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.