Definitions Of Commonly Used Real Estate Terms
Acreage - Representing land only, 1 acre being equal to 43,560Sq.Ft.
Amortization - A payment plan by which a borrower reduces a debt gradually through monthly payments of principal and interest.
Appraisal - An evaluation to determine what a piece of property would sell for in the marketplace.
Closing - A meeting to sign documents which transfer property from a seller to a buyer. (Also called settlement).
Closing Costs - Charges paid at settlement for obtaining a mortgage loan and transferring real estate title, such as :
Documentary Stamps & Notes, Recording Deed & Mortgage, Escrow Fees, Attorney Fees, Title Insurance, Appraisal & Inspection, Survey Charge
Conditions, Covenants, and Restrictions (CC and Rs) - The standards that define how a property may be used and the protections the developer has made for the benefit of all owners in a subdivision.
Deed - A formal written instrument by which title to real property is transferred from one owner to another.
Earnest Money - A sum of money normally placed in an escrow account with the title company, to show that a potential purchaser is serious about buying.
Easement - Right-of-way granted to a person or company authorized access to the owner's land: for example, a utility company may be grated an easement to install pipes or wires. An owner may voluntarily grant an easement, or in some cases, be compelled to grant one by a local jurisdiction.
Escrow - The closing of a transaction through a third party, who requires certain funds and documents to be delivered on the performance of certain conditions outlined in the contract.
FSBO - "For Sale By Owner" A property that is being offered for sale by the owner without the benefit of a Real Estate Broker.
Hazard Insurance or Home Owners Insurance - Protects against damages caused to property by fire, windstorms, and other common hazards.
Inspection Report - A physical examination and written report to determine the physical condition of the home, required by the lender in order to supplement the information contained in the appraisal report. The examination includes the homes exterior, foundation, framing, plumbing, electrical system, heating, air conditioning, fireplace, kitchen, bathroom, roof, exterior, well and septic system.
Lien - A claim by one person on the property of another as security for money owed. Such claims may include obligations not met or satisfied, judgments, unpaid taxes, materials or labor.
Listing - An agreement that establishes the rights and obligations between the seller and the Broker or between the buyer and the Broker.
MLS - Multiple Listing Service (MLS) is an information service, generally owned and operated by a local association of Brokers, who pool their listings and agree to share commissions with other member Brokers who find purchasers.
Metes and Bounds - A legal description of a parcel of land that begins at a well marked point and follows the boundaries, using direction & distances around the tract back to the place of beginning.
Option - the right to purchase property within a definite time at a specified price. There is no obligation to purchase but the seller is obligated to sell if the option holder exercises the right to purchase.
Plat - A map or chart of a lot, subdivision or community drawn by a surveyor showing boundary lines, buildings, improvements on the land, and easements.
Real Estate Broker - A middle man or agent who buys and sells real estate for a company, firm, or individual on a commission basis. The broker does not have title to the property, (unless otherwise stated), but generally represents the owner.
Recording Fee - A charge for recording the transfer of a property, paid to a city, county, or other appropriate branch of government.
Right-A-Way - The right or privilege, acquired through accepted usage or contract, to pass over a designated portion of the property of another.
Sales Contract - A contract between a buyer and seller which should explain, in detail, exactly what the purchase includes, what guarantees there are, when the buyer can move in, what the closing costs are, and what recourse the parties have if the contract is not fulfilled or if the buyer cannot get a mortgage commitment at the agreed-upon terms.
Survey - A map or plat by a licensed surveyor showing the results of measuring the land with its elevations, improvements, boundaries, and its relationship to surrounding tracts of land. A survey is often required by the lender to assure him that a building is actually sited on the land according to its legal description.
Taxes - An assessment of a property by a set rate of taxation for local and or county government entities.
Title - Evidence (usually in the form of a certificate or deed) of a person's legal right to ownership of a property.
Title Company - Also known as "Title Insurance Company" or "Title Insurer", a corporation which is in the business of selling policies of insurance guaranteeing and ensuring that the property title is clear, legal ownership and quality of title to real estate.
Title Insurance - Protects lenders or homeowners against loss of their interest in property due to legal defects in title.
Walk-Through - A final inspection of a home before settlement to search for problems that need to be corrected before ownership changes hands.
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