Abstract of Title - A past history of ownership of a particular property examined by an attorney to determine if there are any defects which would prevent passage or transfer of clear title to the next owner.
Adjustable Rate Mortgage (ARM) - A type of real estate loan in which either the interest rate charged or the length of the loan, or both, can change. Adjustable rate mortgages became very popular during the 1980s due primarily to the reluctance of lenders to quote a fixed interest rate loan to potential borrowers. By using an ARM, a lender is able to pass on the uncertainty of changes in interest rates to the borrower if rates change during the life of the loan. ARMs are normally tied to some index such as the Prime Rate, LIBOR or government securities. If you are only going to occupy a home for a short time, an ARM is probably your best bet. If you are planning to say in a home indefinitely, a fixed rate mortgage may be your best bet. Even if rates are high, you can refinance when they go down.
Agency - The relationship resulting from mutual consent between the principal and his or her agent that the agent will act on the principal’s behalf and subject to his or her control.
Agent - a licensee who has agreed to act on behalf of his or her principal and subject to that principal’s control. An agent is the person who acts for and represents you. In a real estate transaction an agent will work to negotiate the best price and terms for their client. An agent owes utmost loyalty to the client and must provide the client with any information the agent knows which might influence the client’s decision to buy or sell. See also Buyer's Agent
Amortization - Gradual reduction of the mortgage debt through periodic scheduled payments over the term of the loan.
Appraised Value - The estimated value of a home, established by a professional who has a knowledge of real estate price and markets.
APR (Annual Percentage Rate) - The actual annual interest rate paid on a loan as opposed to the nominal or stated interest rate on the loan agreement. Disclosure is a requirement under federal truth-in-lending laws.
There a number of ways to calculate an APR, as a result you may have to calculate your own APR to truly compare loan offers.
Association Fees - Fees that cover common costs of all homes in a condominium, townhouse or single family home association, such as trash removal, lawn maintenance, sewer and water fees, etc.
Assessment (Special) - A special tax imposed on property, individual lots or all property in the immediate area, for road construction, sidewalks, sewers, street lights, etc.
Assessments - Connecticut law requires all real estate, motor vehicles, and certain types of personal property to be assessed at 70% of fair market value. Fair market value is defined as the price established between a willing buyer and a willing seller taking into consideration all the uses to which a property is adapted. Connecticut courts have established criteria, which assessors must use to establish fair market value. Assessments notices are mailed in November and can be appealed. By law, the Assessor must physically review each property at least once every 10 years. See Revaluation.
Assumability - The ability of a mortgage to be taken over by a new borrower.
Binder - Purchaser deposits 1% of the purchase price with the real estate agent or broker when a memorandum of sale or written offer to purchase is made. This 1% is subtracted from the 10% of the purchase price paid on signing of contracts. Binders are typically only good faith deposits and will be returned if contracts are not signed. Binders are rarely used in Greenwich.
Blanket Unilateral Offer of Subagency - an offer that may be made by a listing agent to all other members of the MLS when he or she submits his or her seller’s listing to a traditional MLS; the offer is accepted whenever an agent shows the listed property without rejecting the offer. In Connecticut subagency has been replaced by Buyer Agency. This provides better protection to both the buyer and the seller.
Broker - A broker is someone licensed by the state to represent a buyer or seller as their agent. Salespeople, even though licensed, must work for a broker. A broker has real estate training and credentials in addition to those required for salespeople.
Buyer Agency - is an extremely important concept. To be represented costs you nothing, but you must sign an agreement with the real estate company of your choosing. If you have questions, please read the article What You Should Know about Agency (PDF) and/or the Connecticut Pamphlet on Agency (PDF) and/or the Connecticut Policy on Agency (PDF).
Buyers Agent - A Buyer’s Agent is a Realtor who is employed by and represents the buyer in a real estate transaction, regardless of whether the Realtor is paid by the buyer, seller or through a commission split with the listing broker. This is sometimes called Buyer Brokerage. See also Agent. Ask us for Why Every Home Buyer Needs a Buyer's Agent - a free publication.
Certificate of Title - A certificate issued by a title company or a written opinion rendered by an attorney that the seller has good marketable and insurable title to the property which he is offering for sale. A certificate of title offers no protection against any hidden defects in the title which an examination of the records could not reveal. The issuer of a certificate of title is liable only for damages due to negligence. The protection offered a homeowner under a certificate of title is not as great as that offered in a title insurance policy.
Client - A client is the person who is represented by an agent in a transaction and who is subject to that buyer’s or seller’s control. A seller becomes a client by signing a listing agreement with a broker. A buyer becomes a client by signing a buyer agency agreement with a broker. Connecticut state law specifies these agreements must be in writing; also called a principal. Ask us for a free publication on Connecticut's Agency Law.
Closing - The act of transferring ownership of a property from Seller to Buyer in accordance with a sales contract.
Closing Costs - The miscellaneous expenses involved in closing a real estate transaction that are over and above the purchase price. Examples of closing costs are title insurance, appraisal fee and credit report.
Cloud (On Title) - An outstanding claim or encumbrance which adversely affects the marketability of title.
Community Property - In community property states, what you can leave by will consists of your own separate property and one half (1/2) of the community property. The system of community property derived from Spanish law, which viewed both partners in a marriage as contributing equally, no matter whose name was on a paycheck, deed, bank account or other legal document. In community property states, community property is owned in equal shares by a married couple, i.e., each spouse owns 50%. Connecticut is not a community property state.
Condominium - The owner of a condominium unit owns the unit and has the right, along with other unit owners, to use the common areas, which are owned by the condominium association. Condominium laws vary greatly from state to state, but typically include an association that maintains the building, pays taxes and insurance, and maintains the reserves for improvements.
Condominium Resale Package - Information for condominium buyers that includes by-laws of the condominium association and the association's current financial statement. Buyers have five business days after receiving this package from the seller to legally rescind the purchase offer.
Confidentiality - the fiduciary duty that requires the agent to keep secret any information that his or her principal considers to be private.
Conflict of Interest - the situation in which an agent’s interests may be adverse to those of his or her principal; immediate disclosure is required.
Contingent Fee - any fee that is conditional upon some event, usually a closing, occurring.
Conventional Mortgage - A mortgage loan not insured by HUD or guaranteed by the Veterans' Administration. It is subject to conditions established by the lending institution and State statutes.
Conveyance Taxes - This tax is paid to the State and the Town of Greenwich.The State Tax has two parts:
½ percent up to $800,000 in sales price, and;
1 percent above $800,000 (nicknamed the mansion or Fairfield county tax)
The Greenwich Municipal Tax
0.0011% (just over a 1/10 of a percent or about $1 per thousand)
Cooperative - An apartment building or a group of dwellings owned by a corporation, the stockholders of which are the residents of the dwellings. It is operated for their benefit by their elected board of directors. In a cooperative, the corporation or association owns title to the real estate. A resident purchases stock in the corporation which entitles him to occupy a unit in the building or property owned by the cooperative. While the resident does not own his unit, he has an absolute right to occupy his unit for as long as he owns the stock.
Covenants - Private restrictions limiting the use of real property. Restrictive covenants are created by deed and may "run with the land," binding all subsequent purchasers of the land, or may be "personal" and binding only between the original seller and buyer. The determination whether a covenant runs with the land or is personal is governed by the language of the covenant, the intent of the parties, and the law in the State where the land is situated. Restrictive covenants that run with the land are encumbrances and may affect the value and marketability of title. Restrictive covenants may limit the density of buildings per acre, regulate size, style or price range of buildings to be erected, or prevent particular businesses from operating or minority groups from owning or occupying homes in a given area. (This latter discriminatory covenant is unconstitutional and has been declared unenforceable by the U.S. Supreme Court.)
Customer - A customer is a person who purchases or rents real estate, but is NOT represented in the transaction. A customer is traditionally a buyer who is buying a product or service from a salesperson. You would expect the salesperson to provide honest information, but you would not expect the salesperson to represent you or to negotiate the best price in the purchase for you. A Realtor is obligated by law to treat customers honestly and fairly. A Realtor can provide valuable market information and services to assist buyers (as customers) during the decision-making process, but is not allowed by law or ethics to provide the customer with the same level of help that they expected to give a client. A customer can also be the seller of an unlisted property that is being sold to a buyer represented by a buyer’s agent.
Debt ratio - the ratio between gross monthly income and monthly long-term debt; used to determine financial qualification of a buyer.
Deed - A written instrument, usually under seal, conveying some property interest from a grantor to a grantee. The grantor is the person who conveys the property interest (usually the Seller); the grantee is the person to whom the grant is conveyed (usually the Buyer). In order for a deed to be effective in transferring title, it must be in proper legal form and executed as specified by the law in the state in which the property is located. The title is actually transferred the moment the deed is properly delivered to and accepted by the grantee. In order to protect the validity of the title from subsequent innocent third parties purchasing the same property from the original grantor, the deed must be recorded as required by the particular state's recording statute. This also gives assurance to third parties that no one else has good title unless the title has been recorded. This gives constructive notice to third parties. When a deed is delivered, all prior oral and written agreements are merged into the deed and are collateral. This means that when a deed is delivered and accepted, all prior agreements which are inconsistent with the deed are superseded and have no legal effect. An exception to this rule occurs in cases of fraud and mutual mistake. Another exception exists when the contract specifically provides that the obligations will survive the closing. This type of deed is commonly used to transfer real estate between spouses who are divorcing.
Deed, Quitclaim - A deed without warrants; passes a grantor's interest only.
Deed Restrictions - A deed which binds all future owners of a property to abide by its restrictions for use of the property.
Deed, Warranty - A deed in which a grantor insures a grantee that title is free to pass.
Deffered Interest - Accrued but unpaid interest, occurring with Adjustable Rate Mortgage (ARM) loans, when a payment remittance does not cover the full amount of interest due for a given period.
Down payment - The amount of money to be paid by the buyer to the seller upon the signing of the agreement of sale (Contract). The agreement of sale will refer to the down payment amount and will acknowledge receipt of the down payment. Down payment is the difference between the sales price and maximum mortgage amount. The down payment may not be refundable if the buyer fails to buy the property without good cause. If the buyer wants the down payment to be refundable, he should insert a clause in the agreement of sale specifying the conditions under which the deposit will be refunded, if the agreement does not already contain such clause. If the seller cannot deliver good title, the agreement of sale usually requires the seller to return the down payment and to pay interest and expenses incurred by the purchaser. The down payment is normally 10% of the purchase price. The down payment is typically held in escrow by the seller’s attorney, although the seller can bargain to hold the down payment.
Dry Closing (Tender Closing) - A Dry Closing is one that is complete in all of the contract requirements except for the final fund disbursement and delivery of documents. Sometimes a closing is dry because the Seller or Buyer refuses to close and the other party wants to call their hand. More often a Dry Closing occurs because an out-of-state mortgage company gets their funds later than scheduled. If the funds are delayed, usually the documents are held in escrow pending their receipt.
Dry Mortgage - Also known as "non-recourse loan" because the lender has no personal right of action against the property owner in the event of default. The lender may only sell the property to enforce the loan obligation.
Dual Agent - If a Realtor lists a property which their buyer client wishes to buy, the Realtor will be the agent for both the buyer and the seller. This is called Dual Agency. If this situation were to occur, the buyer would be informed and asked to sign a Dual Agency Consent Agreement. This Agreement provides that the agent will not disclose either client’s personal, financial or confidential information. To best protect the interests of our clients, when negotiating on a property listed by our company, the Realtor representing the buyer will not be the same Realtor that represents the seller.
Earnest Money (Binder) - The deposit money given to the seller or his agent by the potential buyer upon the signing of the offer to purchase to show that he is serious about buying the house. Earnest money is not normally used in Greenwich.
Easement - A right-of-way given a person to make use of another person's property. For example, one property owner may need to use a neighbor's property as a driveway to gain access to his or her own driveway. To gain this access, the first property owner would request an easement from the second. Buyers should always check for easements before signing any purchase agreements on a property. See Encumbrance.
Encumbrance - A legal right or interest in land that affects a good or clear title, and diminishes the land's value. It can take numerous forms, such as zoning ordinances, easement rights, claims, mortgages, liens, charges, a pending legal action, unpaid taxes, or restrictive covenants. An encumbrance does not legally prevent transfer of the property to another. A title search is all that is usually done to reveal the existence of such encumbrances, and it is up to the buyer to determine whether he wants to purchase with the encumbrance, or what can be done to remove it.
Equity - The value of a property, minus outstanding mortgage debt and other liens. Equity is the portion of the value of your property that you have already paid for, plus the appreciation or less the decline if any, in the value of the property since you acquired it, and less the amount if any additional liens on the property.
Escrow - Funds paid by one party to another to hold until the occurrence of a specified event, after which the funds are released to a designated individual. In FHA mortgage transactions an escrow account usually refers to the funds a mortgagor pays the lender at the time of the periodic mortgage payments. The money is held in a trust fund, provided by the lender for the buyer. Such funds should be adequate to cover yearly anticipated expenditures for mortgage insurance premiums, taxes, hazard insurance premiums, and special assessments.
FHA Loan - A loan insured by the Department of Housing and Urban Development of the Federal Housing Administration (FHA).
Fixed Rate Mortgage - A mortgage loan with a constant interest rate and payment schedule throughout the life of the loan. The interest rate and payment amount are established at the time of funding.
Fixture - A fixture is personal property that has become real estate because it is permanently attached or fixed to the building. Custom as to what is a fixture varies in different jurisdictions. In Greenwich it is the custom to assume that the washer and dryer are fixtures as well as lighting and even mirrors attached to a wall.
Grand List - After individual property assessments have been determined, the assessor compiles a complete listing of all property. The total assessments of all listed property is called the grand list.
Grantee - That party in the deed who is the buyer or recipient.
Grantor - That party in the deed who is the seller or giver.
Homestead Exemption - Homestead is real estate occupied by a person as his or her home or dwelling place. Homesteads often are exempt from levy or liens, at least to a certain extent. This is referred to as the homestead exemption. State law defines the extent of the homestead exemption. For Connecticut, the homestead exemption is limited to $75,000 in value. Connecticut Code §52-352.
Hubbard Clause - A "Hubbard" clause is a provision in a purchase contract which makes the buyer's obligation to close contingent on the buyer selling a property which the buyer currently owns. Usually, that property is the buyer's current home. There is no set language for a Hubbard clause, and the devil in these provisions is usually in the details.
HUD - U.S. Department of Housing and Urban Development. Office of Housing/Federal Housing Administration within HUD insures home mortgage loans made by lenders and sets minimum standards for such homes.
HUD-1 (Uniform Settlement Statement) - A closing statement or settlement sheet that outlines closing costs on a real estate transaction or refinancing.
Implied Agency - any agency relationship that is indicated by the words and/or actions of the agent rather than by written agreement; also called accidental or undisclosed agency.
Index - An economic indicator lenders use to calculate interest rates on Adjustable Rate Mortgages (ARMs).
Initial Interest Rate - The introductory interest rate on an Adjustable Rate Mortage (ARM), which usually changes at the first rate adjustment.
Informed Consent - any consent in which the party (buyer or seller) clearly understands what he or she is signing and why; it is obtained when the agent makes his or her explanation commensurate with the education and understanding of the party.
Joint Tenants with Right of Survivorship - Any two (or more) people can own property - typically real estate or a bank account - in joint tenancy with rights of survivorship. When one of them dies, his or her share automatically goes to the surviving owner. The phrase “as joint tenants with full rights of survivorship” or similar wording must appear in the deed. A deceased owner's interest does not ''pass through'' the decedent's estate. A joint tenant cannot use a will to leave his or her share of joint tenancy property to someone else. If all joint tenants die simultaneously, no one owner has survived any of the others, each joint tenant’s interest in the property passes by their will. Sometimes owners decide to change ownership of property from joint tenancy to tenancy in common in order to leave their interests to someone other than the surviving joint tenant(s).
Jumbo Mortgage - A Jumbo Mortgage is a mortgage with a loan amount larger than the legislated purchase limits of Fannie Mae and Freddie Mac. Fannie Mae (FNMA) and Freddie Mac (FHLMC) are large agencies that purchase the bulk of residential mortgages in the U.S. They set a limit on the maximum dollar value of any mortgage which they will purchase from an individual lender. Currently, this limit is $417,000. This leaves a portion of the market to look elsewhere for placement. Other large investors, such as insurance companies and banks, step in to fill the need. The average interest rates are typically greater than normal for conforming mortgages, and vary depending on property types and mortgage amount.
Lead-Based Paint Hazards - If you buy a home built before 1978, you should receive an EPA Pamphlet “Protect Your Family from Lead in your Home” and the Seller must give you a Lead Base Paint Disclosure.
LIBOR (London Interbank Offered Rate) - LIBOR is the rate of interest at which banks offer to lend money to each other. LIBOR is among the most common interest rate benchmarks for adjustable rate mortgages.
Lien - A claim by one person on the property of another as security for money owed. Such claims may include obligations not met or satisfied, judgments, unpaid taxes, materials, or labor.
Lifetime Cap - The maximum allowable interest rate over the life of the loan.
Listing agent - an agent of the seller who markets the seller’s property and represents the seller during the sale and closing of his or her property.
Loan Origination Fee - A one-time fee that covers a portion of the lender's administrative costs in processing a loan.
Loan-to-Value (LTV) - The ratio of the principal amount of the loan to the lesser of the purchase price of the property or the property's appraised value. If the loan balance equals 80% of the value of the property, you may see this expressed as an 80% loan, or 80% LTV.
Marketable Title - A title that is free and clear of objectionable liens, clouds, or other title defects. A title which enables an owner to sell his property freely to others and which others will accept without objection.
Margin - The Adjustable Rate Mortgages (ARMs), a margin or spread, is the difference between the interest rate charged on the loan and the index. Generally, the margin remains fixed over the life of the loan.
Mill Rate - The tax rate for real estate is usually expressed in mills. A mill is equivalent to dollars of tax per thousand dollars ($.001)of taxable value. Each municipality sets its own mill rate. Some municipalities also have different mill rates for different districts, as well as for school, water and sewer taxes. To obtain the tax for a property, divide the taxable value by one thousand and multiple this by the mill rate. In Greenwich the mill rate is set by the BET (Board of Estimate & Taxation.) See Mill Rate article.
MLS (Multiple Listing Service) - an organized system by which Realtor members share information about properties for sale and offer cooperation and compensation to buyers’ agent. In Greenwich all Brokers list their properties with the Greenwich MLS. In Fairfield County the towns of Greenwich, New Canaan and Darien have their own MLS, the rest of the county is covered by the consolidated MLS.
Mortgagee - A bank or other financial institution that lends money to the borrower. The borrower is considered the mortgagor.
Mortgage Loan - A mortgage loan is a loan that is secured with a lien on real property. Forms of mortgages include fixed rate, adjustable-rate, and balloon mortgages.
Mortgage Note - A written agreement to repay a mortgage loan. The agreement is secured by a mortgage, serves as proof of an indebtedness, and states the manner in which it shall be paid. The note states the actual amount of the debt that the mortgage secures and renders the mortgagor personally responsible for repayment.
Mortgage (Open-End) - A mortgage with a provision that permits borrowing additional money in the future without refinancing the loan or paying additional financing charges. Open-end provisions often limit such borrowing to no more than would raise the balance to the original loan figure.
Mortgage Origination - The making of a new mortgage. It includes all steps taken by a lender to process the mortgage loan application, legally bind the parties and place the loan on the lender's books.
Mortgage Insurance - Often required when making a down payment less than 20%. It protects the lender against payment default by the homeowner. This insurance does not relieve the borrower of the obligation to repay the loan, nor should it be confused with various forms of life or disability insurance designed to pay off a mortgage in the event of the disability or death of the borrower.
Mortgagor - The person who borrows money to purchase a house. The lender is called the mortgagee.
NAR (National Association of Realtors®) - an organization of licensees in which all members swear to uphold the Realtors®’ code of Ethics; NAR also provides education and legislative cooperation for the benefit of its members.
Nominal Interest Rate - The stated, or contractual, interest rate in a loan agreement, bond or other security, which may differ from the effective or actual interest rate. See APR.
Owner-Occupied - A residence lived in by the borrower.
Payment Cap - The limit to how much the monthly payment can change from one adjustment period to another. Also referred to as a Payment Change Cap.
Planned Unit Developments (PUDs) - A subdivision of five or more individually owned lots with one or more other parcels owned in common or with reciprocal rights in one or more other parcels.
PITI (Principal, Interest, Taxes, Insurance) - When a buyer applies for a loan, the lender will calculate the principal, interest, taxes & insurance. The figure is designed to represent the borrower's actual monthly mortgage-related expenses.
P.M.I (Private Mortgage Insurance) - Covers part of the first mortgage on 90-100% loans, enabling the lender to loan a greater percentage of the sales price; paid for by borrower.
(POC) Paid Outside Of Closing - Some fees may be listed on the HUD-1 to the left of the borrower’s column and marked "P.O.C." Fees such as those for credit reports and appraisals are usually paid by the borrower before closing/settlement. They are additional costs to you. Other fees such as those paid by the lender to a mortgage broker or other settlement service providers may be paid after closing/settlement. These fees are usually included in the interest rate or other settlement charge. They are not an additional cost to you. These types of fees will not be added into the total on Line 1400.
Pocket Listing - A listing which is not multiple listed immediately. It is withheld from other Realtors so that the listing agent or broker has the first opportunity to sell the property. This practice is not illegal, but is certainly not in the best interest of the Seller Client.
Points (sometimes called Discount Points or Origination Fee) - A fee charged by lenders at the time a loan is originated. A point is equal to 1 percent of the total loan amount.
Pre-Approved for a Mortgage - Pre-approval takes pre-qualification one step further. The lender will verify the Buyer’s income, assets, debts and credit history, and then issue a letter stating that the mortgage is approved for a certain amount within a certain time frame, subject to an appraisal of the property. Many times a buyer can use this pre-approved status as leverage during the negotiation process.
Prepaid Interest - Interest paid before it is due. For example, at the close of a real estate transaction borrowers usually pay for the interest on their loan that falls between the closing period and the first monthly payment.
Prepayment Penalty - A fee charged to a borrower who pays a loan before it is due.
Pre-Qualified for a Mortgage - This is the first step in which the lender collects income, debts and repayment capability information from the borrower to determine credit worthiness and financial ability to qualify for a loan. The lender does not verify any of the information. Pre-qualification" is non-binding to the lender and only serves as an indication the buyer might be qualified to get a mortgage.
Prime Rate - The Prime Rate is the lowest rate charged by banks on short-term loans to their most creditworthy commercial customers.
Principal - The remaining amount or balance of a mortgage loan.
Private Client - A Private Client signs a buyer agency agreement with a real estate broker. Connecticut state law specifies these agreements must be in writing. The Realtor therefore represents their Client and not the Customer. See Buying Real Estate. Ask us for Anderson Associates Private Client Group - a free publication.
Property Appraisal - A written analysis of or opinion about the estimated value of a property, prepared by a qualified appraiser.
Purchase Contract - A written promise to purchase and sell a property at a specified time.
Purchase Money Mortgage (Seller Financing) - A loan made by the owner of property to the purchaser to cover part or all of the sales price. While common with both residential and commercial real estate, seller financing, or owner financing as it is also called, becomes a very popular means of "making the deal work" when interest rates are high. During such times, the purchaser who is unable to qualify for a loan from a traditional lender often turns to the seller and makes an offer to purchase contingent upon seller financing.
Purchase Price - The total sale price of a home.
Radon - A ground-generated radioactive gas that seeps into some homes through sump pumps, cracks in the foundation and other inlets. A leading cause of lung cancer, Radon is found in mostly the northern half of the country. The EPA recommends radon reduction if the radon level is 4pCo/L or more. Even high levels of Radon can usually be easily and inexpensively reduced. The average cost or a radon reduction system is about $1,200.
Real Estate Taxes - Real Estate Taxes are paid twice a year; July 1 and January 1. The tax is determined by multiplying your Assessment times the Mill Rate. There is no separate tax for Schools. Because of Greenwich’s pay as you go policy, taxes are lower in Greenwich than other CT towns and in New York towns.
Realtor - A designation given in to a real estate agent who has subscribed to the code of ethics of the National Association of Realtors. Not all brokers or real estate salespeople are realtors. See Anderson Associates.
RESPA (Real Estate Settlement Procedures Act) - A federal law designed to make sellers and buyers aware of settlement fees and other transaction-related costs. RESPA also outlaws kickbacks in the real estate business.
Revaluation - Connecticut law requires all real estate to be revalued for assessment purposes every five years. Towns and cities that do not adhere to the revaluation requirements will be penalized 10% of their state grants. Revaluations are required to ensure uniformity in property valuations. A complete revaluation program includes modernizing the assessment system, taking a complete description and inventory of all property, and setting new assessed values on a current basis. By law, the Assessor must physically review each property at least once every 10 years. The Assessor views several hundred properties each year. Because regular assessment work must be carried on along with the revaluation program, most assessors find it necessary to seek the assistance of a private appraisal company in conducting a complete revaluation. Responsibility for final determination of value, however, remains with the assessor.
Reverse Mortgage - A special type of loan available to equity-rich, older owners. The interest and money used is taken out of the equity in the house. Repayment is not necessary until the borrower sells the property or moves into a retirement community. Beware - many reverse mortgages have stealth provisions entitling the mortgage company, for instance, to all increases in the value of the house from the time of the loan in addition to interest and repayment of money loaned.
Seller Agency - All Realtors at a real estate brokerage firm represent sellers who have listed their property with that firm. They are all agents of and owe their allegiance to that seller.
Seller's Disclosure Form - Connecticut law requires that a buyer receive a seller's disclosure form describing the characteristics of the dwelling, including whether the seller knows of the existence of any lead paint, asbestos or hazardous substances on the property.
Seller's Market - An economic situation in which demand is greater than supply. The result is often greater opportunities for owners who may find someone willing to offer the asking price or even a figure greater than the asking price. During times of high demand, stories appear regarding the owner who had "five offers above the asking price”. In contrast, a Buyer's Market refers to a situation in which demand is less than supply at which time the advantages shift to the buyer. When there is more than 5 months of inventory on the market in a particular price range, it is considered to be a Buyer’s Market for that price range.
Selling agent - any agent who sells a property; he or she may be a subagent or listing agent of the seller, a buyer’s agent or a dual agent. Also called a "co-op" agent.
Single Ownership - This type of ownership, also referred to as One Name Ownership, is primarily used when there is a single homeowner living alone. Ownership is very simple, your name would be the only one on the deed. For the purpose of making your will, you are the sole owner, even if a lender has some legal ownership in the property until you pay off the mortgage(s). These days, one of the concerns of married couples when considering property ownership is liability for court judgments. The Homestead Exemption is not very large in Connecticut. For this reason, some couples choose to put the property in the name of the wife, LLC or trust.
Smart Mortgage - Smart Mortgage allows mortgagers to pay off their mortgages more rapidly. Instead of paying monthly, you authorize a draft from your checking account every week or every two weeks. The result is more payments going to principal. This arrangement enables Smart Mortgagers to payoff their home loan much more quickly than a conventional mortgage arrangement.
Sub-Agency - Sub-agency is legal in Connecticut, but is not practiced in Greenwich. Under sub-agency, a Realtor showing a property not listed by their firm, represents the seller as sub-agent of the seller’s agent. It is that sub-agent’s duty to protect the seller’s interests at all times. Before Connecticut enacted Buyer Agency law in 1996, all Realtors showing properties to buyers were sub-agents and represented only the interests of the seller. Sub-agency is still the standard for most of the USA.
Subagent - a selling agent who has accepted a listing agent’s blanket offer of subagency and is, therefore, an agent of the seller who is working with a buyer as a customer.
Survey - A measure to determine the exact location of the house, lot lines, easements and rights-of-way.
Tax Free Exchange - Also known as a "Like Kind Exchange or 1031 Exchange". Under Internal Revenue Code 1031, certain real estate properties may be sold and the seller can avoid paying taxes on any gain if a new similar property is purchased. This "exchange" must conducted under very specific guidelines.
Tenancy by the Entirety - This form of ownership is basically the same as joint tenancy with right of survivorship but is limited to married couples. The phrase “tenancy by the entirety” or “as tenants by the entirety” must appear in the deed. When one spouse dies, the entire interest in the property automatically goes to the other. Before tenancy by the entirety property can be changed to some other form of property ownership, both spouses must agree to the change. This form of ownership is not recognized in Connecticut.
Tenants in Common - In a tenancy in common, all owners have equal rights to use the property. Ownership shares may be equal, however, unequal shares may be arranged by deed or other written contract. An advantage of tenancy in common ownership is that each co-owner is free to transfer or bequeath his/her interest to anyone he/she chooses. Tenancy in common is the most common way for unmarried people to own property together. For that reason it is often wise to have a written agreement when purchasing property with someone other than a spouse. For example, it usually makes sense for both parties to agree to a ''right of first refusal'' whereby an ownership interest cannot be sold without the interest first being offered to the co-owner. Unless there is a specific agreement to the contrary, or unless the parties have taken title as a legal partnership, the law presumes that any owner has an absolute right to do whatever he or she wants with an interest in real estate. Married couples can use this form of co-ownership, but more often choose joint tenancy.
Title Company - Firms that ensure that the title to a piece of property is clear and provide title insurance.
Title Insurance - A policy issued to lenders and buyers to protect any losses because of a dispute over the ownership of a piece of property.
Title Search - A check of public title records to ascertain that the seller is the legal owner and that there are no claims or liens against the property. See Abstract of Title.
Truth in Lending Act - Requires lenders to provide an estimate of the total financing charges over the entire life of the loan, including the method of calculating the finance charge - the total dollar amount the buyer will pay for the loan - and when those finance charges begin. See Mortgage Process for more information.
Undisclosed Dual Agency - a dual agency relationship that occurs when a listing agent or subagent acts and speaks as though he or she also represents the buyer but without either written or oral disclosure; see "implied agency."
Unrepresented Buyer (customer) - A customer is a buyer who is not represented in the transaction. A customer is traditionally a buyer who is buying a product from a salesperson. You should expect the salesperson to provide honest information, but you would not expect the salesperson to negotiate the best price for you. Realtors are obligated by law to treat customers honestly and fairly and to disclose material facts about a property, but are not allowed by law or ethics to provide a customer with advice in the transaction or to keep the customer’s conversations confidential.
VA Loan - A loan that is partially guaranteed by the U.S. Department of Veterans Affairs (VA) and made by a private lender.
Walk-through inspection - Typically done within 48 hours of closing, the buyer and their real-estate agent do a final inspection of the property the buyer is purchasing to ensure it is in essentially the same condition it was when the buyer made the purchase offer.