Commonly Used Real-Estate Terms
Abstract of Title — A lengthy legal document showing the history of ownership interests in a particular piece of property
Adverse Possession — A legal process by which an ownership interest in real property attaches to a nonowner who meets certain conditions while openly using the property as if he or she owned it for a particular number of years specified by state law
Appraisal — An approximate value assigned to a particular piece of real estate by an appraiser, a specialist in assessing property value
Local or Special Assessment — The assignment by a government body, usually a municipality, of infrastructure development costs to the landowners benefiting from the project, such as one for sidewalks or sewers
Closing — A meeting at which mortgage and property transfer documents are executed by the purchaser and seller of real estate
Condominium — An ownership arrangement where an individual owner buys a unit in a multiunit building and the individual owners share interest in the common areas
Deed — A common legal document serving as the vehicle for ownership transfer from a real-estate owner to the next owner
Easement — The narrow right of a nonowner to use real estate of another for a specific purpose, such as the entitlement to use an access road over a neighbor’s land to reach an isolated parcel
Eminent Domain — The governmental power to purchase real property from private owners for public use
Escrow — In the mortgage context, an account containing the borrower’s money held and administered by the bank or other mortgage holder to pay important expenses related to the subject property, such as property taxes and hazard insurance
Estate — Designates the extent of an ownership interest in real property, such as a life estate, a joint estate or an estate for years
Eviction — A legal action under state law instituted by a landlord to cancel the right of the tenant to remain on the subject property
Fannie Mae and Freddie Mac — Large quasi-public entities that buy and service mortgages on the secondary market
Foreclosure — The act of a bank or other mortgage holder of taking back ownership of the subject property when the borrower has defaulted on the loan
Implied Warranty of Habitability — An implied duty of the landlord in every residential mortgage to keep the property in safe, livable condition and provide basic services like warm water, heat and proper ventilation
Landlord — Property owner who rents his or her real estate to another for residential or commercial purposes; also called a lessor
Lease — Contract between a landlord and tenant detailing the legal terms of the rental arrangement
Mortgage — A loan used to finance the purchase of real property and secured by the borrower’s ownership interest in the subject real estate
Mortgagee — The bank or other lender in a mortgage transaction
Mortgagor — The borrower in a mortgage transaction
Real Estate or Real Property— Land and the buildings and fixtures attached to it
Real-Estate Broker or Agent — A specially trained professional representing buyers or sellers in the negotiation, sale or lease of real estate
Secondary mortgage market — The business investment sector actively involved in buying mortgage loans, often in bundles, from the original lenders
Subprime mortgage — A mortgage with relatively costly terms entered into with a risky borrower
Tenant — A residential or commercial party renting a building or land
Title — A person’s right of ownership in a piece of real property
Title Insurance — Insurance guarantying protection of the legal and financial interest of a real-estate buyer or mortgage lender should a defect in the property title arise
Title Search — The act of reviewing historical ownership records pertaining to a particular real-estate parcel to determine the existence of any outstanding liens or other encumbrances that could prevent a buyer from taking clear title
Zoning — A system of real estate classification by district used by governmental bodies, usually municipalities or counties, to control development and use of property
