Real Estate Glossary

Deed: A document transferring ownership or "title" to a property.  The deed is signed by the seller or the person transferring the land.

Homestead: An Estate of Homestead offers Massachusetts Homeowners up to $500,000 of protection for the value of their home.

Inspections: Before purchasing a property, most buyers engage a professional home inspector to walk through and inspect the property. The inspector will detail all building code issues and other potential problems and he or she will often make suggestions for improvements. In addition, in Massachusetts, the fire department will enter the property to certify that the smoke detectors are in proper working order.  Some Purchase and Sale Agreements are contingent on the property passing inspection.

Insurance:  In Massachusetts, homeowners are required to carry Homeowners Insurance. Prior to closing on a home purchase, proof of insurance will be required from the insurance provider.  Homeowners Insurance protects the homeowner, and typically his or her lender, from damage to the property.  Additional “umbrella” insurance policies can add protections that a basic Homeowners policy does not offer.   

Offer to Purchase: The first step in buying or selling a home, which can lock in the price and other initial terms.

Power of Attorney: A document whereby a “Principal” appoints an “Agent” to act on his or her behalf in regards to certain matters.  In a real estate context, buyers and sellers, using a Power of Attorney, often appoint an Agent to sign documents at a closing so that they don’t have to attend the closing in person.  A Power of Attorney for real estate is often limited to a particular transaction, as opposed to a “Durable” Power of Attorney, which lasts forever. 

 Purchase and Sale Agreement: The official document, signed by both buyer and seller, outlining the purchase price, deposits, terms of agreement, items included and excluded from the sale, and the expected time frame for the transaction. Contingencies and other terms are also included which outline the parties’ responsibilities in the transaction and the terms on which the transaction may be cancelled or extended.

Settlement Statement: Also referred to as a HUD (the form is published by the US Department of Housing and Urban Development), this document contains all of the final financial information about the transaction.  The HUD gives a summary of taxes paid and expenses allocated, so that all of the parties have one document that they can refer to for the specifics of the transaction.  A real estate attorney can help you to prepare the final document so that it accurately reflects what took place at closing.

Trust: A legal instrument, created by a Donor, whereby a Trustee agrees to hold property for a group of Beneficiaries according to set terms outlined by the Donor.