Real Estate Definitions

General Real Estate Definitions

• Assessed Value: The value placed on property by the Central Appraisal District as a basis for taxation.
• Attorney's Fees: Charges by an independent attorney chosen by the lender to draw the legal documents, i.e. Note, Deed of Trust, etc.
• Balloon Payment: An instance in which the final installation payment on a note is greater than the preceeding payments and pays the note in full.
• Chain of Title: A history of conveyances and encumbrances affecting the title (ownership) of real property.
• Convey or Conveyance: Process of transferring ownership of a property from one person to another.
• Courier Fee: Charges for Federal Express or a runner.
• Deed: A document which, when properly excised and delivered, conveys (transfers) title (ownership) of real property.
• Discount Points: A negotiable fee paid to the lender to secure financing for the buyer. Discount points are up-front interest charges to reduce the interest rate over the life, or a portion, of the loan's term. One discount point equals one percent of the loan amount, i.e. 3 discount points on a $100,000 loan would be $3,000.
• Earnest Money: Money deposited by a buyer to indicate and evidence good faith. In Texas, that is normally deposited with a title comapny.
• Encumbrance: Anything that affects or limits ownership of real propertry - such as, mortages, liens, easements, or restrictions of any kind.
• Escrow Fee: Charged by the title company to service the transaction and to escrow (hold and disburse) money and documents. Usually split between buyer and seller.
• Fair Market Value: The price at which a willing seller would sell and a willing buyer would buy, neither being under abnormal pressure.
• Mortgage: A legal document that provides security for repayment of a promissory note.
• Mortgagee's Title Policy: Required by lender to ensure that lender has a valid lien. It does not protect the buyer. Also required for second mortgages.
• Owner's Title Policy: Insures the buyer against loss due to any defect in the title not excepted to or excluded from the policy.
• Recording Fee: Charged by the County Clerk to record documents in the public records. Charges are based on the number of pages recorded.
• Survey: Survey of property required by lender; shows lot size, easements, any encroachments, locations of improvements, etc.
• Tax Certificate: Charged by taxing authorities to present certification showing that the current year's taxes were paid.
• Title: In dealing with Real Property, "title" means ownership.