Earnest Money Deposit:
A deposit given to the seller or seller’s sales professional by the potential buyer upon signing the agreement of sale. The deposit shows that the buyer is serious about buying the property, an expression of good faith. If the sale goes through, the earnest money is applied against the down payment. If the sale does not go through, the earnest money is forfeited or lost unless the binder or offer to purchase expressly provides in writing that it is refundable. Also known as Earnest Money.
A right, interest or privilege provided to persons other than the owner granting access to or over a property. For example, a utility easement provides public utilities such as electric, gas or telephone the right to place their lines or equipment across others’ property.
An improvement such as a building, or portion of a building, or an obstruction that physically intrudes upon, overlaps or trespasses upon the property of another.
Any right or interest in land that affects or limits the fee simple title to a property, such as mortgages, leases, easements or restrictions.
The value of a homeowner’s unencumbered interest in real estate. Equity is calculated by subtracting from the property’s fair market value the total of the unpaid mortgage balance and any outstanding liens or other debts against the property. Equity increases as the mortgage balance declines or as the property value appreciates. When the mortgage and all other debts against the property are paid in full, the homeowner has 100% equity.
Something of value, such as money or documents, put into the custody of a third party to be delivered upon the fulfillment of specified conditions. For example, a buyer places a down payment in escrow with an attorney to be disbursed when the transaction closes or a borrower places funds in escrow with a lender to pay taxes when they are due.
Funds held by a lender or service provider to pay for taxes, hazard insurance, mortgage insurance and other expenses as they become due. Also known as Escrow Payment.
A mortgage where the lender is insured against loss by the Federal Housing Administration (FHA).
Computer score, based on information from a borrower’s credit history, used by a lender to predict the likelihood that the borrower will repay a mortgage.
A person who acts on the behalf of others in a legal manner.
Fixed-Rate Mortgage (FRM):
A debt instrument in which the interest rate does not change during the entire loan term. Also referred to as FRM.
Legal loss of property because of non-payment of a mortgage.
A debt instrument in which the interest rate does not change during the entire loan term. Also referred to as Fixed-Rate Mortgage.
An acronym that stands for “For Sale By Owner” is used to describe someone who is not working with a sales professional to sell property.
Full Service Agent:
A real estate agent who is a licensed sales professional for the purpose of listing homes for sale and representing buyers in real estate transactions.
General Warranty Deed:
A deed in which the grantor fully warrants that title is free from defects, or does not have a cloud on title. See Cloud On Title. Commonly used in most real estate deed transfers because it offers the greatest protection of any deed.
Good Faith Estimate:
Lender disclosure of credit terms and costs associated with a mortgage.
A person who receives a conveyance of real property from a grantor.
The person transferring title to, or an interest in, real property to a grantee.
A policy with coverage that compensates for physical damage to a property from wind, fire, vandalism, or other perils. Coverage should be equal to at least the replacement cost of the property to ensure that the home will be fully rebuilt in case of a total loss. Also referred to as Home Insurance.
A thorough examination that evaluates the mechanical and structural condition of a property.
A type of insurance policy that covers repairs to specified parts of a house for a specific period. Also known as a Residential Service Contract.
A policy with coverage that compensates for physical damage to a property from wind, fire, vandalism or other perils. Coverage should be equal to at least the replacement cost of the property to ensure that the home will be fully rebuilt in case of a total loss. Also referred to as Hazard Insurance.
An acronym for the Department of Housing and Urban Development.