Buy High Country

Serving Homeowners in Southern Utah

Real Estate Terms

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

A  

Abstract
A succinct summary; (e.g. an abstract of judgment; an abstract of title, an abstract plant.)
Abstract of Judgment
Summary of a court judgment creating a lien against a property when filed with the county recorder.
Abstract of Title
The condensed history of a title to a particular parcel of real estate, consisting of a summary of the original grant and all subsequent conveyances and encumbrances affecting the property and a certification by the abstractor that the history is complete and accurate.
Abstract Plant
A collection of information and documents relating to title of a particular property. Also known as “title plant”.
Acceleration Clause
The clause in a mortgage or deed of trust that can be enforced to make the entire debt due immediately if the borrower defaults on an installment payment or other covenant.
Acceptance
The written approval made by the seller from a buyer’s offer.
Accrued
On a closing statement, items of expense that are incurred but not yet payable, such as interest on a mortgage loan or taxes on real property.
Addendum
Any addition or change to a contract.
Adjustable Rate Mortgage (Arm)
A loan with an interest rate that fluctuates based on a specified financial index, such as Treasury securities, or the 11th District Cost of Funds, etc.
Agent
A licensed representative of the state to conduct real estate transactions.
Agreement of Sale
Also known as an agreement to convey. A signed, written contract entered into between the seller (vendor) and buyer (vendee) for sale of real property (land) under certain specific terms and conditions.
Alienation
The transfer of property from one person to another. Alienation may be voluntary, such as by gift or sale, or involuntary, as through eminent domain or adverse possession.
Alienation Clause
A term of a mortgage which requires that the borrower pay in full the principal and interest due upon the sale of the property. ( See Acceleration or Due-on-Sale Clause)
All-Inclusive Deed of Trust
A form of deed of trust that, in addition to any other amounts actually financed, includes the amounts of any prior deeds of trust. Sometimes referred to as a wrap-around or over-riding trust deed.
Amortization
The repayment of a debt in installments.
Appraisal
A valuation or an estimation of value of property by disinterested persons of suitable qualifications; the process of ascertaining a value of an asset or liability that involves expert opinion rather than explicit market transactions.
Appraise
To fix or set a price or value upon.
Appreciation
The difference between the increased value of the property and the original value.
Arrears
Generally, being overdue in an installment payment.
Assessor
A municipality employee who estimates the value of properties for the purpose of taxes.
Assignee
The person to whom a transfer of interest is made. Hence an assignee of an Agreement of Purchase and Sale may buy the property and enforce the contract in the same fashion as the original party.
Assignment
The method by which a right or contract is transferred from one person (the assignor) to another (the assignee).
Assignor
The person who makes an assignment to another person.
Assumable Mortgage
A mortgage that can be taken over (“assumed”) by the buyer when a home is sold. If interest rates have risen, an assumable mortgage at a low rate may prove a selling point for the property.

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Balloon Payment
A final payment of a mortgage loan that is considerably larger than the required periodic payments because the loan amount was not fully amortized.
Bankruptcy
An action filed in a federal bankruptcy court that allows a creditor to reorganize or discharge credit obligations due to insolvency. A property owner may halt foreclosure action by filing bankruptcy. Bankruptcies remain on a credit record for seven years and can severely limit a person’s ability to borrow.

  • Chapter 7 – “Debtor Wipeout” The court oversees the liquidation of the debtors’ non-exempt assets, distributing the cash proceeds proportionally amongst their creditors.
  • Chapter 11 – This is a business reorganization proceeding.
  • Chapter 13 – “Debtor Workout” This is the almost-automatic choice of most trustors seeking to use a bankruptcy filing to delay the in- evitable trustee’s sale as long as they can. The purpose of this proceeding is to give a “wage earner” time for rehabilitation . . . a temporary respite free from the collection efforts of creditors.
Beneficiary
A person entitled to receive money or assets from a trust or an estate. A lender is a beneficiary with a deed of trust or a note as a security for a loan.
Betterment
Any improvement of real estate that results in a rise in market value of that property.
Bid
An offer by an intending purchaser to pay a designated price for property which is about to be sold at auction.
Bill of Sale
Written document by which title to personal property (goods or chattels) is transferred from one party to another.
Blanket Deed of Trust
A deed of trust secured by more than one lot or parcel of land.
Borrower
He to whom a thing or money is lent at his request.
BPO
Brokers Price Opinion.
Breach
The breaking or violating of a law, a right, obligation, engagement, or duty, either by commission or omission.
Broker
A agent authorized by the state to deal in real estate.
Brokerage
The bringing together of two or more parties interested in making a real estate transaction.
Buy-Down mortgage
A financing technique used to reduce the monthly payments for the first few years of a loan. Funds in the form of discount points are given to the lender by the builder or seller to buy down or lower the effective interest rate paid by the buyer, thus reducing the monthly payments for a set time.
Buyers Market
A market condition where there are fewer buyers than there are sellers. Usually indicated when a property is on the market for more than 90 days and interest rates are very high. (12% or higher)

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Capital Gain
A profit earned from the sale of an asset.
Cash Flow
The surplus left over out of the rents after paying out all operating expenses and mortgage payments.
Certificate of Sale
A certificate issued at a judicial sale that entitles the buyer to receive a deed after confirmation of court for the purchase of the property.
Chain of Title
A succession of conveyances that comprises the title record history to a specific parcel of real property.
Chattel
Personal property, such as household items.
Chattel Mortgage
A mortgage which is secured by personal property.
Closing Costs
Expenses supplementary to the sale of real estate, which includes loan, title and appraisal fees.
Closing Date
The date agreed upon which the buyer takes over the property.
Cloud on Title
Any outstanding claim that contradicts the title record, if valid, would impair the owners title.
Code
A collection of laws relating to a certain topic, such as real property, patents, etc.
Co-signer
A co-signer signs a promissory note and takes responsibility for the debt.
Collateral
Real estate or personal property which is pledged as security for a debt.
Collection
Obtain payment or liquidation of a debt or claim, either by personal solicitation or legal proceedings.
Comparables
Similar properties used as yardsticks to determine the market value of a certain property.
Complaint
The original or initial pleading by which an action is commenced; a written statement of the essential facts constituting the offense charged.
Condemnation
A judicial or administrative proceeding to exercise the power of eminent domain, through which a government agency takes private property for public use and compensates the owner.
Contingency
A specified condition that must be fulfilled before a contract becomes firm and binding.
Contract
An agreement between two or more persons that creates an obligation to do or not to do a particular thing.
Conventional Loan
A loan that requires no insurance or guarantees.
Conveyance
A written instrument that transfers title to or an interest in land from one party to another (i.e. a deed, an assignment, a bill of sale, etc.)
Counteroffer
A response given to an offer.
Credit report
A document from a credit bureau setting forth a credit rating and pertinent financial data concerning a person or a company and used by banks, merchants, suppliers and the like in evaluating a credit risk.
Creditor
One to whom money is owed.

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Debt
A sum of money due by a certain and express agreement; a specified sum of money owing to one person from another, including not only obligation of debtor to pay but the right of the creditor to receive and enforce payment.
Debt Ratio
To compare the total monthly payments of all of the borrower’s debts (including the mortgage) with the gross monthly income of the borrower. It evaluates the borrower’s ability to pay mortgage. Also called Debt-to-Income ratio.
Debtor
An entity that owes a debt; one who owes a debt.
Decree of Foreclosure
A court order to set out the outstanding amount on a delinquent mortgage in order to sell the property to pay the mortgagee.
Deed
A written instrument that, when executed and delivered, conveys title to or an interest in real estate.
Deed in lieu of foreclosure
A process whereby the owner, with the approval of the lender, deeds the property to the lender to avoid foreclosure. Lenders are generally reluctant to accept a “deed in lieu” unless the title is free and clear of any other encumbrances junior to theirs and the owners execute an estoppel affidavit acknowledging that they are acting volitionally, with informed consent.
Deed of Reconveyance
A instrument that releases and discharges a deed of trust, when the mortgage has been paid out.
Deed of Trust (Trust Deed)
A three party security instrument conveying the legal title to real property as security for the repayment of a loan. The owner is called the “trustor”. The neutral third party to whom the bare legal title is conveyed (and who is called on to liquidate the property if need be) is the “trustee”. The lender is the “beneficiary”. When the loan is paid off the trustee is directed by the beneficiary to issue a deed of reconveyance to the trustor, which extinguishes the trust deed lien.
Default
The failure to make payments in full, on time or at all or to live up to any other obligations placed on the borrower by the loan agreement.
Defeasance Clause
A clause used in leases and mortgages that cancels a specified right upon the occurrence of a certain condition, such as cancellation of a mortgage upon repayment of the mortgage loan.
Defendant
The person who defends against a claim asserted in a Court action.
Deficiency judgment
A judgment entered in a lawsuit when a property is sold for less than the amount of the loan.
Delinquency
A condition when the payment is being late but not yet in default.
Demand Letter
Also known as a Breach Letter or Notice of Intent to Foreclose. Notice to the borrower that he/she is in “breach” of the terms of the Note and advising of the right to “cure” the default.
Department of Housing and Urban Development (HUD)
A federal department that focuses on programs regarding housing and renewal of city communities.
Department of Veterans Affairs (VA)
An independent federal agency which oversees programs for military veterans, including loan and mortgage programs. This agency allows most veterans to purchase a house without a down payment.
Disclosure Statement
Document disclosing the terms of a loan.
Due-on-Sale Clause
A clause in a mortgage which requires that the mortgage be paid out in full upon the sale of the property.
Due Diligence
Such a measure of prudence, activity, or assiduity, as is properly to be expected from a reasonable and prudent man under the particular circumstance.

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Earnest Money Deposit
A deposit made by a purchaser of real estate used as a down payment as evidence of good faith.
Easement
A right of way allowing someone to cross over another’s property for certain purposes, such as power lines or water mains.
Encroachment
A fixture that illegally intrudes into or invades the property or encloses a portion of it, diminishing its width or area.
Encumbrance
Anything, such as a mortgage, tax, or judgment lien, an easement, a restriction on the use of the land or an outstanding dower right that may diminish the value or use and enjoyment of a property.
Equity
The surplus of value which may remain after existing liens are deducted from the property.
Equity Right of Redemption
The right to avoid foreclosure action by paying off the debts, interest, and fees that have accumulated on the property.
Escrow Account
A bank account generally held in the name of the depositor and an escrow agent which is returnable to the depositor or paid to a third person on the fulfillment of a condition.
Estate
The total assets a person has when he dies, including real property.
Estoppel Certificate
A certificate in which a borrower certifies the amount owed on a mortgage loan and the rate of interest.
Eviction
The act of depriving a person of the possession of land or rental property that he has held or leased.

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Fair Market Value
The amount at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of the relevant facts.
Fannie Mae
Its an official name of the Federal National Mortgage Association which is one of the largest agencies that buys mortgages from lenders and resells them as securities on the secondary mortgage market.
FHA
Stands for Federal Housing Administration. It’s a branch of H.U.D. It’s basic function is to direct housing in a way that Congress mandates by issuing mortgage insurance to institutional lenders on the loans they make. With such loan insurance, lenders are willing to lend with smaller down payments and at lower rates of interest.
FHA Loans
A loan program offering low-rate mortgages to buyers who are willing to make a down payment as small as 3 percent.
First Mortgage
A mortgage that is in first position and has priority as a lien over all other mortgages.
Foreclosure
A legal procedure whereby property used as security for a debt is sold to satisfy the debt in the event of default in payment of the mortgage note or default of other terms in the mortgage document. The foreclosure procedure brings the rights of all parties to a conclusion and passes the title in the mortgaged property to either the holder of the mortgage or a third party who may purchase the realty at the foreclosure sale, free of all encumbrances affecting the property subsequent to the mortgage.

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Garnishment
A statutory proceeding whereby person’s property, money, credits in possession or under the control of, or owing by, another are applied to payment of the former’s debt to third person by proper statutory process against debtor and garnishee.
Good Faith Estimate
Institutional lender estimates the costs a borrower will incur, including inspection fees and loan-processing charges.
Grace Period
A period of days during which a debtor may cure a delinquency without penalty (before triggering a late charge, a foreclosure or an acceleration of the balance due).
Grantee
The person to whom the title of the property is granted.
Grantor
The person (seller) who grants title to another person (buyer).

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Habendum Clause
Meaning “to have and to hold” which defines the quantity of the estate that is transferred to the new owner of land.
Home Equity Line of Credit
A loan that is secured by the owners property which can be repaid and borrowed again at the owners convenience.
Home Equity Loan
Owners who borrow against the equity in their homes.
HUD 1 Statement
A form, usually given by a bank, that includes the costs of purchasing a home.
Hypothecate
When you use something as security and still retain possession of it.

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Indemnify
Any losses and damages endured by another person that you are fully responsible for.
Instrument
A legal written document.
Involuntary lien
A lien issued against a property without the owners approval.

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Joint Ownership
When two or more parties own the same property.
Joint Venture
A project where two or more individuals take part in a business transaction to share the cost, risk, and reward.
Judgment
The final decision of the court resolving the dispute and determining the rights and obligations of the parties.
Judicial Foreclosure
A foreclosure process which is executed via a court action.
Junior lien
A lien that is subordinate or junior to a senior lien.

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Land Contract
An agreement used to sell real property that transfers ownership of the property, but the title does not transfer until most or all of the purchase price is paid.
Landlord
He who, being the owner of an estate of land, or rental property, has leased it to another person.
Lease
An agreement involving payment of rent for possession of real estate for a specific period of time.
Lease Option
A lease that contains the right to purchase a property for a specific price during a given time frame.
Lender
He from whom a thing or money is borrowed.
Lien
A claim or charge on a property for payment of some debt, obligation or duty.
Life Estate
An estate whose duration is limited to the life of the party holding it.
Lis pendens
A term meaning “legal action pending” that gives notice of an action or proceeding affecting the title of the property.
Loss Mitigation Department
A department which helps homeowners avoid foreclosure; the lender tries to help a borrower who has been unable to make loan payments and is in danger of defaulting on his or her loan
Lot Book Report
A title record report given by a title company which announces any encumbrances recorded against the property.

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Marketable Title
A title with no claims or defects that could otherwise hinder a property being sold.
Mechanic’s lien
A claim created by state statutes for the purpose of securing priority of payment of the price or value of work performed and materials furnished in erecting or repairing a building or other structure, and as such, attaches to the land as well as buildings and improvements erected thereon.
Mortgage
An interest in land created by a written instrument providing security for the performance of a duty or the payment of a debt.
Mortgagee
The entity, usually a bank or financial institution, who lends money to a borrower.
Mortgagor
The person who borrows the money from a lender to purchase a property.
Multiple Listings Service (MLS)
A listing of properties from local real estate agents that consist of all homes available in an area. For-Sale-by-Owner properties are not listed in this database.

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NARCA
National Association of Retail Collection Attorneys.
Notice of Default (NOD)
A notice that is sent out by the lender when a mortgage payment is late in an attempt to cure or make the loan current.
Notice of Rescission
A legal document used when the defaulting party has cured or corrected the default
Notice of Sale
The notice of an impending foreclosure sale required by the state. It recites the legal description of the property being foreclosed upon and gives the time, date and place of the pending sale.

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Offer to Purchase
A contract expressing of a person’s willingness to purchase a certain property on terms expressed in the offer.
Owner Financing (Seller Financing)
A creative method in real estate where the seller of a property agrees to finance all or some of the property. In a sense, the owner acts like a bank.

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Power of Attorney
A written document signed by the owner which authorizes someone else to act in behalf of the owner.
Power of Sale
A clause commonly inserted in mortgages and deeds of trust that are in default, giving the mortgagee (or trustee) the right and power to advertise and sell the mortgaged property at public auction to satisfy the debt.
Pre-Foreclosure
Term used to discuss delinquent properties before they go to the foreclosure auction.

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Quit Title
An action at law to remove an adverse claim or cloud from the title of property.
Quit Claim Deed
A deed of conveyance that releases any title, interest, or claim, which the grantor may have in the premises.

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Real Estate Owned (REO)
Property acquired back by the lender after it has gone to auction.
Recorder
A public official that is responsible for keeping all the records of real estate transactions.
Redemption Period
The time allotted to the mortgagor to reclaim his/her property after it has been sold at an auction. Not all states have a redemption period.

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Sales Contract
A contract to which the buyer and seller agree to terms of sale.
Second Mortgage
A second loan placed upon a property in addition to an existing first loan.
Seller Financing
A creative method in real estate where the seller of a property agrees to finance all or some of the property. In a sense, the owner acts like a bank.
Sellers Market
When the market conditions are such that the sellers have the advantage and multiple offers are made.
Sheriff’s Sale
The sale of a property to satisfy a debt or judgment.
Short Sale
The sale of a property under or at market value that’s lower than the loan balance.
Simultaneous Closing
The term “simultaneous closing” refers to two closings occurring simultaneously, or at the same time. This is a creative technique used when traditional financing will not work.
Subject To
The transfer of rights to pay a debt from one party to another, with the original party remaining liable for the debt if the second party defaults.
Survey
The process by which a parcel of land is measured and its boundaries and contents set forth.

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Tax Deed
A type of deed used to convey title after real property is sold at auction by public authority for non-payment of taxes.
Tax Lien
A lien on real estate in favor of a state or local government that may be foreclosed on for the non-payment of taxes.
Tenant
A person in possession of real property with the owner’s permission.
Tenant at sufferance
A person who after rightfully being in possession of a rented premises continues to live in that premises after his right has terminated.
Tenant at will
One who holds possession of premises with the owners permission.
Title
Evidence of ownership of land.
Title Company
Firms that examine properties to ensure that the title to a piece of property is clear and free of any encumbrances. They also issue title insurance.
Title Insurance
An insurance policy that provides protection for lenders and buyers against any losses caused by defects in the title.
Title Report
A report which sets out the current state of title to a property.
Title Search
A search within the public records to determine ownership and that there are no claims or liens against the property.
Torrens Title
A torrens title contains a listing of all legal instruments (mortgages, judgments, liens) that have been recorded on the property from its origin.
Trust Account
A special account used by a broker or escrow agent to safeguard funds for a buyer or seller.
Trust Deed
A three party security instrument conveying the legal title to real property as security for the repayment of a loan. The owner is called the “trustor”. The neutral third party to whom the bare legal title is conveyed (and who is called on to liquidate the property if need be) is the “trustee”. The lender is the “beneficiary”. When the loan is paid off the trustee is directed by the beneficiary to issue a deed of reconveyance to the trustor, which extinguishes the trust deed lien.
Trustee
A legally empowered person who holds or controls a piece of property for another person.
Trustee’s Deed
A deed given to the successful high bidder after a foreclosure auction.
Trustee’s Sale
An auction where a trustee may sell a property that has defaulted in effort to pay the outstanding debt that is owed.

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UCC
Uniform Commercial Code; uniform laws drafted by the National Conference of Commissioners on Uniform State Laws governing commercial transactions.
Undivided Interest
Ownership of real estate by joint tenants under the same title.
Unsecured debt
Debt not secured by collateral.
Upset price
The opening bid amount that begins the auction bidding during a foreclosure sale.

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VA Loans
A program that allows the purchase of a house without a down payment to most veterans.
Vacate
To make vacant or empty.

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Warranty Deed
Deed in which the grantor warrants good clear title.
Without Recourse
Giving the lender no right to seek payment or seize assets in the event of nonpayment from anyone other than the party specified in the debt contract.
Wraparound Mortgage
The financing technique in which the payment of the existing mortgage is continued by the seller and a new, higher interest loan, which is larger than the existing mortgage, is paid by the borrower.

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Yield
The return on investment or the amount of profit stated as a percentage of the amount invested.

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Zoning
Regulations that control the use of land within a jurisdiction.