You might be ready to buy or sell your home, but how much do you know about real estate lingo? Before you venture into the world of home buying and selling, it might be a good time to familiarize yourself with the top phrases.
Top Terms for Buyers
Adjustable rate mortgage – a mortgage loan with an interest rate that adjusts over the life of the loan. The adjustment rate is usually determined by a market indicator, such as the weekly average of U.S. Treasury Bills, but is limited by how much and often it can be adjusted.
Appraisal – the determined value of a property based on initial purchase price compared with the sales prices of similar properties in the area. Your bank or mortgage company may require an appraisal before they will lend you the money for the home.
Closing costs – all monies that need to be paid by the buyer at the time of close of escrow. These fees can include, lender’s fees, property taxes, real estate commissions, homeowner’s and other insurance premiums, etc. The seller may also be responsible for closing costs, depending upon the negotiation process for purchase.
Escrow – money or documents held by a neutral third party until the sale of your home closes.
House closing – The final transfer of ownership of the home from the seller to the buyer. This occurs after both parties have met the terms of the contract and the deed has been recorded.
Fixed rate mortgage – a mortgage loan that has a consistent, set interest rate for the entirety of the loan, typically15 or 30 years.
Top Terms for Sellers
Affidavit of title – a certified statement indicating ownership of the property, permission to sell the property and record that the property is not being sold to anyone else. The statement will also show that there is not a lien on the home or that the seller is in bankruptcy proceedings.
Assessed value – a county certified value of the property as determined by an assessor
Back-up offer – an accepted offer that is contingent upon a previous offer falling through.
Competitive Market Analysis – a listing of the prices of recently sold homes or home currently on the market that are similar to your home. The comparison is usually based on location, amenities and home style.
Counteroffer – the offer a seller makes after receiving the buyer’s offer. This is a rejection of the buyer’s offer because the price or terms don’t meet your expectations.
Market value – the estimated value that the home should sell for under the current market conditions.