ABSTRACTING - The process of making and compiling an abstract.

ACCEPTANCE - The date when both parties, seller and buyer, have agreed to a completed signing
and or initialing the contract.

ADVERSE POSSESSION - The unauthorized occupation of land belonging to another, by a person
who does not have the consent of the owner. Said occupier is said to hold possession adversely to
the rights and interests of the owner. In most states, by operation of law, title to the land becomes
vested in such occupier after a fixed number of years of peaceful occupancy.

AGENT - An individual who represents a seller, a buyer or both in purchass or sale of real estate.

AMORTIZATION - The schedule of loan payments that establishes the amount of payment to be
applied to the principal and the amount to be applied to interest, usually on a monthly basis, for the
full term of the loan.

APR - Annual Percentage Rate. The yearly interest percentage of a loan as expressed by the actual
rate of interest paid.

APPRAISAL - An estimate of value of real estate from analysis of facts about the property; an opinion
of value. An appraisal is normally paid for by the buyer.

BASIC RATE - When referring to title insurance, the basic rate is the rate charged to a consumer who
does not qualify for a reduced rate. Please consult the “Shopping for Title Insurance” section of this
site for more information.

BILL OF SALE - Document used to transfer title of personal property.

BROKER - One who acts as an agent for another in negotiating sales or purchases in return for a fee
or commission.

BROKERAGE - A fee or commission paid to a broker.

BUYERS AGENT - A real estate agent that has made a agreement to represent the buyer exclusively,
rather than the seller.

CERTIFICATE OF TITLE - In areas where attorneys examine abstracts or chains of title, a written
opinion, executed by the examining attorney stating that title is vested as stated in the abstract.

CLAIM - A right to assert, or the assertion of, a demand for payment of money due; or the surrender
or delivery of possession of property or the recognition or some right. A demand for something as
one's rightful due.

CLOSING - In some areas called a "settlement." The process of completing a real estate transaction
during which deeds, mortgages, leases and other required instruments are signed and/or delivered,
an accounting between the parties is made, the money is disbursed, the papers are recorded, and all
other details such as payment of outstanding liens and transfer of hazard insurance policies are
attended to.

CLOSING STATEMENT - A summation, in the form of a balance sheet, made at a closing, showing the
amounts of debits and credits to which each party to a real estate transaction is entitled.

CLOUD ON TITLE - An irregularity, possible claim, or encumbrance which, if valid, would adversely
affect or impair the title.

COMMISSION - The amount due a real estate broker, mortgage loan broker, or real estate
professional for services performed in such capacity.

CONDITIONS - This term is first cousin to restrictions and reservations. It refers to provisions in deeds
and other real estate instruments which provisions make a particular right contingent upon the
occurrence of some future event.

CONTRACT - An agreement to do or not to do a certain thing.

COVENANT - A formal agreement or contract between two parties in which one party gives the other
certain promises and assurances, such as covenants of warranty in a warranty deed.

DEED - Written instrument, which when property executed a delivered, convey title to real property.

DEFAULT - Failure to perform a promised task or to pay an obligation when due.

DEFECT - A blemish, imperfection or deficiency. A defective title is one that is irregular and faulty.

DEPRECIATION - Loss in value occasioned by ordinary wear and tear; destructive action of the
elements; or functional or economic obsolescence.

EARNEST MONEY - Also known as a deposit. Down payment or a small part of the purchase price
made by a purchaser as evidence of your good faith in buying a home.

EASEMENT -  The right to use the land of another.

ENCROACHMENT - The extension of a structure from the real estate to which it belongs across a
boundary line and onto adjoining property.

ENCUMBRANCE - Anything that burdens (limits) the fee title to property, such as a lien, easement, or
restrictions of any kind.

ENDORSEMENT - Addition to or modification of a title insurance policy which expands or changes
coverage of the policy, fulfilling specific requirements of the insured.

ESCROW - Technically, this term strictly refers to a deed delivered to a third person to be held by him
until the fulfillment or performance of some act or condition by the grantee. In title industry parlance it
means the depositing with an impartial third party called the escrow agent (usually the title company)
of anything pertaining to a real estate transaction including money and documents of all kinds which
are to be disbursed and delivered to the rightful parties by the escrow agent when all conditions of the
transaction have been met.

ESCROW AGREEMENT - A written agreement usually made between buyer, seller, and escrow agent,
but sometimes only between one person and the escrow agent.

FIRST MORTGAGE - A mortgage having priority as a lien over any other mortgage or lien on the
same property.

FSBO - For Sale By Owner.        

FORECLOSURE - The process in which a lender takes back property from a defaulting owner and re-
sells it.

GOOD FAITH ESTIMATE - An estimate of closing costs the lender is required (under the federal Real
Estate Settlement Procedures Act) to give to the buyer within at least three days of applying for a
mortgage loan. This is the lender's estimate - it must be completely accurate regarding the lender's
own charges and is supposed to be reasonably close to the charges third-party providers such as title
insurers/agents, attorneys, surveyors, etc., may change. You should check with those third-party
providers, however, regarding how much they will charge if you have any questions or concerns prior
to settlement.

HAZARD INSURANCE - Real estate insurance protecting against fire, some natural causes,
vandalism, etc., depending upon the policy. The buyer often adds liability insurance and extended
coverage for personal property.

FHA - A government loan with a low down payment, insured by the borrower's payment of the
Mortgage Insurance Premium (MIP).

HOMEOWNER'S ASSOCIATION - An owners group, whether in a como., townhouse, or single family subdivision that
establishes general guidelines for the community.

INGRESS - The right or permission to enter; also the means or place of entry such as a right-of-way
across adjoining land.

INSPECTION - A whole house inspection of a house being considered for purchase which looks for defects in the

INTESTATE - Dying without leaving a legal will.

JOINT TENANTS - Two or more persons who hold title to real estate jointly, with equal rights to share
in its enjoyment during their respective lives with the provision that upon the death of a joint tenant,
his share in the property passes to the surviving tenants, and so on, until the full title is vested in the
last survivor. A joint tenant cannot legally sell or encumber his interest without the consent or joinder
of all of the other joint tenants.

JUDGMENT - A conclusion or determination by a court of law usually awarding the payment of money
or relief of some kind to one of the parties to a lawsuit.

LEASE - An agreement granting the use or occupancy of land during a specified period in exchange
for rent.

LIEN - The liability of real estate as security for payment of a debt. Such liability may be created by
contract, such as a mortgage, or by operation of law, such as a mechanics lien.

LISTING - A property for sale by a real estate brokerage or agent.

LIS PENDENS - A pending lawsuit. A lis pendens notice is legal notice to the world that a lawsuit is

LOAN POLICY - A policy of title insurance issued to the mortgage lender insuring against loss by
defects in, liens against, or un marketability of title.

LOCK BOX - A key storage system placed on a house entrance that is accessible only by active, licensed real estate

MARKETABLE TITLE - A title which a court of equity considers to be so free of material defects and
liens that it will force the title's acceptance by questioning purchaser. Also known as a merchantable

MARKET VALUE - An average between the highest price which a buyer, willing but not compelled to
buy, would pay and the lowest price a seller, willing, but not compelled to sell, would accept.

MECHANIC'S LIEN - A lien on real estate, created by operation of law, which secures the payment of
debts due to persons who perform labor or services or furnish materials incident to the construction of
buildings and improvements on the real estate.

METES AND BOUNDS - A land description in which boundaries are described by courses, directions,
distances, and monuments.

MORTGAGE - A temporary conditional pledge of property to a creditor as security for the payment of
a debt which may be cancelled by payment.

MLS - MLS stands for multiple listing service.

NOTE - A written promise to pay a certain amount of money.

NOTICE OF DEFAULT - The action filed to initiate foreclosure under a Trust Deed and Note.

OPINION - In title industry terms, referred to as title opinion. The conclusion and judgement of a skilled
person as to the status of a title, based upon a title examination.

OWNER'S POLICY - A policy of title insurance usually insuring an owner of real estate against loss
occasioned by defects in, liens against, or unmarketability of the owner's title.

POWER OF ATTORNEY - A legal instrument authorizing one to act as another's agent or attorney.

PRESENT VALUE - Today's worth of monies to be received in future.

PROBATE - A legal procedure in which the validity and probity of a document, such as a will, is

PRICE - The amount of money bring asked for a product or property, or the amount it sells for.

PROMISSORY NOTE - A written contract containing a promise to pay a definite amount of money at a
definite future time.

PUBLIC RECORDS - The transcriptions in a recorder's office of instruments which have been
recorded, including the indexes pertaining to them.


QUIT CLAIM DEED - A deed which does not imply that the grantor holds title, but which surrenders
and gives to the grantee any possible interest or rights which the grantor may have in the property.

REALTOR - This is a copyrighted trade name which can be legally used only by those persons
belonging to the National Association of Realtors.

RECORDING A  TITLE - The act of entering deed and or mortgage information in public record with
your local government

REFINANCE -  Obtaining a new loan, often at a lower interest rate, out of which the old loan is paid off.

RIGHT OF WAY - (1) The right to pass over property owned by another, usually based upon an
easement. (2) A path or thoroughfare over which passage is made. (3) A strip of land over which
facilities such as highways, railroads, or power lines are built.

SEARCH - In title industry terms, a careful exploration and perusal of the public records in an effort to
find all recorded instruments relating to a particular chain of title.

SECOND MORTGAGE - A mortgage ranking in priority immediately below a first mortgage.

SELLERS DISCLOSURES - The property's title and physical condition information required by the
REPC to be given to the buyer by the seller.

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.

SURVEY - To determine the location, boundaries, area, or the elevations of land and structures upon
the earth's surface by means of courses in relation to the North Star, and the measuring of angles
and distances by using the techniques of geometry and trigonometry. The map or plat drawn by a
surveyor which represents the property surveyed and shows the results of a survey.

TAX LIEN - The lien which is imposed upon real estate by operation of law which secures the payment
of real estate taxes.

THIRD PARTY - A term usually applied to persons who are not principal parties to a contract or other
instrument, but who have some right, interest or duty which such contract or instrument affects.

TITLE - A combination of all the elements that constitute the highest legal right to own, possess, use,
control, enjoy, and dispose of real estate or an inheritable right or interest therein.

TITLE COVENANTS - Covenants ordinarily inserted in conveyances and in transfers of title to real
estate for the purpose of giving protection to the purchaser against possible insufficiency of the title

TITLE INSURANCE - Protects your title - your ownership rights from claims against it.

UNDERWRITER - An insurance company which issues insurance policies either to the public or to
another insurer.


WALK-THROUGH INSPECTION - An optional visit by the buyer to check and approve the condition to
be real property.

WATER RIGHTS - The ability under the law to have the use of water. They are considered to be real

WATER SHARES - A right to use water on real property, granted to the owner by a canal company
with water certificates.

WAIVER - The voluntary and intentional relinquishment of a known right, claim, or privilege.

WARRANTY DEED - A deed containing one or more title covenants.

ZONING - Laws that govern specifically how a zoned area can be used.