In real estate, 'ABLE' refers to the financial capability of a buyer to complete a transaction. Being ABLE indicates that the buyer has the necessary funds or financing arrangements to proceed with the purchase of a property.
The acquisition cost of a property is the total price and all associated fees required to complete the transaction and take ownership of the property.
An Agreement of Sale is a written contract where the buyer agrees to purchase and the seller agrees to sell real estate under specified terms and conditions.
Assumption of mortgage is a real estate transaction where the buyer accepts liability for the existing mortgage debt on the property, often facilitating a smoother and potentially cheaper transfer of ownership compared to obtaining a new loan.
A buyer's broker, also known as a buyer's agent, is a real estate professional hired by a prospective purchaser to locate an acceptable property for purchase and negotiate with the seller in the purchaser’s best interest.
Carry-back financing, also known as seller financing, occurs when the seller of a property provides a loan to the buyer to complete the property purchase. This arrangement can be beneficial in situations where traditional mortgage financing is difficult to secure.
A down payment is the initial upfront portion of the total amount due on a property purchase. It is typically paid in cash, representing a percentage of the property's value.
Financing is the process of borrowing money to purchase property. Various methods exist to acquire the necessary funds, which can involve different types of loans and arrangements.
Good faith money, also known as earnest money, is a deposit made by a buyer to demonstrate serious interest and intent in purchasing a property. This deposit helps assure the seller of the buyer's commitment while the transaction details are finalized.
A high-ratio mortgage is a loan that requires a smaller percentage of down payment, typically covering more than 80% of the property's value. Such loans often necessitate mortgage insurance to mitigate risk.
A home loan, often synonymous with 'mortgage', is a type of loan specifically used for purchasing real estate property. The borrower is required to pay back the loan over time, typically with interest, and the property usually serves as collateral.
Initial equity refers to the amount of down payment made by a buyer when purchasing a property. Initial equity does not include appreciation, mortgage amortization, or transaction costs.
A lease purchase agreement, also known as a lease with option to purchase, is a contractual arrangement that combines elements of a traditional rental lease with an option to buy the property within a specified timeframe. It can provide benefits for both buyers and sellers.
A mortgage loan is a type of loan secured by real estate property that the borrower is obliged to pay back with a predetermined set of payments. It allows individuals and businesses to purchase real estate without paying the full value upfront.
The 'Offering Price' refers to the amount a prospective buyer offers for a property on the market. This crucial figure determines the start of a negotiation process and can heavily influence the final transaction.
An optionee is the individual or entity that receives an option to purchase property at a future date for a predetermined price. This provides the optionee the right but not the obligation to complete the transaction. Options are commonly used in real estate and financial markets.
A Purchase and Sale Agreement (PSA) is a legally binding contract that outlines the terms and conditions related to the purchase of real estate assets. It is used primarily to detail the obligations and rights of both the buyer and the seller before the actual transfer of property ownership.
A mortgage provided by the seller to the buyer in part payment of the purchase price of real estate. It serves as an alternative or additional financing option for buyers who may not qualify for traditional loans.
A qualified buyer is an individual or entity that has been assessed and deemed financially capable of purchasing a property within a specific price range. This term is crucial in real estate transactions as it helps differentiate between prospective buyers who have the financial means to complete a purchase and those who do not.
A sales agreement, also known as a sales contract, is a legally binding document that outlines the terms and conditions of a transaction between a buyer and a seller.
Secondary financing refers to an additional loan that is secured by a property that already has a primary loan (first mortgage) attached to it. This type of financing is often used to bridge financial gaps when purchasing or refinancing property.
In a title insurance policy, a title exception refers to a statement detailing items or conditions that are not covered by the policy. Understanding these exceptions is crucial for assessing potential risks before purchasing a property.
Title search is an examination of public records to determine the ownership and encumbrances affecting real property. It is an essential step in the purchase of real estate to ensure the buyer receives clear title to the property.
A Variable-Maturity Mortgage (VMM) is a long-term mortgage loan where the interest rate may be adjusted periodically, impacting the loan term while keeping the payment levels constant.
A vendee is a party, typically in real estate transactions, that buys property. This term is specifically used in real estate contexts and contrasts with the term 'buyer,' which is commonly used for personal property transactions.
A willing buyer is a person who expresses genuine interest in purchasing a property under common market conditions, without being under undue pressure or compulsion.
A term used in certain home inspection forms, indicating that as a condition for purchase, the property must be free of these insects.
