Real Estate Dictionary| Harman Realty | Decorah, Iowa
In the process of buying and selling your home, there are some terms that you may not be familiar with. Here are a few of the commonly used terms you may run into.
Abstract of Title: History of conveyances and encumbrances affecting the title of real property.
Addendum: Something added. A list or other material added to a contractual agreement.
Agency: Any relationship in which one party (agent) acts for or represents another (principal) under the authority of the latter.
Amendment: A change, either to correct an error or to alter a part of an agreement without changing the principal idea or essence.
Application Fee: A fee to cover some of the charges of the loan process.
Assessed Value: The value placed on the property by the Assessor's Office as a basis for taxation.
Built-Ins: Commonly - kitchen ranges, ovens, dishwashers and other appliances framed into the building construction and not removable.
CC&R's: Covenants, Conditions, and Restrictions. A document that controls the use, requirements and restrictions of a property. Commonly used in a Homeowners Association.
Closing Statement: The financial disclosure statement that accounts for all of the funds received and distributed at the final settlement.
Comparable Sales: Sales that have characteristics similar to the subject property (aka 'Comps').
Condominium: A system of individual fee ownership of units combined with joint ownership of common area of the structure and the land.
Conventional Mortgage: A mortgage not obtained under a government insured program. A loan provided by investors.
Convey/Conveyance: Process of transferring ownership of property from one party to another.
Counter Offer: A rejection of an offer by a Seller or Buyer along with an agreement to Sell or Buy the property on terms differing from the original offer.
Deed: A conveying instrument given to pass fee title to property upon sale.
Easement: A right or interest limited to a specific purpose that one party has in the land of another.
Encumbrance: Anything that affects or limits the ownership of real property, such as mortgages, liens, easements or any other restrictions.
Equity: The interest or value that an owner has in real estate over and above the liens against real property.
Exclusive Right To Sell: A written agreement between owner and agent giving agent the exclusive right to sell a property and collect a fee for a set period of time.
Fair Market Value: A price that would probably be negotiated by a willing Seller and a willing Buyer in a reasonable amount of time. Usually calculated by comparable sales.
Grantee: One to whom a grant is made. Generally, the buyer.
Grantor: One who grants property or property rights.
Hazard Insurance: Casualty insurance protecting real property against fire, some natural causes, vandalism, etc.
Legal Description: A description of land that complies with government surveys to thoroughly identify a specific parcel so that it, and it's boundaries, cannot be mistaken for any other.
Lien: An encumbrance against property for money, either voluntary or involuntary. All liens are encumbrances but not all encumbrances are liens.
Loan Origination Fee: Typically 1% of the loan amount, charged to Buyer by Lender.
Mortgage: A legal document that provides security for repayment of a promissory note.
Personal Property: Any property which is not real property, e.g. appliances, cars, boats, furniture, etc. In real estate, anything not permanently attached to the building is considered personal property.
PITI: A payment that includes Principal, Interest, Taxes and Insurance.
Points: Charged by the Lender and paid by the Buyer or Seller, or Both. One point is equal to 1% of the loan amount.
Power of Attorney: A written instrument, an authority by which a principal enables another to act for him / her.
Promissory Note: Following a loan commitment from the Lender, the Borrower signs a note promising to repay the loan under stipulated terms. The promissory note establishes personal liability for its repayment.
Quitclaim 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.
Special Assessment: Legal charge against real estate by a public authority to pay cost of public improvements such as: streetlights, sidewalks, street improvements, etc.
Survey: Shows easements, encroachments, locations of improvements, lot size, etc.
Time Is Of The Essence: Demands punctual performance in fulfilling the terms of the contract.
Title: The evidence one has of right to possession of land.
Warranty Deed: A deed used 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.