A policy provided by the builder for a certain period (often two years on appliances and systems and ten years on the structure) that provides for the repair of any covered item at the expense of the policy rather than the homeowner.

Another term for an appraisal of the property value that is required by the buyers’ lender. The valuation fee is paid by the buyers.

A statement required by the federal government to be presented to borrowers at the settlement that discloses an estimate of the annual cost of the mortgage and the total cost of the loan over the loan’s full term.

A tax, also known as a stamp tax, charged by the state or county government when property is transferred. The tax is part of the closing costs paid at settlement.

Title insurance is an important protection. Insurance that protects the lender against title defects, usually required by lenders. Homebuyers can also buy their own title insurance to protect themselves in case of a future problem with their title.

In some states and counties, this is the name for the tax charged when property is transferred from one owner to another (also known as a transfer tax).

A “speculative” home that a builder builds without a purchase contract and hopes to sell at a profit. Some spec homes are complete; others can still be personalized with the buyers’ choices for finishes and fixtures.

The process during which buyers and a representative of the builder sign legally binding paperwork and loan documents that transfer the ownership of the property; also known as a “closing.” A builder may offer incentives to buyers such as closing cost assistance when buyers opt to use the builder’s preferred settlement company.

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Q: Walk-through (or walk-thru)

A final inspection of the home by the buyers and their agent to check for any last-minute problems that must be addressed. This walk-through takes places shortly before settlement.