Know your real estate lingo when buying a home in Northern Virginia.
The first time you buy a home, the real estate jargon can be overwhelming. We’re here to answer any questions you may have. This quick reference guide covers many of the terms you may hear during the process, from Appraisal to Zero-lot lines. Contact us any time to chat more about buying a new home!
Courtesy of Zillow
Appraisal: An estimation of a home’s market value by a licensed appraiser based on comparable recent sales of nearby homes.
Backup offer: An offer on a home under contract that becomes active if the primary contract falls through.
Contingent offer: An offer that is accepted by the seller, but certain conditions must be met before the sale is final.
Down payment: The percentage of the home purchased price (usually between 5% and 20%) paid upfront in cash.
Escrow: A neutral third party that holds funds from the buyer and distributes them when all conditions have been met.
Federal Housing Administration (FHA): The government agency that insures loans designed for low- to moderate-income borrowers.
Good Faith Estimate (GFE): A form used by lenders to give to borrowers with an estimate of fees due at closing. This form was replaced by the Loan Estimate in 2015.
Homeowners Association: A management organization within a community, subdivision or neighborhood that creates and enforces rules for properties within its jurisdiction.
Inspection: An examination of a property and its systems performed by a qualified professional, usually before the sale of a home.
Jumbo mortgage: A mortgage that exceeds the conforming-loan limit, commonly used for luxury home purchases.
Key rate: An interest rate set by the federal government that determines the cost to borrow money—in this case, a mortgage to buy a new home.
Loan-to-value (LTV): The risk assessment ratio used by lenders. To calculate the LTV, divide the mortgage by the appraised value.
Multiple Listing Service (MLS): A database for real estate agents to list and market for-sale homes.
Net proceed: The amount received by the seller at closing after all other costs have been deducted.
Open house: An event hosted by a listing agent to showcase a home to potential buyers.
Pre-approval letter: A letter indicating that a lender is willing to loan a specific amount of money for a home purchase; pre-approval does not guarantee a loan.
Quitclaim deed: A deed that transfers property rights without any validation of ownership; typically used between spouses and family members.
Real estate owned (REO) property: A repossessed property owned by a lender after an unsuccessful sale at auction.
Seller disclosure: A document completed by the seller disclosing the property’s history and defects.
Title: The right to ownership of real property recognized and protected by the law.
Under contract: A buyer has submitted an offer and the seller has accepted, but the closing is not final.
VA loan: A mortgage loan for veterans and their spouses, made by private lenders and guaranteed by the U.S. Government.
Walkthrough: The final inspection conducted before a home sale is final.
X marks the spot: Where you sign for your dream home!
Yield-spread premium (YSP): The amount a lender pays a mortgage officer for selling a loan with a higher interest rate than the par rate.
Zero lot lines: A residence build very close to—or directly on—the property line.
Thanks to Zillow for providing us with this list!