Sell Your Home: Definitions

Selling your home is all about financial
transactions and legalities. Bottom line, you
need to understand the lingo. Here is an
abbreviated list of terms you should know.

The person to whom an interest in real property is conveyed.
The person who conveys an interest in real property.
home inspection
A professional inspection that evaluates the structural and mechanical condition of a property, including the plumbing, heating and cooling systems, roof, wiring, foundation, and pest infestation. A satisfactory home inspection is often included as a contingency by the purchaser.
homeowner’s warranty
Insurance offered by a seller that covers certain home repairs and fixtures for a specified period of time. Buyers often ask the seller to pay for this coverage as a condition of the sale, but either party can pay.
The fee charged for borrowing money.
joint tenancy
A form of ownership in which each party owns the whole property; ownership is not separate. If one of the parties dies, the survivor still owns the entire property.
A decision made by a court of law. In judgments that require the repayment of a debt, the court may place a lien against the debtor’s real property, as collateral for the judgment’s creditor.
legal description
A property description, recognized by law, that is sufficient to locate and identify a property.
Debts and other financial obligations.
A legal claim against a property that must be paid off when the property is sold. A mortgage or first trust deed is considered a lien.
liquid asset
A cash asset or an asset that is easily converted into cash.
The date on which the principal balance of a loan, bond, or other financial instrument becomes due and payable.
A legal document or loan that pledges a property to the lender as security for payment of the debt. Instead of mortgages, some states use first trust deeds.
mortgage broker
An independent finance professional who, for a fee, brings together borrowers and lenders to facilitate real estate mortgages. In Ohio, mortgage brokers must be registered and their loan officers must be licensed.
The lender in a mortgage agreement.
mortgage insurance (MI)
Insurance that protects lenders against losses resulting from a borrower’s default on a home loan. MI is usually required if the borrower’s down payment is less than 20 percent of the purchase price.
mortgage insurance premium (MIP)
The amount paid by a mortgagor for mortgage insurance, either to a government agency, such as the Federal Housing Administration (FHA), or to a private mortgage insurance (PMI) company.
The borrower in a mortgage agreement


Multiple Listing Service (MLS)
A clearinghouse through which member real estate brokers exchange information about properties and share commissions with members who locate buyers.
notice of default
A formal written notice to a borrower that a default has occurred and that legal action may be taken.
A formal bid from a prospective buyer to purchase a property. It may stipulate any concessions the buyer wants, appliances that are expected to be included in the sale, and other factors that the buyer wants the seller to consider.