Glossary

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capital gains

The profit on the sale of a capital asset, such as stock or real estate.

Certificate of Eligibility

The document given to qualified veterans which entitles them to VA guaranteed loans for homes, business, and mobile homes.

chain of title

A history of conveyances and encumbrances of a property from some starting point, whereby the present owner derives title.

clear title

A land title that doesn't have any liens (including a mortgage) against it.

closing

The conclusion of the sales transaction when the seller transfers title to the buyer in exchange for consideration and any financing or loan transactions are completed.

closing costs

Costs the buyer must pay at the time of the closing in addition to the down payment which may include points, title charges, credit report fee, document preparation fee, mortgage insurance premium, inspections, appraisals, prepayments for property taxes, deed recording fee, and homeowners insurance.

closing statement/settlement statement

A detailed written summary of the financial settlement of a real estate transaction, showing all charges and credits made, and all cash received and paid out. See also HUD-1

cloud on title

A claim or encumbrance that may effect title to land.

collateral

Something of value deposited with a lender as a pledge to secure repayment of a loan.

compound interest

Interest which is computed on the principal and any unpaid accumulated interest.

consideration

The price or thing of value that is bargained for and paid for a contract or promise.

contingency

A provision in a contract stating that some or all of the terms of the contract will be altered or voided by the occurrence of a specific event.

contract

An agreement between two or more persons which creates an obligation to do or not to do a particular thing. A legally enforceable agreement between two or more competent parties made either orally or in writing.

contract for deed

A contract for the sale of real estate where the deed (title) of the property is transferred only after all the payments have been made. Also known as a conditional sales contract, or installment contract.

conventional loan

A real estate loan, which is not insured by the FHA or guaranteed by the VA or other governmental agency.

conveyance

Written instrument, such as a deed or lease, that evidences transfer of some ownership interest in real property from one person to another.

counter offer

The rejection of an offer to buy or sell that simultaneously makes a different offer, changing the terms in some way.

covenants, conditions & restrictions (CC&Rs)

The written rules, limitations and restrictions on use, mutually agreed to by all owners governing the use of real estate, usually enforced by a homeowners' association and passed on to the new owners of property.

credit report

An account of your credit history, prepared by a credit bureau. A credit report will contain both credit history, such as what you owe to whom and whether you make the payments on time, as well as personal history, such as your former addresses, employment record and lawsuits in which you have been involved.

These terms and their presence on this site are not intended as, nor should they be used as, legal advice. You should always obtain advice from a licensed attorney for all legal matters.