Real Estate Terms - From Pre-Approval Letter to Townhouse
When buying or selling a property, it always helps to have a
basic understanding of real estate terms. In this on going
series of articles, we take a look at definitions starting with
"Pre-Approval Letter."
1) Pre-Approval Lender Letter - a writing from a lender stating
that a potential buyer has approval to borrow a stated amount of
money from his firm based on having documented all the personal
information needed. Final approval is subject only to the
lender's receiving a copy of a contract to purchase real estate,
a satisfactory appraisal of that real estate, and its
underwriting department's review of all pertinent information.
In other words, the buyer qualifies so long as the property does
and no changes occur.
2) Pre-Qualification Lender Letter - a writing from a lender
stating that a potential buyer is able to get a loan in a named
amount. It typically states the price of real property to be
purchased, and what information the lender had when forming his
opinion. When a lender has pulled a borrower's credit file, his
opinion is worth more than if he just based it on what the
borrower told him.
3) Real Estate, or Real Property - ground, any plants growing in
it, any minerals under it, and any buildings or other
improvements built on it.
4) Septic System - a self contained means of disposing of
sewerage which tends to intimidate city dwellers. The simple
version is a holding tank in which enzyme and bacterial action
decomposes the waste material and buried lines in a drainage
field which uses soil to strain out what remains. This works
very well in soil which percolates well (water drains through it
quickly). More elaborate septic systems are often needed in
areas with heavy, clay soil and in areas with a high water
table. Some properties are totally unsuited for septic systems
and cannot be built on until public sewer is available.
5) Title Insurance - insurance which will compensate the insured
for the value of his ownership or collateral position in real
property if a person not thought to be a current owner
materializes as an owner. (I've seen this come into play when
property was owned by many heirs a generation or two ago.)
6) Townhouse - A single family attached dwelling unit with
common walls.
Well, as promised, it's not a be-all, end-all, but we have
covered lots of the important definitions and concepts needed to
successfully handle your for sale by owner transaction. If I've
missed something, don't hesitate to visit our site to read more.