Learn something new every day – that’s what I always say! {ooh I’m a poet and didn’t know it!} Whether you are a first time home buyer (or 5th) or you are a Real Estate professional – now is the time to brush up on these commonly used Real Estate terms.
Appraisal – An appraisal is the estimation of a home’s current market value. It’s good for all parties – you won’t want to overpay for a home and lenders will want to make sure they’re covered if anything happens in the future.
Buyer’s Agent – One who is licensed to assist buyers buyers during the home buying process. Some of their responsibilities include negotiating for the best possible price for a home, providing information on the neighborhood and its surrounding area, helping you through the inspection process and performing due diligence.
Closing costs – Expenses, beyond the property cost, that are paid at the closing table.
Down payment – Depending on the type of loan you’ll apply for, and your overall financial situation, this amount will be paid in cash at closing and will not be part of your mortgage.
Earnest money – Money deposited by the buyer under the terms of a contract, to be forfeited if the buyer defaults but applied to the purchase price if the sale is closed.
FHA loan – A loan insured by the “Federal Housing Administration” and made by an approved lender in accordance with FHA regulations.
Good-faith Estimate – An estimate from an institutional lender that shows the costs a borrower will incur, including loan-processing charges and inspection fees.
HOA\CCR - A Homeowners Association (HOA) is an organization, made up of elected officials who represent the neighborhood. They enforce the rules found in the CCRs (Covenants, Conditions and Restrictions.) You will usually pay dues of some sort and should be able to see a copy of the CCRs before determining if a neighborhood is right for you and your family.
Inspection - An assessment of the property’s physical condition and mechanicals including, but not limited to, including the roof, ceilings, walls, floors, windows and doors.
Jumbo loan - A type of mortgage loan used for properties higher than $510,400.
Knowledge – As the old saying goes, the more you know… Do your research about the area you’re looking in. Drive the neighborhood, wave at people walking, check out the lawns - try to get a feel for what it would be like to live there. Your realtor can help you with this too! Research comparable homes, market history, tax information, schools - try to learn all you can!
Listing Agreement - The agreement between you and your agent, giving the agent the right to sell your property.
Mortgage broker - An agent, representing a financial institution, who will work with you to apply for, understand and close your mortgage loan when purchasing a home.
Negotiation - The back and forth regarding the details of the Real Estate transaction leading up to the closing table (handled by your awesome agent.)
Offer - a proposal written up by your agent listing out your conditions for the purchase.
Pre-approval - Running and verifying all of your financial history (employment, tax records, bank records, etc) letting you know EXACTLY what you can afford when going to purchase a home.
Pre-Qualification - An informal look at the clients background to get a basic understanding of what level of loan you could qualify for.
Refinance - Working with a lender to replace your existing mortgage with a new one, usually because of more favorable terms.
Sellers disclosure - A list of any known issues or remodeling projects done while in the home, including ages and any known issues of mechanicals.
Title\title insurance - A title is a formal document proving ownership of land. Title insurance is a policy insuring the owner or borrower against loss by reason of defects in the title to a parcel of Real Estate, other than encumbrances, defects and matters specifically excluded by the policy.
Underwriter – An insurance company that issues insurance policies either to the public or to another insurer.
VA mortgage - A mortgage loan on approved property made to a qualified veteran by an authorized lender and guaranteed by the Department of Veterans Affairs in order to limit the lender’s possible loss.
Warranty - A Home Warranty is typically a 1 year policy that covers the repair or replacement of home systems and appliances that break down over time.
eXcitement – Ok, so I’m stretching here. But what words start with X? Whether you’re buying or selling or investing – be excited in all of your Real Estate adventures!
Yield – For all you investors out there, yield will tell you the annual income from the investment, expressed as a percentage of the investment's total cost (or some cases its estimated current value). You’ll want to discuss this with your Broker before moving forward with a purchase.
Zoning - The division of a city or county by legislative regulations into areas (zones), specifying the uses allowable for the property in those areas. Buyers are encouraged to investigate any zoning issues directly with the city or county.
Now you know your ABCs...of Real Estate! Be sure to save this page for future reference and you’ll be able to rock all of your Real Estate needs like a pro!
Full disclosure, I am the Operations Manager of Ferris Property Group, so of course I love our brokerage! Working for FPG has been an absolute blessing to my family (as a mama of 4), being able to thrive in my career but also be there when I need to be at home.
We have also used them to both buy and sell homes, so I can vouch for their real estate expertise as well. If you’re interested in a career in real estate, looking to make a change, or if you have any real estate needs, we’d love to hear from you!
+ Holly Stauffer