Whether you are buying or selling, the language of real estate is often complex and confusing. Following is a plain-language explanation of commonly encountered real-estate-related lingo.
Title: Title to a property essentially denotes ownership interest and is designated by the name(s) on a specific legal documents such as mortgages and deeds. The title can be held by an individual, couple or even a corporation.
Deed: A deed is used to transfer ownership of property from one person or entity to another person or entity.
Deed of Trust: A deed of trust is a document that transfers title in a property, with the stipulation that the transfer is contingent upon repayment of an exiting loan.
Mortgage: A mortgage is a loan you take out to buy property.
Clear Title: Clear title indicates that the property is free of liens or legal questions surrounding ownership.
Chain of Title: The record of historical ownership of a property. The title company or real estate attorney typically reviews the record in order to determine clear title.
Clouded Title: Any property that has an existing questions regarding ownership, chain of title or even liens may have a “clouded” rather than “clear” title, which may adversely impact the ability to obtain financing or properly record the title. Most clouded title issues require a release, court action or other legal intervention to remediate.