Appraisal: a document that gives an estimate of
a property's fair market value; an appraisal is generally
required by a lender before loan approval to ensure that
the mortgage loan amount is not more than the value of
the property. An appraisal is an estimate of what amount
of money your home may sell for. It is very different
from a home inspection which will warn you against anything
in the new home that should be fixed. A home inspection
must be conducted by a qualified home inspector.
Appraiser: a qualified individual who uses his
or her experience and knowledge to prepare the appraisal
estimate. An appraiser is a professional person who can
tell you what your home is worth. The appraiser will come
to your house and list the number and size of the rooms
and any extras, such as a fireplace, porch, pool, or garage.
The appraiser will compare your home and property to other
homes that have sold recently with similar features. The
appraiser then estimates that your home might sell for
approximately the same amount of money as similar homes.
This is called an "appraisal."
Assessor: a government official who is responsible
for determining the value of a property for the purpose
Condominium: a form of ownership in which individuals
purchase and own a unit of housing in a multi-unit complex;
the owner also shares financial responsibility for common
FHA: Federal Housing Administration; established
in 1934 to advance homeownership opportunities for all
Americans; assists homebuyers by providing mortgage insurance
to lenders to cover most losses that may occur when a
borrower defaults; this encourages lenders to make loans
to borrowers who might not qualify for conventional mortgages.
Home inspection: an examination of the structure and mechanical
systems to determine a home's safety; makes the potential
homebuyer aware of any repairs that may be needed. This
is not an appraisal.
MARKET VALUE IS DEFINED AS:
The most probable sale price which a property should bring
in a competitive & open market under all conditions
requisite to a fair sale, the buyer & the seller each
acting prudently, & knowledgeably, and assuming the
price is not affected by undue stimulus. Implicit in this
definition is the consummation of a sale as of a specified
date & the passing of title from seller to buyer under
1. Buyer & seller are typically motivated
2. Both parties are well informed
3. A reasonable time is allowed for exposure on
the open market
4. Payment is made in terms of cash in United States
dollars or in terms of financial arrangements comparable
5. The price represents the normal consideration
for the property sold unaffected by special or creative
financing or sales concessions granted by anyone associated
with the sale.
PMI: Mortgage insurance is a type of insurance
that helps protect lenders against losses due to foreclosure.
This protection is provided by private mortgage insurance
companies, and allows lenders to accept lower down payments
than would normally be allowed. Premiums on a $200,000
loan can be $1,500 per year.
VA: Department of Veterans Affairs: a federal agency
which guarantees loans made to veterans; similar to mortgage
insurance, a loan guarantee protects lenders against loss
that may result from a borrower default.