Study Up on These Real Estate Terms Before Buying a Home

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Study Up on These Real Estate Terms Before Buying a Home

May 26th, 2020 by Joyner Fine Properties

Real Estate Terms

Buying a home requires learning a new language. It is normal to feel a little lost in the conversation until you learn the lingo. To help make buying a home in Richmond a little easier, our real estate agents recommend studying the following vocabulary words as you start the process.

Mortgage Terms

ARM - Adjustable Rate Mortgage (ARM) refers to a mortgage whose interest rate changes over time. ARM's can adjust at 5, 7, or 10-year intervals, and you will want to go over the terms of the loan carefully before deciding on this mortgage option.
Amortization - This option allows you to combine both interest and principal in your payments. This allows you to build equity in the home earlier in the process.
Discount Points - Don't like the interest rate offered by the bank? Ask about discount points. You can purchase these and receive a lower interest rate, which can save you money over the life of the loan.
Fixed-Rate Mortgage - A fixed-rate mortgage is a conventional loan. Most fixed-rate mortgages are for 15, 20, or 30 years. With a fixed-rate mortgage, your interest rate remains unchanged for the life of the loan.
Pre-Approval Letter - Pre-approval letters are issued by the bank and estimate how much money they will lend you to purchase a home. This requires proving income, employment, and credit history. It's a good idea to get a pre-approval letter before you start searching. There are two reasons for this. First, it helps you narrow your search to homes you can afford. Second, it shows sellers you can purchase the home, and it can give you a little leverage during the negotiation process.

Legal Terms

Active Contingent - When the seller accepts your offer, both parties may have certain contingencies, you will need to meet. Active contingencies can include the results of a home inspection, mortgage approval, and the seller's purchase of a new property before you can move in.
Appraisal - Lenders will require an appraisal of the home's true value before they will approve the loan. The appraisal needs to be conducted by a qualified third party.
Clear Title - It is imperative to conduct a title search before purchasing any property. The title search verifies that there are no liens or levies from creditors or government entities. When you receive a "clear title," you have a green light to purchase the home that verifies there are no building code violations, survey problems, back taxes, etc. on the property.
Escalation Clause - This clause establishes how much you are willing to bid on a property if a bidding war develops. This clause will set a ceiling on your bid price and the terms that you are willing to accept as part of the deal.
Dual Agency - The laws in Virginia allow real estate agents to represent multiple parties in the transaction. There are strict rules regarding this, and it is essential to ask your real estate agent all the parties to the transaction that they represent.

There are a hundred or more terms to learn when buying a home. Contact us and our team will help you study these as you start the process of examining which Richmond homes for sale are best suited for the lifestyle you want to enjoy.

Categories: Buying a House

Tags: Joyner Fine Properties, Home-buying tips, Buy a Home

©Joyner Fine Properties - Seller will consider paying buyer agent compensation based upon the terms and conditions of any offer made. Said compensation to be negotiated in the purchase agreement. Disclaimer: All information deemed reliable but not guaranteed. All properties are subject to prior sale, change or withdrawal. Neither listing broker(s) or information provider(s) shall be responsible for any typographical errors, misinformation, misprints and shall be held totally harmless. Listing(s) information is provided for consumers personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. Information on this site was last updated 03/02/2026. The listing information on this page last changed on 03/02/2026. The data relating to real estate for sale on this website comes in part from the Internet Data Exchange program of Delta Media Group MLS (last updated Mon 03/02/2026 4:23:40 PM EST) or CAAR MLS (last updated Mon 03/02/2026 4:10:48 PM EST) or CVRMLS (last updated Mon 03/02/2026 4:19:06 PM EST) or Bright MLS (last updated Mon 03/02/2026 4:18:22 PM EST). Real estate listings held by brokerage firms other than Joyner Fine Properties may be marked with the Internet Data Exchange logo and detailed information about those properties will include the name of the listing broker(s) when required by the MLS. All rights reserved.

©Joyner Fine Properties - Seller will consider paying buyer agent compensation based upon the terms and conditions of any offer made. Said compensation to be negotiated in the purchase agreement.
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Agency License Information: Joyner Fine Properties and its agents are licensed in the Commonwealth of Virginia.

Study Up on These Real Estate Terms Before Buying a Home

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