Real Estate Encyclopedia: Page 7

Key Takeaways

• Forbearance is an arrangement in which a mortgage servicer or lender temporarily pauses or reduces a borrower's payments during financial hardship.
• Forbearance does not erase or decrease the amount owed: every missed or reduced payment must be repaid, according to the Consumer Financial Protection Bureau (CFPB).
• Repayment options include a lump sum, a repayment plan, adding the missed amounts to the end of the loan, or a loan modification.
• Interest may keep building on unpaid or reduced amounts until they are repaid.
• Forbearance is meant to prevent foreclosure, so owners in forbearance are a different situation from owners already in default.

What Is Forbearance?

Key Takeaways

• For Sale By Owner (FSBO) is a sale in which the property owner sells without a licensed real estate agent.
• The main reason to sell FSBO is to avoid the listing agent's commission, which has traditionally been about 5% to 6% of the sale price and varies by market and negotiation.
• An FSBO seller handles pricing, marketing, negotiation, disclosures, contracts and coordination with a title company or attorney.
• Sellers must still follow state disclosure rules, so FSBO does not remove legal obligations.
• Investors can negotiate directly with FSBO sellers, which can lead to favorable deals.

What Is For Sale By Owner (FSBO)?

Key Takeaways

• Floor Area Ratio (FAR) is a zoning metric equal to the total floor area of all buildings on a plot divided by the plot's land area.
• An FAR of 2.0 means the total floor area can be twice the plot area, so a 10,000-square-foot plot allows up to 20,000 square feet of floor area.
• Municipalities set FAR limits by zoning classification, and some offer FAR bonuses for features such as affordable housing or green spaces.
• A higher FAR does not automatically mean a taller building, because the same floor area can be spread across a larger footprint.
• Developers and investors use FAR to estimate how much can be built on a site, which directly affects land value.

What Is Floor Area Ratio (FAR)?

Key Takeaways

• Flood insurance is a separate policy that covers property damage caused by flooding, which standard homeowner's insurance often excludes.
• A standard National Flood Insurance Program (NFIP) policy for a single-family home covers up to $250,000 for the building and up to $100,000 for contents, according to FEMA's FloodSmart.
• NFIP coverage usually starts 30 days after purchase, with exceptions such as a purchase made while closing, increasing, extending or renewing a mortgage.
• Federal law requires flood insurance on properties in high-risk flood zones that have a mortgage from a federally regulated or insured lender.
• Premiums depend on flood risk, elevation and building characteristics, so investors should price flood insurance before buying.

What Is Flood Insurance?

Key Takeaways

• The flood certification fee is a charge made during the mortgage process for a flood zone determination, which shows whether the property is in a FEMA-designated flood zone.
• The determination uses FEMA’s Flood Insurance Rate Maps (FIRMs), and lenders must make it under the National Flood Insurance Reform Act.
• The fee is often cited as roughly $15 to $25, but the amount varies by lender and provider.
• A property in a high-risk flood zone typically requires flood insurance when the loan is made by a regulated lender, which raises monthly costs.
• A borrower who believes a property is wrongly mapped can seek a Letter of Map Amendment (LOMA) from FEMA.

Navigating the real estate landscape in 2026 can feel overwhelming, especially for first-time homebuyers or new investors. One of the many considerations in the property acquisition process is understanding various fees and their implications. Among these, the "Flood Certification Fee" plays a crucial role for properties located in areas susceptible to flooding. This guide explains this fee and its significance in the real estate market today.

Key Takeaways

• Flipping is an investment technique where investors purchase properties, renovate them quickly and sell them for a profit.
• A flip follows five steps: market research, property acquisition, renovation, marketing and selling, and time management to limit holding costs.
• The 70% rule suggests the purchase price should not exceed 70% of the after-repair value (ARV) minus renovation costs.
• Flips are financed with traditional mortgages, hard money loans or private investors, and profit on property held one year or less is short-term gain taxed as ordinary income (IRS Topic 409).
• The main risks are market downturns, cost overruns and time pressure to sell.

Flipping properties remains a popular real estate investment strategy, offering the allure of quick profits and dynamic market engagement. As we move into 2026, flipping continues to be a significant component of the real estate landscape. This guide provides a comprehensive understanding of flipping, its importance, processes, and implications for all parties involved.

Key Takeaways

• A fixture is an item of personal property that has been permanently attached to real estate, becoming part of the property itself.
• Courts and contracts commonly look at the method of attachment, whether the item is adapted to the property, and the intent of the parties.
• Fixtures are generally included in a sale unless the contract says otherwise, so the purchase agreement should list any exceptions.
• Built-in appliances, light fixtures and anchored shelving are typical fixtures; freestanding furniture and appliances are typically personal property.
• Unclear fixture terms are a common source of buyer-seller disputes that can delay a closing.

In real estate transactions in 2026, understanding which elements of a property are included in a sale or lease is crucial. One such element that often causes confusion is the "fixture." This guide provides a comprehensive overview of fixtures, their significance in real estate, and how they affect buyers, sellers, investors, and agents.

Key Takeaways

• Fix and flip is an investment strategy where an investor buys a property, renovates it and resells it for a profit, typically within a short timeframe.
• The five core steps are property selection, financing, renovation, market analysis and a timed sales strategy.
• Common financing includes cash, loans, hard money loans and private investors; holding costs rise the longer the property sits unsold.
• Flip profits held one year or less are short-term gains, which the IRS taxes as ordinary income (IRS Topic 409).
• Main risks are market volatility, renovation overruns and delays, and holding costs if the property does not sell quickly.

In the ever-evolving landscape of real estate investment, "Fix and Flip" remains a popular strategy for those looking to capitalize on market opportunities in 2026. This guide provides a comprehensive look at the fix and flip method, offering insight into its definition, significance, processes, and practical applications. Whether you're a novice investor or a seasoned real estate professional, understanding the fix and flip strategy can enhance your investment portfolio and help you navigate the complexities of real estate markets.

Key Takeaways

• A First-Time Home Buyer (FTHB) is generally an individual or household that has not owned a principal residence in the past three years, so a former owner can qualify again.
• FTHB status unlocks programs such as down payment assistance, grants, tax credits, homebuyer education and state or local loan programs.
• Low-down-payment loans, including FHA loans, are popular with first-time buyers; some programs allow down payments as low as 3%.
• A 20% down payment is not a lending requirement for most loans; it is the usual threshold for avoiding private mortgage insurance.
• Eligibility, income limits and benefits vary by program, state and locality, so buyers should confirm each program's rules.

The journey towards homeownership is a significant milestone for many individuals and families. In 2026, specialized programs and incentives designed for First-Time Home Buyers (FTHBs) can make the process of purchasing a first home more attainable, although availability varies by state and program. This guide provides a comprehensive overview of what it means to be a First-Time Home Buyer, the benefits and challenges involved, and the steps one can take to begin this exciting venture.

Key Takeaways

• Fire insurance is property insurance that covers damage and losses caused by fire, including structural damage and, in many policies, the contents of the building.
• Fire insurance is not legally required, but most mortgage lenders require it as a condition of loan approval to protect their collateral.
• Premiums depend on the property's location, construction materials, security systems and fire prevention measures.
• Fire insurance is usually part of a homeowners policy; renters need renter's insurance for their own belongings, and landlords insure the building.
• Deductibles, exclusions (such as intentional fire damage) and the choice between replacement cost and actual cash value decide how much a claim actually pays.

Fire insurance is a critical component of real estate investment, offering protection against the financial devastation that can result from a fire. As a new property owner in 2026, understanding the role and necessity of fire insurance is essential. This guide gives beginners a comprehensive overview, from the basic definition to its practical applications and implications in the real estate market.

Key Takeaways

• A financial contingency is a contract clause that lets the buyer cancel the deal and recover earnest money if financing or the sale of the buyer's current home falls through by a set date.
• The buyer must usually give the seller written notice before the contingency period expires, and the period can be extended only by mutual agreement.
• Contingency periods are set by the contract, and the original guide cites 30 to 60 days as common.
• A mortgage contingency, a home-sale contingency, an appraisal contingency and an inspection contingency are separate protections.
• Sellers often view contingent offers as riskier, so waiving the contingency can make an offer more competitive but exposes the buyer's earnest money.

A financial contingency is a clause in a real estate purchase contract that lets the buyer withdraw without penalty if they cannot obtain the needed financing, or sell their current home, within a set period.

Key Takeaways

• An FHA-insured loan is a mortgage insured by the Federal Housing Administration, which protects the lender if the borrower defaults.
• Borrowers with a credit score of 580 or higher can put down as little as 3.5%; scores of 500 to 579 are limited to a 90% loan-to-value ratio (a 10% down payment), per HUD.
• The 2026 one-unit FHA loan limit ranges from a $541,287 floor to a $1,249,125 ceiling, per HUD's December 2025 announcement.
• Borrowers pay an upfront mortgage insurance premium (1.75% of the loan) plus an annual premium billed monthly.
• The home must generally be the borrower's primary residence, so FHA loans are not used for pure investment properties.

An FHA-insured loan is a mortgage made by an approved lender and insured by the Federal Housing Administration, which allows smaller down payments and lower credit scores than many conventional loans.

Key Takeaways

• The FHA 203(k) loan combines the purchase price and renovation costs of a home into one FHA-insured mortgage.
• The Limited 203(k) caps rehabilitation costs at $75,000 with no minimum for FHA case numbers assigned on or after November 4, 2024, according to HUD's 203(k) calculator guidance; the earlier cap was $35,000.
• The Standard 203(k) requires at least $5,000 of repairs and an FHA-approved 203(k) consultant, per HUD.
• For 2026 the one-unit FHA loan limit ranges from a $541,287 floor to a $1,249,125 ceiling, per HUD, and the total loan must fit the local limit.
• Borrowers generally must live in the home, so investors can use it only for owner-occupied one- to four-unit properties.

The FHA 203(k) renovation loan is an FHA-insured mortgage that finances both the purchase (or refinance) of a home and the cost of repairing or improving it in a single loan.

Key Takeaways

• Fee simple defeasible is ownership that continues indefinitely but can end if a stated condition or event occurs.
• The three main forms are fee simple determinable (ends automatically), fee simple subject to condition subsequent (the grantor must act to reclaim) and fee simple subject to executory limitation (passes to a third party).
• The conditions normally appear in the deed, so a title search is how buyers and investors find them.
• Conditions can reduce marketability and value, and breach can lead to litigation, so a real estate attorney should review them.
• It differs from fee simple absolute, which carries no condition or reversion.

Fee simple defeasible is a form of property ownership that lasts indefinitely but can be lost, with the property reverting to the grantor or a third party, if a condition stated in the deed is broken.

Key Takeaways

• Fee simple absolute is the most complete form of private real estate ownership: it has no time limit, no condition and no automatic reversion.
• An owner can sell, lease, mortgage, improve or leave the property to heirs, subject to zoning, building codes, taxes, liens and eminent domain.
• It differs from fee simple defeasible (ownership that can end if a condition is broken), a life estate (ownership for a person's lifetime) and a leasehold (a fixed term).
• Fee simple absolute is the default estate in most residential sales, so buyers should still check title for easements, covenants and liens.
• Owners are responsible for property taxes and upkeep, and unpaid taxes or mortgages can lead to loss of the property through foreclosure.

Fee simple absolute is the highest form of property ownership, giving the owner indefinite, unconditional rights to use, sell, lease, mortgage or bequeath the land and buildings.

Key Takeaways

• The Federal Trade Commission's Bureau of Consumer Protection (BCP) is the FTC bureau that investigates unfair, deceptive and fraudulent practices that harm consumers.
• The FTC's Mortgage Assistance Relief Services (MARS) Rule bans foreclosure-rescue and loan-modification providers from collecting fees until the homeowner has a written lender offer they accept, per the FTC.
• The FTC received about 3 million fraud reports in 2025, with consumers reporting roughly $15.9 billion in losses, according to its March 2026 testimony.
• The BCP investigates and the FTC brings the cases, so penalties and refunds come through FTC orders and federal court actions rather than the bureau acting alone.
• The BCP covers advertising and non-bank mortgage-related practices, while the CFPB oversees mortgage rules such as TILA and RESPA.

The Bureau of Consumer Protection (BCP) is the division of the Federal Trade Commission that investigates and prosecutes unfair, deceptive and fraudulent business practices, including misleading real estate advertising and mortgage relief scams.

Key Takeaways

• The Federal Trade Commission (FTC) is an independent federal agency established in 1914 to protect consumers and promote competition.
• In real estate, the FTC enforces truth-in-advertising, endorsement, data-security and antitrust rules against brokerages, lenders, investors and marketers.
• The FTC received about 3 million fraud reports in 2025, and consumers reported roughly $15.9 billion in losses, according to the FTC's March 2026 testimony to the Joint Economic Committee.
• Violations can lead to cease-and-desist orders, federal lawsuits, and monetary relief or civil penalties, depending on the law broken.
• The FTC is not the only regulator in a deal: the CFPB oversees mortgage rules, HUD enforces the Fair Housing Act, and state commissions license agents.

The Federal Trade Commission (FTC) is the independent U.S. agency that enforces federal consumer protection and antitrust law, including rules on honest advertising, data security and competition that apply to real estate marketing.

Key Takeaways

• The Federal Reserve Board (FRB), also called the Board of Governors, governs the Federal Reserve System, the central bank of the United States established in 1913.
• The Federal Open Market Committee (FOMC) sets the target for the federal funds rate and typically meets eight times a year.
• The federal funds rate does not set mortgage rates directly, but Federal Reserve policy and inflation expectations influence them, which changes borrowing costs for home buyers and investors.
• The FRB also supervises and regulates banks and monitors risks to financial stability.
• When the Fed raises rates to fight inflation, mortgage rates often rise and housing demand can cool; when it lowers rates, borrowing usually becomes cheaper.

The Federal Reserve Board (FRB) is the governing board of the Federal Reserve System, the U.S. central bank, and it helps steer interest rates, inflation and bank supervision, all of which move the real estate market.

Key Takeaways

• The Federal National Mortgage Association (FNMA), known as Fannie Mae, is a government-sponsored enterprise (GSE) that expands the secondary mortgage market by buying mortgages from lenders and securitizing them into mortgage-backed securities (MBS).
• Fannie Mae is not a government agency: it operates under a congressional charter and is regulated by the Federal Housing Finance Agency (FHFA), which has been its conservator since 2008.
• Fannie Mae buys only loans that meet its guidelines, including the conforming loan limits set by the FHFA.
• For 2026 the baseline conforming loan limit for one-unit properties is $832,750, up $26,250 from 2025 (FHFA, 2025).
• Fannie Mae guarantees payments on the MBS it issues, so investors are protected from borrower defaults on those loans.

Fannie Mae, formally the Federal National Mortgage Association (FNMA), is a government-sponsored enterprise that buys mortgages from lenders and guarantees them, giving lenders the liquidity to make more home loans.

Key Takeaways

• The Federal Housing Finance Agency (FHFA) is the regulator of Fannie Mae, Freddie Mac and the 11 Federal Home Loan Banks, created in 2008 by the Housing and Economic Recovery Act (HERA).
• The FHFA has acted as conservator of Fannie Mae and Freddie Mac since 2008, when it placed both into conservatorship during the housing crisis.
• The FHFA sets the conforming loan limits: for 2026 the baseline limit for one-unit properties is $832,750, up $26,250 (3.26%) from 2025 (FHFA, 2025).
• The FHFA sets housing goals that direct Fannie Mae and Freddie Mac to support low- and moderate-income housing.
• The FHFA does not set mortgage rates directly; it influences them through its oversight of the companies that buy and guarantee most U.S. mortgages.

The Federal Housing Finance Agency (FHFA) is the federal regulator that supervises Fannie Mae, Freddie Mac and the Federal Home Loan Banks to keep the U.S. housing finance system safe and sound.

Key Takeaways

• The Federal Housing Administration (FHA) is a U.S. government agency, created in 1934, that insures mortgages made by FHA-approved lenders.
• FHA loans typically require a minimum down payment of 3.5% with a credit score of 580 or higher, or 10% down with a score between 500 and 579.
• FHA loans require both an upfront and an annual mortgage insurance premium (MIP), which protects the lender if the borrower defaults.
• FHA loans are meant for owner-occupants; investors can use them for a two-to-four-unit property only if they live in one of the units.
• FHA loan limits vary by geographic region, and FHA loans can be assumed by a new buyer.

The Federal Housing Administration (FHA) is the federal agency that insures home mortgages so lenders will approve borrowers who have smaller down payments or lower credit scores.

Key Takeaways

• The Federal Emergency Management Agency (FEMA) is a U.S. agency within the Department of Homeland Security, established in 1979, that coordinates the federal response to disasters that overwhelm state and local resources.
• FEMA assistance generally follows a presidential disaster declaration.
• FEMA manages the National Flood Insurance Program (NFIP) and publishes the flood maps lenders use to decide whether a property needs flood insurance.
• FEMA's Individual Assistance helps households and its Public Assistance program reimburses governments for rebuilding infrastructure.
• FEMA assistance may not cover all losses, so buyers and investors in disaster-prone areas should check flood zones and insurance before closing.

FEMA is the federal agency that coordinates disaster response and recovery in the United States and runs the National Flood Insurance Program.

Key Takeaways

• The Federal Deposit Insurance Corporation (FDIC) is a U.S. government agency, established in 1933, that insures deposits at banks and thrift institutions.
• FDIC insurance covers $250,000 per depositor, per insured bank, for each account ownership category (FDIC, 2026).
• FDIC coverage is backed by the full faith and credit of the U.S. government and does not cover stocks, bonds or mutual funds.
• In real estate, FDIC limits matter for escrow and earnest money deposits that exceed $250,000 at one bank.
• Credit unions are not FDIC insured; the National Credit Union Administration (NCUA) insures them.

The FDIC is a U.S. government agency that protects bank and thrift depositors by insuring their deposits up to a set limit if the institution fails.

Key Takeaways

• Fannie Mae (the Federal National Mortgage Association, FNMA) is a government-sponsored enterprise created in 1938 that buys and guarantees mortgages so lenders have capital to make new loans.
• Fannie Mae does not lend directly to homebuyers: lenders originate the loans, then sell conforming mortgages to Fannie Mae.
• Fannie Mae pools the loans it buys into mortgage-backed securities (MBS) and sells them to investors, which spreads mortgage risk.
• The Federal Housing Finance Agency (FHFA) regulates Fannie Mae, sets the conforming loan limits, and has acted as its conservator since 2008.
• For 2026 the FHFA set the baseline conforming loan limit for one-unit properties at $832,750, up $26,250 from 2025 (FHFA, 2025).

Fannie Mae is a government-sponsored enterprise that buys and guarantees home mortgages from lenders, giving them the money to make more loans and keeping credit flowing to the U.S. housing market.

Key Takeaways

• Fair market value is the price a willing, informed buyer and a willing, informed seller would agree on in an open market, with neither under pressure.
• Appraisals, comparable sales and broker price opinions are the main ways to estimate it.
• Fair market value changes with interest rates, local supply and demand and property condition.
• Fair market value is not the same as assessed value, which a tax assessor sets for property tax, or the listing price, which a seller chooses.
• It matters for pricing, lending, taxes, divorce and estate valuations, and investor offers.

Fair market value (FMV) is the estimated price at which a property would sell between a willing buyer and a willing seller, both reasonably informed and neither forced to act, in an open market.

Key Takeaways

• Fair Market Rent (FMR) is a HUD estimate of the gross rent, including utilities, needed to rent a moderately priced unit in a local housing market.
• HUD generally sets FMRs at the 40th percentile of gross rents for standard-quality rental units in an area.
• FMRs are used to set payment standards for the Housing Choice Voucher (Section 8) program.
• HUD publishes new FMRs every year, and they take effect at the start of the federal fiscal year on October 1.
• FMR is not a cap on what a landlord may charge and is not the same as market rent.

Fair Market Rent (FMR) is the U.S. Department of Housing and Urban Development's estimate of what a household would pay in gross rent, including basic utilities, for a modest rental unit in a specific area.

Key Takeaways

• A FICO score is a three-digit credit score from 300 to 850 created by the Fair Isaac Corporation and used by lenders to judge credit risk.
• FICO weighs five factors: payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%) and credit mix (10%), according to myFICO.
• Scores of 670 to 739 are generally rated good, 740 to 799 very good and 800 to 850 exceptional.
• A higher score typically qualifies a borrower for a lower mortgage rate, and a low score can raise the rate or lead to denial.
• Borrowers have several FICO scores because bureaus and score versions differ, and checking your own score does not lower it.

Fair Isaac Corporation (FICO) is the analytics company behind the FICO score, the most widely used credit score in U.S. lending, which turns the information in a credit report into a number from 300 to 850.

Key Takeaways

• The Fair Housing Act is a federal law enacted in 1968 that prohibits discrimination in the sale, rental and financing of housing.
• It protects seven classes: race, color, national origin, religion, sex, familial status and disability, according to HUD.
• HUD enforces the Act and accepts complaints online, by phone and through its regional offices.
• Landlords must make reasonable accommodations for people with disabilities, such as permitting an assistance animal despite a no-pets rule.
• Many states and cities add protected classes, such as source of income or age, so local law can be stricter than federal law.

The Fair Housing Act is the federal law that makes it illegal to discriminate in renting, buying, financing or advertising housing because of race, color, national origin, religion, sex, familial status or disability.

Key Takeaways

• The Fair Credit Reporting Act (FCRA) is a federal law enacted in 1970 that governs how consumer reporting agencies collect, share and use consumer credit information.
• Under the FCRA, consumers can access their reports and dispute inaccurate information, and agencies must investigate disputes.
• A lender that denies credit or offers worse terms based on a credit report must give the consumer an adverse action notice.
• A business may obtain a consumer report only for a permissible purpose, such as a credit application or tenant screening.
• The FTC and the CFPB are the main federal enforcers of the FCRA, and violations can lead to damages and penalties.

The Fair Credit Reporting Act (FCRA) is a U.S. federal law that regulates consumer reporting agencies, the credit reports they produce and the businesses that use them, to promote accuracy, fairness and privacy.

Key Takeaways

• A failed listing is a property that was listed for sale and did not sell before the listing agreement ended.
• Overpricing is the most commonly cited reason, followed by weak marketing, property condition and market conditions.
• Failed listings are also called expired listings, and the owners are often motivated sellers.
• Sellers usually respond by repricing, improving marketing, fixing condition issues or changing agents.
• Investors can buy failed listings at a negotiated price after the seller has carried the property for months.

A failed listing is a home that was put on the market through a listing agreement and did not sell by the time that agreement expired or was canceled.

Key Takeaways

• The expiration of an offer is the date and time after which a real estate offer is no longer open for acceptance.
• An offer that is not accepted by its deadline lapses and the buyer is no longer bound by it.
• An offer accepted before it expires, with the acceptance communicated as the contract requires, can form a binding contract.
• A counteroffer rejects the original offer and creates a new one, which usually has its own expiration.
• Buyers and sellers can agree in writing to extend a deadline, and a buyer can generally withdraw an offer before it is accepted.

The expiration of an offer is the deadline stated in a real estate purchase offer after which the seller can no longer accept it and the offer is void.

Key Takeaways

• A real estate exit strategy is a plan for how and when an investor will sell or otherwise get out of a property to realize a profit or limit a loss.
• Common exits are flipping, buy and hold followed by a sale, a 1031 exchange, a short sale and a refinance-and-hold.
• A 1031 exchange defers capital gains tax on the sale of investment property by reinvesting in like-kind property, under IRS rules and deadlines.
• The exit should be chosen before purchase because it drives the price an investor can pay, the financing and the holding period.
• Different exits carry different tax treatment, so investors should confirm the consequences with a tax professional.

An exit strategy in real estate is the plan an investor makes, ideally before buying, for how to leave an investment: sell, exchange, refinance, or hand it off.

Key Takeaways

• An executory contract is an agreement in which one or both parties still have obligations left to perform.
• A signed home purchase agreement is executory until closing, when the deed and funds change hands and it becomes an executed contract.
• Contingencies such as inspection, financing and title review are the most common unfinished obligations, and they usually carry deadlines.
• A party that misses its obligations may be in breach, which can end the contract or lead to a legal dispute; an earnest money deposit is often at stake.
• Seller-financed land contracts (contracts for deed) and the term as used in bankruptcy law also involve "executory" obligations, but the rules differ from a standard purchase.

An executory contract is a contract in which one or more parties have not yet fully performed what they promised. In real estate, a purchase agreement between acceptance and closing is the standard example.

Key Takeaways

• An executor is an individual appointed by a will to administer the estate of a deceased person, including paying debts and taxes and distributing assets as the will directs.
• When there is no will, the court may appoint an administrator to fulfill similar duties.
• Executors often oversee probate, the legal procedure that validates the will and grants them authority to manage the estate.
• Executors hold a fiduciary duty and can be held liable for mismanaging the estate's assets or ignoring the will.
• Executors may sell estate real estate to pay debts or distribute proceeds, which is why probate sales create opportunities for investors and agents.

An executor is the person named in a will to carry out its instructions: gathering the deceased person's assets, paying debts and taxes, and distributing what remains to the beneficiaries.

Key Takeaways

• The execution date is the date a real estate contract is signed by all involved parties, which makes the agreement legally binding.
• Many contract deadlines, such as inspection periods, financing periods and the closing date, are often calculated from the execution date.
• The execution date is not the closing date: it marks when the contract is signed, while closing is when the transaction is finalized and ownership transfers.
• Changes after the execution date require written amendments signed by all parties.
• The execution date applies to every kind of real estate agreement, including leases, sales and purchase contracts.

The execution date in real estate is the date on which every party has signed a contract, so that the agreement is complete and enforceable.

Key Takeaways

• In contract law, an executed contract is one where all parties have fully performed their obligations; an executory contract still has obligations outstanding.
• In everyday real estate practice, a "fully executed" contract also means one that all parties have signed and dated, which makes it binding before closing.
• A purchase contract is typically completed at closing, when payment is made and ownership transfers from seller to buyer.
• The signed contract and closing statements serve as the legal record of the transaction and a reference point in disputes.
• A verbal agreement does not count: real estate contracts must be documented in writing to be enforceable.

An executed contract in real estate is an agreement whose terms have been completed by every party, and the phrase is also used for a contract that all parties have signed.