Ignite FB Tracking PixelConfused By Real Estate Terms? This Terminology Guide Will Help - Jon & Suzan Busch ®Realtor/e-Pro/Certified Marco Island Specialist
Confused By Real Estate Terms? This Terminology Guide Will Help

by Jon & Suzan Busch ®Realtor/e-Pro/Certified Marco Island Specialist 01/27/2019

If you’re planning on buying a home in the near future and are confused about many of the terms associated with mortgages, you’re not alone. Real estate is its own industry with its own set of processes, terms, and acronyms. If you’re new to the home buying process, there can be somewhat of a learning curve to understand what each of these terms means.

Since buying a home is such a huge investment and life decision, there’s a lot of pressure on home buyers to make sure they get everything right. This makes for a stressful situation for buyers who don’t feel like they understand the terminology of things like mortgages, appraisals, credit reports, and other factors that contribute to the home buying process.

To alleviate some of those concerns and to make the home buying process run more smoothly, we’ve compiled a list of the most common, and most commonly confused, real estate words, terms, and acronyms. That way, when you’re talking things over with your real estate agent or your mortgage lender, you’ll be confident that you understand exactly what’s being considered.


Read on for our real estate terminology glossary.

  • Adjustable rate mortgage (ARM) - This is one type of home loan. Mortgage rates with this type of loan fluctuate throughout the repayment term of the loan. The fluctuation is based on a market indicator.

  • Fixed rate mortgage (FRM) - Another type of home loan, a fixed rate mortgage has a rate which does not fluctuate, remaining constant for the life of the term, most commonly 15 or 30 years.

  • Appraisal - An appraisal is the determination of the value of a property. Appraisals are used when purchasing and selling a home, as well as when refinancing a home loan. Appraisers are required to be licensed or certified in each state and are usually paid for by the lender.

  • Appreciation - An increase in a property’s value, most commonly due to market inflation, or the general increase in home prices over time.

  • Depreciation - A decrease in a property’s value, due to either market deflation (uncommon) or the wear and tear on a home that comes with age.

  • Closing costs - The costs and fees that a buyer is responsible for when purchasing a home or taking out a mortgage. These include underwriting fees, inspections, appraisals, transfer taxes, and more. Closing costs typically range from 2% to 5% of the total loan amount.

  • Contingency - Home purchases have contracts to protect the interest of the buyer, seller, and lender. Contingencies are provisions designed to protect the buyer or lender should something occur in the time leading up to closing on (or purchasing) the home. One common contingency is the buyer’s right to have a final inspection of the home before closing to ensure no new issues with the home have occurred.

  • Private mortgage insurance (PMI) - Buyers who cannot afford a down payment of %20 typically are required to take out a private mortgage insurance policy. This policy protects the lender should the borrower default (fail to repay or meet the conditions of their loan).



About the Author

Author
Jon & Suzan Busch ®Realtor/e-Pro/Certified Marco Island Specialist
Born in Chicago, IL and lived in the Northwest Suburbs. Moved to Tempe, AZ to attend college at Arizona State University. Graduated with Cum Laude Honors93'. My 9-year previous career was mostly in Law Enforcement with the Attorney General's Office, Phoenix Police Dept., and The Maricopa County adult probation Department. Over 19 years ago, I moved to Marco Island to enjoy a lifestyle and pursue a career as a Realtor®. I started my real estate profession by working as an assistant to a Top Producer for over one year to gain valuable experience. During the past 19 years, selling real estate has become my passion. I have since become a Top Producer myself for the past 18years and ranked #25 in total sales for the State of Florida within the Berkshire Hathaway Florida Realty network 2015. I am committed to old-fashioned customer service, integrity, and professionalism. Awarded"Five-Star Customer Service Real Estate Agent" by Gulfshore LifeMagazine 14 years in a row. Numerous references are available upon request of my satisfied past and current clients. In June of 2016, Suzan retired from a 25 year career in women’s retail and joined her husband Jon Busch in his Real Estate business. Suzan was a District Sales Manager for White House-Black Market traveling to stores in Florida, the Caribbean, and at times all over the Southeastern United States. Her work life was all about being in the field traveling and managing up to 72 stores. She worked with her Store Teams to maintain the corporate vision and customer service level they are known for. As a native of Collier County, it was a dream job for someone growing up in such a small town (Naples) area! After 25 years it was time for something new and what better way to transition from selling women’s clothing and customer service than to go straight into selling Real Estate. It has been an amazing transition. Interacting with our customers is the best part! She has gotten her Marco Island Specialist Certification and loves to do Open Houses. She is great at meeting new people, getting to know them and helping them find their Marco Island dream home and life style! *Awarded #25 Realtor in the BHHS Florida Realty network in total sales for 2007 and 2015! •Certified Fine Homes Specialist, Property Disclosure, Fair Housing, real estate and Anti-trust. •Winner of Leading Edge Award for 2003, 2008, 2009, 2011, 2012, 2014, 2016,and 2017. Honor Society Award for 2001,2002, and 2010. Winner of Chairman Circle Gold Award (top 2% of Realtors) for 2004, 2005, 2006, 2007, and2015. •Realtor Board member of the Professional Standards Committee, since 2002. •Bachelor of Science Degree in Justice Studies, Minor in Pre-Medicine, Cum Laude Honors at Arizona State University, 1993. •Ed Klopfer Real Estate School Graduate 1999. •Advisory Board Member for Marco Island Prudential Florida Realty Office 2001,2004, 2005. •President Circle Award for top 2% in Sales within Berkshire Hathaway Realty Florida network 2016. •Sales Leader for 1st Quarter of 2018, in the Marco Island Branch Office. Certifications and Recognitions •REALTOR® licensed salesperson •Member of the Marco Island Board of Realtors •Associate member of the Naples Board of Realtors •Member of FAR (Florida Association of Realtors) •Member of NAR (National Association of Realtors) •e-Pro Certified • Marco Island Specialist certification MIAAR on May 30, 2014