Real Estate Terms

Abstract of Title - A condensed history or summary of all transactions affecting a particular tract of land.

Adjustable Rate Mortgages - Mortgages with an interest rate that may change up or down depending on an indicator. These are usually based something like the current Treasury bill rate.

Administer - To pay the debts and wind up the business of a deceased person's estate. Also, to handle and dispose of properties of an estate by an executor, administrator or trustee in conformity with legal procedures and provisions of wills or trust instruments.

Administrator - A person appointed by a probate court to administer the estate of a person who dies intestate; that is without leaving a will.

Adverse Possession - The unauthorized occupation of land belonging to another by a person who does not have the consent of the owner. Said occupier is said to hold possession adversely to the rights and interests of the owner. In most states, by operation of law, title to the land becomes vested in such occupier after a fixed number of years of peaceful occupancy.

Affidavit - A sworn statement in writing.

All-Inclusive Title Insurance - This means that most title insurance charges are included in one price.

Amortize - To reduce a debt by means of regular periodic payments which includes amounts applicable to both principal and interest.

Approved Attorney - A practicing lawyer whose examinations of title and title opinions are acceptable to a title insurance company as a basis for the issuance of its title insurance policies.

Appurtenance - A minor right or privilege that is incident to, but outside of, the principal property such as a right-of-way to a highway across the land of another. Water rights are also an example.

APR - Annual percentage rate. On some mortgages the APR is higher than the actual mortgage rate.

Assumption - A mortgage that allows a new owner to take over payments. The original borrower remains liable on the mortgage note.

Beneficiary - A person who is entitled to receive funds or property under the terms and provisions of a will or trust or insurance policy.

Bill of Sale - The instrument by which title to personal property is transferred or conveyed.

Binder - (1) Sometimes called "Preliminary Certificate." It is a preliminary report as to the condition of a title and a commitment to issue a title insurance policy in a certain manner when certain conditions are met. (2) Also, a deposit in escrow of a small part of the purchase price of real estate as evidence of good faith and to bind an agreement to purchase.

Broker - One who acts as an agent for another in negotiating sales or purchases in return for a fee or commission.

Certificate of Title - A certificate issued by a title examiner stating the condition of a title; usually more formal than an attorney's opinion.

Chain of Title - Beginning with a conveyance out of an original source of title such as a government, each succeeding deed, will or other medium which conveys and transfers the title to succeeding owners constitutes a link in the chain of title. The chain of title is the composite of all such links.

Closing - In some areas called a "settlement". The process of completing a real estate transaction during which deeds, mortgages, leases and other required instruments are signed and/or delivered, an accounting between the parties is made, the money is disbursed, the papers are recorded, and all other details such as payment of outstanding liens and transfer of hazard insurance policies are attended to.

Closing Statement - A summation, in the form of a balance sheet, made at a closing, showing the amounts of debits and credits to which each party to a real estate transaction is entitled.

Cloud on Title - An irregularity, possible claim, or encumbrance which, if valid, would adversely affect or impair the title.

Conveyance - The transfer of title to property from one person to another.

Deed - A written document by which the ownership of land is transferred from one person to another.

Deed of Trust - Instrument used to secure a loan on real estate. Like a mortgage, generally used in the South. The major difference is in how foreclosures are handled. Foreclosures are much faster with a Deed of Trust than with a Mortgage.

Defect - A blemish, imperfection or deficiency. A defective title is one that is irregular and faulty.

Deposit or Earnest Money - Advance payment of part of the purchase price to bind a contract for property.

Dispossess - To deprive one of the possession and use of real estate.

Dominant Estate - The property for the benefit of which a right-of-way easement exists across another's adjoining piece of land is said to be the dominant estate. The land across which the easement runs is said to be the servient estate.

Due-on-Sale Clause - A provision in a mortgage or deed of trust which requires the loan to be paid in full if a property is sold or transferred.

Equity - The interest or value which an owner has in real estate over and above the debts against it.

Escrow - (1) A procedure whereby a disinterested third party handles legal documents and funds on behalf of a seller and buyer. (2) Money that is kept by the mortgage company to ensure that taxes can be paid in full when due. This is paid up front on settlement sheet lines 1001 - 1006 and is added to the mortgage payment monthly over the principal and interest figure.

Examination - In title industry parlance, to peruse and study the instruments and muniments incident to a chain of title and to determine their effect and condition in order to reach a conclusion as to the status of the title.

Examiner - Usually referred to, in title industry parlance, as title examiner. One who examines and determines the condition and status of real estate titles.

Exception - In title industry parlance, a provision in a title insurance binder or policy which excludes liability regarding a specified title defect or an outstanding lien or encumbrance.

False Personation - The act of a person who falsely and fraudulently claims to be another person.

Falsification - The forging, altering, or counterfeiting of a document, or knowingly making untruthful statements or misrepresentations.

Fee Simple - The highest degree of ownership which a person can have in real estate. An interest in real estate which gives the owner unqualified ownership and full power of disposition.

Filing - In title industry parlance, this term relates to the delivery of real estate instruments to a recorder for recordings.

First Mortgage - A mortgage having priority as a lien over any other mortgage or lien on the same property.

Foreclosure - Legal process by which a mortgagor of real property is deprived of his interest in that property due to failure to comply with terms and conditions of the mortgage.

Freehold - A life estate or a fee simple estate.

Grantee - A person who acquires an interest in land by deed, grant or other written instrument.

Grantor - A person who, by a written instrument, transfers to another interest in land.

Hazard Insurance - The homeowners insurance policy.

Heir - One who might inherit or succeed to an interest in lands under the rules of law applicable where an individual dies without leaving a will.

Improvement Liens - Liens imposed by municipalities on real estate which has been directly benefited by municipal improvements such as the construction of streets, sidewalks and sewer lines. Such liens secure payment of the proportionate costs of such improvements.

Inchoate - Immature; not fully developed; an early stage; incomplete; only partially existing. An inchoate right of dower held by a wife matures and becomes exercisable only upon the death of her husband.

Indemnity - Insurance against possible loss or damage. A title insurance policy is a contract of indemnity.

Indenture - A deed or other real estate contract executed between two or more parties.

Installment Contract - A real estate purchase agreement providing for the payment of the purchase price in several successive payments such as monthly payments.

Instrument - Any written document.

Insurer - One that insures—sometimes called an underwriter—such as a title insurance company.

Interests - Estates, rights, or legal claims in and to real estate.

Intestate - Dying without leaving a legal will.

In personam - Directed at specific persons rather than against property or generally for all people.

In rem - Pertaining to property or people in general.

Junior Mortgage - A mortgage lower in lien priority than a first mortgage.

Judgment - A decree of a court.

Loan origination fees - Money required by the lender to be paid to start the work of approving a mortgage.

Liability - A legal obligation or responsibility for the payment of a loss or damages or a debt.

Lien - A hold, a claim or charge allowed a creditor upon the lands of a debtor.

Marketable Title - A title which a court of equity considers to be so free of material defects and liens that it will force the title's acceptance by questioning purchaser. Also known as a merchantable title.

Market Value - An average between the highest price which a buyer, willing but not compelled to buy, would pay and the lowest price a seller, willing, but not compelled to sell, would accept.

Mechanic’s Lien - A lien on real estate, created by operation of law, which secures the payment of debts due to persons who perform labor or services or furnish materials incident to the construction of buildings and improvements on the real estate.

Mortgage Note - An instrument used to encumber land as security for a debt. This document gives the mortgage company "in rem" jurisdiction over the mortgagor.

Mortgagee - A designation for the mortgage lender on lands.

Mortgagor - A designation for the mortgage borrower on lands.

MIP - Mortgage insurance protection

Note - A written promise to pay a certain amount of money, at a certain time, or in a certain number of installments. It usually provides for payment of interest and its payment is at times secured by a mortgage.

Opinion - In title industry parlance, referred to as title opinion. The conclusion and judgment of a skilled person as to the status of a title, based upon a title examination.

Owner’s Policy - A policy of title insurance usually insuring an owner of real estate against loss occasioned by defects in, liens against, or unmarketability of the owner's title.

P.O.C. - Paid outside of closing. Sometimes the lender requests this money before settlement. If you pay any charges before settlement they should be written on the settlement sheet. They are written on the proper line outside of your column. They should also be marked P.O.C.

Personal Property - Temporary or movable property as distinguished from real estate.

Point - A percentage point; equal to one percent of the loan amount.

Power of Attorney - An instrument authorizing another to act on one's behalf as his agent or attorney.

Premium - (1) The amount payable for an insurance policy. (2) A sum of money or bonus paid in addition to the regular price.

PMI - Private mortgage insurance.

PMM - Purchase money mortgage. A mortgage given by the seller simultaneously with the purchase of real estate to secure the unpaid balance of the purchase price.

Pro-Rate - To allocate between seller and buyer their proportionate share of an obligation paid or due.

Promissory Note - A promise to pay. The promissory note document gives the mortgage company "in personam" jurisdiction over the mortgagor.

Quiet Enjoyment - (1) One of the common law warranties. (2) Assurance that one's title, possession, or use of real estate will not be disturbed or disrupted by a legitimate cause or adverse right.

Quiet Title Suit - A lawsuit brought by an owner of real estate for the purpose of cancelling, wiping out, and putting a quietus upon supposedly immaterial, inconsequential, and unenforceable claims and interests which cloud his title.

Quietus - Final disposition, settlement, or elimination of a claim or debt.

Quit Claim Deed - A deed which does not imply that the grantor holds title, but which surrenders and gives to the grantee any possible interest or rights which the grantor may have in the property.

Real Property - Land and that which is affixed to it.

Recording - The act of a recorder of receiving and transcribing, in a book or on film of the public records, instruments affecting the title to real estate.

Reinsurance - Insurance insuring an insurer. When an insurance company has issued a policy and does not want to be fully exposed to loss for the full amount of the policy, such company may purchase a reinsurance policy from another insurance company to insure that first company against a part or all of the loss which the first company may have to pay under its policy.

Reissue Rate - A reduced rate of title insurance premium applicable in cases where the owner of the land has been previously insured in an owner's policy by the insurer within a certain time.

Search - In title industry parlance, a careful exploration and perusal of the public records in an effort to find all recorded instruments relating to a particular chain of title.

Second Mortgage - A mortgage, the lien of which is subordinate to that of another mortgage.

Set Aside - To declare invalid or void; to annul. For example, a court may set aside an erroneous judgment or decree.

Survey - The process of measuring land to determine its size, location and physical description and the resulting drawing or map.

Tax Lien - The lien which is imposed upon real estate by operation of law which secures the payment of real estate taxes.

Tax Service Fee - A fee paid to the mortgage company to verify that they actually pay the real estate taxes.

Title - The evidence or right a person has to the ownership and possession of land.

Title Defect - (1) Any possible or patent claim or right outstanding in a chain of title which is adverse to the claim of ownership. (2) Any material irregularity in the execution or effect of an instrument in the chain of title.

Title Insurance - Insurance against loss or damage resulting in defects or failure of title to a particular parcel of real property.

Title Insurance Binder or Commitment - A report issued by a title insurance company binding or committing the title insurance company to issue the form of policy designated in the commitment or binder upon compliance with and satisfaction of requirements set forth in the commitment or binder.

Title Search - An examination of public records and court decisions to disclose the current facts regarding ownership of real estate.

Transfer taxes - Money paid to the county and or state when property is sold.

Underwriter - An insurance company which issues insurance policies either to the public or to another insurer.

Usury - (1) Any premium, profit, bonus, fee, or charge which is demanded, required, or extracted by a lender in excess of legal interest on money loaned.

Will - A written document properly witnessed, providing for the distribution of property owned by the deceased.

Rate Calculators

New Jersey
Pennsylvania

*Quotes derived using the attached rate calculator links do not include applicable search, endorsement and settlement fees which are specific to each transaction. Please contact mcallocchia@princetonassurance.com for a more comprehensive quote.

Links

Old Republic Title
First American Title
New Jersey Land Title Association
Pennsylvania Land Title Association
Richard A. Weidel Corporation
Princeton Mortgage Corporation