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Are you sometimes
confused by the terms Realtors use? Below are some common phrases and words
which we may use, believing you know what we're talking
about! |
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Agency - A relationship created when one person (the
principal) delegates to another person (the agent) the right to act on the
principal's behalf. In New Jersey we are mandated by law to disclose our agency
relationship in all real estate transactions. We can be a Buyer's Agent, a
Seller's Agent, a Transaction Agent or a Disclosed Dual Agent (one who
represents both Buyer and Seller in a transaction). Make sure you understand the
Agency you have with any Realtor before you enter a
transaction!
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Agreement - A shortened form of Purchase And Sale
Agreement. Also called simply the
Contract.
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Attorney Review -
In the State of New Jersey there is a mandated attorney review period when you
use an attorney. It takes 3 business days. The reason for this is to protect you
the buyer. During this time the attorney reviews the agreement that was written
up by a Realtor to make sure everything is correct. Sometimes attornies spit out
a form letter to buy time, do not be frightened of this. Also during attorney
review when a property is "hot" other contracts may come in and be reviewed by
the seller. So it is always advisable to try to get "out of attorney review" as
quickly as possible . |
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Broker - Generally, this term refers to the Realtor
who is responsible for managing a Real Estate office. When a Realtor has a
question, they go to their Broker for
advice.
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Closing - The act of finalizing a real estate
transaction. In New Jersey typically we close at an Attorney's office. This
attorney usually represents the Buyer, sometimes the Seller's attorney will do
the closing.
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Closing Date - The date upon which the Buyer can move
into their new home.
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Condominium - A type of dwelling wherein units have
shared walls and common space. In this form of ownership, the area owned is
considered to be the space inside of the walls of each unit and a shared
interest in the common areas of the complex. There is a monthly fee assessed to
cover the cost of maintaining the exterior of each building and the common
areas. This fee could be hefty, so make sure you inquire when checking out any
condo you may consider buying.
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Cooperatives Co-ops for short, look like condos,
townhouses, cluster houses or apartment buildings. They can be commercial or
residential.
A corporation owns the building and the land under the building.
The corporation is formed by a sponsor who usually obtains the loans on which
interest must be paid.
Like any corporation, co-ops have by laws. The sponsor
forms a Board of Directors, which governs the co-ops, making decisions on
finance, maintenance and such mundane matters as who gets to live there. The
sponsor also writes a proprietary lease, heavily in their favor.
The sponsor
then begins selling shares in the coop, just like any corporation. The coop is
the lessor. The shareholder is the lessee. The terms of ownership of the shares
are governed by the proprietary lease and the by laws. As units are sold
shareholders elect the entire Board.
In a coop the shareholder gets to occupy
the unit that he/she bought. The person who is to occupy the unit must be
approved by the Board of Directors.
The shareholder, based on number of
shares, pays a maintenance fee every month to the coop. This usually covers all
the taxes on the building, the interest on the debt of the building, the outside
lights, water, maintenance of the buildings and grounds, wages of the
maintenance and administration personnel and other costs common to all residents
of the coop.
The IRS has ruled that the shareholder may deduct the taxes and
interest portion of the maintenance fee.
When a coop shareholder wants to
sell his/her shares to a buyer the Board of Directors must approve the
buyer.
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Deed - A written document that, when properly
executed and delivered, conveys title to land and/or property. After the close
of the sale, this document is filed in the county
courthouse.
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Earnest Money - The money that accompanies an offer
to purchase as evidence of good faith. Also called good faith deposit/money.
This money is held in escrow until the closing, when it is applied to the
Buyer's down payment.
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Fee Simple - This term most often relates to
ownership of a house. In this type of ownership, your property generally
consists of everything "from the ground up to the sky," as compared to
Condominium ownership wherein you own the space within the walls of the
dwelling. You are responsible for the upkeep everything on the exterior and the
property. Sometimes there are Townhomes that have this type of ownership and
then you are responsible for roof, and everything in front, in back and to the
side if you are an end unit. Most of the times there is no maintenance fee
involved; however there may be a home association that is in charge of the
landscape, street, garbage and snow removal and therefore have a fee for
that.
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Home Inspection - Gives the buyer more detailed
information about the home. In the state of New Jersey home inspectors must be
qualified and certified. A home inspection gives the buyer an impartial, physical
evaluation of the overall condition of the home and items that need to be
repaired or replaced. The inspection gives a detailed report on the condition
of the structural components, exterior, roofing, plumbing, electrical, heating,
insulation and ventilation, air conditioning and interiors.
The inspector
takes an in-depth, unbiased look at your future home to:
evaluate the
physical condition: structure, construction and mechanical systems.
identify
items that need to be repaired or replaced
estimate the remaining useful life
of major systems, equipment, structure and
finishes.
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Lender - A mortgage broker or bank where you acquire
your loan.
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Mortgage - A document which makes the property a
security for the repayment of a debt. This payment consists of four or five
sub-parts, which we often call "The PITI payment." Principle + Interest + Taxes
+ Insurance = Mortgage Payment. There may also be another aspect of the payment,
the PMI or Private Mortgage Insurance, which is collected whenever the
down payment is less than 20% of the loan amount. This amount is added to your
monthly mortgage payment.
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Offer - We use this term when we refer to "making an
offer" on a home. The Buyer takes the first step in negotiating a sale when they
present their offer by putting it in writing. The Seller then comes back with a
"counter offer." This process goes back and forth until an agreement is reached
at which point it becomes a binding contract after the seller signs. Or when
both signatures are on the contract.
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Seller's Property Disclosure Statement - The document
provided by the Seller disclosing all known problems and repairs, past and
present, with the house. A Buyer should insist upon seeing a Seller's Disclosure
Statement before making an offer to
purchase.
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Title - The right to or ownership of something. We
use this term normally when referring to the deed. The title shows who owns the
property.
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Walk Through - The
day of or 1 day before the closing date. You walk through the home to make sure
everything is as it was the first day you saw it and that any repairs etc. were
made.
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?2003 - gloribee.com.
No part of this page may be copied in whole or in part by any means without the
express written permission of the author, Gloria Benaroch. | | |
