When buying or selling property the lingo can get overwhelming! Check out some Real Estate ABC’s to help you navigate…
- A APPRAISAL: An estimation of a home’s market value by a licensed appraiser
based on comparable recent sales of nearby homes.
- B BACKUP OFFER: A secondary offer on a home that is under contract and becomes active if the primary contract falls through.
- C CONTINGENT OFFER: An offer is accepted by the seller but certain conditions must be met before the sale is final.
- D DOWN PAYMENT: The percentage of the home purchase price (usually between 5% and 20%) paid upfront in cash.
- E ESCROW: A neutral 3rd party that holds funds from the buyer and distributes them when all conditions have been met.
- F FEDERAL HOUSING ADMINISTRATION (FHA): The government agency that insures loans designed for low-to-moderate-income buyers.
- G GOOD FAITH ESTIMATE (GFE): Provided by a lender to a buyer GFE was an estimate of fees due at closing. New mortgage rules in 2015 replaced this form with one called a Loan Estimation.
- H HOMEOWNER’S ASSOCIATION: A management organization within a community, subdivision or neighborhood that creates and enforces rules for properties within it’s jurisdiction.
- I INSPECTION: An examination of a property and its systems performed by a qualified professional usually before the sale of a home.
- J JUMBO MORTGAGE: A mortgage that exceeds the conforming-loan limit, commonly used for luxury home purchases.
- K KEY RATE: An interest rate set by the federal government that determines the cost to borrow money – in this case a mortgage to buy a new home.
- L LOAN-TO-VALUE (LTV): The risk assessment ratio used by lenders; to calculate the LTV divide the mortgage amount by the appraised value.
- M MULTIPLE LISTING SERVICE (MLS): A database for real estate agents to list and market for sale homes.
- N NET PROCEEEDS: The amount received by the seller at closing after all other costs have been deducted.
- O OPEN HOUSE: An event hosted by a listing agent to showcase a home to potential buyers.
- P PRE-APPROVAL LETTER: Letter indicating that a lender is willing to loan a specific amount of money for a home purchase, a pre-approval does not guarantee a loan.
- Q QUITCLAIM DEED: A deed that transfers property rights without any validation of ownership; typically used between spouses and family members.
- R REAL ESTATE OWNED (REO) PROPERTY: A repossessed property owned by a lender after an unsuccessful sale at auction.
- S SELLER DISCLOSURE: A document completed by the seller, disclosing the property defects and history.
- T TITLE: The right to ownership of real property recognized and protected by the law.
- U UNDER CONTRACT: A buyer has submitted an accepted contract but the closing is not yet final.
- V VA LOAN: A mortgage loan for veterans and their spouses, made by private lenders and guaranteed by the U.S. government.
- W WALKTHROUGH: The final inspection conducted before a home sale is final.
- X X MARKS THE SPOT: Where you sign on the dotted line for your new dream home.
- Y YIELD-SPREAD PREMIUM (YSP): The amount a lender pays a mortgage officer for selling a loan with a higher interest rate than the par rate.
- Z ZERO LOT LINES: A residence built very close to – or directly on – the property lines.
There is so much to know when entering into a real estate transaction! Call me with any questions you need answered, I’m always here to help!
(A-Z from Zillow.com)