Buying and selling real estate in Mississippi is not an everyday event for most people. Therefore, it is important to know and understand those terms contained in this and the next two blogs when buying or selling real estate.
Abstract of Title - A history of all transactions shown in the public records affecting title to a particular piece of real estate. (Also known as a "title search".)
Appraisal - A report prepared by an independent third party appraiser detailing the estimated market value of real estate based either on comparable sales (sales comparison approach), cost of construction (cost approach), or income produced (income approach), depending on which approach may be most applicable.
Chain of Title - The history of successive ownership and transfer ("links") in the title to a tract of land.
Contract (Real Estate) - A written agreement between a buyer and seller for the purchase and sale of real estate which is legally binding. It must: (1) be in writing, (2) identify the parties to the agreement, (3) identify the property, (4) state the purchase price, and (5) be signed by all the parties. It may also contain certain contingencies which must be met in order for the buyer or seller to be obligated to perform.
Covenants - Rules that tell you what you can and cannot do on or with your property which usually contain (a) building requirements (i.e., minimum square footage, type of building materials permitted, architectural review controls, set-back lines), (b) the establishment of a homeowners' association and its board of directors, and (c) sets an initial assessment amount owed by each homeowner.
Earnest Money Deposit - A good faith deposit of money made by the buyer indicating an intention and ability to carry out the contract which is generally applied toward the purchase price at closing, or which generally can be forfeited if the buyer does not comply with the contract or refunded if the seller does not comply with the contract. It is given by Buyer to Seller as consideration (i.e., something of value to make the contract enforceable).
