5 Real Estate Terms You Should Know

Earnest money
A security deposit made by the buyer to assure the seller of his or her intent to purchase.

Deed
A deed is the legal document that establishes ownership of real property, and is also used to transfer the ownership of real property to another person or entity.

Closing costs
Fees associated with the purchase of a home that are due at the end of the sales transaction. Fees may include the appraisal, the home inspection, a title search, a pest inspection and more. Buyers should budget for an amount that is 2% to 5% of the home’s purchase price.

Under contract
A period of time (typically 30 days or more) after a buyer has made an offer on a home and a seller has accepted. During this time, the home is inspected and appraised, and the title is searched for liens, etc.

Underwriting
A process a lender follows to assess a home loan applicant’s income, assets and credit, and the risk involved in offering the applicant a mortgage.