Glossary Of Real Estate Terms
A - E | F - Q | R - Y

- A -

Abstract of Title ‑ A summary of all the recorded instruments and proceedings that affect the title to property, arranged in the order in which they were recorded.

Accelerate ‑ To make a debt due and payable at once.

Acceleration Clause ‑ A provision in a note, mortgage or trust deed that permits the holder to declare the entire unpaid balance due and payable at once upon the happening of some particular event, such as failure to pay an installment on time or sale of the property used as security.

Accrued Interest ‑ Interest that has been earned but is not due and payable.

Acknowledgment ‑ A formal declaration before an authorized official (usually a notary public) by the person who executed a document stating that the person did in fact execute it. The notary public signs and puts a seal on a written statement describing the declaration. This written statement, or acknowledgment, is required on most instruments before they may be recorded.

All‑Inclusive Contract of Sale, Mortgage or Trust Deed ‑ See Wrap‑Around Contract of Sale, Mortgage or Trust Deed.

ALTA Title Insurance Policy ‑ A type of title insurance issued to lenders that gives greater coverage than a standard policy by insuring against additional items, such as unrecorded physical easements, unrecorded mechanic's liens, water and mineral rights, facts a physical survey would show, and rights of persons in possession. Formerly called ATA title insurance policy. ALTA is an abbreviation for American Land Title Association, a trade association of title insurance companies.

Amortization ‑ The repayment of a debt in installments.

Amortized Loan ‑ A loan that is completely paid off in installments.

Amortized Note ‑ A promissory note that is completely paid off in installments.

Annual Statement ‑ A statement required by California law statue to be given by a note holder to the payor within 60 days after the end of each year itemizing and accounting for the money received during the year just ended.

Appraisal Report ‑ The report, written by a real estate appraiser, stating the appraiser's opinion of the value of real property.

Appraised Value ‑ An estimate or opinion of value at a stated time. The opinion of value expressed by a real estate professional known as a real estate appraiser.

Assessed Value ‑ The value placed on property for taxation purpose.

Assessor ‑ An official who has the responsibility of determining assessed value.

Assign ‑ To transfer title to personal property or a right or claim to another person.

Assignee ‑ The person to whom title to personal property or a right or claim is transferred.

Assignment ‑ A transfer by one person (the assignor) to another (the assignee) of title to personal property.

Assignor ‑ The person who transfers title to personal property or a right or claim to another person.

Assume ‑ To take over the obligation of another; for example, to assume a note and deed of trust.

Assumption Agreement ‑ An agreement under which a person (usually a buyer) "assumes" (that is, agrees to pay) a note and mortgage or deed of trust on a property.

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- B -

Balloon Payment ‑ A final installment payment, larger than previous installments, that pays off a debt.

Bene Statement ‑ See Beneficiary Statement.

Beneficiary ‑ The person entitled to the benefit of a trust. In a trust deed, the beneficiary is the creditor who is secured and for whose benefit the trustee holds legal title.

Beneficiary Statement ‑ A statement by the holder of deed of trust stating the amount of the unpaid principal on the note and other information about the debt. The holder is required to give this statement upon payment of a small fee. This is also called an offset statement or a bene statement.

Blanket Mortgage or Blanket Trust Deed ‑ A mortgage or deed of trust covering more than one piece of property. For example, it may cover an entire subdivision and provide for a partial reconveyance of individual lots as they are sold.

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- C -

Call ‑ To declare the entire debt due at once.

Certificate of Discharge ‑ A written instrument executed by the mortgagee and given to the mortgagor when the debt secured by a mortgage is satisfied to show that the mortgage is released. Sometimes called a release of mortgage.

Certificate of Sale ‑ A certificate issued to the buyer at an execution sale or judicial foreclosure sale. The holder of the certificate is entitled to a deed if the owner of the property does not redeem it within one year.

Closing Statement ‑A statement from an escrow agent given to the parties to an escrow when it closed, which accounts for all funds received into and paid out of escrow.

Collateral ‑ Property used as security for a debt.

Collateral Assignment ‑ An assignment of property for security purposes rather than absolute assignment.

Community Property ‑ Property acquired by a husband and wife while married and not separated, except property acquired by gift, will or inheritance and certain other items specified by statute. Any other property owned by a husband or wife is separate property.

Comparison Approach ‑ See Market Data Approach.

Compound Interest ‑ Interest computed not only on the principal but also on previously accumulated interest.

Conditional Sale ‑ A contract for the sale of property stating that although delivery is to be made to the buyer, the title is to remain vested in the seller until the conditions of the contract have been fulfilled.

Conditional Sales Contract ‑ See Land Contract.

Consideration ‑ Anything of value given to induce another party to enter into a contract.

Contract ‑ An agreement between two or more parties to do or not to do certain things for the breach of which the law will give remedy.

Contract for Deed ‑ See Land Contract.

Contract of Sale ‑ See Land Contract.

Conventional Loan ‑ A loan made without government guarantee.

Conveyance ‑ A written instrument that transfers title to or an interest in real property.

Corporation ‑An artificial entity, created by law, that has certain powers and duties of a natural person.

Cosigner ‑ A person who signs a note as an additional maker to help another maker secure a loan.

Cost Basis ‑ The aggregate amount an owner pays to acquire an asset plus all capital improvement, if any, less capital losses and depreciation taken.

Credit Report ‑ A report on a credit applicant from a credit reporting service stating creditors' experience with the applicant and frequently containing information or estimates about the applicant's assets, liabilities and character.

Creditor ‑ A person to whom a debt is owed.

Current Value ‑ The value at the time of appraisal.

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- D -

Debt Financing ‑ The use of borrowed capital to finance the purchase of property.

Debt Service ‑ The sum of money needed each month or year to amortize a loan.

Debtor ‑ A person who owes a debt.

Declining Principal Loan ‑ A loan for which interest is calculated each month, quarter, etc., on the remaining balance of the loan.

Deed ‑ A written instrument transferring title to real property from one person to another.

Deed of Reconveyance ‑ See Reconveyance Deed.

Deed of Trust ‑ A written instrument transferring bare legal title to real property to a trustee to be held as security for an obligation. Also called a trust deed. The accepted form is presented to the trustee for approval before the execution thereof by the trustor and beneficiary and before recordation. The trustee is therefore duty‑bound to perform if trustee accepts. The automatic form is the most widely used form. It contains a provision whereby the trustee named will accept duties when the trust deed is properly executed, acknowledged, and recorded and provided trustee has approved the promissory note and deed of trust. The trustee is not usually aware of the appointment until called on to act in case of default by the trustor.

Default ‑ Failure to fulfill a duty or promise or to discharge an obligation; omission or failure to perform an act.

Defeasance Clause ‑ A provision in a mortgage that allows the mortgagor to have property released from the mortgage when the secured debt is paid.

Deficiency Judgment ‑ A judgment for the amount left unpaid after a property has been sold at a foreclosure sale when the net proceeds are not sufficient to pay off the loan.

Demand Note ‑ A note that is payable on demand of the holder.

Discount ‑ (1) To sell a note for less than the unpaid balance due on it. (2) The dollar difference between the unpaid balance of a note and the price for which a note holder sells the note.

Discount Interest ‑ Interest that is deducted from the principal amount of the loan in advance by the lender on the first day of the loan, hence increasing the lender's yield.

Discount Points ‑ A fee, expressed a percentage of the loan amount, when making a loan. Points increase the yield.

Dragnet Clause ‑ A clause in a deed of trust that makes it the security not only for the present loan but also for any other past or future debt to the beneficiary.

Due‑on‑Sale Clause ‑ A clause in a note or deed of trust giving the holder the right to declare the entire debt due and payable if the owner sells or contracts to sell the property. Also called a due‑onalienation clause.

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- E -

Effective Interest Rate - The actual cost the borrower pays in interest for a loan. Also called true interest rate.

Encumbrance ‑ In a legal or technical sense, anything that limits or affects the ownership of property, such as a lien, mortgage, easement or restriction. In the daily language of real estate people, the term usually means a lien.

Endorsement ‑ A signature placed on the back of a note or check to transfer ownership. An endorsement in blank guarantees payment to later holders. An endorsement without recourse, or qualified endorsement, does not guarantee payment to later holders.

Entity ‑ A form of business organization.

Equitable Title ‑ The ownership held by a buyer after the buyer has contracted to buy property but before legal title has been conveyed to the buyer.

Equity in Property ‑ The current market value of a property less the amount of all liens and charges against it.

Equity Loan ‑ Junior (subordinate) loan based on a percentage of the equity.

Equity of Redemption ‑ (1) The right of an owner to redeem property after default on a mortgage. (2) In California, the term is usually applied to the right of an owner to redeem property for one year after judicial foreclosure sale. Also called right of redemption.

Equity Return or Buildup ‑ Dollars paid toward the principal on a loan, which reduces the outstanding balance.

Escalation ‑ The raising of some item, such as the interest rate or size of installment payments. The right to escalate the interest rate or size of payment may be given by contract to the lender under specified conditions.

Escalator Clause ‑ A clause providing that an item will be adjusted upward or downward under certain conditions. For example, a note may provide that the interest rate goes up or down as the cost of living index rises or falls.

Escrow ‑ The deposit of items such as money, deeds, and other instruments by contracting parties with a neutral part, called an escrow holder or escrow agent, to be held until all the terms and conditions of the escrow are fulfilled.  Then there is a close of escrow, and the items are delivered to the respective parties entitled to them.

Escrow Officer ‑ An employee of an escrow agent who has the responsibility of handling and closing escrows.

Estoppel Certificate ‑ An instrument executed by a note payor setting forth the status of and the balance due on the promissory note as of the date of the execution of the certificate.

Extension Agreement ‑ An agreement giving additional time in which to pay money or perform some other obligation.

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