19 Terms that Scare Homeowners, but Shouldn't
from mibor.com's blog: My4Walls
1. Appraisal
An appraisal is the estimated value of a property. A property is appraised to know the amount of money that a lender is willing to lend for a buyer to buy a particular property.
If the appraised amount is less than the asking price for the property, then that piece of real estate might be overpriced. In this case, the lender will refuse to finance the purchase.
Appraisals are designed to protect both the lender and buyer. The lender will not get stuck with a property that is less than the money lent, and the buyer will avoid paying too much for the property.
2. Certificate of title
This document ensures that a particular property is legally owned by the seller and that no other individual owns it or can lay claim to it.
3. Closing
Closing happens when you meet up to close the deal. It’s also referred to as settlement. It involves the buyer and his or her attorney, the seller and his or her attorney, as well as the escrow agent.
4. Closing costs
This refers to the additional expenses spent in financing and purchasing the property. Costs usually include lawyer’s fees, loan origination fee, escrow impounds, appraisal, survey and title search fees. The closing costs usually amount to 6 percent of the sale price of the property.
5. Comparative market analysis (CMA)
The CMA is conducted to determine the market value of a property, which is needed to make a fair asking price. The analysis is done by comparing the property in question to other similar properties that have been sold recently in the area. It’s one of the ways to find out the salable factors of a property.
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