The ABCs of homebuying

An addendum is a document added to the sale contract for a home. Some states mandate addenda regarding things like septic systems, water wells, and Homeowners Association fees. An addendum is different from an amendment.

When you make a Homeward Cash Offer, your agent will attach at least one addendum, the Homeward Purchase Addendum, to the contract.

Unlike with a fixed-rate loan, the interest rate for an adjustable rate mortgage (ARM) fluctuates over time. ARMs offer a lower initial rate than fixed-rate loans, which is why they're often called a "teaser rate". That low initial rate usually lasts for five, seven, or 10 years. After that, the new rate is tied to changes in a common index rate such as Cost of Funds Index (COFI) and the Constant Maturity Treasuries (CMT). ARMs are sometimes a good choice for people who only plan to stay in a home for a few years. Talk to your Loan Officer to determine what type of mortgage is best for you.

An amendment modifies the terms of a contract the buyer and seller have both already signed. (Don't confuse it with an addendum.) Amendments are usually the result of inspections and surveys, and commonly cover things like price and term changes. Your real estate agent might, for instance, create an amendment that states the seller will give you a credit at closing to cover roof repairs.

Amortization refers to the concept of spreading out loan payments over time. Your lender might share comparisons of 30-year amortization and 20-year amortization with you so that you can see how different loan terms might affect your payments and payoff. Mortgage amortization refers to how you pay off your home loan. At first, more of your payment will be applied to interest so you don't make much of a dent in the debt. But, over time, that shifts and you start paying more of the loan principal (the amount of money you borrowed).

The annual percentage rate (APR) is a broader measure of the cost of borrowing money than interest rate. The APR reflects your interest rate, discount points, mortgage broker fees, and other charges that you pay to get the loan. For that reason, your APR is usually higher than your interest rate. The Truth in Lending Act of 1968 requires lenders to disclose a loan's APR to you before you finalize your loan.

An appraisal (aka property valuation) is an assessment of the value of a property.

An appraisal shortage results when a property is assessed for less than the contract price. The shortage is the difference between the contract price and the appraised value.

Sellers listing a home in as-is condition are broadcasting that they will not fix any issues you discover with the home. A seller might sell a house as-is because they can't afford to make the repairs or because they're in a rush to move. That said, you can still get the home inspected. And, as-is sellers must comply with state and federal disclosure standards, which require them to tell you about risks such as lead-based paint and asbestos.

Assets are things that are worth money. Assets include cash, cash equivalents (money market accounts, certificates of deposit, or anything else you can withdraw as cash), and property. Your net worth is the combination of your income and your assets.

In some states, attorneys handle real estate closings. Those are called attorney states. (In other states, title companies handle closings.)

Pronounced, "bin-zer", this document is the Buyer's Inspection Notice Seller Response and is unique to residential real estate transactions in Arizona. The buyer and their agent complete this document during due diligence. The BINSR is based on the home inspection report and is a list of repairs the buyer requests that the seller complete prior to closing.

Our Backed by cash service enables you to attach an addendum to your offer saying that if you can't close on time, we will buy the home with cash. We'll even hold onto the home for up to 30 days so you can buy it back from us if you still want it.

A backup offer is an offer on a house that already has a sale pending. In other words, the sellers have already accepted an offer, but it hasn't been finalized. Sometimes home sales fall apart during due diligence — often because of a contingency. So if you make a backup offer and the original buyer doesn't get a loan or can't sell their current home, your offer is ready and waiting.

In real estate, a bridge loan is a short-term loan that allows you to buy a new home before you sell your old one. Between high-interest rates and large origination fees, bridge loans are expensive. If you get a bridge loan, you'll be making three payments: the mortgage for your old house, the mortgage for your new house, and the bridge loan payment. If, on the other hand, you use our Buy before you sell service, you'll only pay one mortgage payment at a time.

Our Buy before you sell service enables you to make a cash offer on a new home before you even sell your current home. This is the competitive offer upgrade for buyers who are both selling and buying.

For more detail about how our this service works, read our Buy before you sell guide.

A buyer's agent represents you, the buyer, and your best interests. They guide you through the homebuying process, from house-hunting to closing. When you make a Homeward Offer, you choose your own agent rather than being assigned one.

When the supply of homes is greater than the demand for homes, it is a buyer's market. In a buyer's market, the buyer has the upper hand. See seller's market.

Our Buy with cash service enables you to upgrade your offer to cash using our funds. This is the competitive offer upgrade for buyers who aren’t also selling a home.

For more detail about how this service works, read our Buy with cash guide.

Cash reserves are the liquid assets you'll have left over after you make your down payment and cover closing costs. Liquid assets include your cash savings and any funds that you could quickly convert into cash. Why does this matter? Your lender wants to know that you have enough cash on hand to make one or more mortgage payments. Lenders often consider cash reserves as part of the pre-approval process.

You officially become a homeowner at closing. It's the final step of a real estate transaction when the property title transfers from the seller to the buyer. In other words, the seller gets their money and you get your keys. The words closing and settlement are often used interchangeably — they mean the same thing.

To learn more about closing with Homeward Title, read this article.

The process of closing — transferring the title from the seller to the buyer — is a legal transaction. Closing costs include everything from attorney fees to photocopying. States regulate most of the fees associated with closings, so prices don’t vary much. Your loan estimate will include an itemized list of your closing costs.

To learn more about closing with Homeward Title, read this article.

A closing credit or is money the seller or lender gives to the buyer at closing. Closing credits lower the total amount of money you'll need to buy a home.

A closing disclosure (CD) is a five-page document your mortgage lender provides that summarizes your transaction and includes the final loan terms, your estimated monthly payments, closing costs, and all transaction fees. You'll review and sign your CD at closing.

Collateral is an asset or property that a lender uses as security for a loan. If the borrower fails to pay back the loan, the lender can seize the collateral and sell it to recover some or all of their losses. In the case of a home loan, the home itself is the collateral.

Real estate agents earn commissions for helping you buy or sell a home. The typical commission is 5% to 6% of the home's purchase price and is split between the buyer's agent and the listing agent. Working with us does not change your relationship with your agent or affect their commission.

Comparables or comps are recently sold homes that are similar to the one you're buying or listing. They should be similar in size, condition, location, and features. Real estate agents use comps to conduct a comparative market analysis (CMA) to help you determine how much to pay for a home. Appraisers use them to help lenders decide how much money to lend you.

Conforming loans are mortgages that meet the underwriting guidelines set by Fannie Mae and Freddie Mac and satisfy the financing criteria created by the Federal Housing Finance Agency (FHFA). The most important of those criteria is the loan limit. For 2022, the baseline conforming loan limit for single-unit properties is $647,200.But there are some exceptions to this limit, including (non-contiguous states and territories: (Alaska, Hawaii, Guam, and the US Virginia Islands), as well as some counties in the contiguous United States where the cost of living is very high (Hello, Manhattan!). Loans that exceed the conforming loan limit are known as jumbo loans. If you want to see the conforming loan limit in your area, check out the interactive map on the FHFA's website.

Think of a contingency as an escape hatch in your real estate contract. So, for instance, if you make your home purchase contingent upon getting a loan, you can back out of the contract if your mortgage doesn't come through. While that may appeals to you, it doesn't appeal to sellers.

The Homeward Offer helps you reduce or remove contingencies.

When you make an offer on a home, you sign a contract. Your agent will write the contract for you and you'll sign it. Once the seller accepts your offer, the home is "under contract".

A conventional loan (or conventional mortgage) is a loan that is not backed by a government entity. Conventional loans are the most commonly used non-government loan product for individuals borrowing under the jumbo loan threshold. There are conforming and non-conforming conventional loans. Conforming loans meet the requirements of Fannie Mae and Freddie Mac.

Conveyance is the legal transfer of property from one person to another. In addition to the home itself, some sellers convey other property (such as appliances, furniture, or window treatments) to the buyer when they sell the home.

When a seller is not happy with the buyer's offer, they may make a counteroffer. Sometimes the purchase price is the sticking point. Other times the seller's counteroffer may hinge on removing contingencies or changing the closing date.

Credit pull is just another term for a credit check or credit inquiry. A credit pull assesses whether you pay your bills and debts on time. There are two types of credit pulls: soft and hard. Soft credit pulls typically involve a person or company checking your credit as part of a background check. Soft credit pulls do not affect your credit score.

Lenders, banks, and other creditors perform hard credit pulls to make a lending decision. We do a soft credit pull to approve you to make a Homeward Offer.

When you use our Buy before you sell or Buy with cash service, there are actually two home purchases. First, we buy the home for you. This is the Homeward Purchase. Then you buy back the home from us. This is the Customer Purchase. There is a separate contract for each of these purchases.

Days on market (DOM) is the number of days a home has been listed on the local multiple listing service (MLS).

Mortgage companies use your debt-to-income (DTI) ratio to judge your ability to make your monthly mortgage payment and — ultimately — to pay off your loan. They calculate it by adding up all of your monthly debt payments and dividing that total by your gross monthly income (the amount of money you earn before you take out taxes and any other deductions). Let's say your monthly mortgage payment will be $2,100 and you have a $450 monthly car payment and $220 monthly student loan payment. And let's suppose your gross monthly income is $7,900. Your DTI ratio would be 35% ($2,770/$7,900).

A deed of trust is simply an agreement between the mortgage lender and the homebuyer, stating that the lender will hold the legal title to the property until the buyer pays off the mortgage.

A disbursement authorization or DA is a document that gives the title company or title attorney instructions on how to pay the real estate agents' commissions.

A down payment is a partial payment you make when you buy a house. You cannot borrow money for your down payment. Down payments range in size, typically from 3% to 20% of the purchase price of your home, depending on what type of mortgage you're getting, what your other financial goals are, and a few other factors.

Due diligence refers to a brief period of time after your offer is accepted during which you can inspect and explore your new home before finalizing the contract. Some states call this an option period or inspection period.

During the due diligence period, most buyers order a home inspection and a title search, research the school district, and dig into the condo or Homeowners Association (HOA) rules (if applicable). As a result of your due diligence, you may create a list of demands and repairs you'll want to the seller to handle. During due diligence, the seller may continue to negotiate and accept backup offers from other buyers.

Earnest money is a cash deposit that represents your good faith to buy a home. You'll sometimes hear it called an Earnest Money Deposit (or EMD). EMD is not a fee. EMD is applied as a credit to your down payment at closing.

In real estate, when people mention equity they are talking about home equity. Your home equity is the difference between how much your home is worth and how much you owe on your home mortgage.

If you use our Buy before you sell service, our team of analysts conducts a thorough assessment of your home using publicly available real estate data to determine how much equity have.

Escrow is a third-party account that holds and then disburses funds at closing when the home is officially transferred from seller to buyer. For instance, your earnest money deposit (EMD) is held in escrow until the title company or closing attorney applies the EMD to the purchase price of the home at closing. If your home is "in escrow" that simply means that it's under contract, but you haven't closed yet.

Some buyers use an escrow account to manage property taxes and homeowners insurance premiums. If you use an escrow account, your monthly mortgage payment is split three ways to cover principal, interest, and escrow so you don't have to manage these payments separately.

In some states, title companies handle real estate closings. In other states, attorneys do. Those are called escrow states. (In other states, attorneys handle real estate closings.)

According to the US Department of Justice, "The Fair Housing Act prohibits discrimination by direct providers of housing, such as landlords and real estate companies as well as other entities, such as municipalities, banks or other lending institutions and homeowners insurance companies whose discriminatory practices make housing unavailable." The Fair Housing Act is designed to protect people on the basis of:

• race or color
• religion
• sex
• national origin
• familial status
• disability

The Federal National Mortgage Association (FNMA) is better known by its nickname: Fannie Mae. The US Congress started Fannie Mae in 1938 to provide access to affordable mortgage loans. But Fannie Mae does not lend money directly to homebuyers. Instead, it purchases mortgages from lenders, keeping money flowing in the American housing market. Conventional loans must meet Fannie Mae guidelines.

The FHA is part of the US Department of Housing and Urban Development. The FHA provides mortgage insurance on loans made by FHA-approved lenders nationwide. Mortgage insurance protects lenders when borrowers default, so FHA lenders offer favorable terms to borrowers who might not otherwise qualify for a home loan.

When you make a Homeward Cash Offer, there are two purchases: The Homeward Purchase (HP), when we purchase the home you love on your behalf, and the Customer Purchase (CP), when you buy that home back from us. There are also two appraisals: a Preliminary Appraisal for the HP and a Final Appraisal for the CP.

Your lender orders the Final Appraisal, which is based on a property inspection and comparables. This appraisal prevents you from overpaying for a home and helps your lender determine how much money to lend you.

To learn more about how appraisals work at Homeward, read this article and watch this video.

The interest rate for a fixed-rate mortgage remains the same throughout the term of the loan.  The interest rate for a fixed-rate mortgage is locked before the loan closes. (This is very different than an adjustable rate mortgage, which initially offers a lower interest rate that goes up over time.)

The Federal Emergency Management Association (FEMA) and the National Flood Insurance Program classify every address as high-risk, moderate-risk, or low-risk zone on a flood zone map. The insurance industry uses these flood zone maps to determine what kind of flood insurance you're required to have and how much you'll pay for it.

If you want to better understand flood zones and explore flood zone maps, check out this helpful page from the National Flood Insurance Program.

Most homebuyers who use our Buy before you sell service qualify for Floor Price Certainty, our guarantee that we'll buy your old home if it doesn't sell on the open market within six months. We base your Floor Price on publicly available real estate data and current photos of your home. Your Floor Price is typically 90% to 95% of your home’s market value. We also deduct the standard 6% agent commission fees. It's like having a guaranteed buyer in your back pocket, but 99% of our clients sell their homes on the market so they never have to rely on Floor Price Certainty.

The Federal Home Loan Mortgage Corporation (FHLMC) is better known by its nickname: Freddie Mac. Like Fannie Mae, Freddie Mac was created by the US Congress and does not lend directly to borrowers. Instead, Freddie Mac buys loans from approved lenders, enabling them to provide more loans to borrowers, which keeps money flowing into the US housing market. After it buys the mortgages, Freddie Mac bundles the mortgages it buys into securities and sell those to investors. Conventional loans must meet Freddie Mac guidelines.

See mortgage gift

See credit pull.

Hazard insurance simply refers to the coverage that homeowners insurance provides for certain risks including theft, fire, and more.

Most home inspections are conducted by a certified home inspector, who specializes in evaluating a home as part of a sale. The home inspector will examine: heating and cooling systems, plumbing, electrical work, water, sewage, and more. The home inspector also looks for evidence of water, fire, and insect damage or anything else that could affect the value of the property. As the buyer, you'll choose your home inspector and pay for the inspection. Then you'll share the inspection report with your Customer Experience (CX) manager, who — along with your agent — will help you decide on the next steps, including requesting repairs or closing credits to cover the cost of repairs.

A Homeowners Association (HOA) is a private organization of resident members that creates and enforces rules for a neighborhood, building, or development. While HOA members may share some maintenance responsibilities, an HOA can also impose additional responsibilities and restrictions on homeowners.

Most HOAs require residents to pay a monthly fee. They may also impose a one-time assessment for larger expenses and initiatives like resurfacing a parking lot. Before you buy an HOA-governed home, make sure you study the HOA's rules and covenants and can abide by them.

Your lender will require you to prove that you have homeowners insurance before closing on your new home. The lender will also require you to keep your home insured for as long as you have the home loan.

We highly recommend you get renter’s insurance to protect your belongings if you rent your new home from us before buying it back. Make sure you understand exactly what your policy covers in case you need to buy additional policies (coverage for floods, big-ticket items, an at-home business, etc.) to fill any coverage gaps.

The Homeward Offer reduces or removes contingencies to help you get the home you love on your terms. For more information, visit this page.

Depending on how you structure your Homeward Offer, we may purchase the home on your behalf with our cash. We call this the Homeward Purchase. (Then you buy back the home from us. We call that the Customer Purchase.)

A home warranty (aka residential service agreement) isn't really a warranty. It's a contract between you (the homebuyer) and a company that connects you with discounted repairs and replacements for things not covered by homeowners insurance (the furnace, plumbing, maybe even major appliances).

However, many consumer advocates say they're not as comprehensive or convenient as they sound. So while there's no reason to turn down a home warranty if the seller offers you one, you should do plenty of research before buying one yourself.

Your lender must provide you with an initial closing disclosure at least three business days before your closing. They do this so you have enough time to compare the final terms and costs with the loan estimate they provided when you started working with them. If you find a discrepancy, notify your Loan Advisor.

The interest rate is the cost you will pay each year to borrow money to finance your home purchase. Your interest rate is expressed as a percentage rate. Do not confuse interest rate with Annual percentage Rate (APR).

A jumbo loan is bigger than a conforming loan. For 2022, the baseline conforming loan limit for single-unit properties is $647,200. Homes that exceed the local conforming loan limit require a jumbo loan. If you want to see the conforming loan limit in your area, check out the interactive map on FHFA's website.

You'll get the keys to your new home at closing.

A leaseback (aka sale leaseback) allows you to temporarily rent your new home to the sellers. The most common reason sellers request a leaseback is because they haven't found a new home to move into yet.  You may offer the seller a leaseback while you rent a home from us (between the Homeward Purchase and the Customer Purchase), but keep these two things in mind:

• You will be the property manager so you'll handle the lease and deposit.
• You will be charged carrying costs beginning the day the Homeward Purchase closes, so keep this in mind when negotiating a leaseback rate for the seller.

In the context of real estate, your lender is the financial institution that gives you a mortgage or loan to buy a home.

A lien is a creditor's claim against property that they've loaned you money to buy. If you don't pay the creditor, they can repossess the property. A mortgage is a type of lien, but as long as you make your mortgage payment, the lien is just a formality.

To list a property is to officially put it on the market by including it in the Multiple Listing Service (MLS).

A listing agent (a seller's agent) is the real estate broker representing the seller in a real estate transaction.

A listing agreement is a contract you sign with a real estate broker, hiring them to act as your agent and represent your best interests while selling your home.

The Consumer Financial Protection Bureau (CFPB) created the Loan Estimate (and the Closing Disclosure) to make it easier for you to shop around and compare mortgage services. Need help reviewing your loan estimate? Check out the CFPB's Loan Estimate Explainer tool.

Loan-to-value (LTV) ratio is a risk assessment used in the underwriting process. Lenders calculate your LTV ratio by dividing the loan amount by the lesser of the sales price or the appraised property value. The higher the LTV, the riskier the loan. Some lenders require borrowers with an LTV ratio above a certain number to purchase private mortgage insurance (PMI). If you're able, you can lower your LTV ratio by putting more money down or restructuring your loan.

A lock-in period or rate lock is a specific period of time in which the interest rate a lender quoted you is guaranteed or "locked in". Rate locks protect you from interest rate fluctuations while you are finalizing your loan, but they have expiration dates.

A mortgage is a type of loan you use to buy or refinance a home.

Did your Uncle Pete really gift you $10,000 to put towards a down payment, or was it a loan? It matters because if Uncle Pete expects you to repay him, your lender has to consider this money a debt and factor it into your debt-to-income ratio. If he doesn't expect repayment, your mortgage company may ask Uncle Pete him to put that in writing. This is called a gift letter and your lender can probably provide you a template to make it easier on your generous uncle. Keep in mind that only relatives by blood, marriage, or adoption may make a mortgage gift; friends cannot make a mortgage gift.

A multi-family home or multiplex is a single building or a building complex divided into single residential units, such as duplex, triplex, or condo. We can help people purchase multi-family homes that include up to four units. We follow conventional loan criteria for multi-family homes. So, if the home can be financed with a conventional mortgage, we can help.

Multiple listing services (MLSs) are private databases created, maintained, and paid for by real estate agents. Agents use the MLS as a tool to share and discover information about properties that are for sale. The MLS helps sellers by making their homes findable and it helps buyers discover homes that meet their criteria.

Some states have laws requiring sellers to provide this report, which discloses whether the property being sold is located within an area zoned for major hazards such as floods, earthquakes and wildfires. Sometimes the report covers other hazards, including airplane noise and military ordnance.

Net income is the amount of money someone "takes home" after subtracting taxes and other deductions (including social security, health insurance payments, 401K contributions, etc.) from the total amount of money they earn (or gross income). That's why some people call it "take home" pay. Net income includes taxable wages, tips, and income from investments.

In real estate, an offer is the contract that the buyer presents to the seller, spelling out the proposed terms and conditions to purchase the home.

The Texas residential real estate contract includes a termination option, but buyers must pay the seller a fee to have this option. The option fee gives the buyer the right to terminate within a certain number of days of the contract being signed by both parties. Buyers pay this option fee to give themselves time to do due diligence work, including inspections. If the buyer terminates, the seller keeps the option fee to compensate them for their time and trouble.

To learn more about option fees, read this article.

Option period refers to a brief period of time (usually five or six days) after your offer is accepted during which you take a closer look at your new home to discover any issues or red flags. Other states call this an inspection period or due diligence. During the option period, most buyers order a home inspection and a title search and dig into the Homeowners Association (HOA) or condo rules (if applicable). During the option period, you may make a list of demands and repairs you want to be done before closing. The seller may continue to negotiate and accept backup offers from other buyers during the option period.

To learn more about the option period, read this article.

Mortgage lenders charge an origination fee to cover the costs of processing your loan. The origination fee includes everything from underwriting to document prep.

PITI is short for payment, interest, taxes, and insurance — and is meant to reflect the true monthly cost of owning a home. Estimating your PITI can tell you whether a certain home is really within your budget. You can find PITI calculators on the web. To use them, you'll need to have estimates for: the price of your new home and your down payment, mortgage rate, property taxes, and homeowners insurance premium.

Points (aka discount points) offer a way to pay more for your mortgage upfront so that you pay less over the long term. Paying points on a loan gives you a lower interest rate than you would get with a zero-point loan from the same lender You pay points at closing (and they increase your closing costs). One point equals one percent of the loan amount, so one point on a $300,000 mortgage would cost $3,000. But you can pay partial points, too. Not sure whether paying points makes sense for you? Talk to your Loan Officer.

During a pre-approval, the lender underwrites you by checking your credit score and reviewing your bank statements and other financial documents. A pre-approval carries more weight with sellers than a pre-qualification because a pre-approval is based on verified information rather than self-reported data.

We complete a Preliminary Appraisal during the option period or due diligence of the Homeward Purchase, when we buy the home on your behalf. This Preliminary Appraisal gives you insight into the value of the home and helps you understand how your loan and cash to close might be impacted. If the Preliminary Appraisal comes in lower than the purchase. price, you can either back out and recover your earnest money deposit (EMD), or choose to move forward. The latter may require you to make a low appraisal deposit.

To learn more about how appraisals work at Homeward, read this article and watch this video.

A pre-qualification is an estimate of how much house you can afford. Lenders base your pre-qualification on basic financial information that you self-report. They do not underwrite you, review any financial documents, or do a hard credit pull, which makes pre-qualification less reliable than a pre-approval. But it's still a good place to start when you begin looking for a home. Some homebuyers find it helpful to get a pre-qualification letter, which shows sellers and their agent that you're already working with a lender.

Principal is the amount of money you borrow to buy your home. For instance, if you buy a house for $350,000 and you make a $70,000 down payment, your principal is $280,000.

Private mortgage insurance (PMI) is a type of mortgage insurance your lender may require you to buy when you take out a conventional loan and make a downpayment of less than 20% of the home's purchase price. Most homebuyers pay PMI as a monthly premium that is added to their mortgage payment. Keep in mind that PMI protects your lender, not you.

A proof of funds letter is a document the buyer provides the seller to show that the buyer has the money to pay for upfront costs like a downpayment or closing costs. When you are making a cash offer — and paying for the entire purchase upfront — a proof of funds letter showing that you have enough cash to buy the home is even more important.

When your agent makes a Homeward Offer on the home you love, they will attach a proof of funds letter that we provide.

When you make a Homeward Offer, you may see "Purchasing Fund" listed as the buyer on the Homeward Purchase contract (in Texas, Georgia, and Arizona) or as the party who holds the title to your new home (in Colorado). Purchasing funds are special-purpose entities we own and use to purchase the homes we buy on our customers' behalf.

A quick close is a real estate transaction that closes much faster than the average transaction. (In 2019, the average home sale closed in 50 days according to Realtor.com). Sellers generally prefer quick closes because the sooner the sale closes, the sooner they get their money.

A Realtor is a licensed real estate salesperson who belongs to the National Association of Realtors, a trade group, which has its own the Code of Ethics. Some Realtors are brokers. Brokers are managers that run an agency and supervise a salesforce of agents. Some Realtors are agents. They are salespeople who work for brokers.

Refinancing is replacing one mortgage with another to gain some benefit. People refinance for a shorter-term loan, a lower interest rate, or to consolidate debt with one lender.

For more on rent, see our Buyer FAQs.

See home warranty.

RESPA is short for Real Estate Settlement Procedures Act, first passed by the US Department of Housing and Urban Development (HUD) in 1972. RESPA is now regulated by the Consumer Financial Protection Bureau (CFPB). RESPA governs closing processes and costs with the hope of providing transparency to consumers and eliminating illegal payments such as kickbacks and referral fees.

Sellers are legally obligated to tell buyers about any problems that might impact the property price or the buyer's safety. These disclosures are documented in what's called a seller's disclosure. Most seller disclosures are regulated by state law.

When the demand for homes is greater than the supply of homes, it is a seller's market. In a seller's market, the seller is usually in a position of power. See buyer's market.

See credit pull.

Staging or home staging refers to the process of physically preparing a home to market or advertise it through photography, video, and in-person showings. Professional stagers do everything from decluttering to redecorating. Prices for home staging vary widely, depending on the scope of the work. According to a report from the National Association of Realtors (NAR), 25% of buyer's agents and 22% of seller's agents said that staging a home increases the offer price by 1% to 5%. In the same report, more than half of seller's agents said that staging decreases the amount of time a home spends on the market.

A survey (also known as a property survey or boundary survey) is a professional inspection and mapping of your property's boundaries. Some markets require a survey when you buy a home, some don't.

You will pay property taxes on your new home. These taxes are assessed by your local government and are based on their appraisal of your property's value. The IRS sometimes calls this a "real estate tax". For an accurate estimate of the property taxes you'll pay on your new home, call the local assessor's office or check out their website.

The title to your home is not a single document. Instead, the word title refers to several documents and the concept that gives property owners their ownership rights. The title to a property changes hands with each new owner and is transferred with a deed. Title also includes a physical description of the property and shows whether there are any liens or claims against the property from a creditor. Once you buy a home, for example, your mortgage will show up on the title as a lien.

Title insurance protects you and your lender from any future claims against the ownership of your property. Your mortgage company will require you to have title insurance.

Underwriting is the process lenders use to assess your income, assets, and debt in order to approve you for a mortgage. During the underwriting process, your lender will review your financial documents, including W-2s, bank statements, and more.

Loans from the Department of Veterans Affairs, commonly called VA loans, are designed to make it easier for active-duty military personnel, veterans, and eligible surviving spouses to become homeowners. The VA guarantees a portion of the loan so that private lenders will give you more favorable terms. For more information about VA loans, visit the department's website.

A walkthrough is exactly what it sounds like: the buyer walks through their new home after the seller has moved out — usually right before closing. This gives the buyer a chance to confirm that any repairs the seller agreed to have been completed, that everything that was supposed to convey did, and that the home is in the same (or better) condition than it was in when the buyer put it under contract.

See home warranty.

The Homeward Offer, which enables you to use our cash and your agent to buy your next home, can be the X factor in your real estate transaction. The Homeward Offer reduces or removes contingencies, making your offer more attractive to sellers and helping you negotiate better terms.

Congrats on your new home — and yard! The American Society of Landscape Architects (ASLA) recommends that homeowners invest 10% percent of their home's value in landscaping.

Zoning laws dictate how land can be developed. There are residential zones, commercial zones, and mixed-use zones — among others. Zoning laws sometimes also dictate how you can use your land, the size of your lot, how tall a building can be, and how far back a house should be from the property line.

People also use the phrase zoning to refer to the boundaries of school districts.