Below, you'll find some common real estate jargon, defined!
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Real Estate Definitions:
Do you ever wonder what all those real estate, title company, escrow, and lender terms mean? Here's a list of common terms used in the real estate business:
Appraisal: A professional estimate and opinion of the value of real property based on the analysis of facts derived from comparisons
and market conditions.
CMA or Comparative Market Analysis: This is when a realtor compares your property to property sales & listings near you with similar
characteristics and gives you an estimated value or your property.
Escrow: Documents, funds, and instructions through a neutral third party that makes sure all the provisions of a contract are carried
Foreclosure: Foreclosures mean that the borrower has stopped making payments. The owner can't pay the debt or sell it on a short sale
and the borrower's rights to the property are forfeited. The lender will try to sell it or have an auction.
HOA: Home Owner's Association
REO or Real Estate Owned: The name is confusing since it says 'real estate owned' what it actually means is that the property is owned by the lender (usually a bank) after an unsuccessful sale
at a foreclosure auction.
Short Sale: When a property is listed as a 'short sale' that means that it is being sold for less than what is actually owed by the
current owner. The lien holder (usually a bank) agrees to release their lien and accept less than the amount owed to them. Short sales are used because it saves the borrower and lien holder additional fees, so it is better for both parties.
Title Insurance: This insurance protects property owners against a loss if the title is defective.
Title Report: A preliminary report that discloses the condition of the title on
Underwriting: Lenders review of the file to determine if all the documentation and borrower details meet the lender's guidelines for
the loan program.