Featured News 2014 11 Real Estate Terms You Need to Know

11 Real Estate Terms You Need to Know

As complicated as it already is to sell or buy a property, having to pick your way through legalese and jargon does not help matters. While working closely with a real estate attorney can certainly help you with the storm of paperwork headed your way, here is a quick guide to some of the most important terms that are sure to keep cropping up.

Terms Regarding the Sale & Purchase of a Home

Closing Costs: All the costs that a home buyer (and sometimes the seller) must pay on top of the property's purchase price. This often means paying the lender's fees, real estate agent's commissions, lawyer's fees, inspection costs, etc.

  • Nonrecurring closing costs are one-time payments, such as title insurance, transfer taxes, and appraisal fees.
  • Recurring closing costs are payments made at the time of home purchase that will reoccur regularly, such as property taxes and homeowners' insurance.

Contingency: A stipulation in the purchase contract that could change or cancel the contract if certain requirements are not fulfilled. For a home buyer, a contingency could say that the buyer can pull out of the home buying process if he or she is dissatisfied with the inspection report. As for the seller, a contingency could say that the deal cannot go through until he or she has found a new place to live.

Escrow: This is the part of the process where an outside third party retains the paperwork or finances of the sale until before closing.

Real Estate Agent: This is the licensed real estate professional who will show you a house and perform other such essential duties. In some states, the real estate agent might be called a real estate broker or "designated broker", as opposed to a "managing broker".

Real Estate Broker: This licensed real estate professional is in more of a supervisory role compared to agents. A broker is also involved in real estate negotiations. In some states, this position is titled "managing broker".

Types of Mortgages

Adjustable rate mortgage: An ARM loan has a variable interest rate, one that is adjusted whenever a specified market indicator changes. While there is the risk of extreme adjustments, the terms of an ARM are likely to restrict the range of variation.

Assumable mortgage: This arrangement allows the home buyer to simply continue with the seller's mortgage. Usually the first step is for the buyer to be approved by the lender, then the buyer can pay the loan under the terms of the seller's mortgage.

Balloon mortgage: Under the terms of this loan, the buyer will not be finished repaying the mortgage in the time specified (however many years that is). At the end of that specified term, whatever amount of the mortgage is left over must be fully repaid, or the borrower will have to refinance.

Fixed rate mortgage: As it sounds, the interest rate for this mortgage stays the same for the entirety of the loan. A fixed rate mortgage is often 15 to 30 years in length.

As you face a myriad of important financial and legal decisions, not to mention a great deal of fine print, a real estate lawyer can provide sound counsel. Especially when it comes to matters of title, purchasing contracts, and mortgage terms, a real estate attorney can be of invaluable assistance. In fact in some states, the services of a real estate attorneys are required. You can start searching for the experience and skill you need at your side when you look through our directory. Find out how a legal professional can help you with the sale or purchase of property when you call a lawyer today!

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