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Real
Estate Glossary
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 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.
Buyer Working
With Broker: Traditionally, buyers of residential real estate
have worked with a real estate broker or a sales associate on a
non-agency basis. In other words, the sales associate acts as the legal
agent of the seller and not as the buyer??s legal agent. The sales
associate or broker has a responsibility to deal with the buyer in a
fair and honest manner, but does not have fiduciary duties to the buyer.
The buyer has access to listings available to the sales associate
through the multiple listing service and will receive other services
from the sales associate such as financing information, determining the
range of prices at which a buyer can purchase and assistance in
facilitating the closing. The sales associate will try to provide the
best quality services to the buyer consistent with his or her duties to
the seller.
Closing/Settlement:
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.
Designated
Agency: This arrangement with a real estate brokerage company
will result in one or more sales associates being designated as your
legal agent. You can enter into this arrangement either as a seller or
buyer. Other sales associates in the firm may be the legal agents of
other buyers and sellers and may be the legal agent of the party who
buys your property or from whom you buy property. The only individuals
owing you fiduciary duties are those designated as your legal agent and
not the real estate brokerage company itself or all other sales
associates with that company. A real estate brokerage company will
generally offer this service to provide representation for both buyers
and sellers.
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?? or attorney 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.
Impact Fees:
A municipal assessment against new residential, industrial or commercial
development projects to compensate for the added costs of public
services generated by new construction.
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:
In this multiple-ownership property, a purchaser holds title to a
specific unit in a high-rise, building complex or townhome community.
Condominiums come in various design styles such as contemporary, vintage
or loft. The buyer also has a percentage of ownership in the underlying
land and common elements such as elevators, stairways, hallways and
parking. Each owner pays taxes on his or her unit, as well monthly
assessments the condominium association uses to maintain, repair and
improve the property. Owners elect a condominium board, which governs
the association and in most instances must approve new buyers. Condo
owners must abide by the association??s rules and regulations.
Cooperatives:
In a co-op, residents are shareholders in the corporation that owns the
building. The value and size of a specific unit determine the amount of
shares a resident must buy. Although residents do not own their units,
they have the right to live there for as long as they hold stock in the
corporation. Each shareholder is responsible for a portion of property
taxes, building maintenance and any loans. Most commonly apartments,
co-ops also can be townhomes or row houses. Co-ops have a reputation for
exclusivity; their bylaws give the board the right to decide whether a
prospective owner can buy into the corporation, and some co-ops require
cash-only transactions.
Duplex:
In Baltimore real estate language the term means simply a two-story
unit. Within the context of a walk-up vintage building, a high-rise or
loft building, a living space could be duplexed to the floor above or
below.
Flats:
This type of apartment or condominium occupies an entire floor of a
building. For example, a two-flat is a two-story building with one unit
per floor.
High-rise
or mid-rise: Built since the 1920s, these buildings
have many apartments, usually divided vertically into tiers, with
identical floor plans stacked on top of each other, but with several
different floor plans offered on each floor. High-rises always have
elevators and often doormen, swimming pools, commissaries, tennis
courts, health clubs and parking.
Investment property:
Investment property includes two-flats, three-to-six unit buildings and
apartment complexes. Owners typically purchase these properties with the
expectation of gaining a return on their investment through a
combination of rents or leases and appreciation over time. For as long
as the owner holds the property, ROI is calculated by deducting related
debt and expenses from rents and leases.
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
features restored or new mechanics??plumbing, electrical system,
etc.??installed.
Rowhouses:
Originally built in the 1890s, rowhouses are the forerunners of
today??s townhomes. The facades form a continuous row, but the
structures are divided vertically internally so there are common walls
between buildings.
Single-family:
In Baltimore, these freestanding, one-residence properties most commonly
are constructed of brick, wood or stucco. Architectural styles run the
gamut?? bungalow to Beaux Arts; Victorian, Tudor, ranch and Prairie;
Craftsman, Cape Cod, Colonial and contemporary. Homes vary in size, but
typically are found on standard city lots, measuring 25 feet by 125
feet. Depending on zoning, they can be one story to four or more stories
tall. If the home has a garage, it may be accessed through a city-owned
alley, attached or below-grade. Ownership is fee-simple, which means the
purchaser has full title and therefore is responsible for all property
taxes.
Townhomes:
Generally smaller than a single-family home, this dwelling is part of a
row or complex containing multiple homes of the same or similar design.
Units consist of two or more floors, often with a street-level garage.
Each townhome shares at least one wall with neighbors, but has its own
entrance and outdoor area. Owners have title to--and pay property taxes
on--their individual unit and lot, as well as joint ownership of common
areas and building exteriors. In a fee-simple scenario, each owner pays
for maintaining his or her unit and for services such as snow and
garbage removal. Alternately, townhomes can be part of a homeowners
association in which all residents equally share financial
responsibility for services and common elements such as doors, roofs and
gates.
Vintage buildings:
These are older structures, usually pre-World War II. They typically
have hardwood floors, high ceilings, fine woodwork, sun parlors and
plaster moldings.
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