If you've ever tried to buy or sell a home without the help of a real estate agent or a real estate lawyer, you know how confusing it can be. Real estate contracts run for pages and pages and seem to be specifically written so that its meaning remains cloaked from the average person. Legalese cannot be learned in a day, but we can help you begin to grasp your contract by explaining some common jargon used by lawyers.
Leasehold vs Freehold
When you see the word leasehold on a real estate agreement it indicates the property in question is a rental property, or more specifically, in a leasehold agreement you are renting instead of buying the condos for sale in Toronto the contract refer to. If you are purchasing the property outright from the owner, you should have a freehold contract. Your freehold contract should be a fee simple title (straight ownership) not life estate (ownership of a property while you're alive) or freehold easement (permission to use a property without owning it).
Warranty and Quitclaim Deeds
Believe it or not, there's more than one type of deed you may get for the property you're buying. If you, with the help of brokers, are buying a property outright, you get a warranty deed where you get a guarantee that the seller has the right to sell the property to you which extends back through the history of the property. You can also end up with a deed that contains no insurance for you. It's called a quitclaim deed and it's when the owner gives up his or her property to you with no promises.
Liens and Encumbrances
Liens are claims on a property that would prevent real estate agents from selling it free and clear to someone else. Liens can arise from many situations, including failure to pay taxes and using a home as collateral in an unpaid loan. Encumbrances are like liens but do not prevent sales, only complicate them. For example, a neighbor might have the right to move cattle across your land. More about liens here
A contingency is a condition you or the company doing your real estate services must meet if you want to make sure the sale goes through. Sellers often make contracts contingent on their ability to obtain a mortgage or the house's ability to pass a home inspection. Seller contingencies are less common. A special thank you goes to our page support partner, Avalanchesearch.com.