Abstract
A condensed history of the title to a parcel of real property consisting of copies of all documents from the public record that affect that parcel such as deeds, mortgages, encumbrances, easements, marriages, deaths, divorces, liens, etc.
Appraisal
An opinion of value based upon a factual analysis. Legally, it is an estimation of value by two disinterested persons of suitable qualifications.
Assessment
A non‐recurring charge levied against property to meet some specific purpose portioned either by the benefit derived from property or based on value of the property (value for taxation).
Assignment
The transfer of an interest in a bond, mortgage, lease, or other instruments by writing.
Assumption of Mortgage
The act of acquiring title to property that has an existing mortgage and agreeing to be personally liable for the terms and conditions of the mortgage, including payments.
Attachment
The legal seizure of property to force payment of debt.
Building Line
A line is usually shown on the plat map specifying how far a building must be set back from the lot line.
Building Restrictions
Limitations on the use of property or the size and location of houses that are established by governmental law or by covenant in deeds or plats.
Chain of Title
The succession of conveyances from some accepted starting point whereby the present holder of title to real property derives his or her title.
Clear Title
A title that is not encumbered or burdened with unacceptable defects.
Closing Statement
A listing of the debits and credits of the buyer and seller to a real estate transaction for the financial settlement of the transaction.
Commitment
A title insurance term for the preliminary report issued before the actual title policy. It shows the condition of the title (as revealed by a title search, a thorough search of the county records) and the steps necessary to complete the transfer of the title. It is a written promise to insure a loan.
Condominium
A form of property ownership providing for individual ownership of a specific apartment or other space not necessarily on ground level, together with an undivided interest in the land or other parts of the structure in common with other owners.
Consideration
The actual price at which the property is transferred.
Contract for Deed
An agreement between the seller and the buyer for the purchase of real property. The purchase price is paid in installments over the period of the contract, with the balance due at maturity. When the buyer completes the required payments, the seller is obliged to deliver a deed to the buyer.
Covenant
An agreement written into deeds and other instruments promising performance or nonperformance of certain acts or stipulating certain uses or non-use of the property.
Date of Policy
Date of recording of the deed, mortgage, or other interest being insured as evidenced by the later-date search report.
Deed
An instrument in writing that, when executed and delivered, conveys an interest in real property.
Deed in Trust
An instrument that conveys property into a trust (see also Trust Deed and Trustee’s Deed).
Deed of Trust
An instrument creating a lien on real property as security for a debt; a mortgage.
Deposit, Earnest Money
A sum of money or other consideration tendered in conjunction with an offer to purchase rights in real property.
Easement
The right to use or enjoy the land of another, such as the right of way or the right to receive air and light.
Effective Date of Commitment
Date of initial search report (i.e., the date through which the records in the recorder’s office that affects the title to the property being transferred have been searched).
Encroachment
An unauthorized invasion or intrusion of an improvement, fixture or other real property wholly or partly upon another’s property. Encroachments typically are either:
(1) over building line,
(2) over a lot line,
(3) over an easement, or
(4) onto the insured premises.
Encumbrance
Any claim, lien, charge or liability attached to and binding on real property that may lessen its value or obstruct the use of the property but not necessarily prevent the transfer of title; a right or interest in a property held by one who is not the legal owner of the property. There are two general classifications of encumbrances:
(1) those that affect: the title, such as judgments, mortgages, and liens, and
(2) those that affect the physical condition of the property, such as restrictions, encroachments, and easements.
Escrow
The process by which money and/or documents are held by a third person until the satisfaction of the terms and conditions of the escrow instructions (as prepared by the parties to the escrow). When these terms have been satisfied, there is delivery and transfer of the escrowed funds and documents.
Estate
The interest or nature of the interest that one has in a property, such as a life estate, the estate of a deceased, real estate, etc.
Federal National Mortgage Association (FNMA or Fannie Mae)
A private corporation dealing in the purchase of first mortgages at discounts.
Fee Simple
The maximum possible estate one can possess in real property; absolute ownership. It is of indefinite duration, freely transferable, and inheritable.
Foreclosure
A legal procedure whereby property used as security for a debt is sold to satisfy the debt in the event of default in payment of the mortgage note or default of other terms in the mortgage document.
“Gap” in Chain of Title
An instance in which a conveyance is missing from the county records.
Grantee
One who receives an interest in real property by deed, easement, or other instruments of conveyance.
Homeowner’s Insurance
Includes the coverage of Hazard Insurance plus added coverage such as personal liability, theft away from home (items stolen from the insured’s car), and other such coverage.
Homestead
The dwelling (house and contiguous land) of the head of a family. Some states grant statutory exemptions, protecting homestead property (usually to a set maximum amount) against the rights of creditors. Property tax exemptions (for all or part of the tax) are also available in some states. Statutory requirements to establish a homestead may include a formal declaration to be recorded.
Ingress and Egress
The right of legal access to insured premises.
Joint Tenancy
An undivided interest in the property, taken by two or more joint tenants.
Judgment
A debt or other obligation resulting from a court order.
Lease
The transfer of possession and right to use the property for a stipulated period with rent paid to the owner.
Legal Description
A description, either by metes and bounds, lot and block, unit and/or volume and page, which exactly details the perimeter of certain property. Legal descriptions are relied upon more heavily than street addresses, as they are more exact and unchanging.
Lien
A claim on the property of another person as security for the payment of a debt.
Metes and Bounds
A description of real property by courses and distances, giving the lengths and direction of the boundaries of a tract of land, usually irregular in shape.
Mortgage
A legal document used to secure the performance of an obligation. The purpose of the mortgage is to create a lien on the mortgaged property as security for repayment of a debt.
Mortgagee
The source of funds for a mortgage loan; one who receives and holds a mortgage as security for repayment of a debt.
Mortgagor
The owner of the property who borrows money and mortgages the property as security for the loan.
Owner Policy
A title insurance policy is used to insure title to real property that a purchaser is acquiring.
Plat
A plan or map of a town, section, or subdivision indicating the location and boundaries of individual properties.
Quit Claim Deed
A deed of conveyance whereby whatever interest the grantor possesses in the property described in the deed is conveyed to the grantee without warranty.
RESPA
An acronym for Real Estate Settlement Procedures Act of 1974, a consumer protection statute designed to help homebuyers be better shoppers in the home buying process by specifically addressing closing costs and settlement procedures. RESPA requires that consumers receive disclosures at various times in the transaction and outlaws kickbacks that increase the cost of settlement services. RESPA is enforced by the Department of Housing and Urban Development (HUD).
Recording
Filing documents affecting real property as a matter of public record, giving notice to future purchasers, creditors, or other interested parties. The recording is controlled by statute and usually requires the witnessing and notarizing of an instrument to be recorded.
Refinance
(1) The renewing of an existing loan with the same borrower and lender;
(2) a loan on the same property by either the same lender or borrower;
(3) the selling of loans by the original lender.
Restrictions
Limitations upon the use or occupancy of the real estate placed by covenants in deeds or plats or by government‐imposed laws.
Sales Contract
A binding agreement between the buyer and seller outlining the terms of a sale of real estate.
Sheriff’s Deed
An instrument is drawn under the order of the court to convey title to the property sold to satisfy a judgment at law.
Special Assessment
A charge placed against real estate by a public authority to defray the cost of making public improvements from which the real estate benefits.
Tenancy
An estate in fee; a form of ownership. The main types are joint tenancy, tenancy in common, and tenancy by the entirety.
Tenancy by the Entirety
A form of ownership by the husband and wife whereby each owns the entire property. In the event of the death of one, the survivor owns the property without probate.
Tenancy in Common
An undivided ownership in real estate by two or more persons. The interests need not be equal, and, in the event of the death of one of the owners, no right of survivorship in the other owners exists.
Title Insurance
An agreement binding the insurer to indemnify the insured for losses sustained by reason of defects in title to the real estate.
Trust
A right of property, real or personal, held by one party for the benefit of another.
Trust Certificate
(1) A certificate of beneficial ownership in real estate, the title to which is held in trust by the trustee who issues the certificate.
(2) term used synonymously with a mortgage.
Trustee
(1) One who is appointed, or required by law, to execute a trust.
(2) one who holds title to real property under the terms of a deed of trust.
Trustee’s Deed
an instrument that conveys title to property from a trust (i.e., executed by the trustee)
Warranty Deed
Conveyance of title that contains certain assurances and guarantees by the grantor that the deed conveys a good and unencumbered title.