Custom Home

A custom home is made based on the preferences of the owner by a hired architect. Such homes vary in shape, size and design and are often built on a lot that has already been purchased by the homeowner. They are often much more expensive to build than to purchase and are more often considered high end or luxury homes. The major purpose of a custom home is to provide unique housing tailored to the individual client. The complexity of designs in a custom home can vary: A builder can provide a floor plan to a home buyer and allow them to move or add walls, add entire rooms or change the entire arrangement of the house. This term refers more to structural foundation. If a home buyer were to replace the carpeting with tile in a home, for example, this alteration most likely would not constitute a custom home in itself.

Contingent Fee

A contingent fee is a fee that someone must pay if and when a certain event happens. A very common example of this is the fee earned by an agent upon closing a real estate transaction. This fee is contingent on the final sale of the property, and it is part of the contract a seller signs when asking a real estate agent to sell a piece of property as well as part of the sales contract both the buyer and the seller sign. As part of the closing process, the title company disperses the fee to the real estate agent involved in the transaction. This fee will not happen if the sale does not go through, so a real estate agent has a real stake in thoroughly completing the transaction.

Co-Housing

Co-housing involves a housing situation with individual housing units clustered around a common area where residents share cooking and other communal activities. The level of shared communal activity varies from community to community. The individual housing units in a co-housing situation can be connected apartments, townhomes, or detached houses. In urban situations, apartments are most common with shared facilities in the same building. In suburban and rural areas, co-housing often includes a cluster of buildings on a larger lot. Common areas are places where neighbors can cook and eat together. These areas can include laundry, offices, childcare facilities, play grounds, guest rooms, gardening space, and meeting space. This type of housing gained popularity in Denmark in the 1960s. Today, communities of this type are found in Canada, the United States, Australia, the UK, and the Netherlands.

Custom Builder

A custom builder constructs a building based on plans provided by the property owner. Most think of custom-built homes, but office buildings are most often built according to custom plans. In the world of real estate, custom builders create a completely unique building every time they complete a project. This means a custom floor plan, finishes, flow and aesthetic. Quite often, people planning on building a custom building will work with an architect to come up with the plans before they contract with a custom builder. Many custom builders work with architectural firms to create plans ideal for a parcel of land. The land owners contract with the custom builder to complete the work, usually from land preparation through final finishes on the building. This is in contrast with builders who offer set plans from which their clients choose. That type of situation is common in many builder-developed subdivisions.

Contingency Listing

A contingency listing is a property listing that requires the property’s buyer to fulfill an obligation before owning the home. In other words, there are conditions that the property buyer must meet to purchase the property. The specifics of the a contingency listing can vary. Sometimes a contingency listing is a listing where the current property owner is waiting on lender approval on a short sale. In these cases, a realtor may accept a backup offer from a different buyer in the event that the first offer falls through. Contingency listings can take longer to settle than traditional property sales, so it is smart to take this into consideration when considering the purchase of a property. These sales are more complicated because approval is typically not only contingent on the owner’s approval but also on the approval of a third party.

Cluster Development

A cluster development describes a system of compressing more homes into a constricted space. Cluster developments are commonly found in urban neighborhoods where open space is hard to find. These neighborhoods have typically been built-out to cover the maximum open space that is available. Examples of the types of homes found in cluster developments include high-rise buildings, apartment buildings, row houses, brownstones and similar multi-dwelling housing units. Neighborhoods where housing is in high demand can be assisted by the construction of cluster developments. With this type of housing, hundreds of residents can find homes in neighborhoods that traditionally could not provide such supply. With the help of builders that specialize in cluster developments, high-quality homes can be built in areas that residents want to remain in for reasons such as schooling, family or proximity to employers.

Curb Appeal

Curb Appeal is a term used by real estate agents to describe the first impression a potential buyer gets upon looking at the home from the outside upon arrival. A home with great curb appeal is more likely to get visits than a home that looks drab and boring from the outside. Real estate agents will often make suggestions on how to improve the home’s curb appeal for potential buyers prior to putting the house up for sale. A well-maintained yard and well-kept house exterior can sometimes be crucial to even getting a picky buyer inside. If a house is showing signs of wear and tear or the yard has weeds everywhere, it’s going to create a negative first impression that could likely stick with the potential buyer as the real estate agent leads the tour through the rest of the property.

Contingency

A contingency is a condition that must be met for a contract to be valid and binding. In the case of a real estate offer, a contingency may include many things that could possibly happen to prevent the sale from closing. Some buyers will make their offer contingent upon the sale of their own home. In this case, the buyer could back out of the deal if their home never sold. There would be no repercussion for backing out of the deal. There are many ways a contingency clause may be used. Offers can be subject to certain closing dates. Buyers sometimes limit their offer to their ability to obtain a favorable mortgage rate. When property value is uncertain, a definite appraised value may be stipulated. Accepting an offer with a contingency clause can be a good way to obtain a sale. Make sure that both parties can live with the outcome should the contingency come into play.

Cloud on Title

Cloud on title is a term referring to an apparent encumbrance on real estate property. Part of most real estate transactions is getting title insurance, which requires a thorough title search. During a title search, the researcher may uncover something that may impair or invalidate the transfer of title from seller to buyer. That circumstance is the cloud on title. Common problems uncovered in a title search include liens, old mortgages with no record of pay-off, an improper previous deed and an unresolved levy by a government agency. The seller of the property must clear up the clouds on title before the sale can go through. Doing so can mean settling liens and levies, getting a quitclaim signed or filing for a quiet deed. In some cases, the circumstances may prevent a sale from going through within the sales and purchase agreement time frame.

Curable Defect

Defects are often discovered during the home-purchasing process: rooms that need painting, doors that are in need of repair or an unkempt yard that requires landscaping. These are known as curable defects and are often used for negotiating selling prices; they can be easily repaired by the buyer or seller of the home. More serious defects such as a high-crime neighborhood, poor schools or noisy neighbors are typically regarded as non-curable. When purchasing a home with curable defects, it is a good idea to have them listed in a purchase and sale agreement and designate the responsible party in this agreement. Typically, a curable defect will reduce the overall value of the home, based on the severity of the defect and who will ultimately be responsible for the repair. Property that is in poor repair typically will sell for far less than a home that has been properly maintained and has only a few curable defects.

Contiguous Lots

Contiguous lots refers to lots that are adjacent to each other. People who want a larger parcel on which to build buy two or more lots that are side by side to increase the yard size. In the case of commercial development, developers assemble a series of contiguous lots to put up large structures. In larger urban areas, older neighborhoods may have more desirable locations where the housing is old and the lot is worth more than the structure. Sometimes people buy these properties and demolish the existing structures in order to build a new home in a central location. Commercial developers do the same too, and both new residential and commercial development in aging neighborhoods helps revitalize the area. In almost all jurisdictions, building on adjacent lots involves rezoning the property for the intended use. The second step requires working with the planning department to be certain that the planned structure meets the building code requirements and zoning stipulations.

Closing Statement

A closing statement is a statement that outlines the final details of a real estate transaction. It lists all the costs of the transaction and indicates the ones the seller is paying and the ones the buyer is paying. Another name for a closing statement is a settlement sheet. The closing agent draws this document up to give both the seller and the buyer details on all fees that are in the transaction. Standard items added to this statement include loan fees, related costs, advanced PMI payments, homeowners insurance, agent commissions, loan settlement amounts and purchase price information. If either the buyer or seller agrees to pay part of the other’s normal fees, this information also goes on the closing statement. This document became a requirement with the passage of the Real Estate Settlement Procedures Act in 1974, and it provides a clear statement of all costs associated with the real estate transaction.

Creditor

A creditor is a person, bank or financial institution to whom money or a debt is owed. In a loan, there are primarily two parties that are involved in a transaction. The debtor and the creditor usually enter a contractual relationship during a home mortgage. The debtor is the person who borrows the money while the creditor is the financial institution or bank that provides the funds. For example, say you are interested in purchasing a great beachfront condo. You just found the ideal location that is on the oceanfront and in the heart of everything. Because you do not have $1 million, you need to ask a bank for a loan. The bank agrees and decides to lend you the money. The bank is your creditor, and you are their debtor. There can even be more than a single creditor for a mortgage for loans that are taken by multiple parties.

Contemporary Style

Contemporary style is a type of architecture that features what many would call a “modern” look. It focuses primarily on streamlined angles and a diverse collection of shapes. In contemporary style, sharp edges and lines are essential. Another marker of contemporary style is the windows, which tend to be large and unadorned. This particular style utilizes industrial materials, and the designers are unconcerned with using traditional items in decoration. Contemporary style retains its place in many of the homes that hit the market each year. Prospective home buyers will often have to choose between contemporary styles and more traditional homes, including ranch style and Victorian style. The upside to contemporary style is the clean an uncluttered look. The downside for buyers is that contemporary style can fall out of vogue if some new look becomes popular.

Closing Disclosure (CD – formerly HUD-1)

The Closing Disclosure (CD – formerly the HUD-1 Uniform Settlement Statement) is a three-page, government-mandated form that details the costs associated with a real estate transaction. The borrower should receive a copy of the CD at least one day prior to the closing. Because the figures on the CD are the actual charges associated with the loan, it is important for all parties to examine the document and check for inaccuracies. As of 2010, settlement agents are required to include the figures from the Loan Estimate (LE – formerly Good-Faith Estimate). The inclusion of these figures enables borrowers to easily compare the charges that were initially quoted by the lender with the actual loan charges. Seeing the numbers side by side may highlight errors or wide variations so that they can be corrected before the closing.

Credit Union

A credit union is a financial institution that is similar to bank but differs is several key ways. A credit union is a member-run cooperative that is democratically controlled by its members. Credit unions seek to promote thrift and offer credit and other financial services to their members at competitive rates. Many credit unions also provide services to support community development. The main way that credit unions differ from banks is in their operation. Anyone holding an account at the credit union, in effect, owns part of the credit union. They are run by a board of directors chosen in an election where each member gets one vote, no matter how much money they have invested. Credit unions often receive higher scores in customer satisfaction than banks, and they normally offer most of, if not all, the same services that are found in banks.

Consumer Credit Counseling Service (CCCS)

The Consumer Credit Counseling Service, known as the CCCS, is a nationally known, non-profit agency chartered with the goal of helping consumers out of debt. Consumers can get into debt and may need help getting out of it. For those who are in trouble, the CCCS provides counseling services to help the consumer stop creating more debt and start paying down their debt. They can counsel consumers before they file for bankruptcy. The CCCS offers education seminars for anyone who wants to get started on managing their debt and credit. When considering the purchase of a home, credit and debt plays a big part in whether a mortgage lender will consider giving a loan to a borrower. The CCCS can help the consumer deal with these credit issues beforehand. The national headquarters of the CCCS is at 8701 Georgia Avenue, Suite 507, Silver Springs, Maryland, 20910.

Closing Costs

Banks and financial institutions charge fees for creating the mortgage loan. The closing costs generally amount to about 1 to 5 percent of the mortgage but can vary widely between states and types of mortgages. These costs include fees for lawyers creating the paperwork, title insurance, assessment of the property and even mundane services such as shipping the paperwork. Sometimes, the closing costs can be rolled into the price of the mortgage loan, but they are often paid outright at the completion of the sale of the property. The financial institution must provide a list of the fees and an estimate of their costs prior to the final sale. It is important to look these over carefully and ask questions if any items seem to be listed in error or do not make sense to you.

Credit Repository

A credit repository is a company that maintain credit records and financial information about consumers, including payment records. Credit repositories are commonly referred to as credit bureaus in the United States. There are three major credit bureaus in the United States: Experian, Equifax and Transunion. Credit repositories maintain consumer records of credit balances, payments and other items in one’s financial history, including social security information, previous addresses and employment history. Based on the credit information, each credit repository or credit bureau assigns a credit score, which is an indicator of credit risk. The higher the credit score, the more likely it is that a potential creditor will grant credit to the consumer. A better credit score may also allow an individual to seek a larger loan, line of credit or consumer credit card. Consumers can also benefit from lower interest rates and other promotional benefits if they have a high enough credit score.

Construction To Permanent Loan

A construction-to-permanent loan is one that is used to finance the construction of a home; it is then converted to a traditional mortgage once construction on the home has been completed. The benefit of this type of loan is that the loan process is condensed: Instead of having to apply for and then close on both a construction loan and a traditional mortgage, resulting in two separate loan applications and two loan closings, the borrower only has to go through the process once. The application process happens before construction commences. Once the borrower is approved for the loan, specifically before construction begins, the details of both the construction loan and permanent mortgage are determined. Once the construction is complete, the loan is converted to a traditional mortgage, at which time the loan goes to closing.

Closing

For the home buyer, the real estate closing is the final step into home ownership. There are usually many documents to sign, depending the type of mortgage. A cash purchase will require quite a bit less documentation. The closing agent will explain each document prior to signing and issue a copy to the buyer. The closing statement will be explained in detail so that no amount should go unaccounted for in the deal. This is the day that all money is due and payable in a cashier’s check, in most cases. For the seller, the closing is payday. There are not as many documents for the seller to sign. The closing agent will explain the closing statement and answer any questions the seller may have. Generally, the closing agent will issue a check to the seller. In some cases, the seller may ask that the funds be wired or direct deposited into their bank account.

Credit Report

A credit report is an official report that shows a person’s credit history, including payments they have made on debts, including previous rent or mortgages, bills and utilities, credit cards, and loans. There are three national credit consumer reporting agencies, including Equifax, Experian, and TransUnion. Every U.S. citizen is entitled to a free annual credit report that can be accessed at annualcreditreport.com. This free annual report does not include a consumer’s overall credit score but rather provides a list of accounts so that consumers can confirm that there is no erroneous data. Consumers seeking to access their free credit report online should be vigilant for impostor or copycat sites that may be looking to scam or steal the identity of visitors. In addition to the three national credit consumer reporting agencies, there are also a handful of national specialty consumer reporting agencies, including Innovis, PRBC, and Teletrack.

Construction Loan

Construction loans, also known as story loans, are short-term loans that provide funding for the land development and construction phases of homes and buildings. A construction loan includes an agreement between the borrower, lender and contractor that governs the disbursement of funds. The approved draw schedule provides funding for each phase of the building project. Lenders typically require various forms of documentation, including construction plans, a summary of all work to be completed, a breakdown of costs to be incurred and a signed construction contract. Construction loans typically require interest only payments while the building is under construction. Interest is charged on all funds disbursed to date, and the loan is due in full upon completion of the building project. Completion means that a certificate of occupancy has been issued. Construction loans are usually paid off with the proceeds of a permanent loan or mortgage.

Clear Title

In real estate, the term clear title is the definition for property that is clear from liens, encumbrances and judgments, and it belongs solely to the owner. Other terms for clear title are often used interchangeably, such as “free and clear title.” When a title is clear, no other party can make a legal claim for ownership of it. A property holder can obtain a clear title while it is under the encumbrance of a mortgage. A mortgage is specifically worded to convey a clear title once the owner pays the balance of the mortgage. A clear title is required to buy or sell any piece of real estate in the United States. During a sale of property, a title company is hired to investigate each title to ensure it is clear. Aside from financial issues, code violations may also prevent a clean title.

Credit Rating

When a person applies for a loan, the financier scrutinizes that individual’s credit rating. A credit rating is a score that has a basis on how a person pays his or her bills on time as well as the person’s employment status and residency. It provides finance companies an idea of how credit worthy a person is and how well that person would be able to meet the credit obligation. A majority of the rating is based on how well a person has paid past obligations on time each month. A person who has paid his or her bills on time with few or no defaults generally has a good rating. People who have defaulted on loans, credit card bills, and other expenses often have lower ratings. The length of time a person has been employed by the same employer also tends to be factored into his or her rating.

Construction Documents

Construction documents are plans and specifications drawn up by an architect that give detailed requirements for the construction of a building. Typical construction documents for a project include building plans showing the layout and dimensions of the new building, placement of openings and the location of electrical and plumbing outlets. Specific drawings detail runs for HVAC, electricity and plumbing; others show foundation requirements and roof construction details. Another critical document is the specification book, which outlines materials and specific instructions on aspects of the project. Any written changes made during construction complete the set of construction documents. Property owners can use construction documents to obtain bids from builders for the project. Local agencies in charge of permits require full sets of documents for review and inspection purposes. They show what the property owner plans to build and offer a way to ensure the actual construction proceeds according to the plan.

Classified Property Tax

A classified property tax is a tax that varies depending on the use of the property. The value of a parcel of land varies greatly depending on its use and zoning. With this type of property tax, state and local governments can collect more taxes on properties that have a higher value. Take an acre of land. If that land is a wheat field, the taxes on the property will be low as agricultural land does not have high value except for crop production. If someone comes along and builds a house on that acre of land, the value of the property increases and the taxes go up as well. If someone tears down the house and builds a strip mall there, the value of the property will go up even more along with the taxes.

Credit Life Insurance

Credit life insurance is a type of insurance that pays off a mortgage if the borrower dies. Credit life insurance is optional, and it should not be added into a mortgage without the consent of the borrower. Consumers may consider asking a few questions about the particular credit life insurance that is being offered, including how much the premium costs, if it will increase the loan amount, if it can be paid separately and which exclusions or limits apply. Additionally, if borrowers choose to add credit life insurance to their mortgage, they may want to find out if they can cancel the coverage if they decide that they do not want it, and if so, if the premium is refundable. The Federal Trade Commission handles complaints from consumers who have experienced deceptive, unfair or fraudulent business practices regarding credit life insurance while obtaining financing for their home.

Construction Budget

The construction budget is the amount of money that the owner arranges for the building of his or her home. This budget must cover every aspect of construction—from the foundation to the roof. The construction budget must be set before floor plans can be chosen or building begins as it may determine what the owner can afford. Once a budget is set, the general contractor can go over various options and help the owner come up with an affordable plan. After everything is finalized, the building will commence. Typically, the construction budget is set by the lender who is financing the build. The amount of money that the bank is willing to lend must cover the land purchase and the building of the home. However, if the owner wants to take out a smaller loan than what the lender offers, he or she can easily adjust the budget.

Chimney Back

A chimney back refers to the back wall or lining of the chimney in a fireplace or furnace. In an older chimney, this back is often made of fire-brick masonry or ornamental metal. The design of such a chimney wall is formed to reflect heat back into the room. It helps to protect the house from ember fires while enhancing heat production of the fireplace. It is important to have the chimney back inspected prior to purchasing a home. Cracks in the back or the lining of the fireplace can lead to fires or carbon dioxide build-up. A good chimney mason can replace this chimney component with new fire-brick or with a modern synthetic liner. However, this job can be expensive and should be part of the sale price negotiations if it needs replaced or repaired.

Credit History

A individual’s credit history is a record of the person’s payment history to other lenders. The credit history is pulled by consulting one of three major credit bureaus: Equifax, TransUnion and Experian. The credit history will show every credit account a potential homeowner has had for their entire life, and it will note if payments were made on time or if there are any red flags that might make the potential homeowner a credit risk. The credit history is used in determining what the initial interest rate will be for the mortgage. It is critical to maintain an accurate credit history for this reason. Every citizen has the right to receive a free report from each of the three credit bureaus to check for errors. If an error is found, a request must be made in writing to fix the mistake.

Consideration

A consideration is a legal inducement that encourages a person to enter into a contract. Considerations are usually money, but they can be anything of value. For example, you are interested in buying a home and look at several properties that are on the market. You find one property that looks great, but there is trouble arranging the necessary mortgage. You talk with multiple lenders but cannot find a single finance company that will give you a loan. You discuss your issue with the seller, and you decide to offer a consideration for the seller to keep the mortgage in his or her name. Your consideration is used to encourage the seller to hold the first mortgage, and as an inducement, you offer $5,000 in cash. The seller agrees to your consideration and holds the mortgage while you make monthly payments. In addition, you pay the seller $5,000 as part of the transaction’s consideration clause.

Chattel Mortgage

A chattel mortgage is a loan to buy a personal item where the item is security for the loan. Originating in Anglo-Saxon law, the term chattel refers to movable personal property. This chattel mortgage has been used for vehicles, ships and aircraft. Under this chattel mortgage, the debtor takes out a loan for the property. The legal ownership of the chattel is transferred to the financial institution making the loan. The debtor receives the legal title once the debt repayment schedule is completed. Legal title must be transferred to the lender to qualify as a chattel mortgage. American law defines chattel mortgage under secured transactions in Article 9 of the Uniform Commercial Code. This is similar to collateral for lenders. Lenders are securing mortgages that give them a more clear legal ownership of a property.

Credit Card Discounts

Credit card discounts refer to the fees that credit card companies charge the retailer for billing and handling. It generally runs between 1 and 3 percent. In running a motel, this is a direct expense that should be on the profit and loss statement. This percentage amount is what the credit card company takes out of the money they send to the merchant after settling charges. For example, let’s say a motel customer charges $100 for a night’s stay. The credit card company has a 3 percent charge for the use of that card. They will charge the motel customer the full $100. However, they will send the motel $97, which is the $100 minus the 3 percent charge. Many credit card companies compete with each other by offering lower discount rates to different customers like motels and hotels.

Conservator

A conservator is appointed by a court to take care of affairs for another person. The second person may be mentally or physically disabled and unable to manage their assets on their own. Among many other things, the duties of the conservator may include buying or selling real estate in the best interests of the conservatee. The conservator may also manage rental property. The conservator must make reports to the court. The court examines the reports and monitors the actions of the conservator. In some instances a conservatorship may be temporary and end when the conservatee recovers. In other cases, the conservatorship may be permanent until the death of the conservatee. Generally, a conservator is only appointed by the court if the conservatee has assets that need to be managed.

Change Order

A change order is a term used during the process of building a new home or a remodeling project on an existing home. When the original construction contract needs to be revised, a change order is incorporated. All parties must sign the change order, including the builder, contractor, architect and the owner. One example of why an owner may be asked to sign a change order is if the delivery of certain building materials has been delayed, which will cause a delay in the completion of a particular phase of construction. Another reason why a change order may be needed is if the buyer requests an upgrade that was not included in the original construction contract. For example, if the owner opts for two windows in the dining area instead of the one window that was in the original plan, a change order will confirm the revised costs and construction timelines.

Credit

Credit is the amount of money that a lender will loan to a buyer to purchase a home from the seller. The amount of credit loaned and the interest rate on that loan are dependent on the buyer’s credit history and whether or not the lender views the buyer as a potential credit risk. The lender will often pull credit reports on the buyer from the three major credit bureaus prior to making a credit offer. It’s always a good idea for a buyer to check his own credit history at TransUnion, Experian and Equifax prior to apply for credit in order to assure that their background is accurate and will not negatively affect their loan. After determining the buyer’s credit history, the lender will make an offer, usually in a commitment letter, detailing the terms of the bank’s mortgage offer.

Chain of Title

Chain of title is an official record of ownership linking the original owner of property to the most recent owner. In real estate transactions, banks will usually ask for a chain of title from the buyer’s attorney to ensure that the property is free from any previous legal claims to title. During the title search, the title company or legal professional will trace the title to the property from the current owner to the original owner and generate a report showing the chain of ownership. Once the title insurance company is satisfied with the report, it will issue title insurance for the property. The title insurance basically protects the buyer from potential defects in title to real property. The report is extremely important and a critical part of real estate transactions.

Covenants, Conditions and Restrictions (CC&Rs)

Covenants, conditions and restrictions, also known as CC&Rs, are the rules and regulations that affect certain properties, and homeowners must adhere to them while owning the property. CC&Rs are commonplace in master-planned communities, and they typically comprise a variety of issues that pertain to residential living. A restriction on parking oversized vehicles in driveways is one example of a restriction. A limitation on operating home-based businesses from home is an example of a covenant. CC&Rs are conveyed to the homeowner when he or she purchases a home that is subject to such restrictions. Typically, a homeowner’s association is tasked with monitoring and enforcing CC&Rs throughout the neighborhood. Homeowners who violate a covenant, condition or restriction can face numerous penalties that range from monetary fines to civil suits. Homeowners can obtain legal advice in order to thoroughly understand each restriction contained in CC&Rs before purchasing the home.

Condemnation

“Condemnation,” in real estate terms, refers to the seizure of private property by the government. The most common reason for a home to become condemned is that it was deemed unsafe to live in or use due to physical defects like chemical or mold toxicity, or structural problems such as storm damage that could cause the home to collapse. Other reasons for a home to be seized and condemned include criminal activity, such as drug production or dealing taking place inside the home, or in some cases, development of the area. If the government decides that a home is the only thing standing in the way of building a new highway, they can exercise their right of eminent domain and condemn the property in order to acquire the land for use. In these cases, the property owner is usually paid the worth of the property as decided by a government appraisal.

Certificate of Occupancy

A certificate of occupancy verifies that a given property meets all building codes. Therefore, this certificate establishes that it is safe to live in that property. This document is important for any landlord to have before closing on a deal. Landlords need to make sure that their building is safe because their tenants could sue. Damages could exceed whatever the monthly rental income is for that building. If a landlord gets a bad reputation, he could have a hard time renting to people in the future. All tenants have a reasonable right to peace and safety in their building. If a landlord rents to a business, that business needs to know that the property is safe for the owner and for his employees. Having a certificate of occupancy gives everyone a little peace of mind.

Covenant

A covenant is a promise that is part of the written agreement between a buyer and seller. There are different kinds of covenants; they can be made by the buyer or seller or may be something that is connected to the real property itself. For example, a seller will agree to a covenant of warranty and promise that the buyer will receive a title free of any claims. A buyer may enter a mutual covenant and promise to abide by the rules of a homeowners association. An example of a covenant that is tied to the land is a permanent easement. This easement might give usage of a driveway to an adjoining property, and it will pass to the new owners if the property is sold. A covenant may function concurrent with another covenant, dependent on another covenant or independent of any covenants or promises.

Certificate of Title

The certificate of title is the piece of paper that states the property belongs to the owner. This document can help buyers know what the assets of the property are and how much they are worth. The certificate is divided into sections. One section will list the physical things about the property. This can include the size of the buildings or the amount of land. It can also include the address. A certificate of title also gives information about the owner of the property. The registered name of the owner as well as some other type of identifying information are listed. The information on the title will vary based on where the property is located. The last section on the certificate is the most important as it will list any claims or liens against the property.

Corrective Work

Corrective work refers to the home repairs that a potential buyer demands after issues are discovered during either a specialized or general home inspection. During the home buying process, the potential buyer pays for a home inspector to take a look at the foundation, the structural integrity and a number of other aspects of the home. The inspector will then provide either a clean bill of health on the home or note the major problems that exist; the buyer then has a choice to either buy the home in its current condition or ask the seller to arrange for corrective work. Many sellers will only agree to corrective work on issues of home integrity; foundational issues, for instance, may prompt the immediate need for work. Simple cosmetic issues are generally a matter of taste and will not be addressed by the inspector in a standard home inspection.

Cashier’s Check

A cashier’s check is written and funded by a bank or other financial institution, then signed by one of their representatives to be payable to a specified recipient. When purchasing a cashier’s check, the customer pays the bank the full amount of the check, along with a small service charge in most cases. Unlike a personal check, using a cashier’s check ensures that the purchaser’s funds are available for payment to the recipient as the check’s amount is first secured in the issuing bank’s own account before the bank then signs it over to the recipient. In this way they differ from certified checks, which are also guaranteed by the issuing bank but instead drawn from a portion of the customer’s account that was reserved for the check amount. Also, while a stop-payment order can be applied to cashier’s checks, it cannot usually be placed on a certified check.

Common Law

Common law is a body of laws that are based on the history of court rulings in a particular area. The rulings have the same weight as other laws, such as statutes and regulations. In the world, there are two major types of law systems. The United States and a number of other countries rely on a blend of common law and civil law. Common law systems govern nearly 30 percent of the world’s population. The approach is often known as case law or precedence because it is developed over time by the decisions of the courts. Common law is the rule of thumb in England, and it affects many of the United States’ laws. For example, the United States Supreme Court hears cases on a regular basis, and their decisions affect future decisions and laws. Common law systems place emphasis on court rulings, and the verdicts have the same force as a law, statute or regulation in a civil law system.

Cash Return

Cash return refers to the net profit that a seller receives after the sales funds go to meet sales expenses and debt obligations. When it comes to property sales, a hierarchy exists to who gets paid first. If a debt exists on the property such as a mortgage or lien, that has highest priority. The real estate professionals and the transaction professionals have fees tied to the transaction. Those fees are near the top of the priority list as well. The buyer provides the funds for the real estate transaction and all priority entities receive their share. Then the seller receives whatever is left over. Some real estate transactions do not give a cash return to the seller. Some are neutral where the seller receives nothing. However, there are times when the seller has to come to the table with money to complete the sales transaction.

Corporate Relocation

A corporate relocation occurs when an employer agrees to pay for the cost for an employee to relocate to another geographical area for his or her job. Corporate relocation takes place every day throughout the world. It is often cheaper for employers to pay existing employees to move than it is to hire a new employee for the job. Employers need to address the distinctive business needs of each separate location, and geographically relocating employees is one way to meet those needs. Corporate relocation agreements typically include the cost of packing and moving an employee’s furnishings and personal belongings. It usually covers incidental expenses, such as temporary lodging and meals, incurred while en route to the new location. Ideally, employers will compensate for a down payment on a home in the new city as well. Employees can negotiate additional items to be included in the corporate relocation agreement if the items are reasonable.

Commingling

Commingling is the term for the act of mixing client funds with personal funds. Commingling can take place in any scenario where funds are obtained from a client with the intent to hold for future use. Individuals who are vulnerable to this practice include lawyers, landlords, property owners, brokers, business owners and corporations. Tenants, for example, are typically required to pay a deposit at the start of a lease. This deposit is supposed to be held in a separate account by the owner, landlord or property manager. If the tenant’s deposit funds are mixed with other funds such as rent proceeds, this is considered commingling. Funds such as rent deposits should be held in a trust account that is not used for normal operating expenses. The only time that the trust account should be accessed is when it is time to return the tenant’s deposit.

Codicil

A codicil is a change or addendum to a will that adds new provisions or clarifies a certain portion of the legal document. Here is a brief example that will flesh out the idea of a codicil. Imagine that you just drafted your will and spent quite a bit of money on it. The document was prepared by a licensed attorney, and you took several days thinking through all of the different issues. You decide to leave your home and savings to your son who is living in another city. A week later, you get a disappointing phone call and hear that your son is badly injured in a car accident. You rush to see him and are just in time because he soon passes away. Rather than going through the trouble of writing your entire will over, you add a codicil that takes into account your son’s passing.

Assumption Fee

When most people buy a house, they do with an brand new loan. The seller will generally pay off the existing mortgage with proceeds from the sale of the home. However, some owners take ownership of a house by taking over an existing loan. When this happens, the lender will charge a fee to update the records to reflect that their is a new owner using the same loan. The amount of this fee may vary depending on who the lender is and other unique circumstance surrounding the loan. Generally, this type of deal may be approved as an alternate to foreclosure. The bank would rather get their money than have to spend money going through such a procedure. If you are a potentially homeowner looking to go this route, don’t forget to include this fee among the other costs of purchasing a home.