Westchester and Putnam Counties Glossary of Terms

Whether you are a buyer or a seller, you should understand the contract terms and how they affect you.


Nearly everyone, at sometime in life, faces the problems of buying and selling real estate. The purchase of a home is probably the largest single investment a person will ever undertake, and careful consideration should be given to the technical difficulties involved in the transfer of real estate before any action is taken.


Once you have found the house you would like to buy and have agreed on the price, you will probably be asked to review a paper. This paper may be called a Memorandum of Agreement and is usually prepared by the seller's agent; the terms of this agreement will be forwarded to the sellers attorney to prepare the contract of sale.

The contract of sale should state the parties, the purchase price, how it is to be paid, an adequate description of the property being sold, the kind of deed to be delivered, the quality of the seller's title to the property, a description of personal property and the parties' respective responsibilities to each other.

The contract should also permit the buyer to cancel the contract if financing cannot be obtained and provide for the return of payment if the sale falls through. Or, perhaps the seller may want to retain possession of the property for sometime in order to find new accommodations. If so, appropriate clauses can be included in the contract defining such rights.

These are only a few matters usually covered in the contract. However, they illustrate the variety of terms and conditions to be considered when you enter into such a transaction.


All contracts and mortgage documents for the purchase and sale of real estate costing $50,000 or less must be written in non-technical language and in a clear and coherent manner. This requirement applies only to real estate, which is, or will be, personally used by the buyer or seller.


The "title" to real estate is the right of the owner its peaceful possession and use free from the claims of others. Often, however, the exercise of that right is limited by the existing of other rights, which are called easements. To obtain electricity, sewers, telephone, etc., an owner gives the municipality or public utility the right to run its lines or pipes across his or her property to the house. Other often-encountered easements provide for drainage of surface water, or access right of way such as for a jointly used driveway. These easements must be recognized by the owner in the use of the property and considered by the buyer who is purchasing the property.

There are other ways in which the use of the owner's property may be limited. One is by restrictions in the deed; another is by local zoning law. Almost all land is subject to real estate property taxes, which if not paid, may result in the loss of title. Other debts owed on the property (i.e.- special assessment or levies) can also cause problems later on.

When you buy a home, you should be certain that you have the right to occupy it without interference and that you later will be able to sell or mortgage it without problems.


After the contract has been signed, you should satisfy yourself that the seller can convey a "marketable" title to the property to you as agreed upon in the contract of sale.

In different areas of the state, varying methods are used to make sure that the title received from the seller is marketable.

In some areas, your lawyer will make his or her own examination of the records and issue a certification indicating the finding. In other areas, your lawyer may supply you with a written title opinion based on an abstract of title (which is a simple title history) prepared by a commercial abstractor. In still other areas, your attorney may purchase a title insurance policy. Or, a combination of any of these methods may be used.

A word about title insurance--while it may give you protection against financial loss and the possible expense of defending your title in court it does not lessen the importance of your lawyer's advice. Your lawyer can advise you how to obtain title insurance and also on the terms, exceptions, and conditions of a title insurance policy.


In residential transactions there are two generally used forms of deed. The first is called a "warranty deed," which assures the buyer that the title is good against anyone who may claim a superior title. The second commonly used form of deed is the "bargain and sale deed with covenant against grantor's acts." This deed assures the buyer that the seller has done nothing to affect the title to the property through his or her own acts. In both instances, if the title insured by a title insurance company, the buyer will look to the title insured for protection against claims even through the buyer may make claims against the seller.


Remember one important point--the seller, broker, and bank in the transaction may have an attorney representing each of their interest. An attorney representing any of these parties (even though you may be charged with a fee, as in the case of the bank) is not your attorney. It is your own responsibilities, as a buyer, to seek the professional advice of an attorney to protect yourself and to insure that you get precisely what you are legally entitled to receive.


The "closing" of the purchase of your home is the transaction in which you receive all of the documents required to convey the title of your home.

At the closing these documents are reviewed to be sure that the conditions and promises of the purchase contract are fulfilled. Also at this time, the balance of the purchase price is paid to the seller.

Arrangements are made at the closing for the time when you will occupy the home. Normally, when the full purchase price is paid, the keys to the house are delivered to the buyer, who then has the right to move in immediately. However, your purchase agreement may also specify that you move in at a later date.

The important thing to remember is that buying a home is a major investment. It usually involves making payment over a period of years. In the long run, it is likely to be more economical to have professional advice (an attorney) in making the purchase, than to risk the trouble and expense that could result from not having that advice in the first place.