Real Estate Terms

This is a complete real estate dictionary and glossary of realty words you'll use when you list and sell your Eastside, Bellevue or Redmond property in Washington, including legal terms definitions, and more:

Acceleration Clause - A clause in a note, trust deed or mortgage advancing the date of maturity of the debt upon the happening of a certain event, such as a sale or transfer of title to property.

Adjustable Rate Mortgage (ARM) - A mortgage with an interest rate that is periodically adjusted up or down, depending on a specific index. Agency - A relationship between two or more persons whereby one is authorized to act for another.

Amortization - Payment of principal and interest at stated periods for a stated time until debt is paid off.

Annual Percentage Rate (APR) - The finance charges for a loan, including points and other loan fees, that are in addition to interest on the loan.

Appurtenance - Anything incidental to or belonging to the land and considered a part of the real property.

Assessed Value - The value of the property for taxation purposes. Assumption of a Mortgage (or Deed of Trust) - An agreement in which the buyer accepts liability for payment of a sellers existing promissory note secured by a mortgage or deed of trust.

Balloon Payment - A final installment payment larger than preceding installment payments on a promissory note.

Beneficiary - One for whose benefit a trust is created, such as a lender whose loan is secured by a deed of trust.

Beneficiary's Demand - The payment required by a beneficiary under a deed of trust before authorizing a reconveyance, the removal of the lien on title to property created by a deed of trust.

Beneficiary Statement - The statement of a beneficiary under a deed of trust stating the principal balance due on a promissory note and other information concerning the loan.

Binder - A memorandum of agreement to issue insurance giving temporary coverage until a formal policy is issued.

Chain of Title - A chronological list of documents comprising the record history of title to a specific parcel of real property.

Commitment - A pledge, promise or firm agreement, such as a title insurance contractual obligation to insure title to real property.

Contract of Sale - An agreement entered into for the sale and purchase of real property.

Convey - To transfer title to property from one to another.

Dedication - The donation of land for public use by its owner.

Deed - A written document transferring ownership of land from one to another.

Deed of Trust - A three-party security document conveying title to land, secured by the performance of an obligation, such as the repaying of a loan. It is also called a trust deed.

Default - Omission or failure to fulfill a duty or promise, discharge an obligation or perform an agreement.

Documentary Transfer Tax - A tax on recorded transfers of title to real property.

Down Payment - The amount or percentage of the purchase price paid by the buyer in cash, not borrowed from the lender.

Due on Sale Clause - A clause in a promissory note or deed of trust calling for automatic maturity and payoff of the loan in the event of a sale or transfer of title to real property.

Earnest Money - Something given as part of the purchase price to bind a bargain, such as a deposit.

Easement - A limited right or interest in the land of another entitling the easement holder to some use, privilege or benefit.

Encroachment - The extension of an improvement onto the land of another.

Equity - The value of the property actually owned by the property owner, often calculated by adding together the purchase price, appreciation and value of improvements and then subtracting the amount of all mortgages and liens on the property.

Escrow - A transaction in which an impartial third party acts as an agent for both the seller and buyer, or both the borrower and lender, in carrying out instructions, delivering papers and documents and disbursing funds.

Fee Simple - Absolute ownership of real property.

Fixture - Personal property that is considered a part of the real property because it has been affixed in a manner that to remove it would cause damage to the property.

Foreclosure Sale - The sale of real property given to secure performance of an obligation after the obligation has been breached.

Grant Deed - A written instrument transferring title to real property.

Grantee - The person/entity acquiring title to real property by a deed.

Grantor - The person/entity transferring title to real property by a deed. Interest - The cost of borrowing money, usually expressed as a percentage over time. Lien - A charge on real property in order to secure payment or satisfaction of a debt or other obligation.

Legal Description - A description of real property sufficient to locate it on the ground by reference to surveys or approved recorded maps.

Lis Pendens - A recorded notice of the pendency of a lawsuit. Multiple Listing Service (MLS) - A service providing member real estate licensees with information about properties listed for sale or lease.

Notice of Default - A recorded notice of a borrowers failure to perform the obligations in a deed of trust.

Ordinance - A legislative enactment of a city or country.

Party Wall - A wall located on a boundary line of real property and used by the owners of the property on each side.

PITI - The amount of principal, interest, taxes and insurance which are the basis for monthly mortgage payment.

Point - One percent of the loan principal, charged in part or in multiples to obtain a loan, in addition to interest and other fees.

Pre-payment clause - A charge imposed by a lender for payment of a debt before its due date. Principal - A party to a contract; also, the amount of money borrowed upon which interest is charge.

Promissory Note - A written promise, signed by the borrower, to repay a loan.

Prorate - To divide or assess proportionally.

Public Report - A report issued Department of Real Estate containing a wide variety of information of interest to a prospective buyer of sub-divided property.

Real Property - Immovable property such as land and improvements on it, such as buildings. Reconveyance - A document, executed when obligations in a deed of trust has been met, that removes the lien on a title to property created y a deed of trust.

Recording - The act of filing documents in the office of the County Recorder.

Request for Reconveyance - A written instruction by a beneficiary under a deed of trust acknowledging that the obligations in the deed of trust have been met, and directing that the lien on title to property created by the deed of trust must be removed.

Recision - The act of canceling the effect of a document. Rider - A supplement, addition, or endorsement to a document.

Statute of Frauds - A law requiring certain agreements to be in writing in order to be enforceable, including an agreement for the sale of real property.

Straight note - A promissory note calling for payment of principal in one sum rather than in installments.

Subdivision - The division of a tract of land into separate parcels.

Title - A document indicating ownership of a specific parcel of property.

Title Insurance or Title Policy - A contract indemnifying the policy holder against loss resulting from a defect in the title to the insured interest in real property.

Title Search - The steps required to complete the chain of title to a parcel of real property.

Trustee - The fiduciary designated to hold title to real property for the benefit of another.

Usury - The exaction of a greater payment or return for a loan of money than is permitted by law.