Real Estate Terms to Know Part 2
Terms to Know When Selling Your Home
Defining Important Real Estate Terms
We’re back today with the second part of our “Real Estate Terms to Know” series, where we try and provide a little bit of an explanation for some of the more complicated or essential terms that you need to know during the real estate process. It’s essential to understand what is going on when you are buying or selling a home, and the best way to stay in the know and make sure everything is working in YOUR favor is by working with an experienced Realtor. The entire team here at Ask Cathy are professional Realtors, with years of experience in every type of market, and the knowledge to help you navigate the current market with confidence.
With this blog, we’re hoping to provide you with just a fraction of the security that comes with working with a member of our team, by defining some of that real estate jargon you are likely to run into when buying or selling a home. If you’d like to get in contact with a member of our team and have them handle the jargon and the paperwork and rest easy knowing that you have someone working for your best interests, contact us today by filling out the contact form below or by giving us a call at 816-268-4033!
In the follow-up from the first part of this series, we’re going to just some of the terms you need to know when selling your home.
Conventional Sale: A conventional home sale is the most common type of sale in the real estate world. A conventional sale occurs when a homeowner either owns the property outright, meaning they have paid their mortgage off fully, or they owe less on their property than what the market expects it to sell for.
Cash-Out Refinance: A refinance transaction in which the amount of money received from the new loan exceeds the total of the money needed to repay the existing first mortgage, closing costs, points, and the amount required to satisfy any outstanding subordinate mortgage liens. In other words, a refinance transaction in which the borrower receives additional cash that can be used for any purpose.
Earnest Money Deposit (EMD): A deposit made by the potential home buyer to show that he or she is serious about buying the house.
Equity: A homeowner's financial interest in a property. Equity is the difference between the fair market value of the property and the amount still owed on its mortgage.
Escrow: An item of value, money, or documents deposited with a third party to be delivered upon the fulfillment of a condition. For example, the deposit by a borrower with the lender of funds to pay taxes and insurance premiums when they become due, or the deposit of funds or documents with an attorney or escrow agent to be disbursed upon the closing of a sale of real estate.
Escrow Holder: An escrow holder is the impartial third party that manages the escrow account and deposits made into that account. They hold onto escrow deposits, documents, and other items of importance during a real estate transaction and release these materials once certain contractual obligations have been met.
Home Equity Line of Credit (HELOC): A credit line that is secured by a second deed of trust on a house. Equity lines of credit are revolving accounts that work like a credit card, which can be paid down or charged up for the term of the loan. The minimum payment due each month is interest only.
Inspection: A home inspection is when a professional home inspector examines a home to determine if there are any major structural or safety issues with the home that would affect the sale. They will typically look at the roof, electrical system, plumbing, the exterior of the home, etc.
Inspection Contingency: A contingency that specifies that the contract is not binding until the purchaser obtains a satisfactory home inspection report from a qualified home inspector.
Preliminary Report: A preliminary report is a document typically obtained from a title company that details any issues with the title of a home in order to determine what needs to be done in order to deliver a clean title to the home buyer. It will detail any liens on the property, and the information on the property including lot size, property boundaries, etc.
Seller Concession: A seller concession is when a seller offers certain concessions in order to attract buyers to purchase their home. The seller will offer concessions to the buyer, meaning that they will offer a certain amount of money for the buyer’s closing costs. The concessions can go towards paying for the title insurance, inspection fees, points on the mortgage, etc.
Seller Disclosure: The seller’s disclosure is a comprehensive document filled out by the seller that details all of the pertinent information about the property to the best knowledge of the seller. This disclosure includes material facts and known issues about the property that might affect the decision of the buyer to proceed with writing a contract.