Real Estate Terms

1031 Tax Exchange

1031 Tax Exchange

Allows an investor to sell a property, to reinvest the proceeds in a new property and to defer all capital gain taxes.

Closing

Closing

Also known as “escrow” or “settlement.” The process of executing legally binding documents, such as deeds and mortgages, most commonly associated with the purchase of real estate and the borrowing of money to assist in the purchase.

Deed of Trust

Deed of Trust

Like a mortgage, a security instrument whereby real property is given as security for a debt.

Easement

Easement

A right of way giving persons other than the owner access to or over a property.

Foreclosure

Foreclosure

The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property. This usually involves a forced sale of the property at public auction with the proceeds of the sale being applied to the mortgage debt.

Loan Policy

Loan Policy

A title insurance policy issued to the mortgage lender insuring against loss by defects in, liens against, or unmarketability of title.

Mechanics Lien

Mechanics Lien

A lien created by statute for 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 improvements.

Power of Attorney

Power of Attorney

A legal document that authorizes another person to act on one’s behalf.
**If you plan on using a Power of Attorney please contact us or forward a copy as soon as possible for review. These have to be approved by us and the lender prior to closing.

Road Maintenance Agreement

Road Maintenance Agreement

An Agreement often made between neighbors for roads that are privately maintained, rather than maintained by a public body.

Short Sale

Short Sale

The sale of real property where the fair market sale price is less than the loan balance.

Title Commitment

Title Commitment

An offer to issue a title insurance policy. The title commitment will describe the various conditions, exclusions, and exceptions that will apply to that particular policy.

Title Examination

Title Examination

To peruse and study the instruments in a chain of title and determine their effect and conditions to reach a conclusion as to the status of title.

Trusts

Trusts

A fiduciary relationship under which one holds property for the benefit of another.

Appraisal

Appraisal

a licensed appraiser’s opinion of a home’s market value based on comparable recent sales of homes in the neighborhood.

Closing Costs

Closing Costs

the expenses and fees associated with the purchase and sale of a home, such as taxes, title insurance, appraisal, lender fees, and other services carried out during closing.

Disbursement

Disbursement

The receipt and distribution of settlement proceeds (funds) after the recording has taken place.

Financing Statement

Financing Statement

The receipt and distribution of settlement proceeds (funds) after the recording has taken place.

Judgment

Judgment

The determination of a court regarding the rights of parties in an action. Money judgments, when recorded, become a lien on the real property of the party the judgment is against.

Lien

Lien

a legal claim against the property of another, usually to secure an unpaid debt.

Marketable Title

Marketable Title

A title which is free of defects and liens, as well as enables an owner to sell his property freely to others and others will accept without objection.

Survey

Survey

The process of locating and measuring a property’s boundary lines to determine the exact amount of land that a homeowner owns. A survey will also locate and measure any easements or encroachments on a property, which will be noted on a home’s chain of title. Buyers often have a survey done to make sure any issues are documented and resolved prior to closing.

Owner's Policy

Owner's Policy

A title insurance policy insuring an owner of real estate against loss occasioned by defects, liens, or unmarketability of the title.

Settlement

Settlement

Another term for closing. Settlement occurs when the buyers, sellers, and their agents execute the documents of a transaction and the closing agent or attorney facilitates payment of all closing costs.

Restriction

Restriction

Often called restrictive covenants. Provisions in a deed or other instrument whereby an owner of land prohibits or restricts certain use, occupation or improvement of the land.

Title Insurance

Title Insurance

Insurance that protects the lender (lender’s policy) or the buyer (owner’s policy) against loss arising from disputes over ownership of a property.

Title Search

Title Search

A search of the public records for recorded instruments that affect the title to a piece or parcel of land.