1. Reverse Mortgage
This is one of the most searched terms on google. A reverse mortgage is a loan that homeowners above the age of 62 who have a substantial amount of equity can borrow against the value of their home. This loan is tax-free and can be received as a lump-sum, in fixed monthly payments, or as a line of credit. Unlike the more common forward mortgage, here the borrower does not need to make any loan payments. Instead, the entire loan balance up to a limit, becomes due to be paid when the borrower dies, moves out permanently, or sells their home. Reverse mortgages can be beneficial to older homeowners whose cash is tied up in their home equity: the balance left when you subtract all outstanding home loans from its market value.
2. Cash Offer
Just like the name suggests, this is a bid made by a buyer who is willing to pay the entire purchase price in cash, without taking a mortgage loan or any other type of financing. This type of offer may be more attractive to sellers—since there’s no way a lender will decline a potential buyer’s loan—and can give a buyer an advantage in a competitive, tight market such as ours.
3. Contingency
Buyers usually meet this term when they’re in the process of making an offer. Contingency is basically an open item between the buyer and the seller after an offer has been accepted. Contingencies appear as clauses in the purchase agreement, specifying an action or requirement that have to be met for the contract to become legally binding. Both buyer and seller must agree to the terms of the contingency and sign the contract before it becomes binding. A common contingency could be a financing contingency: the deal will depend on the buyer getting approved for a mortgage by a lender. If for any reason their financing falls through, the buyer will then have the ability to back out of the deal without suffering any financial implications, like losing their deposit for example.
4. Pending
A home is pending when a seller has accepted an offer from a buyer. Once an offer is accepted, the attorneys for both sides will draft the contract of sale, and the property will remain pending even after that, as the buyer works to meet all of the requirements for the sale. In New York, this often means getting approved by the condo or co-op board by signing and submitting various documents. Many buyers tend to shy away from a property that is already pending, thinking that it is already spoken for by another buyer, but I would say it is always worth checking in with the listing broker. You never know, maybe the terms you’re wiling to offer the seller are more attractive than they buyer they already have, if they haven’t signed a contract yet.
5. Close of Escrow
This is the goal for everyone involved in a real estate deal, when the buyer, seller, and all other parties involved in the transaction have fulfilled their legal responsibilities to one another. The buyer finished signing all of their mortgage documents, the board has given its approval of the sale to the buyer, the lender has wired the money to the seller, and the keys have been exchanged.
Source: Apartment Therapy
