Common Terms

Click a letter below to learn about common terms used in the title industry. If you don't see what you need, don't hesitate to contact us.

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• Abstract

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

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• Chain of Title

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

  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 Closing Disclosure (CD) and other paperwork, money is distributed, and ownership is officially transferred from the seller to the buyer.

  Closing Disclosure (CD)

  A Closing Disclosure, or CD, is a form that provides final details about the mortgage loan buyers have selected. It includes the loan terms, projected monthly payments, and how much one will pay in fees and other costs to get a mortgage (closing costs). It also shows the purchase price for the home and reflects and prior deposits made, allocations between the parties for property taxes, condominium or homeowners association fees, credits from one party to another, and the costs for title services, title insurance and government recording and transfer charges. It is the summary document for all the money connected to the purchase of the home between the buyer and seller. Buyers and sellers have separate Closing Disclosures.

  Lenders are responsible for preparing and delivering the buyer's CD and work hand in hand with the title company to prepare the final CD. Title companies generally prepare and deliver the seller's CD. Download sample CD's here: Buyer CD, Seller CD

  Closing Specialist

  Your go-to person at Title Forward. This individual oversees 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.

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• Deed

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

  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.

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• Easement

  The right to use the property owned by someone else for a specific purpose. Typical examples are resolutions about a property boundary line 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.

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• 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 building 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.

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• 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.

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• 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.

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• 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

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• 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 for title insurance in states where this rate is offered by the title insurance underwriters (not available in all Title Forward markets). When available, the amount of any discount depends on the age and face value of the current seller's owner's policy. The title company must be provided with a copy of the prior policy by the seller in order for the reissue rate to be an option.

  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.

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• 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 Closing Disclosure (CD), deed, mortgage agreement, etc.

  Signing Agent

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

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• 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.

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