Real Estate Encyclopedia: Page 19
- The Real Estate Beginners Guide to Rate Lock in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- A rate lock is a lender's commitment to hold a specific mortgage interest rate for a set period while the loan is processed.
- According to the CFPB, rate locks are typically available for 30, 45 or 60 days, and sometimes longer.
- Extending a lock can be expensive, and the CFPB notes a lock can keep a borrower from benefiting if rates fall.
- A locked rate can still change if the application changes, such as loan type, down payment, credit score or verified income.
- A rate lock does not guarantee loan approval; the borrower must still meet the lender's requirements.
A rate lock is an agreement in which a lender holds a borrower's quoted mortgage interest rate for a fixed number of days, so the rate does not change before closing.
- The Real Estate Beginners Guide to Rate Cap in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- A rate cap is a limit in an adjustable-rate mortgage on how much the interest rate can change.
- ARMs commonly have three caps: an initial adjustment cap, a subsequent (periodic) adjustment cap and a lifetime cap.
- According to the CFPB, the initial cap is commonly two or five percentage points, the subsequent cap one or two, and the lifetime cap most commonly five.
- A 2/2/5 cap on a 5/1 ARM means the rate can rise at most 2 points at the first adjustment, 2 points at each later adjustment and 5 points over the loan's life.
- Rate caps apply only to adjustable-rate mortgages; a fixed-rate mortgage has a rate that never changes.
A rate cap is a contractual limit on how far an adjustable-rate mortgage's interest rate can increase, either at each adjustment or over the life of the loan.
- The Real Estate Beginners Guide to Radon in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- Radon is a colorless, odorless, radioactive gas from the natural decay of uranium in soil, rock and water that can build up indoors, especially in basements and crawl spaces.
- The EPA says radon is the second leading cause of lung cancer overall, the leading cause among non-smokers, and responsible for about 21,000 lung cancer deaths a year.
- The EPA action level is 4 pCi/L: homes testing at or above it should be mitigated.
- Radon mitigation usually costs from several hundred to a few thousand dollars, and the most common system draws gas from under the foundation and vents it outdoors.
- Radon disclosure and testing rules vary by state and locality, so buyers and sellers should check local requirements.
Radon is a naturally occurring radioactive gas that seeps from the ground into buildings and, with long-term exposure, raises the risk of lung cancer.
- The Real Estate Beginners Guide to Quitclaim Deed in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- A quitclaim deed transfers whatever ownership interest the grantor has in a property to the grantee, with no warranties about the title.
- A quitclaim deed does not guarantee the grantor owns anything; if the grantor has no valid interest, the grantee receives nothing.
- Quitclaim deeds are common between family members, in divorce settlements and to clear a cloud on title.
- A quitclaim deed must be recorded with the county recorder or registry of deeds to be effective against third parties.
- A quitclaim deed changes who holds title but does not by itself remove anyone from the mortgage loan.
A quitclaim deed is a deed that transfers any interest the grantor may have in a property to the grantee without promising that the title is clear or that the grantor owns anything.
- The Real Estate Beginners Guide to Quick Flip in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- A quick flip is buying a property and reselling it within a short period, often after minor improvements, for a profit.
- Quick flips work best in rising markets with strong buyer demand, and they depend on fast, low-cost renovations.
- Investors usually fund quick flips with short-term financing such as bridge loans or hard money loans, which carry higher interest rates.
- Per the IRS, a gain on an asset held one year or less is short-term and taxed as ordinary income at graduated rates.
- The main risks of a quick flip are market volatility, over-improvement and financing costs.
A quick flip is a real estate strategy in which an investor buys a property and resells it quickly, often within months, usually after cosmetic improvements, to earn a profit.
- The Real Estate Beginners Guide to Quality Control in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- Quality control in real estate is the systematic process of checking that construction, services and administrative work meet predefined standards.
- Typical quality control tools are inspections, audits, material testing, standard operating procedures, worker training and written records.
- Many quality control measures, especially inspections and code compliance, are required by building codes and local regulations.
- Quality control adds cost and time up front but can prevent costly repairs, liability and disputes later.
- Investors use quality control on renovations by inspecting work before releasing contractor payments.
Quality control is the set of checks, such as inspections, testing and documentation, that verifies finished work meets defined standards.
- The Real Estate Beginners Guide to Qualifying Ratios in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- Qualifying ratios are numerical benchmarks lenders use to judge whether a borrower can afford monthly mortgage payments; the main one is the debt-to-income (DTI) ratio.
- The front-end ratio is housing costs divided by gross monthly income; the back-end ratio is all monthly debts, including housing, divided by gross monthly income.
- The traditional rule of thumb is a 28% front-end and 36% back-end ratio, but actual limits vary by lender and loan program.
- Fannie Mae's Selling Guide sets a maximum total DTI of 36% for manually underwritten loans (up to 45% with qualifying credit score and reserves) and 50% for loans run through Desktop Underwriter.
- A borrower with a high DTI may still qualify with compensating factors such as a strong credit score, but may pay a higher interest rate.
Qualifying ratios are the percentages, mainly front-end and back-end debt-to-income, that a mortgage lender calculates to decide whether a borrower's income can support the loan.
- The Real Estate Beginners Guide to Qualifying Guidelines in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- Qualifying guidelines are the criteria lenders use to decide whether a borrower is eligible for a mortgage, including credit score, debt-to-income ratio, employment history, down payment and loan-to-value ratio.
- Guidelines differ by lender and loan program; a 620 credit score is often cited as the minimum for conventional loans.
- Fannie Mae's Selling Guide caps total debt-to-income at 36% for manually underwritten loans, up to 45% with compensating credit score and reserves, and at 50% for loans run through its Desktop Underwriter system.
- Investment properties and second homes can have stricter guidelines than primary residences.
- FHA and VA loans are government-backed programs with more lenient requirements for eligible borrowers.
Qualifying guidelines are the rules a mortgage lender applies to a borrower's credit, income, debts, assets and the property to decide whether to approve a loan.
- The Real Estate Beginners Guide to Purchase Price in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- The purchase price is the amount a buyer and seller agree on for a property.
- The purchase price is set by negotiation and is stated in the purchase agreement; it is not the same as the listing price or the appraised value.
- Lenders base a purchase loan on the lower of the purchase price or the appraised value, so a low appraisal can leave the buyer to cover a gap.
- The purchase price does not include closing costs, which are separate expenses.
- Investors compare the purchase price with repair costs and expected resale or rental income to judge a deal.
The purchase price is the amount a buyer and seller mutually agree on for a property, as written in the purchase agreement.
- The Real Estate Beginners Guide to Purchase Money Mortgage in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- A purchase money mortgage is a mortgage used to buy the property that secures it.
- The lender can be a bank or the seller; when the seller is the lender, it is a form of seller financing.
- In a seller-financed purchase money mortgage, interest rate, term, down payment and repayment schedule are negotiated between buyer and seller.
- The seller holds a lien on the property until the loan is paid off and can foreclose if the buyer defaults.
- Seller-held purchase money mortgages often carry higher interest rates than conventional loans because the seller takes on more risk.
A purchase money mortgage is a mortgage taken out to buy the property that secures it, and it is commonly seller-financed, meaning the seller lends part of the price to the buyer.
- The Real Estate Beginners Guide to Purchase Agreement in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- A purchase agreement, also called a sales contract, is the legally binding written contract that sets the price and terms of a property sale between a buyer and a seller.
- A purchase agreement states the purchase price, earnest money deposit, contingencies, closing date, property description, disclosures and both parties' signatures.
- Contingencies such as a home inspection, appraisal or financing approval let a buyer back out under the contract's terms if the condition is not met.
- A signed purchase agreement can be changed only if both parties agree to a written amendment.
- A buyer who breaches a purchase agreement can lose the earnest money deposit or face legal action, depending on the contract's terms.
A purchase agreement is the written contract in which a buyer agrees to buy, and a seller agrees to sell, a specific property at a stated price and on stated terms.
- The Real Estate Beginners Guide to Pur Autre Vie in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- Pur autre vie, Law French for "for another's life," is a life estate whose duration is measured by the life of someone other than the person who holds the estate.
- The estate ends when the measuring life ends, not when the life tenant dies.
- If the life tenant dies first, the interest can pass to the life tenant's heirs through probate for as long as the measuring person is still alive.
- When the estate ends, the property goes to a named remainderman, or reverts to the grantor if the deed names no one (Cornell Law School's Legal Information Institute).
- In 2026, pur autre vie remains an uncommon estate-planning tool that needs legal drafting, and tax treatment depends on the jurisdiction.
A life estate pur autre vie is a right to use or benefit from property for as long as a specified other person lives.
- The Real Estate Beginners Guide to Protecting Tenants at Foreclosure Act (PTFA) in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- The Protecting Tenants at Foreclosure Act (PTFA) is a federal law, first enacted in 2009, that protects bona fide residential tenants when their rented home is foreclosed.
- The PTFA requires the successor owner to give a bona fide tenant a notice to vacate at least 90 days before its effective date, and a tenant with a lease generally keeps it until the lease ends.
- The one lease exception is a purchaser who will occupy the home as a primary residence: that buyer may end the lease, but still must give the 90-day notice.
- A tenancy is bona fide only if the tenant is not the mortgagor or the mortgagor's child, spouse or parent, the lease was an arm's-length deal, and the rent is not substantially below fair market rent (or is subsidized by a government program).
- Congress repealed the PTFA's sunset in 2018 (Public Law 115-174, section 304), so the law is permanent, and state or local laws that give tenants more protection still apply in 2026.
The Protecting Tenants at Foreclosure Act is a U.S. federal law that lets bona fide tenants stay in a foreclosed rental until their lease ends and guarantees them at least 90 days' notice before they must leave.
- The Real Estate Beginners Guide to Prorations in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- Prorations are adjustments on the closing statement that split recurring expenses, such as property taxes, homeowner association fees and utilities, between buyer and seller by the time each owns the property.
- Prorations are usually calculated with a daily rate: the total expense divided by the number of days in the billing period, multiplied by each party's days of ownership.
- On a $3,650 annual tax bill, the daily rate is $10, so a seller who owned the property for 196 days owes $1,960 and the buyer's 169 days cost $1,690.
- The proration date is often the closing date, but the specifics can be negotiated in the purchase contract and local custom varies.
- In 2026, prorations remain a standard line on closing statements, and errors found after closing may be corrected by agreement.
A proration is a closing-statement adjustment that divides a recurring property expense between buyer and seller according to how many days each one owns the property.
- The Real Estate Beginners Guide to Property Turnover in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- Property turnover is the cycle in which a rental property goes from occupied to vacant and then rented again.
- High turnover raises costs for advertising, renovations and lost rental income during vacancy periods.
- A high turnover rate can point to problems with the property or its management, while a low rate can indicate tenant satisfaction and stability.
- Turnover rates vary by market; the original guide cites a range of about 20% to 50% a year.
- In 2026, landlords still cut turnover costs with fast maintenance, strong tenant screening, clear leases and responsive service.
Property turnover is the process of a rental unit becoming vacant when a tenant leaves and being prepared, marketed and leased to a new tenant.
- The Real Estate Beginners Guide to Property Squatter in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- A property squatter is an individual who occupies a property without legal title, right, or lease, typically without the owner's permission and without paying rent.
- Under specific legal conditions, a squatter can potentially claim rights through adverse possession, which generally requires continuous and open occupation for a set period.
- Squatting and adverse possession laws vary widely by jurisdiction, including the required timeframe.
- Owners generally need to use legal eviction proceedings to remove squatters, which can be time-consuming and costly.
- In 2026, investors weigh squatting risk when buying vacant properties, because unauthorized occupants can delay a sale, cause damage and lower value.
A property squatter is a person who lives in or uses a property that they do not own or rent and have no permission to occupy.
- The Real Estate Beginners Guide to Property Manager (PM) in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- A property manager (PM) oversees the daily operations of a property: maintenance, leasing, rent collection and tenant relationships.
- A PM acts as the intermediary between property owners and tenants, following the owner's directives and local property laws.
- A landlord owns the property, while a PM manages it on the owner's behalf.
- Fees commonly run around 8-12% of monthly rental income and vary by market and contract; licensing requirements depend on the jurisdiction.
- In 2026, PMs remain essential for investors who do not live near their properties.
A property manager is a person hired to run a property's day-to-day operations for its owner, including leasing, maintenance, rent collection and tenant communication.
- The Real Estate Beginners Guide to Property Management Company in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- A property management company is a professional service provider that oversees the day-to-day operations of real estate on behalf of property owners.
- Its core services are tenant management, maintenance and repairs, rent collection, legal compliance and financial reporting.
- Fees are typically a percentage of the monthly rent collected or a flat fee, and they are defined in a management agreement.
- Hiring one saves owners time and adds expertise, but it costs money and means giving up some direct control.
- Hiring a property management company is not obligatory, but it is most useful for owners who lack the time, expertise or local presence to manage a rental themselves in 2026.
A property management company is a business that an owner hires to run a rental property's daily operations, including tenants, repairs, rent and reporting, in exchange for a fee.
- The Real Estate Beginners Guide to Property Inspection in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- A property inspection is a systematic, detailed examination of a property's physical condition by a qualified professional, ending in a written report.
- Inspections generally last 2 to 4 hours, and the buyer typically pays, though this can be negotiated.
- An inspection is generally not legally required, but it is highly recommended, and it is often written into purchase agreements as a contingency.
- Inspections cover visible and accessible areas and may not detect hidden problems, so they reduce risk but do not remove it.
- An inspection differs from an appraisal: the inspection assesses condition, while the appraisal estimates market value.
A property inspection is a professional examination of a building's condition, covering systems such as HVAC, plumbing and electrical, that produces a written report of defects, safety issues and maintenance concerns.
- The Real Estate Beginners Guide to Property Classifications in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- Property classifications categorize properties by usage and characteristics: residential, commercial, industrial and mixed-use.
- A property's classification affects how it is valued, taxed and regulated, and the rules vary by jurisdiction.
- Zoning laws, building codes, tax assessment and development guidelines all depend on classification.
- A classification can be changed, but only through a formal process with local zoning authorities.
- In 2026, investors still use classifications to judge the risks, returns, financing options and insurance costs of different property types.
A property classification is the category, such as residential, commercial, industrial or mixed-use, that a property is assigned to based on how it is used.
- The Real Estate Beginners Guide to Property Appreciation in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- Property appreciation is the increase in the market value of a property over time.
- Appreciation is driven by economic factors, location, market demand, improvements and government policies such as zoning and infrastructure projects.
- Appreciation does not guarantee a profit: market volatility and downturns can lead to depreciation.
- Appreciation is generally taxed as a capital gain when a property is sold, but the IRS lets a homeowner who meets the ownership and use tests exclude up to $250,000 of gain on a main home ($500,000 on a joint return).
- The average appreciation rate varies widely by location and market conditions, so investors in 2026 should check local trends rather than rely on a national figure.
Property appreciation is the rise in a property's market value over time, measured as the difference between what it is worth now and what it was worth when it was bought.
- The Real Estate Beginners Guide to Proof Of Funds in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- Proof of Funds (POF) is a document that verifies a buyer has the money to complete a real estate transaction.
- POF is shown through bank statements, a letter from a financial institution, or an investment portfolio summary, and it is typically no older than 30 days.
- POF shows available funds; a pre-approval shows a lender's willingness to finance a buyer, so the two are not the same.
- Sellers or their agents may contact the issuing institution to verify a POF document, and false or misleading POF can lead to legal disputes and breach of contract.
- In 2026, POF is still most often requested in competitive markets, cash purchases and real estate auctions.
Proof of Funds is a document, usually a bank statement or a bank letter, that shows a buyer has enough available money to close a purchase.
- The Real Estate Beginners Guide to Promissory Note in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- A promissory note is a written promise by a borrower to repay a specified sum to a lender, either on demand or on a set date.
- In real estate, the note records the loan terms, while the mortgage or deed of trust secures the loan with the property.
- A valid note states the principal amount, interest rate, maturity date and issue date, and is signed by the borrower.
- On a $250,000, 30-year loan at 4%, the monthly principal-and-interest payment is about $1,194 and total interest is about $179,700.
- Promissory notes can be negotiable, so a lender can sell the note to another party.
A promissory note is a signed document in which a borrower promises to repay a loan, with interest, on stated terms.
- The Real Estate Beginners Guide to Probate in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- Probate is the court-supervised legal process of administering a deceased person's estate: validating the will, paying debts and taxes, and distributing assets.
- Real estate does not pass to heirs automatically; the executor must be authorized by the probate court before the property is transferred or sold.
- Probate often takes several months to years, and legal and court fees reduce the estate's value.
- Probate proceedings are public, and some estates avoid probate through living trusts, joint ownership or beneficiary designations.
- Probate itself is not a tax; the IRS federal estate tax basic exclusion amount is $15,000,000 for people who die in 2026.
Probate is the court process that proves a deceased person's will, appoints someone to manage the estate, pays its debts and distributes the remaining assets to heirs.
- The Real Estate Beginners Guide to Private Mortgage Insurance (PMI) in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- Private mortgage insurance (PMI) protects the lender, not the borrower, if the borrower stops making payments, according to the Consumer Financial Protection Bureau.
- PMI is generally required on a conventional loan with a down payment of less than 20% of the purchase price.
- By law, a servicer must automatically end PMI when the loan balance is scheduled to reach 78% of the home's original value, if the borrower is current; the borrower can request cancellation at 80%.
- PMI typically costs 0.3% to 1.5% of the original loan amount per year.
Private mortgage insurance (PMI) is insurance that a lender generally requires on a conventional loan with less than 20% down, protecting the lender if the borrower defaults.
- The Real Estate Beginners Guide to Private Money Lender in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- A private money lender is an individual or non-institutional entity that lends its own funds, usually secured by real estate.
- Private money loans are typically short-term, from a few months to a few years, and often fund fix-and-flip, bridge and auction purchases.
- Interest rates are generally higher than bank rates, often ranging from 8% to 15%.
- Funding can occur in a matter of days, compared with weeks or months at a bank.
- Private lenders must follow applicable state and federal lending laws, and borrowers risk foreclosure if they cannot repay.
A private money lender is an individual or company that lends its own money to a borrower, usually secured by a property, outside the traditional banking system.
- The Real Estate Beginners Guide to Principle of Substitution in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- The Principle of Substitution says a buyer will pay no more for a property than the cost of an equally desirable substitute available without costly delay.
- It underlies the sales comparison approach, in which an appraiser compares a property with similar recent sales.
- Two nearly identical homes listed at $350,000 and $330,000 will draw buyers to the cheaper one when condition and features match.
- Unique, one-of-a-kind properties may not follow the principle strictly because no true substitute exists.
The Principle of Substitution is a real estate valuation rule stating that a property's value is limited by the price of a similar, equally desirable property that a buyer could acquire instead.
- The Real Estate Beginners Guide to Principle of Regression in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- The Principle of Regression says a higher-valued property tends to lose value when it is surrounded by lower-valued properties.
- It is the inverse of the Principle of Progression.
- Appraisers and agents evaluate regression through neighborhood assessment and comparative market analysis.
- Over-improved homes, such as a luxury home in a declining neighborhood, are most exposed.
The Principle of Regression is a real estate valuation rule stating that the value of a better property is pulled down by the presence of lesser properties nearby.
- The Real Estate Beginners Guide to Principle of Progression in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- The Principle of Progression says a lower-priced property tends to rise in value when it sits among higher-priced properties.
- Appraisers apply it through comparative sales analysis, since nearby higher-value sales influence the buyer's perception of the lower-priced home.
- It is the opposite of the Principle of Regression, where a higher-priced property loses value near lower-priced ones.
- The gain is a tendency, not a guarantee, and it can also bring higher property taxes.
The Principle of Progression is a real estate valuation rule stating that a lower-valued property is worth more when it is located among higher-valued properties.
- The Real Estate Beginners Guide to Principle of Highest and Best Use in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- The Principle of Highest and Best Use says a property's value is maximized by the use that is legally permissible, physically possible, financially feasible and maximally productive.
- The four tests are applied in order: a use that fails an earlier test is dropped before the later ones are considered.
- Appraisers, developers and investors use the analysis to decide between uses such as residential, commercial or mixed-use.
- Zoning controls what is legally permissible, so a zoning change can change a property's highest and best use.
Highest and best use is the most profitable use of a property that is legally allowed, physically possible and financially feasible.
- The Real Estate Beginners Guide to Principle of Conformity in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- The Principle of Conformity holds that a property's value is highest when it fits the size, style, condition and use of its surrounding neighborhood.
- Appraisers consider conformity when valuing a home, which affects mortgage approvals and sale prices.
- Homeowners associations and historic-district rules often enforce conformity through written guidelines.
- A home that clashes with its neighborhood can lose marketability, as in a contemporary house built on a street of 1980s colonial homes.
- Conformity is related to, but different from, the principles of progression and regression.
The Principle of Conformity is a real estate valuation rule stating that a property reaches its highest value when it is similar to the properties around it.
- The Real Estate Beginners Guide to Principal, Interest, Taxes, and Insurance (PITI) in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- PITI stands for principal, interest, taxes and insurance, the four parts of a monthly mortgage payment.
- Principal and interest repay the loan; taxes and homeowner's insurance are often collected by the lender in an escrow account.
- On a $300,000 loan at 4%, principal and interest is about $1,432 a month; adding $300 in taxes and $100 in insurance gives a PITI of $1,832.
- Lenders compare PITI to a borrower's income when deciding whether a mortgage is affordable.
- PITI can rise even on a fixed-rate loan, because property tax and insurance amounts change.
PITI is the total monthly payment on a mortgage: the principal and interest on the loan, plus property taxes and homeowner's insurance.
- The Real Estate Beginners Guide to Principal Balance in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- Principal balance is the amount a borrower still owes on a loan, excluding interest and other charges.
- Interest is charged on the remaining principal balance, so every dollar of principal paid down lowers future interest.
- On a $300,000, 30-year loan at 4%, the monthly principal-and-interest payment is about $1,432, and the principal balance is still about $271,300 after five years.
- Principal payments are not tax-deductible; only the interest portion of a mortgage payment may be.
- A principal balance above a property's market value is negative equity.
Principal balance is the unpaid part of the amount borrowed on a loan, not counting interest, fees or escrow.
- The Real Estate Beginners Guide to Primary Residence in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- A primary residence is the main home where a person lives most of the year, as opposed to a second home or an investment property.
- A person can have only one primary residence at a time.
- Selling a primary residence can exclude up to $250,000 of gain ($500,000 for joint filers) if the owner meets the IRS ownership and use tests of 24 months in the five years before the sale (IRS Topic 701).
- Lenders generally offer better terms on primary residences than on investment properties, and falsely claiming a home as a primary residence on a loan can be treated as fraud.
A primary residence is the home where a person or family actually lives as their main dwelling, and it is the home that qualifies for owner-occupant financing and tax benefits.
- The Real Estate Beginners Guide to Price Fixing in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- Price fixing is an agreement among competitors to set prices at a certain level instead of competing.
- In real estate, the classic example is brokers agreeing on uniform commission rates.
- Real estate commission rates are negotiable and not set by law.
- The NAR settlement of the buyer-broker commission lawsuits led to MLS rule changes effective August 17, 2024.
Price fixing is an agreement between competitors to set, raise or hold prices rather than let competition decide them.
- The Real Estate Beginners Guide to Prescriptive Easement in 2026 Nov 6, 2026 Austin Beveridge Read article →
Key Takeaways
- A prescriptive easement is a legal right to use another person's land, acquired through continuous, open and adverse use for a period set by state law.
- The required period varies by jurisdiction and often ranges from 5 to 20 years.
- The use must be without the owner's permission; permission, such as a license, defeats the claim.
- A prescriptive easement gives a right to use the land, not ownership, which separates it from adverse possession.
A prescriptive easement is a right to use part of someone else's property that a person earns by using it openly and without permission for a long period.