Terms You Should Know When Buying A Home
A historical summary of all transactions shown in the public records
affecting a particular piece of real estate.
A means of acquiring title to real estate where an occupant has been
in actual, open, notorious, exclusive, and continuous occupancy of
property for the period required by state law.
An estimate and opinion of the quality or value of real estate as of
a given date.
The procedure by which title to real estate is transferred by deed,
or a lien is created on the title by deed of trust or mortgage, and all
necessary documents are accumulated and disbursement of money is made
for the purchase of finance of real estate and related costs. The
closing is conducted by a settlement agent responsible for the
accumulation of all necessary documents to facilitate the closing and
the preparation of the settlement statement and disbursement of money.
The settlement agent causes the deed or deed of trust or mortgage to be
recorded in the public records.
Various fees and expenses payable by the seller and buyer at the time
of a real estate closing.
commitment for title insurance
Prepared by the title insurance company, after the title is searched
in the public records, indicating the status of the title and setting
forth requirements to be satisfied upon closing. Such requirements may
include a deed to the purchaser and a deed of trust or mortgage,
satisfaction of delinquent taxes, judgments, etc., and payment and
release of other encumbrances on the title.
A husband's fractional life or fee estate in the property of his
deceased wife. By statute, in most states it is a life estate or fee
simple in one third of the land the wife owned during their marriage.
A written instrument duly executed, acknowledged and delivered for
the purpose of conveying title to real estate.
deed of trust
A conveyance of title to land by a maker of a note (borrower/owner)
to a third party, a trustee, as collateral security for the payment of
the note with the condition that the trustee shall re-convey the title to
the borrower upon payment of the note, and with power in the trustee to
sell the land and pay the note in the event of a default on the part of
defect in title
Any recorded instrument that would prevent a grantor from giving a
clear title. discount points Amounts paid to the lender (usually by the
borrower) at the time of origination of a loan, to account for the
difference between the market interest rate and the lower face rate of
A fractional estate for life or fee simple to which a married woman
by statute is entitled on the death of her husband. In most states, it
is a life or fee estate of one third of the value of all land which the
husband owned during their marriage.
A privilege or right to use or enjoyment which one person may have
in, on, over and across the lands of another. For example, a
right-of-way for utility lines, joint driveways, etc. An appurtenant
easement is an easement which benefits another parcel of real estate and
is usually for access to and from that parcel.
Trespass. A building, a part of a building, or an obstruction that
physically intrudes upon, overlaps, or trespasses upon the property of
Any right or interest in land that is held by others and may lessen
the value of the title to real estate. Includes outstanding mortgage
loans, unpaid taxes, easements, deed restrictions, etc.
The interest of value which an owner has in real estate over and
above the debts against it.
An agreement between two or more parties providing that certain
instruments or property be placed with a third party for safekeeping,
pending the fulfillment or performance of a specified act or condition.
Real estate settlements are sometimes referred to as escrow closings.
An estate in which the owner is entitled to the entire property, with
unconditional power of disposition (sell) during the owner's life, and
which descends to the heirs upon the owner's death if the owner dies
without a will (interstate) or can be devised (given to another) by will
A judicial or non-judicial legal process by which the owner/borrower
of real estate is deprived of any interest in that property due to
failure to comply with the terms and conditions of the loan. Generally,
the failure to make (timely) mortgage payments will result in
general warranty deed
A deed containing a promise whereby the seller agrees to protect the
buyer against any claims against the real estate.
The buyer of real estate.
The seller of real estate.
Protects against loss caused to property by fire, some natural
causes, vandalism, etc., depending on the terms of the policy.
Any encumbrance on a title that is not apparent in the public
records; for example, unknown heirs, forged instruments, mental incompetence, infancy of a seller, etc.
A charge against property making it security for the payment of a
debt, judgment, mortgage, or taxes; it is a type of encumbrance.
A title that is free and clear of objectionable liens, clouds,
encumbrances or other title defects.
A lien given by law upon a building or other improvement on the land,
and upon the land itself as security for the payment for labor done and
materials furnished for improvement.
An instrument recognized by law by which property is pledged to
secure the payment of debt or obligation.
The lender under a deed of trust or mortgage, also referred to as note-holder
The owner/borrower under a mortgage/deed of trust, also referred to
as borrower and grantor in the deed of trust or mortgage.
A title insurance policy insuring the owner against loss due to
defects in title not excepted to or excluded from the policy.
Any interest less than the whole.
The elimination of all claims made against a title to real estate.
plat (or survey)
A map of land made by a surveyor showing boundary lines, buildings,
and other improvements on the land.
Penalty paid to the lender for payment of the debt before it becomes
A reduced title insurance premium for the owner's title insurance
applicable in cases where the seller of the land had purchased an
owner's title insurance policy within a specified period of time prior
to the current purchase.
A limitation placed upon the use of property, contained in the deed
or other written instrument in the chain of title or in local ordinances
pertaining to land use. settlement agent Person or company that conducts
the closing of a sale and/or finance of real estate.
special warranty deed
A deed containing a covenant whereby the seller agrees to protect the
grantee (purchaser) against any claims created by the grantor (seller).
tenants by the entirety with the right of survivorship as at common
An estate that exists only between husband and wife with equal right
of possession and enjoyment during their joint lives and with the right
of survivorship; i.e., when one dies, the property goes to the surviving
tenant. Such ownership requires both to convey land at the same time and
together, a judgment against only one does not attach as a lien against
the title to the real estate, and the survivor takes title by
survivorship, not be probate. Title Evidence that the owner of the land
is in lawful possession thereof; evidence of ownership.
An unresolved claim against the ownership of property which prevents
presentation of a marketable title. Such claims may arise from failure
of the owner's spouse, or former part owner to sign a deed, current
liens against the property, or an interruption in the title records to a
An insurance policy that protects the holder from loss sustained by
defects in the title.
Any circumstance that defeats the right of whole ownership of
property by the owner of record. Title search An examination of the
public records to determine the ownership and encumbrances affecting
One who holds property in trust for another to secure performance of
an obligation; the neutral party in a trust deed transaction.