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If you've made the decision to buy a home in downtown, smart
move! Welcome to a neighborhood filled with unbelievable San
Diego properties enjoyed by a diverse group of intelligent
people who work hard for the very best life has to offer.
Our clients like to be "in the loop" through every
step of their new home purchase or sale, so we make a special
effort to provide up-to-date information about the market
and the business of real estate. We like to brag that we represent
the smartest home buyers and sellers in San Diego!
Agent
A person acting on behalf of another, called the principal
or fiduciary.
Appraisal
An expert judgment or estimate of the quality or value
of real estate as of a given date.
Assessed Value
The valuation placed on property by a public tax assessor
as the basis for taxes.
Bill of Sale
An instrument that transfers title to personal property
(chattels); a "Deed" transfers'' real property.
Buyer-Broker Agreement
A written agreement authorizing a broker to represent
a buyer's best interests in the purchase of a property.
CC& Rs (Covenants, conditions and restrictions)
A document that controls the use, requirements and restrictions
of a property.
Certificate of Reasonable Value (CRV)
A document that establishes the maximum value and loan
amount for a VA guaranteed mortgage.
Certificate of Title
A document signed by a title examiner or attorney stating
that the seller has a good marketable and insurable title.
Closing Statement (Settlement)
The computation of financial adjustments between buyer
and seller as of the day of closing a sale to determine the
net amount of money the buyer must pay to seller to complete
purchase of the real estate and seller's net proceeds. Also,
"settlement sheets," "HUD-1."
Commission
Payment to a real estate broker for services performed.
Condominium
A form of real estate ownership where the owner receives title
to a particular unit and has a proportionate interest in certain
common areas. The unit itself is generally a separately owned
space whose interior surfaces (walls, floors and ceilings)
serve as its boundaries.
Contingency
A condition that must be satisfied before a contract is
binding. For instance, a sales agreement may be contingent
upon the buyer obtaining financing.
Deed
A formal written instrument by which title to real property
is transferred from one owner to another. Also, "conveyance".
Deed of Trust
Like a mortgage, a security instrument whereby real property
is given as security for a debt. However, in a deed of trust
there are three parties to the instrument: the borrower, the
trustee and the lender (or beneficiary).
Due-On-Sale Clause
An acceleration clause that requires full payment of a mortgage
or deed of trust when the secured property changes ownership.
Earnest Money
The portion of the down payment delivered to the seller or
escrow agent by the purchaser with a written offer as evidence
of good faith.
Equity
The interest or value the owner has in real estate over and
above the debts against it. (Sales - Price - Mortgage - Balance
- Equity).
Escrow
A procedure in which a third party acts as a stakeholder for
both the buyer and the seller, carrying out both parties'
instructions and assuming responsibility for handling all
paperwork and distribution of funds.
Federal National Mortgage Association (FNMA)
Popularly known as Fannie Mae. A privately owned corporation
created by Congress to support the secondary mortgage market.
It purchases and sells residential mortgages insured by FHA
or guaranteed by the VA, as well as conventional home mortgages.
Fee Simple
An estate in which the owner has unrestricted power to dispose
of the property as he wishes, including leaving by will or
inheritance. It is the greatest interest a person can have
in real estate.
Fiduciary Duty
the responsibility of an agent, principal or fiduciary to
act in the best interests of the party he or she represents.
Fixture
What was formerly personal property, which is now permanently
attached to real property, and goes with the property when
it is sold.
Graduated Payment Mortgage
A residential mortgage with monthly payments that start at
a low level and increase at a predetermined rate.
Hazard Insurance
Protects against damages caused to property by fire, windstorms,
and other common hazards.
Home Inspection Report
A qualified inspector's report on a property's overall condition.
The report usually includes an evaluation of both the structure
and mechanical systems.
Home Warranty Plan
Protection against failure of mechanical systems within the
property. Usually includes plumbing, electrical, heating systems
and installed appliances.
Interest-Only Loan
A non-amortized loan in which interest is due at regular intervals
until maturity, when the principal amount is due in whole.
Equity will not accrue beyond the down payment made on the
mortgage.
Joint Tenancy
An equal undivided ownership of property by two or more persons.
Upon the death of any owner, the survivors take the decedent's
interest in the property.
Lien
A legal hold or claim on property as security for a debt or
charge.
Listing Contract
Between a homeowner (as principal) and a licensed real estate
broker (as agent) by which the broker is employed to market
the real estate within a given time, and for which service
the owner agrees to pay a commission. Also, "listing
agreement."
Loan Commitment
A written promise to make a loan for a specified amount on
specified terms.
Loan-To-Value Ratio
The relationship between the amount of the mortgage and the
appraised value of the property, expressed as a percentage
of the appraised value.
Market Value
The highest price a buyer-ready, willing and able but not
compelled to buy-would pay, and the lowest price a seller-ready,
willing and able but, not compelled to sell-would accept.
Basis for "listing price'' or "asking price."
Mortgage
A lien or claim against real property given by the buyer to
the lender as security for money borrowed.
Mortgage Life Insurance
A type of term life insurance often bought by mortgagors.
The coverage decreases as the mortgage balance declines. If
the borrower dies while the policy is in force, the debt is
automatically covered by insurance proceeds.
Mortgage Note
A written agreement to repay a loan. The agreement is secured
by a mortgage, serves as proof of indebtedness and states
the manner in which it shall be paid. Also, "deed of
trust note."
Natural Hazard Disclosure
A California law mandating disclosure, where the necessary
information is publicly available, of information about whether
a property for sale is in any of six hazard zones. It requires
home sellers or their agents to conduct research to specifically
determine this information.
Negative Amortization
Negative amortization occurs when monthly payments fail to
cover the interest cost. The interest that isn't covered is
added to the unpaid principal balance, which means that even
after several payments you could owe more than you did at
the beginning of the loan. Negative amortization can occur
when an adjustable rate mortgage (ARM) has a payment cap that
results in monthly payments that aren't high enough to cover
the interest.
Origination Fee
A fee or charge for work involved in evaluating, preparing
and submitting a proposed mortgage loan. The fee is limited
to one percent of FHA and VA loans.
PITI
Principal, interest, taxes and insurance.
Planned Unit Development (PUD)
A zoning designation for property developed at the same or
slightly greater overall density than conventional development,
sometimes with improvements clustered between open, common
areas. Uses may be residential, commercial or industrial.
Point
An amount equal to one percent of the principal amount of
the investment or note. The lender assesses loan discount
points at closing to increase the yield on the mortgage to
a position competitive with other types of investments.
Prepayment Penalty
A fee charged to a mortgagor who pays a loan before it is
due. Not allowed for FHA or VA loans.
Principal
This word has several meanings:
- to denote the most important;
- a capital sum lent on interest;
- one who appoints an agent to act on their behalf;
- either party to a contract.
Private Mortgage Insurance (PMI)
Insurance written by a private company protecting the lender
against loss if the borrower defaults on the mortgage.
Prorate
To allocate between seller and buyer their proportionate share
of an obligation paid or due. For example, a prorate on real
property taxes, fire insurance or condominium fee.
Purchase Agreement
A written document in which the purchaser agrees to buy certain
real estate and the seller agrees to sell under stated terms
and conditions. Also called a sales contract, earnest money
contract, or agreement for sale.
REALTOR®
A real estate broker or associate active in a local real estate
board affiliated with the National Association of REALTORS®.
Regulation Z
The set of rules governing consumer lending issued by the
Federal Reserve Board of Governors in accordance with the
Consumer Protection act.
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. A survey
is often required by the lender to assure a building is actually
sited on the land according to its legal description.
1031 or Tax Deferred Exchange
IRS rules allowing owners of certain types of like kind Real
and Personal property to sell their property and buy other
like kind property without paying the Capital Gains Tax. These
rules mandate certain time limits and other requirements for
compliance.
Tenancy in Common
A type of joint ownership of property by two or more persons
with no right of survivorship.
Title Insurance
Protects lenders and homeowners against loss of their interest
in property due to legal defects in title.
Title Search or Examination
A check of the title records, generally at the local courthouse,
to make sure the buyer is purchasing a house from the legal
owner and there are no liens, overdue special assessments,
or other claims.
Transfer tax
State tax, local tax (where applicable) and tax stamps (in
some areas) required by law when title passes from one owner
to another.
If you have any questions, or if you'd like to know about
a term not included in our dictionary, contact
or Sandra today. We'd love to talk!
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