|
Acceptance
A positive response to an offer or counteroffer. An acceptance
may be "conditional," "express," "implied"
or "qualified."
Agent
Someone who acts on behalf of another for a fee, such
as a real estate agent.
Appraisal
An estimate of value, as determined by an independent
agent familiar with local real estate values.
"As-is" agreement
Certifies that a buyer accepts whatever physical condition
a property is in at the time the contract is signed. May
be controlled by state and local regulations.
Assumption
When a buyer assumes the loan payments and obligations
of the seller. If the purchaser defaults, however, both
the buyer and seller are responsible for the debt.
Return to top
Broker
A licensed real estate professional who, typically, represents
the seller of a property. A broker's duties might include
determining market values, advertising properties for
sale, showing properties to prospective buyers, and advising
clients with regard to offers and related matters.
Return to top
Clear title
A title to a property that is free of legal challenges
to ownership.
Closing costs
Costs associated with the purchase of a home that must
be paid at the sale closing. These could include mortgage
fees, title insurance, appraisal and inspection fees and
points.
Comparative market analysis
A listing of recent home sales in the neighborhood, used
as a basis for price comparison. This is prepared by a
real estate agent. Also known as a "comp."
Condominium
Piece of a large property that is owned as an individual
unit. Ownership includes a non-exclusive interest in certain
"common properties" controlled by the condominium
organization.
Co-op
Abbreviation for "cooperative," a portion of
a large property whose owner has purchased exclusive rights
to its use by buying a share of the corporation that owns
the large property.
Co-signer
A person who assumes joint liability for a loan. The co-signer
of a loan agreement is not necessarily, however, a co-owner.
Contingency
A contractual provision that renders an agreement incomplete
until a designated event (such as an inspection or an
escrow payment) occurs.
Credit
A measurement of a person's ability to pay bills on time.
Several companies track individuals' credit histories
by detailing late or missed payments on loans, credit
cards and other debts.
Credit report
Used by lenders to determine a potential borrower's creditworthiness.
Independent sources compile the report, which lists the
borrower's debts, liabilities and assets.
Return to top
Deed
A document that transfers real estate from one party to
another. Officially recorded in government records.
Return to top
Easement
A landowner can grant a second party the right to use
land in a certain way. For example, if you need to cross
your neighbor's property to access your garage, you would
ask your neighbor to grant you an easement. Easements
may restrict changes a buyer can make to a property.
Encroachment
Anything belonging to one landowner that extends onto
an adjacent landowner's property is considered an encroachment.
A fence that is a few inches over the property line is
one example.
Encumbrance
A problem with the title to a property that does not affect
the transfer of ownership.
Equity
The actual cash value of property after all claims against
the property have been paid.
Return to top
Fair Credit Reporting Act
A federal law that gives consumers the right to see their
credit records and correct any mistakes.
Front ratio
The proportion of a purchaser's income that lenders will
allow for principal, interest, taxes and insurance on
a property. Used in the evaluation of a loan application.
Full disclosure
A requirement that sellers fully disclose all known defects
in a property when selling it.
Return to top
Judgment
An unpaid, court-ordered monetary judgment against a current
or previous property owner.
Return to top
Lien
Any claim against a property, including mortgages, unpaid
taxes or repair bills or other unpaid charges. Prospective
property buyers conduct a title search to determine whether
any liens against the property exist. A lien must be filed
or recorded with the local county government to be attached
to a property title.
Return to top
Mechanic's lien
Any payment owned to a contractor for work done on the
property.
Mortgage lien
The unpaid balance on the mortgage loan.
Multiple listing service The multiple listing service,
or MLS, is a local database that lists homes for sale.
Member real estate agents can access the MLLES and show
listed homes to potential buyers.
Return to top
Offer
A bid for a home purchase. Generally, it is made in writing.
Offers may be withdrawn without penalty prior to acceptance
or rejection; if accepted, the offer becomes binding.
Option
The right to buy or sell property or sign a contract,
based upon certain terms and conditions. Usually applicable
to specific time frames during which the "option"
may be exercised.
Return to top
Plat
A map that shows all boundaries of a piece of property.
Pre-approval
A process whereby a potential home buyer secures a guaranteed
mortgage approval before making an offer on a house. A
lending institution guarantees in writing to grant a loan
for a specified amount. Not to be confused with pre-qualification.
Pre-qualification
Some lenders "pre-qualify" mortgage applicants
in less than an hour by performing cursory checks. Seldom
can a lender fully check an applicant's credit, asset
and debt status this quickly, so final approval typically
takes at least a few more days. Though such preliminary
pre-qualifications may soon lead to a full pre-approval,
there is no guarantee until the applicant receives a letter,
certificate or wallet-size card bearing the mortgage-holder's
name and maximum loan amount.
Return to top
Recording fee
Fee charged by a government for entering into the public
record a real estate purchase or sale.
Right of first refusal
A priority arrangement that grants a particular prospective
buyer the first right to purchase a property, given certain
agreed-upon conditions.
Return to top
Self-amortization
Occurs when monthly payments allow a loan to be repaid,
including principal and interest, over its terms without
any balloon.
Settlement (Closing)
The process by which all financial dealings and contractual
arrangements are completed for the buyer and seller. At
the time of settlement, or closing, all debts are paid,
adjustments made and money disbursed, and a deed is prepared
in the new owner's name.
Survey
A professional examination of a property. A survey usually
will reveal the size of a property, its boundary distances,
ground contours and where improvements or alterations
have been made.
Return to top
Tax
A type of lien placed on a title when the owner has not
paid property or assessment taxes or other state and federal
taxes.
Take-back
A loan made directly from the seller to the buyer.
Tax basis
The value of your home for tax purposes.
Title
Evidence of the right of property ownership; can be held
solely, jointly, in common or in corporate or partnership
form.
Title company
A company that performs and insures title searches. Usually
selected by the seller, they sometimes work as a lender's
agent. Depending on the preferences of the seller, buyer
and others involved in the sale, the closing might take
place at the title company's offices.
Title defect
Anything that is wrong with a title -- including an easement,
encroachment or lien -- that has not been recorded with
the city building department or the county recorder's
office.
Title insurance
Insurance that protects a property owner against defects
to or claims against a property. Typically purchased by
the buyer upon closing, sometimes as required by the lender.
Title companies issue the policies.
Townhome
A residence, often including two or three stories, that
is connected by a common wall to another residence.
Return to top
Walk-through
A final tour of a home after the sale closing in which
any defects are noted.
Warranty
A protection plan, generally paid for by the seller, that
protects the buyer against major repair expenses and breakdowns.
Warranties are assigned to specific items, usually major
appliances or systems on the property.
Return to top
|