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Real Estate Terms You Need To Know: |
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Agency: |
The relationship which exists when
one party, the principal, legally contracts with another
party, the agent, to represent him or her in a real estate
transaction. This delegation of authority puts the agent in a
fiduciary responsibility to his or her client. In all cases,
the relationship demands that the agent represent the client in good
faith and with loyalty.
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Listing Agent: |
An agent who represents only the
seller in a real estate sale.
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Selling
agent: |
An agent who represents the buyer.
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Duel Agent: |
An agent who represents both buyer
and seller in a real estate transaction. This type of agency may
occur when the buyer's agent sells a piece of property listed by
another agent in his or her brokerage.
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Buyer Broker: |
A broker who
represents only the buyer in a fiduciary relationship.
Customarily,
the broker fees associated with the transaction are paid by the buyer.
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Conditional Loan Approval: |
A letter sent by a mortgage company
stating that its primary investigation of a buyer's financial condition allows it to conditionally offer mortgage coverage to that buyer. This is also referred to as
pre-qualification. Traditionally, it includes the amount to be loaned and the interest rate ceiling.
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Encroachment: |
Unauthorized use of another's
property by invasion or intrusion. Typically, this is a building or part of a building, a roof overhang, fencing, sheds, guest houses,
etc. which crosses another's property line and reduces the invaded party's use of his
or her private property.
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Escrow: |
The
holding of documents and money in relationship to a real estate transaction by a disinterested third party until all terms and conditions of the contract are
completed.
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Home Inspection:
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The
inspection by a professional of a piece of improved property to ascertain its
condition. Scope of the inspection should be determined by the buyer and his or her agent. Not
all home inspections include roof, foundation, or septic inspections.
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Lot
Survey: |
Customarily a survey includes the measuring of the boundaries, flagging/staking
of corners, dimension and position of any improvements, check for encroachments, easements,
walls, and setbacks.
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Perc Test: (Percolation)
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A test
performed by a licensed engineer to determine the rate at which water filters
through soil. The rate of percolation determines whether a septic system can be
established on a piece of property. Acceptable percolation rates vary from county to
county.
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Septic
System: |
A system
that includes a sewage tank which converts sewage to gas and liquids and then
allows the remaining material to discharge into a leach field. It is considered
an acceptable system in low population areas.
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Staking
and flagging: |
The process by which the corner
boundaries of a piece of land are determined and staked with wood or
metal stakes and colored flags. It is required for the sale of
vacant land and is recommended in improved property sales.
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Title Insurance: |
Insurance that
protects a buyer's title to land or improved property against any
hidden risks.
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