ND Real Estate key terms

The most complete form of property ownership, giving the owner the right to use, sell, lease, or pass the property to heirs, 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 cannot permanently damage it, and the interest ends automatically at that person's death.

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

Any claim, lien, easement, or restriction that burdens a property and may reduce its value or limit how the owner can use it, even though it does not necessarily prevent transfer of title.

Co-ownership by two or more people with no right of survivorship. Each owner holds a separate, transferable share and may leave that share to heirs.

A way to gain title to land by openly, continuously, exclusively, and hostilely occupying another person's property for the period set by state law.

A property use that was lawful when it began but no longer complies with current zoning rules. It is usually allowed to continue, though expansion is typically restricted.

A legal relationship in which one person, the agent, is authorized to act on behalf of another, the principal, and owes that principal loyalty and obedience.

The heightened legal obligation an agent owes a principal, including loyalty, confidentiality, disclosure of material information, obedience to lawful instructions, reasonable care, and accounting for money handled.

Representing both the buyer and the seller in the same transaction. Because the agent cannot be fully loyal to both, it requires informed written consent and careful impartial treatment of both parties.

A state law requiring certain agreements, including contracts for the sale of real property and leases longer than one year, to be in writing and signed to be enforceable.

A response to an offer that changes its terms. It legally rejects the original offer and creates a new offer that the other party may accept or reject.

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

The most probable price a property should bring in a competitive, open market under fair sale conditions, with both buyer and seller acting knowledgeably and without undue pressure.

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

A rate that converts a property's annual net operating income into an estimate of value; dividing net operating income by the rate gives the indicated value.

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

The four components of a typical monthly housing payment: principal, interest, property taxes, and homeowner's insurance. Lenders use it to judge whether a payment is affordable.

The gradual repayment of a loan through scheduled payments that cover both interest and principal, so the balance declines over the loan term until it reaches zero.

Fees paid to the lender at closing, with each point equal to one percent of the loan amount, usually to obtain a lower interest rate.

A deed in which the seller promises to defend the buyer's title against all defects, including those that existed before the seller owned the property.

A deed that transfers whatever interest the grantor may have, without any promise that the title is good or that the grantor owns anything.

A policy that protects a buyer or lender against losses from title defects, such as forged documents or undisclosed liens, that existed before the policy was issued.

Notice of a property interest that the law presumes everyone has because the document was properly recorded in the public records, whether or not anyone actually read it.

Title that is free of unreasonable risk of litigation or defects, so a reasonable buyer would accept it; sale contracts usually require the seller to deliver it.

The chronological record of documents showing how ownership of a property passed from one owner to the next, used to verify that the seller has valid title.

The state board that licenses real estate brokers and salespersons, adopts rules, investigates complaints, and imposes discipline for violations of North Dakota license law.

A licensed broker who works under another broker's supervision rather than operating an independent brokerage, typically meeting the same education and experience requirements as a broker.

The licensed broker responsible for supervising a real estate office and the licensees who work there, including review of transaction documents, trust funds, and advertising.

A separate bank account in which a broker deposits money belonging to clients, such as earnest money or rents, and which must not be mixed with the broker's own funds.

A formal command from the Commission ordering a person or company to stop an activity that violates license law, often paired with fines or other discipline.

A listing agreement giving one brokerage the right to a commission no matter who finds the buyer, including the seller, during the listing period.

A listing agreement that pays a commission only to the brokerage that actually produces a ready, willing, and able buyer, and that lets the owner list with several brokerages at once.

A deposit a buyer gives with an offer to show good faith and financial ability; it is usually credited to the buyer at closing and may be forfeited if the buyer defaults.

Mixing client money with the broker's personal or business funds, or failing to keep client funds in a proper trust account, which is a serious license law violation.

The federal categories that cannot be used to discriminate in housing: race, color, religion, sex, national origin, familial status, and disability.

Directing prospective buyers or tenants toward or away from particular neighborhoods based on protected characteristics such as race or national origin, which is illegal.

Trying to persuade owners to sell by suggesting that members of a protected class are moving into the area and will lower property values; a fair housing violation.

A change in rules, policies, practices, or services that a housing provider must make when needed so a person with a disability has an equal opportunity to use and enjoy a dwelling.

An illegal arrangement in which a settlement service provider gives or receives something of value for referring business, such as paying an agent for sending clients to a title company.