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Buying and Selling Real Estate in
Buying or selling a piece of real estate is the single largest and most complex financial transaction that most people ever make. Unfortunately, people who rely on “common sense” and trust that all the other parties have carried out their responsibilities carefully, often end up with big problems and disappointments.
While legally authorized to conduct sales, real estate brokers are not responsible for making sure that titles and deeds are clear. Brokers representing sellers are bound to report only the problems with the property that are reported to them. Purchase and sales agreements lock both sellers and buyers into specific agreements not only regarding price and financing, but what may and may not be removed, and what each party promises to do as part of the transaction. Each side can be hurt if certain conditions are omitted from this contract, and either side can be sued by the other if the contract is not followed.
The only person who will represent only your interests in a real estate transaction is your own attorney.
Legal Terms Related to Real Estate Transactions
Abutter – the person or entity owning property with a shared boundary to the property in question.
Encumbrance – a right, legal interest in, or legal liability attached to a piece of real property that does not prohibit transferring the title to the land to another party, but does retain a claim against its value, and obligate the owner to whatever that claim is. Encumbrances include easements, leases, licenses, mortgages, certain privileges, and judgment liens such as a mechanics lien.
Easement – a right or privilege extended by a property owner to another party for use of the property or specified part of the property. There are limitations to what uses can be guaranteed by an easement.
Lien – in general, a legal claim attached to the property owned by a party owed a debt or charge by the property owner.
Mechanics Lien – a claim by a contractor to gain priority in the order of payment when property is sold, for money owed for excavation or construction work done building or repairing a structure.
Right of Way – an easement that allows use of someone’s property as access to someone else’s property, such as a driveway.
Quitclaim Deed – a deed that conveys the interests and rights of only the person who signs it, and does not protect against other claims.
Warranty Deed – a deed that guarantees to the purchaser that the property has no encumbrances, and makes the deed holder who sells the property liable if it turns out that there are other claims to the title.
Title Search – research done in the public records office, usually the Registry of Deeds, tracking the chain of title ownership of property to check for liens, mortgages, encumbrances, or conflicts which might put rights to the property in question.
These are only some of the legal terms related to real estate transactions.
To prevent problems when buying or selling real estate, consult an attorney.
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