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REAL ESTATE
When it comes to residential and commercial Real Estate issues many people have a hard time understanding the roles of all parties involved in the transaction. At Alison Grant, Attorney at Law we can help sort out the legal issues involved when it comes to things like:
- Contracts
- Leases
- Deeds
- Closings
Knowing the roles of each individual involved with a commercial or residential Real Estate transaction is vital to understanding how the transaction will take place. The following is a list of the typical professionals who would be involved in a residential Real Estate transaction:
- Real Estate Agent – is either a broker or sales person and is required to be licensed by the Texas Real Estate Commission. The realtor typically assists the buyer in locating property. Sometimes the realtor assists sellers in determining the sales price for the property. A realtor can represent either a buyer or seller.
- Title Company – acts as the escrow agent and has a duty to collect all documents referenced in the earnest money contract. They conduct the closing, disburse the funds, and issue title commitments to show the status of the title to the property. When all requirements are met they will issue a title insurance policy.
- Lender – advises and assists the buyer concerning application requirements to obtain a loan for the property to be purchased. Once the buyer is approved for a loan, the lender provides the buyer with a list of requirements to be satisfied prior to the loan being funded. These requirements may include a down payment, the payment of points, a title commitment, a survey of the property, an appraisal of the property, etc.
- Surveyor – indicates where the boundary lines of the property are and confirms that the property description set forth in the title commitment accurately describes the land and improvements of the property being purchased. Typically an actual survey is prepared to reveal any encroachments onto the property.
- Real Estate Inspector – The Texas Real Estate License Act provides for the licensing of inspectors and their job is to inspect the property to determine if everything is working properly in the home and if it is structurally sound.
- Appraiser – estimates the value of the property and typically a lender will require an appraisal prior to funding the loan.
GLOSSARY OF TERMS:
- “As Is” condition – premises accepted by a buyer or tenant in the condition at the time of the sale or lease, including all physical defects.
- Binder – memorandum of agreement to issue insurance giving temporary coverage before a formal policy is issued.
- Closing – the final procedure in which documents are executed and the sale is completed.
- Closing Costs – expenses incidental to a sale of Real Estate, such as, real estate commission, recording fees, loan fees, title fees, appraisal fees, etc.
- Closing Statement – the statement which lists the financial settlement between buyer and seller and details the costs each must pay.
- Title Commitment – a title insurers contractual obligation to insure title to real property.
- Conditional Sales Contract – a sale in which the title to the property remains with the seller until the purchaser has fulfilled the terms of the contract (usually payment in full – also called Contract for Deed or Executory Contract for Deed).
- Contract for Deed – generally an installment purchase of real estate with deed to be given on payment of full purchase price.
- Deed – a written document transferring ownership of land from one person to another.
- Deed in Lieu of Foreclosure – a deed given by an owner/borrower to a lender to prevent the lender from bringing foreclosure proceedings or to eliminate the need for foreclosure.
- Down Payment – cash portion paid by a buyer from his own funds, as opposed to that portion of the purchase price which is financed.
- Earnest Money – something given as a part of the purchase price to bind a bargain.
- Encroachment – generally, construction onto the property of another, such as a wall, fence, building, etc.
- Escrow – a transaction in which an impartial third party acts as agent for both seller and buyer, or for both borrower and lender, in carrying out instructions, delivering papers and documents, and disbursing funds.
- Foreclosure – a proceeding in or out of court to extinguish all rights, title, and interest of the owners of property in order to sell the property to satisfy a lien against it.
- Land Contract – an installment contract for the sale of land.
- Lien – an encumbrance against property for money.
- Mortgage – the instrument by which real estate is hypothecated as security for repayment of a loan.
- Option – a right, which acts as a continuing offer, given for consideration to purchase or lease property at an agreed upon price and terms within a specified time.
- Plat – a map dividing a parcel of land into lots, as in a subdivision.
- Title – the evidence one has of right to possession of land.
- Title Insurance – insurance against loss resulting from defects of title to a specifically described parcel of real property.
- Title Search – a review of all recorded documents affecting a specific piece of property to determine the present condition of title.
As you can see the different roles individuals play and the terms used in the sale of Real Estate can be confusing. Knowing what your rights are and what each party’s obligation is may require the assistance of an attorney. If you need questions answered regarding Real Estate Law issues please download the following questionnaire to fill out and bring to your initial consultation.
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