Glossary of Common Real Estate T

Glossary of Common Real Estate Terms

Adjustable Rate Mortgage - The interest rate charged to the borrower will vary (or adjust) based on changes to the prime interest rate. As the prime rate goes up, so does the interest rate on the home loan.

Appraised Home Value - The estimated value of a home or property. Appraisals are subjective and may or may not accurately reflect the actual price a home will command in the market when competing with other homes.

Balanced Housing Market - The supply of available homes is in approximate equilibrium with the buyer demand.

Buyer’s Market - The supply of homes available for sell exceeds the demand. In this kind of market, prices tend to decrease and homes take longer to sell.

Closing the Transaction - The final stage in the home selling process. At the closing, the seller and buyer (or their representatives) will meet with an authorized closing officer (title company representative or attorney) to sign the legal documentation necessary to transfer title from the seller(s) to the buyer(s). Financial disbursements are made to the appropriate parties to the transaction.

Comparative Market Analysis - An estimate of the value of a home using a few key indicators taken from sales of comparable properties. A CMA is not a formal appraisal and should be considered only as educated opinion about the home’s probable value.

Counteroffer - A home seller reviews an offer to purchase from a buyer and decides to propose one or more changes to the offer. The proposed changes are annotated on the offer to purchase form and returned to the buyer for their consideration. This constitutes a counteroffer. The buyer has the right to accept or refuse the counteroffer. In some cases, the buyer may decide to make their own counteroffer back to the seller. This back and forth process may continue until an agreement is reach or the offer is retracted.

Curb Appeal - How a home appears from the road or driveway. A home with good curb appeal will appear clean, well maintained, and attractive.

Disclosure of Property Condition and History - Informing prospective buyers of the condition and history of the house and property. Disclosure is normally accomplished by the seller(s) completing one or more legal forms requesting information about various aspects of the home’s condition and history. The seller is obligated to be forthright and accurate in the statements they make regarding the home and property’s condition. Failure to do this can put the seller at risk of legal recourse from the buyer should problems arise later that the seller did not disclose.

Earnest Money - A financial consideration deposited by a buyer to demonstrate good faith in making a real estate purchase. Earnest money may be forfeited to the seller if the deal falls through due to any action, failure to perform, or negligence on the behalf of the buyer.

Escrow Account - An escrow account is an account designated to hold escrow funds such as earnest money from the buyer. The escrow accounts purpose is to keep funds held under an escrow agreement segregated from any other funds and to withhold or disburse the funds in the escrow account according to the sales agreement. Normally, the buyer’s earnest money deposit is held in the escrow account until closing unless the seller releases the money back to the buyer if the deal falls through.

Fixer-Upper Home - A fixer upper home requires extensive repairs and improvements. Fixer-upper homes are normally sold at discounted prices to compensate for the work required to bring them up to standard.

FSBO (For Sale By Owner) - A term used for home owners who decide to sell their home by themselves without the services of a trained, experienced real estate professional.

Graduated Payment Mortgage (GPM) - The GPM features a monthly mortgage payment system in which the payment amounts gradually increase each month.

Growing Equity Mortgage (GEM) - With a GEM, mortgage payments steadily increase each month. The increased monthly payment amount goes towards paying down the principle balance of the loan. With a GEM, the loan is paid off at an accelerated rate and less money is ultimately paid towards interest on the debt.

Home Equity - Amount left after subtracting the unpaid debt balance(s) on the property from the property's current market value as assessed by a valuator. Home equity can increase two ways: 1) Debts against the property are reduced (i.e., loan balance is paid down) or, 2) The property's value appreciates.

Home Inspection - Within their offer to purchase, a buyer may reserve the right to conduct inspections and tests of the home’s condition to ensure no significant problems or defects exist. Typical inspections include: termite and pest inspections, lead based paint inspections, structural and roof inspections, as well as inspections of the heating and cooling systems, electrical, appliances, plumbing, and sewer/septic systems. Some inspections might include tests for hazardous substances or chemical agents on the property.

Loan Discount Points - A method lending institutions use to allow the borrower to “buy down” the interest rate on their home loan. Mortgage discount points are a one time (upfront) prepayment of future interest on a loan in exchange for a lower interest rate on the loan. One mortgage discount point is equal to 1% of the total loan’s value.

Loan Origination Fee - A fee charged to the borrower to cover the lender’s costs involved in processing the loan application and preparing a mortgage. It is, in essence, an upfront administrative fee to cover the lender’s expenses associated with making the loan to the home buyer.

Low Ball Offer - Occurs when a buyer makes an offer to purchase that is significantly below the seller’s asking price.

Mortgage - A written agreement between the borrower and the lender where the borrower pledges the subject property as security for the payment of the loan.

Mortgage Loan Origination - The process of creating a mortgage beginning with the loan application and culminating with the buyer’s signing of the mortgage.

Multiple Listing Service (MLS) - A collection of proprietary databases which allow real estate brokers representing sellers under a listing contract to widely share information about properties with real estate brokers who may represent potential buyers or wish to cooperate with a seller's broker in finding a buyer for the property.

Offer to Purchase - A contract for the purchase of a property. This contract will identify the price offered, the terms of the sale, and the obligations and rights of the seller and buyer in the transaction. An offer to purchase is secured by a deposit of earnest money into an escrow account to evidence the buyer’s good faith.

Prepayment Penalty Clause - A legal statement in a mortgage that imposes a monetary penalty on the borrower in the event they prepay or satisfy the loan prior to a specific date.

Price Gouging - In a free market economy, prices are driven by the demand and the supply for a particular product or service. A large demand for a product or service that has a limited supply translates to higher prices. The owner of a product or service may decide to increase their selling price to balance increased demand against decreased supply in order to maximize profit. People, who do not believe profit maximization is ethical, refer to this process as “price gouging”.

Private Mortgage Insurance (PMI) - A premium added to your monthly mortgage payment to maintain insurance protection for the lending institution in the event the borrower defaults on the loan. PMI applies to conventional loans when the loan to home value amount exceeds 80% of the home’s value.

Purchase Money Mortgage (PPM) - The home owner finances all or a part of the purchase price of the property. This is often referred to as the seller taking back a mortgage.

Qualified Buyer - A buyer who is willing and able to purchase a specific property (house, condo, real estate). A qualified buyer has been pre-qualified for a mortgage or has sufficient cash funds to purchase a property within a given price range.

Realtor - A licensed real estate agent or broker who is a member of the National Association of Realtors.

Seller’s Market - The demand for homes exceeds the supply of homes available for sell. In this kind of market, prices tend to increase and homes sell more quickly.

Short Sell - A short sale occurs when a property is sold and the lender agrees (in advance) to accept a discounted mortgage payoff and release the homeowner from the remaining balance.

Weak Housing Market - The supply of available homes exceeds buyer demand.

Julington Creek Plantation, Julington Creek, JPC, Homes Sale, Julington Creek Home Prices, Jacksonville FL 32259, Denise Bash, JCP, NW St Johns County, Riveroaks Plantation

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