Having a basic understanding of important Real Estate terms and concepts before you start the home buying process will give you peace of mind now and will help ease the process. Here are some important terms to know:
One who has authorization, either expressed or implied, to act for or represent another party, usually in business matters.
An expert judgment or estimate of the quality or value of real estate as of a given date.
Adjustable Rate Mortgage (ARM)
A loan with an interest rate that changes periodically in keeping with a current index, like one-year treasury bills. Typically, however, ARMs can’t jump more than two percentage points per year or six points above the starting rate.
A loan that carries an unchangeable interest rate over its entire term typically a period of 15-30 years.
A presentation of proposal for acceptance in order to form a contract. To be legally binding, an offer must be definite as to price and terms.
Contract (of Sale)
An agreement entered into for the sale and purchase of property.
The numerous expenses which buyers and sellers normally incur to complete a transaction in the transfer of ownership of real estate. These costs are in addition to price of the property and are items prepaid at the closing day. This is a typical list:
- Buyer/Lender Search Fees
- Recording Deed and Mortgage
- Escrow/Closing Fees
- Buyer’s Attorney’s Fee
- Lender’s Title Insurance Costs and Premiums
- Lender’s Appraisal and Inspection
- Seller Search Fees
- State Transfer Tax Stamps on Deed
- Real Estate Commission
- Recording Mortgage Release
- Seller’s Attorney’s Fees
Insurance against loss resulting from defects of title to a specifically described parcel of real property. Insurance benefits will be paid only to the “named insured” in the title policy, so it is important that an owner purchase an “owner’s title policy”, if he desires the protection of title insurance.