Buyers

HOME BUYING GLOSSARY:

Contingency- defines a condition or action that must be met for a real estate contract to become binding. FOR EXAMPLE: If you have a home loan, the house must appraise AT or ABOVE the purchase price. EX: Financing must be secured within 10 days or the contract becomes void. We use this as a safety, so we are able to back out of the contract if inspections come back less-than satisfactory, financing is denied, or the house appraises too low.

Appraisal- This is a property evaluation, and can tell you how much your house is worth before you put it on the market, or can tell you what your home is currently valued at. The appraisals are done if you have a home loan, and the appraisal must come in AT or ABOVE purchase price, or the seller will have to lower the purchase price, or the contract becomes void.

Pre-Approval- A lender will give you a pre-approval after going over your credit report and W2’s, and maybe some other necessary documents. This pre-approval is good for usually a few months, and gives us a specified amount so we are able to nail-down specific homes within that price range.

Clear to Close- The lender will give us the “clear to close” 3 business days prior to closing. This means they have pushed your loan through all necessary hoops, and you are good to sign come close day! Closing- The house is YOURS! All contingencies have been met (inspection, financing, appraisal…) and you are ready to sign, sign, and sign again. Bring your best pen and a happy heart- its move in day!

Escrow- This is an account that holds your earnest deposit money. When the earnest deposit money has been applied to your closing costs, what sits in escrow is the money that is needed to pay your property taxes. When you pay your mortgage each month, some goes to the principle and interest of your loan, some goes to property taxes, and some goes to insurance. Also, you’ll have money in there for your HOA if needed. Title Insurance- protects the seller and lenders against loss or damages incurred by liens, encumbrances or title defects. Buyer pays ½, Seller pays ½. On a $100,000, YOUR half of the title insurance will be approximately $175.00. This is put into your closing costs, and paid at closing.

Termite Inspection- This is a $90 cost and title takes care of this, it is charged to you at closing. It will check your house and any other exterior buildings for wood infestation. If termites are found, they will treat it, and in 12 months, I’ll send you a reminder to have the company come BACK to your house for a recheck. If they are found again, it is at no cost to you to rid them, again.

Home Warranty- A home warranty is usually paid by the seller, and covers the cost of repair/replacement of all of your appliances, including your HVAC system. The cost is $500, and the deductible is $75-150 depending on the appliance. It is a YEARLY subscription, so it covers you for the month of closing, and the 12 months that follow. Terms provided upon request.

Home Inspection- A qualified inspector will go through every single nook and cranny of your contracted home and give you the run down of the details. What condition everything is in, if it is in good-working order, needs repair, or needs cleaning. They are $300-500 for a typical -2000SF home. We have TEN business days to conduct the inspection, and the cost is paid outside of closing.. meaning you must pay for the service when it’s done. I have a list of inspectors when we are ready for this step. Once inspection is complete, we are able to ask the sellers to make reasonable repairs.

Taxes- Title will ask for a tax reserve at the time of closing; usually 6-9 months of taxes. Your taxes are due twice a year, but the amount will be added to your mortgage and will sit in escrow until its time for the title company to pay your taxes for you. When you get a property tax sheet in the mail, don’t fret! You don’t owe this. Sometimes taxes will increase/decrease depending on the market/economy.

Closing Costs- Lender Fees, Title Fees, Credit Report Fees, Flood Certificate, Homeowners Insurance, Taxes, Mortgage Insurance, Courier Fees, Surveys, Pest Inspection, Appraisal, Broker Admin Fee and Verification Fees…. It all adds up quick! Let me know if you want me to throw together a MOCK estimated cost sheet for you. This helps you visualize what you’ll be looking at; down payment and closing costs.

Earnest Deposit- When you rent, you give the seller a deposit. When you buy, you give title an earnest deposit, usually 1% of the purchase price, and it sits in the Title Company’s trust account. This amount will be applied towards your closing costs. It acts as a security for the seller; if you unlawfully back out of the agreement, they are entitled to keep your ED. If appraisal comes back less-than ideal, financing isn’t approved, or inspection comes back unsatisfactory, you are entitled a return of your ED.

Financing/Loans- SO many loan options! The most common… Conventional and FHA. Conventional is a 10-20% down, FHA is so good for first time home buyers and the one I see the most. FHA requires a minimum of 3.5% down, and you are allowed to ask the seller UP TO 6% of the purchase price to be applied towards your closing costs. There is a LOT of nitty-gritty info about loans, contact me for more details.

Survey/Plot Plan- Did you buy land? This will be helpful! Even if you want to put in a fence, this is a great idea. It will show the boundary lines of your exact property. Cost is around $90.

Offer Expiration- In this market, we need expirations. We use these in order to nail down our offer and force the seller to make a decision. Each house varies, but if it is a HOT time of year and the house is under or around $150,000… I give them a few hours. It allows us to have an answer ASAP!

 

 

 

For my Future Buyers.

You have been sent here by a friend, found me on social media, or just decided to give this home ownership thing a shot. I am so glad you’re here, and I cannot wait to get started on finding you a new home. I have put together an EXCELLENT buyers packet- it is SO informative and will answer quite possibly every question you might have. Just fill out the form below, I’ll send you the guide upon request, and we will get started.

 

Don’t forget to check out the HOME SEARCH page to enter your criteria and find homes within your price range. It is so easy to use- please let me know if you have problems with it. I will be catching up with you sooner than you can save homes to your favorites bar. Talk soon!