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Real Estate Terms and Definitions, Part II

Below are a few more Real Estate terms and definitions that buyers and sellers of real estate should know.

REALTOR®  Only real estate licensees who are members of the NATIONAL ASSOCIATION OF REALTORS® are properly called REALTORS®. REALTORS® are committed to treat all parties to a transaction honestly, and subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge of the process of buying and selling real estate. REALTOR® is a registered trademark.

Agency is the relationship between a principle (buyer or seller / owner or renter) wherein a real estate agent is authorized to represent the principle in certain transactions.

Appraisal is an estimate of quantity, quality and/or value of a property. Also refers to the report that sets forth the estimation parameters and conclusion of value.

Commission is a fee usually based on a percentage of the final sales price, but can also be a flat fee. Commission is paid to the broker, who then pays the licensed agent. Commissions are negotiable.

Comparables are properties used that a substantially equal to a subject property in determination of value.

Earnest Money is money deposited by a buyer under the terms of a contract, to be forfeited to the seller should the buyer default, but applied to the sales price of the property should the sale close.

Equity is the interest or value an owner has in a property above any debt on that property.

Exclusive Right to Sell is a listing contract in which the owner of a property designates a real estate broker as exclusive agent for a determined period of time, to sell the property on the owner’s stated terms, and agrees to pay the broker a commission when the property is sold, whether by the broker, the owner or another broker.

John Eberle is a REALTOR® living and working in Fountain Hills, Arizona. For more information on buying a home or selling a home in Fountain Hills, AZ contact John by clicking on the Contact Me tab above this blog.

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Real Estate Terms and Definitions

REALTORS® are often asked to interpret the legalese in a home sales contract. It is important to note that REALTORS® are not lawyers.  Sellers and buyers of real estate should always consult professionals in law and accounting if there are questions of serious concern.

Below are some terms and definitions that are common to real estate transactions in Arizona.

Acceleration Clause is a clause in a mortgage or Deed of Trust that can be enforced, bringing the entire debt due immediately in the event of borrower default on installment payment or other covenant. Also called Due on Default clause.

Alienation Clause is a clause in a mortgage or Deed of Trust that states the entire balance of secured debt is due and payable immediately upon sale of the property by the borrower. This prevents the borrower from assigning the debt without the lender’s approval. Also called Due on Sale clause.

Annual Percentage Rate (APR) is the cost of credit expressed as a yearly rate. This is not the interest rate on a loan, but rather a measure of the total cost including the interest, loan discount (points), origination fees, transaction fees and any premiums for credit-guarantee insurance. APR is meant to provide a uniform measure for comparing the costs of similar credit transactions.

Amortized Loan is a loan where principle and interest is paid off over a period of time.

Beneficiary in a Deed of Trust transaction is the lender.

Deed of Trust (Trust Deed) is an instrument used to create a mortgage lien by which the borrower conveys title to a trustee, who holds it as security for the benefit of the lender.

Trustor is the borrower in a Deed of Trust transaction.

Trustee is a neutral third party that holds title in a Deed of Trust transaction.

 

John Eberle is a REALTOR® living and working in Fountain Hills, Arizona. For more information on buying a home or selling a home in Fountain Hills, AZ contact John by clicking on the Contact Me tab above this blog.

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