This page includes many terms that Realtors, Mortgage Brokers, Lenders, Title Companies and others use on a regular basis. Now you can feel like a pro!
A
Acre A measure of land equal to 43,560 square feet, 4,840 square yards, 4,047 square meters, 160 square rods or .4047 hectares.
American Land Title Association (ALTA) policy A title insurance policy that protects the interest in a collateral property of a mortgage lender who originates a new real estate loan.
Amortized Loan A loan in which the principal as well as the interest is payable in monthly or other periodic installments over the term of the loan.
Appurtenance A right, privilege or improvement belonging to and passing with, the land.
B
Balloon Payment A final payment of a mortgage loan that is considerable larger than the required periodic payments because the loan amount was not fully amortized.
Beneficiary (1) The person for whom a trust operates or in whose behalf the income from a trust estate is drawn. (2) A lender in a deed of trust loan transaction.
Buydown 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.
Buyer-Agency Agreement A principal-agent relationship in which the broker is the agent for the buyer, with fiduciary responsibilities to the buyer. The broker represents the buyer under the law of agency.
C
CC&R’s Covenants, Conditions and Restrictions These are guidelines as to what an owner in a development can do with a property, may indicate Design Guidelines that must be adhered to so surrounding property values continue to rise. All developments with CC&R’s will have recorded copies at the courthouse.
Cloud on Title Any document, claim, unreleased lien or encumbrance that may impair the title to real property or make the title doubtful; usually revealed by a title search and removed by either a quit claim deed or suit to quiet title.
Conveyance A term used to refer to any document that transfers title to real property. The term is also used in describing the act of transferring.
Counter Offer A new offer made in response to an offer received. It has the effect of rejecting the original offer, which cannot be accepted thereafter unless revived by the offeror.
D
Deed A written instrument that, when executed and delivered, conveys title to or an interest in real estate.
Deed Restrictions Clauses in a deed limiting the future uses of the property. Deed restrictions may impose a cast variety of limitations and conditions-for example, they may limit the density of buildings, dictate the types of structures that can be erected or prevent buildings from being used for a specific purposes or even from being used at all.
Design Guidelines A document, usually included with the CC&R’s, (but sometimes an additional document) stating what type of home the development encourages, allowed types of exterior finishes, roof pitches, and should include minimum and/or maximum square feet.
Dual Agency Representing both parties to a transaction. This is unethical unless both parties agree to it, and it is illegal in many states. (It is legal in Idaho).
E
Earnest Money Money deposited by a buyer under the terms of a contract, to be forfeited if the buyer defaults but applied to the purchase price if the sale is closed.
Easement A right to use the land of another for a specific purpose, such as for a right-of-way or utilities; an incorporeal interest in land.
Encroachment A building or some portion of it-a wall or fence for instance-that extends beyond the land of the owner and illegally intrudes on some land of an adjoining owner or a street or alley.
Encumbrance Anything-such as a mortgage, tax, or judgment lien, and 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.
Escrow The closing of a transaction through a third party called an escrow agent, or escrowee, who receives certain funds and documents to be delivered upon the performance of certain conditions outlined in the escrow instructions.
F
Fair Housing Act The federal law that prohibits discrimination in housing based on race, color, religion, sex, handicap, familial status and national origin.
FHA Loan A loan insured by the Federal Housing Administration and made by an approved lender in accordance with the FHA’s regulations.
Fixture An item of personal property that has been converted to real property by being permanently affixed to the realty.
G
Gap A defect in the chain of title of a particular parcel of real estate; a missing document or conveyance that raises doubt as to the present ownership of the land.
General Lien The right of a creditor to have all of a debtor’s property both real and personal sold to satisfy debt.
Grantor The person transferring title to or an interest in real property to a grantee.
H
Highest and Best Use The possible use of a property that would produce the greatest net income and thereby develop the highest value.
Homeowner’s Insurance Policy A standardized package insurance policy that covers a residential real estate owner against financial loss from fire, theft, public liability and other common risks.
I
Improvement (1) Any structure, usually privately owned, erected on a site to enhance the value of the property-for example, building a fence or a driveway. (2) A publicly owned structure added to or benefiting land, such as a curb, sidewalk, street or sewer.
Installment Contract A contract for the sale of real estate whereby the purchase price is paid in periodic installments by the purchaser, who is in possession of the property even though the title is retained by the seller until a future date, which may not be until final payment. Also called a contract for deed or articles of agreement for warranty deed.
J
Joint Tenancy Ownership of real estate between two or more parties who have been named in one conveyance as joint tenants. Upon the death of a joint tenant, the decedent’s interest passes to the surviving joint tenant or tenants by the right of survivorship
Junior Lien An obligation, such as a second mortgage, that is subordinate in right or lien priority to an existing lien on the same realty.
L
Latent Defect A hidden structural defect that could not be discovered by ordinary inspection and that threatens the property’s soundness or the safety of its inhabitants. Some states impose on sellers and licensees a duty to inspect for and disclose all latent defects.
Lien A right given by law to certain creditors to have their debts paid out of the property of a defaulting debtor, usually by means of a court sale.
M
Mechanic’s Lien A statutory lien created in favor of contractors, laborers, and materialmen hoe have performed work or furnished materials in the erection or repair of a building.
Metes-and-Bounds Description A legal description of a parcel of land that begins at a well-marked point and follows the boundaries, using directions and distances around the tract, back to the place of beginning.
Multiple Listing Service (MLS) A marketing organization composed of member brokers who agree to share their listing agreements with one another in the hope of procuring ready, willing and able buyers for their properties more quickly than they could on their own. Most MLS services accept exclusive-right-to-sell or exclusive agency listings from their member brokers.
N
Nonagent An intermediary between a buyer and seller, or landlord and tenant, who assists both parties with a transaction without representing either. Also known as facilitator, transaction broker, transaction coordinator and contract broker.
O
Obsolescence The loss of value due to factors that are outmoded or less useful. Obsolescence may be functional or economic.
Occupancy Permit A permit issued by the appropriate local governing body to establish that the property is suitable for habitation by meeting certain safety and health standards.
P
Personal Property Items, called chattels, that do not fit into the definition of real property; movable objects.
Planned Unit Development (P.U.D.) A planned combination of diverse land uses, such as housing, recreation and shopping in one contained development or subdivision.
Principal (1) A sum loaned or employed as a fund or an investment, as distinguished from its income or profits. (2) The original amount (as in a loan) of the total due and payable at a certain date. (3) A main party to a transaction-the person for whom the agent works.
Q
Quiet Title A court action to remove a cloud on the title.
Quitclaim Deed A conveyance by which the grantor transfers whatever interest her or she has in the real estate, without warranties or obligations.
R
Radon A naturally occurring gas that is suspected of causing lung cancer.
Range A strip of land six miles hide, extending north and south and numbered east and west according to it’s distance from the principal meridian in the rectangular (government) survey system of legal description.
Real Estate Land: a portion of the earth’s surface extending downward to the center of the earth and extending upward infinitely into space, including all things permanently attached to it, whether naturally or artificially.
Real Property The interests, benefits and rights inherent in real estate ownership.
Recording The act of entering or recording documents affecting or conveying interests in real estate in the recorder’s office established in each county. Until it is recorded, a deed or mortgage ordinarily is not effective against subsequent purchasers or mortgages.
S
Section A portion of township under the rectangular (government) survey system. A township is divided into 36 sections, numbered 1-36 . A section is a square with mile-long sides and an area of one square mile, or 640 acres.
Short Sale The sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property and the property owner cannot afford to repay the liens’ full amounts. Therefore the lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt.
Statute of Frauds That part of a state law that requires certain instruments, such as deeds, real estate sales contracts and certain leases, to be in writing to be legally enforceable.
T
Tenancy in Common A form of co-ownership which each owner holds an undivided interest in real property as if he or she were sole owner. Each individual owner has the right to partition. Unlike joint tenants, tenants in common have right of inheritance.
Title (1) The right to or ownership of land. (2) The evidence of ownership of land.
Title Insurance A policy insuring the owner or mortgagee against loss by reason of defects in the title to a parcel of real estate, other than encumbrances, defects and matters specifically excluded by the policy.
Trust Deed AKA Deed of Trust An instrument used to create a mortgage lien by which the borrower conveys title to a trustee, who holds it as security for the benefit of the note holder (the lender).
U
Unilateral Contract A one-sided contract wherein one party makes a promise so as to induce a second party to do something. The second party is not legally bound to perform’ however, if the second party does comply, the first party is obligated to keep the promise.
V
Valid Contract A contract that complies with all the essentials of a contract and is binding and enforceable on all parties to it.
VA Loan A mortgage loan on approved property made to a qualified veteran by an authorized lender and guaranteed by the Department of Veterans Affairs in order to limit the lender’s possible loss.
W
Wraparound Loan A method of refinancing in which the new mortgage is placed in a secondary , or subordinate, position; the new mortgage includes both the unpaid principal balance of the first mortgage and whatever additional sums are advanced by the lender. In essence, it is an additional mortgage in which another lender refinances a borrower by lending an amount over the existing first mortgage amount without disturbing the existence of the first mortgage.
Z
Zoning Ordinance An exercise of police power by a municipality to regulate and control the character and use of property.
I am an Associate Broker with Teton Valley Realty. I have been a licensed REALTOR® for twelve years and actively involved with property sales and development in Teton Valley.
I have lived in Teton Valley for over 20 years and feel fortunate to have made a home here with my husband, Travis, and two children, Conley and Arah. 