If you’ve been thinking of buying or selling and have set a meeting with one of our Wolstencroft agents… congrats! We are so excited for you and assure you that you are in good hands. Our agents will help you with every step of the way, but in case you wanted to brush up on your Real Estate ‘Lingo’, we are providing you with a few terms you may hear… and will definitely want to know! Here goes:
Amortization
The combination of ‘interest’ and ‘principal’ in loan payments. Instead of paying off only interest at the beginning, you’re able to build greater equity in the home much sooner by also paying off principal.
Appraisal
Banks appraise the value of the home or property before lending to ensure the price is correct and the money they are lending to you is a safe investment on their part. Appraisals are obtained by an examination of the property, as well as comparing with recent sales.
Assessed value
The value of a home according to a public tax assessor, dictating how much property tax will be.
Closing
The finalizing of the sale where both the buyers and sellers sign legal documents and the down payment and closing costs are paid.
Closing costs
Usually about 2%–5% of the sale price will be needed up front in addition to the down payment to cover fees such as loan processing costs, title insurance, tax, and legal.
Comparative market analysis
Also known as a (CMA), this report compare homes in the area in order to find the value and list price for your home.
Contingencies
Conditions to meet in order for the sale to be final. There may be contingencies for loan approval.
Fixed-rate mortgage
A mortgage where the interest rate stays the same throughout the life of the loan.
Home warranty
A warranty for potential major issues in the home such as plumbing and heating.
Inspection
Home inspections check things like plumbing, foundation, appliances, and ensure other features are up to code. Issues found in an inspection may affect the negotiation on a final price.
Listing
A listing is a home that is for sale.
Buyer’s agent & Listing agent
These are the real estate agents who represent the buyer and seller respectively in the real estate process.
Mortgage broker
A professional responsible for managing mortgage dealings between borrowers and mortgage lenders.
Offer
The price offered by a buyer to the seller for their home. The offer may be accepted, rejected or countered with a different offer.
Principal
The money borrowed to buy the home. Principal is combined with interest to determine the monthly mortgage payment. Paying down your principal is how you gain equity.
Refinancing
Restructuring your mortgage by replacing your old loan with an entirely new loan that has different rates and payment structures. People often refinance their home loans to take advantage of a lower interest rate offering on their mortgage which lowers the monthly payment and overall debt.
Title insurance
Often part of the required closing costs, it includes a search into public records to ensure that the title is free and clear, and able to sell.
