Key Terms

Appraisal

Assessment of the property’s market value, for the purpose of obtaining a mortgage and performed by a licensed appraiser.

Assessed Value

Value placed upon property for property tax purposes by the Tax Collector.

Closing Costs

Expenses incidental to a sale of real estate, such as loan fees, appraisal fees, title insurance and escrow fees.

Closing Statement

The statement which lists the financial settlement between Buyer and Seller, and the costs each must pay.

Contingency

Certain criteria that have to be met in order to finalize the sale.

Conventional Mortgage

A mortgage or Deed of Trust not obtained under a government insured program such as FHA or VA.

Credit

Money given to a buyer from a seller through escrow at closing.

Escrow

A neutral third party that handles the transfer of any money during the sale of a home from initial deposit to final funding and closing.

Earnest Money Deposit

Buyers in California usually deposit 3% of the purchase price to show that the buyer is serious about purchasing the home. It is usually refundable in the event a contingency in the sales contract cannot be met.

Fixed Rate Mortgage

A loan on which the interest rate and monthly payment do not change. Home Warranty

A policy that covers certain repairs (e.g. plumbing/heating) of a newly purchased home for a period of time, typically one-year.

Preliminary Title Report

A report showing the condition of title before a sale or loan transaction. After completion of the transaction, a new title insurance policy will be issued.

Title Insurance

Insurance to protect the buyer and lender against losses arising from disputes over the ownership of a property.

Recording Fees

Money paid to the lender for recording a home sale with the local authorities, thereby making it part of the public records.