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Contract

A sales contract is an agreement by which property rights are transferred from one party to another, in real estate industry.


Unilateral Contract


Unilateral contract is an agreement in which one party's obligations are contingent upon a second party's performance. However, the second party has no obligation to perform and faces no penalty for non-performance.


Back-Up Contract


A back-Up contract is a real estate purchase agreement that becomes effective only if a primary contract with another party fails to close. The buyer in the back-up contract understands that he or she may not be able to purchase the property, particularly if the primary buyer is able to complete a purchase.


Development Contract


A development contract is an agreement by which a developer agrees to construct a particular improvement and the client agrees to purchase the improvement and (normally) property upon completion.


Implied Contract


An implied contract is legally recognized contract established by actions taken, even if the contract is not written or spoken.


Installment Contract


An installment contract is an agreement between the buyer and the seller, which allows the buyer to purchase the property on installment. The seller, in fact, becomes the lender for the buyer's purchase. However, the property remains in the seller's name until the established price is fully paid.


With an installment contract, the buyer is allowed to move in; the buyer pays monthly payments. Most installment contracts are essentially balloon in structure, giving the buyer a limited amount of time to eventually procure mortgage refinancing.


Land Contract


A more common term for an installment purchase agreement.


Oral Contract


A legally binding verbal agreement. In general, oral contracts are just as valid as written ones, but some jurisdictions either require a contract to be in writing in certain circumstances (for example where real property is being conveyed), or that a contract be evidenced in writing (although the contract itself may be oral). An example of the latter is the requirement that a contract of guarantee be evidenced in writing, which is found in the Statute of Frauds.


References

Conspicuous

(Conspicuousness) One factor in determining property value. It is of great importance in a business dependent on advertising.
Needs to be improved.

Consideration

Consideration is a legal concept which means anything of value given to induce someone into entering a contract. Typically, consideration is the money exchanged by the parties, but it may be other consideration of value, such as other property in exchange, personal services, or even love and affection.

Condition

A qualification in a deed which if violated or not performed defeats the deed and places the title back to the original grantor. The strongest of CC&Rs (covenants, conditions, and restrictions).

Compensation

Compensation is money or its equivalent which a real estate agent receives for services.

Courtesy

Courtesy is the right a husband has in his wife's estate at the time of her death.
Needs to be improved.

Adjusted gross income

Gross income of a building if fully rented, less an allowance for estimated vacancies and bad debts. Also called "effective gross income."

Inventory

In real estate, inventory means that any property held by an individual or entity for future sale or use, and is a record of all of a taxpayer's personal property. This record will also include how much was paid for each property and when, along with each property's current market value. Taxpayers use this record to calculate gain/loss on sale of property.

Real property

Real property is a legal concept that refers to a real estate including the bundle of property rights in addition to real estate ownership. Examples of real property rights include the right of ownership, right of possession, right of exclusion, right of disposition, and the right of use and enjoyment.


Real property, real estate, realty, or immovable property are mostly used interchangeably. However, in the legal sense, real property is a broader concept than real estate and refers to the bundle of rights involved with ownership.

Real estate

Real estate refers to an immovable property including land and the buildings on it. The key difference between a property (personal) and real property is that real property is immovable by law. The term "real" indicates that the property is immovable.


See estate.

Estate

In the real estate industry, the term "estate" refers to the ownership interest one has in real property. An estate encompasses the degree, nature and extent of ownership rights.


Estates are typically divided into two groups: freehold estates of indefinite length and leasehold estates for a fixed term.

Estate

1. The ownership interest one has in real property.
2. The property left by a deceased person.
3. A large house with substantial grounds surrounding it, giving the impression of belonging to a wealthy person.

Escrow

A sale transaction wherein one person (usually the seller) delivers evidence of title to a third person to be held by the escrow holder until the happening of the performance of a prescribed condition (usually deposit of funds by a buyer), when the evidence of title is then delivered to the buyer.


:: Escrow in mortgages ::
Escrow concept is used in mortgages where the mortgage provider opens an escrow account to pay insurance and real estate tax throughout the mortgage.

Equity

The market value of a real estate property after the amount of existing liens have been subtracted. Thus, a home valued at $100,000 with $30,000 in mortgage liens has a net equity of $70,000 ($100,000 - $30,000).

abatement

A decrease or reduction in the amount of rent. An abatement of rent might be offered to a tenant when leased space cannot be occupied due to fire or flood damage.

Principle of substitution

In appraising, it is a principle which contends that the higher limit of the value of a property is defined by the cost of acquiring an equally desirable substitute property. This principle is the basis for the market comparison or market data approach.

agency

Agency arises out of a contract, either expressed or implied, written or oral. Agency involving real property should be in writing, such as listings, trusts, power of attorney.
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