The penalty a borrower pays when a payment is
made after the due date
Lease
A written agreement between the property owner
and a tenant that stipulates rent to be paid, as well as the terms under which
the tenant may reside in the real estate for a designated period of
time
Leasehold estate
The tenant's right to title to a property for a
specific period of time whereby the tenant does not actually own the property
but has a long-term lease on it
Lease option
A lease that gives the tenant the right to
purchase the property, either during the lease term or at its
end
Lender's Title Insurance
An insurance policy covering a lender for the
loan amount, whereby the coverage declines in amount as the loan is paid off,
to the point where there coverage ends when the loan is paid
completely
Lessee
The individual or party who takes property upon
a lease
Lessor
The individual or party who grants property upon
a lease
Liabilities
An individual's financial
obligations
Lien
A legal claim or charge allowed to a creditor
against a debtor's property that must be paid when the property is sold to
transfer title
Life estate
The right to use, occupy and own, for the
duration of the life of the individual
Lifetime payment cap, or Lifetime rate
cap
The limit on the amount that payments can
increase or decrease over the term of an adjustable-rate mortgage
(ARM)
Liquid asset
Cash, or an asset that can be readily converted
into cash
Liquidated damages
The compensation predetermined by both parties
to a contract to be paid to the injured party, should the other party breach
the contract
Lis pendens
A legal document filed in either a federal or
state court indicating that a suit is pending against property located in the
county where the notice is recorded
Listing agreement
A contract by which a broker is employed by the
seller to find a buyer for the seller's real estate, according to the seller's
terms, and for which service, the broker is paid a commission
Listing broker
A broker whose office initiates the property
listing (as opposed to the cooperating broker, whose office negotiates the
sale); the listing broker and the cooperating broker may be the same
person
Loan origination
The process by which a lender sets up a mortgage
loan secured by real property
Loan origination fee
The fee charged by the lender to the borrower
for setting up a mortgage loan, usually computed as a percentage of the total
mortgage amount
Loan-to-value (LTV)
percentage
The proportion of the amount of the mortgage
loan against the appraised value or sales price of the piece of property being
pledged as collateral; e.g., a home with appraised value of $100,000 but with a
$90,000 mortgage has a LTC of 90 percent
Lock-in
A guaranteed interest rate established at the
time of closing which is honored if the mortgage closes within a certain period
of time, also usually establishing the number of points to be paid at closing
as well
Lock-in period
The time period during which the set interest
rate is guaranteed to the borrower
Loss Payable Clause
A provision in an insurance policy that provides
payment for any loss to two or more parties, as their interest so justifies,
the two parties typically being the owner and the lender
Lot
A parcel of land with fixed boundaries as
determined by a survey
Is there a real estate word that we failed to explain here in our dictionary for homebuyers and sellers? Let us be your personal real estate dictionary! We'll send a brief explanation of any word or term that you encounter when buying and selling property.
Do you have a suggestion of a real estate word that should be included? Let us know! We always appreciate feedback.
Do any of these definitions raise questions for you? Didn't find the word you're looking for? Let us know! We're happy to answer ANY questions. It's our job! There's no obligation, and we promise to get back to you quickly...
Short Sales >1. What Is a Short Sale?
A short sale is discussed if the home owner is facing financial hardship and is therefore unable to make payments on the home loan. In the event that the bank or mortgage lender agrees to it, a short sale is an alternative solution when foreclosure is looming. “Short sale” literally translates to selling a piece of real estate just short of the remaining balance of the loan. Because the homeowner finds him or herself in a position where paying the loan just isn’t feasible, the lender will then discount the balance of the loan and the home owner will sell the property and forfeit all of the proceeds to the lender. By doing this, the lender concedes that selling the property at a loss is a better option than continuing to pursue the borrower.
There are four conditions of a short sale:
The home’s market value is down. This means that the home is worth less than the remaining balance on the home loan. Another way to say this is by saying that the home is "underwater".
The mortgage is in default or heading that way. A mortgage default occurs when the borrower stops making payments on the loan. At that point, the lender can seize the property from the borrower.
The home owner encounters hardship like divorce, death or serious illness, unemployment, bankruptcy, etcetera. It is important to note that personal lifestyle choices that cause financial strain are not considered.
The home owner has no assets. If the homeowner had assets, he or she could use these to make payments on the loan.
How do you know if you qualify for a short sale?
Whether or not a home seller can go through with a short sale ultimately depends on his or her bank or mortgage lender. They have to agree to the short sale process in order for it to come to pass. If the seller’s situation does not line up with the aforementioned four points, he or she may not qualify to sell their home on a short sale.
Any buyer can put an offer in on a home up for short sale so long as they are able to qualify for a loan. It is, however, up to the lender whether or not an offer will be accepted on the property.
Charlie & Barbara Kaylor RE/MAX Communities The Dream Team 750 Hopmeadow Street Simsbury, CT 06070 Direct Telephone: (860) 392-9280 Office Telephone: (860) 651-6100 Direct Fax: (888) 392-9281 Email: TheDreamTeam@NUMBER1EXPERT.com
Charlie and Barbara Kaylor, The Dream Team, have over 30 years combined residential real estate experience. Charlie, Broker-Owner of RE/MAX Communities has been awarded the RE/MAX International Platinum Club status for outstanding sales volume for four consecutive years and is among the elite RE/MAX Hall of Fame recipients. Barbara's innovative marketing and promotional material has been recognized as the best in the area. The Dream Team is an enthusiastic, knowledgeable and dedicated team of professionals with a genuine love for The Farmington Valley. They have two elementary school aged children and are deeply involved in their community. Partners in business and in life, The Dream Team is the best choice to help you with all of your real estate needs. Please visit www.CTDreamTeam.com to learn more about The Dream Team and the beautiful Farmington Valley area. Don't miss the 40 testimonials from their clients!
www.CTDreamTeam.com
is brought to you by The Dream Team, real estate for
Avon, Canton and Simsbury,
- NUMBER1EXPERT 
