Addendum: Something added to a document, escrow, contractual agreement, etc.

Agency: A relationship in which one party represents another under authority of the latter.

Amendment: An alteration, change, or addition to an existing agreement without changing the principal idea.

Appraisal: An opinion of value based on factual analysis.

Appreciation: An increase in the value of real estate.

Assessed Value: Value placed on property by Assessor’s Office for the purpose of taxation.

Built-Ins: Stoves, dishwashers, ovens, and other appliances framed into the building construction and not removable.

C.C.&R.’s: Covenant, Codes, and Restrictions are regulations found in a master planned community or a sub-division. These permit the association to enforce certain aspects of the community. (Example: Exterior paint colors)

Chain of Title: An abstract of conveyances, transfers, encumbrances, and other details relied on as evidence of title, together with other essentials of record that could affect the marketability of the title.

Close of Escrow: Date title passes from seller to buyer when the documents have been recorded.

Closing: Ending settlement of a real estate transaction between the buyer and seller.

Closing Statement: Financial disclosure statement that accounts for all funds received and distributed at close of escrow, including tax prorations, hazard, and mortgage insurance.

Counter-Offer Rejection of an offer by the seller along with the agreement to sell the property to a potential buyer under different terms from the original offer.

Comparable Sales: Sales that have very similar characteristics as the subject property.

Convey of Conveyance: To transfer ownership of a property from one party to another.

Deed: An instrument that conveys title when properly executed and delivered.

Deed of Trust: An instrument used in place of a mortgage so that the lender’s rights are secured.

Disclosure: Make something known or tell the “whole truth”. Should always be in writing when dealing with property.

Earnest Money: Payment made by buyer as a sign of good faith to purchase property.

Easement: Right or interest limited to a specific purpose that one party has in the land of another.

Encumbrance: Anything that could affect or limit ownership of real property. (Examples: Liens, mortgages, and easements)

Equity: Value owner has in real estate over and above liens against the real property.

Escrow: Deposit of funds and documents with instructions to a neutral third party to carry out the provisions of the contract or agreement.

Escrow Fee: Fee charged by title company for escrow services.

Exclusive Right to Sell: Written agreement between the owner and an agent giving the agent the exclusive right to sell within a set period of time for a fee.

Fair Marker Value: Price negotiated by a willing seller and a willing buyer within a reasonable amount of time.

Hazard Insurance: Casualty insurance that protects property damage caused by fire and some natural causes. (Example: Vandalism)

Impound Account: A trust type account set-up by lenders for the accumulation of borrower’s funds to meet periodic payments of taxes, mortgage insurance premiums and/or future insurance premiums.

Legal Description: Description of land that complies with government surveys to identify a specific parcel so its boundaries cannot be mistaken.

Lien: An encumbrance against property for money, either voluntary or involuntary. All liens are encumbrances but not all encumbrances are liens.

Mortgage: A legal document that provides security for repayment of a promissory note.

Mortgagee’s Title Policy: Lenders require this policy to insure their lien is valid. Also required for second mortgages and does not protect the buyer.

Owner’s Title Policy: Insurance for the owner of the property, rather than a lien holder. Insures the buyer against loss due to any defect of the title not excepted or excluded from the policy.

Personal Property: Any property, which is not real property. (Examples: Money, boats, appliances, etc.)

PITI: Principal, interest, taxes, and insurance.

Power of Attorney: A written instrument, an authority by which a principal enables another (attorney in fact) to act for him or her.

Promissory Note: Following a loan commitment from the lender, the borrower must sign a note promising to repay the loan. This establishes personal liability for repayment.

Quit Claim Deed: A deed operating as a release; intended to pass any title, interest or claim which the grantor may have in the property, but not containing any warranty of a valid interest or title in the grantor.

Recording: The filing of documents affecting real property with the County Recorder for public record.

Recording Fee: Charged by the County Recorder to record documents in the public records. Charges are based on the number of pages recorded.

Septic Inspection: The septic system must have a certification of inspection issued by the city or county Health Department.

Special Assessment: Legal charge against real estate by a public authority to pay cost of public improvements. (Examples: Sidewalks, streetlights, etc.)

Survey: Shows easements, encroachments, locations of improvements, lot size, etc. May be required by a lender, buyer, or a title company.

Sub-Division: A parcel of land that has been divided into smaller parts.

Termite Inspection: Required by lender or buyers to show property free and clear of termites or other wood-destroying organisms.
Time is of the essence: Demands punctual performance in fulfilling the terms of the contract/agreement.

Title: The evidence one has of right to possession of land.

Title Insurance Policy: An insurance policy that protects the investment or equity of the buyer, lender or owner in their real property interest.

Warranty Deed: A deed used in many states to convey fee title to real property wherein the seller (grantor) warrants the interest being conveyed.

Zoning: The division of a city or a county by legislative regulations into areas (zones), specifying the uses allowable for the real property in these areas.