The ABCs of Real Estate
I recently received this list of Real Estate definitions from Zillow which I thought would be perfect to share. Real Estate terms can be hard to decipher if you don’t work in the industry so feel free to look them up here or call me at 562-544-0449 for more explanation.
A – Appraisal
An estimation of a home’s market value by a licensed appraiser based on comparable recent sales of nearby homes.
B – Backup offer
A secondary offer on a home that is under contract and becomes active if the primary contract tails through.
C – Contingent offer
An offer is accepted by the seller. but certain conditions must be met before the sale is final.
D – Down payment
An estimation of a home’s market value by a licensed appraiser based on comparable recent sales of nearby homes.
E – Escrow
A neutral third party that holds funds from the buyer and distributes them when all condit1ons nave been met.
F – Federal Housing Administration (FHA)
The government agency that insures loans designed for low-to-moderate-Income borrowers.
G – 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 one called a Loan Estimate.
H – Homeowners Association
A management organization within a community, subdivision or neighborhood that creates and enforces rules for properties within its jurisdiction.
I – Inspection
An examination of a property and its systems performed by a qualified professional. usually before the sale of a home.
J – Jumbo mortgage
A mortgage that exceeds the conforming-loan limit, commonly used for luxury home purchases.
K – 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.
L – Loan-to-value (LTV)
The risk assessment ratio used by lenders: to calculate the LTV, divide the mortgage amount by the appraised value.
M – Multiple Listing Service (MLS)
A database for real estate agents to list and market tor-sale homes.
N – Net proceeds
The amount received by the seller at closing after all other costs have been deducted.
O – Open House
An evert hosted by a listing agent to showcase a home to potential buyers.
P – 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.
Q – Quitclaim deed
A deed that transfers property rights without any validation of ownership; typically used between spouses and family members.
R – Real estate owned (REO) property
A repossessed property owned by a lender after an unsuccessful sale at auction.
S – Seller Disclosure
An estimation of a home’s market value by a licensed appraiser based on comparable recent sales of nearby homes.A document completed by the seller disclosing the property’s history and defects.
T – Title
The right to ownership of real property recognized and protected by the law.
U – Under contract
A buyer has submitted an accepted offer, but the closing is not yet final.
V – VA loan
A mortgage loan for veterans and their spouses. made by private lenders and guaranteed by the U.S. government.
W – Walkthrough
The final inspection conducted before a home sale is final.
X – X marks the spot
Where you sign on the dotted line for your dream home!
Y – 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.
Z – Zero lot lines
A residence built very close to-or directly on-the property line.