Glossary.
Plain-English meanings of words used in our contract and on this site. Section numbers refer to our standard purchase agreement. Where this page and the contract differ, the contract you sign controls. This isn't legal advice.
- Assignment
When we transfer our purchase contract to another buyer, who then buys your property at the same price and terms. Our contract allows it (Section 13), and we may be paid a fee. If we assign to an affiliated company (a company with the same owner as Star Thing LLC), we tell you in writing before closing. In Idaho, we buy in our own name and don't assign.
- Assignee
The buyer who takes over our contract by assignment. Once the assignee signs a written agreement to take over our obligations and we send you a copy with its legal name and contact details, it takes our place and you deal with it directly (Section 16(d)).
- Affiliated company
A company with the same owner as Star Thing LLC. We may buy with it, or pass a contract to it; if the buyer at closing is our affiliate, we tell you in writing before closing.
- "And/or assigns"
The words after our name in the buyer line of our contract. They mean we may pass the contract to another buyer (assign it), who then buys at your price and dates.
- Wholesaler
A buyer who signs a purchase contract intending to assign it to someone else for a fee. Some states use this word in their laws, for example Wisconsin's 'real property wholesaler'.
- Loan (financing) contingency
A clause that lets a buyer cancel if their loan isn't approved. Our contract doesn't have one: our purchase doesn't depend on a loan.
- Escrow
Money or papers held by a neutral party, usually the title company or closing attorney, until closing or until the contract says who gets them.
- Assumption
When a new buyer signs an agreement to take over our obligations under your contract after we assign it.
- Prorated
Split by date. Property taxes and rents for the year are divided at the closing date, so each side pays for its own days.
- Equitable interest
A buyer's rights under a purchase contract before closing: the right to buy the property, not ownership of it. Our Texas contract puts it this way: "Buyer's interest is only an equitable interest under this contract; Buyer does not hold legal title to the Property."
- Earnest money
Money a buyer deposits to show it's serious. In our contract (Section 2) the amount, if any, is written in each contract; it is held by the closing agent, never by us, and credited to the price at closing. If the contract ends during the inspection period, it goes back to us.
- Option fee
Where a contract shows one (Section 3), a payment we make to you through the closing agent within 3 business days after signing, once the closing agent has checked your ID, in exchange for the inspection period. You keep it even if we cancel, and it is credited to the price at closing.
- Inspection period
The 14 business days after the contract is fully signed (Section 4), not counting weekends and federal and state holidays. We check the property in person or remotely: for example a visit by a local inspector or contractor, a video walkthrough, photos, county and title records, and flood, zoning and aerial maps. A possible buyer of the contract may also do a walkthrough, with 24 hours' notice to you. We also check title and road access. If we don't confirm in writing that we're moving forward by 11:59 PM local time on business day 14, the contract ends on its own. We may also cancel in good faith before then.
- Effective Date
The date the last party signs the contract (Section 18(b)). The contract becomes binding only when every seller and Star Thing LLC have signed it and it has been delivered.
- As-is
You sell the property in its current condition, with no repairs (Section 9). The contract still requires clear title. We prefer the property vacant and clear of trash, but it isn't required; its condition is taken into account in our price.
- Closing agent, title company, closing attorney
The company or attorney that handles the closing: it checks title and each seller's ID, holds any earnest money, pays off any mortgage and liens from your proceeds, and records the deed. Depending on the state, it is a title company, an escrow company or a closing attorney; in Georgia, a Georgia-licensed closing attorney. We pay its fees (Section 11).
- Probate, succession
The court process for handling a person's property after they die, including who may sell it. Louisiana calls it succession. Rules differ by state; talk to a probate attorney in your state.
- Letters testamentary, letters of administration
Court papers that appoint the person who may act for an estate. Letters testamentary appoint an executor named in a will; letters of administration appoint an administrator, usually when there is no will. Title companies usually ask for a certified copy.
- Heirship affidavit
A sworn statement listing the heirs of a person who died. Some states and title companies accept one, in some situations, instead of a full probate. Ask a probate attorney whether it applies to you.
- Personal representative
The executor or administrator a court appoints to handle an estate. When one has been appointed, that person usually signs for the estate.
- Liens
Legal claims against the property for a debt, such as a mortgage, unpaid taxes or a court judgment. Our contract requires clear title, and any liens are paid from your proceeds at closing (Sections 6 and 11).
- Back taxes
Property taxes that are past due. Like other liens, unpaid taxes are paid from your proceeds at closing. Current-year property taxes are prorated to the closing date (Section 11).
- Payoff
The exact amount needed to pay off a loan or lien in full on the closing day, shown on a payoff statement from the lender. The closing agent pays it from your proceeds.
- FIRPTA
If a seller isn't a U.S. person for tax purposes, federal law (FIRPTA) may require part of the price to be withheld for the IRS at closing. Our contract refers to 26 U.S.C. 1445.
- Lead-based paint disclosure (homes built before 1978)
For a home built before 1978: the federal lead-based paint disclosure (Exhibit C) and the EPA pamphlet, before you sign the contract. Federal law (42 U.S.C. 4852d) requires it for most homes built before 1978; our contract (Section 10) lists the exceptions.
- Seller disclosure form
A state form on which the seller reports what they know about the property's condition. Some states require one before the contract or before an offer, unless the sale is exempt. Your state's page and our state requirements tool show yours.
- Wholesaler notice
A written notice some states require, telling the seller that the buyer may assign the contract to someone else for a fee. Where your state requires one, you sign it before our contract; your state's page shows it word for word.
- Cancellation period
A time after signing during which a state's law lets the seller cancel. Some states give sellers extra notices and cancellation rights, such as Louisiana, where you can cancel for any reason for at least 5 calendar days after signing. If your state does, they apply to your sale.
- Specific performance
A court order that makes a party go through with a sale. Under Section 16(b), if a seller fails to close, we may ask a court to order the sale only if we deposited earnest money or paid an option fee. If we fail to close, your remedy is to cancel and keep any option fee and earnest money (Section 16(a)), unless your state's law gives you more.
- Release (Section 16(d))
After we assign, once the assignee signs a written agreement to take over our obligations and we send you a copy with its legal name and contact details, you deal only with the assignee and Star Thing LLC is released from its obligations under the contract. You agree to this release when you sign. If a court decides the release isn't effective, our liability to you is no greater than your remedy in Section 16(a).