Real Estate Title & Escrow Glossary.
Every term you need to understand — from abstract of title to zoning. Written in plain language by real closing professionals.
Abstract of Title
An abstract of title is a condensed history of all recorded documents and proceedings that affect the ownership of a specific piece of real...
Acceleration Clause
An acceleration clause is a provision found in most mortgage agreements and deeds of trust that allows the lender to demand full repayment ...
Acknowledgment
An acknowledgment is a formal declaration made before a notary public or other authorized officer confirming that the person signing a docu...
Adjustable-Rate Mortgage (ARM)
An adjustable-rate mortgage (ARM) is a home loan where the interest rate changes periodically based on a benchmark index plus a margin set ...
Adverse Possession
Adverse possession is a legal doctrine that allows a person to claim ownership of land they have openly, continuously, and exclusively occu...
Affidavit
An affidavit is a written statement of facts made under oath and signed before a notary public. Unlike a simple written statement, an affid...
ALTA Survey
An ALTA (American Land Title Association) survey is the most comprehensive type of property survey available, meeting rigorous national sta...
Amortization
Amortization is the process of gradually paying off a mortgage through regular installments that include both principal (the amount borrowe...
Appraisal
An appraisal is an independent, professional estimate of a property's fair market value conducted by a state-licensed or certified appraise...
Assessment
An assessment is a charge levied against a property by a government entity or homeowners association for a specific purpose. Unlike regular...
Assignment
An assignment is the transfer of rights, title, or interest in a property, contract, or financial instrument from one party (the assignor) ...
Assumption of Mortgage
An assumption of mortgage occurs when a buyer takes over the seller's existing mortgage, including its terms, interest rate, and remaining ...
Balloon Mortgage
A balloon mortgage is a type of home loan that requires a large lump-sum payment — known as the balloon payment — at the end of a relat...
Beneficiary
A beneficiary is a person or entity that benefits from a trust, will, insurance policy, or financial arrangement. In real estate, the term ...
Bill of Sale
A bill of sale is a legal document that transfers ownership of personal property from the seller to the buyer. In real estate transactions,...
Binder
A binder — also called a commitment for title insurance — is a preliminary report issued by a title company that outlines the condition...
Blanket Mortgage
A blanket mortgage is a single mortgage that covers multiple properties under one loan agreement. Rather than obtaining separate financing ...
Bridge Loan
A bridge loan is a short-term financing option designed to help homeowners purchase a new property before selling their current one. It lit...
Buydown
A buydown is a mortgage financing technique where upfront money is paid at closing to reduce the interest rate on a home loan, either tempo...
Capital Gains
Capital gains are the profits realized when a property is sold for more than its adjusted cost basis — which is the original purchase pri...
Cash to Close
Cash to close is the total amount of money a buyer needs to bring to the closing table to complete the purchase of a property. It is not si...
Certificate of Occupancy
A certificate of occupancy (CO) is a document issued by a local government building or zoning department confirming that a building complie...
Chain of Title
The chain of title is the complete history of ownership transfers for a piece of real property, from the original government grant or paten...
Clear Title
A clear title — also called clean title, marketable title, or free and clear title — means the property has no liens, encumbrances, or ...
Closing
Closing — also called settlement, completion, or escrow closing depending on your region — is the final step in a real estate transacti...
Closing Costs
Closing costs are the collective fees and expenses paid at the closing of a real estate transaction, above and beyond the property's purcha...
Closing Disclosure
The closing disclosure (CD) is a standardized five-page document that provides the final, detailed accounting of your mortgage loan terms a...
Cloud on Title
A cloud on title is any claim, lien, encumbrance, or defect that casts doubt on the validity of a property's ownership. A clouded title doe...
Commitment for Title Insurance
A commitment for title insurance — also called a title commitment, title binder, or preliminary title report — is a document issued by ...
Comparable Sales (Comps)
Comparable sales — universally known as "comps" — are recently sold properties that are similar to the subject property in terms of loc...
Contingency
A contingency is a condition written into a purchase agreement that must be satisfied before the transaction is legally binding or before c...
Conveyance
Conveyance is the legal process of transferring ownership of real property from one party to another. It is the formal act of making someon...
Covenant
A covenant is a binding agreement or promise written into a deed, subdivision declaration, or other recorded legal document that requires o...
Deed
A deed is the legal document that transfers ownership — known as title — of real property from one party (the grantor) to another (the ...
Deed in Lieu of Foreclosure
A deed in lieu of foreclosure is a voluntary arrangement where the borrower transfers ownership of the property directly to the lender to s...
Deed of Trust
A deed of trust is a legal document used in many states as an alternative to a traditional mortgage to secure a real estate loan. While a m...
Deed Restriction
A deed restriction is a limitation on the use of a property that is written into the deed itself or in a separate recorded document (such a...
Default
Mortgage default occurs when a borrower fails to meet the terms and conditions of their loan agreement. While most people associate default...
Defect in Title
A defect in title — also called a title defect or title flaw — is any issue that challenges the validity of ownership or creates uncert...
Disbursement
Disbursement is the process of distributing funds from the escrow account at closing. The settlement agent — typically from the title com...
Discount Points
Discount points — commonly called mortgage points or simply "points" — are upfront fees paid to the lender at closing to permanently re...
Documentary Stamps
Documentary stamps — commonly called "doc stamps" — are a form of transfer tax imposed by state or local government when real property ...
Down Payment
The down payment is the portion of the purchase price that the buyer pays out of pocket at closing, with the remainder financed through a m...
Dry Closing
A dry closing is a real estate closing where all documents are signed by both buyer and seller, but the funds are not disbursed on the same...
Due Diligence
Due diligence is the comprehensive investigation and verification process that a buyer conducts before completing a real estate purchase. I...
Earnest Money
Earnest money — also called a good faith deposit, binder deposit, or escrow deposit — is a sum of money the buyer puts down when submit...
Easement
An easement is a legal right that allows someone other than the property owner to use a specific portion of the property for a defined purp...
Eminent Domain
Eminent domain is the government's constitutional power to take private property for public use, provided the owner receives "just compensa...
Encroachment
An encroachment occurs when a structure, improvement, or feature on one property extends beyond its legal boundary onto neighboring land or...
Encumbrance
An encumbrance is any claim, lien, charge, or liability attached to a property that may diminish its value, restrict its use, or affect the...
Endorsement
A title insurance endorsement is an amendment or addition to a standard title insurance policy that provides extra coverage for specific ri...
Equity
Equity is the difference between your property's current fair market value and the total amount owed on all mortgages and liens against it....
Escrow
Escrow is a financial and legal arrangement where a neutral third party holds money, documents, or property on behalf of two or more partie...
Escrow Account
An escrow account — also called an impound account or reserve account — is an account maintained by a mortgage lender or servicer to co...
Escrow Agent
An escrow agent is the neutral third party responsible for holding funds, documents, and instructions during a real estate transaction and ...
Estoppel Letter
An estoppel letter — also called an estoppel certificate or HOA estoppel — is a document issued by a homeowners association (HOA) or co...
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Get Your Free Quote ›Fair Market Value
Fair market value (FMV) is the price a property would sell for on the open market under normal conditions — where both buyer and seller a...
Fee Simple
Fee simple — or fee simple absolute — is the highest and most complete form of property ownership recognized by law. When you own prope...
Fiduciary
A fiduciary is a person or entity that has a legal and ethical obligation to act in the best interest of another party — putting the othe...
First Mortgage
A first mortgage is the primary lien on a property — the loan that holds the highest priority position among all debts secured by the pro...
Fixed-Rate Mortgage
A fixed-rate mortgage is a home loan where the interest rate remains the same for the entire term of the loan. Whether you choose a 15-year...
Flood Certificate
A flood certificate — officially called a Standard Flood Hazard Determination (SFHD) — is a document that identifies whether a property...
FSBO (For Sale By Owner)
FSBO — pronounced "fizbo" — stands for For Sale By Owner, a method of selling real estate without hiring a traditional listing agent. T...
General Warranty Deed
A general warranty deed is the most protective type of deed available to a buyer in a real estate transaction. When a seller (the grantor) ...
Good Faith Estimate
A Good Faith Estimate (GFE) was a standardized document that provided mortgage borrowers with estimated closing costs and loan terms early ...
Grantee
The grantee is the person or entity receiving ownership of real property through a deed. In a standard home purchase, the buyer is the gran...
Grantor
The grantor is the person or entity transferring ownership of real property through a deed. In a standard home sale, the seller is the gran...
Hazard Insurance
Hazard insurance is the portion of a homeowners insurance policy that specifically covers damage to the physical structure of the home from...
HELOC (Home Equity Line of Credit)
A HELOC — Home Equity Line of Credit — is a revolving credit facility secured by the equity in your home. It functions similarly to a c...
Homeowners Association (HOA)
A homeowners association (HOA) is a private organization that governs a residential community — whether a subdivision, planned developmen...
Homeowners Insurance
Homeowners insurance is a comprehensive insurance policy that protects against financial losses from damage to your home and personal prope...
Homestead Exemption
A homestead exemption is a legal provision that reduces the taxable value of a primary residence for property tax purposes, resulting in lo...
HUD-1 Settlement Statement
The HUD-1 Settlement Statement was the standard closing document used for decades to itemize all charges and credits in a real estate trans...
Impound Account
An impound account is another name for an escrow account — a reserve account maintained by the mortgage servicer to collect and pay prope...
Inspection
A home inspection is a thorough, non-invasive examination of a property's physical condition conducted by a licensed or certified home insp...
Interest Rate
The interest rate is the cost of borrowing money, expressed as a percentage of the loan amount charged annually by the lender. In a mortgag...
Joint Tenancy
Joint tenancy is a form of co-ownership where two or more individuals hold equal, undivided interests in a property with the right of survi...
Judgment Lien
A judgment lien is a court-ordered lien placed on a debtor's property as a result of a lawsuit in which the creditor prevailed and was awar...
Jumbo Loan
A jumbo loan is a mortgage that exceeds the conforming loan limits set by the Federal Housing Finance Agency (FHFA). For 2026, the standard...
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Get Your Free Quote ›Land Trust
A land trust is a legal entity that holds title to real property for the benefit of a named beneficiary. The trustee — often a bank, titl...
Legal Description
A legal description is the precise, legally recognized identification of a property's boundaries and location that distinguishes it from ev...
Lender's Title Insurance
Lender's title insurance — also called a loan policy — is a title insurance policy that protects the mortgage lender's financial intere...
Lien
A lien is a legal claim against a property that serves as security for the payment of a debt or obligation. It gives the lienholder the rig...
Lien Search
A lien search is a thorough review of public records to identify any liens, encumbrances, or claims against a specific property. It is a co...
Lis Pendens
Lis pendens — Latin for "litigation pending" — is a recorded notice filed with the county that alerts the public to an ongoing lawsuit ...
Loan-to-Value (LTV)
Loan-to-value ratio (LTV) is a financial metric that expresses the relationship between the mortgage amount and the property's appraised va...
Marketable Title
Marketable title — also called merchantable title — is title to a property that is sufficiently free from defects, liens, and doubt abo...
Mechanic's Lien
A mechanic's lien — also called a construction lien or contractor's lien — is a legal claim against a property filed by a contractor, s...
Mortgage
A mortgage is a legal instrument that pledges real property as security (collateral) for the repayment of a loan. When you take out a mortg...
Mortgage Insurance
Mortgage insurance is a policy that protects the mortgage lender — not the borrower — against financial loss if the borrower defaults o...
PITI
PITI is an acronym that stands for Principal, Interest, Taxes, and Insurance — the four components that make up a standard monthly mortga...
Plat
A plat — also called a plat map, subdivision plat, or recorded plat — is a detailed, scaled drawing of a subdivision or development tha...
Power of Attorney
A power of attorney (POA) is a legal document that authorizes one person — called the agent or attorney-in-fact — to act on behalf of a...
Preliminary Title Report
A preliminary title report — commonly called a "prelim" or "PTR" — is a document issued by the title company that discloses the current...
Prepaid Items
Prepaid items are expenses paid at closing that cover costs extending beyond the closing date. They represent real expenses the buyer would...
Principal
In mortgage lending, principal refers to the original amount of money borrowed, or the remaining outstanding balance of the loan at any giv...
Private Mortgage Insurance (PMI)
Private mortgage insurance (PMI) is insurance required by conventional mortgage lenders when the borrower's down payment is less than 20% o...
Probate
Probate is the legal process of settling a deceased person's estate — validating their will (if one exists), identifying and valuing asse...
Promissory Note
A promissory note is a legally binding written promise to repay a specific amount of money under defined terms. In real estate, the promiss...
Property Tax
Property tax is an annual tax levied by local governments — counties, cities, municipalities, school districts, and special taxing distri...
Proration
Proration is the process of fairly dividing certain property-related expenses between the buyer and seller based on the closing date. The p...
Purchase Agreement
A purchase agreement — also called a sales contract, purchase contract, or contract for sale — is the legally binding agreement between...
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Get Your Free Quote ›Quiet Title Action
A quiet title action is a lawsuit filed in court to establish clear, undisputed ownership of a property and eliminate any competing claims,...
Quitclaim Deed
A quitclaim deed is the simplest and least protective type of deed used to transfer real property. When a grantor conveys property by quitc...
Real Property
Real property — also called real estate, realty, or immovable property — includes land and everything permanently attached to it: build...
Reconveyance
Reconveyance is the process of transferring title from a trustee back to the borrower after a loan secured by a deed of trust has been full...
Recording
Recording is the act of filing a real estate document with the county recorder's office (also called the clerk of court, register of deeds,...
Refinance
Refinancing is the process of replacing an existing mortgage with a new one — typically to secure a lower interest rate, change the loan ...
RESPA
RESPA — the Real Estate Settlement Procedures Act — is a landmark federal consumer protection law enacted in 1974 that governs the real...
Right of Way
A right of way is a specific type of easement that grants the right to pass over or through another person's property for a defined purpose...
Satisfaction of Mortgage
A satisfaction of mortgage — also called a release of mortgage, discharge of mortgage, or mortgage release — is a document recorded by ...
Second Mortgage
A second mortgage is a loan secured by a property that already has an existing first mortgage. It occupies the junior (subordinate) lien po...
Settlement
Settlement is the term used in many regions for the closing of a real estate transaction — the final step where ownership legally transfe...
Settlement Agent
A settlement agent — also called a closing agent, escrow agent, or closing officer — is the neutral third party who oversees the closin...
Short Sale
A short sale occurs when a property is sold for less than the outstanding mortgage balance, with the lender's approval. The lender agrees t...
Special Warranty Deed
A special warranty deed is a type of deed that provides limited guarantees from the grantor (seller) to the grantee (buyer). Unlike a gener...
Subordination
Subordination is a legal arrangement that alters the normal priority order of liens on a property. Normally, lien priority follows the "fir...
Survey
A property survey is a professional measurement and mapping of a property's boundaries, dimensions, and physical features, performed by a l...
Tax Lien
A tax lien is a government claim against real property for unpaid taxes. It is one of the most powerful types of liens in real estate becau...
Tenancy in Common
Tenancy in common (TIC) is a form of co-ownership where two or more individuals hold undivided interests in the same property. Unlike joint...
Title
Title is the legal concept of ownership — the bundle of rights that come with owning real property. Having title means you have the legal...
Title Commitment
A title commitment — also called a commitment for title insurance or binder — is the formal document from the title company that sets o...
Title Examination
A title examination is the comprehensive legal review and analysis of all records and documents affecting the ownership and condition of ti...
Title Insurance
Title insurance is an insurance policy that protects property owners and mortgage lenders against financial losses from defects in the titl...
Title Search
A title search is the process of examining public records to determine the ownership history and current legal status of a specific propert...
Transfer Tax
Transfer tax is a tax imposed by state, county, or municipal government when real property ownership changes hands. It is essentially the g...
Trust
A trust is a legal arrangement where one party (the trustor, grantor, or settlor) transfers ownership of property to another party (the tru...
Trustee
A trustee is the person or entity that holds legal title to property in a trust arrangement, managing it according to the trust agreement f...
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Get Your Free Quote ›Warranty Deed
A warranty deed is a type of deed that includes legal guarantees (warranties or covenants) from the grantor (seller) about the quality of t...
Wire Fraud
Wire fraud in real estate refers to criminal schemes where hackers intercept or impersonate parties in a real estate transaction to redirec...
Wire Transfer
A wire transfer is an electronic transfer of funds from one bank account to another, typically completed within the same business day. In r...
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