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People Guess What These Real Estate Terms Mean

Finding the perfect place to live is hard, and these real estate terms aren't making it any easier.

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Closing

Mail Order Comedy

"Closing is when all of the preliminary steps to buying the house have been completed (home inspection, escrow, financing), and the deal actually goes through." —Eric S.

“When the walls of the house are literally closing in on you. You should've never taken that golden statue from the treasure room!” —Tyler H.

“When the real estate agent brings coffee to close the deal.” —Clark M.

The actual definition: The meeting at which a home sale is finalized. The buyer signs the mortgage, pays closing costs, and receives the title to the home. The seller pays closing costs and receives the net proceeds from the home sale.

Contingency

Motion Picture Corporation of America

"Contingency is a contractual precondition that must be met in order for the agreement in the contract to become enforceable (Ex. 'I'll buy your house ONLY IF I don't find any hostages locked in your basement.')." —Eric S.

"Some sort of poltergeist haunting." —Mandy C.

"Signing a lease with certain stipulations." —Clark M.

The actual definition: A condition that must be fulfilled before a contract is binding.

Counteroffer

The Stuffed Dog Company

“A negotiation tactic when signing a lease.” —Clark M.

“For those true marble and granite connoisseurs out there, this is when you walk into a house and see a countertop you really like and say, 'Can I take this?'” —Tyler H.

“Like your offer, but vengeful.” —Kyle D.

The actual definition: An offer in response to an original offer.

Earnest Money Deposit

Touchstone Pictures

"A deposit made with good intentions." —Kyle D.

"When you don't have all the money but are good for the installments." —Clark M.

The actual definition: The deposit given by a buyer to a seller to show that the buyer is serious about purchasing the home. Earnest money usually is refundable to homebuyers in the event a contingency of the sales contract cannot be met.

Escrow

20th Century Fox Television

"Another name for those wacky things people put on the wall. Like a sconce, but more load-bearing." —Alex W.

"Crow in Spanish." —Tim U.

"I have no idea. This one is hard." —Ashley B.

The actual definition: The holding of documents and money by a neutral third party prior to closing.

Foreclosure

Monkeypaw Productions

"I'm not entirely sure, but I think it's pretty obvious that you don't want this to happen to you." —Kyle D.

"Prelude to peasantry." —Mandy C.

"When you forget to pay your mortgage, for months on end." —Clark M.

The actual definition: A legal process by which the lender or the seller forces a sale of a mortgaged property because the borrower has not met the terms of the mortgage. Also known as a repossession of property.

Loan-to-value Ratio

Paramount Pictures

"Loan-to-value ratio is a test you have to take when applying for a loan to see if you have the kind of values of a person who promptly and reliably repays loans at reasonable interest rates. You may only use a No. 2 pencil on this test and please fill in all the bubbles as neatly as you can to avoid inconsistencies in grading. " —Eric S.

"Something we were not taught in high school mathematics." —Kyle D.

"The congruence of my mind on my money with my money on my mind." —Mandy C.

The actual definition: The ratio of the amount of money owed on a home to the home's value. The LTV ratio for a $100,000 home financed with a $90,000 mortgage would be 90%, for example.

Mortgage Insurance

BBC

"A monthly payment for your monthly payment to be paid until you die. —Kyle D.

"Two concepts that teachers told us were important in school but never fully explained." —Emily C.

"Insurance on your mortgage because life is unpredictable, and things might happen." —Clark M.

The actual definition: Money paid to insure the mortgage when the down payment is less than 20%.

Short Sale

Deedle-Dee Productions

"Short sale is when you make a short person — usually a child — complete your sale and hope that their cuteness will make it a better deal for you." —Emily C.

"A short sale is where you get a free pair of cargo shorts as a thank-you for buying the house. Custom dictates that you get to choose the color, but they absolutely must be cargo shorts. There's no wiggle room on that." —Eric S.

"When the house is only on the market for a second before it's bought up. 'Wow! That sure was a short sale, Dirk!'" —Tyler H.

The actual definition: A short sale is a transaction in which the lender, or lenders, agrees to accept less than the mortgage amount owed by the current homeowner.

Underwriting

Pilot Boy Productions

"Underwriting is the really small text that nobody reads under the regular-sized text." —Emily C.

"When weird writing in blood mysteriously starts appearing on every surface in your newly purchased house and you think, 'Hm, must be something weird going on under here.'" —Tyler H.

"Underwriting is a person, or more commonly, a financial institution that agrees to stand as guarantor of your home purchase in the event something goes wrong and you can't pay. In that case, the bank takes possession of the house and lets its nephew crash there for a few days until he can get back on his feet after just...a real tough year." —Eric S.

The actual definition: The process of evaluating a loan application to determine if it meets the lender's standards.

All definitions provided by California Association of REALTORS®.

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