Real Estate Glossary

Abstract of Title — A lengthy legal document showing the history of ownership interests in a particular piece of property.

Adverse Possession — A legal process by which an ownership interest in real property attaches to a nonowner who meets certain conditions while openly using the property as if he or she owned it for a particular number of years specified by state law.

Appraisal — An approximate value assigned to a particular piece of real estate by an appraiser, a specialist in assessing property value.

Local or Special Assessment — The assignment by a government body, usually a municipality, of infrastructure development costs to the landowners benefiting from the project, such as one for sidewalks or sewers.

Closing — A meeting at which mortgage and property transfer documents are executed by the purchaser and seller of real estate.

Condominium — An ownership arrangement where an individual owner buys a unit in a multiunit building and the individual owners share interest in the common areas.

Deed — A common legal document serving as the vehicle for ownership transfer from a real-estate owner to the next owner.

Easement — The narrow right of a nonowner to use real estate of another for a specific purpose, such as the entitlement to use an access road over a neighbor’s land to reach an isolated parcel.

Eminent Domain — The governmental power to purchase real property from private owners for public use.

Escrow — In the mortgage context, an account containing the borrower’s money held and administered by the bank or other mortgage holder to pay important expenses related to the subject property, such as property taxes and hazard insurance.

Estate — Designates the extent of an ownership interest in real property, such as a life estate, a joint estate or an estate for years.

Eviction — A legal action under state law instituted by a landlord to cancel the right of the tenant to remain on the subject property.

Fannie Mae and Freddie Mac — Large quasi-public entities that buy and service mortgages on the secondary market.

Foreclosure — The act of a bank or other mortgage holder of taking back ownership of the subject property when the borrower has defaulted on the loan.

Implied Warranty of Habitability — An implied duty of the landlord in every residential mortgage to keep the property in safe, livable condition and provide basic services like warm water, heat and proper ventilation.

Landlord — Property owner who rents his or her real estate to another for residential or commercial purposes; also called a lessor.

Lease — Contract between a landlord and tenant detailing the legal terms of the rental arrangement.

Mortgage — A loan used to finance the purchase of real property and secured by the borrower’s ownership interest in the subject real estate.

Mortgagee — The bank or other lender in a mortgage transaction.

Mortgagor — The borrower in a mortgage transaction.

Real Estate or Real Property— Land and the buildings and fixtures attached to it.

Real-Estate Broker or Agent — A specially trained professional representing buyers or sellers in the negotiation, sale or lease of real estate.

Secondary mortgage market — The business investment sector actively involved in buying mortgage loans, often in bundles, from the original lenders.

Subprime mortgage — A mortgage with relatively costly terms entered into with a risky borrower.

Tenant — A residential or commercial party renting a building or land.

Title — A person’s right of ownership in a piece of real property.

Title Insurance — Insurance guarantying protection of the legal and financial interest of a real-estate buyer or mortgage lender should a defect in the property title arise.

Title Search — The act of reviewing historical ownership records pertaining to a particular real-estate parcel to determine the existence of any outstanding liens or other encumbrances that could prevent a buyer from taking clear title.