MS Real Estate key terms

An item that was once personal property but has become part of the real estate because of how it is attached, how it is adapted to the property, or the parties' intent. Fixtures normally transfer with the land unless the contract excludes them.

The fullest, most complete form of land ownership. It lasts indefinitely, can be inherited, and may be sold or mortgaged freely, subject only to government powers and private restrictions.

Ownership that lasts only for the lifetime of a named person. The life tenant may use the property but must not commit waste; when that life ends, the estate passes to a remainderman or reverts to the grantor.

Co-ownership in which two or more people hold undivided shares that may be unequal. Each owner may sell or will their share, and no owner has survivorship rights, so a deceased owner's share passes to their heirs.

Co-ownership by two or more people with equal undivided shares and a right of survivorship, so when one owner dies that interest passes automatically to the surviving owners instead of to the deceased owner's heirs.

Any right or interest in real property that burdens it or reduces its value but does not prevent the transfer of title. Examples include liens, easements, restrictive covenants, and leases.

A statutory lien filed by a contractor, subcontractor, or supplier who furnished labor or materials for improvements and was not paid. It attaches to the improved property and must be addressed at closing.

A deed in which the grantor promises to defend the title against defects arising both before and during the grantor's ownership. It gives the buyer the broadest protection of any deed form.

A deed that transfers whatever interest the grantor may have in the property without any promise that the title is good. It carries no warranties and is often used to clear up title questions.

A one-time policy that protects a lender or owner against losses from title defects that existed when the policy was issued, such as forged deeds, undisclosed heirs, or earlier liens.

A relationship in which one person, the agent, is authorized to act for another, the principal, and owes that principal fiduciary duties. In real estate it is normally created by a written agreement.

The duties an agent owes a principal, commonly listed as care, obedience, loyalty, disclosure, accounting, and confidentiality. Loyalty requires putting the principal's interests ahead of the agent's own.

A situation in which the same brokerage represents both the buyer and the seller in one transaction. Because loyalty is divided, it requires informed written consent from both parties and careful handling of confidential information.

Information that could reasonably affect a party's decision to buy, sell, or set a price, such as a leaky roof, a pending lawsuit, or the seller's urgent need to move. Agents must disclose such facts honestly.

The two essential steps in forming a contract: one party proposes definite terms in an offer, and the other agrees to those terms in an acceptance. Acceptance must be communicated while the offer is still open.

The rule that certain contracts, including contracts for the sale of land and leases longer than one year, must be in writing and signed by the party to be charged before they can be enforced in court.

A contract condition that must be satisfied before a party is obligated to close, such as obtaining financing, a satisfactory inspection, or an appraisal. If it fails, the buyer may usually cancel and recover earnest money.

A deposit a buyer gives to show good faith and to bind the contract. It is usually held in a broker's trust account and later applied to the purchase price or refunded under the contract terms.

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 primary evidence of the debt; the mortgage or deed of trust secures it.

A three-party security instrument, commonly used in Mississippi, in which the borrower conveys title to a trustee to hold for the lender until the debt is paid. It allows nonjudicial foreclosure after default.

The loan amount divided by the property's appraised value or sales price, expressed as a percentage. Higher ratios mean greater lender risk and usually require mortgage insurance.

A loan provision letting the lender demand full repayment if the property is sold or transferred without the lender's approval. It prevents a buyer from simply taking over an existing low-rate loan.

The most probable price a property should bring in a competitive and open market, with both parties acting knowledgeably and without undue pressure, assuming reasonable exposure to the market.

The use of a property that is legally permissible, physically possible, financially feasible, and produces the greatest value. It guides an appraiser in choosing and applying the right valuation approach.

An appraisal method that estimates value by comparing the subject property with recent sales of similar properties, then adjusting for differences in features, condition, size, and location.

A rate used in the income approach to convert a property's net operating income into an estimate of value. Value equals net operating income divided by the capitalization rate.

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

A broker's or agent's estimate of a property's likely selling price, based on comparable listings and recent sales. It is a pricing tool and not a licensed appraisal.

The agent whose uninterrupted efforts started the chain of events that produced the sale, and who may therefore be entitled to a commission even if another agent writes the contract.

The illegal practice of persuading owners to sell quickly by suggesting that members of a protected class are moving into the neighborhood and will lower property values. Fair housing law prohibits it.

Directing buyers or tenants toward or away from particular neighborhoods based on race, color, religion, sex, disability, familial status, or national origin. It is a fair housing violation even without an explicit statement.

Refusing or varying the terms of loans, insurance, or other services for properties in certain neighborhoods, typically minority areas, regardless of the individual borrower's qualifications. It violates fair housing and fair lending laws.

The federal Real Estate Settlement Procedures Act, which requires disclosures about settlement costs, restricts certain referral fees and kickbacks, and regulates escrow accounts for federally related mortgage loans.

Local government regulation that divides land into districts and specifies allowed uses, lot sizes, setbacks, and building heights. Zoning is an exercise of the police power.

A use that was lawfully in place before a zoning ordinance took effect and does not match the current rules. It may usually continue but often cannot be expanded or rebuilt after abandonment.

Permission from a zoning board to depart from a rule such as a setback or lot-size requirement because of hardship unique to the property. It does not change the uses allowed in the district.

The state agency that licenses and regulates Mississippi real estate brokers and salespersons, enforces the license law and commission rules, and may discipline licensees for violations.

The licensed Mississippi broker who supervises a salesperson and is responsible for that salesperson's real estate activities. A salesperson must work under a licensed broker and cannot be paid directly by clients.

A fund the Commission maintains to pay court judgments obtained against licensees for certain real estate violations when the licensee cannot pay. Payments are limited by statute and by the fund's balance.

A Mississippi requirement that sellers of most residential property give buyers a written statement of known defects and other specified conditions before the sale. It does not replace inspections or professional advice.