A Glossary Of Real Estate Terms
Every industry has its own language and terms. These words and phrases can be confusing to anyone who is not part of the daily operations of a specific sector, and the real estate business is no exception.
To help you understand the terms, acronyms, and phrases regularly used when purchasing a real estate property, Coldwell Banker Town & Country R.E. has created this handy reference guide. Here you’ll find valuable information allowing you to comprehend and communicate your real estate needs effectively.
Mortgage pre-approval letter
Typically for no cost and no obligation, a lender will gather basic debt or income information from a buyer and pull a current credit score to establish if a buyer is able to procure a mortgage and what the mortgage price range would be. Watch this video to see why it is vital to get a pre-approval before looking at homes.
Earnest Money Deposit (EMD)
This negotiated amount of money is required from a buyer when an offer is accepted on a seller’s property. It is held in a non-interest-bearing escrow account, typically with the Listing Agent, but again, that is negotiated. This amount of money is ’at risk’ because if a buyer defaults on the Agreement of Sale, it is negotiated that a buyer MAY lose the deposit to the seller.
This happens when a property is being sold for less than what is owed against the property. Short sales will require the approval of the seller’s lender(s) as the proceeds of the sale will be just “short” of the amount owed; most lenders’ processes of approving short sales are long and drawn out, requiring more time to close than a traditional sale.
A title search examines public records for the history of the home, including ownership, sales, purchases, and tax, and other types of liens. A Title Search uses county records to see who is listed as the record owner of the property. Such information, along with any liens or encumbrances that are recorded against the property, will be listed in the Preliminary Report for the parties to review before the close of escrow.
A seller’s disclosure is a document used by a seller to disclose the mechanics of a home and inform a potential buyer of any defects in the house which could affect a buyer’s decision to purchase the property, all of which must be to the best of the seller’s knowledge. A seller’s disclosure should also indicate items that are not specific to the property itself but related to a person’s enjoyment of the property, such as pest problems, property line disputes, knowledge of major construction projects in the area, military base related noises, or activities, association-related assessments or legal issues, unusual odors caused by a nearby factory, or even recent deaths on the property as permitted by law.
Closing Cost Assistance or Seller Assist
Sellers may offer assistance with a buyer’s closing costs or other concessions to incentivize buyers to purchase the home or sweeten the deal. Seller Assist is when a seller pays for the buyer’s closing costs, up to certain limitations and approvals by a buyer’s lender, which ultimately leaves more money in a buyer’s pocket when all is said and done.
A due diligence period of time might be available in the purchase agreement, which is a time frame provided to a buyer to examine a property thoroughly, often by hiring experts to inspect the property, perform tests, etc., so that a buyer may decide on how to proceed. That time frame is negotiated. A buyer might also be afforded an opportunity to renegotiate the contract based on their findings or possibly even to terminate within a specified time period in order to not be considered in default of the contract. Due diligence allows a buyer to fully understand what they are buying.
Closing costs are typically paid at the closing time of a real estate transaction. The fees can be charged by and are not limited to: a lender, the title company, attorneys, insurance companies, taxing authorities, homeowner’s associations, real estate agents, and other closing settlement-related companies.
A real estate closing is when the home sale is considered final. Typically, all parties’ signatures are affixed on all required documents, all monies conveyed, and when a lender is involved, with full lender’s approval. For some markets across the nation, recording the deed with the county clerk’s office is the ultimate and final step of closing. Once all of these items are completed, then a buyer’s access to the property is provided, and the buyer is considered the new homeowner.
During the sale of a property, a mortgage lender sends out an appraiser to get an opinion of the value of the property. This helps the lender decide if the property is worth the amount of the loan the potential buyer is seeking. This report is called an appraisal.
If you’re looking for a realtor in Altoona, PA, reach out to the experts at Coldwell Banker Town & Country R.E. I am a full-time real estate agent with over twenty years of experience and work diligently to get your unique property to stand out from all others. Over the years, I have built a vast network of contractors, mortgage lenders, and handy people where we can tackle any issues that may arise during your sale or purchase process. I serve clients across Altoona, Tyrone, Hollidaysburg, Warriors Mark, Port Matilda, Williamsburg, East Freedom, Martinsburg, Bellwood, Tipton, Spruce Creek, Claysburg, Sinking Valley, and the surrounding areas.