Real Estate Dictionary

Abstract - A history of all transactions shown in the public records affecting a particular tract of land.

Appraisal - A report from an independent third party detailing the estimated value of real estate.

Assessment - The valuation of real estate for purpose of taxes or special improvement charges.

Attorney Review Clause - A clause required to be in Contracts prepared by a real estate broker in New Jersey which allows for a three day period during which lawyers for the buyer and the seller can review the Contract and reject it for any reason or no reason at all. The lawyers can also recommend changes that may be acceptable to allow for the reinstatement of the Contract.

Back Title - Information, including Deeds and Title searches related to the property involved.

Certificate of Title - A certificate issued by a title examiner stating the condition of a title.

Clear Title - Real property ownership free of liens, defects, encumbrances or claims.

Closing - Also called "settlement." It is a meeting of all parties involved in a property transaction during which the transaction is finalized.

Commitment - A document issued by a title insurance company that contains the conditions under which a policy of title insurance will be issued. It is also called "binder."

Deed - A written legal document which is signed, executed and delivered in which the owner of real estate conveys some right, title or interest in it to another person.

Deposit - Payment of a portion of the purchase price of real estate normally held by a third party until the closing of title.

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.

Execute - To sign a legal instrument. A deed is said to be executed when it is signed, sealed, witnessed and delivered.

Fixed Rate Mortgage - A mortgage that has a rate of interest that remains the same for the life of the mortgage.

Foreclosure - A legal proceeding in which real estate secured by a mortgage or deed of trust is sold to satisfy the underlying debt.

Good Faith Estimate - An estimate of all closing costs including pre-paid and escrow items and lenders fees that must be given to the borrower by the lender within three days after a loan application is submitted.

Homeowners Insurance - Real estate insurance protecting against loss caused by fire, some natural causes, vandalism, etc., depending on the terms of the policy. Also may include 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.

HUD-1 (RESPA) - An important legal document signed at closing which identifies all of the charges involved in a real estate transaction. It is also referred to as a Settlement Statement.

Judgment - The determination of a court regarding the rights of parties in an action. A judgment against a property owner can create a lien on all of that owner's land within the State.

Lien - A monetary charge imposed on a property, usually arising from some debt or obligation.

Mortgage - A loan obtained to purchase real estate which acts as a legal claim on the home or property that secures the promise to pay the 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.

Payoff - The payment in full of an existing loan.

Point - Also called "commission points" or "discount points." One percent of the amount of the loan = one point.

Premium - The amount payable for an insurance policy.

Principal - A sum of money owed as a debt on which interest is payable or a person who empowers another to act as his representative or agent.

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. It is also called "note."

Real Estate Agent - A person licensed to negotiate and arrange real estate sales on behalf of a real estate broker.

Realty Transfer Fee - A tax imposed by the State of New Jersey on the sale of real estate located in the State.

Recording - The noting in the county clerk’s office of the details of a legal document affecting the title to real estate. When such an instrument is properly recorded, it is considered to be a matter of public record and all subsequent purchasers are deemed to have constructive knowledge of that information.

Refinance - To pay off one or more loans by obtaining another loan.

Release - 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.

Search - A careful examination of the public records in an effort to find all recorded instruments relating to a particular chain of title.

Survey - The measurement of the boundaries of a parcel of land, its area aid, sometimes, its topography.

Title - A combination of all the elements that constitute the highest legal right to own, possess, use, control, enjoy and dispose of real estate which are recognized and protected by the law.

Title Insurance Policy - A contract of title insurance under which the insurer agrees to indemnify the insured against loss arising from claims against the insured’s interest.