Each profession has its unique language and so does real estate!  Understanding real estate terminology can be of great assistance in buying or selling a home or investment property.  I have prepared a list of real estate terms below for you. Thanks again and be sure to contact me for any of your real estate needs in King County, Washington.

Glossary:

Appraisal
An educated estimate of the value of a property on a certain date given by a person, usually after an inspection of the property.

ARM
A mortgage whose interest rate is raised or lowered at periodic intervals according to the prevailing interest rates in the market.

As is
Implied in most Agreements of Purchase and Sale, suggests the buyer is accepting the property in it present state and relinquishes and responsibility from the buyer.

Bankruptcy
a) A person who has done any of the acts that by law entitle his creditors to have his estate administered for their benefit; b) a person judicially declared subject to having his estate administered under the bankrupt laws for the benefit of his creditors; c) a person who becomes insolvent.
Bid
To offer (a price) whether for payment or acceptance.

Credit Risk
An estimate of the amount of credit that can be extended to a company or person without undue risk.
Credit Union
A cooperative organization that makes loans to its members at low interest rates.
Earnest Money
The portion of the downpayment delivered to the seller or escrow agent by the buyer with a written offer as evidence of good faith.

Equity
The difference between what is owed and what the property could be sold for.

Escrow
The process in which a third party acts as a stakeholder for both the buyer and the seller, carrying out both parties' instructions and assuming responsibility for handling all of the paperwork and distribution of funds.

Home Equity Loan
A loan or credit line that is secured by the equity the borrower has in a home.

Home Loan
a) Money lent at interest; b) something lent usually for the borrower's temporary use.

Home Inspection Report
A qualified inspector's report on a property's overall condition.  This report usually includes an evaluation of both the structure and its mechanical systems.

Home Warranty Plan
Protects against failure of mechanical systems within the property.  This usually includes plumbing, electrical, heating systems and installed appliances.

Initial Interest Rate
The introductory interest rate on a loan, signals that there may be rate adjustments later in the loan.

Loan to Value Ratio
Relationship between the amount of the mortgag and the appraised value of the property expressed as a percentage of the appraised value.

Lock-in
The fixing of an interest rate or points at a certain level, usually during the loan application process, for a specified period of time.

Market Value
An asset's market value is the price it would fetch in the market, if it were sold in the current marketplace.

Margin
The number of percentage points the lender ads to the index rate to calculate the ARM interest rate at each adjustment.

Mortgage
A temporary, conditional pledge of property to a creditor as security for performance of an obligation or repayment of a debt.

Negative Amoritization
When monthly payments fail to cover the interest cost.  After several payments the borrowers could owe more than they did at the beginning of the loan.

NWMLS
IDX, or broker reciprocity, is a listing sharing arrangement database between brokers within a Mulitple Listing Service.

Origination Fee
A fee or charge for work used to evaluate, prepare, and submit a proposed mortgage loan.  This fee is limited to one percent for FHA and VA loans.

Point
An amount equal to one percent of the principal amount of the investment or note.  The lender determines the loan discount points at closing to increase the yield on the mortgage to a position competitive with other types of investments.

Prepayment Penalty
A fee charged to a borrower who pays a loan before it is due.  This penalty is not allowed for FHA or VA loans.

Property Tax
A tax levied on real or personal property.

Prime Rate
The lowest rate of interest on bank loans at a given time and place, offered to preferred borrowers.

Title Insurance Policy
A policy that protects the purchaser, mortgagee or other party against losses.

Please use this simple real estate request form that will help you when you are looking for a home for sale. Whether you are buying or selling, you have come to the right place. Please note all of your information will be kept strictly confidential and will only be used to provide you with outstanding real estate services.