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GLOSSARY OF REAL ESTATE TERMS (A-G) |
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Glossary Of |
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Real Estate |
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Terms |
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Abstract (Of Title) |
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A summary of the public records relating to the title to a particular piece of land. |
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Acceleration Clause |
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Condition in a mortgage that may require the balance of the loan to become due immediately, if regular mortgage payments are not made or for breach of other conditions of the mortgage. |
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Agreement of Sale |
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Also called contract of purchase, purchase agreement, or sales agreement. A contract in which a seller agrees to sell and a buyer agrees to buy, under certain specific terms and conditions spelled out in writing and signed by both parties. |
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Amortization |
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A payment plan which enables the borrower to reduce his debt gradually through monthly payments of principal. |
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Appraisal |
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An expert judgment or estimate of the quality or value of real estate as of a given date. |
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Assumption of Mortgage |
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An obligation undertaken by the purchaser of property to be personally liable for payment of an existing mortgage. |
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Binder or “Offer to Purchase” |
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A preliminary agreement, secured by the payment of earnest money, between a buyer and seller as an offer to purchase real estate. |
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Certificate of Title |
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Certificate issued by a title company or a written opinion rendered by an attorney that the seller has good marketable & insurable title to the property which he is offering for sale. |
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Closing Costs |
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The numerous expenses which buyers and sellers normally incur to complete a transaction in the transfer of ownership of real estate. These costs are in addition to price of the property and are items prepaid at the closing day. |
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Condominium |
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Individual ownership of a dwelling unit and an individual interest in the common areas and facilities which serve the multi-unit project. |
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Conventional Mortgage |
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A mortgage loan not insured by HUD or guaranteed by the Veterans’ Administration. It is subject to conditions established by the lending institution and State statutes. |
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Deed |
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A formal written instrument by which title to real property is transferred from one owner to another. |
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Default |
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Failure to make mortgage payments as agreed to in a commitment based on the terms and at the designated time set forth in the mortgage or deed of trust. In the event of default, the mortgage may give the lender the right to accelerate payments, take possession and receive rents, and start foreclosure. Defaults may also come about by the failure to observe other conditions in the mortgage or deed of trust. |
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Depreciation |
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Decline in value of a house due to wear and tear, adverse changes in the neighborhood, or any other reason. |
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Documentary Stamps |
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A State tax, in the forms of stamps, required on deeds and mortgages when real estate title passes from one owner to another. |
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Downpayment |
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Amount of money to be paid by purchaser to seller upon the signing of the agreement of sale. The agreement of sale will refer to and acknowledge receipt ot the amount. |
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Earnest Money |
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The deposit money given to the seller or his agent by the potential buyer upon the signing of the agreement of sale to show that he is serious about buying the house. |
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Encumbrance |
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Legal right/interest in land that affects a good or clear title. It diminishes the land’s value. |
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Equity |
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The value of a homeowner’s unencumbered interest in real estate. |
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Escrow |
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Funds paid by one party to another (the escrow agent) to hold until the occurrence of a specified event, after which the funds are released to a designated individual. Should be adequate to cover yearly anticipated expenditures for mortgage insurance premiums, taxes, hazard insurance premiums, and special assessments. |
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Foreclosure |
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A legal term applied to any of the various methods of enforcing payment of the debt secured by a mortgage, or deed of trust, by taking and selling the mortgaged property, and depriving the mortgagor of possession. |
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General Warranty Deed |
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A deed which conveys not only all the grantor’s interests in and title to the property to the grantee, but also warrants that if the title is defective or has a “cloud” on it (such as mortgage claims, tax liens, title claims, judgments, or mechanic’s liens against it) the grantee may hold the grantor liable. |
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Grantee |
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That party in the deed who is the buyer or recipient. |
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Grantor |
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That party in the deed who is the seller or giver. |
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