The ABCs Of Real Estate
Appraisal: estimation of a home’s market value by a licensed appraiser based on the comparable recent sales of nearby homes.
Backup Offer: secondary offer on a home that is already under contract that will become active if the primary offer falls through.
Contingent Offer: offer is accepted by the Seller, but certain conditions must be met before the sale is final.
Down Payment: percentage of the home purchase price (usually between 5% and 20%) paid upfront in cash.
Escrow: neutral third party that holds funds from the buyer and distributes them when all conditions have been met.
Federal Housing Administration (FHA): government agency that insures loans designed for low-to moderate-income buyers.
Good Faith Estimate (GFE): provided by a lender to a borrower, GFE was an estimate of fees due at closing. New mortgage rules in 2015 replaced this form with one called a Loan Estimate.
Homeowners’ Association (HOA): management organization within a community, subdivision, or neighborhood that creates and enforces rules for properties within its jurisdiction.
Inspection: an examination of a property and its systems performed by a qualified professional, usually before the sale of a home.
Jumbo Mortgage: mortgage exceeding the conforming-loan limit, commonly used for luxury home purchases.
Key Rate: interest rate set by the federal government that determines the cost to borrow money, in this case, a mortgage to buy a new home.
Loan-to-Value (LtV): risk assessment ratio used by lenders: to calculate, divide the mortgage amount by the appraised value.
Multiple Listing Service (MLS): database for real estate agents to list and market for-sale homes.
Net Proceeds: amount received by the Seller at closing after all other costs have been deducted.
Open House: event hosted by a listing agent to showcase a home to potential Buyers.
Preapproval Letter: letter indicating that a lender is willing to loan a specific amount of money for a home purchase; preapproval does not guarantee a loan.
Quitclaim Deed: deed transferring property rights without any validation of ownership, typically used between spouses and family members.
Real Estate Owned (REO): repossessed property owned by a lender after an unsuccessful sale at auction.
Seller Property Disclosure Statement (SPDS): document completed by the Seller disclosing the property’s history and defects.
Title: the right to ownership of real property recognized and protected by the law.
Under Contract: when a Buyer has submitted an offer that the Seller has accepted, but the closing is not yet final.
VA Loan: mortgage loan for Veterans and their spouses, made by private lenders and guaranteed by the U.S. government.
Walkthrough: final inspection conducted before a home sale is final.
X Marks The Spot: where you sign on the dotted line for your dream home!
Yield-Spread Premium (YSP): amount a lender pays a mortgage officer for selling a loan with a higher interest rate than the par rate.
Zero Lot Lines: residence built very close to or directly on the property line.
We hope this glossary of terms has helped with your real estate education! Contact us today to set up your free consultation.
844-400-6040 or TucsonPowerGroup@gmail.com
Tucson Power Group can help you with a residential sale or purchase anywhere in Southern Arizona. If you are in another area or state, we have a network of quality agents. Call us today, and we can help you find a competent agent in your town.