitlement of a veteran to enable the veteran
to purchase property under a VA program. (Also called
restoration of Eligibility).
Investment Trusts) -- A method of
investing in real estate in a group, with certain tax
advantages. Federal and state statutes dictate procedure.
-- An instrument releasing property from the lien of the
mortgage, judgment, etc. When a trust deed is used, the
instrument is called a reconveyance. In some areas, a
"discharge" is used instead of a release.
Reconveyance -- A request by a
beneficiary under a deed of trust to the trustee, requesting the
trustee to reconvey the property (release the lien) to the
trustor, usually upon payment in full.
RESPA (Real Estate
Settlement Procedures Act) -- A
federal statute effective June 20, 1975, requiring disclosure of
certain costs in the sale of residential (one to four family)
improved property which is to be financed by a federally insured
-- Most commonly used to describe a use or uses prohibited to
the owner of land. Restrictions are set forth by former owners
in deeds or in the case of a subdivision, a declaration of
restrictions is recorded by the developer. A limitation on use
of the property by law (zoning ordinances) may also be termed a
-- Formerly federal tax on sale of real property. Canceled and
replaced by state tax stamps. The stamps (similar to postage
stamps) are affixed to the conveyance instrument (deed), or a
rubber stamp is used to show the amount of tax.
Right of Survivorship
-- The right of a survivor of a deceased person to the property
of said deceased. A distinguishing characteristic of a joint
Right of Way
-- A strip of land, which is used as a roadbed, either for a
street or railway. The land is set aside as an easement or in
fee, either by agreement or condemnation. May also be used to
describe the right itself to pass over the land of another.
-- Belonging or relating to the bank of a river or stream. Land
within the natural watershed of a river or stream.
-- One who owns land along the bank of a river or stream.
-- Rights of an owner to riparian lands and water.
-- A loan, which is periodically reviewed, adjusted (usually to
reflect current interest rates) and extended. Short term loans
can be rolled over into long term loans. The process is by
initial agreement or necessity.
Running with the Land
-- Usually concerned with easements and covenants. Passing with
the transfer of the land.
-- One who is licensed to work in real estate under a licensed
-- Material carried by a salesperson to aid in listings and
sale. This is the "tool kit" of real estate, containing forms,
maps, tape measure, amortization schedules, pens, paper, etc.
-- Discharge of an obligation by payment of the amount due, as
on mortgage, trust deed, or contract; or payment of a debt
awarded, such as satisfaction of a judgment. Also the recorded
instrument stating said payment has been made.
-- A loan secured by a mortgage or trust deed, which lien is
junior (secondary) to another mortgage or trust deed.
Market -- The buying and selling of
first mortgages or trust deeds by banks, insurance companies,
government agencies, and other mortgagees. This enables lenders
to keep an adequate supply of money for new loans. The mortgages
may be sold at full value (par) or above, but are usually sold
at a discount. The secondary mortgage market should not be
confused with second mortgage.
-- A mortgage which ranks after a first mortgage in priority.
Properties may have two, three or more mortgages, deeds of
trust, or land contracts, as liens at the same time. Legal
priority would determine whether they are called a first,
second, third, etc. lien.
-- The real estate agent obtaining the buyer rather than listing
the property. The listing and selling agent may be the same
person or company.
-- A statement prepared by broker, escrow, or lender, giving a
complete breakdown of costs involved in a real estate sale. A
separate statement is prepared for the buyer and seller.
-- The covering over the outside studs (or rafters) of a roof.
May be wallboard, plywood, etc.
Short Form Document
-- A document which refers either to another document not of
record containing the total agreement, or incorporates by
reference a document of record.
-- A simultaneous issuance by a little insurance company of
policies insuring both an owner and a lender. The Lender's
policy is issued at a reduced rate.
Single Family House
-- A general term originally used to distinguish a house
designed for use by one family from an apartment house. More
recently, used to distinguish a house with no common area from a
planned development or condominium.
-- A method of drilling for oil or gas from adjoining property
when surface rights have not yet been granted.
-- Lien assessed against real property by a public authority to
pay costs of public improvements (sidewalks, sewers,
streetlights, etc.) which directly benefits the assessed
-- A fence built for the purpose of causing a problem for one's
neighbor. May ruin the view, make access of a new vehicle, etc.,
or simply ugly.
Square Foot Method
-- Determining the replacement cost of a building by finding the
cost per square foot of comparable building.
Policy -- A title insurance policy
used in several states, not having as broad coverage as the
nationally recognized American Land Title Association (A.L.T.A.)
-- A file card used as a record of the opening of an escrow. It
lists the date the escrow opened, escrow number, name of escrow
officer, names of parties to the escrow, lender, title company,
legal description of the property, consideration, and type of
transaction (sale, loan, etc.).
-- A copy of the last policy issued by a title insurer, which
describes the condition of the title to land upon which a new
policy is to be written. In some states this is furnished to an
attorney for his opinion as to the condition of the title, and
is called a back title letter or back title certificate.
Information -- A confidential form
filled out by buyer and seller to help a title company determine
if any liens are recorded against either. Very helpful when
people with common names are involved. Also called a statement
Statute of Frauds
-- State laws, requiring certain contracts to be in writing. All
contracts for the sale of real property must be in writing.
Leases (personal property) for more than one year must be in
-- An involuntary lien (created by law rather than contract).
Includes tax liens, judgment liens, mechanic's liens, etc.
Bonds -- Interest bearing bonds,
issued by a local government, to secure assessments for street
improvements. The owners of the property assessed may pay in a
lump sum or pay installments on the bonds, including interest.
-- Any shopping are, generally with common parking, comprised of
a row of stores. Usually does not contain major department
stores or grocery chain stores.
-- Vertical supports (wood or metal) in walls and partitions.
-- One who works under a general contractor (builder), such as
an electrical contractor, cement contractor, etc.
"Subject To" Clause
-- A clause in deed, stating that the grantee takes title
"subject to" an existing mortgage. The original mortgagor is
alone responsible for any deficiency, should there be
foreclosure of the mortgage. Differs from an "assumption"
clause, whereby the grantee "assumes" and agrees to pay the
Agreement -- An agreement by which an
encumbrance is made subject (junior) to a junior encumbrance.
For example: A loan on vacant land is made subject to a
subsequent construction loan.
-- A document which is recorded to change the trustee under a
deed of trust. A simple procedure in some states; more regulated
-- The rights (easements) to use the surface of the land,
including the right to drill or mine through the surface when
subsurface rights are involved.
Take Out Loan
-- The "permanent" (long term) financing of real estate after
completion of construction.
-- (1) Deed from tax collector to government body after a period
of non-payment of taxes according to statute. (2) Deed to a
purchaser at a public sale of land taken for delinquent taxes.
The purchaser receives only such title as the former owners had,
and strict procedures must be followed to prevent attachment of
-- (1) A lien for nonpayment of property taxes. Attaches only to
the property upon which the taxes are unpaid. (2) A federal
income tax lien. May attach to all property of the one owing the
-- A list, usually published by a county, containing the
descriptions of all parcels in said county, the names of the
owners (or those receiving the tax bill), the assessed value and
-- A map submitted by a subdivider to a planning commission for
approval; approval is usually conditioned upon charges. The
final map, embodying the changes, is recorded.
-- Having written a last will and testament.
-- An agency issuing the policy of a title insurance company.
-- Insurance against loss resulting from defects of title to a
specifically described parcel of real property. Defects may run
to the fee (chain of title) or to encumbrance.
Company -- A company which issues
insurance regarding the title of real property.
-- An order for a search of title to some parcel of property,
eventually leading to the issuance of a policy of title
-- The page in a subdivision map which is signed by all parties
having an interest in the land, agreeing to the subdivision.
-- A filing of all recorded information to real property,
paralleling the records of the county recorder's office,
although the filing system may be different.
-- A review of all recorded documents affecting a specific piece
of property to determine the present condition of the title.
-- Information to validate title taken from tombstones, such as
the death of the owner, date of death, names of survivors, etc.
-- A system by which title to land is registered with a
registrar of land titles, instead of being recorded. Originally
established by Sir Torrens in Australia in 1858.
-- State tax on the transfer of real property. Based on purchase
price or money changing hands. Check statues for each state.
Also called the documentary transfer tax.
-- One who insures another. A small title insurance company may
buy insurance from a larger one (the underwriter) for all or
part of the liability of its policies. A larger title company
may buy part of the insurance from another company on high
Unity of Title
-- In joint tenancy, the holding by the joint tenants under the
-- Not salable. A title which has serious defects.
-- A deed, mortgage, etc., which is not recorded in the county
recorder's office and, therefore, not protected under recording
statutes. Valid between the parties involved, but not against
innocent third parties.
Variable Interest Rate
-- An interest rate which fluctuates as the prevailing rate
moves up or down. In mortgages there are usually maximums as to
the frequency and amount of fluctuation. Also called "flexible
-- Present ownership rights, absolute and fixed. Modernly,
ownership rights, even though on a land contract or subject to a
mortgage or deed of trust.
Administration (VA) Loans -- Housing
loans to veterans by banks, savings and loans, or other lenders
which are insured by the Veteran's Administration, enabling
veterans to buy a residence with little or no down payment.
-- A lien placed against real property by the voluntary act of
the owner. Most commonly, a mortgage or deed of trust.
-- A deed used in many states to convey fee title to real
property. Until the widespread use of title insurance, the
warranties by the grantor were very important to the grantee.
When title insurance is purchased, the warranties become less
important as practical means of recovery by the grantee for
-- Lands which, in their normal condition, have wet or spongy
soil, such as a marsh or bog.