The term “title,” as it relates to real estate, describes ownership associated with a given piece of property. When a person buys a home, he/she assumes “title” of the property, which is conveyed during a settlement proceeding known as “closing.” 

Though the home closing process can seem rather complex at times, knowing common title terms can help you gain a clearer understanding of your rights as a property owner. We’ve put together a list of some of the more common title terms you’re likely to hear as you navigate your way through settlement proceedings.

Title-Related Terminology

-Deed: A real estate document that legally transfers ownership (title) of a property from one party to another. 

-Closing/Settlement: The formal process of finalizing the transfer of ownership rights to real property from one party to another.

-Title Search: The due diligence process of reviewing the historical chain of ownership surrounding a given property to search for and identify any title defects.

-Title Defects (Clouds on Title): Existing liens, judgments, or other legal impediments that could render title unmarketable and prevent a homebuyer from taking full legal possession of a property in a real estate transaction.

-Clear Title/Clear-to-Close: The notification to move forward with settlement, signifying a title searched that revealed no clouds on title. This also indicates that any title defects identified during title search have been resolved and ownership can legally transfer from the home seller to the buyer, free and clear.

-Title Agent: The professional conducting the title search and home closing process.

-CD Form (Closing Disclosure Form): A document integral to mortgage settlement proceedings that details closing costs, loan information, and the overall financial responsibility of the buyer.

-Title Insurance: A type of indemnity insurance plan that protects the homeowner’s property rights (Owner’s policy) or the mortgage company’s financial interest (Lender’s policy) against loss in the event title defects are discovered after closing. 

-Escrow: A financial account established by a neutral third party that holds, manages, and transfers real estate funds and documentation during the settlement process. 

-Closing Costs: Funds paid by the home sellers and buyers at settlement to conclude the real estate transaction. 

For more on title services and real estate closings, contact Linear Title & Escrow today!