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You will have peace of mind
WHEN this long, tedious process is complete and you can begin to enjoy
your new purchase. |
The following is a small glossary of terms, presented to assist you in understanding terminology that will probably be used during your title search and title insurance policy issuance. ABSTRACT- A summary; an abridgement. Before the use of photostatic copying, copying, public records were kept by abstracts of recorded documents. APPRAISAL- An opinion of value based upon a factual analysis. Legally, an estimation of value by two disinterested persons of suitable qualifications. CLOSING- (1)- In real estate sales, the final procedure in which documents are executed and/or recorded, and the sale (or loan) is completed. (2) A selling term meaning the point at which the client or customer is asked to agree to the sale or purchase and sign the contract. (3) The final call in a metes and bound legal description which "closes" the boundaries of the property. CLOUD ON TITLE- An invalid encumbrance on real property, which if valid, would affect the rights of the owner. For example: Person A sells lot #1 to Person B. The deed is mistakenly drawn to read lot #2 by the recording of the erroneous deed. The cloud may be removed by quitclaim deed, or if necessary, by court action. DEED- Actually, any one of many conveyancing or financing instruments, but generally a conveyancing instrument, given to pass fee title to property upon sale. EASEMENT- A right created by grant, reservation, agreement, prescription, or necessary implication, which one has the land of another. It is either for the benefit of land (appurtenant), such as right to cross A to get to B, or "in gross", such as a public utility easement. EGRESS- A term concerning a right to come and go across the land (public or private) of another. Usually part of the term ingress and egress. ENCUMBRANCE- INCUMBRANCE- A claim, lien, charge, or liability attached to and binding real property. Any right to, or interest in, land which may exist in one other than the owner, but which will not prevent the transfer of fee title. ESCROW- Delivery of a deed by a grantor to a third party for delivery to the grantee upon the happening of a contingent event. Modernly, in some states, all instruments necessary to the sale (including funds) are delivered to a third (neutral) party, with instructions as to their use. INSTALLMENT CONTRACT- A method of purchasing by installment (usually monthly) payments. When referring to real property, it is usually called a land contract. INSURED MORTGAGE- A mortgage insured against loss to the mortgage in the event of default and a failure on the mortgaged property to satisfy the balance owing plus costs of foreclosure. May be insured by F.H.A., V.A., or by independent mortgage insurance companies. JUDGMENT (JUDGEMENT)- The decision of a court of law. Money judgments, when recorded, become a lien on real property of the defendant. LOAN POLICY- A title insurance policy insuring a mortgagee, or beneficiary under a deed of trust, against loss caused by invalid title in the borrower, or loss caused by invalid title in the borrower, or loss of priority of the mortgage or deed of trust. MARKETABLE TITLE- Title which can be readily marketed (sold) to a reasonably prudent purchaser aware of the facts and their legal meaning concerning liens and encumbrances. MECHANIC'S LIEN- A lien created by statue for the purpose of securing priority of payment for the price of work performed and materials furnished in construction or repair of improvements to land, and which attaches to the land as well as the improvements. MORTGAGE- (1) To hypothecate as security, real property for the payment of a debt. The borrower (mortgagor) retains possession and use of the property. (2) The instrument by which real estate is hypothecated as security for the repayment of a loan. OPEN-END MORTGAGE- A mortgage permitting the mortgagor to borrow additional money under the same mortgage, with certain conditions, usually as to the assets of the mortgage. PAYOFF- The payment in full of an existing loan or other lien. POWER OF ATTORNEY- An authority by which one person (principal) enables another (attorney in fact) to act for him. (1) General power-Authorizes sale, mortgaging, etc. of all property of the principal. Invalid in some jurisdictions. (2) Special power-Specifies property, buyers, price and terms how specific must be varies in each state. QUITCLAIM DEED- A deed operating as a release; intended to pass any title, interest, or claim which the grantor may have in the property, but not containing any warranty of a valid interest or title in the grantor. 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. 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. WARRANTY DEED- A deed used in many states to convey fee title to real property. Until the widespread use of title insurance, the warranties by the grantor were very important to the grantee. When title insurance is purchased, the warranties become less important as a practical means of recovery by the grantee for defective title.
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