|
Back
Buyer Tips
Home |
|
[A]
[B]
[C]
[D]
[E]
[F]
[G]
[H]
[I]
[J]
[K]
[L]
[M]
[N]
[O]
[P]
[Q]
[R]
[S]
[T]
[U]
[V]
[W]
[X]
[Y]
[Z]
- Adjustable rate mortgage
- A type of mortgage rate loan that allows the interest rate to
change periodically up or down, usually once or twice a year.
- Agent
- A person who acts, or has the power to act for another. A real
estate agent acts on behalf of the principal (the buyer or seller)
and has fiduciary responsibilities towards the principal.
- Buyer's agent
- An agent who represents the buyer and owes fiduciary duties to
the buyer.
- Seller's agent
- An agent who represents the seller and owes fiduciary duties to
the seller. Usually referred to as the listing agent, this agent
is authorized by a property owner to find a buyer or a tenant for
the property.
- Agreement of sale
- A written agreement or contract in which the seller agrees to
sell the the buyer agrees to buy under specific terms and
conditions.
- Amenities
- Features that enhance and add to the value or desirability of
real estate. Common amenities include a swimming pool, clubhouse
and a good view.
- Amortization
- The reduction of a debt over time by making periodic payments
(usually monthly) a portion of which is interest and a portion of
which reduces the outstanding amount of the debt. The monthly
mortgage payments remain the same over the life of the loan, even
though the proportion of principal to interest changes over time.
In the early part of the loan, principal repayment is very small
and interest repayment very high; at the end of the loan, that
relationship is reversed.
- Appraisal
- The act or process of estimating value; an estimate of value.
- Appraiser
- Someone who practices appraisal. Appraisers' work involves
appraisal (see above), review (the process of critically studying
a report prepared by another), or consulting (the process of
providing information, analysis of real estate data, and
recommendations on diversified problems in real estate, other than
estimating value).
- Balloon mortgage
- A mortgage for a fixed term shorter than necessary to fully
repay the debt. As a result, the remaining amount of principal is
due at the maturity of the loan.
- Bridge loan
- A loan, usually short term, that finances the portion of the
purchase price not provided by the mortgage loan and the down
payment. A bridge loan is commonly used when a purchaser has not
sold his existing home before he closes on his purchase of a new
home. The bridge loan is paid off when the old home is sold, out
of the proceeds of that sale.
- Broker, as in real estate broker
- A real estate professional who has acquired a higher level of
training and/or experience than a sales agent. Generally, the
legal representative or proprietor of the office.
- Capital gain
- Income that results from sale of a capital (tangible) asset.
- Closing
- The end of the transaction; when the seller hands over the title
to the buyer in exchange for payment.
- Closing costs
- Costs the buyer must pay at the time of the closing in addition
to the down payment which may include points, title charges,
mortgage insurance premium, prepayments for property taxes, and
homeowners insurance. Closing costs can be as much as three to
four percent of the loan amount.
- Condominium or condo
- A condominium, literally, is a home in a shared building or
development. The buyer owns title to his or her unit, shares the
common areas with other unit owners, and pays a maintenance fee to
the condominium association to pay for needed maintenance, repairs
and improvements to the property.
- Contingency
- A condition that must be met before a contract is binding.
- Conventional loan
- A fixed-rate, fixed-term loan that is made without government
insurance.
- Co-operative or co-op
- In a residential co-operative, the buyer purchases shares in the
co-op corporation, made up of the residents in the co-op property.
The buyer owns the shares rather than owning real property. In
exchange, ha has the right to lease and occupy a co-op unit.
- Deed
- A legal document by which property title is transferred from one
owner to another.
- Down payment
- The down payment is the percentage of the purchase price that
the buyer must pay in cash and may not borrow from the lender. The
downpayment amount, in addition to the mortgage, equals the
purchase price of a property.
- Dual agency
- Representing both parties in a transaction. In virtually all
states, it is unethical and illegal for a broker to represent both
buyer and seller in a real estate transaction without written
consent of both.
Back to Top
- Earnest money
- The deposit money given to the seller by the potential buyer as
evidence of good faith in purchasing real estate. The broker
places the money in an escrow/trust account until closing, when it
becomes part of the down payment.
- Equity
- The value of the property, less the amount of unpaid mortgages
and any outstanding liens.
- Escrow
- Money or other valuables given to a third party with directions
to deliver them to another party upon the fulfillment of a
specific act or condition.
- Exclusive agency listing
- A written agreement giving the broker the right to market an
owner's property for a certain period of time, but also allowing
the owner to sell the property during that period without paying a
commission.
- EXCLUSIVE BUYER'S AGENT
- An agent who represents the buyer and owes fiduciary duties to
the buyer only and never takes listings or works for a brokerage
company that takes listings.
- Exclusive right-to-sell
- A written agreement between the agent and the owner, whereby the
owner promises to pay a fee or commission to the broker if his
property is sold during the listing period, regardless of whether
the broker is responsible for the sale.
- Fannie Mae
- Nickname for the Federal National Mortgage Association, FNMA is
a public corporation originally established by the federal
government. Fannie Mae purchases mortgage loans from lenders, and
thus, is a major source of funds for mortgage companies.
- FHA or Federal Housing Administration
- Part of the US Department of Housing and Urban Development (HUD)
--established in 1934 to encourage improvement in housing
standards and communities. The FHA insures mortgage loans. See
HUD listing ahead.
- FHA mortgage
- A mortgage loan insured by the Federal Housing Administration.
- FSBO
- A term or abbreviation that is used to indicate that a property
is "For Sale By Owner"
Back to Top
- Home inspection
- An examination of the physical structure, systems and condition
of a home.
- Homeowners insurance
- Insurance that protects the homeowner from "casualty"
(losses or damage to the home or personal property) and from
"liability" (damages to other people or property).
Homeowners insurance is required by the lender and is usually
included in the monthly mortgage payment.
- HUD or the US Department of Housing and Urban Development
- Department of Housing and Urban Development, a government agency
created to make the American dream of home ownership a real
possibility for everyone. HUD has many programs involving
homeownership assistance for low- and moderate-income families,
community planning and development, fair housing and equal
opportunity, and home improvement loans. The Housing and Urban
Development home page is a rich resource of information.
- Lien
- A hold or a claim on the property of another to satisfy an
unpaid debt.
- Listing contract
- An agreement between a homeowner and a licensed real estate
broker that authorizes the broker to market the property for sale
during a given time period.
- Loan origination fee
- A fee charged by the lender for evaluating, preparing and
submitting a proposed mortgage loan.
- Loan-to-value ratio
- The ratio of a mortgage loan principal to the property's
appraised value or its sales price, whichever is lower.
Loan-to-value ratios vary depending upon the individual lender's
policy.
- Lock-in rate
- A commitment made by a lender to make a mortgage loan at a
specified rate, pending loan approval, on or prior to a specified
date.
Back to Top
- Market value
- The highest price a buyer will pay for a property and lowest
price the seller will accept.
- Mortgage
- A lien on real estate given by the buyer to secure repayment of
money borrowed to purchase the real estate.
- Mortgage broker
- An individual or company that obtains mortgages for others by
finding lending institutions, insurance companies, or private
sources to lend the money; may also handle collections and
disbursements.
- Mortgage insurance
- A policy that provides protection for the lender in case of
default and/or which guarantees repayment of the loan if the
borrower becomes disabled or dies.
NAEBA
The National
Association of Exclusive Buyer Agents.
- NATIONAL ASSOCIATION OF REALTORS
- The NATIONAL ASSOCIATION OF REALTORS is the largest trade
association in the country serving over 700,000 REALTORS. The
purpose of the NATIONAL ASSOCIATION OF REALTORS is to enhance the
ability and opportunity of its members to conduct business
successfully and ethically, and to promote the preservation of the
right to own, transfer, and use real property.
Back to Top
- Offer
- A proposal to purchase real estate at a particular price and
subject to other specified terms and conditions. Acceptance of the
offer by the seller creates a purchase contract. (Counteroffer:
An offer made in response to a different offer.)
- Private mortgage insurance or PMI Insurance
- Insurance issued to a lender to protect it against loss on a
defaulted mortgage loan. Its use is usually limited to loans with
high loan-to-value ratios (generally in excess of 80%). The
borrower pays the premiums.
- PITI Payment
- A loan payment that combines Principal, Interest, Taxes and
Insurance.
- Point
- An amount equal to one percent of the loan amount paid to a
lender for making the loan. A lender may charge the borrower
several points in order to provide the loan.
- Principal
- One of the parties to a transaction. For example, the buyer and
seller are principals in the purchase of real property.
Back to Top
- REALTOR
- A REALTOR is a real estate professional who is a member of the
NATIONAL ASSOCIATION OF REALTORS and subscribes to its strict Code
of Ethics. This distinguished professional is committed to
protecting and promoting private ownership of real property,
establishing and maintaining high professional standards of
practice, and creating unity in the NATIONAL ASSOCIATION OF
REALTORS organization and respect for the real estate profession.
When you want to buy or sell a home, call a REALTOR.
- Title
- Ownership of real property. Title is transferred from one party
to another through a document called a deed.
- Title insurance
- Protection for lenders and homeowners against financial loss
resulting from legal defects in or other claims against the
property's title.
- Trust
- A property interest held by one person for the benefit of
another.
Back to Top
- VA or US Department of Veterans Affairs
- A federal agency designed and operated to help veterans enter
the housing market. The VA assists veterans in terms of low or no
down payment, mortgage qualification assistance and low interest
rates.
- VA loan
- A mortgage loan guaranteed by the US Department of Veterans
Affairs against loss to the lender, and made through a private
lender.
Back | Buyer
Tips | Home
Back to Top
|
