Glossary for Title Terms: A Beginner’s Guide

Navigating the world of real estate and title insurance can sometimes feel like deciphering a foreign language. Whether you’re a first-time homebuyer, a seasoned real estate investor, or simply curious, understanding the jargon can be crucial. We’ve compiled a glossary of some essential title-related terms to help you on your journey.

1. Abstract of Title: A comprehensive summary detailing the entire history of a property, including all transfers of ownership, liens, and any other pertinent information.
2. Chain of Title: A history of all previous owners of a piece of property, tracing back to the original owner or the earliest recorded history.
3. Clear Title: A title without any liens or levies from creditors or other parties and poses no question as to legal ownership.
4. Cloud on Title: Any claim, unreleased lien, or encumbrance that might invalidate or impair a title.
5. Deed: A legal document by which ownership of property is transferred from one party to another.
6. Easement: The right to use or cross (or prohibit others from using or crossing) a specific portion of another person’s land.
7. Encroachment: When a building or some portion of it, or a wall or fence, extends beyond the land of the owner and illegally intrudes onto some land of an adjoining owner.
8. Encumbrance: Any claim on a property, such as a lien, mortgage, or easement, which complicates the title process.
9. Equity: The difference between the market value of a property and the amount the owner still owes on the mortgage. It represents the owner’s actual interest in the property.
10. Escrow: A process where a neutral third party oversees the transfer of property, ensuring that all terms of the sale are met by both parties.
11. Lien: A legal claim or hold on a property, either voluntary or involuntary, as security for a debt or obligation.
12. Mortgage: A specific type of lien, which is secured against a piece of property. The borrower gives the lender this lien as security for the loan’s repayment.
13. Plat: A map of a land area, like a town or a subdivision, showing the boundaries and ownership of individual parcels, streets, easements, and other pertinent information.
14. Title Commitment: An offer to issue a title insurance policy detailing the terms upon which coverage will be provided.
15. Title Insurance: A policy that protects against future losses arising from issues related to the title that were unknown at the time of purchase.
16. Title Search: A review of all recorded documents affecting a specific piece of property to determine the present condition of title.

We hope this glossary helps clear up any confusion and makes your real estate and title journey smoother. If you come across a term not listed here, or if you have questions about any of these terms, don’t hesitate to reach out to our team. We’re here to help!