Use our real estate glossary for work, school, or general knowledge.
Caps: A safeguard against excessively high payment increases, some ARMs place a cap on the amount by which either the interest rate or payment may rise at any single adjustment, over the life of the loan, or both. Look at the cap as “the worst case scenario” to determine if the ARM suits your financial capabilities.
Clear or Marketable Title: A title that doesn’t have any liens or claims against it that would keep it from being transferred. If not Clear, the buyer may be able sue for property rights or be held liable for claims. Often, there may be a clause in the contract that if Clear Title can not be delivered, the seller may void the contract – with no penalties. Also see Title Search.
Closing Costs: Expenses above the purchase price that buyers and sellers pay at closing. Some times, the seller may pay the closing costs or a portion of them.
Contract of Purchase: A document that lists the price, conditions and terms under which the buyer is willing to purchase the property. (Each of these means the same thing: offer to purchase, or purchase offer, or earnest money agreement, or contract of purchase, or deposit receipt.)
Contract of Sale/Sales Contract: An offer of purchase that has been signed by both buyer and seller. A firm contract that outlines all details of the property transaction. (Same as “offer to purchase/acceptance of sale/sales contract.”)