01
In title industry terms, to peruse and study the instruments in a chain of title and to determine their effect and condition in order to reach a conclusion as to the title status.
02
Example:
Before issuing a title policy, the examiner carefully reviewed all recorded deeds, wills, and liens against the property. This examination helped confirm whether the property’s title was clear.
01
The reduction of an existing debt by regular partial payments.
02
Example:
For instance, Linda makes monthly payments on her home loan that go toward both principal and interest. Over time, these payments systematically reduce her total debt until the mortgage is fully paid off.
01
An estimate of value of property from analysis of facts about the property; an opinion of value.
02
Example:
Sarah hires a professional to assess her home before selling, and the appraiser compares recent sales of similar homes to determine a fair market price. This helps Sarah set a realistic listing price based on the appraiser’s opinion of value.
01
The yearly interest percentage of a loan as expressed by the actual rate of interest paid.
02
Example:
Imagine Carlos takes out a car loan at a 5% APR, which includes both the nominal interest rate and any additional loan costs. This gives him a clearer picture of his total yearly borrowing costs.
01
One who acts as an agent for another in negotiating sales or purchases in return for a fee or commission.
02
Example:
When Nina wanted to sell her condo, she hired a real estate broker to list the property and negotiate offers. In return, the broker earned a commission once the condo sold.
01
Beginning with a conveyance out of an original source of title such as a government, each succeeding deed, will or other medium which conveys and transfers the title to succeeding owners constitutes a link in the chain of title. The chain of title is the composite of all such links.
02
Example:
When Chris bought a home, the title company reviewed every owner back to the original land grant. This historical record of all transfers from past to present owners is called the chain of title.
01
In some areas called a “settlement.” The process of completing a real estate transaction during which deeds, mortgages, leases and other required instruments are signed and/or delivered, an accounting between the parties is made, the money is disbursed, the papers are recorded, and all other details such as payment of outstanding liens and transfer of hazard insurance policies are attended to.
02
Example:
At closing, Jesse signed all the final paperwork for his new home, and funds were transferred from his bank to the seller. Once complete, ownership legally moved to Jesse and the transaction was officially recorded.
01
The five-page Closing Disclosure must be provided to the consumer three business days before they close on the loan. The Closing Disclosure details all of the costs associated with their mortgage transaction.
02
Example:
When Michelle was finalizing her mortgage, she received the Closing Disclosure outlining her interest rate, closing costs, and monthly payment details. She reviewed it carefully to avoid any surprises before signing.
01
A summation, in the form of a balance sheet, made at a closing, showing the amounts of debits and credits to which each party to a real estate transaction is entitled.
02
Example:
Max reviewed the closing statement to see exactly how much money he needed to bring to closing and how much the seller would receive. It broke down the transaction costs, taxes, and any prorated expenses.
01
An irregularity, possible claim, or encumbrance which, if valid, would affect or impair the title.
02
Example:
When Stephanie tried to sell her property, the title search revealed an old lien that had never been properly released. This cloud on title had to be resolved before she could complete the sale.
01
A written agreement between parties required for the purchase and sale of real estate.
02
Example:
Jake and Anna signed a formal purchase contract after agreeing on the price and terms for Anna’s condo. This legal document outlined all obligations and deadlines for both parties.
01
A written document by which title to real estate is conveyed from one party to another.
02
Example:
Once the buyer and seller finalize the home purchase, the seller signs a deed transferring ownership to the buyer. The deed is then recorded in the public records to show the change of ownership.
01
Loss in value occasioned by ordinary wear and tear, destructive action of the elements, or functional or economic obsolescence.
02
Example:
Walter’s rental property lost value over the years due to outdated fixtures and normal wear. This decrease in value can sometimes be offset by certain tax deductions.
01
Down payment or a small part of the purchase price made by a purchaser as evidence of good faith.
02
Example:
Sasha submitted earnest money along with her offer on a home to show she was serious about buying. If she backs out without a valid reason or contingency, she may forfeit this deposit to the seller.
01
Addition to or modification of a title insurance policy that expands or changes coverage of the policy, fulfilling specific requirements of the insured.
02
Example:
When David refinanced his home, his lender requested an endorsement to the existing title policy to cover the new loan terms. This adjustment ensured the lender’s interests were further protected.
01
Technically, this term strictly refers to a deed delivered to a third person to be held by him until the fulfillment or performance of some act or condition by the grantee. In the title industry, it means the depositing with an impartial third party (typically an escrow agent or title company) of anything pertaining to a real estate transaction including money and documents of all kinds. The money and documents are to be disbursed and delivered to the rightful parties by the escrow agent or title company when all conditions of the transaction have been met.
02
Example:
Mia placed her down payment and signed documents in escrow with a neutral title company until the final loan approval. Once all conditions were met, the escrow agent disbursed funds to the seller and officially transferred ownership.
01
A written agreement usually made between buyer, seller and escrow agent, but sometimes only between one person and the escrow agent. It sets forth the conditions to be performed incident to the object deposited in escrow, and gives the escrow agent instructions.
02
Example:
Jon and Rebecca signed an escrow agreement with the title company to ensure that all funds and documents would be held securely until closing. This document spelled out exactly how and when each party would meet their obligations.
01
Usually referred to, in title industry terms, as title examiner. One who examines and determines the condition and status of real estate titles.
02
Example:
A title examiner at the local title company studied the property’s recorded history and flagged any outstanding judgments. This professional analysis helped confirm whether the property’s title was clear before closing.
01
Insurance policies include a list of items excluded from coverage. Items excluded from coverage can be found in section two of Schedule B of the policy.
02
Example:
On Sarah’s title insurance policy, there were exceptions for existing easements and certain unrecorded claims. This meant the policy would not cover those specific issues if problems arose with them later.
01
A legal proceeding for the collection of real estate mortgages and other types of liens on real estate, which results in cutting off the right to redeem the mortgaged property and usually involves a judicial sale of the property.
02
Example:
After losing his job, Mark fell behind on his mortgage payments, and the lender began foreclosure proceedings. Ultimately, the property was sold at auction to recover unpaid debt.
01
A warranty provision in a deed or mortgage or other real estate instrument containing all of the common law items of warranty. Also known as a full warranty.
02
Example:
When John purchased a home with a general warranty deed, he received a robust guarantee about the property’s title. This meant the seller stood behind the title against claims arising during or before their ownership.
01
A Home Equity Line of Credit (HELOC) is a revolving credit line secured by the equity in your home. It allows you to borrow up to a set limit as needed, repay it, and borrow again, much like a credit card but using your home as collateral.
02
Example:
After renovating their kitchen using funds from their HELOC, Maria and Sam paid back a portion of the balance within a year. They later borrowed again from the same line of credit to finance their daughter’s college tuition.
01
The liability of real estate as security for payment of a debt. Such liability may be created by contract, such as a mortgage, or by operation of law, such as a mechanics lien.
02
Example:
The contractor filed a mechanics lien against the property because the owner had not paid for completed repairs. This lien had to be satisfied or released before the owner could sell the home.
01
A temporary conditional pledge of property to a creditor as security for the payment of a debt that may be canceled by payment.
02
Example:
Ava financed her new home with a mortgage, which gave the bank a security interest in the property. Once the loan is fully repaid, the bank’s interest in the property is released.
01
This policy is purchased for a one-time premium and protects a homeowner against loss caused by defects, liens or unmarketability of the owner’s title for as long as they or their heirs have an interest in the property.
02
Example:
When Karen bought her house, she opted for an owner’s policy to protect her ownership rights against unforeseen title issues. The coverage will remain in effect even if she passes the home down to her children upon her death.
01
A legal instrument authorizing one to act as another’s agent or attorney.
02
Example:
Carlos granted his brother a power of attorney to handle the closing paperwork while he was overseas. This allowed his brother to sign all necessary documents on Carlos’s behalf.
01
The amount payable for an insurance policy.
02
Example:
When Tim purchased title insurance, he paid a one-time premium at closing. This cost covered the insurer’s obligation to protect him from covered title defects.
01
A legal procedure in which the validity and probity of a document, such as a will, is proven.
02
Example:
After Clara’s mother passed away, her will had to go through probate to confirm its authenticity and settle any estate debts. Only then was Clara able to transfer the house into her name.
01
A written promise to pay or repay a specified sum of money.
02
Example:
Sara signed a promissory note with the bank for her home loan, agreeing to repay the principal plus interest by a certain date. This note is a legally binding obligation to pay back the borrowed funds.
01
Deed that does not imply the grantor holds title, but which surrenders and gives to the grantee any possible interest or rights that the grantor may have in the property.
02
Example:
When Dan divorced, he signed a quit claim deed to remove any interest he may have had in the marital home, giving sole ownership to his ex-spouse. This deed made no guarantees about whether Dan’s title was valid or free of claims or liens.
01
In some areas called a “closing.” The process of completing a real estate transaction during which deeds, mortgages, leases and other required instruments are signed and/ or delivered, an accounting between the parties is made, the money is disbursed, the papers are recorded, and all other details such as payment of outstanding liens and transfer of hazard insurance policies are attended to.
02
Example:
During settlement, all final paperwork was signed and funds were disbursed according to the purchase agreement. Once complete, the new homeowner’s documents were recorded with the county.
01
A deed that warrants the title only with respect to acts of the seller and the interests of anyone claiming by, through, or under him.
02
Example:
Janet received a special warranty deed that only protected her against title defects arising during the seller’s ownership. If any issues arose from previous owners, she would not be covered by this warranty.
01
A property survey confirms the boundaries of a given property according to records and legal descriptions.
02
Example:
Before building a fence, Jack ordered a new survey to confirm his property boundaries. The surveyor marked the corners of the lot and created a drawing showing any easements or encroachments.
01
A combination of all the elements that constitute the highest legal right to own, possess, use, control, enjoy, and dispose of real estate or an inheritable right or interest therein.
02
The rights of ownership recognized and protected by the law.
Example:
Emma’s name on the recorded deed means she holds the title to her house. This grants her ownership control over the property,including the right to sell.
01
An offer to issue a title insurance policy. The title commitment will describe the various conditions, exclusions and exceptions that will apply to that particular policy
02
Example:
Prior to closing, the title company gave Marcus a title commitment outlining what the final policy would and would not cover. He reviewed it to understand any potential title issues or exceptions.
01
Covenants in conveyances and in transfers of title to real estate provide protection to the purchaser against possible insufficiency of the title received. A group of such covenants known as “common law covenants” includes: (a) covenants against encumbrances; (b) covenant for further assurance (in other words, to do whatever is necessary to rectify title deficiencies); (c) covenant of good right and authority to convey; (d) covenant of quiet enjoyment; (e) covenant of seisin; (f) covenant of warranty.
02
Example:
The sellers included specific title covenants in the deed to reassure the buyer that they have the ownership rights that the deed purports to convey. If a dispute over ownership arose later, these covenants could offer legal protection to the buyer.
01
Any possible or patent claim or right outstanding in a chain of title that is adverse to the claim of ownership.
02
Any material irregularity in the execution or effect of an instrument in the chain of title.
Example:
When Becky tried to refinance, the lender discovered a title defect in the form of an unresolved claim from a previous owner. This issue had to be resolved before her loan could be approved.
01
Insurance that protects purchasers of real estate and lenders against loss from liens, encumbrances or defects in the title to the property.
02
Example:
When Lauren bought her home, she purchased title insurance to protect herself against unforeseen problems like undisclosed heirs or unresolved liens. If any covered defects surface, the policy helps cover related legal and financial costs.
01
A database maintained by a title company or other real estate service provider, typically indexed geographically, containing information related to real estate ownership and transfers, including property records, legal descriptions, maps, surveys, and other documents.
02
Example:
Title companies maintain a title plant with records of past property transactions and legal documents. This comprehensive resource helps examiners quickly research properties and issue title reports.
01
An examination of public records to confirm a seller's claim that they are the legal owner of a property. It also confirms that a property is free of liens or ownership claims..
02
Example:
Before finalizing the sale, the title company performed a title search to uncover any mortgages, judgments, or liens.
01
The entity that assumes the financial risk of uncovered defects with the title.
02
Example:
XYZ Title Insurance Company served as the underwriter for David’s title policy, agreeing to cover any covered losses outlined in the title policy. If there is a claim, the underwriter is responsible for paying the claim..
01
A deed containing one or more title covenants.
02
Example:
When Maria purchased her new home with a warranty deed, it meant the seller provided certain guarantees about the property’s title. This gave Maria added peace of mind against future title issues.
