GLOSSARY

“According to value.” The portion of property taxes that are calculated based on property value.

A written statement sworn to under oath before a notary public or other judicial officer.

A table showing how much of each mortgage payment is allocated towards principal and how much is towards interest. It will also show the payment due date with the outstanding balance of the loan.

A written analysis of the estimated value of your property. A qualified appraiser prepares the document and ensures you’re paying fair market value for your home.

A local tax levied against a property for a specific purpose such as a street pavement, sidewalk, sewers, and garbage pickup.

One who holds a power of attorney allowing him or her to execute legal documents on behalf of the grantor of the power.

One for whose benefit a trust is created.

The chronological transfer of ownership in the history of title to a specific tract of land.

An adverse right or interest asserted by one party against another or against an insurer or indemnitor. Claims may arise from unpaid debts or taxes, as well as from hidden title defects such as fraud, forgery, missing heirs, etc.

Real property ownership free of liens (including mortgages), defects, encumbrances or claims.

Title company or attorney authorized by the lender to conduct the closing when the buyers execute the mortgage, promissory note, settlement statement and other required documents.

Loan, title and recording charges that are due at closing. These charges are disclosed for the buyer and seller on the Closing Statement.

The day that documents are executed and monies are exchanged.

Also referred to as a Closing Disclosure, HUD, or Settlement Statement. These forms account for all funds received and disbursed at closing. The expenses are broken down into specific sections and numbered lines. The totals at the bottom of the form represent the seller’s net proceeds and the buyer’s net payment at time of closing.

A percentage of the sales price that is paid to Realtors as compensation for listing or selling the property.

A document signed by the escrow officer, promising to insure a tract of land. Once the title has been searched, the commitment is prepared by the title insurance company, indicating the status of the title and setting forth requirements to be satisfied upon closing.

A condition that must be met before a contract is legally binding. For example, buyers often include a contingency that specifies that the contract is contingent upon them securing a certain financing option.

A document that coveys title (interest) to real property from the grantor(s) to the grantee(s). The deed should contain an accurate legal description of the property being transferred, grantor(s) signature, notarized and have two witnesses sign. There are different types of deeds for different circumstances.

Conveys title to the lender when the borrower has defaulted on their mortgage and wants to avoid foreclosure, however the lender may or may not cease foreclosure activities. Most likely, the avoidance and non-repayment of debt will still show on a credit history, but it may prevent a foreclosure from being recorded in the public record.

Restrictions in the deed that impose certaain limitations on the use or occupancy of the property.

A State tax that is required on deeds and mortgages when real estate title is transferred. Both, the sales price and loan amount need to be rounded to the nearest hundredth for accurate calculations.

1. Documentary Stamps on a deed is 70 cents per hundred or .007 x Sales Price

2. Documentary Stamps on a mortgage is 35 cents per hundred or .0035 x Loan Amount

A right-of-way that is attached to the property, giving persons other than the owner access to or over a property.

The right to leave a parcel of land, usually through an easement.

An obstruction, building, or part of a building that illegally intrudes onto neighboring private or public land.

Anything that affects or limits the fee simple title to a property, and diminishes the property value. This can include, but is not limited to claims, easements, leases, liens, mortgages, pending legal action, restrictions, unpaid taxes, and/or zoning ordinances.

A modification of a title insurance policy expanding or changing coverage, in order to fulfill specific requirements of the insured.

An escrow agent holds funds in an escrow account for a real estate transaction. The funds can be held for a buyer, seller or a lender until the closing is finalized.

Also referred to as “Earnest Money”. The initial deposit that a buyer makes within a certain amount of days from signing the contract. This deposit is then applied towards the purchase price and held in Escrow until the closing is completed. The funds will be disbursed according to the contract.

A letter from the respective Home Owner’s Association certifying the amount that a seller owes them upon closing. This also includes any violations, and transfer fees that may be charged.

An unrestricted, absolute form of property ownership.

Foreign nationals selling US real estate face special tax implications. If the seller of a real estate transaction is a foreign person or corporation, they are subject to a 15% tax of the gross purchase price, unless an exemption applies.

A 12 month time period in which a company maintains its financial records. This may or may not align with a calendar year.

A deed which conveys not only all the grantor’s interests in and title to the property to the grantee, but also warrants that if the title is defective or has a “cloud” on it (such as mortgage claims, tax liens, title claims, judgments, or mechanic’s liens against it) the grantee may hold the grantor liable.

That party in the deed who the grantor conveys the property to.

That party in the deed who conveys the property to the grantee.

An individual that might inherit an interest in the real property of a decedent that did not leave a will (intestate).

Any claim on a property that is not recorded in the public records, for example, an unknown heir or an unrecorded mortgage.

A revolving line of credit secured by your home that is kept open and restored as you pay off the debt. It is similar to a credit card, and commonly used for a large expense or to consolidate a large amount of debt.

An organization in a particular development that creates and enforces rules for the properties and residents. Property Owner’s within an HOA are typically required to pay HOA fees.

The primary residence of the property owner. A homestead is offered certain protections against creditors, as well as property tax exemptions.

The right to enter a specific parcel of land.

A right or claim to the property. This is most commonly the owner(s), heir(s), or lien holders.

When two or more persons have an equal, undivided interest in the property. Upon the death of a joint tenant, the interest passes to the surviving joint tenant(s) instead of the decedent’s heirs.

A court order for monetary compensation between two parties. Once it is recorded of public record, the judgement then becomes a lien against the property.

A description of the property that is recognized by the courts. It is based off surveys, and should be so thorough, that it can not be confused for another parcel.

This is title insurance to protect the lender’s interest from any possible title defects, as well as ensuring the priority of the lender’s lien.

A creditor’s claim or legal right against real property of the debtor until the debt is satisfied.

Search of the public records and departments such as water and garbage looking for liens, open permits, and/or code violations.

Latin for “suit pending”. A legal notice recorded of public record to show pending litigation involving real property, and acts as notice to anyone interested in the property that they may be bound by the outcome of the litigation.

The price that a home is estimated to sell for based on similar homes that have recently sold in the area.

A title that is free and clear of all liens or title defects enabling the owner to freely sell their property.

A lien attached to real property, securing the payment due to persons or companies who perform labor, services or provide materials for the construction or improvements of a building.

A land description in which property boundaries are described by natural markers, courses, directions, distances and monuments.

This portion of taxes/assessments is not based on property value. It is a fee for certain services being provided to the property such as street lighting or solid waste.

A written promise of the borrower agreeing to repay a specified sum of money plus interest at a specified date or on demand.

The document that summarizes your title insurance policy. It protects the purchasers interest against any possible title defects, and states any exemptions the policy does not cover.

A term meaning “by day”.

Anything that can be moved (clothing, cars, furniture, etc.).

Someone appointed by the courts to handle the estate of a decedent.

A map of a subdivision or community drawn by a surveyor, showing boundary lines, buildings, and easements.

A subdivision where common property is maintained by an owner’s association, such as a club house or community pool. The association must have a mandatory membership along with mandatory dues.

A document where a person (the “principal”) authorizes another person (the “attorney-in-fact”) to act on their behalf, either in specific cases or for all financial/legal matters.

To divide in proportion. For example, property taxes are prorated on the Settlement Statement between buyer and seller.

The decree obtained when a court action releases any claims of interest against the property.

A deed which transfers any and all interest the grantor may have in a specific parcel of land. This type of deed makes no guarantees about the title, it simply transfers the grantors interest to the grantee. The grantee assumes all of the risk.

Anything that can’t be moved, such as a parcel of land and/or a house.

Filing documents of public record giving notice to all creditors and future purchasers.

Replacing a mortgage with another mortgage, usually with different terms.

Rights of property owner’s bordering a body of water, relating to the water and its uses.

A document issued by the lender once all debt has been repaid including the principal, interest, and any outstanding charges. It will reference the recording information for the original mortgage and it should also be recorded in the public records.

A special tax imposed on property (may be an individual lot or all lots in a certain area) for road construction, sidewalks, paved roads, street lights, etc.

An agreement where one person assumes the debt or obligation of another.

A map of a particular parcel of land created by a licensed surveyor. Depending on which type of survey is ordered, it may show the elevations, improvements, boundaries, and its relationship to surrounding parcels. A survey is required by the lender as assurance that a building is sited on the land described in its legal description.

The document that transfers ownership when property taxes are delinquent and the property has been auctioned off to the highest bidder.

Two or more persons owning an undivided interest in real estate. In the event of the death of one of the owners, the property passes to the decedent’s heirs rather than the surviving owner(s).

Anyone having legal ownership of the property is considered “on title”.

1. Any possible claim or interest to a property within the chain of title.

2. Any irregularity in the execution of an instrument within the chain of title.

Offers protection for lenders and/or homeowners against loss of their interest in property due to a title defect.

A fiduciary relationship in which one party (trustor), gives another party (trustee), the right to hold title to property or other assets for the benefit of another (beneficiary).

A deed which conveys all the grantor’s interests and title to a property over to the grantee. It also warrants that if a title defect (such as mortgage claims, tax liens, title claims, judgments or mechanic’s liens) was against it at the time of the conveyance of ownership, the grantee may hold the grantor liable.