Real Estate Terms From Condominiums to Deeds of Trust
Below is a MRR and PLR article in category Finance -> subcategory Real Estate.
Real Estate Terms: From Condominiums to Deeds of Trust
Understanding Key Real Estate Terms
Embarking on a property transaction? Whether buying or selling, having a grasp of essential real estate terms is invaluable. This series explores crucial definitions, starting with "condominium."
Key Terms Explained
1. Condominium
A condominium is a form of real estate ownership where individuals own the interior of their units and share common areas with other owners. A homeowners association (HOA) manages these shared spaces and can levy fees for maintenance and improvements.
2. Contract (Sales Contract or Contract of Purchase and Sale)
This is a legally binding agreement between a buyer and a seller, detailing key elements such as property identity, purchase price, sale conditions, settlement date, and occupancy terms. Typically, it must be in writing to be enforceable.
3. Contract for Deed
A written agreement where the property deed is not transferred until the final payment is made. If the buyer defaults, ownership reverts to the seller. This is often seen in owner-financed sales, particularly for raw land.
4. Deposit (Good Faith Deposit)
An upfront payment made by the buyer when making an offer on a property. The contract specifies who holds this deposit and the conditions under which it is returned to the buyer or retained by the seller. The deposit usually contributes to the purchase price or serves as liquidated damages if the buyer defaults, while it's returned if settlement conditions aren't met.
5. Deed
A legal document that transfers ownership of real property. In some states, recording deeds at the courthouse where the property is located is necessary to establish ownership.
6. Deed of Trust
This document allows a third party to represent the lender if foreclosure on a property used as loan collateral becomes necessary.
Stay Informed
Understanding these terms provides a foundation for navigating the real estate market confidently. In our next article, we'll explore terms beginning with "Easement." Stay tuned!
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