Have you ever wondered what your real estate agent was saying? Those confusing words don’t make any sense; well Local Records Office breaks down the real estate lingo and tells you what it means.
The process of buying your first home can be intimidating enough until you realize there’s an entire language of terms you need to learn to fully understand the process and then things become even more daunting. From the different types of mortgages to the process of putting in an offer and then closing on a property, real estate brokers will toss around terms and phrases that may go right over your head. Fear not.
We polled some experts and compiled a list of must-know lingo to help you navigate this intense but exciting process. Read on for an education.
Escrow
This refers to the time period and process where the purchase funds are released and the transfer of the house between parties is completed. The escrow company is a neutral third party and executes the transaction utilizing the purchase agreement and other documents as the directive.
Deed
The deed is the legal document that proves the transfer of ownership from the seller to the buyer. You could get a copy of your deed.
Fixture
Local Records Office says, Anything of value that is permanently attached to or a part of the property. This can include lighting, carpet, or landscaping. These items can be a source of dispute between buyer and seller and can be leveraged for negotiations.
HOA
The short form of Homeowner’s Association Documents. These apply when purchasing a condo and include HOA meeting minutes, a copy of the building’s yearly budget, and/or rules for shared spaces.
Mortgage
A document that pledges the property to the lender as security for the loan needed to purchase the home.
Pre-Qualification
The process the loaner goes through to confirm if a borrower qualifies for a loan based on their credit history and current financial status as well as the amount of money a recipient qualifies to receive.
PITI
Principal, Interest, Taxes, and Insurance. This is another way of describing your monthly mortgage payment. The principal is the portion of the payment that goes toward paying down the loan and interest is the portion that pays the lender for loaning the money to purchase the property.
Fixed-Rate Mortgage
A type of mortgage in which the interest rate does not change over the course of the loan.
MLS
This stands for Multiple Listing Service and is where brokers to share their listings with other brokers.
Due Diligence
This is the responsibility of the buyer to take all necessary care before closing on the purchase. For example, it would include confirming the seller’s broker and attorney are legitimate and confirming there are no issues that have yet to be disclosed that would prevent the buyer from wanting to proceed with the purchase.
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