Every industry has its own lingo, and the title and settlement service industry is no exception. Here are some common terms that you may hear used during your real estate experience:
Borrower’s/Buyer’s Closing Disclosure: The lender’s statement of charges and fees associated with the transaction. This is typically prepared and provided to borrowers by the lender.
Seller’s Closing Disclosure: The lender’s statement of charges and fees associated with the transaction. This is prepared and provided to the seller by Rocket Close.
Certification of Occupancy: An inspection of the home that some cities/townships require before the buyer can take occupancy of the home. If the municipality finds any repairs or permit issues, they may need to be completed prior to closing.
Deed: A deed is a written transfer or conveyance of title to or interest in real property. If there needs to be a change in the ownership status of a property, a new deed needs to be executed and recorded for it to be valid. It is typical for this process to take a few weeks and there may be a transfer tax that is imposed by the local municipality.
Disbursement: A process of releasing funds according to the terms of the transaction as authorized by the specific parties involved in a transaction.
Encumbrance: A claim or liability that is attached to property creating a property right, but not ownership interest. A lien is a type of encumbrance.
Gift of Equity: If the Purchase Agreement calls for a Gift Of Equity, the amount will be credited to the buyer and deducted from the seller’s proceeds.
Lien: A creditor’s interest in another’s property until the debt that secures the lien is paid or satisfied.
Occupancy Escrow: If the Purchase Agreement calls for an Occupancy Escrow, Rocket Close will hold the funds until all parties have confirmed the vacating date. At that time, funds will be released to the buyer to pay for the days the seller remained in the home. Any excess escrow funds will be released to the seller.
Power of Attorney (POA): A power of attorney is a document in which a person (known as the principal) appoints another as an agent (also known as an “attorney in fact”) granting the agent the power to perform certain specified acts on behalf of the principal. This designation of the agent may include the power to execute legal documents on the principal’s behalf.
Survey: A detailed property map completed by a surveyor showing legal boundaries, location of buildings, adjacent properties, easements and encroachments and confirming the legal description of the property. A survey is required in some states/counties, but a buyer can always request one if desired. The fee is typically paid by the buyer unless a survey is required. A survey can take a couple of weeks, so any requests should be made early in the process.
Vesting: How title to real property is held. It describes who owns the property and is established by the language in the recoded deed for the property.
Water Escrow: If a water or sewer bill is paid, an escrow will be held until the final water bill has been provided to Rocket Close. Once the bill is received, Rocket Close will pay the seller’s portion and refund any excess funds to the seller.
