Resources for Home Buyers / terms to know

AMENDMENTS

A minor change or addition to an agreement which does not change the document’s principal idea or essence. 

APPRAISAL

An estimate of value of property resulting from analysis of facts about the property; and opinion of value. 

ASSUMPTION

Taking over another person’s financial obligation; taking title to a parcel of real property with the Buyer assuming liability for paying an existing note secured by a dead of trust against the real property.

BENEFICIARY

The recipient of benefits, often from a deed of trust usually the lender. 

CLOSE OF ESCROW

Generally the date the documents are recorded and title passes from Seller to Buyer. On this date, the Buyer becomes the legal owner, and title insurance becomes effective.

COMPARABLE SALES

Sales that have similar characteristics as the subject real property, used for analysis in the appraisal. Commonly called “comps.” 

DEED OF TRUST

An instrument used in many states in place of a mortgage. 

DEED RESTRICTIONS

Limitations in the deed to a parcel of real property that dictate certain uses that may or may not be made part of real property. 

EARNEST MONEY DEPOSIT

Down payment made by a purchaser of real property as evidence of good faith; a deposit or partial payment. 

EASEMENT

A right, privilege or interest limited to a specific purpose that one party has in the land of another. 

HAZARD INSURANCE

Real estate insurance protecting against fire, some natural causes, vandalism, etc., depending upon the policy. Buyer often adds liability insurance and extended coverage for personal property.

IMPOUNDS

A trust type account established by lenders for the accumulation of borrower’s funds to meet periodic payments of taxes, mortgage insurance premiums and/or future insurance policy premiums, required to protect their security. 

LEGAL DESCRIPTION

A description of land recognized by law, based on government surveys, spelling out the exact boundaries of the entire parcel of land. It should so thoroughly be identified a parcel of land that it cannot be confused with any other. 

LIEN

A form of encumbrance that usually makes a specific parcel of real property the security for the payment of a debt or discharge of an obligation; for example, judgements, taxes, mortgages, deeds of trust.

PITI

A payment that combines Principal, Interest, Taxes, and Insurance. 

POWER OF ATTORNEY

A written instrument whereby a principal gives authority to an agent. The agent acting under such a grant is called an “Attorney-in-Fact.” 

PURCHASE AGREEMENT

The purchase contract between Buyer and Seller. It is usually completed by a real estate agent and is signed by the Buyer and Seller. 

QUITCLAIM DEED

A deed operating as a release, intending to pass any title, interest, or claim which the grantor may have in the property, but not containing any warranty of a valid interest or title by the grantor. 

RECORDING

Filing documents affecting real property with the County Recorder as a matter of public record.