A home inspection is a limited, non-invasive examination or inspection of the condition of a home, usually in connection with a sale. Home inspections are conducted by a licensed, qualified inspector. A home inspection is carried out by an objective third party to establish the condition of a property during a real estate transaction.
Real estate due diligence is the complete survey of a property or real estate asset. It combines all the knowledge and information that could be useful for the buyer to know before moving forward with the purchase
The period of time in which a borrower cannot repay their loan in full without incurring a penalty fine by the lender.
The share of total active listings that dropped their price in a given time period.
A real estate broker is a real estate agent who continues their education and successfully receives a state real estate broker license. Unlike real estate agents, brokers can work independently and start their own brokerage, hiring other real estate agents.
If a third party buyer offers to buy or lease a property owner’s asset, the right of first refusal ensures the property holder is allowed a chance to buy or lease the asset under the same terms offered by the third party before the property owner accepts the third-party offer.
Amortization refers to the process of paying off a loan with regular payments so the amount you owe on the loan gradually decreases. Negative amortization happens when the amount you owe continues to rise, regardless of regular payments, because you’re not paying enough to cover the interest.
The Real Estate Settlement Procedures Act (RESPA) requires lenders to provide disclosures to borrowers informing them of real estate transactions, settlement services, and relevant consumer protection laws. Its goal is to regulate settlement costs, prohibit specific practices such as kickbacks, and limits the use of escrow accounts.
The debt-to-income ratio, or DTI ratio, is the percentage of the borrower’s gross monthly income allocated to monthly debt payments. Is used by lenders to determine borrowing risk.
A due-on-sale clause protects lenders against below-market interest rates. It’s a contract provision requiring the seller of the property to repay the mortgage in full when the property is next sold. It is also called an acceleration clause.
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