Real Estate Terms
MLS - Consumer Information
Listed below is a brief overview of some of the forms, common terms and information you may want to consider before buying or selling your home or property.
TYPES OF REAL ESTATE FORMS
In a real estate transaction a number of forms are required. The consumer should be aware of these forms in order to understand and protect his/her interests.
EXPLANATION OF REAL ESTATE FORMS
Listing Agreement – A contract between a seller of real property and a broker. The broker is employed to sell real estate on the owner’s terms within a given time, for which service the seller agrees to pay a commission.
Management Agreement – A contract between the owner of real property and a broker. The broker is employed to rent, exchange, or lease real estate on the owner’s terms within a given time, for which service the owner agrees to pay a fee.
Buyer/Tenant Agreement – A contract between the client and broker. The broker is employed to seek a particular type of real property, within a certain geographic area, during a given time, for which service the buyer/tenant agrees on the amount and method of compensation to be paid.
Real Estate Relationships Disclosure – A form that specifically sets forth agency and brokerage relationships. At the first substantive contact with a seller or buyer who has not entered into a written agreement with a broker, the licensee discloses in writing to that person the types of agency and brokerage relationships available. The licensee also provides a written copy of the disclosure to the seller or buyer.
Seller’s Property Condition Disclosure – This form describes the condition of residential real property as known by the seller. Sellers of residential real property are required to furnish a completed copy of this form to a buyer before the buyer makes a written offer.
Lead Paint Disclosure – This form is required to comply with the sale or lease of any pre-1978 residential dwellings. This was enacted into law by Congress to disclose lead paint hazards.
Purchase Agreement – A contract for the purchase and sale of real property in which the buyer agrees to purchase for a certain price and the seller agrees to convey title. To be enforceable, it must be in writing and signed by both parties.
Closing Statement – A statement of receipts and disbursements in a real estate property transaction. The listing broker furnishes a closing statement to the seller. The selling broker furnishes a closing statement to the buyer.Lease Agreement – A contract by which one (the lessor or landlord) gives to another (the lessee or tenant) temporary possession and use of real property for reward and the lessee agrees to return such property to the lessor at a future time. A one-year or longer lease requires a written lease agreement.
TYPES OF HOUSING
To meet the many kinds of needs that people have, a number of different types of housing have been developed over the years. Homebuyers need to know about them. Income levels and special needs may dictate the kind of housing appealing to the consumer now and for the near future. However, as family needs change, another style of housing can be considered.
Single Family Residence – The single-family dwelling has always been a very popular kind of housing. Each type of home has its advantages and disadvantages, and tastes vary in architectural styles. But one thing to keep in mind is that eventually all homes are resold to new owners. The more unusual the type of construction, the more difficult it will probably be to find a buyer.
Duplex – A duplex is basically two single-family dwellings joined together. The middle wall separating the units is common to both. This type of housing offers an owner the opportunity to live in one side and rent the other side. The income from the rental portion helps the owner pay for the entire property.
Semi-detached – Two homes sharing a common wall with a "zero lot line".
Condominium – Condominium ownership is designed to provide exclusive use and ownership of a portion of a larger property, plus shared use and ownership of common areas. Under the condominium arrangement, the individual owner purchases the exclusive right to occupy the space where the unit is located. The owner also receives an undivided interest in the land and common areas, such as hallways, elevators, structure of the building, and as a rule, the recreation facilities. A board of directors or a condominium association elected by unit owners administers the common area.
Townhouse – The townhouse combines features of a house and a condominium. The legal concept is that the owner enjoys a separate ownership of his/her dwelling and the land immediately beneath the dwelling, plus joint ownership of the common areas surrounding the dwelling units. There may be restrictions upon all separately owned lots and dwellings. The right to establish and enforce these restrictions is usually vested in an owner’s association. Title to the common areas is vested in the association, and it governs how the residents use the area.
PURCHASING A HOME
Decide on the type of housing to purchase and the general location to live. Although needs differ from family to family, there are certain general guidelines which every potential homebuyer should consider. The following represents some of the items to consider:
Availability and quality of schools in the area
How close you are to work
Availability of shopping centers, churches and recreational facilities
General condition of homes in the neighborhood
Property taxes compared to similar houses in other neighborhoods
Utility rates (gas, electricity, water, and telephone)
Police; fire protection and garbage collection
Availability of public transportation.
Quiet neighborhood or on an arterial street.
Rural or Urban
Give some thought into the approximate price range of the house, and how the monthly payments will be made once the house is occupied. During the qualifying interview, the REALTOR® helps determine the price range and/or payment that will be comfortable.
STOP BEFORE BUYING
Once the prospective purchaser has found the house that seems to be "just perfect", the tendency is to want to close the transaction right away and move in. STOP! Before getting swept away with the excitement of the moment, there are a number of things to check. The time to ask questions and check facts is before buying.
Condition of the house – A Seller’s Property Condition Disclosure form, completed by the seller, is required on most residential real property. This form is to be furnished to the buyer before making a written offer. This form can be utilized during the inspection of the property as a "checklist" of items to review. A person qualified to perform inspections can point out any concerns or problem areas. The money spent for an inspection may be a very wise investment. If obtaining a loan, most lenders will require a survey. Whether or not a loan is obtained, it may be wise to have a survey done prior to closing.
Zoning Restrictions – Ask how the area is zoned. Zoning is established by local government and designates the type of buildings and how they may be used, such as: residential, commercial, and industrial.
Restrictive Covenants – These are private agreements that restrict the use and occupancy of real property. Such things as the purpose of the structure to be built, architectural requirements, setbacks, size of structure and aesthetics are only some examples. The consumer or REALTOR® can contact the Register of Deeds to obtain further information.
Taxes – Find out the cost of property tax and if there are any special assessments regarding roads, streets, sewers, electrical, etc. Also check if there are any property tax reduction programs affecting the current year's taxes.
Easements – An easement is a right or privilege one party has to the use of another’s land for a special purpose consistent with the general use of the land. Easements are commonly given to telephone and electric companies to erect poles and run lines, as well as gas and water companies. Other easements can be given to people to drive or walk across someone else’s land. The consumer or REALTOR® can find what easements exist on the property by contacting the Register of Deeds.