Real Estate Notes

Apr 9, 2025

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Real Estate Agent is a professional who has passed the qualifications exam in the state that he/she tends to work. Salesperson or licensee working under a Broker.

Real Estate Broker can work independently or employ other agents.

Realtor is a Real estate agent of a certain standard. Realtors are licensed by the national association of realtors which are held to a higher standard of ethics. Like a real estate guild of sorts.

Demand – how much of a product or service is asked for

Supply – the amount of product available a given market

Users: This participant purchases property to live in it or purchases property to run their
business out of.

Owner: These people are purely real estate investors. They do not occupy the property that they purchase, instead they rent or lease to other parties.

Renters: These people are purely consumers

Developers: These people buy raw land and develop buildings on it, to be sold in the market

Renovators: These people flip or refurbish properties.

Facilitators: These people act as the catalyst for the purchase and sale of real estate. This includes banks, Real estate brokers, lawyers and more.

What is Real Estate?
Real estate is a form of Real property. All real estate will have the following set of Physical and economic characteristics.

Physical:
Indestructibility: Meaning land cannot be destroyed or worn out. Its appearance may be altered but it always continues to exist.
Immobility: Meaning geographical location of the property remains the same and can never be changed. It is fixed.
Uniqueness or non-homogeneity: Meaning no parcels of real estate are exactly alike.

Economic
Scarcity: Meaning the total supply is fixed. Land is not limitless
Improvements (also known as modification): Meaning improvements to a piece of land can have either a positive or negative impact on its value.
Permanence of Investment: Meaning investments in real estate are long-term. since real estate transactions are not made very frequently.
Location or area preference: Meaning people’s preference for a specific area. Things such as history, convenience, and reputation an area may have.

Property Ownership

Owning Real Estate comes bundled with a set of legal rights. The bundle of rights are.

The right of Possession – The property is owned by whoever owns the title or deed
The right of Control – The owner controls the use of the property
The right of Exclusion – others can be excluded from using or entering the property
The right of Enjoyment – The owner can enjoy any legal activity on the property
The right of Disposition – The title holder can sell, rent, or transfer ownership

Real vs Personal Property

Real property is all things attached to the land and all the rights attached to owning it. Personal property is all things removable from the Real property.

Examples of Real Property: Houses, Garages, Pools, stables, farms etc.
Examples of Personal Property: Cars, lawn mower, couches, etc.

Surface, Subsurface, Air and Water rights

Surface rights are the rights to use the surface of the earth.

Subsurface rights are the rights to use natural resources lying below the surface of the earth. Note that it is entirely possible for a party to own a piece of land, but sell the subsurface rights to another party, (like nestle tapping the water table in flint, or natural gas companies in Texas)

Air Rights are the rights to use the space above the earth.

Water Rights are the rights to use rivers, lakes or oceans that fall adjacent to the property. Water rights are divided up into to subcategories. Riparian (in relation to rivers) and Littoral (in relation to lakes).

Forms of Real Estate Ownership

Ownership in Severalty means one person owns the property.

Co-ownership is when a title to one parcel of real estate is held by two or more individuals, those parties are called co-owners or concurrent owners. Individuals may co-own property as tenants in common, joint tenants, or tenants by the entirety or lastly community property. There are different forms of co-ownership. These include the following.

Tenants in Common – Tenants in Common is when a parcel of real estate is owned by two or more tenants. Upon the death of a tenant in common, that share is transferred to the estate or heir of the deceased tenant. (Sounds like a UK thing)
Join Tenant – When a property is owned by joint tenants, the interest of a deceased owner automatically gets transferred to the remaining surviving owners.
Timeshare is a property with a divided form of ownership and/or use rights. Those types of properties are typically Resort condominiums units in which multiple persons hold the rights to the use of the property. Each owner is typically allotted a period of time in which to use the property.
Condominium is a type of living space which Is similar to an apartment but is independently sellable and is therefore regarded as real estate.
Cooperative a nonprofit corporation, complete with a board of directors and each resident is a shareholder. The largest distinction between a condominium and a co-op is that most co-op associations are require that a prospective purchaser be approved by a committee composed of current co-op “owners”. A cooperative owner typically does not own the unit. The unit is typically leased.

Trust

A trust can be established during an individual lifetime or can be established following someone’s death. A trust is a 3-party relationship in which the first party (the trustor) transfers a property upon a second party for the benefit of the 3^rd party (the beneficiary).

Types of Business Ownership

Sole proprietorship – Can buy or sell property for business/personal use through his or her name. All rights and responsibilities remain with individual.
Partnership – Same as sole proprietorship
Corporation – Because a corporation is a legal entity, a corporation can own property. All right and responsibilities remain with the corporation unless otherwise stated.
Limited Liability Corporation (LLC) – Legal protections differ from state to state.

Estates

Freehold Estates – Exclusive right to enjoy the rights of a property for an undefined length of time
There are 3 types of Freehold estates

Fee Simple Absolute – Highest form of real estate ownership that is recognized by law
Fee Simple Defeasible – A condition is added, if condition is met estate may be forfeit
Life Estate – an interest in real property which is held for the duration of a life of a person (life tenant)

Leasehold Estates – Same as freehold except there is a limitation of time.

Fixed Term Tenancy or Estate for Years – a specific length of time for occupancy
Periodic Tenancy – a specific length of time for occupancy but does not terminate on expiry
Estate at Will – can be ended at any time, term is indefinite
Estate at Sufferance – when a tenant holds over the expiration of the term

Lease – Is a contract by which one party conveys land property or services to another for a specified time. Usually in return for a periodic payment. A lease is a bi-lateral contract as both the tenant and the landlord have obligations to fullfill.

Gross Lease – a rental agreement for the use of the property where the tenant pays a fixed amount which does not fluctuate as a result of changes in expenses related to the property.

Double and Triple Net Lease – is a rental agreement in which 2 or 3 costs are added to the rent.

Net Lease – Flex option

Lease to Buy – Option to buy equipment at the end of the lease.

Percentage Lease – pertains to commercial real estate is a rental agreement based on the percentage of a monthly or annual sales made on the property.

Title vs Deed: What is the Difference?

Title – is a legal concept. It means that someone has the legal right to own a piece of land.

Deed –is a legal document that transfers Title. Deeds must be in writing.

Public/Private Land Use Controls and Government Powers

Public Use Control – Zoning

Private Use Control Deed restrictions

PETE

P for Police Power – Zoning laws Building codes, Fire codes, safety codes.
E for Eminent Domain – The right of a government to take over private property
T for Taxation – Fund the aforementioned laws
E for Escheat – If you die the government will take your land if you have no deed.

Environmental Law in real Estate

3 Key parts:

The different Hazardous substances that exist

Asbestos
Radon
Groundwater Contamination
Lead Poisoning
Electromagnetic Fields
Underground storage tanks
Urea Formaldehyde Foam Insulation
Carbon Monoxide
Molds
Waste Disposal sites

The Different environmental laws effecting ownership

Environmental Protection Agency (EPA) – Enforces all federal environmental rules and regulations. Established in Dec 1970 by Executive order Richard Nixon.

Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA)

Superfund Amendments and Reauthorization Act of 1986 (SARA)

Safe drinking Water Act (SDWA)

The Clean Water Act (CWA)

Residential Lead- Based Paint Hazard Reduction Act (All homes b4 1978)

The responsibility of landlords to disclose to their tenants

It is the responsibility of seller to disclose any environmental hazards to the buyer. For example, you forget to mention the Lead based paint; you can lose your license.

Defects: Material vs Latent

Material Defect is a problem with a property or any portion of it that would impact the value of the property and pose a large risk to the people occupying the land. A Latent defect is usually not discoverable by a normal inspection but is known by the seller or realtor.

Contracts

Written agreement is a contract.

Listing agreement pertains to the real estate agent.

Purchase agreement between the buyer and seller. Includes the settlement date price of property, the deposit amount, and any personal property left behind by the seller(such as washing machines, stoves etc). may also contain specific contingencies such as; the buyer may want the house but only if the house passes a laundry list on inspections.

Construction agreement agreeing to build a certain house for a certain amount of money.

Verbal contract is sometimes called an express contract.

Written contracts are called implied contracts.

Bilateral is a contract between two groups.

Unilateral is a single sided contract.

Properties of a Valid Contract

The party must be 18 years old and of sound mind.
A contract must be legal. For example, there cannot be a contract to kill, steal or anything illegal.
The contract must hold a clear and definite consideration. Which is a term usually associated with money but can be anything of value
There must be mutual consent of the contract. There must be an official offer and acceptance where both parties agree to the terms and conditions

Mortgage

A legal agreement by which a bank or other creditor lends money at interest in exchange for taking title of the debtors’ property with the condition that the conveyance of title gets void upon completion of payment. A mortgage is a pledge of property as security for a loan whereas a loan is typically more of a promise based on economics.

Who Qualifies for a mortgage?

To qualify the lender will look at three things:
• The applicants credit report and employment History
• The applicant’s debt-to-income ratio
• The property itself and how much it is appraised at.

Loan Types:

Balloon Loan – A mortgage that does not fully amortize over the term. Bigger payments usually take place near the end of the loan.
Adjustable-rate Mortgage (ARM) – A standard Mortgage with a flexible interest rate. Typically, the starting interest rate is fixed and then fluctuates at predetermined intervals.
VA Loans – Loan available to Military service members, US Veterans,and eligible spouses.
FHA Loans – Fair Housing Administration Loans

Ethics

Civil rights act of 1866 and 1964 – Prohibits discrimination against Race, Sex, Religion & more.

Fair Housing Act – A law that prohibits the discrimination in the buying selling renting or financing property. What is prohibited differs from state to state. Federally, its race religion color sex disability children nationality.

Anti-trust laws – a collection of federal and state laws that regulate the conduct and organization of business corporations. Anti-trust laws protect the consumer are healthy for a stable economy.

Antitrust Violations:

• Price Fixing – attempting to co-opt other real estate agents to fixing their commissions is illegal. Don’t even talk about that stuff!!
• Dividing Territories – No one should dictate where you should sell to or from.
• Conspiracy to Boycott – A conspiracy to restrict someone from competing.

Breaking any of these laws can result in a hefty fine, imprisonment and having your license revoked.

Vocabulary Words- check if you got all the words!!!

Abutting – an area of land or a building has a common boundary with another
Acceleration Clause – The Acceleration clause is a contract provision that allows a lender to require a borrower to repay all of an outstanding loan if payments are not being made or there is a breach on contract.
Accretion – Accretion is the slow process of growth or acquisition of land, typically when soil is deposited by the natural action of water. Long term accretion can actually increase the size of a property.
Active Property – Means the property is available for sale.
Actual Fraud – Is an intentional misrepresentation of fact.
Ad valorem – Latin, means According to Value
Adjustable-rate Mortgage (ARM) – An adjustable-rate mortgage has a flexible interest rate. Adjustable-rate mortgages have a fixed period during which the initial interest rate remains the same after that he interest rate adjusts at a pre-arranged frequency. The fixed rate period can vary significantly anywhere from one month to 10 years.
Adverse Possession – A legal principal in which a person who does not have legal right to a property acquires legal ownership based on continuous occupation of the land without the permission of the real owner.
Agent – Someone who speaks for a represents someone.
Bill of Sale – The paperwork given to pass title to an individual property.
Blockbusting – Is an illegal practice where real estate agents sell houses at a low price to one race then sell those same houses at a much higher price to a minority. Covered in Anti-trust laws.
Breach of Contract – is the failure to complete an agreement per agreed terms.
Buffer Zone – A buffer zone is a space of land between two use districts such as a park, playground, or a highway. The point of a buffer zone is to ease the transition from zone to zone.
Building code – are rules and standards of properties for the protection of public safety and welfare.
Bundle of Rights – When a person purchases property, he or she is given rights to the property; these rights can be spit up and given to different parties. To be thought of as a bundle of sticks. Different rights can be granted or revoked based on the agreement in place.
Buyer’s Home Sale Contingency – This contingency allows the buyer to cancel the contract if they are able to sell their current home in a specified amount of time.
Buyer’s Agent – Legally represents the buyer in a transaction in return for their services they receive a fee. (What we’re trying to accomplish)
Capital Gain – The profit from the sale or auction of property or investment.
Capitalization – The conversion of Assets or income into capital.
Capitalization Rate – is used to indicate the rate of return that is expected to be generated on a property.
Caveat Emptor – Latin term, means “Let the buyer or buyers beware”. The concept is that the buyer is responsible for checking the quality of a product before a purchase is made. (Do your own appraisal?)
Cetris peribus – Latin term, “Other things equal” or in plain terms all things remaining constant.
Chattels – Another word for personal property. Fancy.
Closing – The final step in executing a real estate transaction. It is when official ownership and payment is transferred to the rightful parties. Closing usually takes place after a purchase agreement is made and the title is now ready to be transferred.
Co-ownership – is when a title to one parcel of real estate is held by two or more individuals, those parties are called co-owners or concurrent owners. Individuals may co-own property as tenants in common, joint tenants, or tenants by the entirety or lastly community property.
Color of title – The legal concept of a claim to title appearing to be legally valid, but in actuality the claim is defective.
Collateral – Something of worth promised to a lender as security (mortgage) for an obligation.
Commercial Property – is a property that generates an income or salary.
Commission – A fee paid to an agent for performing a transaction.
Community property – laws that are based on the idea that husband and wife are equal, separate, partners rather than one whole entity.
Comparables – Another word for properties sold in the same area, usually of the same type, as seen on a property report
Comprehensive Environmental Response, Compensation, and liability Act of 1980 (CERCLA) – also known as The Superfund. The Superfund is a United States federal government Program designed to fund the cleanup of sites contaminated with hazardous substances and pollutants.
Condemnation – The procedure used by a public or private entity with the powers granted from eminent domain to take privately owned real estate.
Conspiracy to Boycott – Conspiracy to boycott occurs when two or more persons or entities conspire to restrict the ability of someone from competing. This is unethical and highly illegal (anti-trust law)
Constructive Eviction – is a term used in the law of real property to describe a circumstance in which a landlord either does something or fails to do something that he has a legal duty to provide
Constructive Fraud – is best described as ignorance or lying without knowing you are lying.
Contingent Property – means an offer for the property has been accepted but there is a condition or “contingency” that is written into the contract, and it must be met before the sale can go through.
Cost Approach – A real estate appraisal method that states the price a buyer pays for a property should equal the cost to build an equivalent building on the property.
Counteroffer – is similar to a purchase agreement. If a counteroffer is made the original offer ceases to exist because legally the seller has rejected it.
Datum – Term used in surveying, The set of data that equals heights and depths measured on a horizontal plane.
DBA – Doing Business As
Debt – Something owed or promised
Deed Restrictions – are limitations to the use of the property imposed by a past or current owner and are usually legally binded forever. For example, a historic artifact like a tree that cannot be cut down.
Defeasance Clause – A required contract provision that ensures that the title for the property is transferred to the buyer once the mortgage is fully paid off.
Delinquent Taxes – Overdue taxes
Delivery – The legal act of transferring ownership.
Depreciation – Depreciation is any loss in the value of a property over time from any cause.
Discount Points – also known as mortgage points are prepaid interest
Dividing territories – is when competing brokers agree to split territories, and divide interests accordingly. This is a clear antitrust violation.
Dominant Estate – is a parcel of real property that has an easement over another piece of property. Term used in the case of overlapping property.
Double Net Lease – Double means two additional costs added to your base rent. Usually taxes and insurance costs are added to the monthly lease payment.
Duress – The act of forcing a business or individual to do something against their will. An illegal act.
Dual Agency – occurs when one real estate agent represents both the buyer and seller in a transaction. Illegal based on the state.
DVA Loan – Department of Veteran Affairs Loan
Easement – An easement is a right held by one person to use the land of another for a specific purpose, such as driving through someone else’s property.
Easement for Ingress or Egress – Type of Easement. Used for entering and exiting a property.
Egress – The right to exit a property.
Economic Obsolescence – Refers to the loss of property value due to external factors, meaning things off the property affecting the property’s value.
Emblements – Emblements are annual crops produced by cultivation legally belonging to the tenant with the implied right for its harvest, and they are treated as the tenants property.
Encroachment – is an intrusion on a person’s territory or property.
Encumbrance – Encumbrance means an involuntary lien on the property.
Endorsement – Signing paperwork, normally a contract
Equal Credit Opportunity Act (ECOA) – A regulation that aims to give all legal individuals an equal opportunity to apply for loans. The act prohibits creditors from considering a consumer’s race, color, national origin, sex, religion, or marital status in deciding whether to approve their credit application.
Equitable Title – The interest held by one party to purchase before closing.
Equity – Equity is the difference between the market value of your home and the amount you owe the lender who holds the mortgage.
Erosion – The opposite of Accretion, Erosion is the wearing away of land or soil by the action of wind, water, currents, or ice. Long term erosion can decrease the size of a property.
Errors and Omissions Insurance – Some but not all states require this form of insurance. It is a type of liability insurance that protects professionals against claims of inadequate work or negligent actions.
Escrow – is a way for money and property to be transferred from one party to another through the use of neutral, third party agent also known as an escrow agent. Escrow makes it a lot safer for both buyers and sellers to close the sale without worrying about getting snubbed or cheated.
Estate in Sufferance – An estate in sufferance arises when the tenant holds over after the expiration of their term.
Estate at Will – Means that it can be ended at any time. The term of this estate is indefinite. It is also important to note that not all states recognize an estate at will and ones that do vary in laws.
Exchange – Transfer of goods and services
Exclusive right to sell listing – When one broker is appointed as the sole agent of the seller and has exclusive authorization to represent the property. The broker receives a commission no matter who sells the property while the listing agreement is in effect.
Executed Contract – a completed contract
Express contract – occurs when both parties legally establish an agency relationship. In other words, they sat down and wrote a contract stating their relationship. This is the most common method of creation for agency relationships. Can be oral but not always.
Federal National Mortgage Association – Also known as fannie mae. Fannie mae buys mortgages on the secondary market, puts them together, and then sells them back as mortgage securities bonds to investors on the open market.
Fee Simple Absolute – Highest form of real estate ownership recognized by law, the owner can enjoy the property to its fullest extent and is only limited bt government powers.
Fee Simple defeasible – a defeasible estate is created when a condition is added on a fee simple estate. if the condition is met, the estate may be lost.
FHA Appraisal – The process done by an approved FHA appraiser to appraise a property for an FHA loan.
FHA Loan – FHA Loans are a mortgage issued by an FHA-approved lender and insured by the FHA which is the Federal Housing Administration. FHA Loans are sought after because they require lower minimum down payments and credit scores than many conventional loans.
Financial contingency – provides a way for buyers to back out of the sale of the property if their loan falls through.
Fixed Term Tenancy or Estate for years – “Estate for years” refers to an estate that has a specific duration of time as defined in the lease agreement.
Fixture – an item that was once personal property but is considered real property either by attachment or legal addition’
Freehold Estate – an estate in which you have an exclusive right to enjoy the possession of a property indefinitely. Contrast to a leasehold estate, where possession is limited by time period.
Functional Obsolescence – Loss of property value due to an obsolete design feature.
Gap – A reals estate term meaning a space or pause in a contract
General agent – An agent hired who can perform all acts associated with a particular business that a principal has appointed the agent to; these relationships are typically continuous.
General Contractor – is the term used to escribe someone whose main responsibility is the construction, improvement, or renovation of a property or project.
General Warranty Deed – A deed where the seller guarantees that he or she holds clear title to a piece of real estate and has a right to sell it to the buyer. In the case where an agent acts on behalf of the seller?
Government Power – Is the constitutional authority and inherent power of a state to adopt and enforce laws and regulations to promote and support the public health, safety, morals and general welfare.
Government Survey System – This method of surveying is a federal system defined by identifying reference lines. The system is based on sets of two intersecting lines: principal meridians and base lines. It is sometimes referred to as the rectangular survey system.
Grant – The transferring of title to real property
Grantee – The legal term for the buyer
Grantor – The legal term for the seller
Gross lease – A gross lease is a rental agreement for the use of the property where the tenants pay a fixed amount which does not change as a result of changes in the various expenses of the property.
Gross National Product (GNP) – The total price of all goods and services produced inside a country annually
Gross rent multiplier – The ratio of the price of a real estate investment to its annual rental income before accounting for expenses such as property taxes, insurance, and utilities. More specifically it’s a measure of the value of an investment property that is obtained by dividing the property’s sale price by its gross annual rental income.
Habendum Clause – The statement in a contract that describes the rights and interests being given.
Home Inspection – is an examination of the condition of a real estate property. This usually takes place in connection with the property’s sale. Looks for missing a shingles, look for bugs, chipped paint etc.
Homeowners insurance – Homeowners insurance is property insurance that covers losses and damages, they cover an individual’s house and assets in the home. It may also provide liability coverage against accidents in the home or on the property.
HUD – The Department of Housing and Urban development.
Implied Contract – refers to contracts that are not a written agreement but still legal and considered a contract (some states)
Implied Grant – are used to create an easement
Improvement – an addition or add-on to the property
Index Lease – A lease that determines the rental prices by evaluating the annual consumer index and determining fair rental price.
Inspection contingency – if a home inspection reveals problems, the buyer can request repairs, compensation for the issue, or just cancel the offer completely.
Ingress – The right to enter a property.
Insurance – is a contract, in which an individual receives legal protection or reimbursement for any predetermined losses.
Interest – Money paid or owed regularly at a particular rate.
Interim Financing – a short term loan.
Inverse condemnation – The event in which the government takes private property but fails to pay compensation or just compensation. Essentially suing the government to reverse condemnation.
Investment – An investment is the legal purchase of something that is not consumed today but will be in the future to create profit.
Involuntary alienation – is when property is transferred without the owner’s consent.
Involuntary Liens – aren’t created by the homeowner. It is a claim imposed against a property without the consent of its owner.
Joint Tenancy – When a property is owned by joint tenants.
Land Trusts – a legal agreement in which a property owner transfers the title to a property to a trustee
Landlord – is the owner of a property (land, house or other buildings) that is leased or rented to another.
Latent Defect – is not discoverable by normal inspections or the naked eye. Is typically known by the seller.
Lease Option – a lease with an option to buy the property.
Leasehold Estate – A less than freehold estate (also known as a leasehold estate) is an estate held by one who rents or leases property. The key difference between a leasehold estate and a freehold estate is the limitation of time. As lease is a legal estate, leasehold estate can be bought and sold on the open market.
Lender – A lender can be an individual or a public/private group. A financial institution like a bank can lend funds available to another person. A lender is usually where people get their loans.
Lessee – The legal term for a tenant who leases a property
Lessor – The legal term for a tenant who leases a property
Leverage – Leverage in an investment strategy of using borrowed cash to finance the bulk of an investment.
Levy – A levy is a legal seizure of property to satisfy a tax debt or obligation.
Lien – is a form of security interest granted over an item to secure the payment of a debt or performance of some other obligation. A lien serves to guarantee an underlying obligation. Usually that obligation is the repayment of a loan.
Life Estate – is an interest in real property which is held for the duration of the life of the person. It may be limited by the life of another person. This designated person is called a life tenant.
Limited Liability Company (LLC) – The structure of LLC’s vary from state to state, but an (LLC) is a hybrid legal entity that has certain characteristics of both corporation and a partnership or sole proprietorship.
Limited Partnership – A limited partnership is composed of one or more general partners and one or more limited partners. The general partners manage the business and share fully in its profits and losses. Limited partners share in the profits of the business, but their losses are limited to the extent of their investment.
Liquidity – The net price and speed of how long it would take to sell an asset and convert it into cash.
Lis Pendens – isn’t a lien, but it is a notice of a potential future lien.
Listing Agreement – is a document in which a property owner contracts with a real estate agent to find a buyer for the owner’s property.
Littoral Rights – pertain to landowners whose land border large, navigable lakes and oceans.
Loan – An amount of money that is expected to be paid back with interest.
Lot and Block – An survey method particularly for areas densely populated like metropolitan areas and suburbs. It starts with a large tract of land that has already been described by another form of survey system. The overall area is made into smaller lots and a map is created.
Market Value or price – The actual selling price of the property. So if your house sells for 200,000, its market value is 200,000.
Master Plan – is a comprehensive plan to guide the long-term physical development of a particular area.
Material Defect – A Material defect is a problem with property or any portion of it that would have significant impact on the value of the property or that involves a large risk to the people on the land. Think about a roof collapsing or something.
Mechanics Lien – is also called a construction lien, is a lien placed on your property for nonpayment for work you had done on the property.
Metes-and-Bounds – Survey method,imported to the original colonies that formed the United States. The system uses physical features of the local geography, along with directions and distances, to define and describe the boundaries of a parcel of land.
Mill Rate – is the amount of tax payable per dollar of the assessed value of a property. Mill rate is also known as the millage rate.
Mortgage – is a promise of property to the lender as security of payment for the debt.
Mortgage Lien – is a voluntary, specific lien. In fact, it’s the most common type of voluntary real estate lien. When you borrow money to buy real-estate, you give the lender a lien against the property. Some states call this deed of trust, a lien.
Multiple listing Service (MLS) – a service used by a group of real estate brokers. It connects listings together under one large umbrella.
Municipality – is a city or town that is considered local government
Negative Fraud – is the act of purposely leaving out information you legally must disclose; or in plain terms lying through omission. Like not telling them about an asbestos problem or lead based paint.
Negligence – is the omission to perform a required action or in plain terms, laziness.
Net Listing – A net listing is when an agent agrees to sell an owner’s property for a set minimum price. Anything over the minimum price belongs to the agent as commission.
Net Operating Income – The total income of a property minus all operating expenses.
Optionee – The legal term for an individual that acquires and holds an option
Optionor – The legal term for an individual that gives or sells an option.
Ownership – The act, state or right of possessing an object, in our case property.
Ownership Severalty – means one person owns the property?
Partition – is a legal way to dissolve the relationship when parties don’t voluntarily agree to its termination. For example your buying a house, a disagreement ensues over the repair of the roof, a partition would occur if neither party could agree to the terms of the roof repair, dissolving the contract.
Partnership – is composed of 2 or more persons who agree to contribute money, labor or skill to a business. Each partner shares the profits, losses and management of the business and each partner is personally and equally liable for debts of the partnership.
Pending property – The term pending means that the offer has been accepted and both parties are moving forward with the sale. When property is pending, it is in the period after the contingencies are resolved.
Percentage Lease – is a rental that is based on a percentage of the monthly or annual gross sales made on the premises. Like downstairs at the swap shop.
Periodic Tenancy – is a leasehold agreement that specifies an initial period of tenancy and the length of the agreement but does not end after the specified period. This type of leasehold agreement renews automatically.
Personal Property – All things removable from the property. Think TVs, lawnmower, furniture.
Power of Attorney – A legal document that authorizes someone to act on behalf of another person, typically in business or for some sort of business transaction.
Prepayment Penalty Clause – A prepayment penalty clause states that a lender can penalize a borrower if the borrower pays off the mortgage much sooner than usual.
Price Fixing – Conspiring to set prices above or below market price

Karl Barclay

Real Estate Notes

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