Buying and selling a home is a confusing process, full of baffling terminology that makes you wonder what you’re really signing up for. This quick list of some common real estate definitions might be a handy reference sheet for you to take along the next time you are out looking for houses.
Amortization: length of time over which your mortgage will be paid.
Appraisal: process of estimating the value of a property, done by an appraiser - a professional skilled in appraisals.
Closing costs: costs that you pay on the close of the home, which can include legal fees, land transfer tax and more.
Counter offer: when you original offer is not accepted, you may give a second offer with amended conditions.
Curb appeal: how the home looks from the street (on first appearance).
Down payment: portion of the home price that you’ve put down from your own funds on the purchase of a home.
Equity: difference between the value of the home and its debts.
Foreclosure: legal process where the lender takes possession of the property due to non-payment of the mortgage.
Mortgage broker: a person who will find you the best rates and terms for your mortgage.
Offer to purchase: written contract setting out the terms of buying a home.
Open house: a home is held open for public viewing, as set up by the real estate agent listed to sell it.
Owner financing: Where the property seller provides all or some of the financing on the sale of the house.
Principal: the amount borrowed of the loan that is not interest.
Property insurance: insurance for the building in the event of damage or destruction.
Property taxes: taxes charged by the municipality, based on the value of the home.
Real estate agent: a person who represents a buyer or a seller in the sale of a home.
Second mortgage: A mortgage that has a lien that is subordinate to the first mortgage.
Secured loan: A loan backed by collateral.
Title: gives the holder of the title full and exclusive ownership of the land and buildings on it.
Trustee: A fiduciary who controls the property for the benefit of another.
Truth-in-Lending: A federal law that requires all lenders to disclose in writing all terms and conditions of a mortgage.
Two-step mortgage: An adjustable rate mortgage that has one interest rate for the first few years and a different one for the remainder of the term.
Title insurance: insurance against loss or damage from a matter that affects the property.
Vendor: the seller of the property.
If you need any more help deciphering real estate terms, feel free to contact me at any time!