Glossary of Terms
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DECLARATION OF TRUST
A written acknowledgement by one holding legal title to property that the property is held in trust for the benefit of another.
DECLINING BALANCE METHOD OF DEPRECIATION
Depreciation by a fixed annual percentage of the balance after deducting each yearly depreciation amount.
Actually, any one of many conveyancing or financing instruments, but generally a conveyancing instrument, given to pass fee title to property upon sale.
DEED OF TRUST
An instrument used in many states in place of a mortgage. Property is transferred to a trustee by the borrower (trustor), in favor of the lender (beneficiary), and reconveyed upon payment in full.
Title, which is not absolute but possibly, may be annulled or voided at a later date For example: Title conveyed to A with condition that if A marries before age 30. title will go to B A's title may be good (doesn't marry) or may be defeated (marries before 30)
Commonly, the amount for which the borrower is personally liable on a note and mortgage if the foreclosure sale does not bring enough to cover the debt. Actually the judgment is for the total amount and not for the deficiency, the recovery from the foreclosure sale being deducted from this amount.
In conveyancing, the placing of the property in the actual or constructive possession of the grantee Usually accomplished by delivery of a deed to the buyer, or by recording said deed.
A note having no date for repayment, but due on demand of the lender.
(1) Money given by the buyer with an offer to purchase shows good faith. Also called earnest money
(2) A natural accumulation of resources (oil, gold, etc) which may be commercially recovered and marketed
(1) Decrease in value to real property improvements caused by deterioration or obsolescence
(2) A loss in value as an accounting procedure to use as a deduction for income tax purposes.
DIRECT REDUCTION MORTGAGE
An amortized mortgage. One on which principal and interest payments are paid at the same time (usually monthly) with interest being computed on the remaining balance.
DISPOSITION OF REAL ESTATE STATEMENT
A statement that the buyer will occupy the property being purchased even though the buyer owns other property. The buyer states that the other property will be sold or rented Particulars must be given as to any loan on the property and the equity or rent to payment amounts
DOUBLE DECLINING BALANCE METHOD OF DEPRECIATION
A use of the declining balance method, but with double the depreciation allowable by straight line. An accelerated method.
Two concurrent escrows on the same property, having the same party as buyer and seller of the property. Example Escrow 1-A buys from B. Escrow 2-A sells the same property to C. A is using C's money to buy B's property. The process is illegal in many states unless full disclosure is made.
The representation of opposing principals (buyer and seller) at the same time. In brokerage many states get around this by saying that the agent aids the buyer but is the agent of the seller only. A problem arises if both buyer and seller pay the broker. Then full disclosure must be made. An escrow agent is the agent of buyer and seller and usually paid by both. This is why an escrow agent must be neutral.
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