Affidavit: A written statement made under oath before a notary or judicial officer.
Appraisal: A report from an independent third party detailing the estimated value of Real Estate.
Balloon Payment: A large principal payment due all at once at the end of specific loan terms.
CC&Rs: This stands for covenants, conditions and restrictions. They can range from dozens of pages or more for condominiums and are typically on properties with Homeowner Associations.
Contingency: A condition in a contract that must be satisfied for the contract to be binding.
Contract: A binding legal agreement between two or more parties that outlines the conditions for the exchange of value. Example: money exchanged for the title to a property.
Closing: A Purchase and Sale Agreement defines closing as when recording numbers have been provided by the county and funds are available to the Seller.
Closing Disclosure: A five-page document that provides final details about the mortgage loan you are receiving. It includes the loan terms, projected monthly payment, and how much you will be paying in fees and other costs (closing costs). It is required to be provided to you three business days before closing.
Debt-to-income ratio (DTI): the relationship between a borrower’s total monthly debt payments and their gross monthly income.
Deed: A document through which conveyance of property is affected. This is the document that the Seller will sign.
Deed of Trust: This is the document that makes the home collateral for a loan. It discloses the original loan amount, other terms and conditions for the loan set by the Lender. When recorded, this becomes a public document.
Disbursement date: The date where funds are paid out to each party involved in the purchase and sale of a home.
Discount Points: A feed paid by the borrower at closing to reduce the interest rate. A point equals to 1% of the loan amount.
Down Payment: A percentage of the purchase and sale agreement that the Buyer must pay in cash and may not be borrowed from a lender.
Earnest Money: A deposit of funds by the purchaser as evidence of good faith in the Purchase and Sale Agreement.
Easement: A right to use all or part of land owned by another party for a specific purchase. For example, this may allow the city to install and maintain sewer/utility lines.
Encroachment: Any building, improvement or structure located on one property but intrudes upon the property of another.
Escrow: An impartial third-party process in which documents and funds are deposited by Buyers, Sellers, and Lenders to facilitate the closing of real estate transactions.
Excise tax: In Washington State, the cities and counties collect excise tax from the Seller based on the sales price of the home.
Interest Rate: The cost of borrowing money, usually expressed as a percentage.
Legal Description: The legal way to describe a property based on the location as it is recorded in official plat maps from the county.
Lien: A monetary charge imposed on a property, usually from debt or obligation.
Listing Agreement: An agreement whereby an owner engages with a real estate company for a specific period of time to sell a property on which results in the agents involved receiving a commission.
Market Price: the actual price of property which is sold.
Market Value: The price of a property that is established by present economic conditions, location, general trends, location and style.
Mortgage Insurance (MI): Insurance that protects Lenders against losses caused by a Borrower’s default on a mortgage loan. This is typically required for a down payment which is less then 20% of the purchase price.
Title Commitment (also called Title Report): A document issued by the title insurance company that contains the conditions in which the policy of title insurance will be issued.
Title Insurance Policy: A contract of title insurance which the insurer in keeping with the terms of the policy, agrees to indemnify the insured against loss arising from claims against the insured’s interest of the property.