ABC's Of Real Estate

Appraisal An estimation of a homes market value by a licensed appraiser based on comparable recent  sales of nearby homes

Backup Offer:  A secondary offer on a home that is under contract and becomes active if the primary contract falls through 

Contingent Offer An offer is accepted by the seller, but certain conditions must be met before the sale is final. 

Down Payment: The percentage of the home purchase price (usually between 5% and 20%) paid upfront in cash 

Escrow A neutral third party that holds funs from the buyer and distributes them when all conditions have been met 

Federal Housing Administration (FHA): The government agency that insures loans designed for low-to-moderate-income borrowers 

Good Faith Estimate (GFE): Provided by a lender to a borrower. GFE was an estimate of fees due at closing. New mortgage rules in 2015 replaced this form with on called a Loan Estimate 

Homeowners Association: A management organization within a community, subdivision or neighborhood that creates and enforces rules for properties within its jurisdiction 

Inspection: An examination of a property and its systems performed by a qualified professional, usually before the sale of a home 

Jumbo Mortgage: A mortgage that exceeds the conforming-loan limit, commonly used for luxury home purchases 

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. 

Loan-to-value (LTV): The risk assessment ratio used by lenders; to calculate the LTV, divide the mortgage amount by the appraised value 

Multiple Listing Service (MLS): A database fore real estate agents to list and market for-sale homes. 

Net Proceeds: The amount received by the seller at closing after all other costs have been deducted 

Open House: An event hosted by a listing agent to showcase a home to potential buyers. 

Pre-approval letter: A letter indicating that a lender is willing to loan a specific amount of money for a home purchase: pre-approval does not guarantee a loan. 

Quitclaim deed: A deed that transfers property rights without any validation of ownership; typically used between spouse and family members 

Real Estate Owned (REO) property: A repossessed property owned by a lender after an unsuccessful sale at auction. 

Seller Disclosure: a document completed by the seller disclosing the property's history and defects. 

Title: The right to ownership of real property recognized and protected by the law. 

Under Contract: A buyer has submitted an accepted offer, but the closing is not yet final 

VA Loans: A mortgage loan for veterans and their spouses, made by private lenders and guaranteed by the U.S.. government. 

Walkthrough: The final inspection conducted before a home sale is final 

X marks the spot:  Where you sign on the dotted line for your dream home! 

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 

Zero lot lines: A residence built very close to-or directly on- the property line. 

Lisa Treadwell

Lisa Treadwell

Indy Real Estate Experts
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