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  • Agreement of Sale Known as many names, purchase agreement, purchase contract, or sales agreement. This is a contract in which a seller agrees to sell and a buyer agrees to buy, under certain terms and conditions spelled out in writing and signed by both parties.
  • Acceleration Clause Condition in a mortgage that may require the balance of the loan to become due immediately, if regular mortgage payments are not made.
  • Amortization A payment plan which enables the borrower to reduce his debt gradually through monthly payments of principal.
  • Appraisal An expert judgment or estimate of the quality or value of real estate on a given date.
  • APR Annual Percentage Rate The Interest rate reflecting the first year rate including certain points and credit costs.
  • Binder A preliminary agreement, secured by the payment of earnest money, between a buyer and a seller as an offer to purchase real estate. If the buyer changes his mind or is unable to purchase the property, the earnest money is forfeited unless the binder expressly provides that the money is to be refunded.
  • Buydowns Mortgage in which the rate is offset by paying more points upfront.
  • Certificate of Title A certificate issued by a title company or a written opinion rendered by an attorney that the seller has good marketable and insurable title to the property which he is offering for sale.
  • Closing Costs The numerous expenses which buyers and sellers normally incur to complete a transaction in the transfer of ownership of real estate. These items are in additions to the price of the property and are prepaid on the closing day. The Sales Agreement negotiated between the buyer and seller may state in writing who will pay for each item at closing.
  • Commission Money paid to a real estate agent or broker by the seller as compensation for finding a buyer and completing the sale.
  • Contractor In the construction business, a contractor is one who contracts to erect buildings or portions of them.. There can be a separate contractor for each phase of the construction; heating, electrical, plumbing, etc.
  • Conventional Mortgage A mortgage loan not insured by HUD or guaranteed by the VA. It is subject to conditions established by the lending institutions and by state laws.
  • Deed A formal written instrument by which title to real property is transferred from one owner to another.
  • Deed of Trust Like a mortgage, a security instrument whereby real property is given as security for a debt.
  • Default Failure to make mortgage payments as agreed to based on the terms and the time set forth in the mortgage or deed of trust.
  • Depreciation Decline in value of a house due to wear and tear, or changes to a neighborhood.
  • Down Payment The amount of money to be paid by the purchaser to the seller upon the signing of the purchase agreement.
  • Easements A right of way granted to a person or company authorizing access to or over the owner's land.
  • Equity The value of a homeowner's interest in real estate. Equity is computed by subtracting from the fair market value the total of the unpaid mortgage balance.
  • Escrow Funds paid to one party to another to hold until the occurrence of a specific event. (taxes, insurance) when the funds are released to the designated individual.
  • Foreclosure A term applied to the various methods of enforcing payment of the debt secured by a mortgage.
  • FHA Federal Housing Administration
  • Hazard Insurance Protects against damages caused by fire, floods, and other common hazards.
  • HUD U.S. Department of Housing and Urban Development.
  • Interest A charge paid for borrowing money
  • Lien A claim by one person on the property of another as security for money owed.
  • Lock The lender's guarantee that the mortgage rate quoted will be good for a specific number of days
  • MLS The Multiple Listing Service is a computerized information network operated and paid for by Realtors. The MLS is comprehensive and contains virtually all homes listed for sale through all realty companies.
  • Mortgage A lien or claim against real property given by the buyer to the lender as security for money borrowed.
  • Mortgage Insurance Premium The payment made buy the borrower to the lender to help defray the cost of the FHA mortgage Insurance program and to provide a reserve fund to protect lenders against loss in insured mortgages.
  • Points Sometimes called discount points. A point is one percent of the amount of the mortgage loan.
  • Prepayment Payment of mortgage loan, or part of it, before the due date.
    Principal The amount of the loan in which interest is paid.
  • Real Estate Broker A middle man or agent who buys and sells real estate for a company. The broker does not have title to the property, but generally represents the owner.
  • Refinancing The process of paying off one loan with the proceeds from another loan.
  • Survey A map or Plat made by a licensed surveyor showing the results of measuring the land with its elevations, improvements and boundaries. A survey is often required by the lender to assure him that the building is actually sited on the land according to its legal description.
  • Title Insurance Protects lenders and homeowners against loss of their interest in property due to legal defects in the title.
  • Title Search A check of the title records to make sure the buyer is purchasing a house from the legal owner and there are no liens attached to the title.

The information on this web site is deemed to be correct but is not guaranteed. All properties or information contained on this site are subject to prior change, modification, sale or withdrawal from the market. ©Copyright 1999 Realty Professionals. All Rights Reserved.