Real Estate Glossary

Appraisal - An opinion of value.

Assessed Value - Value placed on property by the County for the purpose of computing real property taxes.

BPO - Broker?s Price Opinion also called a Comparative Market Analysis. A method of appraisal in which selling prices of similar properties are used as the basis for arriving at the value estimate. Institutional sellers usually rely on a BPO prepared by a real estate agent and a professional appraisal to determine a listing price.

Certificate of Sale - A certificate issued to a buyer at a judicial sale (e.g. foreclosure)

Certificate of Title - This certificate is issued to a buyer 10 days after the foreclosure sale.

Certified Funds - Same as cash. Buyer?s monies must be brought to the closing in this form.

Closing - The final accounting of the real estate sale. The closing Statement outlines the costs on both the buyers and the seller?s side of the transaction.

Contingent - Dependent upon conditions or events. There are conditions the institutional seller will consider in an offer to purchase such as the ability of the buyer to obtain a mortgage or perform inspections. The sale of another property to raise sufficient funds is an example of a contingent usually not considered.

Contract - A promise. Only when an offer to purchase has been fully executed (signed and initialed) by buyer and seller does it become a contract.

Default Judgment - Against someone because they failed to show up in court.

Deficiency Judgment - Decision requiring a borrower to pay the lender the difference between the mortgage balance and the amount realized at the foreclosure sale.

Earnest Money - An amount of money given with the offer to purchase as a ?good faith? gesture of the buyer?s serious intent. Although not required by law in Florida, most institutional sellers require a minimum $500-$1000 deposit in a trust account with an offer.

Escrow - The deposit of funds with a bonded neutral third party with instructions to carry out the provisions of a contract. Earnest money deposits are usually held in the trust accounts of a real estate Broker, title company or attorney.

Fee Simple - Complete legal ownership of a property.

Federal Housing Administration (FHA) - Federal agency that administers FHA insured loans.

Federal Tax Lien - An obligation to the federal government as a result of non-payment of taxes.

F.N.M.A. - Abbreviation for the Federal National Mortgage Association affectionately known as ?Fannie Mae?, an agency which buys blocks of loans from banks. Due to its size, Fannie Mae Foreclosures make up a significant percentage of our Florida inventory.

F.H.L.M.C. - Abbreviation for the Federal Home Loan Mortgage Corporation affectionately known as ?Freddie Mac?, an agency performing a similar function to Fannie Mae and now much larger. Special financing is offered on Freddie Mac Foreclosures.

Foreclosure - Forced sale of property ordered by a lender due to delinquency in mortgage payments. A foreclosure sale terminates all rights of the mortgagor.

G.N.M.A. - Government National Mortgage Association affectionately known, as Ginnie Mae is an agency in the secondary mortgage market dealing primarily in recycling VA and FHA mortgages. Grantee. The buyer.

HUD - Abbreviation for the Department of Housing and Urban Development, an agency that oversees FHA. FHA foreclosures are called HUD Homes.

Institutional Lender - Financial institutions whose loans are regulated by law such as banks, credit unions and commercial loan agencies.

Involuntary Lien - A lien imposed against property without the owner?s consent such as taxes, special assessments, federal income taxes, etc.

Junior Lien - A lien that does not have first priority making the property security for payment of a debt.

Lien - An encumbrance using the property as security for the payment of a debt or obligation of the property owner.

Lis Pendens - Lawsuit pending. This usually recorded in Florida to give constructive notice of pending litigation.

Mechanic?s Lien - A lien placed on property by laborers or material suppliers who have contributed to an improvement.

Mortgage - A legal conveyance of property to a creditor for security (from the Latin meaning death pledge).

Mortgagee - The lender.

Mortgagor - The borrower.

MLS - Multiple Listing Services run by local Realtor associations.

Notice of Default - A notice filed to show that the borrower under a mortgage is in default.

Points - A charge made by the lender for loaning money. One point equals one percent of the loan.

Portfolio Loan - Loan originated and held ?in house? as part of a lender?s investments.

PMI - Private Mortgage Insurance required as part of the monthly payment in loans less than 80% loan to value (less than 20% down payment).

Pre-foreclosure - Period between when a borrower becomes delinquent and the property is foreclosed upon.

Principal - A person acting for him/herself in a transaction. Also the amount of a loan exclusive of interest.

Qualifying - Process of demonstrating a person is credit worthy and has enough money to buy a property. Institutional sellers may require ?proof? in the form of a letter from a lender or some verification of the source of funds if the sale is cash.

Quiet Title - Legal process to eliminate title problems.

Quitclaim - A form of deed in which the grantor is giving the grantee rights to a property but makes no warranties about rights others may have.

Realtor - A broker or sales agent who is a member of a local real estate board affiliated with the National Association of Realtors.

R.E.O. - An abbreviation for Real Estate Owned most commonly used to describe properties acquired in foreclosure and owned by institutions.

Right of Redemption - Right to buy a property back for a limited period of time (usually 10 days) after a foreclosure sale.

Secondary Mortgage Market - Fannie Mae, Freddie Mac, Ginnie Mae were originally chartered by the federal government to stimulate the economy by either buying or recycling packages of loans from financial institutions.

Sheriff?s Deed - Deed given by court order to satisfy a judgment.

Short Sale - In some instances in Florida a lender may agree to adjust the amount owed in order to get the property sold.

Special Warranty Deed - See warranty deed. ?Special? indicates there are limitations.

Title - Evidence that an owner is in lawful possession; instrument evidencing ownership.

Title Insurance - Policy written by a title company to protect a property owner against loss if the title is imperfect.

Title Search - Process to determine validity of the title to real estate.

Warranty Deed - Assures the title conveyed is good and possession will be undisturbed.