REAL ESTATE
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real estate
Adjustable Rate Mortgage (ARM) - a loan characterized by a fluctuating
interest rate
Agency - the relationship between a principal and an agent wherein the
agent is authorized to represent the principal in certain transactions
Agent - One who acts or has the power to act for another
Amortized Loan - a loan in which the principal as well as the interest is
payable in periodic installments over the term of the loan
Annual Percentage Rate (APR) - the relationship of the total finance
charges associated with a loan
Appraisal - The process through which conclusions of property value are
obtained
Appurtenance - A right, privilege or improvement belonging to, and
passing with, the land
Appurtenant Easement - an easement that is annexed to the ownership
of one parcel and allows the owner use of the neighbor's land
Asbestos - A mineral once used in insulation and other materials that can
cause respiratory diseases
Assessment - The imposition of a tax, charge or levy, usually according
to established rates
Assignment - The transfer in writing of interest in a bond, mortgage, lease
or other instrument
Assumption of Mortgage - Acquiring title to property on which there is an
existing mortgage and agreeing to be personally liable for the terms and
conditions of the mortgage, including payments
Attorney's Opinion of Title - An abstract of title that an attorney has
examined and has certified to be, in his or her opinion, an accurate
statement of the facts concerning the property ownership
Balloon Payment - A final payment of a mortgage loan that is
considerably larger than the required periodic payments because the loan
amount was not fully amortized
Bargain and Sale Deed - a deed that carries with it no warranties against
liens or other encumbrances but that does not imply that the granter has
the right to convey title
Beneficiary - (1) The person for whom a trust operates or in whose behalf
the income from a trust estate is drawn (2) a lender in a deed of trust loan
transaction
Blanket Loan - A mortgage covering more than one parcel of real estate
Breach of Contract - Violation of any terms or conditions in a contract
without legal excuse
Broker - One who acts as the intermediary on behalf of others for a fee or
commission
Brokerage - the bringing together of parties interested in making a real
estate transaction
Buyer's Agent - a residential real estate broker or salesperson who
represents the prospective purchaser in a transaction
Buyer's Broker - A residential real estate broker who represents
prospective buyers exclusively
Capital Gain - Profit earned from the sale of an asset
Chain of Title - The succession of conveyances, from some accepted
starting point, whereby the present holder of real property derives title
Closing Statement - A detailed cash accounting of a real estate
transaction showing all cash received, all charges and credits made and all
cash paid out in the transaction
Comparables - Properties used in an appraisal report that are
substantially equivalent to the subject property
Competitive Market Analysis (CMA) - A comparison of the prices or
recently sold homes that are similar to a listing seller's home in terms of
location, style and amenities
Condominium - The absolute ownership of a unit in a multi-unit building
based on a legal description of the airspace the unit actually occupies, plus
an undivided interest in the ownership of the common elements, which are
owned jointly with the other condominium unit owners
Contingency - A provision in a contract that requires a certain act to be
done or a certain event to occur before the contract becomes binding
Contract - a legally enforceable promise or set of promises that must be
performed and for which, if a breach of the promise occurs, the law
provides a remedy
Conventional loan - A loan that requires no insurance or guarantee
Conveyance - a term used to refer to any document that transfers title to
real property
Counteroffer - A new offer made in response to an offer received. It has
the effect of rejecting the original offer, which cannot be accepted
thereafter unless revived by the offerer
Covenant - A written agreement between two or more parties in which a
party or parties pledge to perform or nor perform specified acts with regard
to property; usually found in such real estate documents as deeds,
mortgages, leases and contracts for deed
Deed - A written instrument that, when executed and delivered, conveys
title to or an interest in real estate
Deed of Trust - An instrument to create a mortgage lien by which the
borrow conveys title to a trustee, who holds it as security for the benefit of
the lender.
Discount point - A unit of measurement used for various loan charges;
one point equals one percent of the amount of the loan.
Earnest money - Money deposited by a buyer under the terms of the
contract, to be forfeited if the buyer defaults but applied to the purchase
price if the sale is closed.
Easement - A right to use the land of another for a specific purpose, such
as for a right-of-way or utilities.
Eminent domain - The right of a government or municipal quasi-public
body to acquire a property for public use through a court action called
condemnation, in which the court decides that the use is a public use and
determines the compensation to be paid to the owner.
Encroachment - A building or some portion of it - a wall or fence for
instance - that extends beyond the land of the owner and illegally intrudes
on some land of an adjoining owner or a street or alley.
Encumbrance - Anything - such as a mortgage, tax or judgment lien, an
easement, a restriction on the use of the land or an outstanding dower
right - that may diminish the value or use and enjoyment of the property.
Escheat - The reversion of a property to the state or county, as provided
by state law, in cases where a decedent dies intestate without heirs
capable of inheriting, or when the property is abandoned.
Escrow - The closing of a transaction through a third party called an
escrow agent, who receives certain funds and documents to be delivered
upon the performance of certain conditions outlined in the escrow
instructions.
Equitable Title - The interest held by a vendee under a contractor deed or
an installment contract; the equitable right to obtain absolute ownership to
property when legal title is held in another's name.
Equity - The interest or value that an owner has in property over and
above any indebtedness.
Exclusive right-to-sell listing - A listing contract under which the owner
appoints a real estate broker as his or her exclusive agent for a designated
period of time of time, to sell the property on the owner's stated terms, and
agrees to pay the broker a commission when the property is sold, whether
by the broker, the owner, or another broker.
Fair Housing Act - The federal law that prohibits discrimination in housing
based on race, color, religion, sex, handicap, familial status and national
origin.
Fannie Mae - A quasi-government agency established to purchase any
kind of mortgage loans in the secondary mortgage market from the primary
lender.
Farmer's Home Administration (FmHA) - An agency of the government
that provides credit assistance to farmer's and other individuals who live in
rural areas.
Fee simple absolute - The maximum possible estate or right of
ownership of real property, continuing forever.
FHA loan - A loan insured by the Federal Housing Administration and
made by an approved lender in accordance with the FHA's regulations.
Fiduciary - One whom trust and confidence is placed, a reference to a
broker employed under the terms of a listing contract or buyer agency
agreement.
Foreclosure - A legal procedure whereby property used as a security for a
debt is sold to satisfy the debt in the event of default in payment of the
mortgage note or default of other terms in the mortgage document.
Freddie Mac - A corporation established to purchase primarily
conventional mortgage loans in the secondary mortgage market.
General Warranty Deed - A deed in which the grantor fully warrants good
clear title to the premises. Used in most real estate deed transfers, a
general warranty deed offers the greatest protection of any deed.
Ginnie Mae - A government agency that plays an important role in the
secondary mortgage market. It sells mortgage-backed securities that are
backed by pools of FHA and VA loans.
Graduated-payment mortgage (GPM) - A loan in which the monthly
principal and interest payments increase by a certain percentage each
year for a certain number of years and then level off for the remaining loan
term.
Grantee - A person who receives a conveyance of real property from a
grantor.
Grantor - The person transferring title to or an interest in real property to a
grantee.
Improvement - (1) any structure, usually privately owned, erected on a
site to enhance the value of a property - for example, building a fence or a
driveway. (2) A publicly owned structure added to or benefiting the land,
such as a curb, sidewalk, street or sewer.
Interest - A charge made by a lender for the use of money.
Joint tenancy - Ownership of real estate between two or more parties
who have been named in one conveyance as joint tenants. Upon the death
of a joint tenant, the decedent's interest passes to the surviving joint tenant
or tenants by the right of survivorship.
Legal description - A description of a specific parcel of real estate
complete enough for an independent surveyor to locate an identify it.
Lien - A right given by law to certain creditors to have their debts paid out
of the property of a defaulting debtor, usually by means of a court sale.
Life estate - An interest in real or personal property that is limited in
duration to the lifetime of its owner or some other designated person or
persons.
Listing broker - The broker in a multiple-listing situation from whose office
a listing agreement is initiated.
Littoral rights - (1) A landowners claim to use water in large navigable
lakes and oceans adjacent to his or her property. (2) The ownership rights
to land bordering these bodies of water up to the high-water mark.
Loan origination fee - A fee charged to the borrower by the lender for
making the mortgage loan. The fee is usually computed as a percentage of
the loan amount.
Loan-to-value ratio - The relationship between the amount of the
mortgage loan and the value of real estate being pledged as collateral.
Marketable title - Good or clear title, reasonably free from the risk of
litigation over possible defects.
Market value - The most probable price a property would bring in an
arm's-length transaction under normal conditions on the open market.
Mechanic's Lien - A statutory lien created in favor of contractors,
laborers, and material men who have performed work or furnished
materials in the erection or repair of a building.
Metes and bounds description - A legal description of a parcel of land
that begins at a well marked point and follows the boundaries, using
directions and distances around the tract, back to the place of beginning.
Mortgage - A conditional transfer or pledge of real estate as a security for
the payment of a debt. Also, the document creating the mortgage lien.
Mortgage lien - A lien or charge on the property of a mortgagor that
secures the underlying debt obligations.
Multiple-Listing Service (MLS) - A marketing organization composed or
member brokers who agree to share their listing agreements with one
another in the hope of procuring ready, willing and able buyers for their
properties more quickly than they could on their own.
Planned Unit Development - A planned combination of diverse land
uses, such as housing, recreation and shopping, in one contained
development or subdivision.
Plat map - A map of a town, section or subdivision indicating the location
and boundaries of individual properties.
Power of attorney - A written instrument authorizing a person, the
attorney-in-fact , to act as agent for another person to the extent indicated
in the instrument.
Private Mortgage Insurance (PMI) - Insurance provided by a private
carrier that protects a lender against a loss in the event of a foreclosure
and deficiency.
Probate - A legal process by which a court determines who will inherit a
decedent's property and what the estate's assets are.
Procuring cause - The effort that brings about the desired result. Under
an open listing the broker who is the procuring cause of the sale receives
the commission.
Promissory note - A financing instrument that states the terms of the
underlying obligation, is signed by its maker and is transferable to a third
party.
Property Manager - Someone who manages real estate for another
person for compensation. Duties include collecting rents, maintaining the
property and keeping up all accounting.
Quitclaim deed - A conveyance by which the grantor transfers whatever
interest he or she has in the real estate, without warranties or obligations.
Radon - A naturally occurring gas that is suspected of causing lung cancer.
Real Estate - Land; a portion of the earth's surface extending downward to
the center of the earth and upward infinitely to space, including all things
permanently attached to it, whether naturally or artificially.
Real Property - The interests, benefits and rights inherent in real estate
ownership.
Realtor - A registered trademark term reserved for the sole use of active
members of local Realtor boards affiliated with the National Association of
Realtors.
Reconveyance Deed - A deed used by a trustee under a deed of trust to
return title to the trustor.
Recording - The act of entering or recording documents affecting or
conveying interest in real estate in the recorder's office established in each
county. Until it is recorded, a deed or mortgage ordinarily is not effective
against subsequent purchasers or mortgagees.
Right-of-way - The right given by one landowner to another to pass over
the land, construct a roadway or use as a pathway, without actually
transferring ownership.
Riparian rights - An owner's rights in land that borders on or includes a
stream, river or lake. These rights include access to and use of the water.
Satisfaction of Mortgage - A document acknowledging the payment of a
mortgage debt.
Setback - The amount of space local zoning regulations require between a
lot line and a building line.
Sharecropping - In an agricultural lease, the agreement between the
landowner and the tenant farmer to split the crop or the profit from its sale,
actually sharing the crop.
Special warranty deed - A deed in which the grantor warrants, or
guarantees, the title only against defect arising during the period of his or
her tenure and ownership of the property and not against defects existing
before that time, generally using the language, "by, through or under the
grantor but not otherwise."
Stigmatized property - A property tat has acquired an undesirable
reputation due to an event that occurred on or near it, such a violent crime,
gang-related activity, illness or personal tragedy. Some states restrict the
disclosure of information about stigmatized properties.
Subdivider - One who buys undeveloped land, divides it into smaller
usable lots and sells the lots to potential users.
Subdivision - A tract of land divided by the owner, known as the
subdivider, into blocks, building lots and streets according to a recorded
subdivision plat, which must comply with local ordinances and regulations.
Survey - The process by which boundaries are measured and land areas
are determined; the onsite measurement of lot lines,, dimensions and
position of a house on a lot, including the determination of any existing
encroachments or easements.
Tenancy by the entirety - The joint ownership, recognized in some
states, of property acquired by husband and wife during marriage. Upon
the death of one spouse the survivor becomes the owner of the property.
Tenancy in common - A form of co-ownership by which each owner
holds an undivided interest in real property as if he or she were the sole
owner. Each individual owner has the right to partition. Unlike joint tenants,
tenants in common have the right of inheritance.
Testate - Having made and left a valid will.
Testator - A person who has made a valid will. A woman is often referred
to as a testatrix, although testator can be used for wither gender.
Time-share - A form of ownership interest that may include an estate
interest in property and which allows use of the property for a fixed or
variable time period.
Title - (1) The right to or ownership of land. (2) The evidence of ownership
of land.
Title Insurance - A policy insuring the owner or mortgagee against loss by
reason of defense in the title to a parcel of real estate, other than
encumbrances, defects and matters specifically excluded by the policy.
Title Search - The examination of public records relating to real estate to
determine the current state of the ownership.
Trust - A fiduciary arrangement whereby property is conveyed to a person
or institution, called a trustee, to be held and administered on behalf of
another person, called a beneficiary. The one who conveys the trust is
called the trustor.
Trust deed - An instrument used to create a mortgage lien by which the
current borrower conveys title to a trustee, who hold it as security for the
benefit of the not holder (the lender); also called a deed of trust.
Trustee - The holder of bare legal title in a deed of trust loan transaction.
Trustor - A borrow in a deed of trust loan transaction.
Valid contract - A contract that complies with all essentials of a contract
and is binding and enforceable on all parties to it.
VA loan - A mortgage loan on approved property made to a qualified
veteran by an authorized lender and guaranteed by the Department of
Veterans Affairs in order to limit the lender's possible loss.
Variance - Permission obtained from zoning authorities to build a structure
or conduct a use that is expressly prohibited by the current zoning laws; an
exception from the zoning ordinances.
Zoning ordinance - An exercise of police power by a municipality to
regulate and control the character and use of the property.
Harrisonburg, VA 22802
540-433-REAL (7325)
540-433-6384 fax
______________________
Office Hours:
Monday-Friday
8:30 am - 5:00 pm
Saturday and after hours
by appointment.
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