We came up with a list of the ten most commonly used terms in
real estate and broke each term down to what it means and when/why it will get
used.
Pre-APPROVAL (vs Pre-qualification)
Most often used by: Real Estate Agent / Mortgage Lender
Pre-approval is the result of submitting a mortgage
application, having a credit check completed, providing preliminary supporting
financial documentation and meeting or speaking with your mortgage lender before
submitting an offer on a property. Pre-qualification is simply filling
out the mortgage application and receiving a cursory credit check to determine
how much of a home you can afford based on the information you have provided.
As you can see, in a time crunch when the real estate market is HOT,
pre-qualification is the way to go as documentation is something that can be
done when you have an executed contract on a property. However,
Pre-Approval is much further down the road of obtaining a loan and usually the
only thing missing the home you are wanting to purchase. Click here for more
information on getting Pre-Approval. In
fact, if you need a good lender to and missed the click here button, just click
on the picture below, that is a great place to start.
Escrow
Most often used by: Title company
An escrow is usually an arrangement where a third party (like a
title) company receives, holds, and disburses funds (like an earnest money
deposit) on behalf of two parties who are on either side of a transaction. The
escrow, or Title Company, works as a neutral, third party in the transaction in
order to execute the timeline and conditions of the executed real estate
contract. The title company completes the closing disclosures that bring
the buyer and the seller the amount they need to close on the home and/or the
amount they will net as proceeds from the transaction. These numbers are
usually referred to as closing costs.
Closing
Most often used by: Title company
Also referred to as completion, or settlement, closing is what
describes the final transfer of funds ands documents to the final parties, and
is the second to last step in the real estate transaction with the last piece
of the puzzle being the funding of the transaction by the lender and
disbursements sent to the respective parties by the Title company. Closing date
is usually agreed upon in advance by both parties, who must either be present,
have some form of representation present, documents mailed out to them in
another location and signed in front of a mobile notary or locally signed with
a mobile notary that is approved by the Title company. Closing is when
ownership is transferred from owner to the buyer. If you want to, take a little time to see my
reviews by clicking on the picture below or here…these
are all from past clients after we have CLOSED!
Mortgage
Most often used by: Mortgage Lender
Mortgage is a debt instrument that allows a purchaser to acquire
a piece of real property without paying the entire purchase amount. Mortgages
are contractually financial agreements between the borrower and the lender, where
the property is used as collateral in the event the borrower cannot pay.
Amenities
Most often used by: Real Estate Agent / Appraiser
Amenities are known as desirable or useful feature of a property
or neighborhood development that makes the location a desired location in which
to reside. Examples of amenities include a neighborhood park, a swimming
pool, built in washer and dryer, granite countertops, hardwood floors, outdoor
patio or kitchen, 3 car garage or exercise facility that the community has
access to through the Homeowners Association.
Comparables or Comps
Most often used by: Real Estate Agent / Appraiser
Often called “comps” or “market analysis” is a term used
to describe nearby, like-kind properties that have similar characteristics of
the property in question (subject property) that would give a representation of
the home’s value. These values are determined by using the history of
sold properties, currently pending properties and currently active properties
in a relatively close general location to the subject property.Click here to view
comps in your area or to compare prospective neighborhoods!
Market
Most often used by: Real Estate Agent
This term is used to describe the current state of activity
going on in a particular area, neighborhood, city. Its often encompassing of
the volume of transactions, the types of homes being sold, how much they are
being sold for, and how long they are on the market. Click here for an
example of what a CMA (Comparative Market Analysis can do for you!
Inspection
Most often used by: Real Estate Agent / Title Company/ Home
Inspector
This is an important term, as the inspection can make or break a
transaction. A home inspection is a limited, non-invasive examination of the
condition of a home, often in connection with the sale of that home by a
Licensed Home Inspector that is contracted to inspect the property by the
purchaser of the property. Inspection is usually conducted in the
“Option” period of the contract in the State of Texas.
Appraisal
Most often used by: Real Estate Agent / Mortgage Lender
Real estate appraisal is performed by a licensed professional
appraiser contracted by the buyer’s lender for the purpose of property
valuation or land valuation. It is the
process of developing an opinion of value for real property. It is common
that the taxable value of a property differs from the market value of the
property according to the local County Appraisal District. Property taxes
are calculated according to the appraised value, so this is a very important
term for those in real estate.
Disclosure
Most often used by: Real Estate Agent / Mortgage Lender / Title
Company
Most often used by, well, everyone. Disclosure is making
information that is secret, or new, known for everyone. You will most likely
hear something about the Seller’s Disclosures, which is a notice of the
seller's knowledge of the condition of the property as of the signed date. You
can also expect Closing Disclosures from your lender and title company that
will tell you to the penny, how much you need to close on a property or how
much you will net when selling.
Now that you are armed with an updated vocabulary…if after
reading this and still have questions, feel free to call, email or text Tommy
McMahan at 972-896-8046 or tmcmahan@kw.com
No comments:
Post a Comment