Market price is the actual price paid in a market transaction for an asset, in contrast to the market value. It reflects the monetary amount a buyer is willing to pay and a seller is willing to accept under normal market conditions.
Marketability refers to the speed or ease with which a property can be sold at or near its market value. It encompasses the property’s expected appeal in the market.
A marketable title is defined as a title free from significant defects, ensuring that a court will enforce the title's acceptance by a purchaser. This concept contrasts with a 'cloud on the title,' which indicates a defect or potential issue that could limit marketability.
A material fact is information that is critical to understanding a situation or making an informed decision. In the context of real estate, it refers to details about a property that can influence a buyer's or seller's actions, such as structural problems, zoning changes, or environmental hazards.
A merchantable title, also known as a marketable title, is a legal concept indicating that a property title is free from significant encumbrances or defects, providing clear ownership and the right to transfer the property.
Misrepresentation in real estate involves an untrue statement, whether unintentional or deliberate, affecting material facts about a property. This can lead to legal actions such as damages or rescission of the contract.
An unintentional error made in preparing a contract; may be corrected by mutual consent of all parties without voiding the contract.
MLS (Multiple Listing Service) is a database used by real estate agents and brokers to share information about properties for sale. It is designed to facilitate the buying and selling process by providing detailed listings accessible to all members.
Mortgage relief involves the alleviation or settlement of mortgage debt. This can occur through the assumption of mortgage by another party or the repayment of debt. In tax-free exchanges, mortgage relief can be considered as boot received and could have tax implications.
A Mortgagor’s Title Insurance policy protects the buyer or owner of real property from legitimate claims of ownership interest on the property, offering important supplemental coverage beyond the Mortgagee’s Title Insurance policy. Typically, the buyer covers the premium cost for additional security in property transactions.
Negotiation in real estate refers to the process of bargaining between two or more parties, typically a buyer and seller, aiming to reach a mutually agreeable contract. The successful negotiation results in the formation of a legally binding contract detailing the terms and conditions under which the sale or purchase will proceed.
Novation is a three-party agreement that releases one party from a contract and substitutes another party. It is also the substitution of one contract for another, with acceptance by all parties.
An obligee is the person or entity in whose favor an obligation is entered into and who has the right to demand the fulfillment of that obligation from the obligor.
An offeree is the individual or entity that receives an offer or proposal in the context of a contract negotiation. In real estate, this typically refers to the party that receives a purchase or sale offer.
A Power of Attorney (POA) is a legal document that grants one individual (the agent or attorney-in-fact) the authority to act on behalf of another person (the principal) in legal or financial matters.
A pre-foreclosure sale is a transaction in which a third-party buyer purchases a property after the underlying mortgage has been posted for foreclosure but before the property has been repossessed by the lender or liquidated to pay the debt.
Preclosing is a process conducted prior to the final closing of a real estate transaction whereby instruments are prepared and signed by some or all parties involved in the contract. This process is especially useful in complex transactions involving multiple parties or arrangements.
In real estate, 'Price' refers to the amount of money that buyers and sellers agree upon for the exchange of property. While it represents the transactional amount, it can often differ significantly from 'Value,' which is an estimate or opinion of worth provided by an appraiser.
Procuring cause is a legal term used primarily in real estate to determine if a broker is entitled to a commission. It signifies the actions of a broker that ultimately lead to the creation of a transaction or agreement.
A property description provides a detailed summary of the features, boundaries, and legal status of a particular real estate property. It ensures accurate identification and transference of property rights.
Proration refers to the division of expenses or income proportionally based on the time used or the amount consumed between parties in a real estate transaction. This ensures fair allocation of costs such as property taxes, utilities, and homeowner association fees based on the agreed terms.
A Protection Clause, also known as a Broker Protection Clause, is an agreement within a listing contract that ensures a real estate broker will be paid their commission if a property is sold to certain individuals, even after the expiration of the listing agreement.
A public record refers to official documents relating to real estate transactions that are maintained by a government office, typically a county courthouse. These records are accessible to the public and provide constructive notice regarding the existence of these documents.
A Purchase and Sale Agreement (PSA) is a legally binding contract that outlines the terms and conditions related to the purchase of real estate assets. It is used primarily to detail the obligations and rights of both the buyer and the seller before the actual transfer of property ownership.
A Purchase Offer is a formal document that indicates a buyer's intention to buy a property at a specified price and terms. It serves as the basis for the subsequent negotiation and contract phase in real estate transactions.
A purchase option is a contractual right granted to a party (typically a tenant) that gives them the opportunity, but not the obligation, to buy an asset or property at a specified price within a set period.
A real estate agent is a licensed professional who assists in buying, selling, or managing properties. They work under the authority of a licensed broker and are pivotal in navigating real estate transactions.
A real estate agent is a licensed professional who represents buyers or sellers in real estate transactions. Real estate agents are generally compensated on a commission basis and operate under the supervision of a real estate broker.
A Real Estate Appraiser is a professional who evaluates and estimates the value of properties. The appraiser considers many factors, including location, condition, and market trends, to provide an unbiased opinion of the property's market value. Their services are crucial for transactions such as buying, selling, refinancing, and property taxation.
An audit in the context of real estate refers to the inspection and evaluation of financial records and procedures, conducted by a Certified Public Accountant (CPA) or other qualified individuals. It ensures that the financial aspects of real estate transactions, ownership, and management are accurately and fairly presented.
A Real Estate Broker is a licensed professional who represents buyers or sellers in real estate transactions. They usually own and operate their own brokerage or work independently, overseeing other real estate agents.
A Real Estate Commission is a fee charged by a real estate agent or broker for their services in facilitating a real estate transaction, typically a percentage of the property's sale price.
A Real Estate License is an authorization granted by a state allowing an individual to engage in real estate practices, either as a broker or salesperson, enabling them to legally offer and manage real estate transactions.
A Real Estate License is a certification that allows regulators to ensure that real estate agents and brokers meet minimum requirements for honesty, competency, and securing the legal rights of consumers within real estate transactions.
The Real Estate Settlement Procedures Act (RESPA) ensures that residential mortgage borrowers receive timely and accurate disclosures about the costs involving settlement procedures and protects them from unnecessarily high settlement charges caused by certain abusive practices.
Recording fee closing costs are charges incurred during the real estate transaction to record documents, such as the deed or mortgage, in public records. These fees are mandatory and generally paid to local government offices to ensure the transaction is officially noted and legally recognized.
The act of suggesting the use of a certain broker, which can be both a business strategy and a relationship-building exercise in the real estate industry.
A registrar is responsible for maintaining accurate official records, including deeds, mortgages, and other important documents in real estate transactions.
Representation in real estate refers to the professional assistance or fiduciary advocacy provided in a transaction or negotiation. It ensures that parties are guided and protected in complex real estate dealings.
Rescission refers to the legal act of canceling or terminating a contract, most often due to issues like fraud, duress, misrepresentation, or mistake. It renders the contract void from the beginning, effectively restoring both parties to the situation they were in before the contract was made.
Reservation price refers to the highest price a buyer is willing to pay for a property while still achieving his or her primary objectives such as keeping monthly payments affordable or paying no more than market value for the property. A buyer negotiates to keep the sales price at or below this price point.
A Residential Broker facilitates the buying, selling, or leasing of residential properties such as houses or condominiums, providing essential services to both buyers and sellers.
Revenue stamps are affixed to deeds and other real estate documents to indicate the payment of a state’s deed transfer tax or other applicable transfer taxes.
Reversion refers to the right of a lessor to possess leased property upon the termination of a lease. It is a critical concept in real estate, as it dictates the future interest in rental properties and land transactions.
Revocation is the act of recalling or withdrawing a power of authority previously conferred, such as a power of attorney, license, agency, or other similar agreements. It is a fundamental legal concept that has considerable implications in real estate transactions and credentials.
The Right of First Refusal (ROFR) grants a party the opportunity to match the terms of a proposed contract before it is executed with an outside party.
Sale pending is a term used in real estate to describe a property for which a contract has been signed but the transaction has not yet closed. These transactions are not officially counted as sales until the closing process is completed.
A sales agreement, also known as a sales contract, is a legally binding document that outlines the terms and conditions of a transaction between a buyer and a seller.
The sales price is the amount of money required to be paid for real estate according to a contract, or previously paid. It can include cash payments and assumptions of existing mortgages.
A real estate salesperson is a licensed individual who performs real estate-related activities under the supervision of a licensed broker, as stipulated by state real estate laws.
Seller financing, also known as owner financing, involves the seller providing a loan to the buyer to help facilitate the purchase of a property when traditional third-party financing may be expensive or unavailable. This method can be used to bridge the gap between the purchase price and what the buyer can immediately finance through other means.
The settlement date, often referred to as the closing date, is the date when the sale of a property is officially finalized, and ownership is transferred from the seller to the buyer.
A settlement statement is a critical document in a real estate transaction that itemizes all the financial details and allocations for both buying and selling parties. It ensures transparency, allows for error checking, and provides documentation of the financial exchanges in the sale.
A short sale is a financial arrangement where a mortgagor settles their outstanding mortgage debt with a payment that is less than the principal balance owed. This process helps avoid foreclosure and can be used as an alternative solution for struggling homeowners.
A special agent is an individual authorized to act on behalf of another person in a restricted capacity, often for specific tasks or responsibilities. This limited authority distinguishes the special agent from other types of agents like universal agents, who have broad powers.
In real estate, a 'spread' refers to several key financial differences, often pertaining to prices or interest rates, that can significantly impact transactions, investments, and profits.
A straw man is an individual who purchases property on behalf of another person or entity to conceal the identity of the actual purchaser. This tool is often employed in real estate transactions to prevent price inflation from sellers realizing the true buyer's identity.
A type of real estate transaction where the seller accepts guaranteed periodic payments over a specified time period in the future instead of receiving the entire sales price at the closing. The buyer usually pays a discounted lump sum to purchase an annuity that ensures these periodic payments to the seller.
A real estate transaction where a buyer acquires property that has an existing mortgage but does not assume personal liability for the debt. The buyer must keep making payments to avoid losing the property, and if a default occurs, only the buyer’s equity is at risk.
Subrogation in real estate refers to the substitution of one entity for another concerning a claim or right. The substituting entity acquires the legal rights and claims of the original party.
Subsurface rights refer to the rights to extract minerals, oil, and gas from beneath a property's surface. Owning these rights can be valuable and is often separated from surface rights in real estate transactions.
A sweetener is something included in a transaction to make it more acceptable or attractive to the buyer. This can take the form of various incentives or perks offered by the seller to encourage the buyer to complete the purchase.
Taxable Value, also referred to as Assessed Value, is the dollar amount assigned to a property for the purposes of calculating property taxes. It's an estimation of a property's market value determined by the local tax assessor.
A Tenant Representative Broker represents tenants in seeking the best property to lease, negotiating favorable transaction terms, and assisting with related leasing processes.
In real estate, a tender is an offer to perform an obligation, including delivery or actual performance, under a contract. A tender can involve payments, delivering deeds, or offering services as required by contractual terms.
A clause in a deed or other conveyance that cites the act and date, ensuring that all details such as names and legal descriptions are correct before signing.
The phrase 'Time Is of the Essence' in a contract requires that all time-related provisions must be strictly adhered to, emphasizing that any delays could be a breach of contract.
A Title Binder is a temporary form of title insurance that signifies the intent to issue a title insurance policy at a later date. Typically used in real estate transactions, it offers interim coverage from the time the property sale contract is signed until the closing, when a full title insurance policy is issued.
Title defect refers to any issue or claimant that challenges the legal ownership of a property, preventing the owner from presenting a clear or marketable title. These defects can arise due to various reasons such as missing signatures on the deed, current liens, or interruptions in the title records.
In a title insurance policy, a title exception refers to a statement detailing items or conditions that are not covered by the policy. Understanding these exceptions is crucial for assessing potential risks before purchasing a property.
A title guarantee is a type of protection that ensures the title of a property is clear of any claims or encumbrances. It provides assurance to buyers and lenders that they are purchasing a legitimate piece of real estate, free from past issues.
Title insurance is a protective policy that assures the transfer of clear title in real estate transactions. It protects against potential disputes over ownership and ensures that both lenders and buyers have security over any claims that might arise after the property transfer.
Transaction Brokerage is an arrangement in which a broker facilitates a real estate transaction without representing either the buyer or the seller. The broker remains neutral throughout the process, focusing on administrative duties to ensure the smooth execution of the transaction.
A transfer tax is a tax imposed when the title or ownership of property is transferred from one person to another, often seen in real estate transactions.
A trust account, also known as an escrow account in some states, is a separate bank account required by state law for brokers to deposit all client monies. This ensures that client funds are kept separate from the broker's own funds.
An undisclosed agency relationship occurs when a client is unaware that their agent has a duty to represent the other party in a transaction. This often leads to implied agency where the client believes the agent is working solely for their benefit.
Upfront charges refer to various fees and costs that a homeowner must pay at the closing of a real estate transaction. These include points, recording fees, mortgage title policy, appraisal fees, and credit report fees.
A valid contract in real estate is a legally binding agreement between two or more parties, often associated with property transactions. For a contract to be valid, it must include an offer, acceptance, intention to create legal relations, and consideration.
A vendee is a party, typically in real estate transactions, that buys property. This term is specifically used in real estate contexts and contrasts with the term 'buyer,' which is commonly used for personal property transactions.
In the context of real estate, a vendor is the seller of a property. Vendors are typically involved in various transactions including the sale of personal property, cash exchanges, and mortgage transfers. Vendors are integral to real estate transactions as they transfer ownership to the buyer, or vendee.
Voluntary Alienation is a legal term that describes the transfer of property rights through the free will of the property owner, typically by sale or gift.
A warranty is a promise contained in a contract, typically in real estate, that guarantees certain conditions or performances with regards to a property, often provided by the seller or builder.
A willing buyer is a person who expresses genuine interest in purchasing a property under common market conditions, without being under undue pressure or compulsion.
