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The Terms of Buying a House

Many Americans and people who come to America want to own a home.

Home ownership is part of the American Dream: the hope that if you work
hard and are treated fairly, you can buy a place to call your own.

But buying a home can be difficult. Even talking about it can be confusing.
The language of real estate the buying and selling of property includes its
own terms, phrases and expressions.

For starters, lets talk about who has the advantage in the real estate
market. Well, that depends. A buyers market means a lot of people are
trying to sell their homes. People shopping for a home the buyers have a
lot of choices, and the price of property can be low.

But in a sellers market, more people are trying to buy property
than there are homes for sale. As a result, people selling their homes can
charge a lot of money. Or they can wait for just the right offer before
deciding to accept a bid. In other words, sellers have the upper hand.

So, lets say you finally find a place. You and the seller agree to a
price. But most houses cost a lot more than anyone can simply buy outright in
cash. So you put some money down. For the rest, you take out a mortgage
a loan from the bank to help you pay for your home.

Having a mortgage -- or carrying a mortgage -- is normal. A lot of
Americans owe money on their homes. But you never want to be upside down in
your mortgage. That means you owe more than your house is worth.

Having a home with more debt than value is also called being underwater.
You can find yourself underwater if you buy at the peak of a real estate
boom but then something happens that causes the value of your home to
drop. Maybe a highway is built through your front yard, or a natural disaster
strikes, or violent riots terrorize your once peaceful neighborhood. Suddenly,
your house is not worth as much as you paid for it.

People who find themselves upside down in their mortgage often have no
choice but to foreclose. This means the bank becomes the official owner
of the house. The buyers have to move out, and they lose the the money they had
originally paid for the property.

Before foreclosing on a family, banks sometimes offer a grace period.
This extra time allows the homeowner to pull together some funds to pay the

Now, lets listen to a dialogue using some of these terms.


A: Hey, thanks for coming over. I have big news to tell you!

B: Youre getting married.

A: No. But its almost as life-changing.

B: Well, dont keep me waiting.

A: Im buying a house!

B: But I love your apartment. Its so hard to find a rental with a great
outdoor deck like this!

A: I know. Believe me, I love this apartment too. But Im tired of paying
rent. Its time to invest in some property. And right now, its a buyers

B: Thats true. There are so many houses available that prices have really
hit rock bottom.

A: I know! Housing prices have not been this low in decades. Now is the
time to look for a great deal.

B: My cousin Bernie bought a place 15 years ago in this neighborhood for
a song
. It was so cheap! And now he owns it free and clear.

A: Lucky guy. My friend Rebecca is not so lucky. She bought her place three
years ago when the market was peaking.  

B: Is she carrying a big mortgage?

A: Not only is she mortgaged up to her eyeballs, shes actually upside
in her mortgage.

B: Oh no. She owes the bank more than the house is worth in the current
Being underwater
is the worst situation to be in.

A: It gets worse. She just lost her job and cant make payments. The bank
is threatening to foreclose!

B: Yikes. That is serious. Maybe she can ask her bank for a grace
. If they give her three or four months to find a job and get back
on her feet
, maybe they wont have to foreclose on her house.

A: Actually, she found a job in another city. But she cant move and sell
her house right now because shes underwater and will lose all the money
she has invested.

B: Well, thats a catch-22 if ever I heard one.

A: Stories like my friend Rebeccas scare me to death. Maybe Ill wait a
little longer before becoming a homeowner.

B: Just keep an eye on the market and do your research. You dont want a
big mortgage hanging over your head, but it also sounds like you dont
want to rent forever.

A: Exactly. Especially with my other big news. I got a puppy! Come here,
boy! Come and meet Uncle Mario!

And that brings us to the end of Words and Their Stories. Whether you own
or rent, now you have some expressions for the next time you talk about real



Anna Matteo wrote this story for VOA Learning
English. Kelly Jean Kelly was the editor. John Cougar Mellencamp ends our show
with Little Pink Houses.


Words in This Story


bid n.
to offer to pay (a particular amount of money) for something that is being sold

upper hand  n.
the position of having power or being in control in a particular situation

outright adv. in one payment of money

peak  n.
the highest level or degree of excellence, quantity, activity, etc

boom v.
to grow or expand suddenly

for a song informal
: to buy something very cheaply.

free and clear informal
: without owing any money

up to her eyeballs informal
: used to emphasize the extreme degree of an undesirable situation or

rock bottom n.
the lowest possible level or point

yikes -
: used to express a feeling of fear or surprise

grace period  n.
 an amount of extra time that someone is given to pay a bill, finish a
project, etc.

get back on her feet informal: to recover from something

hanging over your head informal : something makes you unable to relax or enjoy yourself


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