IN Real Estate key terms

Land, the improvements attached to it, and the bundle of legal rights that go with ownership, including the rights to possess, use, exclude others, and dispose of the property.

An item that began as personal property but has become part of the real estate because of how it is attached, how it is adapted, and the intent of the person who installed it. Fixtures transfer with the land.

Co-ownership by two or more people who each hold a separate undivided share, which may be unequal. Each owner may sell or will that share, and no right of survivorship applies.

Co-ownership requiring equal shares and unity of time, title, interest, and possession. When one owner dies, that share passes automatically to the surviving owners instead of through probate.

A local ordinance, adopted under the police power, that divides a community into districts and states which uses are allowed and what lot size, setback, and height limits apply.

Permission from a zoning board to depart from a rule such as a setback or height limit because strict enforcement would cause hardship unique to that parcel and not shared by neighboring owners.

A right to use another person's land for a limited purpose, such as a shared driveway or a utility line. It is an encumbrance and does not give the holder possession.

A private promise, usually written into deeds or subdivision documents, that limits how land may be used, such as single-family-only occupancy or minimum square footage. Neighbors or an association enforce it.

The government's power to take private property for a public use, provided it pays just compensation. The taking itself is called condemnation, and the owner must be given notice.

The strict legal obligation an agent owes a principal, including loyalty, obedience, disclosure, confidentiality, accounting, and reasonable care. Putting the agent's own interest ahead of the client's is a breach.

An Indiana arrangement in which one brokerage represents both the buyer and the seller in the same transaction. All parties must give written informed consent, and the brokerage must treat them evenhandedly.

A person whom a licensee assists in a transaction but does not represent. The licensee owes honesty and disclosure of material facts, but not the full fiduciary duties owed to a client.

The broker whose efforts started an uninterrupted chain of events that produced a ready, willing, and able buyer or seller. It is often the deciding factor in a commission dispute.

Agreement by both parties to the same terms, normally shown by an offer and an unqualified acceptance that is communicated to the offeror. Without it, no contract exists.

Anything of legal value that the parties exchange to make a promise enforceable, such as money, property, or a promise to act or not act. Courts do not measure whether the bargain is fair.

A reply to an offer that changes its terms. In law it rejects the original offer, so the first offer cannot later be accepted, and it becomes a new offer from the other side.

A contract provision that makes a duty conditional on something happening, such as the buyer obtaining financing or approving an inspection. If it is not met, the protected party may cancel.

A buyer's deposit that shows good faith and helps bind a sale contract. It is applied to the purchase price at closing, returned if a contingency fails, or forfeited if the buyer defaults.

The legal rule requiring real estate sale contracts, leases longer than one year, and certain other agreements to be in writing and signed by the party being sued on the agreement.

A written instrument in which the borrower pledges real property as security for a loan, giving the lender a lien that is released when the debt is paid in full.

The borrower's written promise to repay a loan. It states the principal, interest rate, payment schedule, and default remedies, and it is the evidence of debt that the mortgage secures.

The four pieces of a typical monthly housing payment: principal, interest, property taxes, and insurance. Lenders use this figure to qualify borrowers and to set escrow amounts.

The loan amount divided by the property's value or purchase price, whichever is lower, expressed as a percentage. Higher ratios usually mean mortgage insurance and stricter underwriting.

A written document that transfers an interest in real estate from a grantor to a grantee. To be recorded it generally must identify the parties and property, be signed by the grantor, and be acknowledged.

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

A deed that transfers only whatever interest the grantor has, with no promises about title. It gives the grantee the least protection and is common in family transfers and clearing title defects.

A one-time policy that protects the insured owner or lender against losses from title defects existing when the policy was issued, such as forged deeds, undisclosed heirs, or recording errors.

A way to gain title to someone else's land by using it openly, notoriously, exclusively, and continuously without permission for the period the state's statute sets.

The most probable price a property should bring in an open, competitive market, with both parties acting prudently and knowledgeably, without undue pressure and with payment in cash or its equivalent.

The use that is legally permitted, physically possible, financially feasible, and produces the greatest value for the property at a given time. It anchors every appraisal approach.

An appraisal method that estimates value from recent sales of similar properties, then adjusts those prices up or down for differences such as size, condition, location, and financing terms.

A percentage used in the income approach that expresses the relationship between a property's net operating income and its value, calculated as net income divided by value.

A form on which an Indiana residential seller must disclose known defects and conditions of the property, such as roof, mechanical, water, and environmental problems, to a prospective buyer.

Information that a reasonable person would consider important in deciding whether and on what terms to buy, sell, or lease. Licensees must disclose it to their client and may not conceal it from others.

Federal and state laws that prohibit discrimination in selling, renting, or financing housing based on protected classes such as race, color, religion, sex, disability, familial status, and national origin.

Dividing an expense or income item, such as property taxes, rent, or association dues, between buyer and seller at closing based on how many days each owns the property in that period.

A fee paid to the lender at closing to lower the interest rate on a loan. One point equals one percent of the loan amount, and paying points reduces the rate for the life of the loan.

The state board that issues and renews Indiana broker and managing broker licenses, adopts administrative rules, and hears disciplinary cases involving license law violations.

In Indiana, the licensee who supervises a brokerage office and is responsible for its operations and for the conduct of the licensees who work there.

Mixing client money, such as earnest money or property management funds, with the broker's own funds, or failing to hold it in a separate trust account as license law requires.