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Capitalization
Rate: The percentage (acceptable to an average buyer) used to
determine the value of income property through capitalization.
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Certificate
of Title: In areas where attorneys examine abstracts or chains
of title, a written opinion, executed by the examining attorney, stating
that title is vested as stated in the abstract.
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Certificate
of Sale: A certificate issued to the purchaser at a judicial
sale.
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Chain
of Title: A chronological list of recorded instruments affecting
the title to land
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Chattel:
Personal property
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Chattel
Real: Interest in real estate less than recorded instruments
affecting the title to land.
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Close
of Escrow: The date the documents are recorded and title passes
from Seller to Buyer. On this date, the Buyer becomes the legal owner,
and title insurance becomes effective.
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Closing:
The final procedure in the real estate sales process, where the sale and
pertinent loan are completed by the execution of documents for recording.
In some areas, this procedure is known as the closing of escrow.
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Cloud
on Title: An irregularity, possible claim, or encumbrance which,
if valid, would adversely affect or impair the title.
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Coinsurance:
Ordinary coinsurance is defined as a transaction under which each of two
or more insurers assumes a designated portion of the liability for the
total risk and is liable for only such portion of any loss beginning at
the first dollar of loss. (See Reinsurance.)
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Collateral:
By or at the side, additional or auxiliary. Mistakenly used to mean collateral
security.
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Collateral
Security: Most commonly used to mean some security in addition
to the personal obligation of the borrower.
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Commitment:
A binding contract with a title company to issue a specific title
policy, showing only those exceptions contained in the commitment and
any intervening matters after the date of the commitment and prior to
the effective date of the policy. The commitment contains all information
included in the preliminary title report, plus a list of the title company's
requirements to insure the transaction. It also includes the standard
exceptions from coverage that will appear in the policy.
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Community
Driveway: A driveway which is jointly owned, used and maintained
by two or more persons. Usually, a portion of each owner's property is
burdened by the driveway.
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Community
Property: Property acquired by husband, wife or both during marriage
which gives each spouse an interest in the property whether each appears
in title or not.
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Competent:
Legally qualified.
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Comparable
Sales: Sales that have similar characteristics as the subject
property, used for analysis in the appraisal. Commonly called "comps."
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Condemnation:
The taking of private property by the government for public use - as for
a street or a storm drain - upon making just compensation to the owner.
This right or power of government to take property for a necessary public
use is called "eminent domain."
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Confirmation
of Sale: Court approval of the sale of property by an executor,
administrator, guardian, or conservator.
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Conservator:
A person appointed by the court to care for the person and/or property
of an incompetent adult or an adult unable to care for their person or
property because of health.
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Consideration:
The inducement for entering into a contract; it consists of either a benefit
to the promisor, or a loss or detriment to the promisee.
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Constructive
Notice: Notice imparted by the public records of the county when
documents entitled to recording are recorded.
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Contingent:
Dependent upon an uncertain event
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Contract:
An agreement between two or more parties to do or not to do a certain
thing.
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Conventional
loan: A loan secured by a mortgage or deed of trust which is
not insured or guaranteed by a government agency.
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Conveyance:
An instrument in writing, such as a deed or trust deed, used to transfer
(convey) title to property from one person to another
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Corporation:
An entity authorized by law and established by a group of people, the
stockholders, which is endowed with certain rights, privileges and duties
similar to an individual.
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Covenant:
(1) A formal agreement or contract between two parties in which one party
gives the other certain promises and assurances, such as the covenant
of warranty in a warranty deed.
(2) Agreements or promises contained in deeds and other instruments for
performance or nonperformance of certain acts, or use or nonuse of property
in a certain manner.
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Covenants,
Conditions and Restrictions: Commonly called "CC & R's"
the term usually refers to a written recorded declaration which sets forth
certain covenants, conditions, restrictions, rules or regulations established
by a subdivider or other landowner to create uniformity of buildings and
use within tracts of land or groups of lots. The restrictions also can
be established by deed. CC & R's are sometimes referred to as private
zoning.
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Debt:
Money owing from one person to another.
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Debtor:
One who owes a debt.
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Decedent:
A deceased person.
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Decree
of Distribution: A probate court decree which determines how
the estate of a decedent shall be distributed.
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Deed:
Written document by which an estate or interest in real property is transferred
from one person to another. The person who transfers the interest is called
the "grantor." The one who acquires the interest is called the
"grantee." Examples of deeds are grant deeds, administrators'
deeds, executors' deeds, quitclaim deeds, etc. The deed to use depends
on the language of the deed, the legal capacity of the grantor and other
circumstances.
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Deed
of Trust or Trust Deed: A written document by which the title
to land is conveyed as security for the repayment of a loan or other obligation.
It is a form of mortgage. The landowner or debtor is called the "trustor."
The party to whom the legal title is conveyed (and who may be called on
to conduct a sale thereof if the loan is not paid) is the "trustee."
The lender is the "beneficiary." When the loan is paid off,
the trustee is asked by the beneficiary to issue a "recon" or
reconveyance. This reconveyance corresponds to the release that the holder
of a mortgage executes when the mortgage is paid off.
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Deed
Restrictions: Limitations in the deed to a property that dictate
certain uses that may or not be made of the property.
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Default:
Failure to perform a duty or to discharge an obligation
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Defect:
A blemish, imperfection or deficiency. A defective title is one that is
irregular and faulty.
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Defective
Title: (1) Title to a negotiable instrument obtained by fraud.
(2) Title to real property which lacks some of the elements necessary
to transfer good title.
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Demand
Note: A note having no date for repayment, but due on demand
of the lender.
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Deposit:
Money given by the buyer with an offer to purchase. Shows good faith.
Also called earnest money.
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Description: The exact location of a piece of real property
stated in terms of lot, block, tract, part lot, metes and bounds, recorded
instruments, or U.S. Government survey (sectionalized). This is also referred
to as legal description of property.
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Earnest
Money Deposit: Down payment made by a purchaser of real estate
as evidence of good faith; a deposit or partial payment.
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Easement:
A right or interest in the use of the land of another which entitles the
holder to some use, privilege or benefit, such as to place pole lines,
pipe lines or roads thereon.
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Effective
Demand: A qualifying term meaning the ability to pay as well
as desire to buy.
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Eminent
Domain: The right of a government to take privately owned property
for public purposes under condemnation proceedings upon payment of its
reasonable value. See Condemnation.
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Encroachment:
The presence of an improvement such as a building, a wall, a fence or
other fixture which overlaps onto the property of an adjoining owner.
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Encumbrance:
A Right or claim upon real property (land) held by one other than the
property owner. Encumbrances are divided into two classes, as follows:
B Encumbrances other than liens which are limitations on the ownership
of the land (such as conditions, restrictions, reservations, easements,
etc.).
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Endorsement:
Addition to or modification of a title insurance policy which expands
or changes coverage of the policy, fulfilling specific requirements of
the insured.
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Equity:
(1) A legal doctrine based on fairness, rather than strict interpretation
of the letter of the law.
(2) The market value of real property, less the amount of existing liens.
(3) Any ownership investment (stocks, real estate, etc.) as opposed to
investing as a lender (bonds, mortgages, etc.).
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Escheat:
The reversion of property to the state when an owner dies leaving no legal
heirs, devisees or claimants.
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Escrow:
An independent third party, such as Pickford Escrow who acts as the agent
for buyer and seller, or for borrower and lender, carrying out instructions
of both and disbursing documents and funds. Escrow closes and the transfer
of property or document is completed upon fulfillment of certain conditions
specified in the written instructions, whereupon the necessary deeds and
other instruments are recorded.
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Escrow
Impounds, or Reserves: See Impounds or Reserves.
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Estate:
(1) The interest or nature of the interest which one has in property,
such as a life estate, the estate of a deceased, real estate, etc.
(2) A large house with substantial grounds surrounding it, giving the
connotation of belonging to a wealthy person.
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Execution:
An order directing a sheriff, constable, marshal or court-appointed commissioner
to enforce a money judgment against the property of a debtor. This officer,
if necessary, may sell the property to satisfy the judgment.
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Executor:
A person appointed in a will and affirmed by the probate court to cause
a distribution of the decedent's estate in accordance with the will. (The
one who makes the will is called a "testator.") If a woman is
appointed, she is referred to as the "executrix."