| Acceleration Clause. |
A provision in a mortgage whereby In the event of sale or transfer the entire
loan balance becomes due and payable. Also called a Due-on-Sale clause. |
| Acre. |
A measure of land area equal to 43560 square feet. |
| Adjustable Rate Mortgage (ARM). |
A mortgage where the interest rate is tied to a published index and moves up
and down as the index fluctuates. |
| Administrator. |
A person appointed by the probate court to carry out the administration of a
decedent's estate when the decedent has left no will. |
| Agent. |
A person who has been given authority by another to represent him. |
| Alienation. |
The transfer of property from one person to another. |
| ALTA (American Land Title Association). |
Organization composed of title insurance firms which sets standards for the
industry, including title insurance policy forms used on a national basis. |
| Amortization. |
The gradual paying back of a mortgage loan by equal installments. |
| Annual Percentage Rate (APR). |
The cost of credit on an annual basis, expressed as a percentage and calculated
over the life of the loan. Lenders are required to disclose this |
| Appraisal. |
An opinion of value as of a certain date, based upon an analysis of information. |
| APR (Annual Percentage Rate). |
The yearly percentage interest of a loan, as expressed by the actual rate of interest
paid. Must be disclosed as a requirement of federal truth in lending statutes. |
| Assessed Value. |
Value placed on a property by the county assessor as the basis for taxation. |
| Assessor. |
The person appointed to assess property values for taxation purposes. |
| Assessors Parcel Number (APN). |
A number assigned by a county to identify and track a particular piece of
property. |
| Attorney in Fact. |
A person who is empowered to act for another by means of a signed power
of attorney. |
| Balloon Payment. |
A lump sum payment due at the end of the loan term in order to completely pay it off. |
| Boot. |
Cash or debt relief received by the taxpayer in a 1031 exchange. |
| Buyer's Market. |
A market where the buyers outnumber the sellers. |
| Capital Gains. |
The profit resulting from the sale of an asset. |
| Capitalization. |
An appraisal method where net operating income is converted into capital
value by application of a factor representing a percentage of the reasonable return on the investment. |
| Cash Flow. |
The income from a property excluding non cash expenses and depreciation. |
| Certificate of Reasonable Value (CRV). |
The appraised value of a property subject to a VA loan. |
| Chain Of Title . |
The history of ownership and factors affecting the title back to the beginning
of recordkeeping. |
| Close of Escrow (COE). |
The date the documents are recorded and title passes from Seller to Buyer.
On this date, the Buyer becomes the legal owner. |
| Closing Costs. |
The expenses, above and beyond the purchase price, incurred by buyers and
sellers upon completion of a real estate transaction. |
| Closing Statement. |
A separate accounting of buyers and sellers funds provided at the close of escrow. |
| Closing Statement. |
A separate accounting of buyers and sellers funds provided at the close of escrow. |
| Cloud on Title. |
Any irregularity which will adversely affect the title. |
| Commission. |
The fee paid to a real estate broker by the seller as compensation for finding a
buyer. |
| Community Property. |
Property acquired by a husband and/or wife during marriage giving each spouse
an interest in the property even if they are not on title. |
| Comparable Sales. |
Sales of properties similar to the property being appraised. |
| Condemnation. |
Declaration that a structure is unfit to be occupied. The taking of private property
for public use. |
| Condominium. |
A multi unit building in which each owner holds title to his unit together with an
undivided interest in the common areas. |
| Contingency. |
A condition in a contract that permits one of the parties to cancel when it is
not met. |
| Conventional Loan. |
A loan made without governmental underwriting (this excludes FHA and
VA loans). |
| Conveyance. |
A written instrument such as a deed which transfers title from one person
to another. |
| CC&Rs (Covenants, Conditions and Restrictions). |
A recorded declaration of covenants, conditions and restrictions established
by a subdivider or other landowner. CC&Rs can be established by deed. |
| Close of Escrow. |
The date that the change of ownership is recorded. |
| Deed. |
The legal document which conveys title to a property. |
| Deed Restriction. |
Limitations attached to the deed of a property which prohibit certain uses of
the property. |
| Default. |
Failure to comply with the requirements of a mortgage, falling behind in making
the payments. |
| Depreciation. |
Decline in value of a property for any reason. |
| Devisee. |
One who receives a bequest in a will. |
| Documentary Transfer Tax. |
A sum of money collected by the county when real property is transferred. |
| Down Payment. |
The amount of money paid up front when purchasing a property. |
| Earnest Money. |
Funds submitted along with an offer to purchase as a sign of good faith and
serious intent. |
| Easement. |
A right of way given to a person or persons other than the owner to pass over
or access the property. |
| Eminent Domain. |
The right of the government to take posession of private property, with fair
compensation, to use for the public good. |
| Encroachment. |
A structure which overlaps, partially or completely, the property of another. |
| Encumbrance. |
A right or claim upon real property held by one other than the property owner. |
| Equity. |
The value of a property above and beyond any liens against it. |
| Escrow. |
A neutral third party whose role is to carry out the instructions agreed upon by
buyer and seller. |
| Eviction. |
The process of ending the occupancy of a property in accordance with a court
order. |
| Executor. |
A person appointed in a will and affirmed by the probate court to cause a
distribution of the decedent's estate in accordance with the will. |
| Federal Housing Administration (FHA). |
A federal governmental agency that provides insurance for mortgages. |
| Foreclosure. |
The action taken by a lender to take posession, for the purpose of sale, of a
property where the mortgagee is not making the required payments. |
| Grant Deed. |
A deed containing the word "grant" which is used to change the ownership of
a property. |
| Homestead. |
A declaration recorded by a homeowner. It provides a certain amount of
protection against judgements. |
| Impounds. |
Funds, typically collected along with the loan payment, to be used for future
payment of property taxes and homeowners insurance. |
| Intestate. |
Having no will. |
| Intestate Succession. |
The transfer of property to an heir from a person who dies without leaving a will. |
| Lease. |
A contract between owner and tenant stating the conditions under which
the tenant my occupy and use the property. |
| Lien. |
An obligation, financial or otherwise, recorded against a property. The
property cannot be sold until the obligation is satisfied. |
| Listing. |
A contract between a property owner and a real estate broker to sell the
owner's property. |
| Mechanic's Lien. |
A lien on a property for materials and labor used on an improvement to the
property. |
| Multiple Listing Service. |
An organization of local real estate brokers who agree to pool their listings so
that any member may sell any listing. |
| Notice of Default. |
A formal notice, in writing, sent to a borrower informing him that legal action is
likely as a result of his failure to make the required payments. |
| Option. |
A right, given in exchange for a fee, to purchase real estate upon specified terms
by a specified date. |
| Origination Fee. |
Points may be charged by a lender to increase the yield on his loan. A point is
1% of the loan amount. Sometimes you can buy a lower interest rate by paying points. |
| PIQ. |
Stands for Property In Question. Refers to the property which is the subject
of the document in which the term appears. |
| PITI. |
A payment that combines Principal, Interest, Taxes, and Insurance. |
| Points. |
Fee charged for processing a loan application. |
| Patent. |
A conveyance of title to land by the Federal or State Government. |
| Power of Attorney. |
A legal document empowering one person to act for another for a certain period
of time. May be limited in scope or wide ranging. |
| Prepayment Penalty. |
A fee charged by a lender when a loan is paid off sooner than a time prescribed
in the agreement. |
| Pre Qualification. |
The determination, in advance, of how much of a loan a person can qualify for. |
| Private Mortgage Insurance(PMI). |
Insurance for that part of a loan which exceeds 80% of the value of the
property. |
| Probate. |
A procedure carried out in Superior Court to establish the validity of a will
and the identity of the beneficiaries. |
| Qualified Intermediary. |
An entity who is not an agent of the taxpayer who enters into a written agreement
with the taxpayer to facilitate a 1031 exchange. |
| Quiet Title. |
A court action to free the title to a piece of land from the claims of other
persons. |
| Quit Claim Deed. |
A deed which relinquishes the Grantors interest in the property. |
| Realtor. |
A real estate agent who is also a member of the National Association of realtors. |
| Reconveyance. |
An instrument used to transfer title from a trustee to the owner of real estate,
when title is held as security for a debt. Most commonly used upon payment in full of a trust deed. |
| Recording. |
Filing documents affecting real property as a matter of public record, giving
notice to future purchasers, creditors, or other interested parties. |
| Relinquished Property. |
A taxpayers property that is sold in a 1031 exchange. |
| Replacement Property. |
A property that is purchased by the taxpayer in a 1031 exchange. |
| RESPA. |
The Real Estate Settlement Procedures Act. |
| Seller's Market. |
A market where the sellers outnumber the buyers. |
| Subdivision. |
An area of land laid out and divided into lots, blocks, and building sites, and in
which public facilities are laid out, such as streets, alleys, parks, and easements for public utilities. |
| Tax Deed. |
A deed executed by the tax collector to the state, county or city when no
redemption is made from a tax sale. |
| Tax Sale. |
Sale of property after a period of non payment of taxes. |
| Testate. |
Having made a will. |
| Title. |
An instrument evidencing ownership of real estate. |
| Title Insurance. |
An insurance policy protecting the holder against loss of their interest in property
resulting from legal defects in the title. |
| Title Search. |
A review of all recorded documents affecting a specific parcel of land to
determine the present condition of title. |
| Trust Deed. |
A written document conveying the title to real estate as security for the
repayment of a loan. |
| Underwriting. |
The process of verifying a loan applicants information and issuing loan approval. |
| Wrap-Around Mortgage . |
A second mortgage whose face value includes the balance due on the first
mortgage. |
