General Real Estate Definitions

Agency: A legal relationship in which someone (principal) hires someone else (agent) to represent them to a third party.

Assessed Value: Value placed on property as a basis for taxation.

Balloon Payment: An instance in which the final installment payment on a note is greater than the preceeding payments, and pays the note in full.

Chain of Title: A history of conveyances and encumbrances affecting the title (ownership) of real property.

Conventional Mortgage: A mortgage securing a loan made by investors without government underwriting -- that is, not FHA insured or VA guaranteed.

Convey or Conveyance: Process of transferring ownership of property from one person to another.

Deed: A document which, when properly executed and delivered, conveys (transfers) title (ownership) of real property.

Disclosure: To make known or public. When dealing with real property, all disclosures should be made in writing.

Dual Agency: If a broker represents both owner and buyer.

Earnest Money: Money deposited by a buyer to indicate and evidence good faith.

Encumbrance: Anything that affects or limits the ownership of real property, such as mortgages, liens, easements, or restrictions of any kind.

Escrow: The deposit of documents and funds with instructions to a neutral third party to carry out the provisions of an agreement or contract.

Exclusive Right To Sell Listing: A written agreement between owner and agent giving agent the right to sell a property and collect a fee for a set term.

Fair Market Value: The price at which a willing seller would sell and a willing buyer would buy, neither being under abnormal pressure.

Mortgage: A legal document that provides security for repayment of a promissory note.

Principal: The employer of an agency in an agency relationship.

Time Is Of The Essence: Demands punctual performance in a binding contract.

Title: See Seller's Statement definitions.

Title Policy: See Seller's Statement definitions.

Zoning: Act of city or county authorities specifying type of use for which property may be used.