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These terms come up often during real estate transactions

There are many different real estate terms you should know if you're interested in buying or selling property. Understanding these terms can keep you in the loop and make sure you understand everything that you're being told. A little education in these terms goes a long way in helping you move forward with your transaction.

One of the main terms you'll discuss with sellers, buyers and your attorney is a title. This is a document that shows who owns land. Without a title, it's not always possible to sell or transfer a property to another party.

Another thing you should know about is escrow. When money is placed into escrow, it's held by a third-party entity that does not have any interest in the real estate transaction. The third party holds the money until the property transaction is complete. Then, it is released to the seller. This helps guarantee that money only transfers hands once all the legal requirements of the transaction have been met.

A term you may already be familiar with is a mortgage. This is a loan that covers the full price of a home. Basically speaking, a mortgage gives the buyer the right to purchase the home with borrowed funds. In exchange, he or she pays the mortgage company back the principal plus interest over time. Until the final payment, the mortgage company has partial ownership of the property and holds that ownership as collateral. If the recipient doesn't make payments on time, the mortgage lender can place the home into foreclosure to take it back and sell it on to another party.

Your attorney can talk to you more about the things you need to know during a real estate transaction. The right knowledge does make a difference.

Source: FindLaw, "What is Real Estate and Real Property Law?," accessed June 16, 2017

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