Which of the following describes the term "encumbrance" in real estate?

The term "encumbrance" in real estate refers to a legal right or interest in a property that can affect its transferability. Specifically, it often describes financial obligations or claims against the property, such as mortgages, liens, or easements.

In the context of real estate, an encumbrance can restrict the property owner's ability to use or transfer the property freely, as it indicates that there are other interests that must be considered. For instance, a mortgage is an encumbrance since it signifies that there is a financial obligation that the owner must satisfy before they can sell or otherwise transfer the property without limitations.

Understanding the concept of encumbrances is crucial for both buyers and sellers, as it can affect property value and the overall transaction process. The other choices describe different aspects of real estate but do not accurately capture the essence of what an encumbrance entails. For example, physical improvements relate to enhancements made to a property, the process of transferring property ownership is known as conveyance, and a buyer's appraisal refers to an assessment of a property's value rather than any obligations tied to it.