Understanding Escrow Transaction Terms

Amendments
A change—either to alter, add to, or correct—part of an agreement without changing the principal idea or essence.
Appraisal
An estimate of real property resulting from analysis of facts about the real property; an opinion of value.
Assumption
Taking over anothe person’s financial obligation; taking title to a parcel of real property with the Buyer assuming liability for paying an existing note secured by a deed of trust against the real property.
Beneficiary
The recipient of benefits, often from a deed of trust; usually the lender. Close of escrow
Generally the date the documents are recorded and title passes from Seller to Buyer. On this date, the Buyer becomes the legal owner, and title insurance becomes effective.
Comparable sales
Sales that have similar characteristics as the subject real property, used for analysis in the appraisal. Commonly called “comps.”
Deed, Grant Deed, or Warranty Deed
A real estate-oriented document used to convey fee title to real property from the grantor (usually the Seller) to the grantee (usually the Buyer).
Deed of Tust
An instrument used in many states in place of a mortgage.

Deed Restrictions
Limitations in the deed to a parcel of real property that dictate certain uses that may or may not be made of the property
Earnest Money Deposit
Down payment made by a purchaser of real property as evidence of good faith; a deposit or partial payment.
Easement
A right, privilege or interest limited to a specific purpose that one party has in the land of another.

Lien
A form of encumbrance that usually makes a specific parcel of real property the security for the repayment of a debt or discharge of an obligation. For example, judgments, taxes, mortgages, deeds of trust.

Mortgage
The instrument by which real property is pledged as security for repayment of a loan.

PITI
A payment that combines Principal, Interest, Taxes, and Insurance.

Power of Attorney
A written instrument whereby a principal gives authority to an agent. The agent acting under such a grant is sometimes called an “Attorney-in-Fact.”

Purchase Agreement
The purchase contract between the Buyer and Seller. It is usually completed by the real estate agent and signed by the Buyer and Seller.

Quit Claim Deed
A deed operating as a release, intending to pass any title, interest, or claim which the grantor may have in the real property, but not containing any warranty of a valid interest
or title by the grantor.

Recording
Filing documents affecting real property with the County Recorder as a matter of public record.