Real Estate Terms
It seems as though real estate agents have their own language. Keeping us with this language can be a difficult task. Knowing some of the terms that the real estate agents use on a daily basis however, can be very helpful when working with them.
One term that is not all that common is negative amortization. This is an increase in the balance of a loan caused by adding unpaid interest to the loan balance: this occurs when the payment does not cover the interest due. Some people have had this happen to them, they just did not know the name for it.
A term that most people who have ever been involved with buying or selling a house should be familiar with is offer. This is a formal bid from the home buyer to the home seller to purchase a home. On occasion the seller will make a counter offer on the offer that they buyer gives.
Partial payment is a term that many people are at least a little familiar with. This is a payment that is less than the scheduled monthly payment on a mortgage loan. This often happens when someone has to pay a bill but does not have the full amount, but wants to pay some of it at least.
If you have ever tried to get a loan for anything then you are most likely familiar with the term qualifying guidelines. This is criteria that is used to determine eligibility for a loan.
Most people have at least heard of radon, even if they are unsure of what it is. Radon is a toxic gas that is found in the soil beneath a house that can contribute to cancer and other illnesses. That is why it is very important to have a house that you are planning on buying tested for it. If the test comes back positive there are things that can be done to get rid of it and make the house safe again.
A term that is out there that some do not fully understand as far as real estate goes is securities. This is a financial form that shows the holder owns a share or shares of the company (stock) or has loaned money to a company or government organization (bond).
Everyone is familiar with taxes and insurance. As far as real estate goes it is funds that are collected as part of the borrower’s monthly payment and held in escrow for the payment of the borrower’s, or funds paid by the borrower for, state and local property taxes and insurance premiums.
Many people are unfamiliar with the term underwrighting. This is the process used to determine loan approval. It involves evaluating the property and the borrower’s credit and ability to pay the mortgage. It is a very important part of home buying.
Some people have heard of Veterans Affairs (U.S. Department of Veterans Affairs). This is a federal government agency that provides benefits to veterans and their dependents, including health care, financial assistance, educational assistance, and guaranteed home loans. This is something that can be very helpful to veterans and their families.
A walk-through is a common term when looking to buy a home. This is a common clause in a sales contract that allows the buyer to examine the property being purchased at a specified time immediately before the closing.
Real estate agents use many terms that can rather confusing to many people. Knowing some of the terms that they use can be extremely helpful when working with a real estate agent. There are so many that if they use one that you are not familiar with it is important to ask for the meaning. That way you understand every part of what is going on.