GLOSSARY OF COMMON 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 | X | Y | Z

A

Assignment of Rents
A written document which transfers to a mortgagee upon default of the owner's right to collect rent.

B

Buyer
A person who buys or contracts to buy real estate.

Buyer's Agent
Real estate agent acting on behalf of a Buyer in a real estate transaction.

C

Commercial Property
Income producing property (e.g. office buildings, storefronts, etc.) as opposed to residential property.

Construction Loans
A loan given by a Lender to finance the construction of improvements. In most cases, and unlike a loan used to refinance or purchase real estate, the entire amount of the loan is not immediately disbursed at settlement. Rather, the loan documents will provide that progress payments, or draws, will be made from the principal amount of the loan as certain stages of construction are completed. The Borrower would then only pay interest on the amount of the loan actually disbursed at any given time. Typically, these loans will call for interest only payments to be made during the construction period and will convert to permanent financing and be amortized once construction is complete.

D

Deed of Trust
An instrument used in Maryland, taking the place and serving the uses of a mortgage, by which the legal title to real property is placed in one or more trustees, to secure the repayment of a sum of money or the performance of other conditions. Though differing from a mortgage, it is essentially a security.

F

Financing Statements
A document setting out a secured party's security interest in goods. A document designed to notify third parties, generally prospective Buyers or Lenders, that there may be an enforceable security interest in the property of the debtor.

H

Home Equity Loans/Lines of Credit
A type of loan used to convert an owner's equity in real estate to cash. Typically constitute second or third liens on real estate behind the primary financing.  Often the owner can draw on the home equity loan or line of credit in such amount and at such times as the owner desires the cash.

I

Indemnity Deed of Trust
Security agreement whereby one who owns property (grantor) conveys legal title to property to one or more trustees to secure the payment of a loan from a lender (beneficiary) to a borrower separate from the grantor. In most cases, the grantor and borrower are related such that the grantor derives benefit from the loan from the lender to the borrower.

J

Judgments
The final decision by a court in a lawsuit, criminal prosecution or appeal from a lower court's judgment. A money judgment filed in the Circuit Court acts as a lien on all property owned by the debtor in the county where the judgment is filed.

L

Lender
The bank, lending institution or individual loaning money toward the purchase or refinancing of real estate.

Lender's Title Policy
Also know as the Loan Policy of Title Insurance, it insures the Lenders whose loans are secured by real property against loss or damage resulting from defects or failure of title to a particular parcel of reality, or from the enforcement of liens existing against it at the time of the insurance.

Liens
A claim, encumbrance, or charge on property for the payment of some debt, obligation or duty.

M

Mortgage Broker
Person or firm who functions as an intermediary between the Borrower and Lender in securing loan, or places loan with investors.

O

Owner's Title Policy
Also known as the Owner's Policy of Title Insurance, it insures the owners of property against loss or damage resulting from defects or failure of title to a particular parcel of reality, or from the enforcement of liens existing against it at the time of the insurance.

P

Principal Residence
The main place where one makes his/her home or usual place of abode.

Promissory Note
A signed paper promising to pay another a certain sum of money.

R

Real Estate
Land and anything permanently affixed to the land such as buildings, fences and those things attached to that building, such as light fixtures, plumbing and heating fixtures, or other items which would be personal property if not attached.

Real Estate Agent
A broker employed in negotiating the sale, purchase, lease or exchange of lands on a commission contingent on success.

Real Estate Taxes
Tax levied by local taxing authority against the ownership of real estate for purposes of financing the operations of the local government.

Recordation Taxes
A fee that is charged for every instrument of writing that is filed with the state, including deeds, deeds of trust, mortgages and financing statements.

Refinance
 Process whereby owners of property pay off existing loan on property with a new loan. Often the new loan will be for a greater amount than the existing loan for the purpose of turning the equity in property into cash. In many other cases, the new loan will be at a lower rate, different term or both, than the existing.

Residential Property
Property which is zoned for single-family homes, multi-family apartments, townhouses, condominiums and/or co-ops.

S

Seller
A person who sells or contracts to sell real estate.

Settlement
The culmination of a particular transaction involving real property, such as the purchase and sale of the property, the execution of a lease or the making of a mortgage loan.

Selling or Listing Agent
Real estate agent acting on behalf of a Seller in a real estate transaction.

T

Title Abstract
A condensed history of the title to land, consisting of a synopsis or summary of the material or operative or portion of all the conveyances, of whatever kind or nature, which in any manner affect said land, or any estate or interest therein, together with a statement of all liens, charges or liabilities to which the same may be subject, and of which it is in any way material for purchasers to be appraised.

Title Commitment
Also commonly referred to as a Title Binder, it is an agreement by a title insurer to issue a final title insurance policy for a particular piece of real estate upon final closing and satisfaction of certain conditions specified in the commitment.

Title Insurance
A type of insurance taken out by a purchaser of the property or one loaning money for the purchase of property. It is a policy issued by a title company after searching the title, representing the state of that title and insuring the accuracy of its search against claims of title defects.

Transfer Taxes
Tax levied by the state or county on the amount of consideration paid for the transfer of real estate (i.e. the Purchase Price).