Understanding Your Documents

A

Abstract
A brief history of the transfer of a piece of land or property, including all claims that could be made against it.

ALTA
American Land Title Association is an organization made up of title insurance firms that set standards for the industry.

Appraisal
An estimate of the property’s value.

B

Beneficiary
A person who is eligible to receive funds or property under the terms of a will, trust, or insurance policy.

Broker
A person who acts on the behalf of a another person in negotiating sales or purchases in return for a fee or commission.

Brokerage
A fee or commission paid to a broker.

C

Chain of Title
The ownership history of a real estate property that shows how a title was passed from one owner to the next. Chain of title is examined during title search and included in the resulting report, called title commitment.

Closer
An attorney or other person responsible for orchestrating a closing. A closer will draft legal documents, explain these documents, handle funds, and define the terms of the purchase agreement.

Closing Day
The final step in a real estate transaction. It’s the big day when the buyer meets with a signing agent to review and sign the settlement statement (HUD-1) and other paperwork, money is distributed, and ownership is officially transferred from the seller to the buyer.

Closing Specialist
Your go-to person at Partners Title. They oversee your whole closing process, and works with a team of professionals at each step to ensure your transaction goes smoothly.

Clear Title
When the title for a property has no title defects. A title must be cleared before title insurance can be issued.

County Records
These are records kept and filed at the county court house. They are provided by law, are self-maintained, and are open to public examination.

Covenant
A formal agreement or contract between two parties.

D

Deed
A document that records a transfer of ownership from one person to another, and is filed with county records.

Deed of Trust
A deed that explains that the property is held by a third party until the loan is paid.

Defect
Any claims that could cause a title for a property to be invalid including: competing claims of ownership, unknown heirs, misrecorded information in public records, or forged signatures on title transfers.

Depreciation
Loss in value caused by ordinary wear and tear.

Devise
A property transferred by will, or a gift of real estate by will. The devisee is the person (or beneficiary) the property is given too, and the devisor is the deceased person.

E

Easement
The right to use the property owned by someone else for a specific purpose. Typical examples are property boundary line resolutions or items authorized to cross a property boundary (e.g., utility pole, water line, sewer line, fence, or driveway).

Encumbrance
Any charge or claim against a property such as a title defect, lien, easement, or encroachment.

Encroachment
When parts of a neighboring property cross a boundary line (e.g., utility pole, water line, sewer line, fence, or driveway).

Escrow
Also called funds management. A neutral third party or attorney that handles the exchange of money and documents once an offer reaches mutual acceptance.

Examiner
Someone who examines and determines the condition and status of real estate titles.

F

First Mortgage
The mortgage that has the priority as a lien over any other mortgage or lien on the same property.

Foreclosure
The legal process that eliminates a homeowner’s right to a property because he or she failed to make mortgage payments.

Forfeiture of Title
A common penalty when the buyer violates any conditions or restrictions described in the deed that are set by the seller of the property.

H

Heir
Someone who will inherit the property under provisions of a will.

Hiatus
A separation, gap, or unaccounted for area. Usually a strip of land between two properties due to faulty descriptions or surveys.

Homeowners Association (HOA)
The administrative body for a condo, co-op, or cul de sac development that is responsible for upholding a community’s rules and covenants, managing community financials, and providing  maintenance for shared spaces.

HOA Dues
Dues collected by a homeowners association (HOA) to fund maintenance and repair of common spaces in a shared community.

HUD or HUD-1
Also known as a Settlement Statement, which is a RESPA-regulated document tabulating the funds disbursed during the real estate transaction.

L

Legal Owner
Ownership of a property as recognized by local or federal law.

Lien
A lien is a notice filed against a property indicating that payment is owed to a second party such as a creditor, lender, or construction contractor. Liens are filed with county records and can be one of several types: judgement liens, property tax liens, IRS liens, child support liens, or mechanic’s liens.
A lien is notice attached to your property so everyone that does a property search can see that someone claims you owe them money. Any liens on your property means that you do not have a clear title.

Lien Waver
A document provided by a contractor or subcontractor proving that they have been paid for their work and are waiving rights to file a lien.

P

Property Management Company
A homeowners association (HOA) might employ this type of company to assist with the administrative duties for a condo, co-op, or cul de sac development such as preparing financial reports and carrying out regular building maintenance and repairs.

Q

Quote
An estimate of the cost of title insurance and settlement fees based on the type of policy you would like, loan amount, and sale price. Get a Quote

R

Recording
When the signed closing documents are put on record with county records to document a transfer in ownership for a property.

Reissue Rate
A lower fee charged for title insurance and settlement services when a home was last purchased less than 10 years ago. A shorter period of ownership can mean a shorter title search and lower overall fee.

RESPA
Real Estate Settlement Procedures Act (RESPA) is legislation passed by the Federal government to uniformly regulate the manner in which real estate transactions take place.

S

Settlement Appointment
Also called closing. The meeting at which the final paperwork is signed to transfer ownership of a property. Final paperwork can include the settlement statement (HUD-1), deed, mortgage agreement, etc.

Settlement Statement (HUD-1)
Also called HUD. A RESPA-regulated document tabulating the funds disbursed during the real estate transaction. Download Sample HUD-1

Signing Agent
A highly trained, licensed professional who can conduct real estate closings, explain closing documents, and notarize signatures.

Survey
The map of the properties complete boundary lines.

T

Title
Title is the right to, or ownership of, a specific real estate property. A transfer in ownership is recorded in a deed and filed with county records.

Title Commitment
A report summarizing the findings of a title search. It includes the ownership history for a property and any title issues that are discovered.

Title Insurance
Title insurance protects a homeowner or lender against financial loss from real estate title defects or liens against a property.

U

Underwriter
An insurance company that issues insurance policies.

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