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Vocabulary

Appraisal – An appraisal is an evaluation by an independent source that is hired by the mortgage lending bank to ensure that the bank is not loaning more money than the home is worth.

 

Buyer/Broker Agreement – This agreement designates that the purchaser and agent/broker have a mutually agreed relationship for a designated time to purchase a property.  This agreement is required by law and is the equivalent of “going steady”. 

Closing/Settlement Process – This is the process from offer ratification to obtaining keys to the home. The signing of the documents for this are done by both the buyer and seller on a specific date and usually at the title company’s office.

Earnest Money Deposit (EMD) – usually 1% of sales price, this is the deposit put down when placing an offer on a home. Returned if offer not accepted

 

Home Inspection – An inspection on the home by a qualified professional to note any defects found with the home, this is customarily done right after ratification of contract.

 

HOA/Homeowners Documents – When a home is in a community with a Home Owners Association, the seller must furnish a disclosure that the association is financially and legally sound and if there are any violations against the property. 

 

Home Warranty – A warranty that covers any major mechanical items on the property, less deductible, and usually for 1 year.  Paid for by either the buyer or seller, depending on contract.

 

Pre-Approval - A mortgage loan pre-approval is required when making any offer on a property, which is not paid in cash. This approval is a letter from the mortgage loan office that they have reviewed your income and debt and have approved you for a specific mortgage loan amount.  When making an offer this letter tells the seller that you are a good loan risk and that shouldn’t be any problems with your obtaining a loan for the property.

 

Radon Inspection - Radon inspection measures any Radon gas that comes from the natural (radioactive) breakdown of uranium in soil, rock and water and gets into the air you breathe. EPA recommends testing for all homes with basements especially.  We have seen a disturbance of radon levels since the earthquake in Virginia in 2010.

 

Ratification – Mutually signed and agreed to contract, this begins the closing/escrow process. The ratification date drives most due dates in the contract.

 

Walkthrough - An opportunity for purchaser to inspect the property within 7 days prior to closing to make sure any home inspection repairs items have been completed and that the home is in the same condition as when offer was made or home inspection was performed

 

Wood Destroying Insects (WDI) – WDI is a Pest/Termite inspection.