IA Real Estate key terms

The most complete ownership interest in real property, giving the owner unlimited rights to use, sell, lease, or give away the property, with no expiration date, and passing to heirs when the owner dies.

Ownership that lasts only for the lifetime of a named person. The life tenant may use the property but must not commit waste, and the interest ends automatically at that person's death.

A form of co-ownership in which each owner holds a separate, undivided share that may be different in size, can be sold or devised by will, and passes to the owner's heirs at death.

Co-ownership with the right of survivorship: when one owner dies, that share passes automatically to the surviving owners and avoids probate. Equal shares and unity of time, title, interest, and possession are required.

Any right, claim, or interest in real property held by someone other than the owner that limits the owner's use or may affect title, such as liens, easements, deed restrictions, and mortgages.

A right to use a neighboring parcel of land that benefits the owner in the use of their own property; it runs with the land and passes automatically when either parcel is sold.

A statutory lien against real property securing payment for labor, services, or materials that improved it. It can arise without the owner's consent and may cloud title until paid or released.

A deed in which the grantor promises to defend title against all claims, including those that arose before the grantor owned the property, through covenants of seisin, quiet enjoyment, and warranty.

Title that is free of serious defects and reasonable doubts, so a prudent buyer would accept it; it may still be subject to minor encumbrances that the purchase contract allows.

The legal obligations an agent owes a principal, typically care, obedience, loyalty, disclosure, accounting, and confidentiality, requiring the agent to put the principal's interest ahead of the agent's own.

A written statement telling a consumer whom the licensee represents and what duties that creates. Iowa rules call for it early in the relationship, at first substantive contact, before confidential information is shared.

When one licensee or brokerage represents both sides of the same transaction. Iowa rules require written disclosure and consent, and the agent must treat both parties fairly without favoring either.

A listing agreement giving one brokerage the right to a commission if the property sells during the listing period, no matter who produces the buyer, even the owner.

The effort that begins an uninterrupted chain of events leading to a sale; the broker who is the procuring cause is generally the one entitled to the commission.

A legal rule requiring certain contracts, including real estate purchase agreements and leases longer than one year, to be in writing and signed by the party to be charged before they are enforceable.

A deposit a buyer gives when the contract is formed to show good-faith intent to complete the purchase; it is applied to the price at closing or forfeited if the buyer defaults without a valid excuse.

A contract condition that must be satisfied before a party is obligated to close, such as obtaining financing, a satisfactory inspection, or an appraisal at or above the purchase price.

A court remedy ordering a party to carry out the contract as promised; because each parcel of land is unique, it is commonly available to enforce real estate sale contracts.

The borrower's written promise to repay a loan on stated terms, including the interest rate, payment amount, and maturity date; the note is the main evidence of the debt itself.

A written pledge of real property as security for a loan. In lien theory states such as Iowa, the borrower keeps title while the lender holds a lien that can be foreclosed if the debt is not paid.

The loan amount divided by the property's appraised value or purchase price, whichever is lower, expressed as a percentage; lenders use it to judge risk and set mortgage insurance requirements.

The gradual repayment of a loan through scheduled payments covering interest plus a portion of principal, so the balance declines over time until it reaches zero at maturity.

Fees a borrower pays the lender at closing, with each point equal to one percent of the loan amount, in exchange for a lower interest rate over the life of the loan.

The use of a property that is legally permissible, physically possible, financially feasible, and produces the greatest value; it guides appraisers in selecting comparables and valuing land.

A study of recently sold, pending, and active listings that a licensee prepares to suggest a listing or offer price; it is not an appraisal and does not require an appraiser license.

A rate that converts a property's net operating income into an estimate of value; value equals net operating income divided by the capitalization rate.

Money a tenant pays the landlord to cover unpaid rent or damage beyond normal wear; Iowa law sets rules for holding it and for returning it with an itemized written accounting.

A landlord's legal promise, which generally cannot be waived, that rented housing will be fit to live in and meet basic health and safety standards such as working plumbing, heat, and safe conditions.

When a landlord's failure to maintain the property makes it essentially unlivable, so the tenant may treat the lease as ended and move out without further rent liability.

An Iowa notice a landlord may serve when rent is unpaid, demanding that the tenant pay or vacate within three days; if the tenant does neither, the landlord may file for eviction.

The state body that licenses brokers and salespersons, adopts and enforces licensing rules, investigates complaints, and may discipline licensees; it operates within Iowa's professional licensing agency.

A separate bank account a broker uses to hold client money such as earnest money and security deposits; the broker must not commingle personal or brokerage operating funds in it.

Coursework licensees must complete each license cycle to renew; Iowa sets a required number of hours with mandatory topics, and failure to finish can result in denial of renewal.

An Iowa form, signed by the seller and filed with the county recorder at transfer, disclosing known private wells, abandoned wells, solid waste disposal sites, and similar hazardous conditions on the property.

An Iowa form filed with the county recorder when real estate is transferred, stating the purchase price, financing, and other details the state uses for property tax and sales analysis.

Iowa's required written statement in which a seller of residential property discloses known material defects and conditions in the property before a buyer becomes bound to the purchase.

A written opinion from an Iowa attorney, based on an abstract of title, stating whether the seller has good and marketable title and listing defects to cure before closing; Iowa practice commonly relies on it.

Dividing an ongoing expense, such as property taxes, rent, or association dues, between buyer and seller at closing based on the number of days each party owns the property during the period.

In a closing statement, a debit is an amount charged to a party and a credit is an amount owed to that party; balancing the two columns shows the cash each side must bring or receive.

A federally required five-page form a lender must give a borrower at least three business days before closing, itemizing loan terms, projected payments, and all closing costs.