Are you thinking of selling your house or maybe buying your first home. It's all so overwhelming and you find yourself lost in the language. HUD, FHA, VA, MLS, Freddie Mac, Fannie Mae, all sound alien to you. Me too until I started researching them. I came up with some definitions for some of the most popular terms. Hopefully this will help.
Abstract of Title: A historical summary of the recorded instruments and proceedings on the title of the property.
Appraisal: An appraisal of a property by a liscensed appraiser on its price based on previous sales of similar properties. The appraisal value is used by the bank to determine the lending limit on given property. Sellers often have thier property appraised to determine the offering price of a sale.
Bridge Loan: A loan for a short duration of time. This type of loan is used when you are purchasing one property but are dependent on the equity from another property that has not yet been sold. Once property is sold then bridge loan is repaid.
Closing Costs: The expenses incurred in the purchase and sale of a property. Closing costs are paid at closing. Examples of some of the costs are title insurance, attorney fees, appraisal fees, recording fees and taxes.
Comparables (Comps) OR Comparative Market Analysis (CMA): Comps are used in assessing or establishing the fair market valus of a property. Comparing the property to similar sold properties (size, location,condition and amenities)
Deed: A written document when properly executed (signed) and delivered (accepted) conveys title to real property from one party to another
Disclosure Statement: An account of all financial aspects of the mortgage loan required of lenders to borrowers in residential mortgage loan as regulated by the Federal Reserve Board.
Down Payment: The amount of money the buyer pays up front to purchase a property. Usually this is paid at the closing in the form of a certified check. This amount varies, typically its 10% of the sale price.
Dual Agent: A broker or sales person representing both buyer and seller in the same transaction.
Due Dilligence: The investigation and review of a property to determine any legal liability
Earnest Money: A deposit a buyer makes at the time of submitting an offer to demonstrate the true intent to purchase. This can also be called a binder or good faith deposit.
Easement: A non-possesory right of use of land
Equity: The difference between what something is worth and any loan secured by the asset. Example:If a house is worth $100,000 and the owner/borrower owes $65,000 on the mortgage then the equity is $35,000 or 35% equity in the home
Escrow: An account set up to collect your payment for property taxes, homeowners insurance and possibly other items to be paid on your behalf when those bills come due
Fair Market Value: The price agreed upon between a buyer and seller in a competitive market
Fannie Mae: The Federal National Mortgage Asscociation, a privately owned corporation that purchases FHA, VA and conventional mortgages.
FHA: Federal Housing Administration: A federal agency that is part of the Department of Housing and Urban Development (HUD) that sets policy for mortgage underwriting and provides insurance for residential mortgages.
Freddie Mac: A corporation wholly owned by the Federal Home Loan Bank System that purchases FHA, VA and conventional mortgages
Home Equity Loan: A loan made against the equity in the home
MLS: Multiple Listing Service is a central service for real estate listing available to member brokers
Recording Fees: Fees charged by the recorders office to record a document such as a mortgage deed of trust, deed and UCC financing statement
Rider: An addendum to a document that covers supplemental issues
Sellers Agent: The listing agent that works in the best interest of the seller
Title: The title of a property is the evidence or documentation that an owner is in lawful possesionof the property, such as a property deed
Title Search: A process that examines local public records, laws, and related court decisions to determine if any other parties have valid claims against the subject property (past due taxes, judgements, or mechanic leins) It also discloses past and current facts about the subject property's ownership
VA Guaranteed Loan: A mortgage loan in which the loan payment is guaranteed to the lender by the Department of Veteran Affairs
Variance: A deviation from specific requirements of a zoning ordinance due to special conditions of the property
Phew, that was a mouthful and I know there are many more terms I didn't cover. Please know that here at Elliott Realty Group we are happy to explain any of the terms and questions that come up when buying and selling property. Wether it's your first time, second or tenth we understand how confusing and overwhelming this can seem. We enjoy what we do and are hapy to help.