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.