The ratio established by dividing a borrower's fixed monthly debt
obligations by his monthly income.
The failure of a party to meet the terms or conditions of an agreed
upon contract is considered a default.
A dcoument that conveys title is generally called a deed. Deeds must
provide a description of the property conveyed.
Judgement or Deficiency
State statute often provides that a judgment against the borrower or
mortgagee be given to the lender in the event that insufficient funds are
received from the sale of the property assets to cover the mortgage
The loss in value associated with physical aging of improvements, the
functional obsolescence of the building or its parts (usually due to
design) and / or a loss due to external obsolescence from the area,
neighborhood or adjoining properties.
Specialization is a trend in the real estate brokerage and real estate
appraisal business and a designation normally evidences a superior level
of education and /or experience attainment in a particular area.
Designations, like degrees, do not guarantee competence or superior
Real estate firms that routinely offer their services for commission
rates below those of their competitors are called discount brokerage
firms. The services of discount firms are often reduced, and sellers
should make themselves aware of the level of service being offered by such
firms. Discount brokerage firms also generally pay less compensation to
agents that participate in multiple listing service organizations. An
economic disincentive is created for agents, and the marketing time of a
property listed with such a firm may be longer that normal.
An adjustment paid to a mortgage lender by a borrower that increases
the lenders return on a loan. The net effect of discount points is raising
the interest rate or yield on a loan. One point is equal to 1.0% of the
The providing of information on a pertinent fact. Agents are often
required by law to disclose the fact that they hold real estate licenses
when they buy and sell real estate.
Seller disclosure forms that indicate condition and defects are being
adopted by many states to protect consumers.
A disclosure by an agent of a dual agency, where the agent is representing
both the buyer and the seller in the same transaction, is required by law.
Typically, disagreements between buyers and sellers of real estate are
resolved either in court or through the use of arbitration.
Not unlike a "double agent" in the movies a double agency in
real estate is created when a broker represents two parties in a
transaction. When the prior knowledge and consent of all of the parties
has been given this type of agency relationship can be established. It is,
however, difficult conceptually and difficult in the real world to
represent opposing parties in a transaction.
Many mortgages contain a provision that calls for the full payment of a
mortgage if the property is sold by the Mortgagee (owner). VA and FHA
mortgages normally allow for assumption by a third party who meets certain
criteria and approval by the VA or FHA.
The American Arbitration Association (AAA) has developed dispute
resolution systems for real estate. Arbitration is often being offered to
buyers and sellers of real estate as an alternate forum for the resolution
of their problems to litigation.