Whether you are buying or selling a home, and go through a realty service, you may hear some terms or phrases with which you aren't familiar. Listening to all the business jargon and not knowing what is being discussed can be stressful. To reduce your anxiety is an already stressful situation, you should take the time to learn some of the most common terms and phrases associated with real estate transactions.
A deed is a legal document used to transfer a property title from one owner to another. There are two common types of deeds: warranty and quit claim deeds.
A warranty deed states that no one else any legal claim to the property you are buying. A quit claim deed does not include that guarantee for the buyer, so the warranty deed is the best kind.
A title shows ownership. When you have a clear title to a piece of property, this means you have the right to control it, use it, and sell it without any restrictions.
Title insurance is a type of insurance that protects you and the lender against losses if title-related problems occur that did not show up during a title search.
Realty services may request a title search to determine if a piece of property has any problems, such as liens, unpaid taxes, easements, restrictive covenants, or other issues. This issue can lead to a buyer right and ability to use the property as you wish.
A title company or a real estate attorney can conduct a title search. If title search is done, and mistakes are found on the title of property you wish to purchase, you need to have the seller fix the issues as a condition of safe.
The buyer signs the type of document to swear to a lender that he or she has no pending lawsuits or current lawsuits against him or her. This includes tax liens or judgments that may attach to the property once the buyer owns it.
A seller signs the seller's affidavit to declare that there are no encumbrances or judgments against liens on the property he or she is selling.
Encumbrance And Lien
When you sign affidavits stating there are no encumbrances, you are simply stating that the property has no other claims on it or any restrictions. A lien is financial claim that a person has on a piece of property.
Mortgage Deed Or Deed Of Trust
This mortgage deed, sometimes known as the deed of trust, is a document signed to give the mortgage holder or lender a lien on your home.
The legalities and other aspects of buying or selling a home can get complicated for people who do not understand the realty business. However, having some understanding of the terms used can help you better understand the process and where you stand with a sale.