SUSAN SPROUT KNIGHT
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Terms & Definitions

Appraisal –
is an estimate of the quality or value of something. The process of concluding the value of property.

Deed –
conveys title to or an interest in Real Estate; shows ownership.

Deed of Trust –
a legal document that is recorded as a lien on the property until the loan is paid in full. A pledge of real estate as security for the payment of debt.

Easement –
right to use land of another for a specified purpose.

Encumbrance –
any interest, right, lien or liability attached to a parcel of land that represents a charge upon the property.

Escrow –
closing transaction through a third party called an escrow agent. They receive funds on behalf of the broker’s principal until consummation or termination of transaction.

Joint Tenancy –
ownership of property between two or more parties. In the case of the death of one tenant, their ownership interest passes to the surviving tenant(s).

Loan Origination Fee –
a fee charged to the borrower by the lender for making the mortgage loan. It is usually computed as a percentage.

Loan Discount Fee –
a fee charged to the borrower by the lender usually to reduce the interest rate of the loan. It is usually computed as a percentage.

Mortgage –
a pledge of real estate as security for the payment of debt. A legal document that is recorded as a lien on the property until the loan is paid in full.

Principal –
the original amount of the total due and payable at a certain date.

Survey –
there are two types: Location Drawing and Metes and Bounds – shows property lines of land and any structures erected on the property.

Tenants In Common –
ownership of property between two or more parties. Upon the death of a tenant, their ownership interest goes to the tenant’s heir(s).

Tenants By The Entireties –
ownership of property between husband and wife. Upon the death of one tenant, their ownership interest is given to the surviving spouse by operation of law.

Title –
ownership of land.

Title Defect –
any possible claim or right outstanding in a chain of title that is adverse to the claim of ownership.

Title Insurance –
insurance issued to the homeowner and the lender assuring them financial protection against adverse title claims or risks.

Title Search/Abstract –
search made through the records maintained in the public record office to determine the state of title, including all liens, encumbrances, mortgages, future interest, etc. affecting the property.

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