Appraisal Fee - A fee charged by licensed, certified appraiser to render an opinion of market value.

 

Assessed Value - the value set upon property for taxation purposes.

 

Buyer agency - An agency relationship between the broker and the buyer, with fiduciary duties owed to the buyer.

 

Buyer's Market - Market conditions that favors buyers. With more sellers than buyers in the market, buyers have more negotiating power.

 

Buyer representation agreement - A contract which establishes a broker-buyer agency relationship.

 

Closing - The settlement or closing is the conclusion of the real estate transaction. It includes the delivery of your security instrument, signing of your legal documents, and the disbursement of funds necessary to fund your loan.

 

Closing Costs - Costs for services that must be performed before iniatiting your loan. Examples of closing costs include appraisal fees, title fees, survey fees, escrow fees, loan origination fees, and recording fees.

 

Contingency - A condition which must be satisified before a contract is legally binding.

 

Contract of Sale - The agreement between the buyer and seller on the purchase price, terms, and conditions of a sale.

 

Conventional Loan - Loans that are not made under any government housing program and are not subject to government housing program restrictions.

 

Deed - A written instrument that, when executed and delivered, conveys title to or an interest in real estate.

 

Deed of Trust - A instrument used to create a mortgage lien by which the mortgagor (trustor) conveys his or her title to a trustee, who holds it as security for the benefit of the lender.

 

Discount Points - An added loan fee charged by a lender to make the yield on a lower-than-market-value loan competitive with higher interest rate loans.

 

Earnest Money Deposit - An amount of money, deposited by a prospective buyer as evidenence of good faith under the terms of a contract, that is to be forfeited if the buyer defaults but applied to the purchase price if the sale is closed.

 

Easement - A right to use the land of another for a specific purpose, such as for a right-of-way or utilities.

 

Encumbrance - Any lien (such as a mortgage, tax or judgement lien or an easement or a restriction on the use of the land) that may diminish the value of a property: a cloud against clear, free title to property.  

 

FHA Loan - A loan insured by the Federal Housing Administration and made by an approved lender in accordance with FHA regulations.

 

Homeowner's insurance policy - A standardized package insurance policy  that covers a residential real estate owner against financial loss from fire, theft, public liability and other common risks.

 

Homestead - Land that is owned and occupied as the family home.

 

Joint tenancy - Ownership of real estate between two or more parties who have been named in one conveyance as joint tenants. Upon the death of one joint tenant, his or her interest passes to the surviving joint tenant or tenants by the right of survivorship. Not automatically created in Texas.

 

Metes and bounds description - A legal description of a parcel of land that begins at a well marked point and follows the boundaries, using direction and distances around the tract back to the place of beginning.

 

PITI - Principal, interest, taxes and insurance.

 

Prepayment penalty - A charge imposed on a borrower who pays off the loan principal early. This penalty compensates the lender for interest and other charges that otherwise are lost.

 

Principal - The amount  of the note due and payable.

 

Private mortgage insurance (PMI) - Default insurance on conventional loans that insures 20 percent of the loan and not the whole loan.

 

Promulgated contracts - The Texas Real Estate Commission has prepared and authorized various standard contracts that must be used by all licensees when acting as agents in real estate transactions.

 

Realtor - A registered trademark term reserved for the sole use of active members of local Realtor associations affiliated with the National Association of Realtors.

 

Survey - The process by which boundaries are measured and land areas are determined; the on-site measurement of lot lines, dimensions and position of a house on a lot, including the determination of any existing encroachments or easements.

 

Title insurance - A policy insuring the owner or mortgagee against loss by reason of defects in the title to a parcel of real estate, other than encumbrances, defects and matters specifically excluded by the policy.

 

Warranty deed - A deed in which the grantor fully warrants good clear title to the premises.

 

Zero lot line - A term  generally used to describe the positioning of a structure on a lot so that one side rests directly on the lot's boundary line. A zero lot line may be used for garden or patio homes.