Escrow Terms & Phrases
Terms and Phrases is Chicago Title Glossary of definitions, meanings, and
descriptions of significance for some of our industry's most often used
terms and phrases.
Look for terms and phrases in Alphabetical Order:
Cal-Vet Loans -- Real estate loans available to armed forces from California, at low interest rates.
Cancellation Clause -- A clause in a lease or other contract, setting forth the conditions under which each party may cancel or terminate the agreement. The conditions may be as simple as giving notice or complex and require payment by the party desiring to cancel.
Caravan -- An inspection of newly listed properties, either by the entire sales staff of an office or by sales personnel from more than one office in conjunction with a multiple listing group. Generally conducted on a regular basis.
Cashier's Check -- A check drawn by a bank on itself rather than on an account of a depositor. A cashier's check is generally acceptable to close a sale without waiting for the check to clear.
Caveat Emptor -- "Let Him Beware" Legal maximum stating that the buyer takes the risk regarding the quality or conditions of the item purchased, unless protected by warranty or there is misrepresentation. Currently, consumer protection laws have placed more responsibility for disclosure on the seller and broker.
CC&R's (Covenants, Conditions, and Restrictions) -- A term used in some areas to describe the restrictive limitations which may be placed on property. In other areas, simply called restrictions.
Certificate of Deposit (C.D.) -- A specific sum of money deposited into a savings institution for a specified time period and bearing a higher rate of interest than a passbook account if left to maturity. Does not have withdrawal privileges, as does a passbook account. Also called a time certificate deposit (T.C.D.).
Certificate of Eligibility -- A certificate obtained by a veteran from a Veteran's Administration office which states that the veteran is eligible for a V.A. insured loan. There is a list of requirements (when and how long the veteran served, type of discharge, etc.) which also may be obtained from the V.A. office.
Certificate of Occupancy -- A certificate issued by a local building department to a building renovator, stating that the building is in proper condition to be occupied.
Certificate of Sale -- Certificate issued to the buyer at a judicial sale (such as a tax sale), which will entitle the buyer to a deed upon confirmation of the sale by the court or if the land is not redeemed within a specified time.
Certificate of Title -- In areas where attorneys examine abstracts or chains of title, a written opinion, executed by the examining attorney, stating that the title is vested as stated in the abstract.
Certified Check -- A personal check drawn by an individual, which is certified (guaranteed) to be good. The bank holds the funds to pay the certified check and will not pay any other checks drawn on the account if such payments would impede payment of the certified check. The bank also will not honor a stop payment on a certified check.
Chain of Title -- The chronological order of conveyance of a parcel of land, from the original owner (usually the government to the present owner).
Chains and Links -- Measurements. In real estate measurements (surveying) a chain is 66" long or 100 links, each link being 7.92". The measurement may change when used in fields other than surveying.
Chattel -- Personal property.
Cistern -- A tank used for storing rainwater for use in areas where there is no water brought to the property by plumbing.
Closing -- (1) In real estate sales, the final procedure in which documents are executed and/or recorded, and the sale (or loan) is completed. (2) A selling term in which the client or customer is asked to agree to the sale or purchase and sign the contract. (3) The final call in a metes and bounds legal description which "closes" the boundaries of the property.
Closing Costs -- Expenses incidental to the sale of real estate, such as loan fees, title fees, appraisal fees, etc.
Closing Statement -- The statement that lists the financial settlement between buyer and seller, also the costs each must pay. A separate statement for buyer and seller is sometimes prepared.
Cloud on Title -- An invalid encumbrance on real property, which, if valid, would affect the rights of the owner. For example: A sells lot 1, tract 1, to B. The deed is mistakenly drawn to read lot 2, tract 1. A cloud is created on lot 2 by the recording of the erroneous deed. The cloud may be removed by quitclaim deed, or, if necessary, by court action.
Cluster Housing -- Building houses close together with little yard space and a large common area, rather than each house having a large yard. The density is usually greater in the cluster project.
Codicil -- An addition to a will, which modifies the will by adding to it, subtracting from it, or clarifying it.
Color of Title -- That which gives the appearance of good title, but actually contains some defect. For example: a conveyance given without the grantor having good title.
Commercial Property -- Property, which is zoned "commercial" (for business use). Property such as stores, restaurants, etc., falling between residential and industrial.
Commission -- An amount, usually as a percentage, paid to an agent (real estate broker) as compensation for his services. The amount to a real estate broker is generally a percentage of the sale price or total rental.
Commitment -- (1) Title insurance term for the preliminary report issued before the actual policy. Said report shows the condition of title and the steps necessary to complete the transfer of title as contemplated by buyer and seller. (2) A written promise to make or insure a loan for a specified amount and on specified terms.
Commitment Fee -- A fee paid for a loan commitment.
Common Area -- The area owned in common by the owners of condominiums or planned unit development homes in subdivision.
Community Property -- Property owned in common by a husband and wife, which was not required as a separate property. A classification of property peculiar to certain states.
Comparable -- Properties used as comparisons to determine the value of a specified property.
Compensatory Damages -- Damages to cover a loss or injury or nothing more.
Conditional Commitment -- A loan commitment given before a borrower (buyer) is obtained and subject to approval of the buyer by the lender.
Conditional Sales Contract -- A sale in which the title to property or goods remains with the seller until the purchaser has fulfilled the terms of the contract, usually payment in full.
Condominium -- A structure of two or more units, the interior space of which are individually owned; the balance of the property (both land and building) is owned in common by the owners of the individual units. The size of each unit is measured from the interior surfaces (exclusive of paint or other finishes) of the exterior walls, floors, and ceiling. The balance of property is called the common area.
Construction Loan -- Short term financing of real estate construction. Generally followed by a long term financing called a "take out", issued upon completion of improvements.
Constructive Notice -- Notice given by publishing in a newspaper, recording, or other method which legally notifies the parties involved, but may not actually notify them.
Contiguous -- Near or close to, whether actually touching or not. Generally refers to actual touching or bordering on.
Contingency -- Commonly, the dependence upon a stated event, which must occur before a contract, is binding. For example: the sale of a house, contingent upon the buyer obtaining financing.
Contact of Sale -- In some areas of the country, synonymous with land contract. In some areas, synonymous with purchase agreement.
Conventional Loan -- A mortgage or deed of trust not obtained under a government-insured program, (such as F.H.A. or V.A.).
Conveyance -- Transfer of title to land. Includes most instruments by which an interest in real estate is created, mortgaged, or assigned.
Corporation -- A general term encompassing any group of people "incorporating" by following certain statutory procedures. Most common type of corporation is a private one formed to carry on a business.
Co-Trustee -- One who shares the duty if trustee with one or more other trustees.
Counter Offer -- An offer (instead of acceptance) in response to an offer. For example: A offers to buy B's house for X dollars. B, in response offers to sell to A at a higher price. B's offer to A is a counter offer.
County Records -- Public recorded documents by which notice is given of changes to title, liens, and other matters reflecting real estate.
Courtesy to Brokers -- Willingness of a seller to pay a commission to any broker supplying a suitable buyer; or the willingness of a listed broker to share the commission with any broker supplying a suitable buyer.
Creditor's Position -- (1) The portion of the value of property, which is mortgaged, rather than the equity. (2) The portion of the value of property upon which a first mortgage could be obtained.
Credit Report -- A report on the past ability of a loan applicant to pay installment payments. Several national and local companies make such reports.
Custodian - (1) One who is entrusted with the care and keeping of real or personal property. (2) A janitor.
Custody -- The care and keeping of property (real and personal). For example: An escrow agent has custody of documents and funds until closing.
Custom Builder -- One who builds for a specific owner, designing the building to suit said owner's need, rather than building and then looking for a buyer.
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