Select one of the frequently asked questions below to learn more about buying and selling real estate We have also included a real estate terms to know glossary. Also, begin to think about important things to consider when diving into your real estate search. You can then browse our Property Search based on those characteristics. For more information, please feel free to contact us.
Here is a list of common terms used when buying or selling a home.
Abstract of Title – a summary or digest of the conveyances, transfers, and any other facts relied on as evidence of title, together with any other elements of record, which may affect the marketability of the title
Appraisal – an opinion of value based upon of factual analysis
Appraisal Methods – Generally, there are three: cost approach, income approach, and market value (comparables) approach.
Appreciation – an increase in value of real estate
Assumption of Mortgage – the taking of title to property by a grantee, wherein he or she assumes liability for payment of an existing note secured by a mortgage or deed of trust against the property, thus becoming a co-guarantor for the payment of a mortgage or deed of trust note
Closing – the final settlement of real estate transaction between buyer and seller
Condominium – a structure of individual fee ownership of units combined with joint ownership of common area of the structure and the land
Contract for Deed – a contract ordinarily used in connection with the sale of property in cases when the seller does not wish to convey title until the buyer pays all or part of the purchase price
Conventional Loan – a mortgage securing a loan made by investors without governmental underwriting (i.e., not FHA insured or VA guaranteed)
Counter Offer – a rejection of an offer by a seller along with an agreement to sell the property to the potential buyer on terms differing from the original offer
Deed – written instrument which, when properly executed and delivered, conveys title
Discount Points – additional charges made by a lender at the time a loan is made. Points are measured as a percent of the loan, with each point equal to one percent.
Earnest Money Deposit – down payment made by a purchaser as evidence of good faith
Easement – created by grant or agreement for a specific purpose; or, easement is the right, privilege or interest which one party has in the land of another (e.g., right of way)
Equity – the interest or value which an owner has in real estate over and above the liens against the real property
Escrow – the deposit of instruments and funds with instructions to a third neutral party (escrow agent) to carry out the provisions of an agreement or contract. When everything is deposited to enable carrying out the instructions, it is called a complete or perfect escrow.
F.H.A. Loan – a loan insured by the Federal Housing Administration, guaranteeing its payment in case of default by the owner
FMHA Loan – a loan by the federal government similar to FHA loan, usually used for residential property in rural areas
Impound Account – account held by the lender for payment of taxes, insurance, or other periodic debts against real property
Joint Tenancy – Joint ownership by two or more persons with right of survivorship. All joint tenants own equal interest and have equal rights in the property.
Lien – a form of encumbrance which usually makes property security for the payment of a debt of discharge of an obligation (e.g., judgments, taxes, mortgages, deeds of trust, etc.)
Marketable Title – merchantable title; title free and clear of objectionable liens or encumbrances
Mortgage – an instrument recognized by law by which property is hypothecated to secure the payment of a debt or obligation. Procedure for foreclosure in event of default is established by state law.
Mortgage Insurance – insurance written by an independent mortgage insurance company protecting the mortgage lender against loss incurred by a mortgage default, thus enabling the lender to lend a higher percentage on the sale price
Origination Fee – a fee charged by the lending institution
Personal Property – any property which is not real property (e.g., money, savings accounts, appliances, cars, boats, etc.)
Purchase Agreement – an agreement between a buyer and seller for the purchase of real estate
Quitclaim Deed – a deed operating as a release
Real Property – land and whatever by nature or artificial annexation is a part of it
Special Assessment – legal charge against real estate by a public authority to pay cost of public improvements (e.g., street lights, sidewalks, street improvements, etc.)
Sub-Division – a parcel of land that has been divided into smaller parts
Term of Mortgage – the period during which a mortgage must be paid
Trust Account – an account separate, apart and physically segregated from broker’s own account in which broker is required by law to deposit all funds collected for clients
V.A. Loan – a loan guaranteed by the Veterans Administration
Warranty Deed – a deed used to convey real property which contains warranties of title and quiet possession, and the grantor agrees to defend the premises against the lawful claims of third persons
1031 Exchange – also referred to as a nontaxable sale, this enables property owners to trade an investment property for another investment property (or properties) without paying capital gain taxes on the transaction
Selecting an agent to help you through the entire home buying process is as important as determining how much home you can afford and where you want to live. The best thing you can do when selecting your personal real estate agent is to choose someone who has a personality that fits with your own. You will be spending a lot of time with that person, so liking him or her is a major plus!
Choose an agent now. Consider asking the following questions when interviewing an agent:
- Are you a REALTOR®?
- There is a difference between a real estate licensee and a REALTOR®. A licensee who is a member of the National Association of REALTOR®s is bound by the Code of Ethics and Standards of Practice associated with the industry and may be disciplined for violating it. Their duty is to treat all parties honestly and fairly.
- How does the process of purchasing a property work?
- Your agent should be able to explain the process of locating a property, placing an offer on a property, the inspection process, the closing process and more. Your agent can tell you what your responsibilities are during the transaction.
- Can you assist in determining my purchasing power?
- An agent should have a general knowledge of lending and financing but should not determine your financial buying power. You should inquire about lending options and financing terms with a qualified lending professional. Your agent may assist you in locating a few for you to choose from.
- How will I know what price range to look in?
- After you begin the loan application process, an agent should be able to narrow down a price range with the proper information from your lender. At this point you may begin narrowing your area criteria, as well as begin your “needs assessment” with your Agent.
- Do you have training and education?
- Most states have strict laws regarding licensing and continuing education. Your agent should be able to give you up-to-date information, should be committed to continuing education, and should always act professionally.
- Can you give me any references?
- Be certain that your agent is willing to give you references or let you contact past clients.
- What can I expect as far as communication?
- You will want an agent who listens to your goals, explains and identifies problems and answers all of your questions. Communication is key, so ask your potential agent how he or she plans to inform you of issues or concerns throughout the transaction, as well as timelines and deadlines.
- How do you get paid?
- Inquire about the fee structure and representation. Most Buyer’s Agents earn a commission and are paid by the seller but still represent the buyer. Ask your agent to explain the process.
- Conducting a ‘Needs Assessment’
- Narrowing your search criteria
- Selecting a lender
- Identifying your financial power for purchasing
- Providing community information
- Conducting market research
- Showing you properties
- Assisting in the selection process
- Preparing the contract and any additional documents
- Helping negotiate any counter-offers or other terms of sale
- Opening an escrow account and depositing earnest money
- Coordinating home inspections
- Evaluating inspection data and determining issues
- Obtaining home warranty policies
- Maintaining deadlines and timelines for performance from both parties
- Communicating with both parties throughout the transaction
- Conducting walk-throughs
- Determining that all negotiated items have been completed
- Reviewing the settlement statement prior to closing
- Confirming receipt of title insurance and commitment
- Coordinating the closing process
- Providing excellent service throughout the transaction
- Most transactions require financing to assist in the purchase. A lender can be a mortgage company, a bank, private financing, as well as other options. Whichever you choose, the lender plays an extremely significant role in the transaction. You will be asked to complete an application, provide documentation and verify your income. You may also be asked to give permission for your credit score to be checked, and for your assets to be verified. There are numerous steps to take to secure financing, and your cooperation with the lender is a key ingredient to experiencing an on-time, relatively stress free closing!
- The role of the escrow and title companies differ from state to state. Some states require attorneys to conduct the actual closings, and some allow the escrow company to do it. That being said, the escrow company is where you will be closing your transaction. It may also be providing the Title Report, Title Insurance, providing copies of CC&R’s from a Homeowners Association, working with the lender to coordinate the closing and funding, working with the seller to coordinate the payoff of the existing loan, preparing Settlement Statements (HUD 1’s) coordinating tax prorations, recording the deeds, and disbursing the funds.
- HOME WARRANTY COMPANY
- Many transactions today are covered by a home warranty for the first year of ownership. This option can be purchased during the transaction, and covers many of the systems that a home inspector would inspect. A home warranty may provide some piece of mind to a buyer purchasing an older property, or one that may have some systems issues in the future. You can also request coverage of some appliances and septic systems. For a small service call fee, the home warranty company will send a team to your home that can determine a problem and repair or replace an item. The most typical claims are for heating/cooling systems and for plumbing issues, but depending on the region of the country, some may be more typical than others.
- Homeowner’s insurance may not be the most exciting part about purchasing a home, but it is important to protect your investment. Homeowner’s insurance is often required by a lender if you have a loan on your home.
This information is presented for educational and informational purposes only. It should not be construed as specific real estate advice. We do not provide tax or legal advice.