Did you see our social media posts about real estate industry jargon? Here’s a handy glossary – from A to Z- to help you understand some key terms:
A – Abstract of Title
An Abstract of Title is a detailed document that outlines the history of a property, including previous ownership, mortgages, and any liens or legal claims against the property.
B – Beneficiary
In real estate, a Beneficiary refers to the person or entity entitled to benefit from a trust. In the context of a deed of trust, the beneficiary is usually the lender.
C – Closing
Closing is the final step in executing a real estate transaction. This is when the transfer of property from the seller to the buyer is completed, and all associated costs are paid.
D – Deed
A Deed is a legal document that officially transfers ownership of property from one party to another.
E – Escrow
Escrow refers to a financial arrangement where a third party holds and regulates the payment of the funds required for two parties involved in a given transaction. It helps make transactions more secure by keeping the payment in a secure escrow account which is only released when all of the terms of an agreement are met.
F – Fiduciary Duty
Fiduciary Duty is the obligation to act in the best interest of another party. For example, escrow agents have a fiduciary duty to both the buyer and the seller in a real estate transaction.
G – Grantor
The Grantor is the person or entity that transfers ownership of property. They are the seller in the context of a real estate sale.
H – HUD-1 Settlement Statement
A HUD-1 Settlement Statement is a document that outlines all of the costs for both the buyer and the seller associated with a real estate transaction. It is now replaced by the Closing Disclosure form in most cases.
I – Impound Account
An Impound Account is an account maintained by the mortgage lender to collect advance payments for property taxes and insurance.
J – Joint Tenancy
Joint Tenancy is a form of property co-ownership where all owners have equal rights to the entire property. It includes the right of survivorship, meaning that when one owner dies, their share of the property is automatically transferred to the remaining co-owners.
K – Kickback
A Kickback refers to an illegal payment intended as compensation for preferential treatment, or any other type of improper services received.
L – Lien
A Lien is a legal right or claim against a property that must be paid off when the property is sold. Liens can be voluntary, like a mortgage, or involuntary, like a tax lien.
M – Mortgage
A Mortgage is a loan secured by the property being purchased. The borrower agrees to pay back the loan over a set period, typically with interest.
N – Notary Public
A Notary Public is an official appointed to serve as an impartial witness to the signing of important documents, such as real estate transactions.
O – Origination Fee
The Origination Fee is a charge by the lender for processing a new loan application, expressed as a percentage of the loan amount.
P – Plat
A Plat is a map, drawn to scale, showing the divisions of a piece of land. It includes lot lines, streets, and often community layouts.
Q – Quitclaim Deed
A Quitclaim Deed is a type of deed that conveys any ownership interest the grantor has in the property without warranties or obligations regarding title clearness.
R – Reconveyance
Reconveyance occurs when a mortgage has been paid in full, and the property title is transferred from the trustee back to the borrower, releasing the lien on the property.
S – Settlement
Settlement, or closing, is the final step in executing a real estate transaction when the title is transferred from the seller to the buyer, and all fees are paid.
T – Title Insurance
Title Insurance protects real estate owners and lenders against any property loss or damage they might experience due to liens, encumbrances, or defects in the title to the property.
U – Underwriting
Underwriting is the process by which lenders assess the risk of lending money to a buyer based on their credit, capacity to pay, and the property value.
V – VA Loan
A VA Loan is a mortgage loan in the United States guaranteed by the Department of Veterans Affairs (VA). It is available to eligible veterans, service members, and select military
W – Warranty Deed
A Warranty Deed guarantees that the property title is clear and transfers ownership with legal protections.
X – X-bracing
X-bracing is a structural support technique using crossed braces in construction to enhance stability.
Y – Yield Spread Premium
Yield Spread Premium (YSP) is a commission paid to a mortgage broker for selling a loan above the market interest rate.
Z – Zoning
Zoning regulations determine how property can be used in different municipal areas, like residential or commercial uses.
