OH Real Estate key terms

A legal arrangement in which a real estate brokerage acts for a buyer, seller, or landlord and owes that person fiduciary duties. Ohio licensees typically create it with a written representation agreement.

The obligation of an agent to put the principal's interests first and to act with loyalty, obedience, disclosure, confidentiality, reasonable care, and accounting. Breach can lead to discipline and civil liability.

A brokerage representing both the buyer and the seller in one transaction. Ohio allows it only after both parties give informed written consent, and the brokerage must remain neutral on price and terms.

An Ohio practice in which the broker assigns one licensee to represent the buyer and another to represent the seller within the same brokerage, preserving undivided loyalty for each client.

A client is a party the brokerage represents and owes fiduciary duties to; a customer is a party who receives services without representation, such as honesty and fair dealing, but not loyalty.

Facts learned about a client during the agency relationship that could weaken the client's bargaining position if revealed, such as financial limits or motivation to sell. Ohio licensees must protect it even after the agency ends.

A fact that could influence a reasonable person's decision to buy, sell, or lease property. Ohio licensees must disclose known material facts to all parties and must not conceal them.

The broker whose efforts started an unbroken chain of events that produced a completed sale, which generally supports a commission claim. It is often the deciding issue when brokers dispute a commission.

A contract that has not been fully performed by one or more parties. A purchase agreement stays executory until closing, when it becomes an executed contract.

A condition written into a contract that must be met before a party must close, such as obtaining financing or a satisfactory inspection. If it fails, the party may cancel and recover earnest money.

A buyer's deposit showing good faith and binding the purchase agreement. In Ohio it is usually held in the broker's trust account and applied to the price or returned according to the contract.

A legal rule that requires certain contracts, including real estate purchase agreements and leases longer than one year, to be written and signed by the party to be charged.

A reply to an offer that changes its terms. It rejects the original offer and creates a new offer that the other party may accept, reject, or counter again.

An agreement in which a property owner gives a buyer the exclusive right to purchase within a set period for a stated price, usually for consideration. The owner may not sell to anyone else meanwhile.

An Ohio agreement in which a buyer takes possession and pays the price over time while the seller keeps title until the final payment. Ohio law sets disclosure and recording requirements.

A contract clause that sets a predetermined amount, often the earnest money, to be paid if a party breaches. Courts enforce it only if it reasonably estimates anticipated loss.

A statutory form Ohio sellers of most residential property complete to disclose known defects and conditions. It is not a warranty and does not replace the buyer's own inspections.

A written instrument that makes real property security for a loan and gives the lender a lien the lender can foreclose if the borrower defaults. In Ohio the borrower keeps title.

The borrower's written promise to repay a loan with a stated interest rate and schedule. It evidences the debt, while the mortgage gives the lender security.

A legal claim against property that must be paid or released before the owner can transfer clear title. Mortgages, tax liens, and mechanic's liens are common examples.

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

The four parts of a typical monthly housing payment: principal, interest, property taxes, and homeowners insurance. Lenders use this figure to judge whether a borrower can qualify.

An account a lender uses to collect part of each monthly payment and pay property taxes and insurance when due. It protects the lender's collateral.

The yearly cost of credit that includes interest plus certain loan fees such as points and origination charges. Federal truth-in-lending rules require lenders to disclose it.

A fee equal to one percent of the loan amount, paid at closing to lower the interest rate or cover origination costs. Discount points are typically paid by the buyer.

The legal process in which a lender sells mortgaged property to satisfy a defaulted loan. In Ohio it is handled through court, and borrowers may have redemption rights.

A bank account a broker uses to hold other people's money, such as deposits and rents, separate from business funds. Ohio requires detailed records of all trust transactions.

Mixing client money with a broker's personal or business funds. It violates Ohio license law even when every cent is later accounted for.

Using client funds for the broker's own purposes without authorization. It is more serious than commingling and can bring criminal charges as well as license revocation.

A licensee authorized to run a real estate business, supervise salespersons, hold trust funds, and receive commissions. Ohio requires a broker's license for these activities.

A licensee who performs real estate services only under a sponsoring broker's supervision and may not accept compensation directly from clients. Active status requires a sponsoring broker.

A licensee's study of recent sales, pending sales, and active listings to suggest a listing or purchase price. It is not an appraisal and must not be presented as one.

The use of a property that is legally allowed, physically possible, financially feasible, and most productive, producing the highest value. It may differ from the current use.

A valuation method that estimates value by comparing the subject to similar properties that recently sold, adjusting for differences in location, size, condition, and features.

A rate that converts a property's net operating income into an indication of value. It is calculated by dividing net operating income by sale price or value.

The fullest ownership interest in real property, lasting indefinitely and allowing the owner to use, sell, or give the property, subject only to government powers.

Co-ownership in which each owner holds a separate, possibly unequal share with no right of survivorship, so a deceased owner's share passes to heirs.

A right to use another person's land for a specific purpose, such as a driveway or utility line. It is an encumbrance that usually runs with the land.

Any claim, lien, easement, or restriction that burdens title to or use of real property and may lower its value. It does not always prevent a transfer.

In appraisal, any loss in property value from physical deterioration, functional obsolescence, or external obsolescence. It is measured as of the valuation date.