Glossary

Terms used with Maryland and Virginia real estate transactions.
Helping make real estate terms easy to understand.

Abstract (Of Title)
Summary of the public records for liens and encumbrances recorded on a title or deed.

Acceleration Clause
A clause in a mortgage note that triggers DUE IN FULL when a home owner / borrower defaults.

Agreement of Sale
Contract of Sale - Contract - Purchase Agreement - Document between a seller and buyer containing terms and conditions for the transfer of real estate.

Amortization
The term by which a mortgage note is divided for repayment, i.e., 15 years, 30 years, etc.

Appraisal
An expert judgment or estimate of the market value of real estate as of a given date.

Assumption of Mortgage
Taking over the mortgage payments of a seller.

Basement Styles
Walk-out: A basement with a ground level exit without steps.
Outside Welled Exit: A basement with a steps leading from a basement door along the house to the ground level.
Daylight Basement: A basement which is only 4-6 feet less than ground level with 4-6 six feet wide steps leading directly to the ground level. Usually from a sliding glass or french doors.
In-Ground Basement: A basement with no exit directly to the outside.

Building Line or Setback
Distances from the ends and/or sides of the lot beyond which construction may not extend.

Certificate of Title
A certificate issued by a title company or a written opinion rendered by an attorney that the seller has good marketable and insurable title to the property which he is offering for sale.

Closing Costs
The numerous expenses which buyers and sellers normally incur to complete a transaction in the transfer of ownership of real estate.

Commission
Money paid to a real estate agent or broker by the seller as compensation for finding a buyer and completing the sale.

Condominium
Individual ownership of a dwelling unit and an individual interest in the common areas and facilities which serve the multi-unit project.

Conventional Mortgage
A mortgage loan subject to conditions established by the lending institution and State statutes. Meets Fannie or Freddie Mac guidelines.

Cooperative Housing
An apartment building or a group of dwellings owned by a corporation, the stockholders of which are the residents of the dwellings.

Deed
A formal written instrument by which title to real property is transferred from one owner to another.

Deed of Trust
Like a mortgage, a security instrument whereby real property is given as security for a debt.

Default
Failure to make mortgage payments as agreed to in a commitment based on the terms and at the designated time set forth in the mortgage or deed of trust.

Depreciation
Decline in value of a house due to wear and tear, adverse changes in the neighborhood, or any other reason.

Downpayment
The amount of money to be paid by the purchaser to the seller upon the signing of the agreement of sale.

Earnest Money
The deposit money given to the seller or his agent by the potential buyer upon the signing of the agreement of sale to show that he is serious about buying the house.

Easement Rights
A right-of-way granted to a person or company authorizing access to or over the owner's land. An electric company obtaining a right-of-way across private property is a common example.

Encroachment
An obstruction, building, or part of a building that intrudes beyond a legal boundary onto neighboring private or public land, or a building extending beyond the building line.

Encumbrance
A legal right or interest in land that affects a good or clear title, and diminishes the land's value. It can take numerous forms, such as zoning ordinances, easement rights, claims, mortgages, liens, charges, a pending legal action, unpaid taxes, or restrictive covenants.

Equity
The value of a homeowner's unencumbered interest in real estate. The difference between the amount owed on the mortgage and the market value.

Escrow
Funds paid by one party to another (the escrow agent) to hold until the occurrence of a specified event, after which the funds are released to a designated individual.

Foreclosure
A legal term applied to any of the various methods of enforcing payment of the debt secured by a mortgage, or deed of trust, by taking and selling the mortgaged property, and depriving the mortgagor of possession.

General Warranty Deed
A deed which conveys not only all the grantor's interests in and title to the property to the grantee, but also warrants that if the title is defective or has a "cloud" on it (such as mortgage claims, tax liens, title claims, judgments, or mechanic's liens against it) the grantee may hold the grantor liable.

Grantee
That party in the deed who is the buyer or recipient.

Grantor
That party in the deed who is the seller or giver.

Hazard Insurance
Protects against damages caused to property by fire, windstorms, and other common hazards.

Home Types
Detached: Any home that is not connected to another.
Town Home: Any home that is connected side-by-side to another.
Apartment: Any multiple family dwelling with apartment homes on more than one level.
Condominium: Any home with a condominium association which owns the land and does some degree of maintenance/insurance.
Co-op: Any home which is owned by a corporation in which the residents own shares.

Home Styles
Colonial: Any two story home, traditional, contemporary, Tudor, cape cod or other.
Cape Cod: Any two story home with a front slanting roof, with or without dormer windows.
Tudor: Any colonial with distinctive stucco exterior with wooden trim.
Contemporary: Any home, on story or two usually designed with some vaulted, cathedral ceilings, wooden trim and/or siding
Split Level: Any home with three or more levels with steps in the center of the home.
Split Foyer: Any home with a foyer entrance with steps leading up and/or down.
Ranch/Rambler: Any one level home with or without a basement finished or unfinished.

HUD
U.S. Department of Housing and Urban Development. Office of Housing/Federal Housing Administration within HUD insures home mortgage loans made by lenders.

Interest
A charge paid for borrowing money.

Lien
A claim by one person on the property of another as security for money owed. Such claims may include obligations not met or satisfied, judgments, unpaid taxes, materials, or labor.

Marketable Title
A title that is free and clear of objectionable liens, clouds, or other title defects. A title which enables an owner to sell his property freely to others and which others will accept without objection.

Mortgage
A lien or claim against real property given by the buyer to the lender as security for money borrowed.

Mortgage Note
A written agreement to repay a loan.

Mortgagee
The lender in a mortgage agreement.

Mortgagor
The borrower in a mortgage agreement.

Plat
A map or chart of a lot, subdivision or community drawn by a surveyor showing boundary lines, buildings, improvements on the land, and easements.

Points
Sometimes called "discount points." A point is one percent of the amount of the mortgage loan.

Premium
The payment made by a borrower to the lender for transmittal to HUD to help defray the cost of the FHA mortgage insurance program and to provide a reserve fund to protect lenders against loss in insured mortgage transactions.

Prepayment
Payment of mortgage loan, or part of it, before due date. Mortgage agreements often restrict the right of prepayment either by limiting the amount that can be prepaid in any one year or charging a penalty for prepayment. The Federal Housing Administration does not permit such restrictions in FHA insured mortgages.

Principal
The basic element of the loan as distinguished from interest and mortgage insurance premium. In other words, principal is the amount upon which interest is paid.

Real Estate Broker
A middle man or agent who buys and sells real estate for a company, firm, or individual on a commission basis. The broker does not have title to the property, but generally represents the owner.

Refinancing
The process of the same mortgagor paying off one loan with the proceeds from another loan.

Restrictive Covenants
Private restrictions limiting the use of real property. Restrictive covenants are created by deed and may "run with the land," binding all subsequent purchasers of the land, or may be "personal" and binding only between the original seller and buyer. Restrictive Covenants are usually time limited. They are also not enforceable if they violate any Fair Housing laws.

Special Assessments
A special tax imposed on property, individual lots or all property in the immediate area, for road construction, sidewalks, sewers, street lights, etc.

Special Warranty Deed - Most used in Maryland and Virginia for new construction.
A deed in which the grantor conveys tide to the grantee and agrees to protect the grantee against title defects or claims asserted by the grantor and those persons whose right to assert a claim against the title arose during the period the grantor held title to the property. In a special warranty deed the grantor guarantees to the grantee that he has done nothing during the time he held title to the property which has, or which might in the future, impair the grantee's title.

Survey
A map or plat made by a licensed surveyor showing the results of measuring the land with its elevations, improvements, boundaries, and its relationship to surrounding tracts of land. A survey is often required by the lender to assure him that a building is actually sited on the land according to its legal description.

Tax
As applied to real estate, an enforced charge imposed on persons, property or income, to be used to support the State. The governing body in turn utilizes the funds in the best interest of the general public.

Title
As generally used, the rights of ownership and possession of particular property. In real estate usage, title may refer to the instruments or documents by which a right of ownership is established (title documents), or it may refer to the ownership interest one has in the real estate.

Title Insurance
Protects lenders or homeowners against loss of their interest in property due to legal defects in title.

Title Search or Examination
A check of the title records, generally at the local courthouse, to make sure the buyer is purchasing a house from the legal owner and there are no liens, overdue special assessments, or other claims or outstanding restrictive covenants filed in the record, which would adversely affect the marketability or value of title.

Trustee
A party who is given legal responsibility to hold property in the best interest of or "for the benefit of" another.

Zoning Ordinances
The acts of an authorized local government establishing building codes, and setting forth regulations for property land usage.

Real Estate In Maryland and Virginia
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Glossary

Terms used with Maryland and Virginia real estate transactions. Helping make real estate terms easy to understand.

Terms used with Maryland and Virginia real estate transactions.
Helping make real estate terms easy to understand.