Welcome back to RealtyMyths weekly real estate word wizard! Here are some terms that you should know before buying your first home.
Earnest money deposit — A partial payment by a buyer when submitting a contract that demonstrates the buyer’s commitment to the deal. The money, which is held in an escrow account, goes toward closing costs.
Escalation clause — A tool used by buyers to outbid competitors for a property. In the contract offer submitted by the buyer to the seller, the buyer states he will increase his offer by a certain amount if the seller receives offers higher than his.
Fixed-rate mortgage — A mortgage loan with an interest rate that won’t change during the length of the loan.
Escrow — A neutral or third party who handles the exchange of money and documents on behalf of two other parties before the closing of a sale.