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Real Estate Tips One of the greatest difficulties for the layman in the home-buying or selling process is understanding all the unusual terms and legalese used in the industry. So, in the interest of making the process easier, I've put together some of the most commonly misunderstood terms you might run across. In the future I hope to add to this page more
of the things I've learned that might be of assistance to you, but
in the mean time, have fun learning!! Real Estate Terminology Agent - One who is authorized to act for or represent another (principal), usually in business matters. Authority may be expressed or implied. Agreement of Sale - Has separate meanings, depending on area of the country. In some states it is synonymous with a purchase agreement. (see; Purchase Agreement) In other states, it is synonymous with a land contract. (See Land Contract). Amortization - Payment of debt in regular periodic installments of principal and interest, as opposed to interest only payments. Appraisal - An opinion of value based upon factual analysis. Legally , an estimation of value by two disinterested persons of suitable qualifications. Assessed Value - Value placed upon property for property tax purposes by the tax assessor. 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 a "balloon" is due at the maturity. Boring Test - Study of soil by boring holes and removing samples. Breach of Contract - Failure to perform a contract, in whole or in part, without legal excuse. Breach of Warranty - In real property, the failure of the seller to pass title as either expressed or implied (by law) in the conveyancing document. By Laws - Rules and regulation, adopted by an association or corporation, which govern its activities. Cantilever - A structural support which itself is supported at one end only and bears its load through its material strength and rigidity. Closing Statement - The statement which lists the financial settlement between buyer and seller, and also the costs each must pay. A separate statement for buyer and seller is sometimes prepared. Community Property - Property owned in common by a husband and wife, which was not acquired as separate property. A classification of property peculiar to certain states. Texas is a community property state. Condominium - A structure of two or more units, the interior space or which are individually owned; the balance of the property (both land and building) is owned in common by the owners of the individual units. The paint or other finishes of the exterior walls, floors, and ceiling. The balance of the property is called the common area. Conveyance - Transfer of title of land, includes most instruments by which an interest in real estate is created, mortgaged, or assigned. Deed in Lieu - A deed from the owner (debtor) to a lender to prevent foreclosure. There are usually statutory provisions as to fairness of value and absence of coercion which must be recited on the deed. Disbursements - Payments made during the course of an escrow or at closing. Dual Agency - The representation of opposing principals (buyers and sellers) at the same time. In brokerage many states get around this by saying that the agent aids the buyer but is the agent of the seller only. A problem arises if both buyer and seller pay the broker. Then full disclosure must be made. An escrow agent is the agent of the buyer and seller and usually paid by both. This is why an escrow agent must be neutral. Duplex - (1) Any building containing exactly two dwelling units. Most commonly refers to the units which are side by side with a common wall and roof. (2) An apartment on two floors or levels. Errors and Omissions - Insurance covering losses caused by errors and omissions of professions other then medicine. Used by banks , real estate companies, escrow companies, Inspection companies. Escrow Officer - An escrow agent. In some states, one who has through experience and education, gained a certain degree of expertise in escrow matters. Latent Defect - A hidden or concealed defect. One which could not be discovered by inspection, using reasonable care. In legal descriptions, a latent defect may be corrected, and a totally new description not necessary. Lis Pendens - A legal notice recorded to show pending litigation relating to real property, and giving notice that anyone acquiring an interest in said property subsequent to the date of the notice may be bound by the outcome of the litigation. NAR - National Association of Realtors Owners Policy - Title insurance for the owner of the property, rather then a lienholder. Quitclaim Deed - A deed operating as a release; intended to pass by title, interest, or claim which the grantor may have in the property, but not containing any warranty of a valid or title in the grantor. Recording - Filing documents affecting real property as a matter of public record, giving notice to future purchasers, creditors, or other interested parties. Recording is controlled by statute and usually requires the witnessing and notarizing of an instrument to be recorded. Verification - Confirmation of truth, correctness, or authenticity. Done by affidavit, oath , or deposition, all of which require sworn statements. Zero lot line - The construction of a building on any of the boundary lines of a lot. Usually built on the front line, such as a store built to the sidewalk. Zero side yard - The building of a subdivision with each house built on a side boundary line. This gives more usable yard space on a narrow lot. An easement for maintenance is given over the portion of the lot adjoining each house. I am hoping this might help you to understand just a few of the more common terms used within the Real Estate world. If there is something that you do not understand, please do not hesitate to e-mail me at polly@pollybraun.com. Sincerely,
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