Real Estate Glossary, Home Buying and Selling jargon
Real Estate Glossary
It occurred to me that there are few places for consumers to go to get a layman’s explanation of Real Estate Jargon, so I thought I would begin a glossary on this blog for people who are planning to buy or sell real estate. I am going to start with the A’s of course, but if you need to have a W or Z term described, just ask. The list will by no means be exhaustive and may have many important holes in it when I am done. If you find that is the case, please email me at john@mijac.com or leave a post here and if it is at all relevant to the Buying and Selling of Real Estate, I will add the term to the list! Many thanks to Hogan Real Estate School http://hoganschool.com/index.php where I learned a lot of what I know about these terms, and to Michelle Lind who’s excellent book “Arizona Real Estate” http://www.aaronline.com/documents/MLindBook.aspx is a must have resource.
Abstract of Title: A summary of the history of the property which might reveal gaps in the record of ownership (which might need to be cleared up before a sale.)
Acceleration Clause: This clause in a Loan allows the lender to declare the balance of the loan immediately due (usually attached to some condition like non-payment).
Acceptance: The moment at which an Offer becomes a Contract. When there is a Meeting of the Minds, when all parties have agreed in writing to the terms of a contract.
Accretion: This is when land grows…think of lava flows, river deposits and the like.
Acknowledgement: In Real Estate this is a formal declaration made before a Notary and part of what a Deed needs to be valid.
Acre: In the US an Acre is 43,560 square feet (no more, no less). This weird number is actually rather elegant. One square mile (a Section) contains 640 Acres, which is a great number because you can divide it up so many ways without fractions…but this is true of 43,560 too. You can evenly divide it by 2,3,4,5,6,8,9,10,11,12 and so on – what an amazing number! You can easily and equally divide up an acre thousands of ways; this makes splitting land up rather easy.
Actual Eviction: If a tenant (or Lessee) fails to perform their duties, the Lessor can sue for possession of the property (typically unpaid rent, but other terms may be used.) See Constructive Eviction.
ARM: An Adjustable Rate Mortgage is where the interest rate and payments change over the life of the loan.
Adverse Possession: So called squatter’s rights, this is the taking title to land or an interest in the property of another. The specifics may vary from area to area but generally this happens when property is possessed through Notorious, Open, Continuous and Hostile Action. So, if I were to give you permission to use my land in a certain way you could not take it, but if you had been using my land every day, Openly and with Hostile intent over a period of time and I did not try to stop you or give permission then you might have a claim to the property.
Affidavit of Affixture: In Arizona this is the document which converts a mobile home (personal and movable property) to Real Property (Immovable and a part of the land). In all states there is a process of Conversion in which personal property becomes a part of Real Property, and sometime vice versa. (lumber into a home, trees into lumber, for example).
Agency: An Agent represents the Principal, the Principal employs the agent. So, in a Real Estate transaction the Client (Seller or Buyer of a home) is the Principal and employs the Agent, which is the Designated Broker. The Real Estate Agent who is working with the Buyer or the Seller is actually the Agent of the Broker, who is her Principal (because the Broker employs the Agent). This may be confusing but it is important to know that that your Real Estate Agent is the Agent of her broker and that Broker is you real Agent.
Alienation Clause: This is the clause in a loan which allows the lender to declare the balance of the loan is due upon the sale of the property. Without this, you could (in theory) sell your property and still owe the lender .
ALTA Title Policy: This is the Title policy the lender usually requires on the sale of a financed property, though in a cash sale the new homeowner could call for this type of policy which would protect against the same additional items (over a standard owner’s policy). These items would be: Mechanics liens not yet recorded; Persons in possession of the property; and Encroachments or Errors a survey would find.
Amortization: Leveling out the payments over the life of the loan (including principal in interest).
ARP: Annual Percentage Rate .Interest, discount points and loan costs expressed as an Annual Percentage Rate. (Disclosed this way because of Regulation Z, which is the Federal Truth in Lending Act). This makes it easier for you to compare loans and lenders to figure out which one really is the best deal.
Appreciation: An increase in value for any reason. Property can appreciate due to owner efforts (commonly called Sweat Equity, also known as Earned Incriment), due to an Unearned Increment which would be a change not due to owner effort like inflation or increase in demand, or Assemblage, which is the joining of different pieces of land.
Appurtenance: The rights and improvements that are transferred with the Property (unless they are reserved or excepted. Appurtenances fall generally into two categories. The first is all that is physical and attaches to the land, like buildings, plants and trees, but not water and minerals. (Another exception to this are the emblements, which are crops or fruits, which may not transfer on a sale – imagine you buy a home in the spring and then later in the fall the Seller returns to harvest the fruit trees: it may be his right!) The second category is the so called intangible rights and privileges. These include water, mineral and air rights and any easements. As a note, and of these rights can be leased or sold by the owner of that right.
Asbestos: Asbestos is a mineral which was widely used to create fireproof materials used in housing until it was proved that tiny airborne fibers would be released when it was disturbed which often resulted in respiratory diseases. Encapsulating asbestos may ameliorate the problem, but if a homeowner knows there is asbestos in the house is must be disclosed.
Assessment: An involuntary lien on a property placed by an action of law. Examples: Government assessments for road improvements or HOA assessments for association repairs or improvements.
Assemblage: The joining of two or more pieces of land to increase their usage and/or value.
Assignment: In the Real Estate and Lending worlds, the process of selling a loan to another lender. For example, you meet a Mortgage Officer who works with a lender and you buy a house financing it with a loan from that institution. Suddenly one day you find you must now make payments to another lender: your loan has been assigned.
Avulsion: The erosion of land through natural forces.
Attorney-in-Fact: Any person authorized to represent another through a Power of Attorney.
Automatic Right of Survivorship: When at the death of one Joint Tenant that person’s interest in a property passes to another tenant(s) immediately and without Probate. There are many different ways to hold Title to a property; some allow for this path to ownership, others involve the government through probate.
Balloon Payment: This is where the term of the loan is shorter than the Amortization period, so the balance is due in a “balloon” at the end of the loan.
Bargain & Sale Deed: This is a deed which conveys the grantor’s interest but has no expressed warranty. In other words, though it implies that the grantor has the right to convey(sell or give) the property, there will not be any other guarantees (see Warrantees or Covenants)
Beneficiary Deed: This is a special deed which an owner of a property can sign and record which will not go into effect until the owner dies. Upon death the property automatically conveys to the grantee (the beneficiary).
Bequest: This is a gift of property through a will.
Bequeath: To give personal property.
Bill of Sale: Document used to transfer Personal Property (also called Chattel) , such things as cars, furniture, potted plants and anything not attached to the Real Property.
Block Busting: This is the practice of encouraging people to sell or move out of a neighborhood because people of a different race, ethnicity, religion (ets) are moving in. This practice was prohibited by the 1968 Federal Fair Housing Act.
Boot: A term from the rules governing a 1031 Exchange (which allows property owners to defer taxes when similar property is exchanged). So, Boot is an unlike property given or received in exchange (consult your tax attorney!)
Broker: As in the Agent section: The Designated Broker is the agent of the client, the clients Real Estate Agent is the Agent of the Designated Broker for the Real Estate firm.
Buffer Zone: This is an area separating to incompatibly zoned areas, think Rail yard and public park…there would likely be a buffer zone between the two.
Buyer Broker Agreement: This is a written agreement in which the Buyer of a property hires a Broker to represent and assist them in locating and purchasing property. Years ago most all Brokers worked for the Seller of a property and Buyers really had to beware. That Caveat Emptor mentality has changed and now it is understood that Buyers must have equal representation. If you are buying property I strongly suggest you hire a Buyer Broker to represent you in a transaction.
Capitalization: This is a way to find a value for income producing properties. Finding a, a value for a residential income property (a duplex or a triplex for example) is not the same as finding the value for a residence. In this case the value really is determined by deducting expenses from income and then dividing that by the rate you expect to receive on your investment. This is called the Capitalization rate or the Cap Rate.
Cap Rate: Value=Net Income/Rate For example, suppose we had a duplex that brought in $19,200 a year (each unit rents for $800 a month), but we know our expenses are a total of $4,200 a year (we know through experience that we have a month out of each year with a vacancy equaling $800. We also have $1,000 in upkeep, $400 in common area utilities and $2,000 in other expenses for a total of $4,200). We deduct that from the Gross income to get Net Income of $15,000. We divide that by the rate which would be acceptable to us for a return on investment (let’s say 12%) and we would get a value of $125,000 for the property.
CC&Rs Covenants, Codes and Restrictions These are Encumbrances (restrictions) on the use of the property put in place by a land owners, a developer or by a HOA (Home Owner’s Association). These may be found in the deed, recorded separately or even kept by an HOA as an unrecorded document.
Certificate of Elegibility: This is issued by the VA to veterans stating that the veteran is eligible or entitled to the amount of the entitlement for a VA loan.
CRV: Certificate of Reasonable Value This is the name of the VA appraisal, which is required for a VA loan (and the value MUST be at the purchase price (plus a VA appraisal will look for certain defects in a home which must be repaired and not at the Buyer’s expense prior to funding.
Chain of Title: As opposed to an Abstract of Title, the Chain of Title is a complete history of the property – or, as complete as human necessity and history can make it.
Chattel: Personal property, but specifically personal property associated with an estate. Property not affixed to land (this used to include slaves and, once, women).
Civil Rights Act 1886: (Didn’t know we were getting into history, did you?) This act, as you might guess, prohibits discrimination based on race or color and, I would say, is the foundation for all subsequent Federal Fair Housing Laws.
Client: A Client is a person a brokerage represents – whereas a customer is a person not represented by that brokerage. What is important here is the representation. If a property is listed by one Real Estate Agent and a Buyer is represented by another agent from the same brokerage, then a dual agency (or a limited representation) exists. In other words in this situation there are limits on the representation of both the Selling and Buying clients…a potential conflict of interest exists and by law, the clients must be advised of this potential conflict.
Commingling: This is the mixing of a client’s funds with those of the Broker’s business or personal accounts, and it is strictly forbidden.
Common Areas: In Condominiums or Townhouses, the shared ownership of common areas might include land and improvements, such as parking areas, stairs, pools, parks or land buffers, walls and so forth.
Community Property: This is a method of ownership or a way to take title, but in most states also includes property acquired by husband and wife (unless otherwise specified) and each spouse shares in the property 50-50. This also includes things like salary and personal property. With Real Property, both spouses must sign to convey, whereas either spouse may sign to convey personal property.
Competent Party: In Contract Law, a person must be legally capable of entering into a contract. To be competent a person must have reached their majority (be at least 18) be mentally competent and not under the influence of alcohol or drugs. Contracts entered into by incompetent people are Voidable by the incompetent person (unless also signed by a legal guardian.)
Condemnation: This is the way a governmental body can take property through Eminent Domain.
Condemnation Clause: This is a clause in a Lease which terminates the lease if the property is taken through Eminent Domain.
Conditional Commitment: If a loan is insured by the FHA (Federal Housing Administration) an appraisal is required and the purchase price must at or less than the appraisal value, if not the buyer is released from the obligation to purchase the property.
Condominium: This is a property type in which the owner receives a Deed for the unit, and may pay taxes on the unit, but participates with the other condominium owners in shared ownership of the Common Areas (these may include the land, parking, stairways, pool and other facilities.)
Confidentiality: One of the Fiduciary Duties owed by an Agent to their Client. The Agent must keep certain information confidential and this confidentiality may remain in effect for an indefinite period of time (perhaps even the lifetime of the agent.)
Consideration: One of the 6 essential elements of a Contract. Valid consideration can be anything of value including: money, real or personal property and even love and affection.
Constructive Notice: One of the elements for a valid Deed. Constructive notice is a public declaration usually performed through Recordation in the county in which the property exists.
Constructive Eviction: This is the reverse of Actual Eviction. Constructive Eviction is where the Landlord fails to perform obligations to the tenant and the tenant can terminate the lease and sue for any damages. Such obligations might be failure to provide promised utilities or keep the major systems of the residence functional.
Contingency Clause: This is a clause in the contract which makes the sale hinge upon an event. If the contingency is not accomplished then the Contract is void. Examples would be, Discovery or Inspection contingencies, or an appraisal or Mortgage contingency (If the hose won’t appraise for the sale value or if it cannot be mortgaged then the sale is void).
Contract: A contract is a legally enforceable agreement to do or not to do specific things. Certain Contract must be in writing to be enforceable (this is through the “Statute of Frauds”). Contracts that must be in writing include: Employment Agreements to hire a Broker for the purchase or sale of Real Property; Agreements to transfer or sell real property (or even an interest), and a lease for more than 1 year.
Contracts must have the following elements to be enforceable (Legally Binding.) They must be between Competent Parties; they must include Valid Consideration; there must be an Offer and an Acceptance (a meeting of the minds); there must be a Legal Object or Legal Purpose; they must be written; and there must be a proper description (in real estate, of the Property.)
Conventional Life Estate: A Life Estate is an ownership interest in a property created by one person for the benefit of another. Imagine you want your mother to have a home for the rest of her life and so you give her a Conventional Life Estate. She can live there and has all the rights of the property except, she cannot destroy the property (commit waste.) She could even sell or lease the property, however she would only be selling or leasing its use for the term of her life. Upon her death, the property reverts back to you even if sold or leased. (see Reversionary Interest)
Conversion: Conversion is the process of turning Real Property into personal property or personal into real. For example, trees are a part of the land and therefore Real Property. If the trees are harvested and turned into lumber, they are converted to Personal Property. If the lumber is used to construct a hoiuse on the property the lumber has been converted in to Real Property.
Cooperatives: In this case, a corporation holds Title to a building and a buyer purchases stock in the corporation, for which he receives shares and a lease on a part of the building. Only one tax id and tax bill, upon sale of the stock the Seller transfers his leasehold interest.
Correction Township: (See Township, Range and Section) A Township is a grid of 36 square miles (6 on a side), and this is the basis of surveyed land in the United States. However, because it is a flat grid and we live on a globe, occasionally the grid has to be adjusted. This is done by shrinking the six Sections (a section is a one by one square mile area) on the North of the township and the 6 sections on the West (making a total of 11 sections since one is shared) of the township and cutting them down to fit the map. These are called Fractional Sections.
Counter Offer: A Counter Offer is an Offer made by the receiver of an Offer (Offeree) to the sender of the Offer (the Offeror). When an Offer is made it is unilateral and is not a binding contract because the other party has not agreed to it. If there are changes the receiver of the offer wants to make (a different price or date of closing for example), the original offer is gone and it only becomes a part of a new offer from the side making the change. If any change is made in the offer (even a typo correction by the Offeree), then that original offer is not a contract at all but simply a counter offer.
Covenant: A binding agreement to do something or not to do something, made between two or more parties.
Customer: In Real Estate, a customer is a person not represented by the Agent’s Brokerage. Agents who are not representing customers still have the obligations of fairness, honesty and the disclosure of any known material defects and facts to a customer.
Dedication: Transferring Private Property to the public without any consideration (recompense).
Deed: A deed is the written instrument which conveys the ownership of a property. There are four main types of deeds, each of which grant various warranties: in order of strongest to weakest warranty, the Warranty Deed, Special Warranty Deed, Bargain and Sale Deed, and the Quit Claim Deed.
Deed Restrictions: These would include Restrictive Covenants, and Covenants, Codes and Restrictions (CC&Rs). These may be found in the deed, recorded separately or even kept by an HOA as an unrecorded document. It is important to note that deed restrictions cannot violate the law or public policy. For example, there are still many CC&Rs which restrict the purchasers of land to people of certain ethic groups, religions or that specifically excludes some protected classes of people. As this is against federal law those restrictions are not enforceable.
Defeasance Clause: This is the clause in a note (mortgage or loan), which declare the note and mortgage are defeated (or voided) when the note is paid off.
Defeasible Fee Simple: This is a kind of ownership where the owner only keeps the property as long as certain conditions are met…if they are not then the ownership of the estate is “defeated” and the property reverts to the original owner, or Grantor of the property. Imagine your rich uncle in law gives you ownership of a home so long as you remain married to his niece or nephew. At divorce the property would revert to the controlling uncle.
Deferred Maintenance: This is a kind of depreciation where there is a loss in value due to accumulated deterioration of the property.
Delivery & Acceptance: The final Step in transferring Title to a property usually is accomplished through recordation, but that is not required by law for a deed to be valid.
Demise: (Do not confuse with Devise.) This is another, more formal name for a Lease.
Depreciation: This is a loss in value to the property for any reason but primarily through: Deterioration, Functional Obsolescence, or Economic Obsolescence.
Descent: This is the transfer of property when the holder of the interest dies without a will (Intestate).
Designated Broker: This is the Broker legally in charge of a Brokerage. All agents in a brokerage are acting on the designated broker’s behalf.
Deterioration: This is the loss in value to a property through wear and tear or the effects of time such as destructive pests such as termites, rats, weather damage, erosion, water…often the effects are curable.
Devise: This is to transfer property through a will. Remember the phrase “Devise and Bequeath.” To Devise is to give Real Property, to Bequeath is to give Personal Property.
Disclaimer Deed: This deed is signed by a spouse, prior to the purchase of a property by the other spouse in order for it to become community property. Most often used when one spouse is financing and the other’s name cannot be on the title.
Disclosure: There are many types of disclosure and I would say that most all of them are good to practice. For example, a Seller should disclose everything material that they know about a property they are selling. That means one should disclose everything which might be important to a buyer (and that could be a lot). People are often afraid that disclosing might prevent the sale, but I say, you want those sales to be prevented. All properties have issues, and if a person discloses the issues, not only may that protect them legally in the future, but it engenders trust with a buyer. Buyers also must disclose anything which may prevent them from completing the sale. Agents must disclose all matters which may affect the client including any conflicts of interest, other offers on the property, Material defects they are aware of and their agency relationship status (if the agent (or their Brokerage) is already representing the Seller the agent must inform a potential Buyer of that fact, up front and at the beginning, since this implies a limited representation or Dual Agency.)
Discovery: This is the actual process of investigating the property (by the Buyer) during the Inspection Period. Only the Buyers know what may be Material to them, howev er and Agent is required to exercise reasonable skill and care. If the agent suspects problems then disclosure must be made.
Dominant Parcel: When two or more parcels of land share an easement appurtenant (which is the right across one parcel for the benefit of the other), the dominant parcel is the one benefitting from the easement. Imagine you have a piece of land and to get in and out of it you have an easement for ingress and egress across your neighbor’s property, yours would be the dominant parcel. Now imagine that he had an easement across your land for city water and power, for the easement his would be the Dominant parcel, and yours would be the subservient parcel.
Dual Agency: This is when one or more agents (licensees), from the same brokerage represent both a buyer and a seller in the same transaction. Dual Agency must be disclosed to all involved parties as there is an inherent conflict of interest and neither party can be said to have full representation.
Earned Increment: This is a kind of Appreciation, and it is often called sweat equity. Simply put, this is an increase in value do to the efforts of the owner.
Earnest Money: This is sometimes called the binder or hand money. This money is traditionally offered by a Buyer to insure the Seller knows his offer is in good faith. Interestingly, there are cases where Earnest Money is appropriate from the Seller…such as when the Sellers owe more on the property than they are likely to receive. This is a negotiated amount, there are no set rules about how much you should offer (or demand), and it is not required by law.
Easement: This is the right to use a property not belonging to you (though it is possible to own an easement.) There are four categories of easement (see below).
Easement Appurtenant: This is created by a deed or reservation. Such an easement is created to allow ingress and egress, or for utilities, access to water or other necessities. See Dominant and Subservient Parcels.
Easement in Gross: This is the kind of easement that utilities have across property for the benefit of one or more other parties. The distinction is that it benefits a person, persons or companies instead of another parcel. These are always recorded as far as I know.
Easement Personal: This kind of easement is rarely recorded and pertains to permissions or licenses a specific party has been granted with regards to another property. These are often limited by time and purpose and may be revoked at any time. They may be verbal or in writing and they may be given freely or with compensation. Examples of an easement personal include private camping, fishing and hunting permits.
(Prescriptive) Easement: An easement created by Adverse Possession. For example, a rancher walks his cattle on a neighboring property every day on the way to a stream or pasture, or a group of children cut through a property every day on their way to school. The length of time this must be done to claim the prescriptive easement as a permanent right may vary from state to state, but this has existed in land law longer than the US has been a country. However, to claim ownership or an easement through adverse possession the person or group must take a court action to demonstrate that the property was possessed in a manner that was Notorius, Open, Continuous and Adverse (Hostile).
Economic Life: This is how long an income property is expected to produce income.
Economic Obsolescence: This is a kind of depreciation. A loss in value to a property because of external factors, such as Zoning or other legislative changes, neighborhood conditions (ie a new highway or airport increases noise and congestion in the area, or an over improvement of the property for the area.
Ejectment: This is part of an actual eviction where a tenant has breached the terms of a lease. It is the legal proceeding used to regain possession of the property by the Landlord.
Emblements: These are crops or fruit which are being raised on a piece of land. Unless expressed otherwise in writing the Seller of a piece of land (or a tenant farmer), has the right to return to the land after the sale of the property and harvest these. This term can also refer to that right.
Eminent Domain: One of the four basic governmental rights, which also include Police Power, Taxation, and Escheat. Eminent Domain is the right, through the process of condemnation to take private property for public use with fair compensation.
Encroachment: An encroachment is when a structure or some improvement (like a road or a planted tree or bush), invades (trespasses) on a neighboring property. An encroachment is not equivalent to an easement and in and of itself does not constitute adverse possession.
Encumbrances: An encumbrance is any claim, restriction, right or interest that is held by one party on the property of another. For example, liens, easements and deed restrictions are all encumbrances on a property.
E & O Insurance: Errors and Omissions Insurance is similar to Malpractice Insurance for doctors, it insures Real Estate Licensees against errors the agent might make.
Endorsements: This is an addition, extension or restriction of a Title Insurance policy.
Erosion: See Avulsion. The removal of land by wind, water or other natural causes.
Escape Clause: Also called the FHA Amendatory clause, this is an addendum to the contract with allows the buyer to back out of the contract if the appraisal does not meet the agreed purchase price.
Escheat: This is one of the four basic Governmental Rights. This right allows the reversion of the property to the state if the owner dies intestate, or without a will.
Escrow: In Real Estate this is a neutral third party who holds the funds and the title and exchanges both at Close of Escrow. Opening Escrow mean opening the account which holds earnest money and other funds until all parties are paid and the title is changed and recorded.
Escrow Instructions: These are usually defined by the Contract. In a conflict between written and preprinted words the written always prevail. The Escrow company is an agent of the Buyer and the Seller and so has the job of remaining a disinterested third party go-between. They are hired by both to faithfully close the transaction.
Estate at Sufferance: Here a lease has terminated but the tenant has refused to leave, their rent is neither paid nor accepted. (if accepted the leaseholder’s right to evict could be affected.)
Estate at Will: An informal tenancy where the property owner (lessor) gives permission to use the property. Think guests for the summer or a child that returns to the nest. In this case rent is not formalized and may not be required or accepted.
Estate for Years: This is a tenancy where rent is paid for a specific time period. A lease always must have a start and ending date. Think Hong Kong, which was leased by the British from the Chinese for 99 years. This kind of leashold does not automatically renew itself.
Estate from Period to Period: This is the so-called Month to Month lease, it can also be from year to year or any other time period. It does automatically renew itself indefinitely and requires notice to terminate.
Estate in Remainder: This is an Estate where the holder (who is someone other than the grantor) gains an interest in the future. For example, you grant you parents a Life Estate (which means they get to use the property as long as they live) and let’s imagine that your sibling is living there with them taking care of them in their final years. You may give your sibling an estate in remainder which means that upon the death of your parents the life estate passes to your sibling. BTW, the person holding this kind of estate is called the Remainderman.
Estate in Reversion: In the above example (where a grantor gives a life estate), the grantor holds a Reversionary Interest. This means that upon the death of all parties who hold a life estate the grantor reacquires the property (or whatever granted interest is held.)
Estoppel Certificate: This is a certificate issued by the tenant (To Whom It May Concern) that the Lease is in full effect. This may be requested by a lender when financing a property, or it may be required during a sale. Remember that a lease takes precedence over a sale. (If you sell your residential income property, part of what you are selling are the leases, if you buy such a property, you are bound to the terms of the lease.)
Excess Land: A very odd idea for most of us, excess land is the land which is not required to fulfill the “Highest and Best Use” of a property. Think filling station on the corner of a one acre parcel. Clearly, only the corner (and parking lot) needed to fit the gas station is necessary for the functioning of that business, the remainder of the parcel would be considered excess land.
Exclusive Agency: In this kind of listing, the Broker will be paid a commission if she sells the property or if another broker sells it, but not if the owner sells. Contrast with the entry below:
Exclusive right to Sell: Here the broker is paid no matter who sells the property, this is the most common kind of listing. Note that the amount of payment may be different (or not) if: One Broker Lists and another sells, if one broker lists and sells or if the owner sells.
Executed Contract: This is when all terms in the contract have been fulfilled by all parties.
Executory Contract: Here, all terms have not been fulfilled or performed, but it is a complete contract fully signed, dated and initialed. A contract prior to closing is executory.
Expressed Contract: If, all of the terms have been stated, either in writing or verbally, then a contract is said to be expressed. (Note that in Real Estate, with the exception of a lease of less than a year, contracts must be in writing to be enforceable.)
Expressed Agency: This is the type of Agency created by the Principal, and is what we generally think of as an Agency. Contrast this with an Implied Agency.