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A sum of money that a buyer gives to the seller when making an offer on a home
The right to enter or use another person’s land for a specific purpose
Utility companies commonly get easements to install poles and string wire across private land. An easement is also called right-of-way.
See: Quitclaim deed
The age of a building based on its condition rather than age
Effective age takes into account major renovations made on the building and how it has been maintained.
The government's right to take private property for the purpose of condemnation
When one person builds a permanent object on another person’s property
A preliminary title report or a survey, a physical inspection of the home and grounds, can tell you if there’s an encroachment on a property that you want to buy. The most common kinds of encroachments are fences, garages, driveways, shrubs and trees, all of which can intrude, usually not on purpose, into a neighbor’s property - even if by just a few inches.
See: Title search, Cloud on title
An interest in or right to a property by someone other than the home owner
Before you buy a home, you’ll receive a preliminary title report that details any encumbrances on the property. There are two types of encumbrances: (1) a money encumbrance, which affects a property’s ownership. Money encumbrances include any lien placed on a property, such as a mortgage, mechanic’s lien, or tax lien. (2) A non-money encumbrance, such as an encroachment, affects how a property is used.
See: Lien, Encroachment, Cloud on title
The money value of a home minus any amount owed on the mortgage
Equity is the amount of money you would have left over if you sold your home today and paid off your mortgage. The equity you build up in your home may be used as security on another loan if certain qualifications are met.
See: Home equity loan, Appreciation
The fees and documents are dealt with through a third party to close on the property
In general escrow follows three steps: (1) the buyer and seller sign an agreement requiring them both to hand over all the closing fees and documents to a neutral third party, called an escrow agent; (2) the escrow agent distributes the money and documents to the proper party, such as the lender or title company; and (3) the escrow is considered "closed."
Escrow adds in a middle man so that it is very possible that the buyer and seller never meet. If any change needs to be made to how escrow is handled, it must be mutually agreed on.
See: Closing date, Escrow agent/officer
Lenders often set up a type of escrow account, called an impound account, for you to prepay certain recurring costs: such as property taxes, hazard insurance and mortgage insurance, if required.
See: Impound account
An escrow agent oversees escrow. The buyer and seller sign an agreement that gives the escrow agent a detailed list of instructions on how the process should be carried out, which includes how much money to collect, what documents to prepare and when to order a title search. The escrow agent is a neutral party who impartially represents both parties. The escrow agent can be a lender, title company or real estate attorney.
The nature of interest a person has in a particular property
Estates show the type of ownership arrangement tied to the property. In general, each type of estate specifies your claim on a property, how long the claim will last and the rights that go along with the claim. Two types of estates are (1) freehold estates, which refer to property owners; and (2) leasehold estates, which are for tenants.
A person appointed in a will to carry out the terms of the will