Real Estate Terms

Assessments

Assessments usually refer to the annual fees levied by homeowners associations. Many subdivisions have mandatory homeowners associations. All owners in those subdivisions must pay an annual fee to pay for the upkeep of the subdivision and its amenities. At closing, any such assessment is prorated between the buyer and seller.

Closing Attorney

The closing is handled by the closing attorney. This attorney typically represents the buyer's lender, and prepares the documents which are signed by the buyer and seller at closing.

Closing

This is the meeting at which the loan is made to the buyer, the buyer pays the purchase price to the seller, and the seller transfers title to the house to the buyer. The closing is usually held at the office of the closing attorney, and is attended by the buyer, the seller, and the closing attorney. The buyer's and seller's real estate agents, and the buyer's mortgage broker may also attend.

Contract

This is the document which, when signed, obligates the buyer to buy the home and obligates the seller to sell the home.

Deed to Secure Debt

See Security Deed

Earnest Money

Earnest money is paid by the buyer when the contract is signed. Earnest money shows the buyer's commitment to go through with the deal, helps make the contract legally enforceable, and provides compensation to the seller if the buyer does not close. Earnest money is typically held by the real estate agent or, if there is no agent, by the seller. The earnest money is applied against the purchase price at closing - that is, the amount of money which the buyer must bring to closing is reduced by the earnest money which the buyer has already paid. The amount of earnest money depends on the transaction. Ask your real estate agent for details.

Good Funds

Money in the form of a cashier's check, Georgia closing attorney's escrow check or wire transfer. See Closing Tips for Buyers for more information.

Hazard Insurance

Hazard insurance is also known as casualty insurance or homeowner's insurance. This is the insurance you buy to cover fire or other damage to your home. All lenders require their borrowers to obtain hazard insurance. See Closing Tips for Buyers for more information.

Prepaid Interest

At closing, a buyer prepays the interest on his loan for the rest of the month in which closing occurs. If the closing occurs early in the month, a lot of prepaid interest will be due. Less interest will be due if the closing occurs at the end of the month.

Recording

After closing, the warranty deed and the security deed must be recorded at the county courthouse. This means that these documents are filed with the county clerk who put indexes them and makes a photocopy available for public inspection. By doing this, any party can determine whether you have good title to your home.

Recording Fees

The buyer's warranty deed and security deed must be recorded at the county courthouse. The county charges a fee to record these documents. Recording fees usually run between $30 - $60 and are the buyer's responsibility. The closing attorney will send these documents to be recorded.

Reserves

See Escrows.

Security Deed

This document is often called a mortgage. It pledges the house to the lender to secure the loan. The security deed gives the lender the right to foreclose if the loan is not paid. Only the borrower (buyer) signs the security deed.

Settlement Statement

The Settlement Statement, or closing statement, is a summary of all funds paid or received by the buyer and seller at closing. The closing attorney prepares the Settlement Statement. At closing, the buyer and seller must review and sign the Settlement Statement. Make sure to keep your copy of the Settlement Statement in a safe place after closing.

Survey

A survey is a drawing showing the boundary lines of a piece of property, and the location of all buildings and other improvements on the property in relation to the property lines. A survey will show whether your home encroaches upon any setback lines or easements. Contact Marks & Williams to obtain a survey for your closing with us. See our example for more information.

Taxes

The are several kinds of taxes involved in a real estate transaction. See ad valorem taxes, intangible tax, and transfer tax.

Title Examination

Transfer Tax

The transfer tax is a tax levied by the State of Georgia on the warranty deed. The transfer tax is paid by the seller at closing and will appear on the Settlement Statement. The transfer tax is .1% of the purchase price.

Warranty Deed

At closing, the seller signs a warranty deed to transfer to the buyer the title to the home. The closing attorney will record the warranty deed for the buyer.