Closing Terms

Many phrases and terms are used through the closing process. Below are a few examples of legal wording you may encounter.

Addenda: Separate writings that become part of the purchase agreement.
Appraisal: The estimate of value made by an impartial expert.
Arbitration: The process in which a dispute is decided by an arbitrator, whose decision may be binding, depending on the type of arbitration.
Assessment: The value of property for tax purposes
Assumable: A mortgage the responsibility of payment for which can be taken on by a buyer.
Bill of Sale: A written agreement by which one person transfers his or her personal property to another person.
Broker: A person or entity licensed to represent buyers or sellers in the purchase or sale of real estate.
Cancellation of Purchase Agreement: Can be accomplished by a written agreement between all parties to the purchase agreement.
Closing: The final procedure in which documents are executed, the sale is complete.
Closing statement: An accounting of funds to the buyer and the seller at closing. (Also called a settlement statement or "HUD-1").
Condominium: Individual ownership of separate parts of a building plus joint ownership of the common elements.
Construction loan: A loan where money is advanced as construction takes place.
Contingency: A future event or action which must occur before the purchase agreement is valid.
Contract: A legally enforceable agreement to do or not to do a certain thing.
Conventional loan: Real estate loans that are not insured by the FHA or guaranteed by the VA
Counter offer: An offer made in response to an offer.
Deed of Trust: Virginia’s term for a non-judicial foreclosure mortgage.
Discount Points: Prepaid interest on a loan; one discount point equals 1% of the total loan.
Dual Agency: Representation of two or more parties in a transaction by the same real estate agent or broker.
Earnest Money: Money paid by a buyer to show the buyer's good faith in making an offer to purchase property.
FSBO: For sale by owner (pronounced "fizbo").
Listing Agreement: A written agreement allowing a real estate agent to sell a homeowner's property.
Litigation: A lawsuit.
Loan Origination Fee: The fee a lender charges for processing a mortgage application.
Maintenance Fees: Fees paid by a property owner to the owner's association for upkeep of the common elements.
Mortgage Insurance: Not life insurance, but insurance to pay the lender a deficiency after foreclosure
Note: A written promise to repay a debt.
Purchase Agreement: A contract for the purchase and sale of real estate.
Quit Claim Deed: A deed that transfers to the buyer the rights of the seller in the land without promising that the seller has full title or that there are no liens against the land.
Survey: A mapping of land boundaries and improvements and easements on real property.
Title Insurance: An insurance policy purchased for protection against most title defects.
Title Opinion: A lawyer's written statement of the current condition of title for a parcel of land.
Warranty Deed: A deed in which the seller promises that the title to the land is good and complete.

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