CS Real Estate Texas
Carl Stidston EXP Realty, LLC DFW & Surrounding Areas, TX email: Carl@CSRealEstateTX.com
Mobile: 817-598-6706

Real Estate Glossary of Terms

ABSTRACT OF TITLE | A condensed history or summary of all transactions affecting a particular tract of land.

Annual Percentage Rate (APR) | A borrower's cost of a loan expressed as a percentage. (not to be confused with their interest rate).

APPRAISAL | An estimate of market value of a property based on the sale of similar properties in the area.  Must be performed by a licensed appraiser.  This value is used by financial institutions to determine how much money they are willing to lend for a mortgage.

BENEFICIARY | the recipient of certain benefits or property, often from a deed of trust, inheritance or insurance policy.

CHAIN OF TITLE | A term applied to the past series of transactions and documents affecting the title to a particular parcel of land.

CLOSING | Also known as “escrow” or “settlement.” The process of executing legally binding documents, such as deeds and mortgages, most commonly associated with the purchase of real estate and the borrowing of money to assist in the purchase.

CLOSING DISCLOSURE (CD) | 5 page document provided to borrowers during a real estate transaction to more details about your loan, its key terms, and how much you are paying in fees and other costs.  Provided by the title company (3) business days prior to closing.

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

DEED OF TRUST | An instrument used in many states in place of a mortgage. Property is transferred to a trustee by the trustor (borrower), in favor of the beneficiary (lender), and reconveyed (satisfied) upon payment in full.

DEED RESTRICTION | Limitations in the deed to a parcel of real property that dictate certain uses that may or may not be made of the real property.

EASEMENT | An interest in land owned by another that entitles its holder to a specific limited use, such as laying a sewer, putting up electric power lines or crossing the property.

ENCROACHMENT | A trespass or intrusion onto another’s property, usually by a structure, wall or fence.

ENCUMBRANCE | A lien, liability or charge upon a parcel of land, e.g. a mortgage or easement.

ENDORSEMENT | As to a title insurance policy, a rider or attachment forming a part of the insurance policy expanding or limiting coverage.

ESCROW | A procedure whereby a disinterested third party handles legal documents and funds on behalf of a seller and buyer, and delivers them upon performance by the parties.

EXAMINATION OF TITLE | The investigation and interpretation of the record title to real property based on the title search or abstract.

EXCEPTION | In legal descriptions, that portion of land to be deleted or excluded. The term often is used in a different sense to mean an encumbrance on title, excluded from coverage in a title insurance policy.

HAZARD INSURANCE | An insurance policy protecting real estate property from damaging events such as fire, natural causes (acts of God), vandalism, theft, etc... preventing loss of value to the owner / lender.

HEIR | One who might inherit or succeed to an interest in land of an individual who dies without leaving a will (intestate).

JOINT TENANCY | An estate where two or more persons hold real estate jointly for life, the survivors to take the entire interest on the death of one of the joint tenants.

JUDGMENT | A decree of a court. In practice, this is the lien or charge upon the land of a debtor resulting from the courts award of money to a creditor.

LEGAL DESCRIPTION | A description of land recognized by law, based on government surveys, spelling out the exact boundaries of the entire parcel of land.

LIEN | A hold, claim or charge allowed by a creditor upon the land of a debtor. Some examples are mortgage liens, judgment liens and mechanics’ liens.

LOAN ESTIMATE (LE) | 3 page document provided to borrowers during a real estate transaction to provide important loan information including: estimated interest rate, monthly payment, total closing costs, taxes, insurance and how the interest rate and payments may change in the future.  Provided by the title company (3) business days prior to closing.

LOAN POLICY | A form of title insurance policy which insures the validity, enforceability and priority of a lender’s lien. This form does not provide protection for the owner.

OWNER’S POLICY | A policy of title insurance that protects the real estate owners and lenders against any property loss or damage they might experience because of liens, encumbrances or defects in the title to the property.

Option Fee | Money paid by a buyer to the seller during a residential real estate contract, purchasing the right to cancel the contract for any reason within a predefined period of time.

PITI | A payment including: Principle, Interest, Taxes and Insurance.

POWER OF ATTORNEY | An instrument authorizing another to act on one’s behalf in legal matters.

PRORATE | To allocate between seller and buyer their proportionate share of an obligation paid or due. For example, a proration of real property taxes or fire insurance premiums.

SETTLEMENT STATEMENT | Provides a complete breakdown of costs involved a real estate transaction.

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

TITLE | (i) ownership of real property, which stands against the right of anyone else to claim the property; (ii) the evidence of right which a person has to the ownership and possession of land.

TITLE DEFECT | Any legal right held by others to claim property or to make demands upon the owner.

TITLE INSURANCE | An agreement to indemnify the insured against loss arising from a covered defect in title to a particular parcel of real property, which is typically issued to both the buyer to protect their property rights (through an owner’s title insurance policy), and the lender to protect its lien rights (through a loan policy of title insurance).

TITLE INSURANCE POLICY | A written contract of title insurance.

TITLE SEARCH | An examination of public records, laws and court decisions to disclose the current facts regarding ownership of real estate.