Real Estate Terms

⁠The value of a property assigned by a local governing authority to levy real estate taxes on the property owner.⁠
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Between assessment, appraisal, listing price, and purchase price, it is easy to get confused. The assessment simply determines what you will pay in real estate taxes. This can be impacted by the sale of a property, particularly if the sale is much more than the current assessment. Making improvements to your home that are visible from the exterior or require a permit may also cause your assessed value to change. The assessed value should not have an impact on your home listing price, sales price, or appraisal value.⁠

If you did not attend business school or work in finance, amortization may be a foreign word. No worries. When you agree to a loan, a schedule of payments is set. Each payment is partially principal (the original amount of the loan) and partially interest (the fee you pay to borrow the money). The amortization schedule shows you the breakdown of principal and interest that make up your total mortgage payment.

The estimated value of a property based on a qualified appraiser’s written analysis. Banks typically require appraisals before issuing loans to ensure the estimated value of the property adequately exceeds the amount borrowed. This number is different from purchase price or assessment.

If finance isn’t your specialty, wrapping your head around mortgage terms can be unnerving. With mortgage rates increasing, many buyers will consider an ARM.⁠
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ARMs are a type of mortgage that begin with an interest rate that is fixed for a set period of time (typically 5, 7 or 10 years). After that time period, the rate will vary up or down based on a benchmark pre-determined at the time of your purchase.

a real estate agent who represents the interests of home or property buyers. 

A real estate purchase can involve different agents representing the buyer and seller, one agent representing both, one agent representing a buyer with a for sale by owner seller, or no agent at all. I will always aid my clients in the best representation possible for their situation, but I am particularly lov representing buyers. Sometimes buyers know exactly what they want so I focus my energy on securing the property they desire. Many other times, buyers start with a set of parameters and need some time to view various properties. I enjoy getting to know new clients through this process and, of course, helping old friends realize their dream.

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Fees associated with completing a real estate transaction. This could include attorney’s fees, credit report fees, document preparation fees, deed recording fees, appraisal fees, inspection fees, etc.

The closing agent prepares a closing statement (a listing of both parties in a real estate transaction have paid and owe) in advance of the closing of the real estate purchase. The Realtor representing the buyer or seller makes sure their client is prepared to fund these previously agreed upon costs.

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A contingency is a particular condition that must be met prior to closing a real estate transaction such as a home inspection, a financing contingency, or a contingency that a buyer must first sell their current home. 

These are common contingencies, but buyers can also request modifications to the home, for the seller to leave certain items within the home, etc. 

Real estate professionals manage deadlines associated with these contingencies to ensure the home or property closing happens in the timeframe agreed upon by the seller and buyer.

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Earnest money are funds kept in a trust account held by an attorney, title company, or real estate brokerage until the time of real estate closing. However, if a real estate purchase does not close, the earnest money is at risk.

To understand more about how this works, give me a call to discuss the different scenarios that impact earnest money. 📞563.299.2077

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A Federal Housing Administration (FHA) loan is one that is insured by the FHA. The rates are typically lower and the lending requirements are less stringent than conventional financing. These loans appeal to buyers with lower credit scores and/or smaller down payments. FHA loans require mortgage insurance, an additional monthly payment for homeowners.

To understand more about how this works, give me a call to discuss the different scenarios that impact earnest money. 📞563.299.2077

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A home loan with a “locked in” interest rate for the duration of the loan repayment period. Mortgage loans are most commonly thirty years, but can be issued for a different length of time. Your pre-determined interest rate cannot change during the term if you pay your mortgage on time.

Whether you want a fixed-rate or variable loan depends on the current interest rates, type of mortgage you are seeking, and how long you intend to own the property. I can help you look at this and direct you to mortgage brokers who will show you the best product for you.

Give me a call to discuss! 📞563.299.2077

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A home inspection is a thorough professional examination (at the buyer’s expense) of the structural and mechanical condition of a property.

Unless there are special circumstances, it is always my recommendation for the inspection period to begin with a whole home inspection. The report generated, along with the time spent with an experienced inspector, will give the new buyer key information for the ongoing maintenance of the property and what additional specialized inspection or repair quoting might be required before the inspection period comes to an end.

I’m happy to explain further how this process works as a step within the purchase process.

Give me a call to discuss! 📞563.299.2077

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A sales contract is a legal agreement between a buyer and seller to purchase real estate for a specified price and terms.

When initially presented to the seller, this document may be called a purchase offer. Once the seller accepts the presented terms (which may happen after back and forth negotiation), it becomes a sales contract.

You may also hear the terms “sales contract” or “offer to purchase” used synonymously.

Give me a call to discuss! 📞563.299.2077

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Why do Realtors call houses for sale listings?

The term may seem a bit antiquated today but it originated as items printed in a “list” for sale, such as in a catalog or store window. Today Realtors speak of their new “listing” and might also refer to the printed or digital details regarding a home for sale as a listing.

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Real Estate Term: Pre-qualification

A pre-qualification is the step before a mortgage pre-approval. A potential buyer may provide to their preferred mortgage lender financial information. The lender will examine the financial information to recommend the high end of a buyer’s purchase budget based on the lender’s ratios of income to debt. This first step is essential for first time homebuyers and should take place prior to any serious home shopping.

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Real Estate Term: Private Mortgage Insurance (PMI)

A monthly insurance payment that may be required if a buyer’s down payment is less than required (typically 20% of the real estate purchase price). The insurance is to benefit the lender and protects against their loss if a borrower defaults on their mortgage. PMI is typically paid as a portion of the mortgage payment and can be removed once the borrower has paid down the loan to the desired percentage of the purchase price.

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