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Real Estate Jargons: Familiarizing with the Terms

Different professions have particular vocabulary that they use in their field and transactions. Visiting a doctor could be a great example of such. The terms they use to discuss your health condition are seemingly unfathomable compared to a “normal” conversation. Real estate has these particular set of vocabularies too, which is called “jargon.” If you happen to go into real estate business or you just simply want to buy or sell a home, you might want to get yourself familiarized first with these terms that real estate agents use in their usual transactions.

Amortization
This refers to a system of paying off the mortgage that combines interest ans principal for your payments, rather than just paying off the interests first.

Assessed Value
This refers to the value assigned to your home by a public tax assessor to distinguish the city/state taxes. This is different from the value assigned by a private home appraiser and from the home’s market price.

Cash Reserves
This refers to the money that the buyer has left over after the down payment and closing costs.

Closing
This refers to the meeting in which the property sale is completed. This is when buyers and sellers sign documents and exchange funds (sometimes called a settlement).

Closing Costs
This refers to all of the miscellaneous expenses and fees paid by the buyer (and sometimes seller) when a deal closes. This includes commissions, mortgage fees, title insurance, etc.

CMA
This stands for Comparative Market Analysis or “comps.” It refers to the report of similar homes in the area that were sold recently or are still on the market.

Contingency
This refers to a particular clause in an agreement which keeps it legally bided.

Earnest Money Deposit
This refers to the payment a buyer shows to the seller to let him know that you are serious in buying the property. This may also refer to as “down payment”  and is subject to refund once the offer is rejected.

Equity
This refers to the difference between the home’s fair market value, and the unpaid balance of the mortgage.

Escrow
This refers to the setup account of a lender that receives monthly payments from buyers to pay (it may include insurance or taxes).

Home Warranty
This refers to a fee which is utilized for the protection of the home against future issues.

Interests
This refers to the charges that the lender asks you to pay for your borrowed money.

MLS
This stands for Multiple Listing Service. It refers to an organization that collects and distributes home sale information to its members.

Mortgage Broker
This refers to an independent person (or company) who brings borrowers and lenders together. Mortgage brokers do not fund the loan. The only thing they do is to process the loan and place it with a funding source such as a bank.

Principal
This refers to the amount of money borrowed to buy a home.

Title Insurance
This refers to an insurance policy that protects owners or lenders’ interests in the property from an unexpected claims or ownership.

Source:

http://www.fourseasonssir.com/blog/21-basic-real-estate-terms-need-know-buying-selling/#sthash.LAw8Cnug.dpbs