Title & Settlement Jargon Made Simple


Abstract of Title

a summary of the conveyances, transfers, and other facts appearing of record and relied upon as evidence of title to real property

Adverse Possession

claim of ownership of property based upon the unauthorized occupation of land belonging to another


a written declaration under oath (the person making the affidavit is known as the “affiant”)


American Land Title Association, the national trade association for the title insurance industry

Assessed Value

value of property for taxation purposes



one who acts as an agent for another in negotiating sales or purchases in return for a fee or commission


Chain of Title

a chronological list of documents comprising the record history of title to a specific parcel or real property


the process of completing a real estate transaction in accordance with written instructions during which deeds, mortgages, leases and other required instruments are executed, payment is made, the papers are recorded in the public record, the money is disbursed, and any other details are attended to (also referred to as “settlement”)

Closing Disclosure

details all of the costs associated with a mortgage-related residential transaction (also referred to as the “settlement statement”)


the value inducing another person to enter into a contract (in a purchase transaction, this is the purchase price)

Contract of Sale

an agreement entered into for the sale and purchase of property


to transfer title to property from one person to another


an agreement or promise



a written document transferring title to land from one person to another

Deed of Trust

a three party security instrument conveying title to land as security for the performance of an obligation


omission or failure to fulfill a duty, observe a promise, discharge an obligation, or perform an agreement


Earnest Money

part of the purchase price made by a purchaser as evidence of good faith to bind the agreement


a limited right or interest in the land of another entitling the holder to some use, privilege, or benefit


the extension of an improvement onto land of another


a right or interest in land decreasing its value but not hindering its sale or transfer


a written document attached to an insurance policy expanding or limiting coverage


the depositing with an impartial third party (the “escrow agent”) of anything pertaining to the transaction, including money and documents, that are then disbursed and delivered to the rightful parties by the escrow agent when all conditions of the transaction have been met



a legal proceeding for the collection of  liens on real estate, which results in cutting off the rights to the property and usually involves a judicial sale of the property to pay the deb



the person acquiring title to real property by a deed


the person transferring title to real property by a deed


Hazard Insurance

real estate insurance protecting against fire, some natural causes, vandalism, etc., depending upon the policy (in residential cases, also known as “homeowner’s insurance”)


Indemnity Agreement

an agreement relieving a person of an obligation to compensate for a potential loss (also known as a “hold harmless agreement”


a formal, legal, written document



a conclusion or determination by a court of law usually awarding the payment of money or relief of some kind to one of the parties to a lawsuit


Legal Description

a description of real property sufficient to locate it on the ground by reference to government surveys or approved recorded maps


the liability of real estate as security for payment of a debt; may be created by contract (ex: mortgage) or by operation of law (ex: mechanics lien or judgment)

Loan Policy

a policy of title insurance insuring the interest of a lender against loss by defects in, liens against, or unmarketability of title.


Marketable Title

title that a court of equity considers to be so free of material defects and liens that it will force the title’s acceptance by questioning purchaser

Mechanic's Lien

a statutory lien which secures the payment of debts due to persons contributing labor, material, supplies, etc. to a work of improvement upon real property


a temporary conditional pledge of property to a creditor as security for the payment of a debt that may be cancelled by payment



to prove execution of a document by means of a notary public’s certificate of acknowledgment


Owner's Policy

a policy of title insurance insuring the title of an owner against possible hidden title problems such as errors or omissions in deeds, mistakes in examining records, forgery, undisclosed heirs, etc.


Power of Attorney

a legal instrument authorizing one to act as another’s agent or attorney


the amount payable for an insurance policy

Promissory Note

a written promise to pay or repay a specified sum of money at a stated time, or on demand, to a named person

Public Records

the transcriptions in a recorder’s office of instruments that have been recorded, including the indexes pertaining to them



to incorporate a legal document into the public records of the Clerk’s office

Reissue Rate

the reduced rate for an Owner’s Policy of title insurance issued on a property that was previously insured within a certain period of years


Survey (n.)

the map or plat drawn by a surveyor that represents the property surveyed and shows the results of the survey

Survey (v.)

a process of measuring a parcel of land and ascertaining its area and boundaries



a person’s right or the extent if his/her interest in real property, recognized and protected by law

Title Agency

any person, company, or entity which is authorized by a Title Insurer to issue title insurance policies

Title Commitment

an offer to issue a title insurance policy, describing the various conditions, exclusions, and exceptions that will apply to that particular policy

Title Defect

any possible or patent claim or right outstanding in a chain of title that is adverse to the claim of ownership

Title Insurance

assurance of indemnification for loss occasioned by defects in the title to real property or to an interest therein which is insured

Title Insurer

any person, company, or entity that is licensed to issue and insure title insurance policies

Title Policy

a contract indemnifying against loss resulting from a defect in the title to the interest or lien in real property insured

Title Search

a careful exploration and inspection of the public records in an effort to find all recorded instruments to complete a chain of title to a particular parcel of real property (also referred to as the “title examination”)



an insurance company that issues insurance policies either to the public or to another insurer