I have found, as a real estate agent, that sometimes just getting started with the home buying or selling process can be the biggest hurdle. There are a lot of unknowns. Finding a good real estate agent, lender and other industry professionals can certainly make the process smoother, but also having a grasp on some of the real estate terms you will encounter helps a prospective buyer/ seller know what to expect and can certainly ease the apprehension that may be associated with a real estate transaction. Here are a few of those terms to know:
• PRE-APPROVAL LETTER: Before a buyer applies for a mortgage or even start looking for a home, they should get a pre-approval or pre-qualification letter from bank/lender, which is an estimate of how much they'll lend. This letter will help a buyer determine what they can afford, and ensures home sellers that a buyer will be able to get a loan when needed
• INSPECTIONS: After a buyer has made an offer on a home, they will need to schedule a home inspection, a pest inspection and possibly well and septic inspections. These home inspectors will go through every nook and cranny, and review things like the plumbing, electrical, foundation, walls, heating, and appliances.
• APPRAISAL: When a buyer applies for a mortgage, the lender will require an appraisal of the home to be purchased. A licensed appraiser will estimate the home's value based on comparable homes that have sold in the area and an investigation of the property.
• CONTINGENCIES: When a buyer puts in an offer on a home, they can specify certain conditions that must be met before the deal will go through – these are called contingencies. There may be loan, inspection, appraisal value contingencies.
• CLOSING COSTS: Buyers and sellers should be prepared to pay a number of fees when selling or purchasing a home. Common fees, negotiated between the buyer and seller, include escrow costs, taxes, loan-processing costs (paid by buyer) title insurance, a one year home warranty, and transfer taxes.
It's great to do your research before jumping into a decision as big as buying or selling a home, but also speak to your local real estate professional right away as you are considering your options. Your agent will be ready with a wealth of knowledge, great referrals and will be happy to help you make the most of your next real estate transaction.
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