Real Estate and Mortgage Glossary

Your real estate terms

Welcome to our real estate and mortgage glossary. Understanding real estate terminology can be of great assistance in buying or selling a home, commercial property, or investment property. In order to help you understand words commonly used in a real estate transaction, we have prepared a list of real estate terms you should become familiar with. Thanks again and be sure to contact me for any of your real estate needs!

Terms:

Appraisal
An educated estimate of the value of a property on a certain date given by a person, usually after an inspection of the property.
 
ARM
A mortgage whose interest rate is raised or lowered at periodic intervals according to the prevailing interest rates in the market.
 
As is
Implied in most Agreements of Purchase and Sale, suggests the buyer is accepting the property in it present state and relinquishes and responsibility from the buyer.
 
Assessed value
The value of a property according to your local tax assessor; determines how much you will pay in property taxes. 
 
Bankruptcy
a) A person who has done any of the acts that by law entitle his creditors to have his estate administered for their benefit; b) a person judicially declared subject to having his estate administered under the bankrupt laws for the benefit of his creditors; c) a person who becomes insolvent.

Bid
To offer (a price) whether for payment or acceptance.
 
Buyer’s agent
A person licensed to negotiate and transact the sale of real estate on behalf of the buyer. The buyer’s broker or agent owes allegiance only to the buyer and does not have an agent relationship with the seller.
 
Closing Statement 
The financial disclosure statement that accounts for all of the funds received and expected at the closing of the escrow, including deposits or taxes, hazard insurance and mortgage insurance.
 
Condominium
A form of real estate ownership. The owner receives title to a particular unit and has a proportionate interest in certain common areas. The unit itself is generally a separately owned space whose interior surfaces (walls, floors, and ceilings) serve as its boundaries.
 
Contingencies
Conditions, contained in the Purchase Agreement, which outline the obligations the seller and buyer must fulfill before sale of the property is completed. Can concern the results of your effort to obtain financing, an inspector’s opinion of the condition of the property, etc.   For instance, a sales agreement may be contingent upon the buyer obtaining financing.
 
Credit Risk
An estimate of the amount of credit that can be extended to a company or person without undue risk.

Credit Union
A cooperative organization that makes loans to its members at low interest rates.
 
Deed: Written instrument by which the ownership of land is transferred from one person to another.
 
Earnest Money 
The portion of the down payment delivered to the seller or escrow agent by the purchaser with a written offer as evidence of good faith.
 
Easement: 
A right created by grant, reservation, agreement, prescription, or necessary implication, which one has in the land of another.

 
Foreclosure 
The legal process of the mortgage lender taking possession of and selling the property. When you default on a loan and the lender determines you are incapable of making payment, you may lose your house to foreclosure.
 
Home Equity Loan
A loan or credit line that is secured by the equity the borrower has in a home.
 
Home Inspection
A thorough inspection that evaluates the structural and mechanical condition of a property.
 
Home Loan
a) Money lent at interest; b) something lent usually for the borrower's temporary use.
 
Homeowner’s Insurance 
Absolutely required to obtain a mortgage, it covers the cost to rebuild your home.

Interest Rate
The percentage usually on an annual basis that is paid for the use of money borrowed from another.
 
Lien
A legal hold or claim on property as security for a debt or charge.
 
Loan Commitment
A written promise to make a loan for a specified amount on specific terms.

Market Value
An asset's market value is the price it would fetch in the market, if it were sold in the current marketplace.
 
MLS- IDX
IDX, or broker reciprocity, is a listing sharing arrangement between brokers within a Mulitple Listing Service.

Mortgage
A temporary, conditional pledge of property to a creditor as security for performance of an obligation or repayment of a debt.
 
Prime Rate
The lowest rate of interest on bank loans at a given time and place, offered to preferred borrowers.
 
Property Tax
A tax levied on real or personal property.
 
Realtor®
A real estate broker or associate active in a local real estate board affiliated with the National Association of Realtors®.
 
Survey
A drawing or map showing the precise legal boundaries of a property, the location of improvements, easements, rights of way, encroachment and other physical features.

Title Insurance
A type of insurance which guarantees the ownership and quality of title to land.
 
Underwriting
The process of evaluating a loan application to determine the risk involved for the lender.
 
VA Loan
A loan that is partially guaranteed by the Veterans Administration but is made by a private lender.

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