Appraisal – A professional appraiser’s estimate of the market value of a property based on local market data and the recent sale prices of similar properties.
Buying Agent – A buyer’s agent will guide you through the home-buying transaction and be at your disposal for any questions or concerns. Buyer’s agents are legally bound to help buyers, whereas listing agents—the agent representing the home listing—have a fiduciary duty to the home seller. That’s why it’s in your best interest as a buyer to get an agent who is there to represent you.
Closing– The final steps in the transfer of property ownership. On the closing date, as specified by the sales agreement, the buyer inspects and signs all the documents relating to the transaction and the final disbursements are paid. Also referred to as the Settlement.
Closing Costs- The costs to complete a real estate transaction in addition to the price of the home, may include: points, taxes, title insurance, appraisal fees and legal fees.
Comparables- When it is time to submit an offer, the buyers agent will look at the neighborhood market date, and look for past sales of similar properties to help come up with a good offer price, typically based on price per square foot.
Contingency– A clause in the purchase contract that describes certain conditions that must be met and agreed upon by both buyer and seller before the contract is binding.
Conventional mortgage– This loan is not insured or guaranteed by the federal government.
Counter-Offer – An offer, made in response to a previous offer, that rejects all or part of it while enabling negotiations to continue towards a mutually-acceptable sales contract.
Down Payment- The money paid by the buyer to the lender at the time of the closing. The amount is the difference between the sales price and the mortgage loan. Requirements vary by loan type. Smaller down payments, less than 20%, usually requires mortgage insurance.
Earnest Money– A deposit given by the buyer to bind a purchase offer and which is held in escrow. If the property sale is closed, the deposit is applied to the purchase price. If the buyer does not fulfill all contract obligations, the deposit may be forfeited.
Escrow- Funds held by a neutral third party (the escrow agent) until certain conditions of a contract are met and the funds can be paid out. Escrow accounts are also used by loan servicers to pay property taxes and homeowner’s insurance.
FHA Mortgage- One that is insured or guaranteed by the federal government. Requires 3.5% of the purchase price as down payment.
Home Inspection – Professional inspection of a home, paid for by the buyer, to evaluate the quality and safety of its plumbing, heating, wiring, appliances, roof, foundation, etc.
Home Owner’s Insurance- A policy that protects you and the lender from fire or flood, a liability such as visitor injury, or damage to your personal property.
Home Warranty – Warranty that covers all major appliances and systems in a house for one year.
Listing Agent- Agent that represents the seller and the sellers best interests in a real estate transaction.
Loan Officer- One who provides you financing options that best fit your situation.
Market Value- The amount a willing buyer would pay a willing seller for a home. An appraised value is an estimate of the current fair market value.
Mortgage Insurance – Purchased by the buyer to protect the lender in the event of default (typically for loans with less than 20% down). Available through a government agency like the Federal Housing Administration (FHA) or through private mortgage insurers (PMI).
NIFA – Nebraska Investment Finance Authority – Has lower interest rates than other loan programs and requires only $1,000 as a down payment. This program can also pay for a portion of the purchasers closing costs as well.
Pre-Paids- The mortgage company requires a portion of property taxes and homeowners insurance be held in an escrow account to be paid each year. Those items tend to increase every year, so they like to have a little cushion in the account in case they do increase.
Pre-Approval Letter– A letter from a mortgage lender indicating that a buyer qualifies for a mortgage of a specific amount. It also shows a home seller that you’re a serious buyer.
Seller Property Condition Disclosure- This is a 4 page document that describes the condition of the property as to the knowledge of the seller.
Title- The right to, and the ownership of, property. A Title or Deed is sometimes used as proof of ownership of land. Clear title refers to a title that has no legal defects.
Title Insurance- Insurance policy that guarantees the accuracy of the title search and protects lenders and homeowners against legal problems with the title.
Title Search- A historical review of all legal documents relating to ownership of a property to determine if there have been any flaws in prior transfers of ownership or if there are any claims or encumbrances on the title to the property.
