Glossary & Terms

Available for visual inspection without moving personal property, cutting holes in walls or dismantling anything. This also means available for inspection without putting the inspector or the property at risk.

Arc Fault Circuit Interrupters were first required in 1999 (on some circuits) to provide a higher level of fire protection by detecting arcing on the circuit before it can become an electrical fire. As of 2014, all 120 volt 12020 amp circuits in a residence require AFCI protection. Our inspectors may recommend AFCI protection but the absence of them is not necessarily a defect. Electrical systems become more dangerous over time and we often recommend upgrading older systems with AFCI protection to increase safety. AFCI devices should be tested regularly by pressing the “test” button on the device. If they fail to reset, they fail the test and should be replaced. Some modern devices will provide more information by flashing a fault code.

Ampacity is the maximum current that a conduction or device can carry continuously without exceeding its temperature rating. (i.e. without overheating).

An appraisal is the estimation of a home’s current market value. A licensed appraiser completes this estimation, which is calculated by comparing the recent sales of homes in the area as to the property that is being appraised. This is required by mortgage lenders to be sure that the money they are lending to a new homeowner or a current homeowner is a fair amount for the home.

A property labeled in “as is” condition usually indicates that the seller is unwilling to perform most if not all repairs. It could also mean that it is priced “as is”, which is typically lower than market pricing in the area.

The American Society of Home Inspectors (ASHI) was founded in 1976 to increase consumer awareness of the occupation and to enhance the overall professionalism of the industry. In states like Georgia, with no licensing or certification requirements for home inspectors, organizations like ASHI can help consumers (and Realtors) connect with professional home inspectors that meet or exceed national standards.

A buyer’s agent, also known as a selling agent, is a licensed real estate professional whose job is to locate a buyer’s next property, represent their interests by negotiating on behalf of that buyer to obtain the best price and purchasing framework for that buyer as possible.

A cable, in an electrical system, is two or more conductors encased in sheathing. In modern homes we usually see non-metallic sheathed cable which is referred to as NM Cable or, often mistakenly, the brand name Romex. In older homes we may see other types, like armored cable, which is often referred to by the brand name BX. In short, a cable is a collection of conductors.

Closing is when the home sale is considered final, which typically includes all parties’ signatures on all required documents, all monies conveyed, and when a lender is involved, with full lender’s approval. Once all of these items are completed, then a buyer’s access to the property is then provided, and the buyer is considered the new homeowner.

Closing costs are a selection of fees, including fees charged by: a lender, the title company, attorneys, insurance companies, taxing authorities, homeowner’s associations, real estate agents, and other closing settlement-related companies. These closing costs are typically paid at the time of closing a real estate transaction.

A conductor is any material, like copper or aluminum, that permits electricity to flow with low resistance. Wires are conductors.

“Double Lugging” refers to using one screw to secure more than one conductor in an electrical system. This was a routine practice until the 2003 NEC specifically prohibited double lugging all current carrying conductors. Double lugging of neutral wires is a common find for a home inspector. It is an easy fix that just requires moving some wires around on the neutral bus bar. You can usually have up to three ground wires under the same screw, provided they are all the same size. This depends on what the manufacturer allows.

A “double tap” in a home inspection typically refers to two conductors connected to the same breaker inside an electrical panel. Some breakers are designed for this but most are not. This doesn’t have to be a big deal because it’s usually an easy fix. Occasionally you need to add a breaker but frequently your electrician can pigtail the wires to a single conductor that is then connected to the breaker following the manufacturer’s instruction.

Due diligence is a time frame provided to a buyer to fully examine a property, often by hiring experts to inspect the property, perform tests, appraise the property, etc., so that a buyer may decide on how to proceed. A buyer might also be afforded an opportunity to renegotiate the contract based on their findings or possibly even to terminate within a specified time period, in order to not be considered in default of the contract. Due diligence allows a buyer to fully understand what they are buying.

An earnest money deposit (EMD), sometimes referred to as a “good faith deposit”, is the initial funds that a buyer is asked to put down once a seller accepts the buyer’s offer. It shows not only that the buyer is serious about buying, but that they are also willing to put their money where their mouth is.

This is the investment a homeowner has in their home. To calculate equity, take the market value of the home and subtract any mortgages or liens against the property. The amount leftover is the amount of equity you have in the home.

Energy Recovery Ventilators (ERVs) replace stale interior air with fresh air from the outside. The exterior air passes through a heat exchanger so the energy from heating or cooling the interior air is not lost. It also helps to remove moisture from exterior air during warmer humid months. The air is filtered to remove particulates like mold spores and pollen.

The escrow holder is the agent and depositary (impartial third-party) who collects the money, written instruments, documents, personal property, or other things of value to be held until the happening of specified events or the performance of described conditions, usually set forth in mutual, written instructions from the parties.

FHA loans are part of a group of loans that are insured by the federal government. This means that instead of actually lending money, the FHA insures banks and private lenders that they will cover losses they might incur in the event that the borrower does not repay the loan in full or timely.

If you are planning on getting FHA financing the property will be subjected to FHA Minimum Property Standards. This is something you should talk to your inspector about. The appraiser is the one who reports that these minimum standards are met and this can happen outside of the due diligence period. If the minimum standards are not met, you may be out of your due diligence period and the seller may not agree to make the repairs required to close the loan.

Ground Fault Circuit Interrupters prevent electrocution by shutting down a circuit (downstream of the device) if any current is missing. (i.e. leaving the circuit.) were first required in 1971 at the exterior and around swimming pools but are currently required in any “wet” or unfinished areas (Bathroom, Kitchens, Garages, Unfinished Basements, Exterior Locations.) These are inexpensive devices that can save lives. We test them during our inspections and we recommend adding them where recommended. This may be considered an upgrade on an older home but it is certainly an inexpensive one to make. GFCI devices should be tested regularly by pressing the “test” button. If they fail to reset, they failed the test and should be replaced.

A home sale contingency is for a buyer to indicate to a seller that part of their condition to purchase the seller’s property relies on the buyer’s ability to finalize a close on their current property. This is often negotiated with a clause in a contract or with an addendum to a contract. An example of how such a contingency can be used would be if a buyer needs to sell their property in order to have the down payment required on the purchase of the new property, or would rather use their sale proceeds instead of their savings to make the down payment.

A homeowner’s association is a private association that manages a planned community or condominium. When you purchase a property that is managed by an HOA, you agree to abide by the HOA’s rules and pay its monthly or annual HOA dues. If you fail to pay and/or comply, they often have the ability to file a lien against the property and/or foreclose on the property.

An iBuyer is a company that uses technology to make an offer on your home quickly or “instantly” as the term implies. iBuyers take on the burden of owning, marketing, and reselling your home. Depending on the service you choose, the benefit is the certainty of an all-cash offer and more control over when you move.

An inspection happens when buyers pay a licensed professional inspector to visit the home and prepare a report on its condition and any needed repairs. The inspection often happens as part of the due diligence period, so buyers can fully assess if they want to buy a particular home as is, or ask the seller to either complete or pay for certain repairs.

A loan contingency is a clause or addendum (also known as a mortgage contingency) in an offer contract that allows a buyer to back out of a deal and keep their deposit if they are unable to secure a mortgage with specified terms during a fixed period of time.

An MLS is a database that allows real estate agents and broker members to access and add information about properties for sale in an area. When a home is listed for sale, it gets logged into the local MLS by a listing agent. Buyer’s agents often check the MLS to see what’s on the market and what similar homes have sold for. According to Inman.com, there are over 600 MLS organizations in the United States.

Buyers make a formal offer on the home they want to purchase. The offer can be the full list price, or what you and your agent deem a fair market value. The buyer’s agent puts the offer in writing, asks you to sign it, and then submits it to the seller’s agent. The seller might immediately accept it, in which case it becomes the parties’ purchase contract, or may make what’s known as a counteroffer. It’s the art of negotiation, recorded in paperwork.

A preliminary report reveals any issues with a title that need to be dealt with by the seller in order to deliver a clear title. It gives details such as ownership history, liens, and easements. The title company gathers this report by searching existing property records at the county recorder’s office. This report is required for a title insurance company to issue a title insurance policy. Most lenders require borrowers to purchase title insurance coverage to protect their interest in a property. It’s customary in many areas for a seller to pay for this policy, although it is a negotiable item.

The principal balance of a mortgage loan is the amount of money owed to the lender, not including interest. Say you borrow $300,000. That’s the principal of the loan, or what you borrowed to buy the home. Buyers pay the principal plus interest each month, although calculated on a daily basis for most loan type. Payments nearly always go toward interest first, then toward paying down the principal. After all, the interest is the reason the bank agrees to make the loan.

A purchase and sale agreement is commonly referred to a written contract between the buyer and seller, which outlines the terms of the parties to sell and purchase real property. When a home is “under contract” it usually signifies that the Buyer and Seller have formalized their commitment to sell and purchase the real property.

An actively licensed real estate agent and REALTOR® are often used interchangeably, although not every real estate agent is a REALTOR®. A REALTOR® is a member of the National Association of REALTORS® (NAR). A REALTOR® promises to uphold the Code of Ethics of the association and to hold each other accountable for when serving the public, customers, clients, and each other, with a high standard of practice and care.

Sellers may offer concessions to incentivize buyers to purchase the home or sweeten the deal. Concessions are most readily seen as a contribution towards the buyer’s closing costs, up to certain limitations and approvals by a buyer’s lender, which ultimately leaves more money in a buyer’s pocket when all is said and done.

A seller’s disclosure is a disclosure by the seller of information about the property, or which could affect a buyer’s decision to purchase the property, all of which to the best of the seller’s knowledge. A seller must also indicate items which are not specific to the property itself but related to a person’s enjoyment of the property, such as pest problems, property line disputes, knowledge of major construction projects in the area, military base related noises or activities, association-related assessments or legal issues, unusual odors caused by a nearby factory, or even recent deaths on the property as permitted by law.

Subject to inspection, or “submit offers subject to inspection”, means that the seller is not allowing the property to be viewed without an accepted offer. Some common reasons for this are privacy concerns of the occupants or uncooperative tenants. The thought of buying a property sight unseen can be daunting for the traditional buyer, which can be used to your advantage as this will inevitably drive overall interest down. It’s also not as bad as it seems as, under the standard purchase contract, you will have an inspection period, during which you can cancel the sale with no penalty.

Termites are small, pale, soft-bodied insects that feed on wood, and can be highly destructive. The WDI (wood-destroying insect) report, also known as the Termite Report, includes a diagram of the property and the location of active and/or previous WDI activity. The report can also and sometimes include what may be necessary to resolve such possible infestations such as spraying or tenting. The WDI report will rarely if ever include the cost for such items, as that may be considered a conflict of interest.

A VA loan is a loan guaranteed by the government (Department of Veteran Affairs) and available to the military, active and retired, and even for some eligible spouses, at low-to-no-down payment scenarios with competitive rates and fees.