Title Insurance

Typically, title insurance is the purchaser’s protection against unknown defects of record in ownership or other encumbrances. Matters not covered by title insurance are specifically excepted. Title insurance protection is not transferable from seller to purchaser.

Mortgage

A Mortgage is a complex form of deed that encumbers real property in order to secure a debt, and is usually accompanied by a promissory note. Generally, in return for lending money for the purchase of real property, a Lender (or Mortgagee) takes a Mortgage in order to secure its interest in the Purchaser’s (or Borrower/Mortgagor) real property.

Real Estate Contract

A Real Estate Contract is an agreement entered into between Purchaser and Seller for the purchase and sale of real estate. Generally, the Purchaser promises to pay the purchase price to the Seller over a period of time in installments and fulfill any other obligations imposed by the agreement. During the period of time while Purchaser is making payment to Seller, Seller retains legal title to the real property as security for payment. Seller promises to transfer legal title to the real property when Purchase has fulfilled the Agreement. A Real Estate Contract typically does not include earnest money agreements and options to purchase.

Purchase and Sale Agreement

A Purchase and Sale Agreement or Earnest Money Agreement is a contract executed by a Purchaser and Seller preliminarily binding, at least, the parties to a purchase and sale of real property. Generally, a Purchase and Sale Agreement contains additional terms, obligations, restrictions or contingencies regarding the transaction. A Purchase and Sale Agreement is an important document that should be reviewed carefully.

Earnest Money

Generally, Earnest Money is any deposit or payment of a part of the purchase price for the real property, made in the form of cash, check, promissory note, or other things of value for the purpose of binding the purchaser to the agreement and identified in the agreement as an earnest money deposit, and does not include other deposits or payments made by the purchaser.

Deed of Trust

The Washington State Legislature created the Statutory Deed of Trust in 1965. Typically, a Deed of Trust is taken to secure payment by a Purchaser or a Borrower. Upon default of the Purchaser of Borrower, a Deed of Trust allows the Trustee to foreclose.

Quit Claim Deed

A Quit Claim Deed conveys all interest in ownership of real property that the Grantor may have without warranty, guarantee, covenant or exception.

Warranty Deed

A Warranty Deed conveys an interest in ownership of real property, and the Grantor warrants to the Grantee (1) that at the time of the making and delivery of the deed the Grantor was lawfully seized of an indefeasible estate in fee simple, in and to the premises therein described, and had good right and full power to convey the same; (2) that the same were then free from all encumbrances; and (3) that the Grantor warrants to the Grantee, his heirs and assigns, the quiet and peaceable possession of such premises, and will defend the title thereto against all persons who may lawfully claim the same, and such covenants shall be obligatory upon any grantor, his heirs and personal representatives, as fully and with like effect as if written at full length in such deed.

Closing

Closing is the formal delivery of the executed deed to the purchaser and the tendering of payment to the seller. Generally at closing, any real estate excise tax owing and any assessments should be paid, and the deed recorded with the county.

Real Estate Excise Tax

Real Estate Excise Tax applies to most transfers of real property. Real Estate Excise Tax does not apply to transfers by gift, inheritance, devise, forfeiture or partition. The total tax varies from county to county, and from municipality to municipality. If the Excise Tax is unpaid, then a lien may be placed on the real property for the amount of the tax, plus any interest and penalties.

Fee Simple

Generally describes complete ownership of real property.

Life Estate

Generally describes right of a person to use property as if it is his or her own during that person’s lifetime. After death, the interest in real property transfers to somebody else.

Tenancy in Common

Generally describes ownership of real property by two or more persons with each person having a separate undivided interest in the real property. Each owner may convey his or her interest in the real property. At death, a person’s interest passes to his or her heirs, not to the other owners.

Tenancy by Entirety

Generally describes ownership of real property by husband and wife. The surviving spouse has a right of survivorship.

Joint Tenancy with Right of Survivorship

Generally describes ownership of real property by two or more persons with each person having an undivided, equal interest. Each owner may convey his or her interest in the real property, but the right of survivorship may be destroyed. At death, a person’s interest passes to the other joint owners.

Easement

An easement generally creates a right of one person to cross over or enter upon the real property of another for a specific purpose or duration of time. Easements are usually created by express agreement, but may be created in a variety of different ways.

Covenant

A covenant is generally a restriction precluding an owner of real property from doing some specific act on his or her property, for the benefit of another. Covenants are usually created in a deed or similar document.