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Terminology Helper


Appraiser: The person who decides the market value of a home based on its condition and the selling prices of comparable homes recently sold in the area. The appraiser computes a fair estimate of market value to help the lender decide a reasonable loan amount.

Assessor: A public official who appraises property for tax purposes, determining the assessed value, not the tax rate.

Closing: The conclusion of a real estate transaction, which includes delivery of a deed, financial adjustments, signing of notes and disbursement of funds necessary to the sale or loan.

Contingency: A condition that must be met before a contract is binding. For example, the sale of a home might be contingent on the seller’s paying for certain repairs.

Conventional Loan: A loan made with real estate as security and not involving government participation in the form of insuring (FHA) or guaranteeing (VA) the loan.

Earnest Money: A deposit given when making an offer on a home to demonstrate good faith. A REALTOR® or attorney usually holds the earnest money, the amount of which varies by community. If the sale goes through, this deposit will become part of the buyer’s down payment.

Fixed-Rate Loan: A loan with the same rate of interest for the life of the loan.

Homeowners Policy: A multiple peril insurance policy commonly called a package policy. Available to owners of private homes, it covers the dwelling and contents in case of fire or wind damage, theft, liability for property damage and personal liability.

Interest Rate Cap: The maximum interest rate allowed on an adjustable-rate loan for any one adjustment period during the life of the loan.

Open Mortgage: A mortgage that may be repaid in full at any time over the life of the loan without a prepayment penalty.

Point: A dollar amount paid to a lender for making a loan. A point is one percent of the loan amount. Also called a discount point.

REALTOR®: A member of the National Association of REALTORS® who subscribes to a strict code of ethics.

Title: Documentary evidence of the right to or ownership in property, which in real estate is the deed. Title may be acquired through purchase, inheritance, gift or exchange, as well as through foreclosure of a mortgage.

HOUSING TERMS

Condominiums: In this multiple-ownership property, a purchaser holds title to a specific unit in a high-rise, building complex or townhome community. Condominiums come in various design styles such as contemporary, vintage or loft. The buyer also has a percentage of ownership in the underlying land and common elements such as elevators, stairways, hallways and parking. Each owner pays taxes on his or her unit, as well monthly assessments the condominium association uses to maintain, repair and improve the property. Owners elect a condominium board, which governs the association and in most instances must approve new buyers. Condo owners must abide by the association’s rules and regulations.

Cooperatives: In a co-op, residents are shareholders in the corporation that owns the building. The value and size of a specific unit determine the amount of shares a resident must buy. Although residents do not own their units, they have the right to live there for as long as they hold stock in the corporation. Each shareholder is responsible for a portion of property taxes, building maintenance and any loans. Most commonly apartments, co-ops also can be townhomes or row houses. Co-ops have a reputation for exclusivity; their bylaws give the board the right to decide whether a prospective owner can buy into the corporation, and some co-ops require cash-only transactions.

Investment property: Investment property includes two-flats, three-to-six unit buildings and apartment complexes. Owners typically purchase these properties with the expectation of gaining a return on their investment through a combination of rents or leases and appreciation over time. For as long as the owner holds the property, ROI is calculated by deducting related debt and expenses from rents and leases.

Lofts: The term implies apartments, condominiums or even offices that have been carved out of existing, older commercial buildings such as warehouses, factories, hospitals, schools or office buildings. These living spaces usually offer high ceilings (12’ to 14´), minimum room partitioning to maintain an open bright appearance, exposed ductwork, brick or timber beams and oversized windows. The term “soft lofts” implies a more finished look, often white walls, industrial carpeting and more definition in room divisions. A benefit of such conversions is that they preserve the architectural character and heritage of the city’s aging industrial and commercial districts.

Renovated or rehabbed: Terms that suggest an older building has had features restored or new mechanics—plumbing, electrical system, etc.—installed.

Single-family: One-residence properties most commonly are constructed of brick, wood or stucco. Architectural styles run the gamut— bungalow to Beaux Arts; Victorian, Tudor, ranch and Prairie; Craftsman, Cape Cod, Colonial and contemporary. Homes vary in size. Depending on zoning, they can be one story to four or more stories tall.

Townhomes: Generally smaller than a single-family home, this dwelling is part of a row or complex containing multiple homes of the same or similar design. Units consist of two or more floors, often with a street-level garage. Each townhome shares at least one wall with neighbors, but has its own entrance and outdoor area. Owners have title to--and pay property taxes on--their individual unit and lot, as well as joint ownership of common areas and building exteriors. In a fee-simple scenario, each owner pays for maintaining his or her unit and for services such as snow and garbage removal. Alternately, townhomes can be part of a homeowners association in which all residents equally share financial responsibility for services and common elements such as doors, roofs and gates.

Vintage buildings: These are older structures, usually pre-World War II. They typically have hardwood floors, high ceilings, fine woodwork, sun parlors and plaster moldings.

 
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