First-time buyer vocabulary: cheat sheet

FALLBROOK – Buying a home is an exciting milestone. The process can be overwhelming in itself, but sometimes you can get lost with the real estate terminologies. Don't get caught saying, "What does it mean?" during a home purchase transaction. Here are words homebuyers should know.

Offer: Also known as a sales contract. It is a proposal made to an owner of a property or seller by a potential buyer to purchase the property at understated terms.

Escrow: The holding of documents and money by a neutral third party before closing.

Closing costs: The miscellaneous fees at the end of the transaction that buyers and sellers normally pay during the transfer of ownership of the property. Common closing costs include escrow fees, title insurance fees, document recording fees, and real estate commissions.

Home inspection: An objective examination of the physical structure and systems of a property by a qualified home inspector. The homebuyer traditionally pays for the cost of a home inspection.

Annual percentage rate: The annual cost of a mortgage, including interest, loan fees, and other costs, stated as a percentage of the loan amount.

Earnest money: The deposit given by a buyer to a seller (held in escrow) to show that the buyer is serious about purchasing the home. Earnest money usually is generally refundable to homebuyers in the event a contingency of the sales contract cannot be met.

Title: A legal concept relating to ownership of property. Indicates "fee'' position of lawful ownership and right to property. "Bundle of Rights" possessed by an owner. It is a combination of all elements constituting proof of ownership.

Mortgage: A legal document that pledges a property to the lender as security for payment of a debt.

Mortgage insurance: Money paid to insure the mortgage when the down payment is less than 20%. This is only charged on certain types of loans, such as FHA loans.

Signing: Schedule closing as soon as you receive approval from your lender. This is when you will be signing for the home.

Recording: The process of placing a document on file with a designated public official for public notice. This is the day after signing. The ownership of the property will then be transferred to the buyer. This is also the day you will receive your keys!

If you have any questions or if you are seeking an experienced agent to support you in your purchase, feel free to reach out to the team at Broadpoint Properties.

Source: California Department of Real Estate, California Association of Realtors®

This article first appeared on Broadpoint Properties' website, https://servingsandiegocounty.com.

Submitted by Elisabeth Hartig Lentulo, broker associate, who can be reached at 760-532-1057, [email protected] or http://www.ehlentulo.com. CalBRE #01904564