When you understand the lingo, you will feel better about discussing the sale of your home with a professional. The Williams Team wants you to feel comfortable every step of the way, we have provided the terminology below to help understand more about what we do, by the book.
appraisal – written justification of the price paid for a property, primarily based on an analysis of comparable sales of similar homes nearby usually performed by an appraiser who is individual qualified by education, training, and experience to estimate the value of real property and personal property.
bill of sale – written document that transfers title to personal property. You hope to hear of a clear title which is a title that is free of liens or legal questions as to ownership of the property.
closing – a meeting where all of the documents are signed and money changes hands. Closing costs are separated into what are called “non-recurring closing costs” and “pre-paid items.” Non-recurring closing costs are any items which are paid just once as a result of buying the property or obtaining a loan. “Pre-paids” are items which recur over time, such as property taxes and homeowners insurance.
commissions – paid out of the charges paid by the seller or buyer in the purchase transaction.
contract – oral or written agreement to do or not to do a certain thing
easement – right of way giving persons other than the owner access to or over a property.
encroachment – improvement that intrudes illegally on another’s property.
encumbrance – anything that affects or limits the title to a property, such as mortgages, leases, easements, or restrictions.
equity – homeowner’s financial interest in a property, the difference between the fair market value of the property and amount still owed on its mortgage and other liens.
escrow – item of value, money, or documents deposited with a third party to be delivered upon the fulfillment of a condition. The earnest money deposit is put into escrow until delivered to the seller when the transaction is closed.
home inspection – thorough inspection by a professional that evaluates the structural and mechanical condition of a property.
HUD-1 settlement statement – document that provides an itemized listing of the funds that were paid at closing. Items that appear on the statement include real estate commissions, loan fees, points, and escrow amounts. This document is referred to as the “HUD” because it’s printed by the Department of Housing and Urban Development, which is also referred to as the “closing statement.”
lien – legal claim against a property that must be paid off when the property is sold, such as a mortgage.
owner financing – property purchase transaction in which the property seller provides all or part of the financing.
real estate agent – person licensed to negotiate and transact the sale of real estate.
Realtor® – real estate agent, broker or an associate who holds active membership in a local real estate board that is affiliated with the National Association of Realtors.
right of first refusal – provision in an agreement that requires the owner of a property to give another party the first opportunity to purchase or lease the property before he or she offers it for sale or lease to others.
survey – map that shows the precise legal boundaries of a property, the location of improvements, easements, rights of way, encroachments, etc.
title – legal document evidencing a person’s right to or ownership of a property that is examined by a specialist known as the title company who can also provide title insurance which protects the lender (lender’s policy) or the buyer (owner’s policy) against loss arising from disputes over ownership of a property.