DE Real Estate key terms

A relationship in which a licensed broker or salesperson is authorized to act for a consumer in a real estate transaction and owes that consumer loyalty, obedience, disclosure, confidentiality, accounting, and reasonable care.

A client is the party the brokerage represents and owes fiduciary duties to; a customer is a party the brokerage helps without representing, receiving only honesty and fair dealing.

A brokerage representing both sides of the same transaction, such as buyer and seller, which requires informed written consent from all parties and neutral treatment by the licensee.

A listing agreement in which the seller promises to pay the broker a commission no matter who produces the ready, willing, and able buyer during the listing period, including the seller.

Money a buyer gives when the contract is signed to show good faith; it is credited toward the purchase price at closing and may be forfeited if the buyer defaults without a contract excuse.

A contract condition that must be met before a party is obligated to close, such as a satisfactory home inspection, loan approval, or an appraisal at or above the contract price.

The most complete form of ownership, giving the holder the rights to use, transfer, and pass on the property with no time limit and no conditions attached to the title.

Ownership lasting only for the lifetime of a named person; the life tenant may use the property but must not commit waste, and the property passes to the remainderman at death.

Co-ownership in which each owner holds a separate, transferable share with no right of survivorship, so a deceased owner's interest passes through that owner's estate.

A right to use a neighboring parcel of land that benefits the owner's own property and transfers automatically when either the benefited or burdened property is sold.

A right to use another person's land gained by open, continuous, hostile, and actual use for the period set by state law, without the owner's permission.

An existing use of property that no longer matches current zoning rules but may continue because it was lawful when it started, usually with limits on expansion.

The use of a property that is legally permitted, physically possible, financially feasible, and produces the greatest value; it frames every appraisal approach.

An appraisal method that values a property by comparing it with recently sold, similar properties and adjusting for differences in features, condition, location, and sale date.

An appraisal method that estimates value as the current cost to replace or reproduce the improvements, minus accrued depreciation, plus the value of the land.

A rate, usually drawn from comparable sales, used to convert a property's net operating income into an estimate of value by dividing the income by the rate.

A figure from comparable sales, multiplied by a subject property's gross rent, to give a quick estimate of value for income-producing property.

The borrower's written promise to repay a stated sum with interest on agreed terms; it creates personal liability, while the mortgage or deed of trust provides the security.

The four parts of a monthly housing payment: principal, interest, property taxes, and hazard insurance; lenders compare this total against income when qualifying a borrower.

The loan amount divided by the property's appraised value or sale price, whichever is lower, shown as a percentage; higher ratios typically require mortgage insurance.

Interest paid in advance at closing to obtain a lower note rate, where one point equals one percent of the loan amount.

The steady reduction of a loan balance through scheduled payments that cover interest due and repay some principal, so the debt reaches zero at maturity.

A deed in which the grantor guarantees a clear title against all claims and promises to defend the grantee, covering defects arising both before and during the grantor's ownership.

A deed in which the grantor guarantees the title only against claims that arise from the grantor's own acts or that occurred during the grantor's period of ownership.

A deed that transfers whatever interest the grantor may hold, if any, with no promises or warranty about the condition of the title.

Title information a person is legally presumed to know because it appears in the public recording records, whether or not the person actually searched those records.

A one-time policy protecting an owner or lender against covered title defects existing before the policy date, such as forged documents, undisclosed liens, or errors in recording.

Groups federal law shields from discrimination in housing, including race, color, religion, sex, national origin, familial status, and disability; state and local laws may add more.

Guiding buyers or renters toward or away from particular neighborhoods because of a protected characteristic, which is a fair housing violation.

A form Delaware requires for many residential resales in which the seller discloses known material defects and other specified property conditions before the buyer is bound.

A federal rule for homes built before 1978 requiring sellers and landlords to disclose known lead hazards and give buyers or tenants the EPA pamphlet with a signed acknowledgment.

The state body that licenses brokers and salespersons, adopts rules, and hears complaints, with authority to fine, suspend, or revoke a license.

The licensed broker responsible for a brokerage's operations, its licensees, and its escrow handling, and who answers to regulators for the firm's compliance.

Mixing client money, such as earnest deposits or rents, with a licensee's personal or business funds; client money must instead be held in a separate escrow account.

Payment for sending business to a service provider; a Delaware licensee may not share compensation with an unlicensed person, though paying another licensed brokerage is permitted.

A tax on transferring Delaware real property, computed at 4 percent of the gross sale price (2 percent state and 2 percent county), customarily split between buyer and seller but negotiable.

Dividing a shared expense such as property taxes or rent between buyer and seller at closing according to how many days of the period each party owns the property.

What a seller actually receives at closing after subtracting loan payoffs, brokerage compensation, transfer taxes, prorations, and other closing costs from the sale price.