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Common Real Estate Legal Jargon: an Interview with Wade Abed of Farrish Law

By Wade Abed

Tell us a little bit about your company and its foundation.

Established in 1893, Farrish Johnson is well-known for its uncommon wisdom. Farrish Johnson is a full-service law firm with lawyers practicing in nearly all major areas of law. Every client receives the full benefit of our experience and expertise as we pursue successful outcomes to legal issues. Based in Mankato, MN, Farrish Johnson lawyers serve the entire state of Minnesota, including the Minneapolis and St. Paul Metro Area and surrounding suburbs, and southern Minnesota

What are the most common and useful terms used in The Real Estate Law business that others might not be familiar with? (Such as: absorption rate, fixed-lead/mortgage, multiple dwelling)

There are many different terms that involve real estate and they are all important, however, the more common and useful ones I think are as follows. This is not a comprehensive list because it only focuses on some of the more commons terms.

Please list and define those terms:

  • mortgage: A legal document that pledges a property to the lender as security for payment of a debt. Instead of mortgages, some states use First Trust Deeds.
  • note: A legal document that obligates a borrower to repay a mortgage loan at a stated interest rate during a specified period of time.
  • fixed-rate mortgage: A mortgage in which the interest rate does not change during the entire term of the loan.
  • adjustable-rate mortgage (ARM): A mortgage in which the interest changes periodically, according to corresponding fluctuations in an index.
  • Truth-in-Lending: A federal law that requires lenders to fully disclose, in writing, the terms and conditions of a mortgage, including the annual percentage rate (APR) and other charges.
  • title: A legal document evidencing a person's right to or ownership of a property.
  • HUD-1 settlement statement: A document that provides an itemized listing of the funds that were paid at closing. Items may include real estate commissions, loan fees, points, and initial escrow (impound) amounts. It's called a HUD1 because the form is printed by the Department of Housing and Urban Development (HUD).
  • escrow account: Once you close your purchase, you may have an escrow account with your lender. This means the amount you pay each month includes an amount above what would be required to cover your principal and interest payment.

Typically, the extra money is held in your escrow account to pay things like property taxes and homeowner's insurance.

Do you believe it's necessary your customers understand the basics of Real Estate Law prior to working with an attorney?

It is not a necessity, although, it is certainly helpful for folks to have some understanding of real estate for the big things like mortgages, notes, and payment obligation.

What are a few ways your company help teach people and walk them through the process so they are understanding of everything?

Farrish Johnson can help residential homebuyers and commercial building purchasers by being a resource that provides time to explain the process and the obligations of the buyer. We can also assist if buyer's run into trouble after they make the purchase.

Is there any other information involving real estate law terms and information that you wish to expand upon?

A good thing to do is visit the U.S. Dept. of Housing and Urban Development's website: http://portal.hud.gov/hudportal/HUD. There is a section on buying home that covers:

  • figuring out how much you can afford
  • your legal rights
  • getting a loan
  • home buyer programs
  • home shopping
  • making offers
  • inspections
  • insurance
  • closing

This information can be found here: http://portal.hud.gov/hudportal/HUD?src=/topics/buying_a_home.

What is the best way for people to reach you and or your company?

Wade H. Abed II, Farrish Johnson Law Office, Chtd., wabed@farrishlaw.com, www.farrishlaw.com, 1907 Excel Drive, Mankato, MN 56001, Phone: 507.625.2525, Fax: 507.625.4394

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