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Abstract of Title
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A chronological summary of all recorded documents affecting the title to a property. An abstract is the raw material from which a title company produces a title commitment.
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Closing
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The final step in a real estate transaction, where ownership officially transfers from seller to buyer. Also called "settlement" in some states, but "closing" is the standard Texas term.
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Closing Disclosure (CD)
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The federally required form that lists all final costs, credits, and terms of a residential mortgage loan. The buyer must receive the CD at least three business days before closing.
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Commitment for Title Insurance
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A document issued by the title company that describes the condition of title and sets out the terms under which the insurer agrees to issue a title policy. The commitment lists any exceptions (matters not covered) and requirements (what must be done before closing).
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Conveyance
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The legal transfer of property from one party to another, typically accomplished by deed.
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Deed
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The legal document that transfers ownership of real property from seller to buyer. Common types in Texas include the General Warranty Deed (strongest protections), Special Warranty Deed, and Quitclaim Deed.
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Deed of Trust
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The document used in Texas to secure a mortgage loan against real property. Texas uses deeds of trust rather than mortgages — they accomplish the same economic purpose but through a slightly different legal mechanism.
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Earnest Money
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A deposit made by the buyer when signing the purchase contract, held in escrow, to show good-faith intent to complete the purchase. Earnest money is applied toward the purchase price at closing or returned to the buyer if the transaction is properly terminated.
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Easement
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A legal right to use part of another person's property for a specific purpose — for example, a utility company's right to install and maintain power lines across a property.
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Encumbrance
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Any claim, lien, charge, or right against property that may affect its title or use. Mortgages, tax liens, easements, and restrictive covenants are all encumbrances.
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Escrow
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A neutral third-party arrangement where funds and documents are held until all conditions of a real estate transaction are met. The title company acts as the escrow holder.
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FIRPTA (Foreign Investment in Real Property Tax Act)
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A federal law requiring that when a foreign person sells U.S. real estate, the buyer must withhold a percentage (typically 15%) of the sale price for the IRS. Many cross-border Valley transactions involve FIRPTA compliance, which our team handles as routine work.
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Grantor / Grantee
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In a deed, the grantor is the party transferring property (seller); the grantee is the party receiving it (buyer).
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HOA (Homeowners Association)
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An organization in a subdivision or planned community that enforces rules (often called CC&Rs) and maintains common areas. HOA dues, assessments, and transfer fees must be addressed at closing.
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ITIN (Individual Taxpayer Identification Number)
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A tax processing number issued by the IRS to individuals who need to file taxes but are not eligible for a Social Security Number — often including Mexican nationals purchasing Texas real estate. Many Valley cross-border buyers use an ITIN rather than an SSN.
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Lien
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A legal claim against property, typically to secure payment of a debt. Mortgage liens, tax liens, mechanics' liens, and judgment liens are all types. Liens must be released or handled at closing to deliver clear title.
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Loan Policy
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A title insurance policy protecting a lender against defects in the title of the property securing a loan. Required by most Texas mortgage lenders.
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Mineral Rights
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The rights to oil, gas, and other minerals beneath a property. In Texas, mineral rights are often severed from surface rights, meaning the owner of the surface may not own the minerals below. Common in ranch and land transactions, especially in Kerr, Gillespie, and Uvalde Counties.
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Owner's Policy
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A title insurance policy protecting the buyer (new owner) against defects in the title of the property being purchased. In Texas, the seller traditionally pays for the owner's policy, though this is negotiable.
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Power of Attorney (POA)
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A legal document authorizing one person to act on behalf of another. Frequently used in cross-border closings where a Mexican national buyer cannot travel to Texas for signing, or where one spouse signs on behalf of another.
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Proration
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The division of recurring costs (typically property taxes, HOA dues, or rent) between buyer and seller based on the closing date. Each party pays only for the portion of the year they owned the property.
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Recording
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The act of filing a deed, deed of trust, or other real property document with the county clerk. Recording creates public notice of the transaction and establishes priority among competing claims.
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Schedule A / Schedule B
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Sections of a title commitment. Schedule A shows the proposed insured, the amount of insurance, the estate being insured, and the record owner. Schedule B lists exceptions (matters the policy will not cover) and requirements (what must be done before issuing the policy).
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Survey
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A drawing made by a licensed surveyor showing the boundaries of a property, the location of buildings and improvements, easements, and any encroachments. Surveys are commonly required for title insurance and lender underwriting.
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TDI (Texas Department of Insurance)
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The Texas state agency that regulates title insurance, including setting the rate schedule that all title insurers must use. Title insurance rates in Texas do not vary between title companies — the TDI Basic Rate Rule applies uniformly across the state.
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Title
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Legal ownership of real property. "Title" refers to the bundle of rights that come with ownership, and "clear title" means ownership without undisclosed claims, liens, or encumbrances.
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Title Insurance
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Insurance that protects the buyer (owner's policy) or lender (loan policy) against losses resulting from defects in title — including undiscovered liens, forged documents, missing heirs, and title chain errors. In Texas, premiums are paid once at closing and coverage lasts as long as the insured owns the property.
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Wire Fraud
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A scheme in which criminals impersonate title companies, real estate agents, or lenders and instruct buyers to wire closing funds to a fraudulent account. Wire fraud is a major threat in real estate. SentryTitle never sends wire instructions by email — always call us at (210) 555-1656 to verify before sending any funds.