NC Real Estate key terms

A relationship in which a broker is authorized to act for a client and owes fiduciary duties, including loyalty, obedience, disclosure, confidentiality, reasonable care, and accounting for money and property.

The legal obligation an agent owes a client to put the client's interests first; it includes loyalty, confidentiality, full disclosure, obedience to lawful instructions, reasonable care, and accounting.

A transaction in which one brokerage firm represents both the buyer and the seller, requiring informed written consent from both and careful protection of each party's confidential information.

A deposit a buyer gives to show good faith and to bind the contract; it is held in trust and applied to the purchase price or returned according to the contract's terms.

A contract condition that must be met before a party is obligated to close, such as obtaining financing or a satisfactory inspection; if it fails, the party may cancel.

A deed that conveys whatever interest the grantor may have, with no warranties of title, so the grantee receives no protection against defects or competing claims.

A policy that protects an owner or lender against covered losses from title defects existing before the policy date, such as undisclosed liens, forgery, or recording errors.

A charge against property that must be satisfied before title passes free of it; liens may be voluntary, like a mortgage, or involuntary, like unpaid taxes.

A right to use another person's land for a specific purpose, such as access or utilities, without owning it; the right usually runs with the land and binds later owners.

Personal property that has been attached to real estate so permanently that it becomes part of the realty and normally transfers with the land when the property is sold.

The most complete form of ownership in real property; it lasts indefinitely, can be sold or inherited, and is limited only by government powers and private restrictions.

Co-ownership in which each owner holds a separate share that can be sold or left to heirs; there is no right of survivorship, and shares need not be equal.

Ownership of an individual unit together with an undivided interest in common elements; the owner pays assessments to an association that maintains shared areas and often the exterior.

Local government regulation that divides a community into districts and specifies permitted uses, lot sizes, setbacks, and building heights within each district.

A use of property that was lawful when it began but no longer complies with current zoning; it may generally continue but cannot be expanded or revived after abandonment.

The loan amount divided by the property's appraised value or purchase price, whichever is lower; higher ratios typically require mortgage insurance and may carry a higher rate.

Federal law that bars discrimination in the sale, rental, or financing of housing based on race, color, religion, sex, national origin, familial status, or disability.

Information that could reasonably influence a party's decision to buy, sell, or lease; licensees must disclose known material facts and may not conceal significant defects.

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

The broker whose efforts were the main reason a transaction closed; this usually decides who is paid when a buyer or seller worked with more than one broker.

The use of a property that is legally allowed, physically possible, financially feasible, and produces the greatest value, as concluded by an appraiser.

A doctrine under which a person can gain title to another's land through possession that is open, notorious, exclusive, hostile, and continuous for the period set by state law.

The state agency created by Chapter 93A that licenses brokers, adopts rules, investigates complaints, and imposes discipline on licensees in order to protect the public.

A North Carolina license status for a newly licensed broker who must work under a broker-in-charge and complete 90 hours of postlicensing education within three years.

The North Carolina broker who supervises the licensed activities of a firm's affiliated brokers and is responsible for compliance with the Real Estate License Law and Commission rules.

A Commission-prescribed brochure and form that a North Carolina licensee must review with a consumer at first substantial contact to explain agency choices before representation begins.

The point in a North Carolina transaction when a licensee begins discussing a consumer's specific needs or property, which triggers the duty to provide the agency disclosure.

A North Carolina form on which a residential seller discloses known property conditions and defects, and on which an owners' association may disclose fees, rules, and pending litigation.

The widely used North Carolina residential resale form (Form 2-T) that sets out price, due diligence and earnest money terms, financing, inspections, and closing details.

A nonrefundable payment a North Carolina buyer gives the seller for the right to terminate during the due diligence period; it is credited to the buyer if the sale closes.

A negotiated period in a North Carolina contract when the buyer may inspect, investigate, and terminate for any reason; the buyer gets earnest money back but not the due diligence fee.

North Carolina's usual security instrument; the borrower conveys title to a trustee who holds it for the lender and may sell the property at foreclosure after default.

A North Carolina arrangement in which a firm assigns one broker to represent the buyer and another to represent the seller, so both can be clients without a dual agency relationship.

The 90 classroom hours of Commission-approved courses a North Carolina provisional broker must finish within three years after licensure, separate from annual continuing education.

North Carolina licensees must complete eight hours of approved education each year, including a four-hour Update course, before renewing their license by June 30.

A North Carolina fund, financed by license fees, that may reimburse consumers who win a court judgment against a licensee for certain acts and cannot collect it.

A person a North Carolina owner designates to receive notice from potential mechanics' lien claimants on a construction project, helping protect the owner and lender from hidden liens.

An account where a North Carolina broker must deposit client funds, such as earnest money and rents, keep them separate from personal money, and maintain records under Commission rules.