Buyers should learn real estate terms when home buying to help them make the best choices.
Learn Real Estate Terms When Home Buying
Deed: A written instrument by which title to land is conveyed. If there is a mortgage on the house, the mortgage company holds the deed until the final payment, then the owner receives the deed.
Earnest money: A deposit made by the buyer as evidence of good faith when offering to purchase real estate. Earnest money is typically held in an escrow account during the period between acceptance of the contract and the closing of the sale, at which time it is credited to the buyer.
Easement: A right to use another person’s real estate for a specific purpose. The most common type of easement is the right to travel over another person’s land, known as a right-of-way. In addition, property owners commonly grant easements for the placement of utility poles, utility trenches, water lines or sewer lines.
Land contract: A contract where the buyer makes payments directly to the seller, who is still financially responsible for the property. Beware: If the seller defaults on his mortgage, you could lose your properly.
Title insurance: Protection for lenders or homeowners, provided by a title company, against financial loss resulting from legal defects in the title, which is a history of the ownership of the property.