Buying a home is the inevitable step after marriage that is both daunting and exciting to take. It will be yours—not just as a couple—but as a family. Choosing a home where you’ll celebrate all of your children’s milestones, like their first day of school, their bar/bat mitzvahs, high school, college, and, eventually, marriages of their own—is not an easy task.
It’s important that when you buy your home (or sell one, if you have decided to move), you understand the information given to you in writing. Every profession has its own language that can be difficult to understand, but with a little help from the following guide, you can easily decipher real estate lingo and make your home buying experience a breeze.
Clear Title: This indicates the property is free of legal questions surrounding ownership. AKA belonging to you, no fuss or fight.
Chain of Title: Record of historical ownership of a property. This is important because the real estate lawyer will typically review this to determine who claims the clear title of the property.
Clouded Title: Any property that there is question in regards to ownership or change of title. Usually, there will be legal intervention in order to clear up confusion and set a clear title.
Comparative Market Analysis (CMA): a report that shows prices of homes, comparable to a home in a listing, that were recently sold, are currently on the market, or were on the market but not sold within the listing period. These are super convenient to check out when buying a home to give you an idea of what kind of homes you can afford within your budget. Any real estate broker should be able to provide you with a CMA upon request.
Deed: Like a title, it’s a document that signifies ownership of a property. It’s used to transfer ownership from one person to another.
Deed of Trust: Transfers title in a property. The deed of trust is a form of a loan that involves three parties—the buyer, the lender, and a trustee. The legal title of the house is held under the trustee, which holds it as security for a loan (debt) between a borrower and lender, but the equitable title remains under the buyer. Not to be confused with a mortgage.
Listing: An agreement between a broker and a homeowner that allows the broker to market and arrange for the sale of the owner’s home. The word “listing” is also used to refer to the for-sale home itself. A broker is required to be considered an official listing.
Mortgage: A loan taken out to buy a property; it involves only a buyer and a lender, commonly between a bank and you, the future homeowner.
Title: The title of a property signifies ownership interest. It can be found on specific legal documents including mortgages and deeds, and can be held by an individual, couple, or even a corporation.
You may have been surprised when looking over this list how many terms you did, or did not, recognize. Hopefully it provided some clarity for you, as a potential buyer (or seller).
In addition to understanding real estate terms, it’s always important to find a great realtor, attorney, and mortgage broker to protect your interests.
Wishing you the best of luck on your future home buying and selling decisions!