RI Real Estate key terms

A legal arrangement where one person, the agent, is authorized to act on behalf of another person, the principal, in dealings with third parties, creating duties and potential liability.

The party who has an agency relationship with a real estate licensee and is owed fiduciary duties, as opposed to a customer who receives only honest and fair treatment.

A legal obligation of utmost good faith, trust, and loyalty that an agent owes to a client, including duties of care, obedience, accounting, and disclosure.

A brokerage arrangement permitted in Rhode Island where different licensees in the same firm represent the buyer and seller separately, each owing fiduciary duties only to their own client.

A situation where one licensee represents both the buyer and seller in the same transaction, requiring written informed consent from both parties and limiting certain fiduciary duties.

A licensee who assists a buyer and seller without representing either as a client, providing services like paperwork and advice while owing fairness and honesty but not full fiduciary duties.

The effort that directly leads to a successful transaction, such as introducing a ready, willing, and able buyer, which can determine who is entitled to a commission.

The state body within the Department of Business Regulation that licenses real estate professionals, investigates complaints, and enforces Rhode Island real estate law.

A Rhode Island credential allowing an individual to perform real estate brokerage activities under the supervision of a licensed broker, after completing education and exam requirements.

A Rhode Island credential allowing an individual to operate a real estate brokerage, supervise salespersons, and handle transactions independently after meeting experience and education requirements.

A separate trust account where a broker holds client funds, such as earnest money deposits, until the transaction closes or the parties agree on disbursement.

A definite proposal to enter a contract on specified terms that, when communicated to the other party, gives that party the power to create a binding agreement by accepting.

An unqualified agreement to all terms of an offer, communicated to the offeror, which creates a binding contract; any change in terms operates as a counteroffer.

A response to an offer that changes one or more terms, effectively rejecting the original offer and proposing a new one that the other party may accept or reject.

A contract condition that must be satisfied before a party is obligated to perform, such as obtaining financing or a satisfactory home inspection, or the contract may be terminated.

Money a buyer gives to show good faith and commitment when making an offer, typically held in escrow and applied to the purchase price or returned under contract terms.

A legal rule requiring certain contracts, including real estate sales agreements and leases over one year, to be in writing and signed to be enforceable in court.

A listing agreement giving one broker the right to earn a commission regardless of who finds the buyer, even if the owner sells the property personally during the listing period.

A non-exclusive listing agreement where the owner can hire multiple brokers and pays a commission only to the broker who procures a ready, willing, and able buyer.

A written contract where a buyer hires a broker to represent the buyer's interests, often specifying the term, territory, and compensation, creating fiduciary duties to the buyer.

A listing arrangement where the seller sets a minimum net price and the broker keeps any proceeds above that amount as commission, a practice that can create conflicts and is regulated in Rhode Island.

A legal document pledging real property as security for a loan, giving the lender the right to foreclose if the borrower fails to repay according to the promissory note.

A written promise by a borrower to repay a loan under specified terms, including principal, interest rate, and payment schedule, separate from the mortgage that secures it.

The amount of a loan divided by the property's appraised value or purchase price, used by lenders to assess risk and determine mortgage insurance requirements.

The final settlement of a real estate transaction where funds are exchanged, the deed is delivered, and ownership transfers from seller to buyer, often overseen by an attorney in Rhode Island.

A policy protecting a buyer or lender against losses from defects in the property's title, such as undisclosed liens or ownership claims, that existed before the policy date.

A standard federal form provided to a borrower before closing that itemizes loan terms, closing costs, and cash needed, allowing comparison with the earlier Loan Estimate.

The most complete form of property ownership, giving the owner full rights to use, sell, lease, or transfer the property with no time limit, subject only to government powers.

A legal right to use another person's land for a specific purpose, such as a driveway or utility line, without owning the land and typically binding future owners.

A form of co-ownership where each owner holds a separate, undivided share of the property, may sell or will that share, and has no right of survivorship.

A form of ownership where individuals own units within a building or complex and share common areas through a homeowners association, with separate deeds for each unit.

An opinion of a property's value prepared by a licensed appraiser using accepted methods, often required by lenders before approving a mortgage loan.

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

A broker's estimate of a property's likely selling price based on recent sales, current listings, and market conditions, prepared to help clients set a listing or offer price.

The most profitable, legally permissible, physically possible, and financially feasible use of a property, a key concept appraisers use when valuing land or buildings.

A written legal document that transfers ownership of real property from one party to another, which must be delivered and accepted and typically recorded with the town or city.

A deed that transfers whatever interest the grantor may have in the property without any warranty or guarantee of clear title, often used to clear clouds on title.

Local government rules that divide land into districts and regulate how property may be used, including building size, density, and allowed activities, under police power.

A zoning board approval allowing a property owner to depart from strict zoning rules because of unique hardship or special conditions, when the use is not contrary to public interest.

The government's power to take private property for public use after paying fair compensation, often through condemnation proceedings, as limited by the U.S. and Rhode Island constitutions.