Terms to Know
Amendments: A change –either to alter, add to, or correct
part of an agreement without changing the principle idea or
essence.
Appraisal: An estimate of value of property resulting from
analysis of facts about the property- an opinion of value.
Assumption: Taking over another person’s financial obligation;
taking title to a parcel of real property with the buyer
assuming liability for paying an existing note, secured
by a deed of trust against the real property.
Beneficiary: The recipients of benefits, often from a
deed of trust, usually the lender.
Close of Escrow: Generally the date the documents are recorded
and title passes from Seller to Buyer. On this date, the
buyer becomes the legal owner and title insurance becomes
effective.
Comparable Sales: Sales that have similar characteristics as
The subject real property, used for analysis in the appraisal.
Commonly called “comps”.
Deed of Trust: An instrument used in many states in place of a
mortgage.
Deed Restrictions: Limitations in the deed to a parcel of real
property that dictate certain uses that may or may not be made
of real property.
Earnest Money Deposit: Down payment made by a purchaser
of real property as evidence of good faith; a deposit or partial
payment.
Easement: A right, privilege or interest limited to a specific
purpose that one party has in the land of another.
Hazard Insurance: Real estate insurance protecting against
fire, some natural causes, vandalism, etc., depending upon the
policy. Buyer often adds liability insurance and extended
coverage for personal property
Impounds: A trust type account established by lenders for the
accumulation of borrower’s funds to meet periodic payments
of taxes, mortgage insurance premiums and/or future
insurance policy premiums, required to protect their security
Legal Description: A description of land recognized by law,
based on government surveys, spelling out the exact
boundaries of the entire parcel of land. It should so thoroughly
identify a parcel of land that it cannot be confused with any
other.
Lien: A form of encumbrance that usually makes a specific
parcel of real property the security for the payment of a debt
or discharge of an obligation. For example, judgments, taxes,
mortgages, deeds of trust.
PITI: A payment that combines Principal, Interest, Taxes and
Insurance.
Power of Attorney: A written instrument whereby a principal
gives authority to an agent. The agent acting under such a
grant is sometimes called an “Attorney-in-Fact.”
Purchase Agreement: The purchase contract between the
Buyer and Seller. It is usually completed by the real estate
agent and signed by the Buyer and Seller.
Quitclaim Deed: A deed operating as a release, intending to
pass any title, interest or claim which the grantor may have in
the property, but not containing any warranty of a valid
interest or title by the grantor.
Recording: Filing documents affecting real property with the
County Recorder as a matter of public record.
Warranty Deed: A written instrument by which a party
