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A consideration bearing no relation to the real value of a contract used so as not to reveal the true value of the property being conveyed; in name only, and not having any relation to actual market value. A deed often recites a nominal consideration, such as “ten dollars and other valuable consideration,” rather than the full selling price. Such nominal consideration makes it clear that the grantee is a purchaser rather than a donee (receiver of a gift) and thus is protected under the state’s recording act as a subsequent good-faith purchaser.

A broker must not be a party to the naming of a false consideration in any document, unless it is the naming of an obviously nominal consideration. To do so would be not only unethical but also a cause generally for suspension or revocation of the broker’s license.
Dearborn Real Estate Education
This "Word of the day" is excerpted from The Language of Real Estate, 6th Edition by John Reilly (published by Dearborn Real Estate Education, 2006 copyright). To purchase the complete book, with over 2800 key terms and definitions, or to browse through Dearborn's hundreds of other professional real estate titles, including Real Estate Technology Guide by Klein, Barnett, Reilly, click here.
  

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