Intermediate1.5 hours10 terms

Real Estate Drafts & Checks Glossary

This curated collection offers key terms that might be helpful when exploring financial instruments like drafts and checks in real estate transactions. It clarifies commonly referenced concepts related to payment processing and legal roles, providing a quick reference for investors. This isn't a complete guide, but a selection of terminology you may encounter.

Term Collection

Purchase Agreement

A Purchase Agreement is a legally binding contract that outlines the terms and conditions of a real estate transaction, formalizing the buyer's offer and the seller's acceptance.

Intermediate12-13 min

Promissory Note

A promissory note is a legally binding written promise by one party to pay a specific sum of money to another party on a specified date or on demand, outlining all loan terms.

Beginner15-18 min

Drawee

The drawee is the party, typically a bank or financial institution, ordered by the drawer to pay a specific sum of money to the payee, most commonly seen in check transactions or other financial instruments. In real estate, the drawee is crucial for processing payments like earnest money or closing funds.

Intermediate5 min

Bill of Exchange

A Bill of Exchange is a legally binding written order from one party (the drawer) to another (the drawee) to pay a specified sum of money to a third party (the payee) on demand or at a predetermined future date, serving as a negotiable instrument in sophisticated financial transactions, including real estate.

Advanced5 min

Mortgage

A mortgage is a loan obtained from a lender to purchase real estate, where the property itself serves as collateral for the debt. Borrowers make regular payments, including principal and interest, over a set period until the loan is fully repaid.

Beginner15-18 min

Loan Servicer

A financial institution responsible for managing the administrative tasks of a mortgage loan, including collecting payments, managing escrow accounts, and communicating with borrowers, on behalf of the loan owner.

Intermediate2-3 min

Debt Service

Debt service is the total amount of principal and interest payments required to repay a loan over a specific period, typically for a mortgage or other property-related financing.

Beginner11-12 min

Escrow

A legal arrangement where a neutral third party holds funds and documents until specific conditions of a contract are met, ensuring a secure and fair transaction, especially in real estate.

Intermediate15-18 min

Real Estate Closing

Real estate closing is the final step in a property transaction where ownership is legally transferred from seller to buyer, all documents are signed, and funds are exchanged.

Beginner13-14 min

Earnest Money

Earnest money is a deposit made by a buyer to a seller, held in escrow, demonstrating the buyer's serious intent to purchase a property and serving as security against buyer default.

Intermediate13-14 min