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Escrow Terms & Phrases

Terms and Phrases is Lawyers Title's Glossary of definitions, meanings, and descriptions of significance for some of our industry's most often used terms and phrases.

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Backup Offer -- A secondary offer to buy property, used in case the first (primary) offer fails. A backup offer is especially useful when the primary offer contains difficult contingencies.

Balloon Note -- A note calling for periodic payments which are insufficient to fully amortize the face amount of the note prior to maturity, so that a principal sum known as the "balloon" is due at maturity.

Balloon Payment -- The final payment (balance due) of a balloon note.

Bankruptcy -- Proceedings under federal bankruptcy statutes to relieve a debtor (bankrupt) from insurmountable debt. The bankrupt's property is distributed by the court to the creditors as full satisfaction of the debts, in accordance with certain priorities and exemptions. Voluntary bankruptcy is petitioned by the debtor; involuntary by the creditors.

Base Map -- A map having background information, such as state, county, or city boundaries, upon which more detailed data is plotted.

Beneficial Estate -- An estate, the right of possession of which has been postponed, such as a devise under a will. More commonly, an estate, the legal ownership of which has not yet vested, as under a land contract. An equitable estate.

Beneficial Interest -- The equitable, rather than legal ownership of property such as under a land contract.

Beneficiary -- (1) One for whose benefit trust is created. (2) In states in which deeds of trust are commonly used instead of mortgages, the lender (mortgagee) is called the beneficiary.

Beneficiary's Demand -- Written instructions by a beneficiary under a deed of trust stating and demanding the amount necessary for issuance of a reconveyance, whether a full or partial amount.

Beneficiary's Statement -- A statement by a lender under a deed of trust, setting forth the pertinent information necessary to assume said deed of trust, such as the unpaid balance, monthly payment, and interest rate.

Bequeath -- To give personal property by will.

Bequest -- Personal property left by will.

Bill of Sale -- An instrument by which one transfer personal property.

Binder -- A report issued by a title insurance company setting forth the condition of title to certain property as of certain date, and also setting forth conditions which, if satisfied, will cause a policy of title insurance to be issued. Also called a commitment. A policy of title insurance (used primarily by investors) calling for a reduced rated for a future policy if the property is sold within a specified period.

Blanket Mortgage -- (1) A mortgage covering more than one property of the mortgagor, such as a mortgage all the lots of a builder in a subdivision. (2) A mortgage covering all real property of the mortgagor, both present and future. When used in this meaning, it is also called a general mortgage.

Board of Equalization -- State board charged with the duty to equitable uniformity to the various local property tax assessments.

Boot -- Something given in addition to. Generally used in exchange to refer to something given other than the major properties to be exchanged, in order to equalize value.

Broker, Real Estate -- One who is licensed by the state to carry on the business of dealing in real estate. A broker may receive a commission for his or her part in bringing together a buyer and a seller, landlord and tenant, or parties to an exchange.

Bulk Sale -- A transfer in bulk, not in the ordinary course of business, of all or substantially all of the inventory and fixtures of a business.

Business Opportunity -- The sale of a business (may or may not include the sale of real estate). Some states require a real estate license for these sales even when real estate is not involved. The Uniform Commercial Code, state statutes, and special laws for alcoholic beverage licenses (when applicable) should be studied by the business opportunities broker.

By-Laws - Rules and regulations, adopted by an association or corporation, which govern its activities.

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