A
Abstract: A set of documents which record the ownership through time
for a property. A brief history of the transfers of a piece of land,
including all claims that could be made against it.
Ad
Valorem: Literally, "according to value." this term is usually used in
reference to real property taxes which are assessed according to value.
Adverse
Possession: A process of acquiring title to real property by
possession for a certain statutory period of time, it may require the
fulfillment of other conditions.
Agreement
of Sale: A written contract entered into between a seller and a buyer
for sale of a property.
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B
Binder:
A temporary insurance commitment covering a piece of real estate
pending closing and the issuance of a permanent title policy.
Bona Fide
Purchaser: One who buys a property in good faith, for fair value, and
without notice of any adverse claim or third parties rights.
Breach of
Contract: Failure to perform a contract, in part or whole, without
legal excuse.
Broker
Compensation or Fee: The amount of money the broker will receive for
finding a loan for a borrower. This may be an amount paid by the borrower,
an amount paid by the lender or a combination of the two.
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C
Chain of
Title: A history of the ownership of a particular property.
Certificate of Title: In areas where attorneys examine abstracts or
chains of title, a written opinion, executed by the examining attorney,
stating that title is vested as stated in the abstract.
Close of
Escrow: The date the documents are recorded and title passes from
Seller to Buyer. On this date, the Buyer becomes the legal owner, and
title insurance becomes effective.
Closing:
The final step in the sale, purchase or refinance of property where
ownership of the property is transferred.
Closing
Costs: A general term to describe the fees that a borrower will pay at
closing. These costs are sometimes called "settlement fees."
Commissions: A fee or allowance given to a sales person or agent or
realtors which usually receive about 3% of the sales price (i.e. 3% to
selling realtor and 3% to listing realtor) of the property at the close of
escrow.
Commitment to Insure: Document stating conditions of the title
insurance, also referred to as binder.
Constructive Notice: Notice imparted by the public records of the
county when documents entitled to recording are recorded.
Contingent: Dependent upon conditions or events specified but not yet
accomplished. Property may be sold contingent upon the seller or buyer
meeting a predetermined condition.
Conveyance: An instrument in writing, such as a deed or trust deed,
used to transfer (convey) title to property from one person to another.
Covenant:
(1) A formal agreement or contract between two parties in which one
party gives the other certain promises and assurances, such as the
covenant of warranty in a warranty deed.
(2)
Agreements or promises contained in deeds and other instruments for
performance or nonperformance of certain acts, or use or nonuse of
property in a certain manner.
Covenants, Conditions and Restrictions: Commonly called "CC&Rs" (which
are sometimes referred to as private zoning) and usually refers to a
written recorded declaration which sets forth certain conditions, rules,
covenants, restrictions or regulations established by a landowner to
create uniformity of buildings and use within tracts of land or groups of
lots. These restrictions can also be established via deed.
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D
Deed:
A legal document conveying title to a property. An instrument whereby a
seller transfers ownership rights of a property.
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E
Escrow
Cancellation/s: A Purchase Agreement is a legal and binding contract.
One may request to cancel the escrow. For example, if the buyer/s show
that they can not qualify for their loan, the Buyer can have their money
(deposits) returned. This may also happen if the appraisal is lower than
the asking price or that some problems are found during the inspections.
A seller may
put a "Kick-out Clause" such a clause allows the Seller to accept one
buyer's contingent offer over another and as a result back out without
penalty if a second buyer makes a better offer.
Escrow
Instructions: Are instructions that are signed by both the buyer and
the seller, and that enable an escrow agent to carry out the necessary
procedures required for the transaction.
Escrow
Officer: An escrow officer is an escrow agent that acquired through
experience and education a degree of expertise in escrow issues.
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F
Flood
Insurance: If flood determination obtained by your lender indicates
that any portion of the property is located within a flood zone, a policy
of flood insurance may be required by your lender.
Full
Disclosure: The act of revealing all known facts that may affect a
buyer's decision. It is also the broker's commitment to disclose known
defects in the property for sale or lease.
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H
Hazard
Insurance (Homeowner's Insurance): Policy that insures property
against fire and other casualties.
Holding
Escrow: The deposit of consideration with a third party by interested
party or parties, for the purpose of effecting terms of a contract of
agreement between the parties. These escrows involve extensive escrow
instructions, scheduled communications and monitoring of monies at
specified levels. Our service allows the interested parties to focus on
the transaction itself, with the security of Escrow of the West as an
experienced third party providing management.
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I
Impounds:
Type of a trust account established by lenders for the accumulation of
borrower's funds to meet periodic payments of taxes, mortgage insurance
premiums, and/or future insurance policy premiums, required to protect
their security. A portion of the monthly mortgage payment that is placed
in an account and used to pay for hazard insurance, property taxes and
private mortgage insurance.
Indemnity: Insurance against possible loss or damage.
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J
Judgment
and Name Search: Part of the title search. Determines if there are any
unsatisfied judgments against the seller or previous owners which were in
existence while they owned the title.
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L
Lender's
Policy: Protection for the mortgage holder, so that if there is a
fault in title that results in a loss, the mortgage company will be paid
back.
Lis
Pendens: A notice recorded in the official records of a county to
indicate that a lawsuit is pending affecting the lands described in the
notice.
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M
Metes and
Bounds: A term used in describing the boundary lines, terminal points
and angles of a specific piece of land.
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N
Needs-Based Pricing: An asking price based on factors such as the
funds required to pay off the seller's mortgage, the cost of remodeling,
or the purchase of another house.
Neutral
Third Party: Escrow Officer or Holder of Escrow and the Title Company
are considered a "neutral third party". These third parties will not
provide any advice about the fair or un-fair value of the transaction,
they would encourage you to consult legal or other professional counsel if
you have any such questions.
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O
Offset
Statement: A statement furnished to an escrow from an owner of land
subject to an encumbrance (note) as to the balance due.
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P
Purchase
Agreement: A written contract between the buyer and the seller of an
asset stating the terms and conditions under which the asset will be sold.
Prelim or
Preliminary Report: A written report commonly issued by a title
company, issued prior to issuing title insurance, which shows the recorded
condition of property title.
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R
Reconveyance: An instrument used to transfer title from a trustee to
the equitable owner of real estate, when title is held as collateral
security for a debt. Most commonly used upon payment in full of a trust
deed.
Recording: Filing documents affecting real property as a matter of
public record, giving notice to future purchasers, creditors, or other
interested parties. Recording is controlled by statute and often requires
the witnessing and notarizing of an instrument to be recorded.
Report on
Possession: Supplement information learned from the title search.
Inspectors verify lot size, location of improvements, evidence verifying
recorded easements.
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S
Septic
Tank: When public sewers are not available, a property is required to
utilize a septic tank system. The system includes hooking up the
property's sewage system to a tank that is buried deep in the ground away
from the house. The solid organic sewage is collected in the tank where it
is decomposed and purified by anaerobic bacteria.
Subdivision: An area of land laid out and divided into lots, blocks,
and building sites, and in which public facilities are laid out, such as
streets, alleys, parks, and easements for public utilities.
Subordination Agreement: An agreement by which one encumbrance ( a
mortgage) is made subject to another encumbrance (a mortgage) is made
subject to another encumbrance (possibly a lease).
Survey:
Graphical drawing that locates improvements on the land in relation to
the property lines, easements, etc.
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T
Tax
Search: Search to determine the present status of real estate taxes
against the property.
Tenants
in Common: Property owned by two or more persons at the same time. The
proportionate interests and right to possess and enjoy the property
between the tenants in common do not have to be equal.
Termite
Letter: Letter from licensed pest exterminating company stating that
there is no active infestation of termites and that there is no damage
from prior infestation.
Title
Insurance: Protects a lender or owner against loss in the event of a
property ownership dispute.
Title
Search: The process of examining all relevant records to confirm that
the seller is the legal owner of a property and that there are no liens or
other claims outstanding.
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V
Vesting:
The names, status and manner in which title of ownership is held with
a fixed or determinable interest in a particular parcel of real property.
Voidable
Contract: A contract that may seem to be valid, but can be rejected by
either one of the parties.
Voluntary
Lien: A lien that a homeowner willingly gives to a lender.
