Prepayment penalty A fine imposed on a borrower by a lender for the early payoff of a loan or any substantial part of a loan.

Principal One of the parties in a real estate transaction, either the seller or the buyers. In a loan, the amount of money borrowed.

Principal residence An IRS term denoting the residence wherein you spend the most time during the tax year.

Probate court A court that handles wills and the administration of estates of people who have died.

Promissory note The written contract you sign promising to pay a definite amount of money by a definite future date.

Property taxes Taxes assessed on property at a uniform rate so that the amount of the tax depends on the value.

Property tax statements Documents that the county assessors office mails to homeowners itemizing the semiannual or annual tax bill on a home and indicating the payment due dates.

Prorations Proportional distributions of responsibility for the payment of the expenses of homeownership. This distribution is based on the percentage of an assessment or billing period during which the seller and buyers own the property.

Purchase contract The contract containing terms and conditions to which the seller and the buyers agree when the seller accepts the offer to purchase their home.

Purchase option Option to buy; the type of contract in which buyers agree to purchase the property for the amount listed in the contract, if they decide to buy the sellers home and make the purchase within the listed period of time, and agree that the seller keeps the option fee if they do not buy the property.

Quitclaim deed A deed using the word quitclaim in the clause granting ownership and thus releasing the grantor from any claim to that property. A quitclaim deed has no warranties.

Real estate See Real property.

Real estate broker A real estate agent who represents another person in dealing with third parties. This person must take required courses, pass a brokers exam, and be licensed by the state. A broker may employ other qualified individuals and is responsible for their actions.

Real estate professional A real estate broker or sales associate.

Real estate sales agent A person who is licensed by a state and who represents a real estate broker in transactions.

Real Estate Settlement Procedures Act See RESPA.

Real property Real estate; land and whatever is built on, growing on, or attached to the land.

Real property sales contract See Land sales contract.

Reconveyance deed A deed that records full satisfaction of a trust deed-secured debt on your property and transfers bare legal title from the trustee to you.

Recording Official entry of liens, reconveyances, and transactions into the permanent records of a county.

Release of contract An agreement that all responsibilities and rights occurring as a result of a contract are invalid.

Repair costs Expenses for work maintaining a homes condition, including replacement and restoration.

Request for notice of default A recorded notice allowing a county recorder to notify lenders of foreclosure on a property in which the lender has an interest.

Rescind To cancel a contract and restore the parties to the state they would have been in had the contract never been made.

RESPA Real Estate Settlement Procedures Act; a federal law that requires that buyers be given, in advance of closing, information regarding their loan.

Revocation Involuntary cancellation that occurs when the time limit has expired and one or both parties do not perform in accordance with the terms of the contract.

Sales associate A real estate professional with either a brokers or sales license who acts as an agent for a broker.

Sale leaseback An agreement in which the seller sells the property to buyers who agree to lease the property back to the seller.

Satisfaction of mortgage A document indicating that the owner has paid their mortgage off in full.

Seller buy-down loan A loan in which the effective interest rate is bought down (reduced) during the beginning years of the loan by contributions a seller makes.

Seller carry-back loan A loan for which the seller acts as a lender to carry back or hold mortgage notes from buyers. These notes may be first, second, or even third loans.

Sellers agent See Listing.

Sellers market A condition in which there are more buyers than sellers; prices generally increase.

Selling agent See Buyers agent.

Settlement See Closing.

Severalty Vesting of title in which you hold title by yourself.

Sheriffs deed Marshals deed; a deed used by courts in foreclosure or in carrying out a judgment. This deed transfers a debtors title to a buyer.

Short sale A lender selling a property for less than the amount of the loan.

Single agent An agent representing only one party in a real estate transaction.

Specific performance Law that allows one party to sue another to perform as specified under the terms of their contract.

Standard-coverage title insurance The regular investigation for this insurance generally reveals only matters of record and location of the improvements with respect to the lot line.

Straight note A promise to pay a loan in which the principal is paid as one lump sum, although the interest may be paid in one lump sum or in installments.

Subject-to loan An existing loan for which buyers take over responsibility for the payments, and seller remains primarily liable in the event of a deficiency judgment.

Take sheet A form used to collect information necessary to prepare the escrow instructions.

Tax deed Controllers deed; a deed used by a state to transfer title to the buyers.