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Real
Estate Terminology
Agency
- A legal relationship in which an owner-principal engages a broker-agent
to market the owner's property or a buyer principal engages a broker-agent
to locate and negotiate for purchase of property on satisfactory
terms.
Amortization
- The gradual reduction in the balance of a mortgage by periodic
payments.
Assessed
Value - The valuation placed on property by a public tax assessor
as the basis of property taxes.
Binder
- An agreement to enter into a contract, accompanied by a deposit,
whereby the purchaser evidences good faith.
Broker -
A person licensed by a state real estate commission to act independently
in conducting a real estate brokerage business. Although the requirements
for a broker's license vary from state to state, an individual usually
must have one or more years of experience to pass an examination.
Buyer-brokerage
- Agreement whereby the agent is representing the buyer. The seller's
agent and prospective sellers must be advised of this relationship.
Cap -
A maximum amount or ceiling that can be charged
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Closing
- The final step in transferring ownership of a property from seller
to buyer.
Closing Costs
- Fees and expenses, not including the price of the home, payable
by the seller and the buyer at the time of closing (e.g., brokerage
commissions, title insurance premiums, and inspection and appraisal
fees).
Conventional
Loan - A fixed-rate, fixed term loan that is made without government
insurance.
Deed
- A legal document conveying title to a property.
Earnest Money
- A down payment given to the seller by a potential buyer indicating
the buyer's intent to complete the purchase of property.
Equity Loan
- A loan that is based on the borrower's equity in real estate property
rather than on the creditworthiness of the borrower.
Escrow
- The placement of money or documents with a third party for safekeeping
pending the fulfillment or performance of a specified act or condition.
Exclusive
Agency Listing - A formal agreement giving a broker the exclusive
right to market the owner's property for a specified period of time
and receive a commission if the broker locates a ready, willing
and able buyer during that time. It also allows the owner to market
and sell the property during the period and avoid paying a commission
if the owner locates the ready, willing and able buyer.
Exclusive
Right-to-sell Listing - A written agreement by which the owner
retains a broker as the exclusive marketing agent and promises to
pay the broker a commission if a ready, willing and able buyer is
found for the property during the listing period, regardless of
whether the broker is responsible for finding that buyer.
Housing and
Urban Development (HUD) - A U.S. governmental agency established
to implement certain federal housing and community development programs.
Lien -
A legal claim against a property. Listing Contract - An agreement
between a homeowner and a licensed real estate broker authorizing
the broker to offer the owner's property for sale during a given
time period.
Market Value
- The highest price a ready, willing and able buyer will pay and
the lowest price a seller, not under duress, will accept.
Points
- A dollar amount, expressed as a percentage of the mortgage amount,
which is paid to a lender as a consideration for making a loan.
A point is I percent of the amount of the mortgage loan; also called
discount points.
Prepayment
Penalty - A penalty for the payment of a mortgage before it
becomes due. Also known as "reinvestment fee."
Principal
- A person who appoints another as a representative. It also refers
to the capital sum lent on interest.
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Principal
and Interest Payment (P&I) - A periodic (usually monthly) payment
that includes the interest charges for the period plus an amount
applied to amortization of the principal balance.
Private Mortgage
Insurance - A policy that provides protection for the lender
in case of default and guarantees repayment of the loan in the event
of the death or disability of the borrower.
REALTOR®
and REALTOR-ASSOCIATE® - Registered collective membership
marks that identify real estate professionals who are members of
the National Association of REALTORS® and subscribe to its
strict Code of Ethics.
Rollover
Loan - A loan that is renewed at an established time at current
market interest rates.
Title -
A document that is evidence of ownership.
Title Insurance
- Protection for lenders and homeowners against financial loss
resulting from legal defects in the title.
Title Search
- A check of title records to identify liens, encumbrances and ownership
right property.
VA Mortgage
- A mortgage loan guaranteed by the Veterans Administration, an
agency of the federal government that provides services for eligible
veterans.
Zoning
- A specified restriction on use of a defined area.
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