Whether you're a first time homebuyer or veteran to owning a home, the real estate buying process can seem like a lot to absorbin a short amount of time. Knowing the terms the real estate industry
21 Terms You Should Know When Buying A Home
Whether you're a first time homebuyer or veteran to owning a home, the real estate buying process can seem like a lot to absorbin a short amount of time. Knowing the terms the real estate industry commonly uses can aid you in understanding the full picture, and in return make you more comfortable and confident throughout the transaction.
1. Ratification: The action of all parties signing and agreeing to make a contract valid.
2. Date of Ratification: Simply the date a contract is fully signed and delivered to all parties of the said contract.
3. Appraisal: The process in which an"appraiser" gives a formal written valuation of a property.
4. Earnest Money Deposit: Deposit made by purchaser on a fully accepted contract to move forward in good faith to the close of the contract.
5. Above Grade Square footage: Square footage that is above the basement level.
6. Below Grade Square Footage: Square footage that is at the basement level.
7. New Construction: Home that has never been occupied.
8. Remodeled: Home that has been updated or upgraded, either throughout the home, or only in certain areas.
9. Closing Date: The date real estate transfers ownership, and most of the time, unless otherwise agreed upon, the date the buyer takes occupancy.
10. Escrow: An account in which a third party holds funds and regulates payment of the funds.
11. Home Warranty: A service in which a company warrants certain items in a home. Usually mechanical, however can sometimes include structural. If for example a system were to malfunction in the warranted home, the warranty would fix or replace the item that is no longer functioning correctly. Most home warranties have a "service call fee" of $75 to $100.
12. Home Inspection: The process which a licensed home inspector formally inspects a homes mechanical, and structural systems for malfunction or deficiencies.A formal written report is provided at the conclusion of the inspection.
13. MortgagePre-Approval: The process is which a mortgage lender verifies that the prospective purchasers credit and supporting financial documentation, meet the standards to obtain a mortgage. However a FULL underwrite by the mortgage company has not yet been performed.
14. Closing Cost: Fees associated with closing of real estate. Most closing cost fees come from the mortgage company lending the funds to purchase the home, however other fees that are charged can include, legal fees, survey of the property, realtor administrative fees, title work, inspection fees, taxes, recording fees, hazard insurance, & courier fees. Most of the time when obtaining a mortgage to purchase real estate your closing cost in our area will typically be between 3% to 4% of the sales price. However your mortgage company can always provide you with an estimate of your closing cost before you purchase a property.
15. Down Payment: The amount of money that you put down at the time of closing to apply to your sales price.
16. Principal Mortgage Insurance: Insurance that a mortgage lender requires you buy when not making a down payment of 20% or more. This type of insurance protects the lender from losing money if the borrower were to foreclose. Most of the time the insurance cost are added into your monthly payment.
17. Assessed Value: a valuation that determines the value of real estate for tax purposes.
18. Real Estate Taxes: Taxes that are charged based on the assessed value of the real estate.
19. Hazard Insurance: Insurance that protects homeowners and mortgage companies against the risk of loss of a property, theft, or damage caused by water, smoke, wind, and fire.
20. Interest Rate: The cost you will pay each year to borrow money expressed as a percentage rate.
21. PITI: Your monthly mortgage payment that includes, the principal amount of the loan, interest rate, taxes, and insurance.
Are you interested in buying a home? Feel free to contact me to get start!
Ashley Nicole Brooks
Vickie Clark-Jennings & Associates
Berkshire Hathaway HomeServices Select Realty
Licensed Realtor in the Commonwealth of VA
Experience As an agent who's an expert in the local area, I bring a wealth of knowledge and expertise about buying and selling real estate here. It's not the same everywhere, so you need someone you ....