A Guide To Selling A Home
Effective home selling in North America requires real estate know-how, particularly when you make the decision to sell your home on your own. Here are some key terms that you should be familiar with:
A 1031 Exchange is a tax aspect of the Internal Revenue Code that allows a real estate investor who meets the requirements to sell their property and put off paying taxes on the gain. Through the exchange, the owner can dispose of the investment property, use equity to get replacement investment property, defer the capital gain tax, and influence their equity into the replacement property.
A Breach Of Contract happens when a party violates a direct obligation or fails to perform provisions in the contract agreement. In the world of real estate, a contract breach occurs most often in two ways The first is to fail to perform in the property listing agreement between the broker and the seller. Second, a violation in the terms in the sales contract between the buyer and seller.
Now there are contingencies in real estate contracts that must be fulfilled by the buyer and seller, or find a way to void the contract. For example, a current home sales contingency is often used when a buyer is making an offer on a home before selling the existing home. The buyer may need to sell the present home before being qualify and afford the purchase. This means that the offer will be contingent upon the sale of the current home. Home inspections, financing, and appraisal are among the key standard contingencies.
The Alienation Clause Due on Sale Clause is the specific verbiage in a mortgage or deed which asserts the lenders option to force that the balance of the secured debt becomes immediately due and payable if the property is sold by the borrower, thus preventing the homeowner/borrower from assigning the debt without the lenders approval. It comes from the term alienate, which means to transfer the title to a property from one party to another.
Exclusive Right To Sell is a very common type of real estate listing agreement. A specific broker is given the exclusive right and authorization to market the sellers property. A key to this agreement is that if the property is sold while the listing is in effect, the seller must pay the broker a commission regardless of who sells the property. So this type of listing agreement gives the best opportunity for brokers to get a commission. This is also known as exclusive agency listing.
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