What is real estate?

Real estate (also called real property) refers to land and things attached to land.

​For most consumers, real estate consists of their home and the lot surrounding it. Commercial real estate may include factories, equipment, and other facilities.

​In addition to buildings and equipment, resources existing on (or under) the land, including minerals and gas, are part of real estate. Some of these components of real estate can be sold separately

What are deeds for?

What is a disclosure statement?

Deeds indicate, and are generally required to transfer, ownership of real estate.

​A deed contains the names of the old and new owners and a legal description of the property and is signed by the person transferring the property. The different kinds of deeds, such as the warranty deed, quit claim deed and grant deed, transfer different interests in property.

​For example, a seller conveying property by a general warranty deed assures good and marketable title to the buyer and will defend the tile to the property from all persons.

​In contrast, a seller conveying property by a quit claim deed conveys only what title the seller may have to the property, with no warranty as to ownership or defects in the title.

A disclosure statement is a form some states require a property seller to complete and provide to the buyer, disclosing certain defects and other information about the property. The disclosure requirements vary by state.

What are some typical restrictions imposed on property owners?

Real estate owners can't do whatever they want on their property. Federal laws provide environmental restrictions, while local ordinances control everything from noise levels to fence height.

Local law is also the usual source of zoning rules, which limit the uses of property in certain areas. State laws typically regulate who can access property and how boundaries are established and changed.

​Private agreements and other restrictions may also control property use. For example, a development may contain restrictive covenants regarding lot size, architectural design, vehicle parking, and other details.

What is joint tenancy?​

Joint tenancy is an arrangement in which more than one person owns a piece of property. Many spouses own their property as joint tenants, with equal shares in the property. Joint tenancy can include a right of survivorship, which allows the property to transfer to the other tenants when one joint tenant dies. Joint tenancy is just one way that people can hold property jointly. Tenancy in the entirety is similar to joint tenancy, except each spouse holds an undivided half of the property.

​Tenants in common can own unequal shares of property and is a common way for commercial partners and cohabiting unmarried couples to hold property. An attorney can help a real estate purchaser to determine which form of ownership is most beneficial under his or her specific circumstances.

How do mortgages work?

When a bank or other financial institution provides a loan for the purchase of real estate, a mortgage interest is created.

​The bank's loan is secured by an interest in the property. State laws interpret mortgages differently, resulting in different consequences if the borrower fails to make a payment.

Mortgages can be fixed rate (interest rates and monthly payments stay the same throughout the life of the loan) or adjustable (interest rates may vary with economic changes and monthly payments change accordingly).

​Some government programs offer special mortgage rates or programs for veterans or other individuals. Some homeowners will take on a second mortgage or a home equity loan secured by their property for home improvement or other financial needs.

All of these mortgage interests can be foreclosed if the homeowner does not meet his or her financial obligations under the loan.

What happens to a deed after it is signed and notarized?

A signed deed should be recorded, or filed, in the appropriate land records office, usually in the county in which the property is located. The office, which has a different name in different states, is typically called the County Recorder's Office, the Land Registry Office, the Registrar, or Register of Deeds.

​To record the deed, a person must deliver the signed, original deed to the land records office, and the clerk will stamp the deed with the date and officially record the transaction. The county will charge a small fee to record the deed. Recording the deed gives public notice of the change in ownership and the interests in the property.

What happens in a mortgage foreclosure?

If a homeowner fails to make mortgage payments, the lender may foreclose on the property. Depending on state law and the terms of the mortgage contract, the lender may do a statutory foreclosure without going to court or a judicial foreclosure in court.

State laws provide strict regulations regarding proper notices and opportunities to pay before the property is sold in a foreclosure sale. In several states, a homeowner may stay in his or her home during a foreclosure.

A lender may want to avoid foreclosure and its costs by working out an agreement with the homeowner, frequently accepting interest-only payments or partial payments in order to assist the homeowner.

​If your home mortgage is at risk of foreclosure, you should consult with an attorney as soon as possible.

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