Real Estate Terms A-F (part 1)

Terms that are good to know, according to abovemag.remax.com.

Amortization: Terms of the mortgage agreement that determine how the interest and principal payments are applied to the balance of the loan over time.

A.R.M: Adjustable Rate Mortgage means that the interest rate of the loan is adjustable and when interests rates rise, house payments rise.

Balloon: A payment made at the end of a loan that is usually a “whopper” of an amount (abovemag.remax.com).

CC&Rs: Covenants, Conditions and Restrictions that homeowners must abide by that are usually monitored by a Homeowners Association (HOA).

Closing: When the Buyer and Seller meet to sign the formal documents so that a new deed can be filed.

CMAs: Comparative Market Analysis is the report REALTORS prepare for Sellers, using comparables (Comps) to substantiate the proposed property value, when setting a new listing price.

Comps: The information gathered about sold real estate that helps the REALTOR determine property value, when setting a new listing price.

Deed: Legal document filed with the appropriate county, transferring ownership from the Seller to the Buyer.

Disclosures: Documents the Seller must complete and provide to the Buyer about the property and its condition.

Due Diligence: A negotiated period of time between the Buyer and the Seller, often accompanied by money paid to the Seller from the Buyer, during which time inspections should be done, allowing the Buyer to walk away from the deal for any reason, losing only the Due Diligence Money to the Seller.

Earnest Money: Money that the Seller puts down with an Offer to Purchase, showing an earnest interest in buying the property for sale, credited toward the purchase of the property at Closing.

Escrow: An account held by an independent third party, where the earnest money stays on deposit until the Sellers and Buyers go to Closing.

Equity: The difference between the Fair Market Value (FMV) and the balance of the mortgage.

Fair Market Value: An accurate valuation or assessment of an asset’s worth.

Fannie Mae: One of the largest mortgage lenders in the United States—government sponsored. During the Great Depression as part of the Roosevelt Administration’s “New Deal,” the Federal National Mortgage Association (FNMA), or Fannie Mae, was formed in an effort to encourage home ownership.

FICO: Is short for Fair Isaac Company, which is the former name of the company providing software that calculates credit ratings. Credit ratings are based on several factors such as current debt level, payment history, length of payment history and types of credit in use.