What does the term "encumbrance" refer to in real estate?

The term "encumbrance" in real estate refers specifically to a claim or liability attached to a property that can affect its value or use. This includes various types of claims such as mortgages, liens, easements, and restrictions. An encumbrance does not necessarily prevent the sale or use of the property, but it does indicate that there are legal rights or obligations that may affect the owner's ability to fully use or transfer the property.

For instance, if a property has a mortgage, that mortgage is considered an encumbrance because it is a claim against the property until the debt is repaid. Similarly, if there is an easement granting a neighbor access to a portion of the property, that would also be categorized as an encumbrance because it limits how the property owner can utilize their land.

In contrast, the other options pertain to different aspects of real estate. A measure of property size refers purely to metrics like square footage or acreage, which does not involve rights or liabilities. A formal offer to purchase real estate is a transactional proposal and not related to any claims against the property itself. An agreement between two parties, while it may pertain to real estate transactions, does not specifically capture the legal implications of ownership or claims against