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CONTRACT A legal agreement between competent parties who agree to perform or refrain from performing certain acts for a consideration. In real estate, there are many different types of contracts, including listings, contracts of sale, options, mortgages, assignments, leases, deeds, escrow agreements, and loan commitments, among others. DEALER An IRS designation for a person who regularly buys and sells real property. HEIR A person who inherits under a will or a person who succeeds to property by the laws of descent if the decedent dies without a will (intestate). CEILING The maximum allowable interest rate of an adjustable rate mortgage. AMORTIZATION The gradual repayment of a debt by means of systematic payments of principal and interest over a set period, where at the end of the period there is a zero balance. PARCEL A specific portion of a larger tract; a lot. WEAR AND TEAR The gradual physical deterioration of property, resulting from use, passage of time and weather. Only property subject to wear and tear is depreciable. |
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