REAL ESTATE TERMS

Agency: This framework has developed in the law to allow individuals to act through another person or representative. In real estate, it refers to working with a real estate broker to buy or sell property. Your legal agent may have unlimited or limited powers on your behalf and owes you fiduciary duties such as loyalty, accounting and disclosure. In the purchase or sale of real estate, you have several agency options.

Appraiser: The person who decides the market value of a home based on its condition and the selling prices of comparable homes recently sold in the area. The appraiser computes a fair estimate of market value to help the lender decide a reasonable loan amount.

Assessor: A public official who appraises property for tax purposes, determining the assessed value, not the tax rate.

Buyer’s Agent: A buyer may ask a real estate brokerage company to act as the his or her legal agent in the process of purchasing real estate. This can be done by designating one or more sales associates as the legal agent in a written agreement with the broker or by entering into an agency agreement with the real estate broker that would provide that the broker and all sales associates affiliated with the broker would act as legal agents of the buyer. The authority of the legal agent to act on a buyer’s behalf would be limited to those powers granted in the written agreement. In the purchase of real estate, the buyer’s agent acts in the buyer’s best interest.

Closing: The conclusion of a real estate transaction, which includes delivery of a deed, financial adjustments, signing of notes and disbursement of funds necessary to the sale or loan.

Contingency: A condition that must be met before a contract is binding. For example, the sale of a home might be contingent on the seller’s paying for certain repairs.

Conventional Loan: A loan made with real estate as security and not involving government participation in the form of insuring (FHA) or guaranteeing (VA) the loan.

Dual Agency: In this situation, both the seller and buyer in a transaction are represented by the same legal agent. Thus, fiduciary duties are owed to both parties. The law states that this is not legally possible without the consent of the buyer and seller. If your consent is secured to allow this type of situation, the role of the sales associate will be somewhat limited, and the buyer and seller will act at times on their own behalf in negotiations for the sale or purchase of the property.

Earnest Money: A deposit given when making an offer on a home to demonstrate good faith. A REALTOR® usually holds the earnest money, the amount of which varies by community. If the sale goes through, this deposit will become part of the buyer’s down payment.

Fixed-Rate Loan: A loan with the same rate of interest for the life of the loan.

Homeowners Policy: A multiple peril insurance policy commonly called a package policy. Available to owners of private homes, it covers the dwelling and contents in case of fire or wind damage, theft, liability for property damage and personal liability.

Interest Rate Cap: The maximum interest rate allowed on an adjustable-rate loan for any one adjustment period during the life of the loan.

Open Mortgage: A mortgage that may be repaid in full at any time over the life of the loan without a prepayment penalty.

Point: A dollar amount paid to a lender for making a loan. A point is one percent of the loan amount. Also called a discount point.

REALTOR®: A member of the National Association of REALTORS® who subscribes to a strict code of ethics.

Seller’s Agent: When you sign a listing agreement with a real estate broker, you are typically signing an agency agreement that makes that broker and all sales associates affiliated with the broker your legal agent. In a designated agency, the broker would name one or more sales associates as your legal agent. The seller’s agent is a limited as opposed to general agent. In other words, the listing or other agreement with the broker gives the selling agent certain authority to act on your behalf in the marketing and sale of the property. However, the selling agent does not have general powers to act on your behalf such as the power to enter into a binding contract for the sale of your real estate. In marketing your real estate, the seller’s agent will act in the seller’s best interest.

Title: Documentary evidence of the right to or ownership in property, which in real estate is the deed. Title may be acquired through purchase, inheritance, gift or exchange, as well as through foreclosure of a mortgage.

HOUSING TERMS

Condominiums and cooperatives: Two forms of multiple-ownership that differ from each other in several major aspects. When you purchase a condominium, you become the title holder to the apartment or townhouse and also own an interest in the common elements of the building or complex. These common elements include grounds, exterior walls, stairways and elevators. When you purchase a cooperative apartment, you become a shareholder in the corporation that owns the building. The stock that you purchase represents the ownership of your apartment in addition to your proportional share of the common elements of the building.

Duplex: In the Sun Cities area, duplexes are commonly two separate dwellings attached with a common wall and roof.  Typically, each side of the duplex is owned separately.  In most cases, duplexes in this area belong to associations that, for a mandatory monthly fee, will maintain the exterior of the unit and the common areas.  Your ownership of the duplex is the same as with a condo.  You own the dwelling and a share in the common areas.

Lofts: The term implies apartments, condominiums or even offices that have been carved out of existing, older commercial buildings such as warehouses, factories, hospitals, schools or office buildings. These living spaces usually offer high ceilings (12’ to 14´), minimum room partitioning to maintain an open, bright appearance, exposed ductwork, brick or timber beams and oversized windows. The term “soft lofts,” implies a more finished look, often white walls, industrial carpeting and more definition in room divisions. A benefit of such conversions is that they preserve the architectural character and heritage of the city’s aging industrial and commercial districts.

Renovated or rehabbed: Terms that suggest an older building has had old features restored or new mechanics—plumbing, electrical system, etc.—installed.

Single-family:  Single family homes are normally frame, brick or stucco. Frame and stucco homes tend to be less costly than brick.

Townhomes: A form of construction and ownership that has become popular since the 1960s. An buyer owns all of the space within his or her unit, similar to a condominium. Townhomes often are condominiums, but share vertical walls with the neighbor on either side. Townhomes typically have a garage on ground level and either a patio or balcony. Exterior walls, roofs and sometimes garages are designated as common elements.