GLOSSARY OF COMMON REAL ESTATE TERMS
ADDENDUM – An addition to the contract that must be signed by both parties to be binding.
APPLICATION FEE – This is a fee that may be charged by the lender to cover the costs of processing your loan application.
APPRAISAL – The professional examination of property for the purpose of estimating its current market value.
ASSIGNMENT – The transfer over to another the whole of any property, real or personal, in possession or in action, or any right or estate.
ASSIGNEE – The person receiving the right or property.
ASSIGNOR – Is the owner of the right or property, which is being transferred to another.
BUYERS AGENT – Agent acts solely on the buyer's behalf. The Agent has full fiduciary responsibilities, which include reasonable care, individual loyalty, confidentiality and full disclosure. This means the agent places the buyer's interest above all else.
CHAIN OF TITLE – A history of all of the documents transferring title to a parcel of real estate, beginning when it originally came from the government to a private owner, through to the latest document transferring title.
CLOSING – The same as Close of Escrow or COE. The final procedure in a real estate transaction. This is the day title is transferred to the new owner.
CONTINGENCY – A condition that must be satisfied before a contract is binding. For example, a sales agreement or offer may be contingent upon the buyer obtaining financing.
CONTINGENCY REMOVAL – Must be signed by the buyer to remove any contingency and create a binding contract.
CONTRACT – A deliberate agreement, based upon legal consideration, between two or more parties who have legal capacity, to perform a legal act. A binding promise.
DEED – A document which, when properly executed, conveys title of real property.
DISCLOSURE – To make known or public. By law, a seller of real property must disclose facts that affect the value or desirability of the property. Unless exempt, the seller completes and signs specific disclosure forms, including the Real Estate Transfer Disclosure Statement, to disclose those material facts.
EARNEST MONEY – The portion of the down payment delivered to the seller or escrow agent by the purchaser with a written offer as evidence of good faith
GRANT DEED – Customary document used to transfer title to real property; contains two implied warranties.
HOME WARRANTY PLAN – Protection against failure of mechanical systems within the property, and usually includes plumping, electrical, heating and cooling systems, and installed appliances.
HOMEOWNER'S ASSOCIATION (HOA) – An organized group of homeowners whose members help to regulate and enforce the rules and standards of their respective communities.
PLANNED UNIT DEVELOPMENT (PUD) – A zoning designation for property developed at the same or slightly higher density than conventional development, often with improvements clustered between open or common areas.
PURCHASE AGREEMENT – A written document in which the purchaser agrees to buy a certain real estate and the seller agrees to sell under stated terms and conditions. May also be called a sales contract, earnest money contract, or agreement for sales.
REAL ESTATE TRANSFER DISCLOSURE STATEMENT – This must be provided by the seller, listing any known defect or problem with the house. Both agents must reveal anything they know that might be a problem with the property. See also DISCLOSURE.
RECORDING FEES – Charged by the County or Town Clerk to record documents in public records. May be included in the borrower's closing costs.
TITLE – The rights of ownership recognized and protected by law. A combination of all elements that constitute the highest legal right to own, possess, use, control, enjoy, transfer, and dispose of real estate. A title spells out who has the right of ownership of a property.
TITLE COMPANY – The company that issues Title Insurance.
TITLE INSURANCE POLICY – A clear title has no liens or claims against it. This policy protects the purchaser, mortgagee, or other party against defects or losses associated with the title.
TOWNHOUSE – Architectural term for a two or more story unit with no units above or below, but with one or more shared walls. Ownership may be in the form of condominium, planned unit development or stock cooperative
UNDERWRITING – These are standards set by the lender which the borrower must meet in order to qualify for the loan
VESTING – Conveying ownership.
WAIVER – The intentional or voluntary relinquishment of a known right, essentially a unilateral act.
WOOD DESTROYING PEST AND ORGANISM INSPECTION – An inspection identifying existing or potential pest, dry rot, fungus, and other structure-threatening infestation or conditions. Sometimes referred to as "termite inspection."