REAL ESTATE TERMS FOR REAL ESTATE IN CHARLES COUNTY, ST. MARY'S COUNTY
AND CALVERT COUNTY TRANSACTIONS
Vocabulary for Real Estate in Southern Maryland Real Estate Buyers
Agreement of Sale
In Maryland, known as the Contract of Sale. Generally originated with a prospective buyer who writes an offer. Following negotiation as to terms and conditions, once the contract is signed by the buyer and seller, it is a ratified CONTRACT OF SALE.
Appraisal
An expert judgment or estimate of the quality or value of real estate as of a given date. Appraisals for Southern Maryland homes are approximately $400.
Basement Styles
Walk-out: A basement with a ground level exit without steps. Outside Welled Exit: A basement with a steps leading from a basement door along the house to the ground level. Daylight Basement: A basement which is only 4-6 feet less than ground level with 4-6 six feet wide steps leading directly to the ground level. Usually from a sliding glass or french doors. In-Ground Basement: A basement with no exit directly to the outside.
Many homes in Charles, Calvert and St. Mary's Counties will NOT have basement foundations due to the very high water table, especially for homes in Charles County and St. Mary's County. Southern Maryland is surrounded by the Potomac River, the Chesapeake Bay and the Patuxent River. With the exception of the higher elevations in Calvert County, most geography is flat, sandy and very close to underground water.
Certificate of Title
A certificate issued by a title company or a written opinion rendered by an attorney that the seller has good marketable and insurable title to the property which he is offering for sale. A certificate of title offers no protection against any hidden defects in the title which an examination of the records could not reveal. The issuer of a certificate of title is liable only for damages due to negligence. The protection offered a homeowner under a certificate of title is not as great as that offered in a title insurance policy.
Closing Costs
The numerous expenses which buyers and sellers normally incur to complete a transaction in the transfer of ownership of real estate. These costs are in addition to price of the property and are items prepaid at the closing day. This is a typical list:
- Documentary Stamps on Notes
- Cost of Abstract
- Recording Deed and Mortgage
- Documentary Stamps on Deed
- Escrow Fees
- Real Estate Commission
- Attorney's Fee Recording Mortgage
- Title Insurance Survey Charge
- Appraisal and Inspection
- Escrow Fees
- Survey Charge Attorney's Fee
The agreement of sale negotiated previously between the buyer and the
seller may state in writing who
will pay each of the above costs.
Closing Day
The day on which the formalities of a real estate sale are concluded. The certificate of title, abstract, and deed are generally prepared for the closing by an attorney and this cost charged to the buyer. The buyer signs the mortgage, and closing costs are paid. The final closing merely confirms the original agreement reached in the agreement of sale.
Deed
A formal written instrument by which title to real property is transferred from one owner to another. The deed should contain an accurate description of the property being conveyed, should be signed and witnessed according to the laws of the State where the property is located, and should be delivered to the purchaser at closing day. There are two parties to a deed: the grantor and the grantee.
Deed of Trust
Like a mortgage, a security instrument whereby real property is given as security for a debt. However, in a deed of trust there are three parties to the instrument: the borrower, the trustee, and the lender, (or beneficiary). In such a transaction, the borrower transfers the legal title for the property to the trustee who holds the property in trust as security for the payment of the debt to the lender or beneficiary. If the borrower pays the debt as agreed, the deed of trust becomes void. If, however, he defaults in the payment of the debt, the trustee may sell the property at a public sale, under the terms of the deed of trust. In most jurisdictions where the deed of trust is in force, the borrower is subject to having his property sold without benefit of legal proceedings. A few States have begun in recent years to treat the deed of trust like a mortgage.
Earnest Money
The deposit money given to the seller or his agent by the potential buyer upon the signing of the agreement of sale to show that he is serious about buying the house. If the sale goes through, the earnest money is applied against the down payment. If the sale does not go through, the earnest money will be forfeited or lost unless the binder or offer to purchase expressly provides that it is refundable. Most sales in Southern Maryland will be processed by the buyer's agent and the earnest money will be held in escrow by Homefinders.com until settlement at which time, the buyer will be credited for that amount.
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.
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.
Detached "Z": Homes on small lots with one side of the foundation on the lot line.
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 residents own shares.
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 filed in the office of land records against a title 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.
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 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.
Points
Sometimes called "discount points." A point is one percent of the amount of the mortgage loan. For example, if a loan is for $25,000, one point is $250. Points are charged by a lender to raise the yield on his loan at a time when money is tight, interest rates are high, and there is a legal limit to the interest rate that can be charged on a mortgage. Buyers are prohibited from paying points on Department of Veterans Affairs guaranteed loans (sellers can pay, however). On a conventional mortgage, or an FHA insured mortgage, points may be paid by either buyer or seller or split between them.
Survey
A map or plat made by a licensed surveyor showing the results of measuring the land with its elevations, improvements, boundaries, and its relationship to surrounding tracts of land. A survey is often required by the lender to assure him that a building is actually sited on the land according to its legal description.
Title
As generally used, the rights of ownership and possession of particular property. In real estate usage, title may refer to the instruments or documents by which a right of ownership is established (title documents), or it may refer to the ownership interest one has in the real estate.
Title Insurance
Protects lenders or homeowners against loss of their interest in property due to legal defects in title. Title insurance may be issued to either the mortgagor, as an " owner's title policy, " or to the mortgagee, as a "mortgagee's title policy." Insurance benefits will be paid only to the "named insured" in the title policy, so it is important that an owner purchase an "owner's title policy", if he desires the protection of title insurance.
Title Search or Examination
A check of the title records, generally at the local courthouse, to make sure the buyer is purchasing a house from the legal owner and there are no liens, overdue special assessments, or other claims or outstanding restrictive covenants filed in the record, which would adversely affect the marketability or value of title.
