Agreement of Sale
An agreement of sale is a contract in which a seller agrees to
sell and a buyer agrees to buy. The agreement of sale has specific
terms and conditions and is signed by both buyer and seller.
It is also called a contract of purchase, purchase agreement,
or sales agreement.
An appraisal is an estimate by an expert (called an appraiser)
of the value of property as of a given date.
Binder or "Offer to Purchase"
This is the first step in buying the property. The buyer gives
earnest money, like a deposit, saying that he will buy the
property within a certain period of time. If the buyer changes
his mind or cannot buy the property, the seller gets to keep
the earnest money, unless the binder or offer to purchase stated
that the buyer would get his money back.
(See real estate broker)
Closing costs are the expenses for buyers and sellers that
normally happen when property is bought and sold. These costs
are not included in the price of the property and have to be
paid at the closing day. This is a typical list:
|Documentary Stamps on Notes
||Cost of Abstract
|Recording Deed and Mortgage
||Documentary Stamps on Deed
||Real Estate Commission
|Appraisal and Inspection
The sales contract states in writing who will pay each expense.
Closing day is the day all the paperwork is finished and the
sale is finished. The buyer signs the mortgage, and closing
costs are paid. The final closing confirms the original agreement
from the agreement of sale.
Money paid to a real estate agent or broker by the seller as
payment for finding a buyer and completing the sale. Usually
it is a percentage of the sale price- - 6 to 7 percent on
property with buildings, 10 percent on land.
Individuals own the apartment-like
units (the space between the walls), and together all the owners
of the units own the
buildings and the common areas.
Contract of Purchase
(See agreement of sale)
A person who agrees in writing (contracts) to build buildings
or parts of them. There are also contractors for each part
of construction: heating, electrical, plumbing, air conditioning,
Cooperative Housing (Co-op)
Co-ops are similar to condominiums but with a different legal
set-up. An apartment building or a group of buildings is
owned by a corporation, and the stockholders are all the
residents of the apartments. Owning the stock gives you an
absolute right to occupy your unit for as long as you own
Depreciation is decline in the value of a property.
Documentary stamps are required stamps on deeds and mortgages
when property title passes from one owner to another.
The downpayment is amount of money to be paid by the buyer
to the seller when the agreement of sale is signed.
Earnest money is the deposit money given to the seller by the
buyer when they sign the offer to purchase. It shows that
he is serious about buying the property. If the sale goes
through, the earnest money becomes part of the downpayment.
If the sale does not go through, the seller gets to keep
the earnest money unless the offer to purchase says he doesn’t.
Hazard insurance protects against damages caused to property
by fire, windstorms, and other common hazards.
A map or chart of an area showing boundary lines, buildings,
improvements on the land, and easements.
See agreement of sale.
Real Estate Broker
A real estate broker is a person who buys and/or sells real
estate for a company, firm, or individual for a commission.
The broker represents the owner, but does not have title
to the property.
See agreement of sale.
Special assessments are special taxes on property in the immediate
area, to provide money for road construction, sidewalks,
sewers, street lights, etc.
See documentary stamps
A map made by a licensed surveyor showing the land with its
elevations, buildings, boundaries, and its relationship to
surrounding tracts of land. A survey is often required by
Local government laws about how a property can be used. For
example, areas are zoned for just single family houses, apartments
and condos, retail business, or industrial.