GLOSSARY

AGENT: One who acts or has the power to act for another.

AGREEMENT OF SALE: A written agreement in which the buyer agrees to buy a certain realty and the seller agrees to sell upon terms and conditions set forth therein.

APPLICATION FEE: A fee charged the buyer by the lending institution for the appraisal and credit check.

APPRAISAL: An estimate of quantity, quality and value of real estate. The appraisal is usually done for the lending institution, although the buyer
pays for the appraisal as a part of the "Application Fee."

ASSESSED VALUE: An assessment of property values by the government
for the purposes of taxation.

BILL OF SALE: A written instrument which passes title of personal property from seller to buyer.

BUYER AGENCY CONTRACT: A written instrument in which the potential buyer authorizes a broker to find real estate to purchase or lease for the buyer.

CERTIFICATE OF TITLE: A statement of opinion on the status of the title
to a parcel of real property based on examination of specific public
records.

CLOSING STATEMENT (Settlement): A statement of settlement made by an attorney, real estate broker, or a title company that reflects the financial position of the buyer and seller in that particular real estate transaction.

CONVEY: The transfer of the title of land from one to another.

DEED: A written instrument that, when executed (signed) and delivered, conveys title to or an interest in real estate.

EARNEST MONEY: The money given to the agent for the seller by the potential buyer upon the signing of the agreement of sale to show that buyer is serious about buying the house. Also called "deposit." It is held in the real estate company’s escrow account until settlement or until final disposition of the earnest money is mutually agreed upon by the buyer
and seller.

EQUITY: The interest or value which an owner has in his or her property
over and above any mortgage indebtedness.

ESCROW: The deposit of instruments and funds with instructions to a
third neutral party to carry out the provisions of an agreement or contract.

FIXTURE: An article of personal property which has been installed in or attached to land or building thereon in such a manner that it is now considered to be part of the real estate.

HAZARD INSURANCE: Protects against damages caused to the property
by fire, windstorms, and other common hazards.

LISTING CONTRACT: A written employment agreement between a
property owner and a broker authorizing the broker to sell, lease or exchange the realty.

MARKET VALUE: The highest price a ready, willing and able buyer, not forced to buy, will pay to a ready, willing and able seller, nor forced to sell, allowing a reasonable time for exposure to the open market.

MARKET PRICE: The price a property brings in a given market.

MORTGAGE: (1) An instrument in writing which, when recorded, creates
a lien upon property pledged as security for the repayment of a debt or obligation OR (2) A conditional transfer or pledge of real estate as security for the payment of a debt. Also the document creating a mortgage lien.

MORTGAGE NOTE: A written agreement to repay a loan. The agreement is secured by a mortgage, serves as proof of an indebtedness, and states the manner in which it shall be paid. Also, "deed of trust note."

PITI: Principal, Interest, Taxes, Insurance. Most residential mortgage payments include the above and are therefore referred to as P.I.T.I. Also "carrying charges."

PRIVATE MORTGAGE INSURANCE (PMI): Associated with Conventional Mortgages, it is normally required with those programs where the
borrower puts down less than 20%. The purpose of this insurance is to provide the lender with protection against loss in the event the borrower defaults on the mortgage.

PROPERTY MANAGEMENT: The management of real estate, including collection of rents, maintenance of the property and upkeep of all accounting for another for compensation.

PRORATE: To divide or distribute proportionately; to divide monies,
usually at time of closing, proportionately between seller and buyer.

SURVEY: The process by which a parcel of land is measures and its area ascertained.

TITLE: Evidence that an owner of land is in lawful possession thereof; an instrument evidencing such ownership.

TITLE ABSTRACT: A condensed history of the title to a parcel of land consisting of a summary of every recorded instrument together with a statement of all liens, charges or encumbrances affecting title to that land.

TITLE INSURANCE: (1) A policy of insurance which indemnifies the holder for loss sustained by reason of a defect in the title, provided the loss does not result from defect excluded by the policy provision OR (2) A policy insuring the owner or mortgagee against loss by reason of defects in the title to a parcel of real estate other than those encumbrances, defects, and matters which are specifically excluded by the policy.

TITLE SEARCH OR EXAMINATION: A check of the title records, generally
at the local courthouse, to make sure the buyer is purchasing a house
from the legal owner and there are no liens, overdue special assessments,
or other claims.

TRANSFER TAX: State tax, local tax, and tax stamps required by law when title passes from one owner to another.



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