Basic Santa Cruz Real Estate Definitions

Posted by Lauren Spencer on Wednesday, November 7th, 2012 at 1:01am.

Buying Santa Cruz real estate can be exciting.  It also can be somewhat daunting, even if you’ve done it before.  You will deal with mortgage options, credit reports, loan applications, contracts, points, appraisals, change orders, inspections, warranties, walk-throughs, settlement sheets, escrow accounts, recording fees, insurance, taxes...the list goes on.  No doubt, you will hear and see words and terms you’ve never heard before.  Just what do they all mean?  Here are the ABC’s of some typical real estate terms and their definitions:

Adjustable-rate mortgage (ARM)

A mortgage in which the interest changes periodically, according to corresponding fluctuations in an index.  All ARMs are tied to indexes.

Amortization schedule

A table which shows how much of each payment will be applied toward principal and how much toward interest over the life of the loan.  It also shows the gradual decrease of the loan balance until it reaches zero.


A written justification of the price paid for a property, primarily based on an analysis of comparable sales of similar homes nearby.

Appraised value

An opinion of a property's fair market value, based on an appraiser's knowledge, experience, and analysis of the property.  Since an appraisal is based primarily on comparable sales, and the most recent sale is the one on the property in question, the appraisal usually comes out at the purchase price.

Assessed value

The valuation placed on property by a public tax assessor for purposes of taxation.

Balloon mortgage

A mortgage loan that requires the remaining principal balance be paid at a specific point in time.  For example, a loan may be amortized as if it would be paid over a thirty-year period, but requires that at the end of the tenth year the entire remaining balance must be paid.

Balloon payment

The final lump sum payment that is due at the termination of a balloon mortgage.

Clear title

A title that is free of liens or legal questions as to ownership of the Santa Cruz real estate.

Comparable sales

Recent sales of similar properties in nearby areas and used to help determine the market value of a property, also referred to as "comps."

If you are ready to wade through the complex terms of buying Santa Cruz real estate, call me at 831.662.6522 or email me at to schedule an appointment. Visit my homepage at


Real estate definitions

Amortization Schedule

Assessed Value


About Lauren Spencer

Award-Winning Santa Cruz REALTOR®

Lauren Spencer is your local real estate expert, specializing in Santa Cruz real estate and surrounding communities—this is where she lives, works, and plays too. Let her know your questions about the community and county and she'll be happy to fill you in on all you want to know! Lauren Spencer has consistently been voted best local REALTOR in Santa Cruz and is always happy to offer her advice and expertise. Call her at: 800.226.4717.

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