Appraisal –
The process of estimating or setting the market value of a piece of property,
partially based on an analysis of comparable sales of similar homes in the
area. An appraisal usually takes the form of a written report. Appraisals are
usually required during the mortgage loan approval process.
Closing Costs – For buyers,
closing costs consist of expenses that must be paid in addition to the purchase
price of the home, like... For sellers, closing costs include expenses that
will be deducted from the proceeds of the sale.
Commission – Compensation paid
to real estate professionals for services rendered in connection with the sale
or exchange of real property.
Comparative Market
Analysis (CMA) – An in-depth analysis of nearby comparable home sales done
by a real estate agent to estimate a home's market value, usually performed to
help select the most appropriate sale price.
Contingencies – Conditions written
into a real estate contract that specify that the contract will cease to exist
in the event of certain conditions. Contingencies, like requiring an acceptable
property inspection report within a certain time period, must be met for a
contract to be legally binding and carried out as written.
Contract – An oral or written
agreement between competent parties who agree to perform or refrain from
performing a certain thing. In real estate there are many different types of
contracts, including listings, contracts of sale, options, mortgages,
assignments, leases, deeds, escrow agreements, and loan commitments, among
others.
Deed – A written, legal
document that conveys or transfers property.
Escrow – The process in
which an item of value, money or documents is deposited with and held by a
trusted third party to be delivered upon the fulfilment of a condition. For example,
the earnest money deposit is put into escrow the transaction is closed, at
which time it is delivered to the seller.
Foreclosure – The process of
taking possession of a mortgaged property as a result of a failure to keep up
with timely mortgage payments. This can involve a forced sale of the property
at public auction after which the proceeds of the sale are applied to the
mortgage debt.
Home Inspection – A thorough
inspection by a qualified professional who evaluates the structural and
mechanical condition of a home. A home inspector may assess the condition of a
property's roof, foundation, heating and cooling systems, plumbing, electrical
work, water and sewage and some fire and safety issues. In addition, the home
inspector will look for evidence of issues that may affect the value of the
property.
Homeowner's Insurance – An insurance
policy that combines personal liability insurance and hazard insurance coverage
for a dwelling and its contents, often required by mortgage lenders.
Lien – A legal claim
against the property as a result of a debt that must be paid off when the
property is sold.
Mortgage – A legal document
that specifies a temporary, conditional pledge of a property to the
lender/creditor as security for the repayment of a debt, in this case a home
loan.
Pre-approval – Pre-approval is a
loosely used lending term that usually implies that a buyer has already talked
to a lender. The lender has, in turn, checked the buyer's credit history and
income to determine that they will be able to get a loan up to a certain
amount. The pre-approval helps a buyer find a home within their price range and
submit a strong offer.
Short Sale – A short sale
occurs when a property is sold at a moderate loss, as an alternative to
foreclosure. The home is listed at a price lower than the amount owed on the
mortgage. Buying a short sale home can require approvals from multiple lenders.
Title – A legal document
evidencing a person's right to or ownership of a property. A title report,
often done by a title insurance company after an offer has been accepted, will
show the history of the title as well as applicable encumbrances such as
easements or liens.
