California Real Estate Principles - Chapter 10 - Escrow and Title Insurance

title insurance company

Business licensed by the state to insure buyers and lenders against losses due to defects in title to real estate.

lot books

Catalogs maintained by title and abstract companies listing properties by location and showing deeds and other documents affecting title.

beneficiary statement

Document provided by the lender if the buyer of a property encumbered by an existing loan will take title to the property subject to the loan.

settlement statement

Document provided to buyer and seller at closing that indicates all of the income and and expenses of the transaction.

escrow agent, escrow officer, escrow holder

Neutral third party who holds in trust the funds and documents necessary to complete a transaction until all of the terms of the underlying agreement have been fulfilled, at which time the funds are disbursed and documents transferred as required.

standard policy

Policy of title insurance that protects against fraud or other challenges to the owners' title that would not be discovered by an examination of the property or title records.

extended-coverage policy

Policy of title insurance, primarily intended for the benefit of lenders, that includes coverage of items that would ordinarily be discovered by a property inspection, such as rights of parties in possession.

bulk sale

When a business sells all or nearly all of its inventory to a single buyer and such a sale is not part of the ordinary course of business.

interpleader

A court proceeding that may be brought by someone, such as an escrow agent, who holds property for another, for the purpose of deciding who among the claimants is legally entitled to the property.

abstract of title

A summary or digest of all recorded transfers, conveyances, legal proceedings, and any other facts relied on as evidence of title to show continuity of ownership and indicate any possible impairments to title,

prorations

Adjustment of interest, taxes, insurance, and other costs or property ownership on a pro rata basis as of the closing or agreed upon date; usually apportions those costs based on seller's and buyer's respective periods of ownership.

binding contract

An agreement that can be enforced in a court of law if one of the parties to the agreement fails to fulfill any of its terms.

title plant

Database of a title insurance company that includes records of real estate transfers.

close of escrow

Date on which all requirements of a real estate transaction have been fulfilled, documents are transmitted, and funds are transferred.

title insurance

Insurance to protect a real property owner or lender up to a specific amount against certain types of loss affecting title or marketability.

guarantee of title

It states the property's owner of record and a listing of the present encumbrances and guarantees the title as described.

loan commitment

Lender's agreement to make specified loan on indicated terms.

demand for payoff

Lender's statement of remaining indebtedness that will be paid at closing on transfer of the property securing the debt.

general indexes

Lists of property owners and documents affecting property title maintained by title companies.

title insurance surplus fund

Specified amount of premiums collected by a licensed California title insurance company that must be set aside each year.

certificate of title

Statement of a property's owner of record as well as any existing encumbrances.

escrow

The deposit of instruments and/or funds (with instructions) with a neutral third party to carry out the provisions of an agreement or a contract.

preliminary report

Title company's initial review of the status of a property's title; that is, the existence of liens or other encumbrances that could affect its marketability.

conditional delivery

Transfer of documents and funds to escrow agent or settlement officer to be held until the transaction is closed, at which time they are transferred to the designated party.

escrow instructions

Written instructions to the escrow holder specifying the terms under which the escrow is to be conducted, including the contract or other requirements that are to be fulfilled as part of the escrow proceedings.