Buying a home can be a daunting process. There are many real estate terms that you need to know in order to make informed decisions. This blog post will discuss 20 of the most important real estate terms that you should know when buying a home. We will provide definitions for each term and explain how it relates to the home buying process. Armed with this information, you will be able to navigate the real estate market confidently!
Real Estate Terms You’ll Hear When Buying a Home
Just like any industry, real estate has its own language. To help you understand some of the terms you’ll hear during your home search, and we’ve compiled a list of definitions for common real estate terms.
Agent:
The agent is oftentimes the first person that you will interact with during your home buying or selling process. An agent represents you as either the buyer or the seller, and they are there to advocate in your best interest during real estate transactions.
Addendum:
An addendum is an amendment or supplement to a real estate contract. An addendum can be used to modify the terms of the contract, or it can be used to include additional information that was not originally included in the contract.
Amortization:
Next on our list of real estate terms is amortization. Amortization is the process of spreading out a loan into equal payments over a certain period of time. This term is typically used in reference to mortgages, and it allows borrowers to pay off their loans over a set period of time.
Appraisal:
An appraisal is an estimate of the value of a property. Appraisals are typically conducted by licensed appraisers, and they are used to determine the value of a property for a variety of purposes.
Contract and Contract Clauses:
The next real estate terms we want to discuss are contract and contract clauses. In order to ensure that clients have the best experience, it is important to formulate real estate contract terms. Your contract should detail key aspects of the transaction, such as
- Financing
- Closing costs
- Sellers assist
- Addendum
- Inspection
- Date of Settlement
- Signatures
In addition, contract clauses will specify what happens in the event that one party breaches the contract. As well as what personal property is or isn’t included in the transaction.
Comparable Sales
Comparable sales, also known as comps, are used to help determine the value of a property. When appraising a home, appraisers will look at recent sales of similar properties in order to arrive at an estimate of the value of the subject property.
Closing Costs:
Closing costs are the fees and expenses associated with the purchase of a property. These costs can include things like loan origination fees, appraisal fees, title insurance, and more.
Disclosures:
Next on our list of real estate terms is disclosure. In real estate, a disclosure is a statement that informs the buyer of any material defects or problems with the property. Buyers will want to know if there are any structural issues, problems with their water supply, and even about the condition of their HVAC system. Issues like this are expensive to fix and can be risky for a new buyer to take on.
For Sale by Owner (FSBO):
A For Sale by Owner, or FSBO, is a property that is being sold by the owner without the assistance of a real estate agent. In most cases, buyers will work with an agent when purchasing a property. However, there are some instances where buyers may choose to work directly with the seller in order to avoid paying a commission.
Home Inspection:
A home inspection is an assessment of a property to determine its condition. Home inspections are typically conducted by licensed inspectors, and they are used to identify any problems with the property before closing.
During a home inspection, the buyer and the inspector will take the time to inspect the property in order to determine if the condition of the home is in good standing. The inspector will check for roof damage, electrical issues, water damage, and pest problems. They will also take the time to pay attention to the structural integrity of your home.
Pre-Approval:
Next on our list of real estate terms that we want to discuss is pre-approval. Pre-approval is the process of getting approved for a loan before finding a property. This is an important step in the home buying process because it gives buyers an idea of how much they can afford to spend on a property.
Once you have been pre-approved for a loan, you will know the maximum amount that you can borrow. This will allow you to narrow your search to properties that are within your budget.
The pre-approval process is typically conducted by a lender and involves an assessment of your financial situation. The lender will review your income, debts, and credit history in order to determine if you are a good candidate for a loan.
If you are pre-approved for a loan, you will be issued a pre-approval letter. This letter is important because it shows sellers that you are a serious buyer who is capable of obtaining financing.
Walkthrough :
A walkthrough is an inspection of a property that is conducted by the buyer before closing. This is the last opportunity for the buyer to inspect the property and make sure that everything is in order.
The walkthrough should be scheduled for a time when all repairs have been made and any final punch list items have been completed. This is also a good time to make sure that all appliances are in working order and that the home is clean.
If there are any problems with the property during the walkthrough, the buyer can negotiate with the seller to have them fixed before closing.
Curb Appeal:
Curb appeal is the attractiveness of a property from the street. This is important because it is one of the first things that potential buyers will see when they pull up to your home.
Turnkey Property:
A turnkey property is a property that is ready to be lived in. This means that all repairs have been made and the home is in good condition. A turnkey property is a great option for buyers who do not want to deal with any repair work.
Escrow:
Last on our list of real estate terms is escrow. An escrow is an account that is used to hold money during a real estate transaction. This money is typically held by a third party, such as a title company or an attorney.
The escrow account is used to pay for expenses related to the property, such as the down payment, inspections, and repairs. The money in the escrow account is only released to the seller once all of these expenses have been paid.
At Honey Tree Realty, We Make Sure You Understand These Important Real Estate Terms
Now that you know some of the most important real estate terms, you can enter the home buying process with confidence. At Honey Tree Realty, we make sure that our clients are well informed throughout the entire process. We will be there to answer any questions that you may have and to help you find the perfect home for your needs.
Contact us today to see how we can help you with all of your real estate needs!
