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 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 existing 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 question 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.