Real Estate Glossary (Part 10 of 10)

Real Estate Broker/Owner with MBA Broker Consultants CalBRE Broker #00983670

September 08, 2013 05:17 PM

Brief Definition of Terms

In the real estate industry, you will discover terms (jargon) that you've never heard before. What do they really mean? Here's a list that will guide consumers to understand terms commonly used in the real estate industry.

Tenants in Common	A method of holding title. Co-owners own undivided interests, but not necessarily equal interests. There is no right of survivorship; each tenant owns an interest which on his or her death vests in his or her heirs. Compare to Joint Tenancy.
Title	Evidence that the owner of land is in lawful possession thereof; evidence of ownership. Title is vested in a certain manner. Often clarified or qualified by an adjective such as absolute, good, clear, marketable, defective, or legal.
Title Company	A company that offers title insurance and other settlement services. Title companies commonly administer the closing process for most real estate transactions. The company conducts the title search upon which the title policy is issued (see below), alerts the seller of any problems with the title, schedules the closing meeting, prepares for and conducts the meeting.
Title Insurance	Insurance that protects the lender against any claims that arise from arguments about ownership of the property. The premium is paid by the buyer when purchasing a home, and the insurance is in effect until ownership changes.
Title Search	An examination of the 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. A Title Search is typically performed before a title policy is issued. If the search shows a title risk, the policy might contain an exclusion or not be issued.
Transfer Fees	Recording fees collected at closing. These fees cover the costs of recording the deed conveying the property and mortgage established at the time of purchase. Refer to Closing Costs.
Trust	Title to real property in California may be held in a title holding trust. The trust holds legal and equitable title to the real estate. The trustee holds title for the benefit of the trustor/beneficiary who retains all of the management rights and responsibilities.
Trust Deed (Deed of Trust)	A conveyance of real estate to a third person to be held for the benefit of another. The Deed of Trust is usually recorded with the County records office. When the property owners borrow money against the property, usually the borrowers sign a Deed of Trust giving up title until their loan is paid in full.
Trustee	One who holds the property in trust for another to secure performance of an obligation; the neutral party in a trust deed transaction.
Truth-in-Lending Statement	A standardized disclosure that must be provided to a borrower when a mortgage loan application is submitted. The statement clearly indicates the contract interest rate on the loan, the amount of monthly payments required to cover principal and interest, and the APR of the loan.
Vesting	A way of holding title. Could be vested as Sole Ownership or as Co-Ownership (Community Property, Tenants in Common, or Joint Tenants).
VA Loan	A loan guaranteed by the Veterans Administration insuring payment in case of default by the borrower. Available to qualified veterans. Most VA loans require no down payment, and the borrower pays minimal closing costs. There are certain limitations, such as the amount of money borrowed. Compare to a Cal-Vet loan, which is administered by the State of California.