What Does This Even Mean?
OK, so Real Estate terminology can sometimes make Realtors sound like we are speaking Greek (or extra-terrestrial).
Here are some basic terms to help you familiarize yourself with the Realm of Real-Estate Speak, Enjoy!
Adjustable Rate Mortgage or ARM
An ARM is not a body part. It is a loan that has a varying interest rate and payment based on an adjustment period. The adjustment is dependent on the variation in a benchmark index like the COFI or LIBOR.
Contingency is a condition in a contract relieving a party of liability if a specified event occurs or fails to occur.
DIL (or Deed in Lieu of Foreclosure)
Deed in lieu of foreclosure is the conveyance of title to the mortgagee by a mortgagor in default to avoid a record of foreclosure.
A state where consideration, benefits, legal rights, document, or a sum of money is held by one person in trust for another, for the purpose of assuring performance under an agreement. Normally in a residential real estate sale, the attorney for the seller is the escrow agent for the deposit money securing the deal until closing. The money is held in an escrow account.
A fixture is an item (appliance, light fixture, etc.) that is
A grant is a transfer of title to real property by deed.
HVAC is an acronym that stands for heating, ventilation and air conditioning.
Intestate is the condition that occurs when someone dies without a valid will.
Joint tenancy is a form of co-ownership that can but does not require the inclusion of the right of survivorship.
Liquidated damages are the agreed amount to be paid as compensation for a breach of contract.
MI (or Mortgage Insurance)
Mortgage insurance is insurance that protects the lender in case the home buyer does not make their mortgage payments. Typically, a borrower would be required to pay a fee for mortgage insurance if their down payment is less than 20%.
National Association of Realtors (NAR)
The NAR is the largest and most prominent trade organization for real estate brokers and agents.
An ordinance is a law enacted by the local government. I promise this has nothing to do with ammunition.
PITI is an acronym for a mortgage payment that includes principal, interest, taxes and insurance.
The rate lock is an agreement between the borrower and the mortgage lender that guarantees a rate for a set period of time (typically 30, 60 or 90 days).
The setback is the distance from the front or interior property line to the point where the structure is located.
The title of a property is the evidence or documentation that an owner is in lawful possession of the property, such as a property deed.
In mortgage lending, underwriting is the decision-making process used to determine whether the loan risk is acceptable to the lender. Underwriting involves the review of the property appraisal and examination of the borrower’s ability and willingness to repay the debt and sufficiency of collateral value of the property.
Vesting options are choices buyers have in how to acquire property.
An area of a municipality or specific building that is zoned for a specific use, such as residential, commercial, etc.