Buydown - Definition: A payment to the lender from the seller, buyer,
third party, or some combination of these, causing the lender to reduce the interest rate during
the early years of a loan. The buydown is usually for the first one to five years of the loan. (See
also - Definition: Certificate Backed Mortgage).
Tax Deed - Definition: A deed executed by the tax collector to the state, county or city when no
redemption is made from a tax sale.
Priority - Definition: The order of preference, rank or position of the various liens and
encumbrances affecting the title to a particular parcel of land. Usually, the date and time of
recording determine the relative priority between documents.
Earnest Money Deposit - Definition: Down payment made by a purchaser of real estate as evidence
of good faith; a deposit or partial payment.
Survey - Definition: The measurement by a surveyor of real property which delineates the
boundaries of a parcel of land. An ALTA survey additionally delineates the exact location of all
improvements, encroachments, easements and other matters affecting the title to the property in
question. A survey may be required by a title insurance company whenever the company is requested to
issue an ALTA Extended Coverage Policy.
Right of Way - Definition: (1) The right to pass over property owned by another, usually based
upon an easement. (2) A path or thoroughfare over which passage is made. (3) A strip of land over which
facilities such as highways, railroads or power lines are built.
a) Liens (mortgages, deeds of trust, mechanics' liens, local taxes, assessments, judgments,
attachments, etc.).
Back Title Letter or Certificate - A copy of the last policy or report issued by a title insurer
which described the title to land upon which a new search is to be made which in some states this is
called a back title letter or back title certificate.
Grantee - Definition: See Deed: A party who receives a transfer of real property by a grant
deed.
Fee Simple - Definition: An estate under which the owner is entitled to unrestricted powers to
dispose of the property, and which can be left by will or inherited. Commonly, a synonym for
ownership.
Underwritten Company - Definition: A title firm which conducts title searches but is not
qualified to insure, and therefore issues policies of a qualified title insurer (underwriter) in return
for a portion of the premium.
Personal Property (movable) - Definition: Any property that is not designated by law as real
property (i.e., money, goods, evidences of debt, rights of action, furniture, automobiles).
Comparable Sales - Definition: Sales that have similar characteristics as the subject
property, used for analysis in the appraisal. Commonly called "comps."
File and Use - Definition: In most states, title insurers file rate schedules, title insurance
policies and endorsement forms with the State Insurance Department or other state agency and then may
use such items or rates starting within a specified period of time after filing. Rates so filed usually
are mandatory.
Hazard Insurance - Definition: Real estate insurance protecting against fire, some natural
causes, vandalism, etc., depending upon the policy. Buyer often adds liability insurance and extended
coverage for personal property.
Defect - Definition: A blemish, imperfection or deficiency. A defective title is one that is
irregular and faulty.
ALTA - Definition: (American Land Title Association) Organization composed of title
insurance firms which sets standards for the industry, including title insurance policy forms used on a
national basis.
Warranty Deed - Definition: A deed used in many states to convey fee title to real property
Branch - Definition: A subordinate or division office of First American Title Insurance
Company, as opposed to an affiliate, agent, subsidiary or underwritten firm associated with the
Company.
Quiet Title - Definition: To free the title to a piece of land from the claims of other persons
by means of a court action called a "quiet title" action. The court decree obtained is a "quiet title"
decree.
Public Records - Definition: The transcriptions in a recorder's office of instruments which have
been recorded, including the indexes pertaining to them.
Party Wall - Definition: A wall generally erected on a property boundary or between two lots for
the common benefit and use of the property owners on either side.
Public Domain - Definition: Land owned by the government and belonging to the community at
large.
Title Insurance - Definition: Insured statement of the condition of title or ownership of real
property. For a one-time-only premium, the named insured and their heirs are protected against title
defects, liens and encumbrances existing as of the date of the policy and not specifically excluded
from it. In the event of a claim, the title company provides legal defense from the policyholder and
pays any covered losses incurred as a result of such claim.
Mortgage - Definition: (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.
Grant Deed - Definition: One of the many types of deeds used to transfer real property. Contains
warranties against prior conveyances or encumbrances. When title insurance is purchased, warranties in
a deed are of little practical significance.
Guardian - Definition: A person appointed by a court to manage the person and/or property of one
who is legally incompetent to handle his/her own affairs.
Patent - Definition: A conveyance of title to land by the Federal or State Government.
Cloud on Title - Definition: An irregularity, possible claim, or encumbrance which, if
valid, would adversely affect or impair the title.
Patent - Definition: A conveyance of title to land by the Federal or State Government.
Power of Attorney - Definition: A document by which one person (called the "principal")
authorizes another person (called the "attorney-in-fact") to act for him/her in a specific manner in
designated transactions.
Forfeiture of Title - Definition: A common penalty for the violation of conditions or
restrictions imposed by the seller upon the buyer in a deed or other proper document. For example, a
deed may be granted upon the condition that if liquor is sold on the land, the title to the land will
be forfeited (that is, lost) by the buyer (or some later owner) and will revert to the seller.
Squatter - Definition: One who settles upon unoccupied land without legal claim or authority.
(See Adverse Possession.)
Abatement - Definition: A reduction of decrease. Usually applies to a decrease of assessed
valuation of ad valorem taxes after the assessment, and levy
Full Disclosure - Definition: In real estate, revealing all the known facts which may affect the
decision of a buyer or tenant. A broker must disclose known defects in the property for sale or
lease.
Waive - Definition: To voluntarily and intentionally relinquish a known right, claim or
privilege.
Capitalization Rate - Definition: The percentage (acceptable to an average buyer) used to
determine the value of income property through capitalization.
Obligee - Definition: One to whom an obligation (promise) is owned.
Vendor - Definition: A seller
Abandonment - Definition: The voluntary relinquishment of rights of ownership or another
interest(such as easement) by faliure to use the property, coupled with an intent to abandon (give up
the interest).
Mortgagor - Definition: The party who borrows the money and gives the mortgage.
Acceleration Clause - Definition: Clause in a deed of trust or mortgage, which "accelerates," or
hastens, the time when the indebtedness becomes due. For example, some deeds of trust contain a
provision(an acceleration clause) stating that the note shall become due immediately upon the sale of
the land or upon faliure to pay interest or an installment of principal and interest
Fixed Rate Mortgage - Definition: A mortgage having a rate of interest which remains the same for
the life of the mortgage.
Partnership - Definition: An association of two or more persons who have contracted to join in
business and share the profits.
Encroachment - Definition: The presence of an improvement such as a building, a wall, a fence or
other fixture which overlaps onto the property of an adjoining owner.
Priority - Definition: The order of preference, rank or position of the various liens and
encumbrances affecting the title to a particular parcel of land. Usually, the date and time of
recording determine the relative priority between documents.
Collateral - Definition: By or at the side, additional or auxiliary. Mistakenly used to
mean collateral security.
Abstract - Definition: A summary or succinct summary; (e.g. an abstract of judgment; an abstract
of title, etc.)
Trustee - Definition: A third party holding legal title in trust for a beneficiary to secure the
performance of an obligation by the trustor under a trust deed. See Trust Deed, Trustor and
Beneficiary.
Title - Definition: (1) A combination of all the elements that constitute a legal right to own,
possess, use, control, enjoy and dispose of real estate or a right or interest therein. (2) The rights
of ownership recognized and protected by the law.
Variable Interest Rate - Definition: An interest rate that fluctuates with the current cost of
money; subject to adjustment if the prevailing rate moves up or down.
Debtor - Definition: A party who is in debt and owes money to another (one who owes a debt).
Conveyance - Definition: An instrument in writing, such as a deed or trust deed, used to
transfer (convey) title to property from one person to another.
"1031 Exchange - Definition: An exchange which is officially called an Internal Revenue Code 1031
Exchange which allows an owner to trade one like property for another under very specific guidelines
and defer paying income tax.
"
Close of Escrow - Definition: 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.
Starter - Definition: A copy of the last policy or report issued by a title insurer which
described the title to land upon which a new search is to be made. In some states, this is called a
back title letter or back title certificate.
Power of Attorney - Definition: A document by which one person (called the "principal")
authorizes another person (called the "attorney-in-fact") to act for him/her in a specific manner in
designated transactions.
Title Search - Definition: A review of all recorded documents affecting a specific parcel
of land to determine the present condition of title. An experienced title officer or attorney reviews
and analyzes all material relating to the search, then determines the sufficiency and status of title
for insurance of a title insurance policy.
Reconveyance - Definition: 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. Also called a deed of reconveyance or release.
All-Inclusive Rate - Definition: Rate which includes charges for title insurance, searching
or abstract fees and examination fees.
"Good Faith" or "Mortgage Savings" CLAUSE - Definition: A clause in CC & R's which provides
that " a violation thereof shall not defeat or render invalid the lien of any mortgage or deed of trust
made in good faith and for value."
PITI - Definition: A payment that combines Principal, Interest, Taxes, and Insurance.
Restrictions - Definition: Often called restrictive covenants. Provisions in a deed or other
instrument whereby an owner of land prohibits or restricts certain use, occupation or improvement of
the land.
Good Faith Purchaser or Mortgagee - Definition: A person who buys or lends in good faith, that
is, without notice of any existing problem, where value is paid or lent.
Conservator - Definition: A person appointed by the court to care for the person and/or
property of an incompetent adult or an adult unable to care for their person or property because of
health.
Testate - Definition: Leaving a legally valid will at death. See Intestate.
Amortized Loan - Definition: A loan that is paid off, both interest and principal, by
regular payments that are equal or nearly equal.
"P.I.Q." - Definition: A title term referring to Property In Question.
Real Property (immovable) - Definition: Land, from the center of the earth and extending above
the surface indefinitely, including all inherent natural attributes and any man-made improvements of a
permanent nature place thereon. For example - Definition: minerals, trees, buildings, appurtenant
rights.
Abstract of Judgement - Definition: A summary of money judgement obtained in court. (When this
summary or abstract is recorded in the county recorder's office, in some states the judgement becomes a
lien on the debtor's property, both presently owned or after-acquired.)
Quitclaim Deed - Definition: 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.
Abstract of Title - Definition: A summary prepared by a licensed abstractor of all documents
recorded in the public records of the political subdivision where the land is located. An abstract in
some states or areas is reviewed by an attorney or other experienced title examiner to determine the
status of title. Virtually every abstractor today provides actual copies of the records rather than an
abstract of each document.
Public Records - Definition: The transcriptions in a recorder's office of instruments
Condemnation - Definition: The taking of private property by the government for public use
- as for a street or a storm drain - upon making just compensation to the owner. This right or power of
government to take property for a necessary public use is called "eminent domain."
Legal Description - Definition: A description of land recognized by law, based on government
surveys, spelling out the exact boundaries of the entire piece of land. It should so thoroughly
identify a parcel of land that it cannot be confused with any other.
Equity - Definition: (1) A legal doctrine based on fairness, rather than strict interpretation of
the letter of the law. (2) The market value of real property, less the amount of existing liens. (3)
Any ownership investment (stocks, real estate, etc.) as opposed to investing as a lender (bonds,
mortgages, etc.).
Beneficiary - Definition: "See Deed of Trust" (1) A party entitled to the benefit of a
trust; (2) a party who receives profit from an estate, the title of which is vested in a trustee; (3) a
party to whom an insurance policy is payable; (4) the lender on the security of a note and trust
deed.
Demand Note - Definition: A note having no date for repayment, but due on demand of the
lender.
Bankruptcy - Definition: A special proceeding under federal, or in some instances state,
laws by which the property of a debtor is protected by the court and may be divided among the debtor's
creditors and the debtor.
Mechanics Lien - Definition: A lien created by statute for the purpose of securing priority of
payment for the price or value 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.
Annual Percentage Rate (A.P.R.) - Definition: The yearly interest percentage of a loan, as
expressed by the actual rate of interest paid. For example - Definition: 6% add-on interest would
be much more than 6% simple interest, even though both would say 6%. The A.P.R. is disclosed as a
requirement of federal truth in lending statutes.
Vesting - Definition: 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; also that portion of a title
report or policy setting forth the above.
Note - Definition: A unilateral agreement containing an express and absolute promise of the
signer to pay to a named person, or order, or bearer, a definite sum of money at a specified date or on
demand. Usually provides for interest and, concerning real property, is secured by a mortgage or trust
deed.
Personal Property (movable) - Definition: Any property that is not designated by law as real
property (i.e., money, goods, evidences of debt, rights of action, furniture, automobiles).
Collateral Security - Definition: Most commonly used to mean some security in addition to
the personal obligation of the borrower.
Parcel - Definition: Any area of land contained within a single description.
b) Encumbrances other than liens which are limitations on the ownership of the land (such as
conditions, restrictions, reservations, easements, etc.).
Subdivision - Definition: 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.
Breach of Contract - Definition: Failure to perform a contract, in whole or part, without
legal excuse.
Description - Definition: The exact location of a piece of real property stated in terms of lot,
block, tract, part lot, metes and bounds, recorded instruments, or U.S. Government survey
(sectionalized). This is also referred to as legal description of proper
Judgment Lien - Definition: A lien against the property of a judgment debtor. An involuntary
lien.
Search - Definition: In title industry parlance, a careful exploration and examination of
the public records in an effort to find all recorded instruments relating to a particular chain of
title.
Street Improvement Bonds - Definition: Interest-bearing bonds issued, usually by a city or
county, to secure the payment of assessments levied against land to pay for street improvements. The
property owner may pay off the particular assessment against the property, or may allow the assessment
to "go to bond" and pay installments of principal and interest over a period of years, usually at the
city or county treasurer's office. The holder of a bond received payments from these offices.
Party Wall - Definition: A wall generally erected on a property boundary or between two lots for
the common benefit and use of the property owners on either side.
Eminent Domain - Definition: The right of a government to take privately owned property for
public purposes under condemnation proceedings upon payment of its reasonable value. See
Condemnation.
Defective Title - Definition: (1) Title to a negotiable instrument obtained by fraud. (2) Title
to real property which lacks some of the elements necessary to transfer good title.
Executor - Definition: A person appointed in a will and affirmed by the probate court to cause a
distribution of the decedent's estate in accordance with the will. (The one who makes the will is
called a "testator.") If a woman is appointed, she is referred to as the "executrix."
Estate - Definition: (1) The interest or nature of the interest which one has in property, such
as a life estate, the estate of a decreased, real estate, etc. (2) A large house with substantial
grounds surrounding it, giving the connotation of belonging to a wealthy person.
Certificate of Title - Definition: 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.
Decree of Distribution - Definition: A probate court decree which determines how the estate of a
decedent shall be distributed.
Homestead - Definition: A statutory protection from execution or the establishment of title by
occupation of real property in accordance with the laws of various states or the Federal
Government.
Trustor - Definition: The party who borrows money from a trust deed beneficiary (lender) and who
deeds the real property securing the loan to a trustee (third party) to be held as security until the
trustor (borrower) has performed (paid back) the obligation to the lender.
Lender - Definition: Any person or entity advancing funds which are to be repaid. A general term
encompassing all mortgagees, and beneficiaries under deeds of trust.
Coinsurance - Definition: Ordinary coinsurance is defined as a transaction under which each
of two or more insurers assumes a designated portion of the liability for the total risk and is liable
for only such portion of any loss beginning at the first dollar of loss. (See Reinsurance.)
Vendor's Lien - Definition: An implied lien given by law to a vendor for the remaining unpaid and
unsecured part of a purchase price.
Affidavit - Definition: A written statement or declaration, sworn to before an officer who
has authority to administer an oath.
Encumbrance - Definition: A right or claim upon real property (land) held by one other than the
property owner. Encumbrances are divided into two classes, as follows - Definition:
Tax Sale - Definition: Property on which current county taxes have not been paid is "sold to the
state." No actual sale takes place - the title is transferred to the state and the owner may redeem it
by paying taxes, penalties and costs. If it has not been redeemed within five years, the property
(referred to as "tax sold property") is actually deeded to the state. (Similar "sales" to cities take
place for unpaid city taxes.)
PITI - Definition: A payment that combines Principal, Interest, Taxes, and Insurance.
"PRE," "PRELIM" OR Preliminary Report - Definition: A written report issued by a title company,
preliminary to issuing title insurance, which shows the recorded condition of title of the property in
question. See Commitment.
Adjustable Mortgage Loans (AML'S) - Definition: Mortgage loans under which the interest
rate is periodically adjusted to more closely coincide with current rates. The amounts and times of
adjustment are agreed to at the inception of the loan. Also called - Definition: Adjustable Rate
Loans, Adjustable Rate Mortgages (ARM'S), Flexible Rate Loans, Variable Rate Loans. (See also -
Definition: Indexing, Rate Index).
Deed - Definition: Written document by which an estate or interest in real property is
transferred from one person to another. The person who transfers the interest is called the "grantor."
The one who acquires the interest is called the "grantee." Examples of deeds are grant deeds,
administrators' deeds, executors' deeds, quitclaim deeds, etc. The deed to use depends on the language
of the deed, the legal capacity of the grantor and other circumstances.
Endorsement - Definition: Addition to or modification of a title insurance policy which expands
or changes coverage of the policy, fulfilling specific requirements of the insured.
Separate Property - Definition: Real property owned by one spouse exclusive of any interest of
the other spouse.
Owner's Policy - Definition: A policy of title insurance usually insuring an owner of real estate
against loss occasioned by defects in, liens against or unmarketability of the owner's title.
Subordination Agreement - Definition: An agreement by which one encumbrance (for example, a
mortgage) is made subject to another encumbrance (for example, a mortgage) is made subject to another
encumbrance (perhaps a lease). To "subordinate" is to "make subject to," or to make of lower
priority.
Community Driveway - Definition: A driveway which is jointly owned, used and maintained by
two or more persons. Usually, a portion of each owner's property is burdened by the driveway.
Surface Rights - Definition: Rights to enter upon and use the surface of a parcel of land,
usually in connection with an oil and gas lease or other mineral lease. They may be "implied" by the
language of the lease (no explicit reservation or exception of the surface rights) or "explicitly" set
forth.
Escrow - Definition: An independent third party, such as First American Title, who acts as the
agent for buyer and seller, or for borrower and lender, carrying out instructions of both and
disbursing documents and funds. Escrow closes and the transfer of property or document is completed
upon fulfillment of certain conditions specified in the written instructions, whereupon the necessary
deeds and other instruments are recorded.
Constructive Notice - Definition: Notice imparted by the public records of the county when
documents entitled to recording are recorded.
Mortgagee - Definition: The party lending the money and receiving the mortgage.
Closing - Definition: The final procedure in the real estate sales process, where the sale
and pertinent loan are completed by the execution of documents for recording. In some areas, this
procedure is known as the closing of escrow.
Bona Fide Purchaser - Definition: One who buys property in good faith, for fair value, and
without notice of any adverse claim or right of third parties.
Easement - Definition: A right or interest in the use of the land of another which entitles the
holder to some use, privilege or benefit, such as to place pole lines, pipe lines or roads thereon.
Quitclaim Deed - Definition: 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.
Deed of Trust or Trust Deed - Definition: A written document by which the title to land is
conveyed as security for the repayment of a loan or other obligation. It is a form of mortgage. The
landowner or debtor is called the "trustor." The party to whom the legal title is conveyed (and who may
be called on to conduct a sale thereof if the loan is not paid) is the "trustee." The lender is the
"beneficiary." When the loan is paid off, the trustee is asked by the beneficiary to issue a "recon" or
reconveyance. This reconveyance corresponds to the release that the holder of a mortgage executes when
the mortgage is paid off.
Lease - Definition: An agreement by which an owner of real property (lessor) gives the right of
possession to another (lessee), for a specified period of time (term) and for a specified consideration
(rent).
Corporation - Definition: An entity authorized by law and established by a group of people,
the stockholders, which is endowed with certain rights, privileges and duties similar to an
individual.
Grant - Definition: A transfer of real estate, between individuals, by deed. A transfer of real
estate from a sovereign is accomplished by patent or royal decree.
Deed Restrictions - Definition: Limitations in the deed to a property that dictate certain uses
that may or not be made of the property.
Priority Inspection - Definition: A title term referring to the type of inspection made in
connection with insuring a new construction loan. In making the inspection of the property, the title
company must be assured that the work of improvement had not yet begun when the lender's deed of trust
was recorded.
Original Cost - Definition: The purchase price of property, paid by the present owner. The
present owner may or may not be the first owner.
Execution - Definition: An order directing a sheriff, constable, marshal or court-appointed
commissioner to enforce a money judgment against the property of a debtor. This officer, if necessary,
may sell the property to satisfy the judgment.
Agent - Definition: One who has authorization, either expressed or implied, to act for or
represent another party, usually in business matters, such as issuing title insurance policies on
behalf of a title insurer for a portion of the premium.
Amendment - Definition: A change either to alter, add to, or correct part of an agreement
without changing the principal idea or essence.
Effective Demand - Definition: A qualifying term meaning the ability to pay as well as desire to
buy.
Trustee Deed - Definition: An instrument in use in many states, that takes the place of and
serves the use of a common law mortgage, by which a trustor places the legal title to real property
with a trustee to secure the repayment of a sum of money to the beneficiary.
Adverse Possession - Definition: A process of acquiring title to real property by
possession for a certain (statutory) period of time, in addition to fulfilling other
conditions.
Accomodation Recording - Definition: Recording of instruments with the county recorder by a title
company merely as a convenience to a customer and without assumption of responsibility for correctness
or validity-Policy.
Blanket or Trust Deed - Definition: A mortgage or trust deed that covers more than one lot
or parcel of real property, and often an entire subdivision. As individual lots are sold, a partial
reconveyance from the blanket mortgage is ordinarily obtained.
Partnership - Definition: An association of two or more persons who have contracted to join in
business and share the profits.
Grantor - Definition: See Deed: A party who transfers his or her interest in real property to
another by a grant deed.
"PRE," "PRELIM" OR Preliminary Report - Definition: A written report issued by a title company,
preliminary to issuing title insurance, which shows the recorded condition of title of the property in
question. See Commitment.
Covenants, Conditions and Restrictions - Definition: Commonly called "CC & R's" the
term usually refers to a written recorded declaration which sets forth certain covenants, conditions,
restrictions, rules or regulations established by a subdivider or other landowner to create uniformity
of buildings and use within tracts of land or groups of lots. The restrictions also can be established
by deed. CC & R's are sometimes referred to as private zoning
Acknowledgement - Definition: A formal declaration before a duly authorized officer (such
as a notary public) by a person who has executed an instrument that such execution is his own act and
deed. An acknowledgment is necessary to entitle an instrument (with certain specific exceptions) to be
recorded, to impart constructive notice of its contents and to entitle the instrument to be used as
evidence without further proof. The certificate of acknowledgment is attached to the instrument or
incorporated therein.
Lien - Definition: An encumbrance against property for money, either voluntary or involuntary.
All liens are encumbrances but all encumbrances are not liens.
Title Report - Definition: A specific document which serves as proof of ownership.
Sale and Leaseback A situation in which the grantor in a deed to a parcel of property sells it and
retains possession by simultaneously leasing it from the grantee.
Covenant - Definition: (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.
Commitment - Definition: A binding contract with a title company to issue a specific title
policy, showing only those exceptions contained in the commitment and any intervening matters after the
date of the commitment and prior to the effective date of the policy. The commitment contains all
information included in the preliminary title report, plus a list of the title company's requirements
to insure the transaction. It also includes the standard exceptions from coverage that will appear in
the policy.
Vendee - Definition: A purchaser or buyer.
Foreclosure - Definition: The sale of property used as security for a debt after default in
payment.
Recording - Definition: 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 usually requires the witnessing and notarizing of an instrument to be recorded.
Building Contract - Definition: An agreement between an owner or lessee and a building
contractor, setting forth terms relative to the construction of a proposed structure.
Debt - Definition: An obligation to repay some amount owed. This may or may not be monetary.
PLAT - Definition: A plan, map or chart of a tract or town site dividing a parcel of land into
lots.
Agreement of Sale - Definition: A written contract entered into between the seller (vendor)
and buyer (vendee) for sale of real property (land) on an installment or deferred payment plan. It is
also known as an agreement to convey, a long form Security Agreement or a real estate installment
contract.
Parcel - Definition: Any area of land contained within a single description.
Reinsurance - Definition: A contract which one insurer makes with another to protect the first
insurer, wholly or partially, against loss or liability by reason of a risk under a separate and
distinct contract as insurer of a third party. Reinsurance differs from coinsurance in that, in the
case of reinsurance, only one insurer has a direct contractual relationship with the insured, and that
insurer (commonly referred to as the "lead insurer") purchases reinsurance in order to lessen or spread
the risk. The "lead insurer" will assume a risk up to a limit (the amount of which is referred to as
the "retention") and any loss which exceeds this limit would be borne by the reinsurers. In the case of
coinsurance, each coinsurer has a direct contractual relationship with the insured, and the risk is
shared in agreed-upon proportions from the first dollar of loss.
Public Domain - Definition: Land owned by the government and belonging to the community at
large.
PLAT - Definition: A plan, map or chart of a tract or town site dividing a parcel of land into
lots.
Administrator - Definition: A person appointed by the probate court to carry out the
administration of a decedent's estate when the decedent has left no will. If a woman is appointed, she
is called an administratrix.
Assumption - Definition: The act of conveying real property; taking title to a property
with the Buyer assuming liability for paying an existing note secured by a deed of trust against the
property.
Community Property - Definition: Property acquired by husband, wife or both during marriage
which gives each spouse an interest in the property whether each appears in title or not.
Appraisal - Definition: An estimate of value of property resulting from analysis of facts
about the property; an opinion of value.
Land Contract - Definition: An installment contract for the sale of land whereby the seller
(vendor) holds legal title and the buyer (vendee) has equitable title until the sales price is paid in
full.
Escheat - Definition: The reversion of property to the state when an owner dies leaving no legal
heirs, devisees or claimants.
Deposit - Definition: (1) Money given by the buyer with an offer to purchase. Shows good faith.
Also called earnest money. (2) A natural accumulation of resources (oil, gold, etc.) which may be
commercially recovered and marketed.
Venue - Definition: Neighborhood; often used to refer to the county or place in which an
acknowledgment is made before a notary; also refers to the county in which a lawsuit may be filed or
tried.
"P.I.Q." - Definition: A title term referring to Property In Question.
Approved Attorney - Definition: An attorney whose opinion is acceptable to a title company
as the basis for issuance of a title insurance policy by the insurer. The insurer, rather than the
attorney, executes the policy.
Priority Inspection - Definition: A title term referring to the type of inspection made in
connection with insuring a new construction loan. In making the inspection of the property, the title
company must be assured that the work of improvement had not yet begun when the lender's deed of trust
was recorded.
Obligor - Definition: One who legally binds (obligates) oneself, such as the maker of a
promissory note.
Quiet Title - Definition: To free the title to a piece of land from the claims of other persons
by means of a court action called a "quiet title" action. The court decree obtained is a "quiet title"
decree.
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