Some Important Real Estate Terms
Buying or selling a home can be a complicated and a confusing process, especially for the first-timers. Throughout the process, you would encounter unfamiliar terms. Having a basic knowledge of such concepts will surely give you peace of mind and may also help you save considerably in the end.
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Appraisal: The evaluation of a property on its price by a licensed appraiser based on recent comparable property sales. The appraised value is used by a bank to determine the lending limit for the property.
B
Backup Offer: Secondary offer on home that is under contract that becomes active if the primary contract offers through.
Contingent Offer: Offer is accepted by the seller, but certain conditions must be met before the sale is final. Down Payment: It is the amount of money that a buyer pays upfront while signing the sale contract and is generally 10% of the purchase price..
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Escrow: neutral third party that holds fund from the buyer and distributes them when all conditions have been met.
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Federal Housing Administration(FHA): Govt. agency that insures loan designed for low-tomoderate income borrowers
H
Homeowners' Good Faith Estimate (GFE): Provided by a Associations: lender to a borrower, GFE was an Management estimate of fees due at closing. New organization within a mortgage rules in 2015 replaced this community, form with one called a loan estimate. subdivision, or neighborhood that creates and enforce rules for property Inspection: An examination of a property and its within its jurisdiction. system performed by a qualified professionals, usually before the sale of a home.
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Jumbo Mortgage: Mortgage exceeding the confirmingloan limit, commonly used for luxury home purchases.
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Loan-To-Value(LTV): Risk assignment ratio used by lenders; to calculate, divide the mortgage amount by the appraised value.
M
Multiple Listing Services(MLS): Data base of real estate agents to list and market for sale for homes.
Key Rate: Interest rate set by the federal govt. that determines the cost to borrow money, in case, a mortgage to buy a new home.
N
Net Proceeds: Amount received by . the seller at closing after all other costs have been deducted.
O
Open Houses: Event . hosted by a listing agent to showcase a home to potential buyers.
P
Preapproval Latter: letter including a lender is willing to loan a specific amount of money for home purchase; preapproval does not guarantee loan.
Quitclaim Deed: deed transferring property rights without any validation of ownership, typically used between spouses and family members.
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Real Estate Owned(REO) Property: repossessed property owned by a lender after an unsuccessful sale at auction.
Seller Discloser: document completed by the seller disclosing the property’s history and defects.
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Title: the right to ownership of real property recognized and protected by the law.
VA Loan: Mortgage loan for veterans and their spouses, made by private lenders and guaranteed by the U.S. Government.
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Walk-Through: final inspection conducted before a home sale is final.
W
X Marks The Spots: where you sign on the dotted line for your dream home!
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Yield –Spread Premium (YSP): Amount a lender pays a mortgage office for selling a loan with a higher interest rate than the par rate.
Y
Z
Zero Lot Lines: residence built very close to or directly on the property line.
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