Appraisal Fee

Cost for professional evaluation of the property's market value based on comparable sales, improvements of the subject property and location. (Fee usually set by the appraiser)

Agent Commission

An amount paid to the Real Estate Agent as compensation for their services per the real estate sales contract.

Certificate of Title

In an attorney state, the Title Searches are reviewed and certified by an attorney. A Certificate of Title is an attorney-reviewed and certified Title Search.

Closing

The final step of the sale process where the proceeds are exchanged, the sale documents are executed, and the property is vested in the new owner.

Cloud on Title

A defect on title that could adversely affect the ownership or position on the property.

Commitment

A document issued by a title insurance agency that contains the conditions and requirements under which a policy of title insurance can be issued.

Community Property

Property that is acquired by either spouse during a marriage is considered community property and therefore belongs to both partners.

Conveyance

When property is conveyed from one person to another using a transfer document such as a Deed, Warranty Deed, or Quit Claim Deed.

Constructive Notice

When notice is given to the public usually through the recorders office when real estate documents are recorded of public record.

Covenants, Conditions, and Restrictions

Also known as CC&R's, these are regulations established by the land association or condominium regime that are outlined and recorded in a deed of public records.

Credit Report

A report on the credit history of a loan applicant.

Deed

A deed is a document that conveys title to real property. There are many types of deeds depending on the state the property is located and the purpose of the conveyance. Some of the types of deeds used to convey or encumber property are Deed, Grant Deed, Quit Claim Deed, Special Warranty Deed, Warranty Deed,

Deed of Trust

A document which secures a loan on a specific piece of real estate, through conveyance to a trustee, with power of sale which must be recorded in the official public records of the county in which the property securing the loan is situated.

Deed Restriction

A limitation in a deed that restricts certain uses of the property.

Defective Deed

A deed that contains an error that could affect the validity of the document including ownership to the property.

Earnest Money/Deposit

A deposit of funds by the purchaser of a piece of real estate as evidence of good faith, as required by the real estate sales contract.

Easement

The right for one to use the land of another. This is common for land access. Similar to a right of way.

Encroachment

The land of one that overlaps the land of another at the adjoining boundary lines.

Encumbrance

The right of one to the land of another. An Encumbrance can be a monetary right or an ownership right.

Endorsement

An addition or modification that expands or changes coverage.

Escrow

A method of closing a real estate transaction in which all required documents and funds are placed with an escrow company for processing, closing and disbursement.

Escrow Fee

A fee charged by the settlement service provider for escrow/closing services.

Fee Simple

Ownership that grants complete and total control over the property with the exception to established restrictions of record.

Filing Fees/Recording Fees

Fees for recording necessary documents in Public Records. The fee is determined by the number of pages filed per document, and is charged by the county clerk.

Grantee

Person or entity receiving the property

Grantor

Person or entity giving the property

Hazard Insurance

Fire and extended coverage casualty insurance protects property and contents in case of loss; required by lender in an amount generally equal to the amount of the loan.

Indemnity

A title policy is an Indemnification or insurance against a possible loss.

Inspections

An examination of the property for various purposes such as termite inspections, mechanical inspections and roof inspections — usually to satisfy the lender, hazard insurance company and buyer. Lender may also require follow-up inspections regarding required repairs.

Judgment

An involuntary charge or lien imposed against the real property (unpaid lien becomes a judgment).

Legal Description

A written description of the property based on a survey to distinctly identify the property from other properties. The legal description can be described by a Lot, Block, Subdivision Name, Plat Name, Meets and Bounds, and City and County details.

Lender

A financial institution (sometimes a person) who provides financing for a real estate transaction. The lender uses a financial document to secure their interest in the property such as a Mortgage, Deed of Trust, or Trust Deed.

Lender Title Policy

A title insurance policy insuring a lender, or beneficiary under a deed of trust, against loss caused by invalidity or unenforceability of a lien, or loss of priority of the deed of trust.

Loan Application

Fee paid to the lender in connection with the origination of a loan and varies by lender.

Lien

A voluntary charge or claim imposed against real property (mortgage).

Mechanic's Lien

Also known as a Materialman's Lien is a lien that a vendor places on the real property based on work performed or materials provided where payment has not been satisfied.

Mortgage

Security instrument a lender uses to secure their financial interest in a mortgaged property. Similar to the Deed of Trust and Security Deed.

Mortgagee

The person or entity lending the funds for the real estate transaction.

Mortgagor

The person or entity receiving the funds for the real estate transaction.

Note

A lender document that is a written promise to pay the specified amount agreed upon in the security instrument.

Obligee

Person or entity to whom the obligation is promised payment

Obligor

Person or entity who is obligated to make payment

Owner Title Policy

A title insurance policy insuring an owner of real property against claims of others impacting the owner's title to the property. Exceptions or exclusions are detailed in the policy.

Origination Fee

A fee the buyer pays a lender to originate a new loan.

Parcel

A specified tract or portion of land.

Plat

A map of land that has been divided into parcels or lots.

Prepayment Penalty

A fee that may be charged by a lender for prepayment of a loan balance prior to maturity of the loan.

PMI Premium/MIP Premium

(PMI — private mortgage insurance - conventional loans, MIP — mortgage insurance premium — FHA loans) Insures lenders against loss in the event of default by the borrower in payment of the loan.

Prorated Taxes

Taxes are prorated with the Seller paying taxes from January 1st through the closing date. Figures are usually based on actual taxes owed the prior year, without any exemptions.

Public Records

Documents that are recorded with the county become public records within the state and county the documents were recorded in.

Real Property

Land or structures that are permanently attached (not movable) to land.

Recording

Placing a document of record in the county records is giving constructive notice to the public. Documents recorded in the county are given recording details (Book, Page, Instrument Numbers) that assist in locating and identify recorded documents at the county level.

Restrictions

A set of limitations on the use of property imposed or created by deeds or other documents in the chain of title. A restriction, for example, may prohibit the placement of a trailer or the construction of a commercial structure on the property.

Right of Way

The right for one to use the land of another. This is common for land access. Similar to an easement.

Security Deed

Security instrument a lender uses to secure their financial interest in a mortgaged property. In addition to being a security instrument, a Security Deed is also a deed of legal title transfer.

Survey

A depiction of the real property by a scaled drawing reflecting all improvements situated on the property, accompanied by written legal descriptions, which may be a lot and block description or a metes and bounds description. A survey should reflect all easements, encroachments, or other items under which another party may claim an interest or right to the property.

Tax Certificate

Report issued by taxing authorities showing the current year taxes, the last year the taxes were paid and any delinquencies. Lender will require delinquent taxes to be paid prior to or at closing. These numbers are also used for tax proration purposes.

Title Insurance

Indemnification agreement based on the condition of title, insuring against future losses based on prior risk.

Title Search

A thorough and comprehensive review of the public records to identify the current condition of the property including the owner(s), legal description, as well as any liens and encumbrances.

Underwriter

Title insurance company that underwrites the title insurance policy written by the title insurance agent at the time of closing.

Vesting

The manner in which an owner takes title. The vesting can determine who has ownership in the property and the rights associated with the ownership.