Title Insurance and Closing Services Since 1954
The Real Estate Industry has its own unique language and, without some knowledge of this language, you may find yourself a bit confused if you become involved in a real estate transaction. Wayne County Title Agency, Inc. has compiled the following Definition of Terms commonly used in the real estate industry. Whether you are entering the real estate market for the first time or have invested in it before, this handy reference will provide an understanding of basic real estate words and phrases.
A written opinion by an attorney that ownership of the particular parcel of land is as stated in the certificate.
In real estate measurements (surveying), a chain is 66 feet long or 100 links, each link being 7.92 inches. The measurement may change when used in fields other than surveying.
The successive ownerships or transfers in the history of title to a particular parcel of land. Each deed or other instrument affecting a transfer of the title is called a “link” and all of the links constitute the chain.
Units of length in the measurement of land.
Real Property ownership free of liens, especially voluntary liens such as mortgages. Title which is not encumbered or burdened with defects. See also marketable title.
Also known as “escrow” or “settlement.” (1) Process by which all the parties to a real estate transaction conclude the details of a sale or mortgage. The process includes the signing and transfer of documents and distribution of funds. (2) Condition in description of real property by courses and distances at the boundary lines where the lines meet to include all the tract of land.
Miscellaneous expenses involved in closing a real estate transaction over and above the price of the land.
A form of insurance issued by the title insurance underwriter to Lenders, Buyers and Sellers in a real estate transaction for a set premium. Available only when title insurance is being issued. The letter indicates the title underwriter's responsibilities for theft, misappropriation, fraud or other failure of the licensed Agent, or anyone acing on the Licensed Agent's behalf to property handle and disburse your funds or documents in connection with such Closing. It is limited to a single transaction, which is closing on a title commitment or binder issued by the underwriter.
An outstanding claim or encumbrance which adversely affects the marketability of title.
Marketable real or personal property which a borrower pledges as security for a loan. In mortgage transactions, specific land is the collateral.
An enforceable agreement that upon satisfaction of the requirements which are stated in the Commitment the insurer will issue the specified title insurance policy subject only to the exceptions stated in the commitment. A commitment sets forth status of title as of a particular date.
A category of property existing in some states, in which all property (except property specifically acquired by husband or wife as separate property) acquired by a husband and wife, or either, during marriage, is owned in common by the husband and wife. NOTE: Ohio is not a community property state.
(1) The lawful taking of private land for public use by a government under its right of eminent domain. (2) A declaration by a governmental agency that a building is unfit for use.
A system of real estate ownership wherein there is separate ownership of units in a multi-unit project with each separate unit ownership being coupled with an undivided share in the entire project less all of the units.
The document which establishes a condominium and describes the most important property rights of the unit owners. State statutes prescribe the contents of this document as a Declaration.
A direct payment plan for disbursement of construction loan and equity funds through the title company as an independent escrow agent to subcontractors and suppliers upon approval of the owner, general contractor, and lender.
A loan which is made to finance the actual construction or improvement on land. It is often the practice to make disbursements in increments as the construction progresses.
Agreement by one person to buy and another person to sell a specified parcel of land at a specified price, and specifying any contingencies or conditions.
A mortgage loan neither insured by FHA nor guaranteed by VA or
(1) A document which transfers an interest in real property from one person to another; e.g., a deed. (2) The act of executing and delivering a deed or mortgage.
An apartment building which is owned by a corporation and in which tenancy in an apartment unit is obtained by purchase of the pertinent number of shares of the stock of the corporation and where the owner of such shares is entitled to occupy a specific apartment in the building.
A corporation is an organization formed with state governmental approval, through the secretary of state where the corporation is registered. Usually only one corporation can have any given name in each state. The defining characteristics of a corporation are (1) the ability to exist and act as a legal entity apart from the individual members; (2) perpetual duration despite changes in the individuals who compose the corporation; and (3) a name by which the corporation can sue and be sued. Corporations are given the right to exist by the state that issues their charter, it has all the legal rights of an individual, except for the right to vote and certain other limitations. It establishes the business as being a separate legal entity from the owner(s). A corporation has a continuous existence independent of the existences of its members, and powers and liabilities distinct from those of its members. This means that the assets, income, debts, and liabilities of the business belong to the corporation, not to the owner(s).
Ownership of the same interest in a particular parcel of land by more than one person; e.g., tenancy in common, joint tenancy, tenancy by the entireties.
An agreement between the parties in a deed whereby one party promises either (1) the performance or non-performance of certain acts with respect to the land or (2) that a given state of things with respect to the land are so; e.g., covenant that the land will be used only for residential purposes.