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ESTIMATED FEES FOR PURCHASES $150,000 AND LOWER.
THIS IS FOR OHIO PROPERTIES ONLY.
SELLER FEES;
TITLE GUARANTY $ 3.50 /thousand _______X $ 3.50 = $_____________
EXAM (PLATTED PROPERTY) $220.00 = $220.00________
CONVEYANCE FEE
(Lucas County only – call for quote on other
Counties) $ 4.00/thousand _______ X $ 4.00 = $______________
TAX PRORATE based on date of closing = $______________
PAYOFF OVERNIGHT COURIER SERVICE $ 20.00 per payoff ______ X $20.00 = $______________
DEED PREPARATION (if no seller attorney) $ 45.00 = $______________
CLOSING FEE $185.00 = $185.00________
CLOSING PROTECTION LETTER = $50.00_________
LOAN PAYOFF first mortgage = $______________
second mortgage/equity line = $______________
COMMISSION ______________X __________% = $______________
HOME WARRANTY (if applicable) = $______________
MISCELLANEOUS BILLS PAID AT CLOSING = $______________
ESTIMATED TOTAL SELLERS FEES______= $______________
BUYERS FEES:
EAGLE POLICY OF TITLE INSURANCE $5.75/thousand + 15% of same policy – TG amount
OR = $______________
STANDARD POLICY OF TITLE INSURANCE $5.75/thousand ________X $5.75 = $ _____________
SIMULTANEOUS ISSUE $100.00 = $______________
(When owner’s and loan policies are purchased at the same time. Not needed on cash transactions)
EXAM (platted property) $ 30.00 = $_30.00________
COMMITMENT FEE $100.00 = $100.00________
CLOSING PROTECTION LETTER = $_15.00________
CLOSING PROTECTION LETTER – LENDER = $ 35.00_______
EPL ENDORSEMENT $ 75.00 = $______________
(Lender may require additional endorsements at a fee)
SURVEY COVERAGE $100.00
SURVEY $150 - $250 (based on property = $______________
location)
RECORDING $28 for 1st two pages, $8 each page = $______________
after (typically $28 for 2 page deed
$140 for 16 page mortgage)
OVERNIGHT, WIRE AND $20 overnight original docs to lender = $______________
ELECTRONIC DELIVERY FEES $20 incoming funds wired by lender = $______________
$15 documents emailed by lender = $______________
MISCELLANEOUS BILLS PAID AT CLOSING = $______________
CLOSING FEE $235.00 = $235.00_________
ESTIMATED TOTAL BUYERS FEES__=$_________________
What to Expect on the HUD Closing Statement
The parties to a real estate sale may negotiate on who will pay certain closing costs. In the absence of an agreement, local custom calls for each party to pay those closing costs related to that portion of the transaction for which they are responsible. Some of those costs and who usually pays them are described below.
The information below will give you a rough idea of what you will expect to see on the HUD or Settlement Statement at the time of closing, what fees are paid by the Seller and what fees are to be covered by the Buyer. These fees may vary based on the area, the property, the purchase price or the lender’s requirements.
When a buyer asks to have his closing costs covered by the seller they must be made aware that this money is in essence coming out of the buyer’s loan and they are really paying it themselves over the term of the mortgage. The Lender will usually only allow the Seller to pay up to 3% or as much as 6% of the Buyers closing fees depending on the loan programs requirements. You may want to look into how much interest will be paid on that few thousand dollars over say a 30 year period and the possible tax benefits of this. Having these fees paid within your loan or by the seller may give you even more benefits when you consider that a lender gives you a better interest rate when you have a higher loan amount and with more money to put on a down payment the lender will qualify you for a larger amount. The major downside of this is that the Seller may not view you as a buyer with solid purchasing power and may not be as willing to work with you to get the deal accepted.
There are also Buyer’s Down Payment Assistance Programs that can be wrapped into the loan. The lender will usually allow you to use from 3 – 9% of the purchase price Down Payment Assistance based on the loan program and the property’s appraised value.
In order to use Seller Paid Closing Costs or Buyer’s Down Payment Assistance Programs you will need to be sure that you are buying the property for that much under market value because a Lender will not make a loan for more than the appraised value of the home. If the home does appraise for too low to fold those costs into the loan then you may ask the Seller if he would consider taking back a second loan for you. If a Seller needs to get out from under the home and will have some equity in the home after his loan payoffs have been made then this could be very advantageous to both you and to the Seller.
There are many creative ways to put a deal together you make ask your Real Estate Agent, however your Loan Officer will be able to up date you on the many financing programs that are available. Be sure to ask your Loan Officer to give you a copy of your Good Faith Estimate after he has plugged in the exact numbers for the property that you are purchasing so that you will know exactly what to expect to pay at closing.
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Definition of Closing Costs
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Seller Paid Fees
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Buyer Paid Fees
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Abstract
An abstract is a summary of the history of ownership of the property. If an existing abstract needs to be updated or continued, the cost will be lower than if a complete, new abstract must be prepared. An update usually costs between $75 - $150. A new abstract in Ohio or Michigan can cost upwards from $250 - $400. The cost for an abstract is usually paid by the Seller.
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Abstract
Update $75 - $150
Complete $250 - $400
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Appraisal
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Appraisal
$250 - $400
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Real Estate Agent/Broker Commisions
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Real Estate Agent/Broker Commisions
Buyers Agent 2% - 3%
Seller’s Agent 2.5% - 4%
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Down Payment
Most lenders require a borrower to pay at least 10% of the purchase price as a down payment but certain loans or government loan programs require less or even no down payment. With a good credit rating you may be allowed as low as a 3% down payment. Ask about down payment assistance programs.
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Down Payment
Percentage of Purchase Price
3 – 10%
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Loan Origination Fee, Points
A loan origination fee is a lender's fee to a borrower for establishing a new loan. Conventional loan origination fees may be 1 to 3+ points. A point is 1% of the loan. The LO gets paid by the Lender that is buying the loan based on the interest rate and how large the loan amount is. It is usually best not to pay points.
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Loan Origination Fee, Points
1% of the loan per point
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Appraisal Fee
An appraisal fee is paid to an appraiser to obtain an estimate of market value upon which the lender will base the loan amount. The cost is about $300-$400. This fee is usually paid by the buyer.
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Appraisal Fee
$300-$400
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Credit Report
A credit report is an evaluation of the buyer's credit habits made by a credit bureau for the lender. The cost is $50-$60 and is usually paid by the buyer.
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Credit Report
$50-$60
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Tax Service Fee
A tax service fee is a charge of approximately $75 by a tax service company to verify to the lender that taxes have actually been paid when due or are due to be paid by a borrower or mortgage company if impounding.
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Tax Service Fee
approximately $75
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Inspection Fees
Inspections the buyer may choose to have done may include a general property inspection that usually cover foundation, electrical, plumbing and overall construction at a cost of $200 -$300. Roof inspections cost $75-$125. Septic inspections may cost between $200-$400. Homes built before 1978 Lead Base Paint/Asbestos
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Inspection Fees
$200 -$700
$200 -$300 structural, mechanical
$ 89 Wood boring Pests
$ 95 Radon
$ 300+ Mold
$ 45 Carbon Monoxide
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Title Insurance
Title insurance covers title defects and even certain unrecorded liens, is based on the loan amount or purchase price and is required by almost all lenders. The cost depends on the amount of the loan, for a lender's policy, or the purchase price, for an owner's policy. A title insurance policy for a lender does not insure owners so the owner may want to buy their own policy. The cost for title insurance is usually paid by the buyer/borrower. Closing Fee $165, $23 per pay off overnight fee. Buyer $215, Shipping $55, Wire fee $15
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Title Insurance
$3 per $1000 plus $350
Closing Fee $165,
$23 per loan pay off overnight fee
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Title Insurance
$215, Shipping $55, Wire fee $15
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Title Examination Fee
The title to the property is reviewed for liens, mortgages, easements or defects. This fee is sometimes added directly to the cost of title insurance or may be a separate item on the settlement statement. This is usually paid by a buyer.
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Title Insurance – Title Exam & Settlement Fee
$3 per $1000 plus $350
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Title Examination Fee
$150 - $200.
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Definition of Closing Costs
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Seller Paid Fees
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Buyer Paid Fees
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Deed Preparation
This is like a bill of sale for real estate. This cost ($60) is usually paid by the seller.
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Deed Preparation $60
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Plat Sketch
A plat sketch is a sketch of the boundaries of a piece of real estate used to determine whether buildings or other improvements are actually located on the property and that the neighbors' buildings or improvements do not encroach on the property to be financed. The cost for a plat sketch (between $60 -$75) is usually paid by the buyer.
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Plat Sketch
between $60 -$75
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Deed Tax
A deed tax is a state tax. The cost is $3.30 per $1,000 of the selling price. This tax is usually paid by the seller.
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Deed Tax
$3.30 per $1,000 of the selling price
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Miscellaneous Costs & Fees
An estimate of $150 should be considered to cover other items such as recording fees and document preparation, as well as allowing for variations from these other estimates.
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Miscellaneous Costs & Fees
An estimate of $150
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Hazard Insurance Reserve
If hazard insurance is to be paid monthly to the lender, a portion of the next premium is collected for the escrow account in order to ensure that enough money is impounded to pay the premium when it comes due. The buyer will usually need to either provide or pay for coverage for the 1st year. If you have seller paid closing costs then add the buyer’s insurance payment into it to be sure to hit your 3 or 6%
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Hazard Insurance Reserve
The buyer will usually need to either provide or pay for coverage for the 1st year.
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Recording Fees
Charges by the County Recorder to record deeds, mortgages, satisfactions of mortgage or other documents required to clear or transfer title are collected by the closing agent. In most counties, the cost is $20.0 for each page and each party may be required to record one or more documents, depending on the transaction.
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Recording Fees
$20
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Recording Fees
< > $200
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Prepaid Interest
A borrower often must pay interest from the date of closing to 30 days prior to the first regular mortgage payment.
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Prepaid Interest
A borrower often must pay interest from the date of closing to 30 days prior to the first regular mortgage payment.
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Mortgage Insurance
Mortgage Insurance usually is required on conventional loans greater than 80% of appraised value. The cost may range from 1/2% to 1% per year and 14 months premium is often collected in advance. This is coverage for the lender in case of default. The premium is paid by the buyer.
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Mortgage Insurance
1/2% to 1% per year and 14 months premium is often collected in advance.
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Mortgage Registration Tax
Mortgage registration tax is a state tax charged by the State of Minnesota for giving a mortgage. The tax amounts to 23¢ per $100 of mortgage amount. This tax is usually paid by the buyer/borrower.
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Mortgage Registration Tax
23¢ per $100 of mortgage amount
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Tax escrow (impound)
If the new loan is going to have an escrow account for the payment of taxes and insurance, the lender will require from 2-10 months taxes to be deposited at the time of closing, depending on when the next taxes or insurance need to be paid out of the escrow account. These sums are paid by the buyer/borrower.
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Tax escrow (impound)
2-10 months taxes to be deposited at the time of closing, depending on when the next taxes or insurance need to be paid
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Underwriting/Credit Fees
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Underwriting/Credit Fees
$125 - $450
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Processing Fees
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Processing Fees
$125 - $450
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Tax Service Fee
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Tax Service Fee
$65
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Definition of Closing Costs
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Seller Paid Fees
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Buyer Paid Fees
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Flood Certification Fee
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Flood Certification Fee
$10 - $25
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Property Survey or Survey Coverage
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Property Survey $200 - $400
Survey Coverage $100- $150
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Mortgage Insurance
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Mortgage Insurance
$0 - $500
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Closing Fee
Closing fees are paid to the closing agent for closing the transaction. These fees range from $150 - $350, depending on the complexity of the closing. Usually the buyer pays a fee to close a loan if there is financing and a seller pays a fee for the work needed to transfer ownership of the land to the buyer. Each party may hire their own closing agent, though, to ensure that their part of the transaction is properly handled. Or the parties may choose to hire the same closing agent to close both the seller's and the buyer's portion of the transaction.
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Closing Fee
$150 - $350
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Closing Fee
$150 - $350
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Real Estate Terms & Definitions
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Abstract (Of Title)
An abstract is a history of a piece of property including a summary of the public records relating to that land. Some people mistakenly believe that an abstract is like a motor vehicle title certificate. That belief is wrong. An abstract is simply a summary of the history of property. With that history it is possible to draw conclusions about ownership and liens.
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Acceleration
The right of a lender to demand immediate repayment of a loan, usually because of some kind of default on the part of the borrower.
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Agent
Someone who acts for another. A real estate agent acts on behalf of the either the buyer or the seller.
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Agreement of Sale / Purchase Agreement
A written contract setting out the terms of a sale.
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Appraisal
An estimate of the value of property.
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ARM-Adjustable Rate Mortgage
A loan in which the interest rate changes, usually as a result on a change in one or more government statistical index rates.
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Assessment
A local tax "assessed" against property, usually for a specific purpose, such as for sewer or water improvements.
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Assessor
A person who values real estate for tax purposes.
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Assignment
A transfer of a right to another person.
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Assumption
An agreement whereby one party takes over the responsibilities of another. For example, one party may sometimes assume a loan or mortgage originally agreed to by another party.
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Balloon Mortgage
A mortgage for a term shorter than necessary to fully repay the debt. As a result, a large lump sum or "balloon payment" is due at the end of the loan.
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Bridge Loan
A short term loan used to help finance the purchase of a new home when a buyer has not sold his old home. The bridge loan is paid off when the old home is sold.
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Building Code
A set of laws that control the construction of buildings.
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Capital Gain
Income from the sale of a capital (tangible) asset. A capital gain is usually the difference between the original purchase price and the later sale price.
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Chain Of Title
A history of the ownership and liens affecting the title as far back as records are available.
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Closing
The end of the transaction when the seller hands over the title to the buyer in exchange for payment. Also called settlement.
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Closing Costs
Costs the buyer or seller must pay at the time of the closing.
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Cloud (On Title)
A title defect which undermines the marketability of real estate.
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Commission
Money paid to a real estate agent or broker by the seller as compensation for finding a buyer and completing the sale. Usually it is a percentage of the sale price: 4 to 7 percent on houses, 10 percent on land.
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Construction Loan
A short term loan to pay for the construction of building or homes. Usually at the end of construction, the construction loan is paid off with financing from a longer term loan.
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Contingency
A condition that must be met before a contract is binding. Contingencies include: the property must appraise for sales price or buyers approving of various inspections.
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Contract for Deed
A contract between purchaser and a seller of real estate to give a deed after it is paid for.
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Conventional Loan
A fixed rate and fixed term loan that is made without government insurance.
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Conveyance
The transfer of the title to land from one to another.
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Covenants
Agreements written into deeds and other instruments stating performance or non-performance of certain acts or noting certain uses or non-uses of property.
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Deed
A legal document by which property title is transferred from one owner to another.
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Default
Failure to meet legal obligations in a contract. For example, the failure to make the monthly payments on a mortgage.
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Depreciation
Decline in value of a house due to wear and tear or any other reason.
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Down Payment
The down payment is the percentage of the purchase price that the buyer must pay in cash and may not borrow from the lender. The down payment amount in addition to the mortgage equals the purchase price of a property. They can vary from 0% to over 50%. The less your down payment the better your credit has to be. Lower down payments generally result in higher interest rates.
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Due-on-Sale Clause
A provision in a mortgage that allows the lender to demand immediate payment of the balance of the mortgage if the borrower sells the home.
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Earnest Money
The deposit money given to the seller by the potential buyer as evidence of good faith in purchasing real estate. The broker places the money in an escrow or trust account until closing, when it becomes part of the down payment.
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Easement
A right- of- way granted to a person or company authorizing access to or over the owner's land. An electric company obtaining a right- of- way across private property is a common example.
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Encroachment
An obstruction, building, or part of a building that intrudes beyond a legal boundary onto neighboring private or public land, or a building extending beyond the building line.
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Encumbrance
A legal right or interest in land that affects a good or clear title, and diminishes the land's value.
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Equity
The value of the property less the amount of unpaid mortgages and any outstanding liens.
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Escrow
Money or other valuables given to a third party with directions to deliver them to another party upon the fulfillment of a specific act or condition. Often a lender will escrow taxes and insurance.
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Fair Market Value
That price a property will bring given that both buyer and seller are fully aware of market conditions and comparable properties.
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FHA - Federal Housing Administration
Part of the US Department of Housing and Urban Development (HUD). It was established in 1934 to encourage improvement in housing standards and communities. The FHA insures mortgage loans.
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FHA Mortgage
A mortgage loan insured by the Federal Housing Administration.
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Foreclosure
A legal process by which the lender or the seller forces a sale of a mortgaged property because the borrower has not met the terms of the mortgage. Also known as a repossession of property.
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Grantee
That party in the deed who is the buyer or recipient.
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Grantor
That party in the deed who is the seller or giver.
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Home or Property Inspection
A detailed inspection of the physical structure, the plumbing, electrical and heating systems and the overall condition of the home. Typically the cost is $150-$300 and the results are detailed in a multiple page report.
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Homeowners Insurance
Insurance that protects the homeowners from Casualty losses or damage to the home or personal property and from liability damages to other people or property. Homeowners insurance is required by the lender and may be included in the monthly mortgage payment.
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Interest
A charge paid for borrowing money.
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Joint Tenancy
Joint ownership by two or more persons with right of survivorship. Upon the death of a joint tenant, his interest does not go to his heirs, but to the remaining joint tenants.
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Legal Description
The geographical identification of a parcel of land.
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Lien
A hold or claim on the property of another to satisfy an unpaid debt or obligation.
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Listing Agreement
An agreement between a homeowner and a licensed real estate broker that authorizes the broker to sell real estate during a given time period, usually for a commission.
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Loan Origination Fee
A fee charged by the lender for evaluating, preparing and submitting a proposed mortgage loan.
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Loan-to-Value Ratio
The ratio of a mortgage loan principal to the property's appraised value or its sales price, whichever is lower. Loan-to-value ratios vary depending upon the individual lender's policy.
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Lock-in Rate
A commitment made by a lender to make a mortgage loan at a specified rate, pending loan approval, on or prior to a specified date.
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Market Value
The highest price a buyer will pay for a property and the lowest price the seller will accept in a typical market.
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Mechanic's Lien
A lien created by statute on a specific property for labor or materials contributed to an improvement on that property.
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Mortgage
A lien on real estate given by a borrower as collateral for the loan .
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Mortgage Insurance
An insurance policy that provides protection for the lender in case of default and or which guarantees repayment of the loan. Mortgage insurance does not give insurance benefits to the borrower.
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Non Assumption Clause
A statement in a mortgage contract forbidding the assumption of the mortgage without the prior approval of the lender.
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Note or promissory note
A written promise to repay a debt. In the nature of an I.O.U.
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Offer
A proposal to purchase real estate at a particular price, subject to other specified terms and conditions. Acceptance of the offer by the seller creates a purchase contract. A counteroffer is a different offer made in response to the initial offer.
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Origination Fee
Application fee(s) for processing a proposed mortgage.
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Plat
A map or chart of a lot, subdivision or community drawn by a surveyor showing boundary lines, buildings, improvements on the land, and easements.
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Point
An amount equal to one percent of the loan amount paid to a lender for making the loan. A lender may charge the borrower several points in order to provide the loan.
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Prepayment
A privilege in a mortgage permitting the borrower to make payments in advance of their due date.
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Prepayment Penalty
Money charged for an early repayment of debt. Prepayment penalties are allowed in some form, but are not necessarily imposed in many states.
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Principal
The amount of debt, not counting interest, left on a loan.
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Purchase Agreement
An agreement between buyer and seller setting out the price and terms of the sale.
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Real Estate Agent
A licensed person who works under the direction of a broker selling and renting real estate.
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Real Estate Broker
A middle man or agent who buys and sells real estate for a company, firm, or individual on a commission basis. The broker does not have title to the property, but generally represents the owner.
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Refinance
Obtaining a new mortgage loan on a property already owned. Often to replace existing loans on the property.
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Restrictive Covenants
Private restrictions limiting the use of real estate.
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Second Mortgage
A mortgage made subsequent to another mortgage and subordinate to the first one.
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Secondary Mortgage Market
The place where primary mortgage lenders sell the mortgages they make to obtain more funds to originate more new loans.
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Special Assessments
A special tax imposed on property, individual lots or all property in the immediate area, for road construction, sidewalks, sewers, street lights, etc.
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Survey
A map or plat made by a licensed surveyor showing the results of measuring the land with its elevations, improvements, boundaries, and its relationship to surrounding tracts of land.
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Title
Ownership of real property. Title is transferred from one party to another through a document called a deed.
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Title Insurance
Protection for lenders and homeowners against financial loss resulting from legal defects in or other claims against the property's title. The cost of the policy is usually a function of the value of the property and is often borne by the purchaser and or seller.
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Title Search
An examination of municipal records to determine the legal ownership of property. Usually is performed by a title company or attorney.
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Variable Interest Rate
A fluctuating interest rate which can go up or down depending on the going market rate.
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Waive
To relinquish, or abandon. To forego a right to enforce or require anything.
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Zoning Ordinances
The acts of an authorized local government establishing building codes, and setting forth regulations for property land usage.
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Ordinarily, geographic precision is needed when describing real estate. Imprecise or ambiguous descriptions lead to disagreement and conflict. Owners and builders need to know precisely where a parcel is located in order to plan for its use and development. Finding out that the new garage you just built is on the neighbor’s property can spoil neighborly friendship.
One common description error occurs when a parcel is subdivided using generic references like the “North Half” of a lot that is not oriented in a north/south or east/west direction. Does the dividing line run parallel with the other boundaries or does it run in an east west direction according to the written description? Descriptions of this sort, when the original parcel lies at an angle to the direction referred to in the description, can pose problems.
Another related problem arises when generic references like the “North Half” of a lot are used when the original lot is irregularly shaped. If a lot is wider at one end than the other, for example, the dividing line between the halves may actually be closer to the wide end than to the narrow end. One half cannot be bigger than the other half but neither half will have the same shape as the other. This kind of description can often lead to disputes.
Problems can also arise when a parcel is divided using assumed dimensions which prove to be incorrect. For example, a “forty” is, in theory, a square forty acres measuring 1,320 feet on each side. In fact, a “forty” in theory is not the same as where the forty was actually laid out by the original government survey. The section corners actually laid out by the original government survey were never precisely located where they were theoretically supposed to be. Legally, the actual corners are where they were actually laid out, not where they might have been laid out using more precise survey technique that was unavailable at the time of the original survey. Some “forties” are considerably smaller or larger than forty acres. A landowner who incorrectly assumes his forty to be exactly 1,320 feet on each side and then sells smaller parcels out of that forty with dimensions that combine to total exactly 1,320 feet on each side, is almost certainly leaving a gap between parcels (when the forty is larger than 1,320 feet on a side), or selling overlapping parcels (when the forty is smaller than 1,320 feet on a side).
Another common description error occurs whenever a parcel is described using a measurement from a waterway. Because waters rise or fall, and shorelines erode, measurements from a waterway are a moving target and imprecise. Measurements should never be taken from a waterway because of that problem.
These errors are just a sample of description problems. Many others also arise from time to time. A common feature of description errors is that they are imprecise or ambiguous. Another common feature is that more than one party may claim ownership of the same parcel. A good legal description of real estate is precise and not susceptible to dispute between adjoining landowners.
PROPERTY OWNERSHIP
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Joint tenancy and tenancy in common are the two most common forms of joint ownership of real estate. Both forms describe ownership by more than one person of the same real estate. They differ, though, in how ownership transfers upon the death of one of those owners.
When a joint tenant dies, the surviving joint tenant(s) are then the owners of the deceased owners' share. "Joint Tenancy" means that if one of the owners dies, the remaining owners acquire the share of the deceased owner automatically. Joint tenants have a "right of survivorship."
When a tenant in common dies, the deceased owners' share passes to heirs or creditors according to the laws of inheritance. The surviving owners do not automatically acquire the deceased owners' share. Tenants in common do not have a right of survivorship.
Joint tenancy is the most common form of joint ownership among spouses, especially when neither spouse have children from prior relationships. Tenancy in common may be more appropriate for non family joint ownership or when spouses have children from prior relationships.
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