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Glossary

A - B - C - D - E - F - G - H - I - J - K - L - M - N - O - P - Q - R - S - T - U - V - W - X - Y - Z


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Abstract:
A history of all transactions shown in the public records affecting a particular tract of land.
ACI:
Appraisers Choice Software. A form of computer software that allows the appraiser to commute the appraisal through the system.
Acquired Property:
A property for which TR has gained title through foreclosure or acceptance of a deed in lieu of foreclosure, often referred to as real estate owned (REO).
Addendum:
Additional information regarding an appraisal.
Adjustable Rate Mortgage (ARM):
A mortgage that permits the lender to adjust its interest rate periodically on the basis of movement in a specified index. Also used collectively to refer to ARMís and graduated payment adjustable rate mortgages (GPARMís).
Adverse Possession:
The possession, by one person, of land belonging to another in a manner deemed adverse to the interest of the owner. In most states, by operation of law, title to the land becomes vested in such person after a fixed number of years if the owner fails to assert his or her rights.
Agreement:
A legally binding contract made between two or more persons.
ALTA (American Land Title Association):
The trade association of the title insuranceindustry, which has adopted certain insurance policy forms to standardizecoverage on a national basis.
Amortization:
Payment to reduce the principal of a debt in regular, periodic installments.
Appraisal:
A report that sets forth an estimate or opinion of value.
Appurtenance:
A right or privilege that is a part of the ownership of property, such as a right of way to a highway across the land of another. Water rights are also an example.
AS IS:
About 90% of the time we at TR appraise the properties AS IS; (i.e., the condition the house is in on the date of inspection).
Assessment:
The valuation of real estate for purpose of taxes or special improvement charges.
Assignment:
The act of transferring an interest, such as a loan secured by a mortgage, from one person to another.
Assessorís Parcel #:
The (PIN) property identifier number, gives you information about the property.
Attorney's Opinion:
A statement by an attorney as to the validity of a title, arrived at after investigation of the history of the title as recorded in the public records.
AVM:
Stands for Automated Valuation Models. AVM products can be ordered on the internet and returned immediately to the user.
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- - - B - - -
Back Title Letter:
Also called "back title certificate" in some areas, and "starter" in others. When titles previously have been examined up to a certain date by reliable examiners, title companies sometimes give subsequent examiners of such titles a letter that sets forth the condition of the title at the timeof the previous examination and authorizes them to begin their subsequent examination with the terminal date of the previous examination.
Balloon Note:
A form of promissory note that calls for the minimum payment of principal and the payment of interest at regular intervals. This type of note requires a substantial final payment, which represents all the principal.
Bankruptcy:
A proceeding in U.S. District Court wherein assets of an insolvent debtor are protected and distributed in an equitable manner.
Binder:
Sometimes called "preliminary certificate" or "commitment." (1) A preliminary report as to the condition of a title and a commitment to issue a title insurance policy in a certain manner when certain conditions are met. (2) A deposit in escrow of a small part of the purchase price of real estate as evidence of good faith and to bind an agreement to purchase.
BPO:
Stands for Broker's Price Opinion.
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Certificate of Title:
A certificate issued by a title examiner stating the condition of a title.
Chain:
In real estate measurements (surveying), a chain is 66 feet long or 100 links, each link being 7.92 inches. The measurement may change when used in fieldsother than surveying.
Chain of Title:
The successive ownerships or transfers in the history of title to a tract of land.
Claim:
An adverse right or interest asserted by one party against another or against aninsurer or indemnitor. Claims may arise from unpaid debts or taxes, aswell as from hidden title defects such as fraud, forgery, missing heirs, etc.
Clear Title:
Real property ownership free of liens, defects, encumbrances or claims.
Closing:
Also called "settlement." A meeting of all parties involved in a property transaction during which the transaction is consummated.
Closing Cost:
Money paid by the borrower to effect the closing of a mortgage loan; (i.e., attorney fees, survey, insurance escrow payments, etc.)
Clouded Title:
An irregularity, possible claim or encumbrance that, if valid, would adversely affect or impair the title.
Coinsurance:
Two or more policies of title insurance issued by different insurers, each covering a portion of the same risk, which together provide total coverage of the risk.
Commitment:
Also called "binder." A document issued by a title insurance company that contains the conditions under which a policy of title insurance will be issued.
Comparable:
An abbreviation for comparable property sales, rentals, incomes, etc., used for the purposes of comparison in the appraisal process. A comparable is similar to the property, is in a similar neighborhood, and has sold and closed in a time frame according to market conditions noted on the front of the URAR.
Condemnation:
The taking of private property for a public purpose, with compensation to the owner under the right of eminent domain.
Condominium:
It is a type of property ownership whereby the owner owns a common interest in the land.
Covenant:
A formal agreement or contract between two parties in which one party gives the other certain promises and assurances, such as covenants of warranty in a warranty deed.
Conventional Loan:
A loan secured by a mortgage or deed of trust for which the loan-to-value ratio is within an acceptable range for a particular lending institution.
Conventional Mortgage:
A mortgage that is not insured or guaranteed by the federal government.
Conveyance:
The transfer of title to property from one person to another.
Cost Approach:
It is an estimate of cost to replace or reproduce a house if this was needed.
Courtesy:
A right that a husband has in his wife's property at her death. It does not exist in all states.
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Dedication:
The setting aside of certain land by the owner and declaring it to be for public use. Examples: streets, sidewalks and parks.
Deed:
A document through which a conveyance of property is effected.
Deed Restriction:
A covenant contained in a deed imposing limits on the use or occupancy of the real estate or the type, size, purpose or location of improvements to be constructed on it.
Defect:
A blemish, imperfection or deficiency. A defective title is one that is irregular and faulty.
Deferred Maintenance:
If a property is in need of repairs, an itemized list and a cost to cureneeds to be provided; (i.e., paint - $200.00, roof $1000.00).
Depreciation:
Loss in value occasioned by ordinary wear and tear, destructive action of the elements, or functional or economic obsolescence.
Devise:
A gift of real estate made by a will.
DOM:
Days On Market. Some lenders want to know how many days the house was on the market before selling.
Dominant Estate:
The property for the benefit of which a right-of-way easement exists across another's adjoining piece of land is said to be the dominant estate. The land across which the easement runs is said to be the servient estate.
Dower:
A right that a wife has in her husband's property at the time of his death.
Duplex:
A house containing two separate dwelling units, side by side or one above the other.
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Earnest Money:
A deposit of funds by the purchaser of a piece of real estate as evidence of good faith.
Easement:
A right to use all or part of the land owned by another for a specific purpose. An easement may, for example, entitle its holder to install and maintain sewer or utility lines.
Eminent Domain:
The right of a government to take privately owned property for public purposes under condemnation proceedings subject to payment of its fairmarket value.
E & O:
Errors and omissions. This insurance covers any errors made or any omissionsthat the appraisers might make.
Encroachment:
Any building, improvement or structure located on one property (such as a wall, fence or driveway) that intrudes upon the property of another.
Encumbrance:
Any interest, right, lien or liability attached to a parcel of land (such as unpaid taxes or an unsatisfied mortgage) that constitutes or representsa burden or charge upon the property.
Escheat:
The reversion of property to the state when an owner dies leaving no legal heirs, devisees or claimants.
Escrow:
A method of closing a real estate transaction in which all required documents and funds are placed with a third party for processing and disbursement.
Estoppel:
A legal restraint that stops or prevents a person from contradicting or reneging on his previous position or previous assertions or commitments.
Equity:
The value of a property minus the amount owed on the property.
Examination:
The study of the instruments and muniments incident to a chain of title to determine their effect and condition in order to reach a conclusionas to the status of the title.
Exception:
A provision in a title insurance binder or policy that excludes liability for a specific title defect or an outstanding lien or encumbrance.
Execute:
To sign a legal instrument. A deed is said to be executed when it is signed, sealed, witnessed and delivered.
External Depreciation:
This occurs on the outside of the home and affects the properties marketability (i.e., power lines, run down house next door, busy highway, nuclear power plant).
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- - - F - - -
Fannie Mae:
(FNMA)- Federal National Mortgage Association. A private corporation dealingin the purchase of first mortgages.
Fee Simple:
This is a property owned outright by an individual or a couple, where they have all rights to the land and improvements.
Fee Simple Deed:
The absolute ownership of a parcel of land. The highest degree of ownership that a person can have in real estate, which gives the owner unqualified ownership and full power of disposition.
FDIC:
Federal Deposit Insurance Corporation.
FEMA:
Federal Emergency Management Agency.
FHA:
Federal Housing Administration. Part of HUD, it insures mortgages made by private lenders.
FHLBB:
Federal Home Loan Bank Board.
First Mortgage:
A mortgage that is the primary lien against a property.
Fixed Rate Mortgage:
A mortgage having a rate of interest that remains the same for the life of the mortgage.
Fixtures:
Personal property that is attached to real property and is legally treated as real property while it is so attached. Examples: medicine cabinets, window blinds and chandeliers.
FMV:
Fair Market Value. Or otherwise known as the estimate of value for the property being appraised.
Foreclosure:
The legal process where the borrower is in default of the mortgage payment. This usually involves the mortgage company taking over the property. Themortgage company will try to sell the house or put it up for auction to have profit applied to the Mortgage debt.
Forgery:
The fraudulent signing of another's name to an instrument such as a deed, mortgage or check.
Freddie Mac (FHLMC):
Federal Home Loan Mortgage Corporation. A federal agency that purchases both conventional and federally insured first mortgages from members of the Federal Reserve System and the Federal Home Loan BankSystem.
FSLIC:
Federal Savings and Loan Insurance Corporation.
Functional Depreciation (obsolescence):
This is a loss of value due to defects in the design of a structure.
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Ginnie Mae (GNMA):
Government National Mortgage Association. A federal association working with the FHA that offers special assistance in obtaining mortgages and purchases mortgages in the secondary market.
GLA:
Gross Living Area. The living space of the home (GLA is above grade, basements are not above grade).
Grant:
To bestow or confer, with or without compensation, a gift such as land or money by one having control or authority over the gift.
Grantee:
One to whom a grant is made.
Grantor:
One who makes a grant.
Ground Rent:
The amount of money paid for the use of the land.
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- - - H - - -
Hardcopy:
A completed appraisal report, with original photos sent to the lender.
Hazard Insurance:
Insurance coverage that compensates for physical damage by fire, wind, or other natural disasters to the property.
Hereditaments:
Any and all kinds of estates, interest and rights in real estate that can be inherited.
Home Mortgage:
A temporary and conditional pledge of property to a creditor as security for the performance of an obligation or the repayment of a debt.
Homeowners Insurance:
Real estate insurance protecting against loss caused by fire, some natural causes, vandalism, etc., depending on the terms of the policy. Also includes coverage such as personal liability and theft away from home.
HUD:
Department of Housing and Urban Development. The federal department responsible for the major housing programs in the United States.
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Income Approach:
A method of measuring the value of a property based on the market rent or income that the property can be expected to earn.
Index:
(1) An alphabetical listing in the public records of the names of parties to recorded real estate instruments together with the book and page number of the record. (2) The listing in abstract and title plants of recorded real estate instruments in groups according to land descriptions, knownas a geographic index. (3) The alphabetical listing in abstract and title plants, by names of the parties, of all recorded instruments that affect but do not describe particular real estate, such as judgments, powers of attorney, wills and probate proceedings. Such indexes are known byvarious names, such as "general index," "judgment index" and "name index."
Instrument:
Any written document having a legal effect.
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Judgment:
The determination of a court regarding the rights of parties in an action. A judgment of debt on a property owner can create a lien on all of that owner's land within a certain jurisdiction.
Junior Mortgage:
A mortgage lower in lien priority than another.
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Leasehold:
Ownership of land for a specified period of time.
Legal Description:
Is the primary identifier of the property being appraised.
Lessee:
A tenant holding a leasehold.
Lessor:
A landlord; one who gives a leasehold to a lessee.
License:
Permission to go upon or use the land of another, the permission being a personal privilege and not constituting an interest in the land.
Lien:
A monetary charge imposed on a property, usually arising from some debt or obligation.
Lien Waver:
Also called "waiver of liens." A waiver of mechanics' lien rights, signed by contractors or subcontractors.
Link:
In surveying, a length of 7.92 inches.
Loan Policy:
Also called "mortgage policy." A title insurance policy insuring a mortgagee, or beneficiary under a deed of trust, against loss caused by invalidity or unenforceability of a lien, or loss of priority of the mortgage or deed of trust.
Lis Pendens:
A legal notice intending to bind third parties of litigation claiming an interest in real estate.
Lot:
Generally, any portion or parcel of real property. Usually refers to a portion of a subdivision.
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Market Value:
The average of the highest price that a buyer, willing but not compelled to buy, would pay and the lowest price a seller, willing but not compelled to sell, would accept.
Mechanic's Lien:
A lien on real estate, created by operation of law, that secures the payment of debts due to persons who perform labor or services or furnish materials incident to the construction of buildings and improvements on the real estate.
Metes and Bounds:
A land description in which boundaries are described by courses, directions, distances and monuments.
MLS:
Multiple Listings Services. An exclusive listing, submitted to all members of an association, so that each may have an opportunity to sell the property.
Mortgage:
A conditioned pledge of property to a creditor as security for the payment of a debt.
Mortgage Insurance:
Insurance written by an independent mortgage insurance company protecting the mortgage lender against loss incurred by a mortgage default, thus enabling the lender to lend a higher percentage of the sale price.
Mortgagee:
The holder of a mortgage. The party to whom a mortgage is made, generally the lender.
Mortgagor:
A person who mortgages property. A person who executes a mortgage, generally
the property owner.
Muniments of Title:
Written evidence (documents) that an owner possesses to prove his or her title to property.
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Note:
Also called "promissory note." A written promise to pay a sum of money, usually at a specified interest rate, at a stated time to a named payee.
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Owner's Policy:
A policy of title insurance insuring an owner of real estate against loss occasioned by defects in, liens against or unmarketability of the owner's title.
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Physical Depreciation:
This is depreciation of a property due to normal or abnormal wear and tear.
Plat:
Also called "plat map." A map dividing a parcel of land into lots, as in a subdivision. A plat book contains the plat maps for a given area.
Point:
Also called "commission points" or "discount points." One percent of the amount of the loan.
Premium:
The amount payable for an insurance policy.
Prescriptive Easement:
A right to use another's property that is not inconsistent with the owner's rights and that is acquired by an open, notorious, adverse and continuous use for the statutory period, for example 20 years.
Principal:
A sum of money owed as a debt on which interest is payable.
PUD:
Planned Urban Development. Is a subdivision that features individually owned residential and/or commercial parcels or lots along with shared ownership of common areas. Property owners pay (HOA: Home Owners Association) fees and assessments to the Home Owners Association for upkeep of common areas.
Purchase Money Mortgage:
A mortgage given by a purchaser to a seller on the subject property to secure payment of a part of the purchase price.
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Quit Claim Deed:
A deed that does not imply that the grantor holds title, but that surrenders and gives to the grantee any possible interest or rights that the grantor may have in the property.
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- - - R - - -
Real Estate:
Also called "real property." Land and anything permanently affixed to the land, such as building, fences and those things attached to the buildings, such as light fixtures, plumbing and heating fixtures, or other such items that would be personal property if not attached.
Recording:
The noting in a public office of the details of a legal document - such as a deed or mortgage - affecting the title to real estate. When such an instrument is properly recorded, it is considered to be a matter of public record. Legally, that means that all subsequent purchasers are deemed to have constructive knowledge of that information.
Reinsurance:
A contractual relationship between two insurance companies under which one insurer assumes a portion of the risk of the insurance policy written by the other.
Release:
(1) To relieve from debt or security or abandon a right, such as the release of a mortgage lien from a part or all of the land mortgaged. (2) The instrument effecting a release.
REO:
Real Estate Owned . Property has been reverted to the holder of the mortgage.
Restrictions:
Limitations on the use of property imposed or created by deeds or other documents in the chain of title. A restriction, for example, may prohibit the placement of trailer or the construction of a commercial structure on the property.
Riparian Rights:
The rights of owners of lands bordering watercourses which relate to the water and its use.
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Sale Agreement:
A contract entered into between a buyer and seller, setting forth the terms, provisions and conditions of a sale of real estate.
Sale and Leaseback:
The sale of an asset to a buyer who immediately leases it back to the seller.
Sales Comparison:
A method of measuring the value of a property based on an analysis of comparable sales, contract offerings, and listings of properties that are most comparable to the property that is being appraised.
Search:
A careful exploration and perusal of the public records in an effort to find all recorded instruments relating to a particular chain of title.
Second Mortgage:
A mortgage that has a lien position subordinate to the first mortgage.
Soft copy:
A faxed or modem transmitted copy of the completed URAR.
SQ.FT.:(Square Footage)
This is the total GLA of the home.
Subordination:
The act or process by which a person's rights are ranked below the rights of others.
Surety:
The pledge or agreement by which one undertakes responsibility for the debt or obligation of another.
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- - - T - - -
Title:
A combination of all the elements that constitute the highest legal right to own, possess, use, control, enjoy and dispose of real estate or an inheritable right or interest therein.
Title Covenants:
Covenants ordinarily inserted in conveyances and in transfers of title to real estate for the purpose of giving protection to the purchaser against possible insufficiency of the title received.
Title Defect:
(1) Any possible or patent claim or right outstanding in a chain of title that is adverse to the claim of ownership. (2) Any material irregularity in the execution or effect of an instrument in the chain of title.
Title Insurance Policy:
A contract of title insurance under which the insurer, in keeping with the terms of the policy, agrees to indemnify the insured against loss arising from claims against the insured interest.
Title Plant:
Also called "abstract plant" in some areas. A geographically filed assemblage of title information that helps in expediting title examinations, such as copies of previous attorneys' opinions, abstracts, tax searches and copies or take-offs of the public records.
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Underwriter:
An insurance company that issues insurance policies to the public or to another insurer.
URAR:
Uniform Residential Appraisal Report.
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Variable Interest Rate:
Also called "flexible interest rate." An interest rate that fluctuates as the prevailing rate moves up or down. In mortgages, there are usually maximums as to the frequency and amount of fluctuation.
Veterans Administration (VA) Loans:
Housing loans to veterans by banks, savings and loans, or other lenders that are guaranteed by the Veterans Administration, enabling veterans to buy a residence with little or no down payment.
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Waiver:
The voluntary and intentional relinquishment of a known right, claim or privilege.
Warranty:
The provision or provisions in a deed, lease or other instrument conveying or transferring an estate or interest in real estate under which the seller becomes liable to the purchaser for defects in or encumbrances on the title.
Will:
A testamentary disposition of property, usually in a form prescribed by law, that takes effect upon death.
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- - - Z - - -
Zoning:
Laws passed by local governments regulating the size, type, structure, nature and use of land or buildings.

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