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1031 Exchange

A provision in the IRS tax code that allows real estate investors to defer capital gains taxes by reinvesting the proceeds from a property sale into a like kind replacement property within specific timeframes.

A

Abstract of Title

A written summary of all recorded documents affecting the ownership of a specific piece of real property.

B

Beneficiary Deed

Also called a Transfer on Death (TOD) Deed, this allows a property owner to designate a beneficiary who will receive the property upon the owner's death without going through probate.

C

Chain of Title

The history of all recorded ownership transfers for a property, from the original patent or grant to the current owner.

Clear Title

A title free of liens, encumbrances, or legal questions about ownership. Required before a property can be transferred.

Closing

The final step in a real estate transaction where documents are signed, funds are disbursed, and ownership officially transfers.

Closing Costs

Fees and expenses paid at closing beyond the purchase price, including title insurance premiums, escrow fees, recording fees, and lender charges.

Cloud on Title

Any claim, lien, or encumbrance that impairs or affects the owner's title to a property.

D

Deed

A legal document that conveys ownership of real property from one party to another.

Deed of Trust

A document used in some states instead of a mortgage, involving three parties: the borrower, the lender, and a neutral trustee.

E

Easement

A right to use another person's land for a specific purpose, such as a utility easement or a right of way.

Encumbrance

Any claim, lien, charge, or liability attached to a property that can affect its use or transferability.

Escrow

An arrangement where a neutral third party holds funds, documents, and instructions until all transaction conditions are met.

F

FSBO

For Sale By Owner. A method of selling real estate without a listing agent. FSBO sellers work directly with a title company.

L

Lien

A legal claim against a property for the payment of a debt. Common liens include mortgage, tax, mechanic's, and judgment liens.

Lender's Title Insurance

A title insurance policy that protects the mortgage lender's financial interest in the property.

O

Owner's Title Insurance

A one time purchase at closing that protects the buyer's ownership rights for as long as they or their heirs have an interest.

P

Promissory Note

A written promise to pay a specified amount of money under specific terms, including loan amount, interest rate, and payment schedule.

Q

Quit Claim Deed

A deed that transfers whatever interest the grantor has without guarantees about title quality. Commonly used for family transfers.

R

Recording

Filing real estate documents with the county recorder's office to create a public record of ownership.

Remote Online Notarization (RON)

A process allowing documents to be notarized via secure video conference. Legally authorized in MO, IL, CO, FL, and IN.

S

Settlement Statement

A document itemizing all credits and charges to both buyer and seller in a real estate transaction.

T

Title Commitment

A document issued before closing outlining terms and conditions under which a title insurance policy will be issued.

Title Insurance

Insurance that protects against financial loss from defects in the title of a property.

Title Search

An examination of public records to determine legal ownership and identify any liens or defects.

TRID

TILA-RESPA Integrated Disclosure. Federal regulations requiring standardized Loan Estimate and Closing Disclosure forms.

W

Warranty Deed

A deed that guarantees the grantor holds clear title and has the right to sell. Provides the highest level of buyer protection.

Wire Fraud

A scam where criminals intercept or impersonate parties in a transaction to redirect wire transfers.

Title & Escrow Glossary

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