Anatomy of Real Estate Jargon

Let's face it. Buying or selling real estate is a complicated process. Even with the best representation from your real estate agent, and good service from your mortgage provider, it is easy to get lost in the 'jargon'.

(Jargon is defined as language used by people who work in a particular area or who have a common interest, and real estate has tons of it!)

When signing any kind of contract, it is necessary that you completely understand what you are committing to. Modern technology's 8th wonder of the world (the Internet), is a great place to look up and read about things you may not understand (check and verify your sources).

However, if you have a professional, like a REALTOR, they should be able to explain your questions and conerns with great detail. Never sign anything you are not completely familiar with.

Lets define some of the commonly used phrases.

Asessed value

The valuation placed on property by a public tax assessor for purposes of taxation.

Bill of Sale

A written document that transfers title to personal property. For example, when selling an automobile to acquire funds which will be used as a source of down payment or for closing costs, the lender will usually require the bill of sale (in addition to other items) to help document this source of funds.

Broker

Broker has several meanings in different situations. Most Realtors are "agents" who work under a "broker." Some agents are brokers as well, either working form themselves or under another broker. In the mortgage industry, broker usually refers to a company or individual that does not lend the money for the loans themselves, but broker loans to larger lenders or investors. (See the Home Loan Library that discusses the different types of lenders). As a normal definition, a broker is anyone who acts as an agent, bringing two parties together for any type of transaction and earns a fee for doing so

Chain of Title

An analysis of the transfers of title to a piece of property over the years.

Closing Costs

Closing costs are separated into what are called "non-recurring closing costs" and "pre-paid items." Non-recurring closing costs are any items which are paid just once as a result of buying the property or obtaining a loan. "Pre-paids" are items which recur over time, such as property taxes and homeowners insurance. A lender makes an attempt to estimate the amount of non-recurring closing costs and prepaid items on the Good Faith Estimate which they must issue to the borrower within three days of receiving a home loan application.

Contigency

A condition that must be met before a contract is legally binding. For example, home purchasers often include a contingency that specifies that the contract is not binding until the purchaser obtains a satisfactory home inspection report from a qualified home inspector.  

Earnest Money Deposit  

A deposit made by the potential home buyer to show that he or she is serious about buying the house.

Grantee

The person to whom an interest in real property is conveyed  

Grantor  

The person conveying an interest in real property

Home Inspection

A thorough inspection by a professional that evaluates the structural and mechanical condition of a property. A satisfactory home inspection is often included as a contingency by the purchaser   Lein   A legal claim against a property that must be paid off when the property is sold. A mortgage or first trust deed is considered a lien.

Power of Attorney

A legal document that authorizes another person to act on ones behalf. A power of attorney can grant complete authority or can be limited to certain acts and/or certain periods of time.

Right of First Refusal

A provision in an agreement that requires the owner of a property to give another party the first opportunity to purchase or lease the property before he or she offers it for sale or lease to others.

Survey

A drawing or map showing the precise legal boundaries of a property, the location of improvements, easements, rights of way, encroachments, and other physical features.

Title

A legal document evidencing a person's right to or ownership of a property.

Title Company

A company that specializes in examining and insuring titles to real estate

For a COMPLETE glossary of definitions, visit  Real Estate ABC's website

Posted by Jamie Bullock

The Burish and Serena Team

www.USA-FloridaHomes.net