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2016-10-17 12:15:28
Buyer & Seller 101: Terms to Know

Buyer & Seller 101: TERMS TO KNOW

How many of these Home Buying/Selling Terms do you know? 

Terms to Know

 

AMENDMENTS: A change - either to alter, add to, or correct - part of an agreement without changing the principle idea or essence.

APPRAISAL: An estimate of value of property resulting from analysis of facts about the property; an opinion of value.

ASSUMPTION: Taking over another person's financial obligation; taking title to a parcel of real property with the Buyer assuming liability for paying an existing note secured  by a deed of trust against the real property. 

BENEFICIARY: The recipient of benefits, often from a deed of trust; usually the lender.

CLOSE OF ESCROW: Generally the date the documents are recorded and title passes from the seller to the buyer. On this date, the buyer becomes the legal owner, and the title insurance becomes effective.

COMPARABLE SALES: Sales that have similar characteristics as the subject real property, used for analysis in the appraisal. Commonly called, 'comps.'

DEED OF TRUST: An instrument used in many states in place of a mortgage.

DEED OF RESTRICTIONS: Limitations in the deed to a parcel of real property that dictate certain uses that may or may not be made of real property.

EARNEST MONEY DEPOSIT: Down payment made by a purchaser of real property as evidence of good faith; a deposit or partial payment.

EASEMENT: A right, privilege, or interest limited to a specific purpose that one party has in the land of another.

HAZARD INSURANCE: Real estate insurance protecting against fire, some natural causes, vandalism, etc. depending upon the policy. Buyer often adds liability insurance and extended coverage for personal property.

IMPOUNDS: A trust type account established by lenders for the accumulation of borrowers funds to meet periodic payments of taxes, mortgage insurance premiums, and/or future insurance policy premiums, required to protect their security. 

LEGAL DESCRIPTION: A description of land recognized by law based on government surveys, spelling out the exact boundaries of the entire parcel of land. It should so thoroughly identify a parcel of land that it cannot be confused with any other. 

LIEN: A form of encumbrance that usually makes specific parcel of real property the security for the payment of a debt or discharge of an obligation. For example, judgement, taxes, mortgages, deeds of trust. 

OPTION PERIOD: The time period after a contract has been accepted in which the buyer conducts due diligence items such as the inspection, etc. Option period and fee are negotiable at the time of contract execution. 

PITI: A payment that combines Principal, Interest, Taxes, and Insurance. 

POWER OF ATTORNEY: A written instrument whereby a principal gives authority to an agent. The agent acting under such a grant is sometimes called an 'attorney-in-Fact'

PURCHASE AGREEMENT: The purchase contract between the Buyer and Seller. It is usually completed by the real estate agent and signed by the buyer and seller.

QUITCLAIM DEED: A deed operating as a release, intending to pass any title, interest, or claim which the grantor may have in the property, but not containing any warranty of a valid interest or title by the grantor.

 

 

 
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