Real Estate Fun Facts
This article will give you a few facts and words about real estate that should help you get accustomed to real estate lingo and thereby make the right decisions for your financial future.
To start, a devisee is a person who receives real estate from another by will. Earnest Money is the deposit money given to the seller by the potential buyer as evidence of good faith in purchasing real estate.
The broker places the money in an escrow or trust account until closing, when it becomes part of the down payment. A non assumption clause is a statement in a mortgage contract forbidding the assumption of the mortgage without the prior approval of the lender.
The notary public is one who is authorized by federal or local government to attest authentic signatures and administer oaths. A note is a written instrument acknowledging a debt and promising payment.
Easement right- of- way is granted to a person or company authorizing access to or over the owner's land. An electric company obtaining a right- of- way across private property is a common example.
Negative Amortization occurs when your monthly payments are not large enough to pay all the interest due on the loan. This unpaid interest is added to the unpaid balance of the loan. The danger of negative amortization is that the home buyer ends up owing more than the original amount of the loan.
The down payment is the percentage of the purchase price that the buyer must pay in cash and may not borrow from the lender. The down payment amount in addition to the mortgage equals the purchase price of a property.
They can vary from 0% to over 50%. The less your down payment the better your credit has to be. Lower down payments generally result in higher interest rates. Dual agency is when you are representing both parties in a transaction. In virtually all states it is unethical and illegal for a broker to represent buyer and seller in a real estate transaction without written consent of both. Due-on-Sale Clause is a provision in a mortgage or deed of trust that allows the lender to demand immediate payment of the balance of the mortgage if the mortgage holder sells the home.
Escheat is the reverting of property to the state in the absence of heirs.
Escrow is the money or other valuables given to a third party with directions to deliver them to another party upon the fulfillment of a specific act or condition.
Condemnation is a declaration by governing powers that a structure is unfit for use.
Conditional Sales Contract is a contract for the sale of property where the buyer has possession and use, but the seller retains title until the conditions of the contract have been fulfilled. A condominium is a home in a shared building or development.
The buyer gets title the space inside the unit, shares the common areas with other unit owners and pays a maintenance fee to the condominium association to pay for needed maintenance, repairs and improvements to the property.
Escrow instructions discloses when the escrow should be closing and when possession should take place, peroration of property taxes, transfer taxes, release of funds and the basics of satisfying the escrow demands. Fee Simple is the ownership of title to property without any limitation, which can be sold, left at will, or inherited.
Finally, foreclosure is a legal process by which the lender or the seller forces a sale of a mortgaged property because the borrower has not met the terms of the mortgage.