Escrow

Adjustable Rate Mortgage

A Note whose interest rate is tied to a movable economic index.

Buydown

A cash payment, measured in points, to a lender in order to reduce the interest rate borrower must pay. The seller may increase the sale price to cover the cost of the buy down.

Certificate or Occupancy

A certificate issued by local building authorities that indicates new construction is in compliance with codes and may be occupied.

Codicil

A change in a will before the maker's death.

Chain of Title

A chronological history of property's ownership. Also, sequential record of changes in ownership showing the connection from one owner to the next. A complete chain of title is desirable whenever property is transferred and required by title insurance companies. If they are writing a policy on a property.

Assignment of Rents Clause

A clause in a deed of trust or mortgage, providing that in the event of default, all rents and income from the secured property will be paid to the lender to help reduce the outstanding loan balance.

Assumption Clause

A clause in a document that allows the buyer to take over existing loan and agree to be liable for the repayment of the loan.

Alienate Clause

A clause in a loan document allowing lender to call the balance of the loan due upon the sale of the property. Also called the due-on-sale clause.

Condition Precedent

A condition that requires something to occur before a transaction becomes absolute and and enforceable; for example, a sale that is contingent on the buyer obtaining financing.

Condition Subsequent

A condition which, if it occurs at some point in the future, can cause a property to revert to the grantor; for example, a requirement in a grant deed that a buyer must never use the property for anything other than a private residence.

Agreement of Sale

A contract for the sale of real property where the seller gives up possession , but retains the title until the purchase price is paid in full. Also called contract for sale or land contract.

Actual Notice

A fact, such as seeing the grant deed, or knowing a person was willed or inherited a property.

Breach of Contract

A failure to perform on part or all of the terms and conditions of a contact.

Certificate or Reasonable Value

A federal VA appraisal commitment of property value.

Commission

A fee for services rendered usually based on a certain percentage of the sales price of a property.

Bequest

A gift of personal property by will.

Condominium

A housing unit consisting of a separate fee interest in a particular specific space, plus an individual interest in all common or public areas of the development. Each unit owner has a deed, separate financing and pays the property taxes for their unit.

Community Property with Rights of Survivorship

A law allowed a husband and wife to hold title to their property.

Agency

A legal relationship in which a principal authorizes and agent to act as the principal's representative when dealing with third parties.

Blanket Loan

A loan secured by several properties. The security instrument used can be a blanket deed of trust or a blanket mortgage.

Cashout Financing

A loan that refinances a prior mortgage and that provides additional cash to the borrower. Funds to usually pay off a debt, or renovate.

Bridge Loan

A loan to bridge the gap between termination of one mortgage and the beginning of another. Such as when a borrower purchases a new home before receiving cash proceeds from the cash sale of a prior home, aka 'swing loan'.

Amortized Loan

A loan, interest and principal, to be repaid by a series of regular payments that are equal or nearly equal, without any special balloon payment prior to maturity. Also called a level payments loan.

Agreement

A mutual exchange of promises (either written or oral). Although often used as synonymous with contract, technically it denotes mutual promises that fail as contract for lack of consideration.

Administrator

A person appointed by the probate court to administer the estate of a deceased person. Duties include making an asset inventory, managing the property, paying the debts and expenses, filing required reports and tax returns, and distributing the assets as ordered by the probate court.

C.L.T.A. Standard Policy

A policy of title insurance covering only matters of record. (California Land Title Association)

CAL-VET Program

A program administered by the State Department of Veterans Affairs for the direct financing of farm and home purchases by eligible California veterans of the armed forces.

All-Inclusive Trust Deed (A.I.T.D.)

A purchase money deed of trust subordinate to- but still including- the original loan.

Code of Ethics

A set of rules and principals expressing a standard of accepted conduct for a professional group and governing the relationship of members to each other and the organization.

Acknowledgment

A signed statement, made before a notary public, by a named person confirming the signature on a document and that it was made of free will.

Agency Relationship

A special relationship of trust by which one person (agent) is authorized to conduct business, sign papers, or otherwise act on behalf of another person (principal).

Beneficiary Statement

A statement of unpaid balance of a loan a describes the condition of the debt.

Abstract of Judgment

A summary of a court judgment.

California Land Title Association

A trade organization of the state's title companies.

Arm's Length Transaction

A transaction such as a sale of property, in which all parties involved are acting in their own self-interest and are under no undue influence or pressure from the other parties.

A.L.T.A. (American Land Title Association) Title Policy

A type of insurance policy issued by title insurance companies. It expands the risks normally insured against under the standard type policy to include unrecorded mechanic's liens; unrecorded physical easements; facts a physical survey would not show; water and mineral rights of the parties in possession, such as tenants and buyers under unrecorded instruments.

Bill of Sale

A written agreement used to transfer ownership in personal property.

Certificate of Title

A written opinion by an attorney that ownership of the particular parcel of land is as stated in the certificate.

Certificate of Taxes Due

A written statement or guaranty of the condition of the taxes on a certain property made by the County Treasurer of the county wherein the property is located. Any loss resulting to any person from an error in a tax certificate shall be paid by the county which such treasurer represents.

Appraisal Report

A written statement where an appraiser gives his or her opinion of value.

Community Property

All property acquired by a husband and wife during a valid marriage (excluding certain separate property).

Complete Escrow

All terms of the escrow instructions have been met.

Conditional Use Permit

Allows a land use that may be incompatible with other uses existing in the zone.

Closing Statement

An accounting of funds made to the buyer and seller separately. Required by law to be made at the completion of every real estate transaction.

Bilateral Contract

An agreement in which each person promises to perform an act in exchange for another person's promise to perform.

Common Area

An entire common interest subdivision except the separate interests therein.

Chattel Real

An item of personal property connected to real estate; for example, a lease.

A.L.T.A. Owner's Policy (American Land Title Association)

An owner's extended title insurance policy. (American Land Title Association)

Bundle of Rights

An ownership concept describing all the legal rights that attach to the ownership of real property.

Appraisal

An unbiased estimate or opinion of the property value on a given date.

After-Acquired Title

Any benefits that come to a property after a sale must fallow the sale and accrue to the new owner.

Cloud on Title

Any condition that effects the clear title of real property or minor defect in the chain of title which needs to be removed.

Business Opportunity

Any type of business that is for lease of sale.

Escrow Instructions

Are written directions, signed by a buyer and seller, detailing the procedures necessary to close a transaction and directing the escrow agent how to proceed.

Capital Assets

Assets of permanent nature used in producing an income (land, building, machinery and equipment).

Capital Gain

At resale of a capital item, the amount by which the net sale proceeds exceed the adjusted cost basis (book value). Used for income tax computations. Gain are called short or long term based upon length of holding period after acquisition. Usually taxed at lower rates than ordinary income.

Amendment

Change to escrow instructions. Any changes must be made by mutual agreement between buyer and seller. The escrow agent does not have the authority to make changes in the contract upon the direction of either the buyer or seller, unless both agree to the changes, in the form of an amendment. A change to an existing contract by mutual agreement of the parties.

Acceleration Clause

Clause in a loan document describing events causing entire loan to come due.

Boot

Extra cash or non like-kind property put into an exchange.

Carryback Financing

Financing by a seller who takes back a note for part of the purchase price.

Common Interest Subdivision

Individuals owning a separate lot or unit, with an interest in the common areas of the entire project. The common areas are usually governed by a homeowner's association.

Compound Interest

Interest paid on original principal and also on the accrued and unpaid interest which has been accumulated as the debt matures.

Escrow Holder

Is a neutral third party who is an agent for buyer and seller.

Escrow Agent

Is an impartial third party who collects all documents and money, through the escrow, and transfers them to the proper parties at the close of escrow.

Seller

Is the owner of record who must deliver the title agreed upon in the contract.

Buyer

Is the party purchasing the property and the one who will receive a deed conveying the title.

Certificate of Eligibility

Issued by Department of Veterans Affairs- evidence of individual's eligibility to obtain VA loan.

Conforming Loans

Loan which conform to Fannie Mae guidelines, which sets loan limits to a certain amount.

Code of Civil Procedure

One of the 25 California codes that contain the statutes passed by the state legislature. It contains most of the procedural requirements for enforcing rights granted by other codes, including the procedures for evictions, foreclosures, and lawsuits.

Co-Borrower

One who is individually and jointly obligated to repay a mortgage loan and shares ownership of the property with one or more borrowers.

Chattel

Personal property.

Closing

Process by which all the parties to a real estate transaction conclude the details of a sale or mortgage. The process includes the signing and transfer of documents and distribution of funds.

Agricultural Property

Property zoned for the use in farming, including the raising of crops and livestock.

Air Rights

Rights in real property to the reasonable use of the air space above the land surface.

Condition

Similar to a covenant, a promise to do or not to do something. The penalty for breaking a condition is return of the property to the grantor Also, Conditions, Covenants, Restrictions- CC&Rs found in Homeowners Associations master deed.

Collateral

Something of value given as security for a debt.

Consideration

Something of value-such as money, a promise, property, or personal services.

Bulk Transfer Law

The Law concerning any transfer in bulk (not a sale in the ordinary course of the seller's business).

Condominium Declaration

The document which establishes a condominium and describes the property rights of the unit owners.

Airspace

The interior space in which and apartment, office or condominiums occupies. Airspace is considered real property to a reasonable hight. For example, an owner or developer of condominiums may sell the airspace as real property.

Beneficiary

The lender under a deed of trust.

Amortization

The liquidation of a financial obligation on an installment basis.

Closing Costs

The miscellaneous expenses buyers and sellers normally inure in the transfer of ownership of real property over and above the cost of the property. A general term to describe the fees that a borrower will pay at closing. Sometimes called settlement fees.

Assessor's Parcel Number (APN)

The official identification number for a specific property. The assessor, who has the responsibility of determining assessed value, to determine property tax. Also referred to as account, folio or UPC number, and appears in legal property descriptions.

Attorney-in-Fact

The person holding power of attorney. A competent and disinterested person who is authorized by another person to act in his or her place in legal matters.

Commission Split

The previously agreed upon division of money between a broker and sales-associate when the brokerage has been paid a commission from a sale made by an associate.

Attachment

The process by which the court holds the property of a defendant pending outcome of a lawsuit.

Annual Percentage Rate

The relationship of the total finance charge to the total amount to be financed as required under the Truth-in-Lending Act.

Bare Legal Title

The title to real property passes to a third party called a trustee who holds the bare legal title, and forecloses in the event of default. Also called naked legal title. The trustee has bare title and the owner has equitable ownership or possession.

Assignment

The transfer of entire leasehold estate to a new person.

Open Escrow

To name an escrow holder, otherwise known as an escrow company, or some other eligible person, such as an attorney, to act as an impartial agent between both buyer and seller.

Alienate

To transfer, convey, or sell property to another. The act of transferring ownership, title, or interest.

Balloon Payment

Under an installment loan, a final payment that is substantially larger than any other payment and repays the debt in full.

Acceptance

Unqualified agreement to the terms of an offer.

Assessed Value

Value placed on property by a public tax assessor as a basis for taxation.

Concurrent Ownership

When property is owned by two or more persons or entities at the same time. Also known as co-ownership.

Attachment Lien

When the court holds the real or personal property of a defendant as security for judgment pending the outcome of a lawsuit. Also known as a writ attachment.

Fall Out of Escrow

Where one of the parties is unable to satisfy the conditions of the purchase and the sale contract.

Abstract of Title

Written summary of all useful documents discovered in a title search.