Open House Calendar


Click on Yellow Dates
To View Open House Events
on those days

Some Terms Relating To Selling and Buying Homes

A

Abstract of Title:
documents recording the ownership of property throughout time.

Acceptance:
the written approval of the buyer's offer by the seller.

Affidavit:
a signed, sworn statement made by the buyer or seller regarding the truth of information provided.

Amenity:
a feature of the home or property that serves as a benefit to the buyer but that is not necessary to its use; may be natural (like location, woods, water) or man-made (like a swimming pool or garden).

American Society of Home Inspectors:
the American Society of Home Inspectors is a professional association of independent home inspectors. Phone: (800) 743-2744

Annual Percentage Rate (APR):
a measure of the cost of credit, expressed as a yearly rate. It includes interest as well as other charges. Because all lenders, by federal law, follow the same rules to ensure the accuracy of the annual percentage rate, it provides consumers with a good basis for comparing the cost of loans, including mortgage plans. APR is a higher rate than the simple interest of the mortgage.

Application:
the first step in the official loan approval process; this form is used to record important information about the potential borrower necessary to the underwriting process.

Application Fee:
a fee charged by lenders to process a loan application.

Appraisal:
a document from a professional that gives an estimate of a property's fair market value based on the sales of comparable homes in the area and the features of a property; an appraisal is generally required by a lender before loan approval to ensure that the mortgage loan amount is not more than the value of the property.

Appraisal Fee:
fee charged by an appraiser to estimate the market value of a property.

Appraised Value:
an estimation of the current market value of a property.

Appraiser:
a qualified individual who uses his or her experience and knowledge to prepare the appraisal estimate.

Appreciation:
an increase in property value.

Arbitration:
a legal method of resolving a dispute without going to court.

As-is Condition:
the purchase or sale of a property in its existing condition without repairs.

Asking Price:
a seller's stated price for a property.

Assessed Value:
the value that a public official has placed on any asset (used to determine taxes).

Assessments:
the method of placing value on an asset for taxation purposes.

Assessor:
a government official who is responsible for determining the value of a property for the purpose of taxation.

Assets:
any item with measurable value.

Average Price:
determining the cost of a home by totaling the cost of all houses sold in one area and dividing by the number of homes sold.

Back End Ratio (debt ratio):
a ratio that compares the total of all monthly debt payments (mortgage, real estate taxes and insurance, car loans, and other consumer loans) to gross monthly income.

Back to Back Escrow:
arrangements that an owner makes to oversee the sale of one property and the purchase of another at the same time.

Broker:
a licensed individual or firm that charges a fee to serve as the mediator between the buyer and seller. Mortgage brokers are individuals in the business of arranging funding or negotiating contracts for a client, but who does not loan the money. A real estate broker is someone who helps find a house.

Building Code:
based on agreed upon safety standards within a specific area, a building code is a regulation that determines the design, construction, and materials used in building.

Budget:
a detailed record of all income earned and spent during a specific period of time.

Cap:
a limit, such as one placed on an adjustable rate mortgage, on how much a monthly payment or interest rate can increase or decrease, either at each adjustment period or during the life of the mortgage. Payment caps do not limit the amount of interest the lender is earning, so they may cause negative amortization.

Capital Gain:
the profit received based on the difference of the original purchase price and the total sale price.

Capital Improvements:
property improvements that either will enhance the property value or will increase the useful life of the property.

Cash Reserves:
a cash amount sometimes required of the buyer to be held in reserve in addition to the down payment and closing costs; the amount is determined by the lender.

Casualty Protection:
property insurance that covers any damage to the home and personal property either inside or outside the home.

Certificate of Title:
a document provided by a qualified source, such as a title company, that shows the property legally belongs to the current owner; before the title is transferred at closing, it should be clear and free of all liens or other claims.

Clear Title:
a property title that has no defects. Properties with clear titles are marketable for sale.

Closing:
the final step in property purchase where the title is transferred from the seller to the buyer. Closing occurs at a meeting between the buyer, seller, settlement agent, and other agents. At the closing the seller receives payment for the property. Also known as settlement.

Cloud On The Title:
any condition which affects the clear title to real property.

Collection Account:
an unpaid debt referred to a collection agency to collect on the bad debt. This type of account is reported to the credit bureau and will show on the borrower's credit report.

Commission:
an amount, usually a percentage of the property sales price that is collected by a real estate professional as a fee for negotiating the transaction. Traditionally the home seller pays the commission. The amount of commission is determined by the real estate professional and the seller and can be as much as 6% of the sales price.

Comparative Market Analysis (COMPS):
a property evaluation that determines property value by comparing similar properties sold within the last year.

Compensating Factors:
factors that show the ability to repay a loan based on less traditional criteria, such as employment, rent, and utility payment history.

Condominium:
a form of ownership in which individuals purchase and own a unit of housing in a multi-unit complex. The owner also shares financial responsibility for common areas.

Consideration:
an item of value given in exchange for a promise or act.

Contingency:
a clause in a purchase contract outlining conditions that must be fulfilled before the contract is executed. Both, buyer or seller may include contingencies in a contract, but both parties must accept the contingency.

Conventional Loan:
a private sector loan, one that is not guaranteed or insured by the U.S. government.

Cooperative (Co-op):
residents purchase stock in a cooperative corporation that owns a structure; each stockholder is then entitled to live in a specific unit of the structure and is responsible for paying a portion of the loan.

Counter Offer:
a rejection to all or part of a purchase offer that negotiates different terms to reach an acceptable sales contract.

Covenants:
legally enforceable terms that govern the use of property. These terms are transferred with the property deed. Discriminatory covenants are illegal and unenforceable. Also known as a condition, restriction, deed restriction or restrictive covenant.

Credit:
an agreement that a person will borrow money and repay it to the lender over time.

Credit Bureau:
an agency that provides financial information and payment history to lenders about potential borrowers. Also known as a National Credit Repository.

Credit Grantor:
the lender that provides a loan or credit.

Credit History:
a record of an individual that lists all debts and the payment history for each. The report that is generated from the history is called a credit report. Lenders use this information to gauge a potential borrower's ability to repay a loan.

Credit Loss Ratio:
the ratio of credit-related losses to the dollar amount of MBS outstanding and total mortgages owned by the corporation.

Credit Related Expenses:
foreclosed property expenses plus the provision for losses.

Credit Related Losses:
foreclosed property expenses combined with charge-offs.

Credit Repair Companies:
Private, for-profit businesses that claim to offer consumers credit and debt repayment difficulties assistance with their credit problems and a bad credit report.

Credit Report:
a report generated by the credit bureau that contains the borrower's credit history for the past seven years. Lenders use this information to determine if a loan will be granted.

Credit Risk:
a term used to describe the possibility of default on a loan by a borrower.

Credit Score:
a score calculated by using a person's credit report to determine the likelihood of a loan being repaid on time. Scores range from about 360 - 840: a lower score meaning a person is a higher risk, while a higher score means that there is less risk.

Creditor:
the lending institution providing a loan or credit.

Creditworthiness:
the way a lender measures the ability of a person to qualify and repay a loan.

Debtor:
The person or entity that borrows money. The term debtor may be used interchangeably with the term borrower.

Debt-to-Income Ratio:
a comparison or ratio of gross income to housing and non-housing expenses; With the FHA, the-monthly mortgage payment should be no more than 29% of monthly gross income (before taxes) and the mortgage payment combined with non-housing debts should not exceed 41% of income.

Debt Security:
a security that represents a loan from an investor to an issuer. The issuer in turn agrees to pay interest in addition to the principal amount borrowed.

Deductible:
the amount of cash payment that is made by the insured (the homeowner) to cover a portion of a damage or loss. Sometimes also called "out-of-pocket expenses." For example, out of a total damage claim of $1,000, the homeowner might pay a $250 deductible toward the loss, while the insurance company pays $750 toward the loss. Typically, the higher the deductible, the lower the cost of the policy.

Deed:
a document that legally transfers ownership of property from one person to another. The deed is recorded on public record with the property description and the owner's signature. Also known as the title.

Deed-in-Lieu:
to avoid foreclosure ("in lieu" of foreclosure), a deed is given to the lender to fulfill the obligation to repay the debt; this process does not allow the borrower to remain in the house but helps avoid the costs, time, and effort associated with foreclosure.

Default:
the inability to make timely monthly mortgage payments or otherwise comply with mortgage terms. A loan is considered in default when payment has not been paid after 60 to 90 days. Once in default the lender can exercise legal rights defined in the contract to begin foreclosure proceedings

Deposit (Earnest Money):
money put down by a potential buyer to show that they are serious about purchasing the home; it becomes part of the down payment if the offer is accepted, is returned if the offer is rejected, or is forfeited if the buyer pulls out of the deal. During the contingency period the money may be returned to the buyer if the contingencies are not met to the buyer's satisfaction.

Disclosures:
the release of relevant information about a property that may influence the final sale, especially if it represents defects or problems. "Full disclosure" usually refers to the responsibility of the seller to voluntarily provide all known information about the property. Some disclosures may be required by law, such as the federal requirement to warn of potential lead-based paint hazards in pre-1978 housing. A seller found to have knowingly lied about a defect may face legal penalties.

Discount Point:
normally paid at closing and generally calculated to be equivalent to 1% of the total loan amount, discount points are paid to reduce the interest rate on a loan. In an ARM with an initial rate discount, the lender gives up a number of percentage points in interest to give you a lower rate and lower payments for part of the mortgage term (usually for one year or less). After the discount period, the ARM rate will probably go up depending on the index rate.

Down Payment:
the portion of a home's purchase price that is paid in cash and is not part of the mortgage loan. This amount varies based on the loan type, but is determined by taking the difference of the sale price and the actual mortgage loan amount. Mortgage insurance is required when a down payment less than 20 percent is made.

Document Recording:
after closing on a loan, certain documents are filed and made public record. Discharges for the prior mortgage holder are filed first. Then the deed is filed with the new owner's and mortgage company's names.

Earnest Money (Deposit):
money put down by a potential buyer to show that they are serious about purchasing the home; it becomes part of the down payment if the offer is accepted, is returned if the offer is rejected, or is forfeited if the buyer pulls out of the deal. During the contingency period the money may be returned to the buyer if the contingencies are not met to the buyer's satisfaction.

Easements:
the legal rights that give someone other than the owner access to use property for a specific purpose. Easements may affect property values and are sometimes a part of the deed.

Eminent Domain:
when a government takes private property for public use. The owner receives payment for its fair market value. The property can then proceed to condemnation proceedings.

Encroachments:
a structure that extends over the legal property line on to another individual's property. The property surveyor will note any encroachment on the lot survey done before property transfer. The person who owns the structure will be asked to remove it to prevent future problems.

Encumbrance:
anything that affects title to a property, such as loans, leases, easements, or restrictions.

Equity:
an owner's financial interest in a property; calculated by subtracting the amount still owed on the mortgage loon(s)from the fair market value of the property.

Escrow:
funds held in an account to be used by the lender to pay for home insurance and property taxes. The funds may also be held by a third party until contractual conditions are met and then paid out.

Escrow Account:
a separate account into which the lender puts a portion of each monthly mortgage payment; an escrow account provides the funds needed for such expenses as property taxes, homeowners insurance, mortgage insurance, etc.

Estate:
the ownership interest of a person in real property. The sum total of all property, real and personal, owned by a person.

Exclusive Listing:
a written contract giving a real estate agent the exclusive right to sell a property for a specific timeframe.

FSBO (For Sale by Owner):
a home that is offered for sale by the owner without the benefit of a real estate professional.

Fair Housing Act:
a law that prohibits discrimination in all facets of the home buying process on the basis of race, color, national origin, religion, sex, familial status, or disability.

Fair Market Value:

the hypothetical price that a willing buyer and seller will agree upon when they are acting freely, carefully, and with complete knowledge of the situation.

Familial Status:
HUD uses this term to describe a single person, a pregnant woman or a household with children under 18 living with parents or legal custodians who might experience housing discrimination.

Fixed Expenses:
payments that do not vary from month to month.

Fixture:
personal property permanently attached to real estate or real property that becomes a part of the real estate.

Flood Insurance:
insurance that protects homeowners against losses from a flood; if a home is located in a flood plain, the lender will require flood insurance before approving a loan.

Foreclosure:
a legal process in which mortgaged property is sold to pay the loan of the defaulting borrower. Foreclosure laws are based on the statutes of each state.

GSE:
abbreviation for government sponsored enterprises: a collection of financial services corporations formed by the United States Congress to reduce interest rates for farmers and homeowners. Examples include Fannie Mae and Freddie Mac.

Good Faith Estimate:
an estimate of all closing fees including pre-paid and escrow items as well as lender charges; must be given to the borrower within three days after submission of a loan application.

Grantee:
an individual to whom an interest in real property is conveyed.

Grantor:
an individual conveying an interest in real property.

Gross Income:
money earned before taxes and other deductions. Sometimes it may include income from self-employment, rental property, alimony, child support, public assistance payments, and retirement benefits.

Guaranty Fee:
payment to FannieMae from a lender for the assurance of timely principal and interest payments to MBS (Mortgage Backed Security) security holders.

Hazard Insurance:
protection against a specific loss, such as fire, wind etc., over a period of time that is secured by the payment of a regularly scheduled premium.

HELP:
Homebuyer Education Learning Program; an educational program from the FHA that counsels people about the home buying process; HELP covers topics like budgeting, finding a home, getting a loan, and home maintenance; in most cases, completion of the program may entitle the homebuyer to a reduced initial FHA mortgage insurance premium-from 2.25% to 1.75% of the home purchase price.

Home Warranty:
offers protection for mechanical systems and attached appliances against unexpected repairs not covered by homeowner's insurance; coverage extends over a specific time period and does not cover the home's structure.

Homeowner's Insurance:
an insurance policy, also called hazard insurance, that combines protection against damage to a dwelling and its contents including fire, storms or other damages with protection against claims of negligence or inappropriate action that result in someone's injury or property damage. Most lenders require homeowners insurance and may escrow the cost. Flood insurance is generally not included in standard policies and must be purchased separately.

Homeownership Education Classes:
classes that stress the need to develop a strong credit history and offer information about how to get a mortgage approved, qualify for a loan, choose an affordable home, go through financing and closing processes, and avoid mortgage problems that cause people to lose their homes.

Homestead Credit:
property tax credit program, offered by some state governments, that provides reductions in property taxes to eligible households.

Housing Counseling Agency:
provides counseling and assistance to individuals on a variety of issues, including loan default, fair housing, and home buying.

HUD:
the U.S. Department of Housing and Urban Development; established in 1965, HUD works to create a decent home and suitable living environment for all Americans; it does this by addressing housing needs, improving and developing American communities, and enforcing fair housing laws.

HUD1 Statement:
also known as the "settlement sheet," or "closing statement" it itemizes all closing costs; must be given to the borrower at or before closing. Items that appear on the statement include real estate commissions, loan fees, points, and escrow amounts.

HVAC:
Heating, Ventilation and Air Conditioning; a home's heating and cooling system.

Indemnification:
to secure against any loss or damage, compensate or give security for reimbursement for loss or damage incurred. A homeowner should negotiate for inclusion of an indemnification provision in a contract with a general contractor or for a separate indemnity agreement protecting the homeowner from harm, loss or damage caused by actions or omissions of the general (and all sub) contractor.

Inquiry:
a credit report request. Each time a credit application is completed or more credit is requested counts as an inquiry. A large number of inquiries on a credit report can sometimes make a credit score lower.

Insurance:
protection against a specific loss, such as fire, wind etc., over a period of time that is secured by the payment of a regularly scheduled premium.

Joint Tenancy (with Rights of Survivorship):
two or more owners share equal ownership and rights to the property. If a joint owner dies, his or her share of the property passes to the other owners, without probate. In joint tenancy, ownership of the property cannot be willed to someone who is not a joint owner.

Judgment:
a legal decision; when requiring debt repayment, a judgment may include a property lien that secures the creditor's claim by providing a collateral source.

K

Lease:
a written agreement between a property owner and a tenant (resident) that stipulates the payment and conditions under which the tenant may occupy a home or apartment and states a specified period of time.

Lease Purchase (Lease Option):
assists low to moderate income homebuyers in purchasing a home by allowing them to lease a home with an option to buy; the rent payment is made up of the monthly rental payment plus an additional amount that is credited to an account for use as a down payment.

Liabilities:
a person's financial obligations such as long-term / short-term debt, and other financial obligations to be paid.

Liability Insurance:
insurance coverage that protects against claims alleging a property owner's negligence or action resulted in bodily injury or damage to another person. It is normally included in homeowner's insurance policies.

Lien:
a legal claim against property that must be satisfied when the property is sold. A claim of money against a property, wherein the value of the property is used as security in repayment of a debt. Examples include a mechanic's lien, which might be for the unpaid cost of building supplies, or a tax lien for unpaid property taxes. A lien is a defect on the title and needs to be settled before transfer of ownership. A lien release is a written report of the settlement of a lien and is recorded in the public record as evidence of payment.

Lien Waiver:
A document that releases a consumer (homeowner) from any further obligation for payment of a debt once it has been paid in full. Lien waivers typically are used by homeowners who hire a contractor to provide work and materials to prevent any subcontractors or suppliers of materials from filing a lien against the homeowner for nonpayment.

Liquid Asset:
a cash asset or an asset that is easily converted into cash.

Listing Agreement:
a contract between a seller and a real estate professional to market and sell a home. A listing agreement obligates the real estate professional (or his or her agent) to seek qualified buyers, report all purchase offers and help negotiate the highest possible price and most favorable terms for the property seller.

Loss Mitigation:
a process to avoid foreclosure; the lender tries to help a borrower who has been unable to make loan payments and is in danger of defaulting on his or her loan

Mandatory Delivery Commitment:
an agreement that a lender will deliver loans or securities by a certain date at agreed-upon terms.

Market Value:
the amount a willing buyer would pay a willing seller for a home. An appraised value is an estimate of the current fair market value.

Median Price:
the price of the house that falls in the middle of the total number of homes for sale in that area.

Mortgage:
a lien on the property that secures the Promise to repay a loan. A security agreement between the lender and the buyer in which the property is collateral for the loan. The mortgage gives the lender the right to collect payment on the loan and to foreclose if the loan obligations are not met.

Multiple Listing Service (MLS):
within the Metro Columbus area, Realtors submit listings and agree to attempt to sell all properties in the MLS. The MLS is a service of the local Columbus Board of Realtors?. The local MLS has a protocol for updating listings and sharing commissions. The MLS offers the advantage of more timely information, availability, and access to houses and other types of property on the market.

Net Income:
Your take-home pay, the amount of money that you receive in your paycheck after taxes and deductions.

No Cash Out Refinance:
a refinance of an existing loan only for the amount remaining on the mortgage. The borrower does not get any cash against the equity of the home. Also called a "rate and term refinance."

Nonperforming Asset:
an asset such as a mortgage that is not currently accruing interest or which interest is not being paid.

Notary Public:
a person who serves as a public official and certifies the authenticity of required signatures on a document by signing and stamping the document.

O

Offer:
indication by a potential buyer of a willingness to purchase a home at a specific price; generally put forth in writing.

Ownership:
ownership is documented by the deed to a property. The type or form of ownership is important if there is a change in the status of the owners or if the property changes ownership.

Owner's Policy:
the insurance policy that protects the buyer from title defects.

Partial Claim:
a loss mitigation option offered by the FHA that allows a borrower, with help from a lender, to get an interest-free loan from HUD to bring their mortgage payments up to date.

Perils:
for homeowner's insurance, an event that can damage the property. Homeowner's insurance may cover the property for a wide variety of perils caused by accidents, nature, or people.

Personal Property:
any property that is not real property or attached to real property. For example furniture is not attached however a new light fixture would be considered attached and part of the real property.

Planned Unit Development (PUD):
a development that is planned, and constructed as one entity. Generally, there are common features in the homes or lots governed by covenants attached to the deed. Most planned developments have common land and facilities owned and managed by the owner's or neighborhood association. Homeowners usually are required to participate in the association via a payment of annual dues.

Power of Attorney:
a legal document that authorizes another person to act on your behalf. A power of attorney can grant complete authority or can be limited to certain acts or certain periods of time or both.

Pre-Approval:
a lender commits to lend to a potential borrower a fixed loan amount based on a completed loan application, credit reports, debt, savings and has been reviewed by an underwriter. The commitment remains as long as the borrower still meets the qualification requirements at the time of purchase. This does not guaranty a loan until the property has passed inspections underwriting guidelines.

Pre-Qualify:
a lender informally determines the maximum amount an individual is eligible to borrow. This is not a guaranty of a loan.

Premium:
an amount paid on a regular schedule by a policyholder that maintains insurance coverage.

Price Range:
the high and low amount a buyer is willing to pay for a home.

Property (Fixture and Non-Fixture):
in a real estate contract, the property is the land within the legally described boundaries and all permanent structures and fixtures. Ownership of the property confers the legal right to use the property as allowed within the law and within the restrictions of zoning or easements. Fixture property refers to those items permanently attached to the structure, such as carpeting or a ceiling fan, which transfers with the property.

Public Record Information:
Court records of events that are a matter of public interest such as credit, bankruptcy, foreclosure and tax liens. The presence of public record information on a credit report is regarded negatively by creditors.

Punch List:
a list of items that have not been completed at the time of the final walk through of a newly constructed home.

Purchase Offer:
A detailed, written document that makes an offer to purchase a property, and that may be amended several times in the process of negotiations. When signed by all parties involved in the sale, the purchase offer becomes a legally binding contract, sometimes called the Sales Contract.

Q

Deed:
a deed transferring ownership of a property but does not make any guarantee of clear title.

RESPA:
Real Estate Settlement Procedures Act; a law protecting consumers from abuses during the residential real estate purchase and loan process by requiring lenders to disclose all settlement costs, practices, and relationships

Real Estate Agent:
an individual who is licensed to negotiate and arrange real estate sales; works for a real estate broker.

Real Estate Mortgage Investment Conduit (REMIC):
a security representing an interest in a trust having multiple classes of securities. The securities of each class entitle investors to cash payments structured differently from the payments on the underlying mortgages.

Real Estate Settlement Procedures Act (RESPA):
a law protecting consumers from abuses during the residential real estate purchase and loan process by requiring lenders to disclose all settlement costs, practices, and relationships

Real Property:
land, including all the natural resources and permanent buildings on it.

Recording:
the recording in a registrar's office of an executed legal document. These include deeds, mortgages, satisfaction of a mortgage, or an extension of a mortgage making it a part of the public record.

Recording Fees:
charges for recording a deed with the appropriate government agency.

Right of First Refusal:
a provision in an agreement that requires the owner of a property to give one party an opportunity to purchase or lease a property before it is offered for sale or lease to others.

Risk Based Capital:
an amount of capital needed to offset losses during a ten-year period with adverse circumstances.

Risk Based Pricing:
Fee structure used by creditors based on risks of granting credit to a borrower with a poor credit history.

Sale Leaseback:
when a seller deeds property to a buyer for a payment, and the buyer simultaneously leases the property back to the seller.

Security:
the property that will be pledged as collateral for a loan.

Seller Take Back:
an agreement where the owner of a property provides second mortgage financing. These are often combined with an assumed mortgage instead of a portion of the seller's equity.

Setback:
the distance between a property line and the area where building can take place. Setbacks are used to assure space between buildings and from roads for a many of purposes including drainage and utilities.

Settlement:
another name for closing.

Settlement Statement:
a document required by the Real Estate Settlement Procedures Act (RESPA). It is an itemized statement of services and charges relating to the closing of a property transfer. The buyer has the right to examine the settlement statement 1 day before the closing. This is called the HUD 1 Settlement Statement.

Sub-Prime Loan:
"B" Loan or "B" paper with FICO scores from 620 - 659. "C" Loan or "C" Paper with FICO scores typically from 580 to 619. An industry term to used to describe loans with less stringent lending and underwriting terms and conditions. Due to the higher risk, sub-prime loans charge higher interest rates and fees.

Subordinate:
to place in a rank of lesser importance or to make one claim secondary to another.

Survey:
a property diagram that indicates legal boundaries, easements, encroachments, rights of way, improvement locations, etc. Surveys are conducted by licensed surveyors and are normally required by the lender in order to confirm that the property boundaries and features such as buildings, and easements are correctly described in the legal description of the property.

Third Party Origination:
a process by which a lender uses another party to completely or partially originate, process, underwrite, close, fund, or package the mortgages it plans to deliver to the secondary mortgage market.

Terms:
The period of time and the interest rate agreed upon by the lender and the borrower to repay a loan.

Title:
a legal document establishing the right of ownership and is recorded to make it part of the public record. Also known as a Deed.

Title 1:
an FHA-insured loan that allows a borrower to make non-luxury improvements (like renovations or repairs) to their home; Title I loans less than $7,500 don't require a property lien.

Title Company:
a company that specializes in examining and insuring titles to real estate.

Title Defect:
an outstanding claim on a property that limits the ability to sell the property. Also referred to as a cloud on the title.

Title Insurance:
insurance that protects the lender against any claims that arise from arguments about ownership of the property; also available for homebuyers. An insurance policy guaranteeing the accuracy of a title search protecting against errors. Most lenders require the buyer to purchase title insurance protecting the lender against loss in the event of a title defect. This charge is included in the closing costs. A policy that protects the buyer from title defects is known as an owner's policy and requires an additional charge.

Title Search:
a check of public records to be sure that the seller is the recognized owner of the real estate and that there are no unsettled liens or other claims against the property.

Transfer Agent:
a bank or trust company charged with keeping a record of a company's stockholders and canceling and issuing certificates as shares are bought and sold.

Transfer of Ownership:
any means by which ownership of a property changes hands. These include purchase of a property, assumption of mortgage debt, exchange of possession of a property via a land sales contract or any other land trust device.

Transfer Taxes:
State and local taxes charged for the transfer of real estate. Usually equal to a percentage of the sales price.

Truth-in-Lending:
a federal law obligating a lender to give full written disclosure of all fees, terms, and conditions associated with the loan initial period and then adjusts to another rate that lasts for the term of the loan.

Trustee:
a person who holds or controls property for the benefit of another.

Underwriting:
the process of analyzing a loan application to determine the amount of risk involved in making the loan; it includes a review of the potential borrower's credit history and a judgment of the property value.

Up Front Charges:
the fees charged to homeowners by the lender at the time of closing a mortgage loan. This includes points, broker's fees, insurance, and other charges.

Variance:
a special exemption of a zoning law to allow the property to be used in a manner different from an existing law.

Walk Through:
the final inspection of a property being sold by the buyer to confirm that any contingencies specified in the purchase agreement such as repairs have been completed, fixture and non-fixture property is in place and confirm the electrical, mechanical, and plumbing systems are in working order.

Warranty Deed:
a legal document that includes the guarantee the seller is the true owner of the property, has the right to sell the property and there are no claims against the property.

Zoning:
local laws established to control the uses of land within a particular area. Zoning laws are used to separate residential land from areas of non-residential use, such as industry or businesses. Zoning ordinances include many provisions governing such things as type of structure, setbacks, lot size, and uses of a building.