Buyers Guide

T ERMS YOU S HOU L D KNOW

AMORTIZED LOAN A loan that i s paid of f—both interest and pr incipal—by regular payments that are equal or near ly equal .

AMENDMENT A change—ei ther to al ter, add to, or correct—part of an agreement wi thout changing the pr incipal idea or essence.

APPRAISAL An est imate of value of property resul t ing f rom analys i s of facts about the proper ty; an opinion of value.

ASSUMPTION Taking over another person’s f inancial obl igat ion; taking t i t le to a proper ty wi th the Buyer assuming l iabi l i ty for paying an exi st ing note secured by a deed of trust against the proper ty.

BENEFICIARY The recipient of benef i ts , of ten f rom a deed of trust ; usual ly the lender. CLOSE OF

ESCROW The date the documents are recorded and t i t le passes f rom Sel ler to Buyer. On thi s date, the Buyer becomes the legal owner, and t i t le insurance becomes ef fect ive.

CLOUD ON TITLE A claim, encumbrance, or condi t ion that impai rs the t i t le to real proper ty unt i l removed or el iminated through such means as a qui tclaim deed or a quiet t i t le legal act ion.

COMPARABLE SALES Sales that have s imi lar character i st ics as the subject property, used for analys i s in the apprai sal . Commonly cal led “comps .”

CONVEYANCE An instrument in wr i t ing, such as a deed used to transfer (convey) t i t le to proper ty f rom one person to another.

DEED OF TRUST An instrument used in many states in place of a mortgage. A wr i tten instrument by which t i t le to an interest in land i s transferred by the trustor to a trustee for a loan or other obl igat ion.

DEED RESTRICTIONS Limi tat ions in the deed to a proper ty that dictate certain uses that may or may not be made of the property.

EARNEST MONEY DEPOSIT Down payment made by a purchaser of real estate as evidence of good fai th; a depos i t or part ial payment .

EASEMENT A r ight , pr ivi lege or interest l imi ted to a speci f ic purpose that one par ty has in the land of another.

HAZARD INSURANCE Real estate insurance protect ing against f i re, some natural causes , vandal i sm, etc. , depending upon the pol icy. Buyer of ten adds l iabi l i ty insurance and extended coverage for personal property. IMPOUNDS A trust type of account establ i shed by lenders for the accumulat ion of borrower ’s funds to meet per iodic payments of taxes , mortgage insurance premiums and/or future insurance pol icy premiums , requi red to protect thei r secur i ty. LEGAL DESCRIPTION A descr ipt ion of land recognized by law, based on government surveys , spel l ing out the exact boundar ies of the ent i re piece of land. I t should so thoroughly ident i fy a parcel of land that i t cannot be confused wi th any other.

LIEN A form of encumbrance that usual ly makes a speci f ic proper ty the secur i ty for the payment of a debt or di scharge of an obl igat ion. For example, judgments , taxes , mortgages , deeds of trust .

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Co p y r i g h t 2 0 1 7 S e c u r i t y T i t l e : Co n t e n t c a n n o t b e e d i t e d o r r e p r o d u c e d w i t h o u t w r i tt e n p e r m i s s i o n f r om S e c u r i t y T i t l e . A l l c o n t e n t h e r e i n i s i n f o r ma ti o n a l o n l y a n d n o t i n t e n d e d t o offe r l e g a l o r fi n a n c i a l a d v i c e .