If you are buying and selling a house, it can be difficult to understand all the real estate terminology you would come across in the process. Too keep yourself in the loop with Aurora real estate, you either need to have a helpful agent or time to hit the real estate books. Check out some common real estate terminology so that you don’t get left behind:

Escrow—a party outside of the buyer and seller that holds onto funds until notified that the transaction can officially take place. This may be used when there are conditions that must be met before the transaction, but the other party needs the reassurance that the money is there.

Amortization—a method of loan payment where the borrower must follow a payment schedule. The initial period of this schedule will primarily focus on repaying the interest first.

Underwriting—this is when lenders will take a close look at the financial risk of lending to a buyer and determining the right characteristics for the loan. The lender will also look at appraising value of the house in regards to future collateral. The borrower will have to pay an underwriting fee for these services and for verifying data from the borrower’s application.

FHA—the Federal Housing Administration, which offers mortgage insurance from approved lenders. This is called an FHA insured loan.

Agency disclosure—during a real estate transaction, the requirement for agents to be upfront concerning who they are representing. Different states will have different laws determining at which point in the process this must be disclosed.

Upgrades—an option to improve a feature of the home. When looking at home features, if there is a weak spot that is not just a quick fix, then the seller will often offer an upgrade as part of the package.
Decorating allowance—similar to upgrades, a decorating allowance is an agreement that money will be offered by the seller for redecorating. This is often held in escrow, and is typically negotiated along with all the other terms of the purchase agreement.

Encroachment—this is a structure on a neighboring property, such as a fence, that extends over the boundary lines. This is a common concern for potential buyers, as the previous owners may have agreed to the encroachment (Letting tree branches extend over the fence because they thought it was pretty, for example.) didn’t notice, or did notice but didn’t say anything.

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