Vocabulary for Escrow and Closing Flashcards
advance money given by buyer to show good fait in a purchase agreement
Earnest money (equitable interest)
process of depositing documents with a neutral third party until terms of contract are met
Escrow
the person that acts on the instruction of the Buyer and Seller during escrow; dual agency
Escrow Agent
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
Delivery of Escrow
delivering a deed following close of escrow
Actual Delivery of Deed
a re-write of the contract so that it can be understood by escrow agent and others agent works with
Signed Escrow Instructions
a document provided in escrow which shows all claims affecting title and the chain of title (title history)
Preliminary Title Report
description page of a preliminary title report and the type of insurance being issued
Schedule A
the portion of the title insurance policy that lists exceptions to coverage including liens, easements, 2nd mortgages, taxes
Schedule B
to draw through Schedule B items once cleared
Redline
a claim on title that hinder it from being marketable
Cloud on Title
a history of constructive notice as it pertains to a certain parcel
Chain of Title
a summary of all documents that appear on public record affecting a parcel
Abstract of Title
a document issue by the title examiner stating the condition of title for a given parcel
Certificate of Title
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
Close of Escrow
to divide or assess proportionally between Buyer and Seller the obligations that have been paid or are due (COE is buyer’s day)
Proration
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
Double Escrow
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
Back to Back Escrow
a 3rd party (court) who is called upon to settle a dispute, usually in an escrow situation
Interpleader
document stating that the death of the Grantor does not terminate a valid escrow
Doctrine of Relation Back
Failure to perform a contracted obligation
Breach of Contract
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
Bring Down Fee
a full disclosure of all charges and disbursements in a real estate transaction; required by regulation Z (RESPA); agent, buyer and seller must sign
Settlement Statement
must be filed with the IRS by the seller showing purchase price
1099-s
legislation stating monies to be sent to IRS by a foreign seller to be held until settlement, usually 10% or purchase price
Foreign Investment Real Property Tax Act
on the settlement statement this occurs when money is going into the escrow account from somewhere or someone
Credit
on the settlement statement this occurs when money is or has been used to pay for services
Debit
an account where special funds are set aside by the lender to cover future tax and insurance bills
Loan Impound Account
fees for paying off old financing and clearing the encumbrance from the title
Release fees
fees charged by escrow company for services they provide in conjunction with closing the transaction
Escrow fees
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
Account Servicing and Escrow Fees
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
Affidavit of Value
