Appraiser: A qualified individual who uses his or her experience and knowledge to prepare the appraisal estimate.
Certificate of title: A document provided by a qualified source (such as a title company) that shows the property legally belongs to the current owner.
Yes, Before the title is transferred at closing, it should be clear and free of all liens or other claims.
Closing: Also known as settlement, this is the time at which the property is formally sold and transferred from the seller to the buyer; it is at this time that the borrower takes on the loan obligation, pays all closing costs, and receives title from the seller.
Closing costs: Customary costs above and beyond the sale price of the property.
Comparables: Comparable properties used for comparative purposes in the appraisal process. Comparables are properties like the property under consideration.
They have reasonably the same size, location , and amenities and have recently been sold. Comparables help the appraiser determine the approximate fair market value of the subject property.
Contingency: A condition that must be met before a contract is legally binding. For example, home purchasers often include a contingency that specifies that the contract is not binding until the purchaser
obtains a satisfactory home inspection report from a qualified home inspector.
Contract: An oral or written agreement to do or not to do a certain thing.
Deed: The document that transfers ownership of a property.
Deposit: A sum of money given to bind the sale of real estate, or a sum of money given to ensure payment or an advance of funds in the processing of a loan.
Earnest money: Money put down by a potential buyer to show that he or she is serious about purchasing the home; it becomes part of the down payment if the offer is accepted, is returned if the offer is rejected, or is forfeited if the buyer pulls out of the deal.
Equity: An owner's financial interest in a property; calculated by subtracting the amount still owed on the mortgage loan(s) from the fair market value of the property.
Escrow account: A separate account into which the lender puts a portion of each monthly mortgage payment; an escrow account provides the funds needed for such expenses as property taxes, homeowner's
insurance, mortgage insurance, etc.
Fair Housing Act: A law that prohibits discrimination in all facets of the homebuying process on the basis of race, color, national origin, religion, sex, familial status, or disability.
Fair market value: The hypothetical price that a willing buyer and seller will agree upon when they are acting freely, carefully, and with complete knowledge of the situation.
Flood Insurance: Insurance that protects homeowners against losses from a flood; if a home is located in a flood plain, the lender will require flood insurance before approving a loan.
Home inspection: An examination of the structure and mechanical systems to determine a home's safety; makes the potential homebuyer aware of any repairs that may be needed.
Home warranty: Offers protection for mechanical systems and attached appliances against unexpected repairs not covered by home owners insurance; coverage extends over a specific time period and does not cover home’s structure.
Homeowner's insurance: An insurance policy that combines protection against damage to a dwelling and its contents with protection against claims of negligence or inappropriate action that results in someone’s injury or
HUD: The U.S. Department of Housing and Urban Development; established in 1965, HUD works to create a decent home and suitable living environment for all Americans; it does this by addressing housing needs, improving and developing American communities, and enforcing fair housing laws.
HUD-1 Statement: Also known as the 'settlement sheet," it Itemizes all closing costs; must be given to the borrower at or before closing.
HVAC: Heating, Ventilation and Air Conditioning; a home's heating and cooling system.
Offer: Indication by a potential buyer of a willingness to purchase a home at a specific price; generally put forth in writing.
Pre-qualify: A lender informally determines the maximum amount an individual is eligible to borrow.
Real estate agent: An individual who is licensed to negotiate and arrange real estate sales; works for a real estate broker.
REALTOR: A real estate agent or broker who is a member of the NATIONAL ASSOCIATION OF REALTORS and its local and state associations.
Settlement: Another name for closing.
Survey: A property diagram that indicates legal boundaries, easements, encroachments, rights of way, improvement locations, etc.
Title insurance: Insurance that protects the lender against any claims that arise from arguments about ownership of the property; also available for homebuyers.
Title search: A check of public records to be sure that the seller is the recognized owner of the real estate and that there are no unsettled liens or other claims against the property.