Vocabulary for Escrow and Closing

Question 1

advance money given by buyer to show good fait in a purchase agreement

Answer 1

Earnest money (equitable interest)

Question 2

process of depositing documents with a neutral third party until terms of contract are met

Answer 2

Escrow

Question 3

the person that acts on the instruction of the Buyer and Seller during escrow; dual agency

Answer 3

Escrow Agent

Question 4

the act of delivering the Deed to a 3rd party with instructions to deliver the same deed to the grantee (actual delivery) once all conditions are met

Answer 4

Delivery of Escrow

Question 5

delivering a deed following close of escrow

Answer 5

Actual Delivery of Deed

Question 6

a re-write of the contract so that it can be understood by escrow agent and others agent works with

Answer 6

Signed Escrow Instructions

Question 7

a document provided in escrow which shows all claims affecting title and the chain of title (title history)

Answer 7

Preliminary Title Report

Question 8

description page of a preliminary title report and the type of insurance being issued

Answer 8

Schedule A

Question 9

the portion of the title insurance policy that lists exceptions to coverage including liens, easements, 2nd mortgages, taxes

Answer 9

Schedule B

Question 10

to draw through Schedule B items once cleared

Answer 10

Redline

Question 11

a claim on title that hinder it from being marketable

Answer 11

Cloud on Title

Question 12

a history of constructive notice as it pertains to a certain parcel

Answer 12

Chain of Title

Question 13

a summary of all documents that appear on public record affecting a parcel

Answer 13

Abstract of Title

Question 14

a document issue by the title examiner stating the condition of title for a given parcel

Answer 14

Certificate of Title

Question 15

the day on which all terms and conditions of contract and escrow are met and title is transferred; escrow is officially closed once all documents are recorded and deed is delivered

Answer 15

Close of Escrow

Question 16

to divide or assess proportionally between Buyer and Seller the obligations that have been paid or are due (COE is buyer’s day)

Answer 16

Proration

Question 17

a seller uses buyer money to acquire property (usually as downpayment) in one escrow and then sell it to the buyer in another escrow, usually for profit; contingent on 1st escrow going through; full disclosure required

Answer 17

Double Escrow

Question 18

a person used one escrow for the simultaneous sale of one property and purchase of another; contingent on 1st escrow going through; full disclosure required

Answer 18

Back to Back Escrow

Question 19

a 3rd party (court) who is called upon to settle a dispute, usually in an escrow situation

Answer 19

Interpleader

Question 20

document stating that the death of the Grantor does not terminate a valid escrow

Answer 20

Doctrine of Relation Back

Question 21

Failure to perform a contracted obligation

Answer 21

Breach of Contract

Question 22

updating the title report from the original report to the recording of loan documents; purpose is to check for new clouds on title ro to make sure old clouds cleared

Answer 22

Bring Down Fee

Question 23

a full disclosure of all charges and disbursements in a real estate transaction; required by regulation Z (RESPA); agent, buyer and seller must sign

Answer 23

Settlement Statement

Question 24

must be filed with the IRS by the seller showing purchase price

Answer 24

1099-s

Question 25

legislation stating monies to be sent to IRS by a foreign seller to be held until settlement, usually 10% or purchase price

Answer 25

Foreign Investment Real Property Tax Act

Question 26

on the settlement statement this occurs when money is going into the escrow account from somewhere or someone

Answer 26

Credit

Question 27

on the settlement statement this occurs when money is or has been used to pay for services

Answer 27

Debit

Question 28

an account where special funds are set aside by the lender to cover future tax and insurance bills

Answer 28

Loan Impound Account

Question 29

fees for paying off old financing and clearing the encumbrance from the title

Answer 29

Release fees

Question 30

fees charged by escrow company for services they provide in conjunction with closing the transaction

Answer 30

Escrow fees

Question 31

a charge that applies when an escrow company receives payments from a borrower and forwards them to a respective lender; typically done when the mortgage is assumed or there is a carryback

Answer 31

Account Servicing and Escrow Fees

Question 32

a document that states the actual price paid for the property and indicates where future property tax bills are to be sent; must accompany the deed and is recorded

Answer 32

Affidavit of Value