The ABCs of Real Estate
A glossary of Real Estate Terms. Learn how to "talk the talk" of Real Estate before you buy or sell!
Whether you're a seasoned Seller brushing up or a first-time Buyer dipping your feet in the water, you've probably heard a ton of real estate jargon thrown around during your research and preparation. At Fine New England Living we are committed to cutting through the confusion of the real estate world for our clients. If you ever have any questions about real estate, please do not hesitate to get in touch with us. In the meantime, though, here's a helpful glossary of terms to assist you in your journey.
TERMS
Distressed Property
At home that is in foreclosure, or will be soon. These homes usually sell below market value, but carry the risk of needing significant repairs or improvements.
Down Payment
The amount of cash that a Buyer pays to the Seller at the time of closing; usually between 3% to 25% of the purchase price. The amount will be the equity that a Buyer invests upfront in their home purchase. A larger down payment generally leads to better interest rates and lower monthly payments. The down payment amount does not include Closing Costs (see above).
Dual Agent
A real estate salesperson who is representing both the Seller and the Buyer in a real estate transaction.
Earnest Money Deposit
An earnest money deposit is money that a potential Buyer puts down to show commitment and good faith in purchasing a property. The standard amount varies by region and market, but is typically a fixed number or 1%-2% of the purchase price. See “Binder” above.
Easement
A right of use or access to land for persons other than the owner, which typically carry over with the sale of the property. For example, an easement may allow a neighbor to a driveway on a property to get to their own driveway.
Encroachment
The intrusion onto another’s property without right or permission; e.g., building a fence that extends into a neighbor’s property without the right to that property
Encumbrance
A right or financial interest claim on a property; i.e., a lien, mortgage, or easement
Equal Credit Opportunity Act (ECOA)
A federal law that prohibits creditors or lenders from acting in a discriminatory manner on the basis of race, color, religion, national origin, sex, marital status, age, receipt of public assistance, or the fact that the applicant has in good faith exercised any right under the Consumer Credit Protection Act.
Equity
The value that an owner has in their home above the total amount of liens against the home
Escrow
An arrangement in which a third party holds funds or property temporarily until the fulfillment of the condition. Examples include deposits being made by a Buyer being held in an escrow account until the closing of a sale, at which point they will be released to a Seller; or deposits made by a borrower to a mortgage lender to pay taxes and insurance premiums when they become due.
Estate
The sum of all assets - less liabilities - owned by a person, especially upon death. Can also be used to refer to a large plot of land, typically in the country with a large home and other outbuildings, farms, or pastures.
Examination of Title
A thorough review of property documents and the chain of title (see above). Used to discover any recorded encumbrances, chain of title issues, liens, or other hidden issues that may affect clear title (see above).