A Glossary of Real Estate Terms Pt.2

Posted by Gurpreet Ghatehora on Thursday, March 12th, 2015 at 10:24am.

Commission:

A commission is paid out of the charges paid by the seller or buyer in the purchase transaction. Realtors generally earn the largest commissions, followed by lenders.

Equity:

A homeowner's financial interest in a property. Equity is the difference between the fair market value of the property and the amount still owed on its mortgage and other liens.

Estate:

The ownership interest of an individual in real property. The sum total of all the real property and personal property owned by an individual at time of death.

Foreclosure:

The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property. This usually involves a forced sale of the property at public auction with the proceeds of the sale being applied to the mortgage debt.

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.

Lien:

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.

Mortgage:

A legal document that pledges a property to the lender as security for payment of a debt. Instead of mortgages, some states use First Trust Deeds.

Pre-approval:

A loosely used term which is generally taken to mean that a borrower has completed a loan application and provided debt, income, and savings documentation which an underwriter has reviewed and approved.

 

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