Situation in which a
buyer is permitted to take possession
of real property prior to closing.
A sum of money given to
bind a sale of real estate, or assure
payment or an advance of funds in the
processing of a loan; a deposit.
A right to the limited use or
enjoyment of land held by another.
Also, an interest in land to enable
sewer or other utility lines to be
laid, or to allow access to a
Equal Credit Opportunity Act. A
federal law that requires lenders and
other creditors to make credit equally
available without discrimination based
on race, color, religion, national
origin, age, sex, marital status, or
receipt of income from public
assistance programs. Also called
For purposes of appraisal,
the physical age given to a building
based on its present condition, which
may differ from its actual age.
The actual rate of
return to the investor, considering
the commitment fees, loan points, or
other fees. Also called yield.
The annual return expressed
as the face interest rate divided by
the amount invested, used when a
mortgage or other debt instrument is
bought at a discount or premium.
The right of government
bodies, public utilities, and public
service corporations to take private
property for public use (e.g., schools
and roads) upon payment of its fair
An improvement that illegally violates
another’s property or right to use
Anything that affects or limits the
fee simple title to property, such as
mortgages, leases, easements, or
The final mortgage loan to the
ultimate purchaser of a property, as
opposed to a construction loan or
other form of interim financing.
A signature on a negotiable instrument
by which title to property mentioned
therein is assigned and transferred.
Also, a notation added to an
instrument after execution to change
or clarify its contents. In insurance,
coverage may be restricted or enlarged
by endorsing a policy. In FHA loans, a
notation placed on the note by the FHA
indicating that the loan is insured
under the National Housing Act.
A report rendered by an
engineer stating the physical
condition of property that has been
inspected, with a summation or
Net ownership, the difference between
fair market value and current
indebtedness, sometimes called
The common law right
to redeem property following default
on a mortgage by paying the unpaid
debt plus interest and costs prior to
the foreclosure sale. In some states,
the mortgagor has a statutory right to
redeem property after a foreclosure
Omissions Insurance (E&O
coverage for errors, mistakes, and
negligence in the usual activities of
a mortgage banker. Fraudulent behavior
is not included.
A clause providing upward
adjustments of rent payments to cover
specified contingencies. Also, a
provision in a lease to provide for
increases in property tax and
A clause that allows a
tenant to cancel a lease in situations
that would not necessarily justify
An item of value, money or documents,
deposited with a third party to be
delivered upon the fulfillment of a
condition. For example, the deposit by
a borrower with the lender of funds to
pay taxes and insurance premiums when
they become due, or the deposit of
funds or documents with an attorney or
escrow agent to be disbursed upon the
closing of a sale of real estate. In
some parts of the country, escrows of
taxes and insurance premiums re called
impounds or reserves.
The segregated trust
account in which escrow funds are
The person or organization having a
fiduciary responsibility to both the
buyer and seller (or lender and
borrower) to see that the terms of the
purchase/sale (or loan) are carried
out. Also called escrow company or
The periodic examination
of escrow accounts to determine if
current monthly deposits will provide
sufficient funds to pay taxes,
insurance, and other bills when due.
established to act as an escrow agent.
A three-party agreement
between the buyer, seller, and the
escrow agent, specifying the rights
and duties of each.
Overage or Shortage
difference, determined by escrow
analysis, between escrow funds on
deposit and escrow funds required to
make a payment when it becomes due.
That portion of a
mortgagor’s monthly payments held by
a lender or servicer to pay taxes,
hazard insurance, mortgage insurance,
lease payments, and other items as
they become due. Also called impounds
or reserves in some states.
ownership interest an individual has
in real property. The sum total of all
the real and personal property owned
by an individual at the time of death.
A written statement
setting forth ceratin facts about a
piece of real estate, such as the
precise amount of indebtedness
A statement that, in
itself, prevents its issuer from later
asserting different facts.
The lawful expulsion of an occupant
from real property.
Proof of ownership of
The review of the chain
of title as revealed by an abstract of
title or public record.
In legal descriptions, that portion of
land to be deleted or excluded. The
term is also used to describe an
objection to title or encumbrance on
A written contract giving
one licensed real estate agent the
exclusive right to sell a property for
a specified time, but reserving the
owner’s right to sell the property
alone without the payment of a
Right to Sell
A written contract
giving one real estate agent the right
to sell a piece of real property and
entitling that agent to a commission
upon sale, regardless of who finds a
Recordation of the appropriate
signature on a document such as a
mortgage note, to render it "in
A judicial order directing an
appropriate officer of the court to
enforce a judgment against the
property or person of the judgment
debtor, in an attempt to satisfy the
A person named in a will to administer
an estate. The court will appoint an
administrator if no executor is named.
Executrix is the feminine form.
Real estate not subject
to property taxes. Religious,
educational, and charitable
organizations generally hold exempt
The price at which property might be
sold at some future date. Generally,
the price used to calculate internal
rate of return.
Continuation past original maturity
date; continuation of a commitment.