News From The Chairman

Barbara Landers

Coldwell Banker Residential

Terms you should know when buying your first home


Did you know that buying a home can require new vocabulary? As part of your homebuying research, learning these real estate-related terms will make you an educated buyer and put you in a more powerful position to purchase your first home.



When you purchase a home, your lender will require a property appraisal. Lenders are not likely to loan you $300,000 for a home that is only worth $150,000. An appraisal assists the mortgage lender in assessing the actual value of the property and looks at the condition of the house, its location and comparable sales in the same area. As a buyer, you’re usually responsible for covering the cost.


The appraisal is done prior to closing on a property. Don’t confuse your appraisal at this stage with the annual appraisals that determine how much you will pay in property taxes. Those are done in mass by the local county appraisal district.


Many first-time homebuyers think the appraiser will also inspect the home. The appraisal process is designed to put value on the property. Property inspections focus on the integrity of the structure and its working systems. Appraisals and property inspections are completely independent of each other.


A survey verifies the home’s boundaries—where your land begins and ends. The surveyor determines whether the house is within the property borders, whether there are any neighbors encroaching upon the property and if any easements on the property may affect legal title. Easements include sewer manholes, drainage ditches, and utility lines. Knowing where the easements are located will also help you if you are considering future home improvements.


If you have plans to add or pool, build a deck or any other addition, you should know how far it is from those easements. There are stringent regulations that determine how far decks or even swimming pools can be from certain easements, or even the lot line.


Surveys have grown in popularity because many title insurers require one before issuing a title insurance policy. The survey acts as a map, determining precisely the property limits of each neighbor’s home. The last thing that the insurance company wants is a land dispute.




Title insurance

Title insurance is just as important as the many other types of insurance you probably have. If there are any problems associated with your property’s title, this insurance plan protects against loss.


If you are purchasing an older home, the title is likely to have changed hands quite a bit and the land that it sits on, perhaps even more. What do you think would happen if a stranger showed up at your door one day and demanded that you get off his land? You’d probably tell him to get lost, but he may really have a case. Maybe somewhere down the line a signature was forged or the seller failed to sign in the appropriate box. That could mean trouble for both you and the lender.


Title insurance covers the injured party, which in this case would be the lender. The policy protects the lender up to the amount of the mortgage, but it doesn’t protect your equity in the property. To protect your equity, you would need a supplemental policy called an owner’s title policy, which covers the full value of the home.


Here in The Lone Star State, it won’t do you any good to shop around for a competitive title insurance policy. The state of Texas sets the rates for title insurance.

Learn more from your Texas Realtor

These are just a few terms that you should know before diving in to the homebuying process. You’ll encounter a lot of real estate industry-specific language and abbreviations. But it doesn’t have to feel intimidating. Your Texas Realtor can guide you along the way.


Learn as much as you can during the process and remember, there are no silly questions. You will feel much more comfortable about buying that first home if you have a basic knowledge of the terminology and advice from an expert.


For more real estate information, I encourage you to visit