Real Estate Glossary Terms P - Z
A map or chart of a lot, subdivision or community drawn by a
surveyor showing boundary lines, buildings, improvements on the
land, and easements.
Sometimes called "discount points." A point is one percent of the
amount of the mortgage loan. For example, if a loan is for $25,000,
one point is $250. Points are charged by a lender to raise the
yield on his loan at a time when money is tight, interest rates are
high, and there is a legal limit to the interest rate that can be
charged on a mortgage. Buyers are prohibited from paying points on
HUD or Veterans' Administration guaranteed loans (sellers can pay,
however). On a conventional mortgage, points may be paid by either
buyer or seller or split between them.
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.
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.
See agreement of sale.
A deed which transfers whatever interest the maker of the deed may
have in the particular parcel of land. A quitclaim deed is often
given to clear the title when the grantor's interest in a property
is questionable. By accepting such a deed the buyer assumes all the
risks. Such a deed makes no warranties as to the title, but simply
transfers to the buyer whatever interest the grantor has. (See deed.)
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
The process of the same mortgagor paying off one loan with the
proceeds from another loan.
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.
The determination whether a covenant runs with the land or is
personal is governed by the language of the covenant, the intent of
the parties, and the law in the State where the land is situated.
Restrictive covenants that run with the land are encumbrances and
may affect the value and marketability of title. Restrictive
covenants may limit the density of buildings per acre, regulate
size, style or price range of buildings to be erected, or prevent
particular businesses from operating or minority groups from owning
or occupying homes in a given area. (This latter discriminatory
covenant is unconstitutional and has been declared unenforceable by
the U.S. Supreme Court.)
See agreement of sale.
A special tax imposed on property, individual lots or all property
in the immediate area, for road construction, sidewalks, sewers,
street lights, etc.
A lien that binds a specified piece of property, unlike a general
lien, which is levied against all one's assets. It creates a right
to retain something of value belonging to another person as
compensation for labor, material, or money expended in that
person's behalf. In some localities it is called "particular" lien
or "specific" lien. (See lien.)
Special Warranty Deed
A deed in which the grantor conveys title 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.
See documentary stamps
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.
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
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.
Protects lenders or homeowners against loss of their interest in
property due to legal defects in title. Title insurance may be
issued to a "mortgagee's title policy." Insurance benefits will be
paid only to the "named insured" in the title policy, so it is
important that an owner purchase an "owner's title policy", if he
desires the protection of title insurance.
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 convenants filed in the record,
which would adversely affect the marketability or value of
A party who is given legal responsibility to hold property in the
best interest of or "for the benefit of" another. The trustee is
one placed in a position of responsibility for another, a
responsibility enforceable in a court of law. (See deed of trust.)