Assignment of Funds - In the context of a real estate transaction, this phrase means that the seller is directing the title company to pay all or a part of the proceeds of sale to a third party (often another title company who may be conducting a subsequent closing where the seller is purchasing a second property).

Chain of Title - This is simply a history of the ownership of a particular piece of property, including who bought it, who sold it and when.

Commitment - When the title search is completed, the title company issues its commitment to insure the closing stating the conditions under which it will insure the title.

Deed - The written document conveying real property. The Deed must be executed (signed), acknowledged, and delivered to the Grantee. Once recorded at the Courthouse, the original piece of paper is not needed to convey title in the future.

Deed of Trust - A voluntary lien to secure a debt deeding the property to Trustees who foreclose, and sell the property at public auction, in the event of default on the Note the Deed of Trust secures.

Encroachment - The physical intrusion of a structure or improvement on the land of another. Examples include a fence or driveway over the property line.

Escrow - A disinterested third party holds funds or documents on behalf of others and subject to their instructions.

Executor - A person named in a will to carry out its terms and administer the estate. Depending upon the terms of the Will, the Executor may not have power to sell the real estate; that power may rest in the individual heirs. The feminine form is Executrix.

Foreclosure - The process by which a lender sells property securing a loan in order to repay the loan. Under a Deed of Trust, foreclosure is by public auction after appropriate advertisement. A Mortgage may require the lender obtain Court approval prior to sale.

Lender’s Title Insurance - the mortgage lender is as concerned as the buyer with the quality of the title because the property being conveyed acts as security for the new mortgage loan. The lender’s title insurance policy insures that the lender has a valid mortgage lien on the property. The lender’s title insurance, however, does not protect the new buyer of the property. Although the land is the same, the interests of the buyer and the lender are very different.

Lien - A claim or charge against property. Property is said to be encumbered by a lien and the lien must be removed to clear title.

Mechanics Lien - The right of an unpaid contractor, laborer or supplier to file a lien against property to recover the value of his work. Virginia allows the claimant to file the lien after title has passed to the new owner and gives the lien priority over the new owner's interest.

Owner’s Title Insurance - The Owner’s Title Insurance policy is a contractual undertaking by the title company to indemnify a buyer against loss or damage resulting from defects or problems relating to the ownership of real property or from the enforcement of liens that exist against it.

Prepayment Penalty - An additional charge imposed by the lender for paying off a loan before the due date.

Power of Attorney - A written document authorizing another to act on his behalf as an Attorney in Fact. One does not need to be a licensed attorney to act as an attorney in fact but, power of attorney forms are legal documents and should only be prepared by a licensed attorney.

Title Insurance - Insurance against loss or damage as a result of defect in title ownership to a particular piece of property. Title insurance covers mistakes made during a Title Search as well as matters which could not be found or discovered in the public records such as missing heirs, mistakes, fraud and forgery.

top of page