25 Property Law Concepts Every Buyer Should Know

Ownership and Title

Fee Simple Ownership: The most absolute form of property ownership; unlimited rights to use, sell, or pass the property.

Joint Tenancy: Co-ownership with equal shares and rights of survivorship.

Tenancy in Common: Co-ownership without rights of survivorship; ownership may be unequal.

Title Search: A search of public records to verify the seller’s legal right to convey ownership.

Title Insurance: Protects the buyer against undiscovered claims or liens on the property.

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Acquisition and Transfer

Deed: A legal document that transfers ownership from the seller to the buyer.

Warranty Deed vs. Quitclaim Deed: A warranty deed guarantees clear title, while a quitclaim deed transfers whatever rights the seller has, with no guarantees.

Closing Process: The final step where ownership officially transfers, including signing documents and paying fees.

Earnest Money Deposit: The initial deposit a buyer makes to demonstrate his seriousness, which is forfeited in some situations.

Contingencies: The conditions of the purchase agreement that have to be satisfied before the sale can take place, for instance, financing or inspections.

Rights and Obligations

Property Taxes: These are the annual taxes based on the assessed value of the property.

Easements: The legal rights granted to others to use a portion of your property for a specified purpose, for example, utilities or access.

Encumbrances: Liens, mortgages, or easements placed against a property and that may have an effect on ownership rights.

Zoning Laws: Local rules and regulations of how a property is allowed to be used, either residential, commercial, or industrial.

Covenants: Private restrictions or obligations attached to the property, often as part of the HOA agreements.

Mortgages and Financing

Mortgage: A loan secured against the property. Payments are regularly made or foreclosure risk occurs.

Loan-to-Value Ratio (LTV): The ratio of the mortgage amount to the property’s appraised value, influencing loan terms.

Foreclosure: The legal process where the lender takes ownership if the buyer defaults on the mortgage.

Disclosures and Inspections

Property Disclosure Statements: Seller-provided information about known property issues or defects.

Home Inspection: A professional evaluation of the property’s condition to identify potential problems.

Appraisal: A professional valuation of the property’s worth, often required by lenders.

Legal Protections

Consumer Protection Laws: Regulations to prevent fraudulent practices in real estate transactions.

Eminent Domain: The government’s right to seize private property for public use with compensation.

Fair Housing Act: Prohibits discrimination in real estate transactions based on race, religion, gender, or other factors.

Statute of Frauds: Requires certain real estate agreements to be in writing to be enforceable.

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