ListingLife
NOV 2009Legal Eagle: Key Real Estate Law Terms Defined
By Amanda N. Wegner
“The purchase contract is the most important step in purchasing a home,” advises the Real Property, Probate and Trust group of the American Bar Association. Small print has big importance in a real estate transaction.
Often, the terms and conditions of transaction documents involved in the home-buying process can be confusing. It helps to know a few key terms:
Defect: In the standard Offer to Purchase form, “defect” typically refers to major structural or mechanical problems that would shorten the life of the home or possibly endanger occupants.
Lien: A lien is a legal hold or claim against a property by a creditor as security for a debt. Liens extend beyond mortgage or home equity credit lenders. Homeowner’s associations, contractors and other third parties can place liens on a home for unpaid debts. Before a home can change hands, the seller must clear the title by transferring or paying all outstanding debts.
Title Commitment: Prior to closing, the standard Offer to Purchase form requires that a buyer receive a commitment for title insurance, which includes checks for important disclosures, such as neighborhood covenants and restrictions, liens and easements.
It can also help to know which relevant questions you should ask when buying or selling a home. Your real estate agent, the other party’s real estate agent or your real estate lawyer should be able to help you get answers to questions like these, suggested by the American Bar Association:
- Exactly what land, buildings and furnishings are included in the sale? Are the window coverings, stove, refrigerator, and other appliances included?
- When will the buyer take possession?
- Are there any restrictions on the use of the property?
