Down payment

The amount of money to be paid by the purchaser to the seller upon the signing of the agreement of sale. The agreement of sale will refer to the down payment amount and will acknowledge receipt of the down payment. Down payment is the difference between the sales price and maximum mortgage amount.

Earnest Money

The deposit money held in an ESCROW ACCOUNT by the a real estate broker. The Earnest Money is held until settlement and credited to the buyer at that time. Also known as Escrow.

Encroachment

An obstruction, building, or part of a building that intrudes beyond a legal boundary onto neighboring private or public land, or a building extending beyond the building line.

Encumbrance

A legal right or interest in land that affects a good or clear title, and diminishes the land's value. It can take numerous forms, such as zoning ordinances, easement rights, claims, mortgages, liens, charges, a pending legal action, unpaid taxes, or restrictive covenants. An encumbrance does not legally prevent transfer of the property to another. A title search is all that is usually done to reveal the existence of such encumbrances, and it is up to the buyer to determine whether he wants to purchase with the encumbrance, or what can be done to remove it.

Equity

The value of a homeowner's unencumbered interest in real estate. Equity is computed by subtracting from the property's fair market value the total of the unpaid mortgage balance and any outstanding liens or other debts against the property. A homeowner's equity increases as he pays off his mortgage or as the property appreciates in value. When the mortgage and all other debts against the property are paid in full the homeowner has 100% equity in his property.

General Warranty Deed

A deed which conveys not only all the grantor's interests in and title to the property to the grantee, but also warrants that if the title is defective or has a "cloud" on it (such as mortgage claims, tax liens, title claims, judgments, or mechanic's liens against it) the grantee may hold the grantor liable.

Grantee

That party in the deed who is the buyer or recipient.

Grantor

That party in the deed who is the seller or giver.

Hazard Insurance

Protects against damages caused to property by fire, windstorms, and other common hazards.

Home Types

Detached: Any home that is not connected to another.

Town Home: Any home that is connected side-by-side to another.

Apartment: Any multiple family dwelling with apartment homes on more than one level.

Condominium: Any home with a condominium association which owns the land and does some degree of maintenance/insurance.

Co-op: Any home which is owned by a corporation in which the residence own shares.

Home Styles

Colonial: Any two story home, traditional, contemporary, Tudor, cape cod or other.

Cape Cod: Any two story home with a front slanting roof, with or without dormer windows.

Tudor: Any colonial with distinctive stucco exterior with wooden trim.

Contemporary: Any home, one story or two usually designed with some vaulted, cathedral ceilings, wooden trim and/or siding.

Split Level: Any home with three or more levels with steps in the center of the home.

Split Foyer: Any home with a foyer entrance with steps leading up and/or down.

Ranch/Rambler: Any one level home with or without a basement finished or unfinished.

HUD

U.S. Department of Housing and Urban Development. Office of Housing/Federal Housing Administration within HUD insures home mortgage loans made by lenders.

Lien

A claim by one person on the property of another as security for money owed. Such claims may include obligations not met or satisfied, judgments, unpaid taxes, materials, or labor. (See also special lien.)

Marketable Title

A title that is free and clear of objectionable liens, clouds, or other title defects. A title which enables an owner to sell his property freely to others and which others will accept without objection.

Mortgage

A lien or claim against real property given by the buyer to the lender as security for money borrowed. Under government insured or loan-guarantee provisions, the payments may include escrow amounts covering taxes, hazard insurance, water charges, and special assessments. Mortgages generally run from 10 to 30 years, during which the loan is to be paid off.

Mortgage Commitment

A written notice from the bank or other lending institution saying it will advance mortgage funds in a specified amount to enable a buyer to purchase a house. Virginia contracts provide for a financing contingency by which the buyer must produce a mortgage commitment by a date certain. The date is negotiable.

Mortgage Note

A written agreement to repay a loan. The agreement is secured by a mortgage, serves as proof of an indebtedness, and states the manner in which it shall be paid. The note states the actual amount of the debt that the mortgage secures and renders the mortgagor personally responsible for repayment.

Mortgagee

The lender in a mortgage agreement.

Mortgagor

The borrower in a mortgage agreement.

Plat

A map or chart of a lot, subdivision or community drawn by a surveyor showing boundary lines, buildings, improvements on the land, and easements.

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