CA Real Estate Principles C7

RESPA

A federal statute requiring disclosure of certain costs in the sale of residential property.

Title Plant

A filing of all recorded information to real property.

Chain of Title

A history of conveyances and encumbrances affecting the title from the time the original patent was granted, or as far back as records are available, used to determine how title came to be vested in current owner.

Preliminary Title Report

A report showing the condition of title before a sale or loan transaction.

Proration

Adjustments of interest, taxes, and insurance, etc., on a pro rata basis as of the closing or agreed upon date. Fire insurance is normally paid for three years in advance. If a property is sold during this time, the seller wants a refund on that portion of the advance payment that has not been used at the time the title to the property is transferred. For example, if the property is sold two years later, seller will want to receive 1/3 of the advance premium that was paid. Usually done in escrow by escrow holder at time of closing the transaction.

Pest Control Report

An inspection report required, in the sale of property, to determine if termites are present within a building.

Title Insurance

Insurance to protect a real property owner or lender up to a specified amount against certain types of loss, e.g., defective or unmarketable title.

Date of Closing

The date documents are recorded and title insurance is written.

CLTA

The minimum standard title insurance policy in California that does NOT require a property survey.

ALTA

The most all inclusive title insurance policy; it requires a property survey and is usually required by most lenders.

Escrow Officer

The person at the escrow company who handles the paperwork of the escrow.

Escrow

The process of depositing instruments, funds, and instructions, with a third neutral party who finalizes the transaction.

Coinsurance

The requirement by a lender that a property be insured up to its full value, or only a proportion of any loss will be reimbursed.

Payoff Demand Statement

Written instructions by a lender stating and demanding the amount necessary to pay off a loan.

Escrow Instructions

Written instructions that direct the actions of an escrow agent. If given separately by each party, they are unilateral escrow instructions (generally the practice in Northern California). If given jointly, they are bilateral escrow instructions (generally the practice in Southern California).