Frequently Asked Real Estate Questions

What is Amortization?

The action or process of gradually writing off the initial cost of an asset.

Do you know what kind of mortgage you have? Do you know whether your payments are going to increase over time? 📈

“Amortization” is the term used for the schedule of mortgage installment payments over a period of time. Typically, a buyer’s amortization schedule is one payment per month over 15 or 30 years.

📢 Important:

📝 There are both adjustable and fixed-rate mortgages. With an adjustable rate, the lender can increase the rate on a predetermined schedule, which would impact your amortization schedule.

📝 With a fixed rate, your payments with remain the same for the life of the loan, unless you refinance or there are changes to taxes or insurance.

What is a conforming loan?

A conforming loan is one that is limited to $647,200 for most of the U.S., which means you may be able to avoid the stricter requirements of a jumbo loan.

Loan limits vary over time and by location so you should check with your lender or Realtor for the latest information.

Other loan types include jumbo loans, FHA, and VA.

What is a credit score?

A number ranging from 300-850 that’s based on an analysis of your credit history.

Your credit score helps lenders determine the likelihood you’ll repay future debts.

You’ll need a score of 620 or better, but you’ll get better financing rates with a score of 720 or higher.

There is much more to know about credit and credit scores, so feel free to ask if you have specific questions.

To learn more about credit scores and credit reports, click here.

What is a Deed of Trust?

A Deed of Trust is like a mortgage. It is an agreement between a borrower (you) and a lender (a bank or other financial institution).

The lender gives you money to buy a house or other property, and you agree to repay the loan with interest, in regular payments.

The Deed of Trust also includes a clause that says if you don’t make the payments, the lender can take the property back.

What is a down payment?

The sum in cash that you can afford to pay at the time of purchase of a home or property.

A conventional loan down payment is usually 20% of the sales price, but other types of financing require as little as 3.5% to 15%. Some 0% down programs are also available.

A mortgage lender can tell you what types of loans you qualify for.

What is a Jumbo Loan?

Conforming loan limits are $647,200 for most of the U.S., so anything above this would be a jumbo loan.

Jumbo loan requirements are stricter and there are more requirements you will need to satisfy.

Find out more about jumbo loans here.

What is a lender?

A lender, AKA Mortgage Lender is an entity that issues mortgage loans. Typically, a bank, mortgage broker, credit union, etc.

A mortgage lender is a bank or other financial institution that provides loans to people who want to buy a home.

The lender will look at a person’s credit history, income, and other factors to decide if they are eligible for a loan and how much they can borrow.

The lender will also discuss the different types of mortgages available and the interest rate and terms of the loan.

The interest rate on a mortgage loan you pay to borrow that money when buying a home.

The lower the rate, the better.

Mortgage rates vary daily, so you don’t have any particular rate until the lender “locks in the loan” securing that rate for your home purchase.

The rate you qualify for is based on your personal financial situation and the type of loan you are applying for.

What is a Pre-Approval Letter?

It is a letter from a lender indicating you qualify for a mortgage of a specific amount.

Getting Pre-Approved

You’ll fill out a mortgage application, provide documents, and bank statements, get a copy of your credit report, etc.

Getting pre-approved is what you need to do before starting a home search. The person selling your dream home will want to make sure you really are qualified to buy. Most sellers aren’t willing to accept your offer with only a pre-qualification.

What is getting Pre-Qualified?

You contact a lender, provide a bit of financial information to them, and they tell you about how much you can afford to buy. That’s about it. It’s usually done over the phone, and your credit report is not needed at this point.

WARNING!  It’s NOT a promise of a loan. You are not guaranteed any particular interest rate. And you are not ready to purchase a home. What you have is an idea of what you may be able to buy. It’s a starting point, and a good way to start planning.

You’ll want to get a Pre-Approval Letter from your lender before you start shopping for a home.

One of the first steps in purchasing a home is getting either pre-approved or pre-qualified for a mortgage. Unless of course, you’re buying with all cash. 😁

It’s very easy to get confused between the two things. So, should you get Pre-Qualified or Pre-Approved for a mortgage loan?

Without getting into too much detail, we’ll give you just the essentials to understanding the difference, not the complete procedure for each.

Pre-Qualified

This is the simpler of the 2 processes. You contact a lender, provide a bit of financial information to them, and they tell you about how much you can afford to buy. That’s about it. It’s usually done over the phone, and your credit report is not needed at this point.

WARNING! 🔥 It’s NOT a promise of a loan. You are not guaranteed any particular interest rate. And you are not ready to purchase a home. What you have is an idea of what you may be able to buy. It’s a starting point, and a good way to start planning.

Check out Investopedia for a more in-depth explanation if you’re curious. https://www.investopedia.com/articles/basics/07/prequalified-approved.asp

Pre-Approved

This one is where the rubber meets the road. Paperwork, and plenty of it. You’ll fill out a mortgage application, provide documents, bank statements, get a copy of your credit report, etc.

It takes more time and there are more questions. It’s best to start with plenty of time before you plan to start looking for a home. That way you can deal with finding the papers you thought were in that one file cabinet, get your updated investment info, and try to fix any credit issues you may have.

Getting pre-approved is what you need to do before starting a home search. The person selling your dream home will want to make sure you really are qualified to buy. Most sellers aren’t willing to accept your offer with only a pre-qualification.

Again find out more here. https://www.investopedia.com/articles/basics/07/prequalified-approved.asp

Conclusion

Save yourself some heartache, heartbreak, and hair-tearing-out. Get pre-approved before shopping for homes.

Better yet, call me, Libby Guthrie at 925-628-2436 and I’ll answer your questions about getting started, and if you like, I’ll connect you with the right lender for your situation.

Just so you know, before my 25 years as a real estate agent and broker, I spent 15 years in mortgage banking. I know what I’m talking about and I love to share my expertise with you and your family.

Contact me today, share this article with a friend, and please, share it on your favorite social site. Thanks!

What is a Settlement Statement?

A settlement statement, also known as a HUD-1, is a document that lists all the costs associated with buying or selling a home.

It includes the purchase price, loan fees, taxes, insurance, and any other costs that need to be paid at closing.

This document will be given to the buyer and seller at the closing of the real estate transaction.

Really good agents will also send you a copy of your HUD-1 right before tax time to make sure you take advantage of any tax-deductible expenses from the purchase or sale of your home.

An Active Property

The property is actively for sale and on the market. The sellers may have received offers but have not accepted any yet.

When an offer is accepted the property will become Pending the completed sale.

If the contract falls through, typically the property will go Active again.

Active contingent in real estate is a status of a property listing indicating that it is under contract, but that the sale is contingent on certain conditions being met.

These conditions may include the sale of the buyer’s current home, the receipt of satisfactory inspection reports, or the approval of a loan.

If the conditions are not met, the listing may revert to active status.

A professional analysis used to estimate the current value of the home in the real estate market.

This is a necessary step in validating a home’s worth to you and your lender as you secure financing.

All parties to the transaction hope the appraisal will come in at the same amount as the listing price.

If the appraisal comes in low, your options include backing out of the sale, having your agent appeal the low value, paying the difference in value in cash, and renegotiating the offer.

What does As-is mean?

A contract or offer clause stating that the seller will not repair or correct any problems with the property. Also used in listings and marketing materials.

In other words, selling a house as-is means that a buyer will get the property in its exact, current condition without any additional repairs or upgrades.

What is a backup offer?

When an offer is accepted contingent on the fall through or voiding of an accepted first offer.

Sellers may accept backup offers if they are not confident about the offer they have accepted.

Consider it a safety net for the seller if the current offer does not close.

There are also benefits for buyers.

Although it might seem like a long shot, putting an offer on a house that’s under contract actually has a reasonable chance of scoring you a home. Deals fall through for all kinds of reasons, so if you’re in the backup position, you’ll lock things in and keep a home from going back on the market.

As usual, discuss putting in a backup offer with your Realtor.

Buyer’s agent: The agent who shows the buyer’s property, negotiates the contract, or offer, and works with the buyer to close the transaction.

You might have heard of buyer’s agents, selling agents, listing agents, and so on. You’re a buyer, so what is a buyer’s agent? True to their name, buyer’s agents help real estate buyers navigate the real estate market; they can also save you tons of time and money on the road to your new home.

Read more to learn how a real estate buyer’s agent can help you.

Close of escrow is the final step in the real estate transaction. It is when the buyer pays the seller for the property and all the documents are signed.

After close of escrow, the title deed is transferred to the new owner and the keys are given to the buyer.

The escrow company then sends the money to the lender and all the parties involved in the transaction.

Closing: The end of a transaction where documents are signed, and funds are dispersed.

A condominium (Condo) is a type of housing where several people own separate units in a larger building or complex.

Each unit is owned by an individual and the common areas, such as the lobby, pool, and gym, are shared by everyone who lives in the building.

Condominiums are often popular because they are often located in desirable areas and offer amenities that single–family homes don‘t.

What is the difference between a condo and a townhouse?

A condo is a type of housing where several people own separate units in a larger building or complex. Each unit is owned by an individual and the common areas, such as the lobby, pool, and gym, are shared by everyone who lives in the building.

A townhouse is similar to a condo, but it is usually smaller and more like a single–family home. Townhouses may have more amenities like a private backyard or a garage.

What is a conforming loan?

A conforming loan is one that is limited to $647,200 for most of the U.S., which means you may be able to avoid the stricter requirements of a jumbo loan.

Loan limits vary over time and by location so you should check with your lender or Realtor for the latest information.

Other loan types include jumbo loans, FHA, and VA.

In real estate, a contingent offer is an offer made on a property, which says that certain conditions must be met in order for the sale to be completed.

A counteroffer is a response to a buyer’s original offer on a house to make changes that better fit a seller’s goals.

A counteroffer is one step closer to an accepted offer!

A counteroffer shows that the seller is willing to work with the buyer, but on slightly different terms (usually a change in the price or contingencies).

Here’s how your real estate agent can help you navigate a counteroffer:

☑️ Buyers, we negotiate on your behalf and provide guidance on how to get your offer accepted.

☑️ Sellers, we help you stay clear of red flags and make sure you accept the right offer.

Negotiation is a BIG part of what we do as real estate pros! Connect with our team to learn more about how we provide 5-star representation for our clients.

What is a credit score?

A number ranging from 300-850 that’s based on an analysis of your credit history.

Your credit score helps lenders determine the likelihood you’ll repay future debts.

You’ll need a score of 620 or better, but you’ll get better financing rates with a score of 720 or higher.

There is much more to know about credit and credit scores, so feel free to ask if you have specific questions.

To learn more about credit scores and credit reports, click here.

Days on market (DOM) means the number of days a home has been listed on the market.

The number of days the property has been on the market may reflect the desirability and/or pricing of the home.

If the home has been on the market too long, the property may be stale.

In real estate, what is a deed?

A deed is a document that shows who owns a piece of property. When someone buys a house, they get a deed that shows they are the owners. The deed has the names of the people who bought the house and is signed and notarized so it is legally valid.

This is not to be confused with a deed of trust. A deed conveys ownership; a deed of trust secures a loan.

What is a Deed of Trust?

A Deed of Trust is like a mortgage. It is an agreement between a borrower (you) and a lender (a bank or other financial institution).

The lender gives you money to buy a house or other property, and you agree to repay the loan with interest, in regular payments.

The Deed of Trust also includes a clause that says if you don’t make the payments, the lender can take the property back.

What is a Disclosure Statement 🤔

Also known as a “Seller’s Disclosure,” this is a legal document that outlines any known flaws that a home seller is aware of that could negatively impact the home’s value 🏡

💡 TIP: Buyers should scrutinize this document closely with their real estate agent to fully understand the condition of a home.

Our best advice? When it comes to buying a home, make sure you get an inspection to confirm what has been disclosed is accurate and discuss any potential deal breakers with your agent.

Contact our team for a ✨ free consultation ✨ to learn more about what you must legally disclose if selling and how to ensure you don’t miss any important information if you’re buying!

What is a down payment?

The sum in cash that you can afford to pay at the time of purchase of a home or property.

A conventional loan down payment is usually 20% of the sales price, but other types of financing require as little as 3.5% to 15%. Some 0% down programs are also available.

A mortgage lender can tell you what types of loans you qualify for.

The representation of opposing principals (buyers & sellers) at the same time.

That is, one real estate agent represents both the buyer and the seller in one transaction (sale of a home).

What is Due Diligence?

How to prevent #buyersremorse 👇

When buying a home, it’s extremely important to do your “due diligence.” During this period, you’ll look into the condition of your chosen property and compare it to other homes like it to make sure it’s really a good fit and value.

When a homebuyer investigates facts about the physical and financial condition of the property and its area before they make an offer and after their contract is accepted.

Due diligence is reasonable steps taken by a person in order to satisfy a legal requirement, especially in buying or selling real estate.

As your agent, we’ll guide you through this process by pointing out and addressing any of the home’s red flags so you feel completely confident about your purchase.

What is Earnest Money? 🤔

A deposit made to a seller that represents a buyer’s good faith to buy a home. It’s typically around 1% – 5% of the sale price.

Earnest money is a deposit from the buyer to the seller, made in good faith to show dedication to purchasing the property 🏡

IMPORTANT FACTS 👇

💰 The amount varies by market
💰 Goes towards the purchase of your home
💰 Protects the seller if a buyer backs out
💰 A buyer may get this money back – due to failed inspections or contingencies

💡 TIP: In a seller’s market, you may consider making your earnest money non-refundable.

Our best advice? When it comes to buying in a low inventory, competitive market, it’s essential to partner with a Buyer’s Agent who understands how to make your offer stand out to sellers 🥊

What is an easement? 🔎🏡

A right to cross or otherwise use someone else’s land for a specified purpose.

The term often crops up after buyers have made an offer on a home that’s been accepted, at which point a title search brings up the easement—which is essentially the legal right for someone else to use the property, or part of the property for a specific purpose.

Say what? You bend over backward to buy a home and now you have to share?! Don’t worry, in most cases, it’s not as bad as it sounds.

Types of Easements:

📝 Right of way: This is where a neighbor may need to pass through the property via a driveway to access the main road, a neighborhood playground, or a community feature (like a lake).

📝 Utility maintenance: This easement is typically granted to utility companies to run power and cable lines on a property.

📝 HOAs/condos: If you live in a condo or home managed by a homeowners association, odds are these institutions own much of the property—while residents have rights to pass through.

What is an escalation clause?

An escalation clause is a clause in a real estate contract that allows the purchase price of a property to increase if a certain condition is met.

For example, if the buyer and seller agree to an escalation clause and the market value of the property increases, the buyer will have to pay more for the property than originally agreed upon.

This clause is typically used when two buyers are competing to purchase the same property.

What is an expired listing?

A real estate listing that has expired and is no longer active, usually because it didn’t sell in the amount of time agreed upon by the listing agent and the owner of the home.

Other reasons for a listing to expire are the asking price was not met, or there were other issues with the property.

If you see an Expired listing, the owner may still be interested in selling. Ask your agent about it.

What is a final walkthrough?

The last inspection of the property before signing the closing documents.

A final walkthrough in real estate is when a buyer goes through the property one last time before the closing.

The buyer makes sure that all the items in the contract are in the same condition they were in when the buyer agreed to purchase the property.

This includes checking for any damage, making sure all appliances are working, and ensuring that all repairs agreed upon by the seller have been done.

A home inspector examines your home for integrity – such as the HVAC system, electrical, plumbing, attic, flooring, foundation, etc.

What is a Homeowners Association (HOA)?

A private organization that is often formed by a real estate developer to manage homes and lots in a residential subdivision.

A Homeowners Association (HOA) is an organization made up of homeowners who live in a specific neighborhood or development.

The HOA is responsible for managing and maintaining the common areas of the neighborhood, such as parks and playgrounds.

They may also have rules in place that all homeowners must follow, such as restrictions on landscaping or noise levels.

If you know where you want to live, have a steady and secure income, and are ready for the responsibilities of homeownership, then it might be time to invest in a home.

Read “5 Questions to Ask Before Purchasing Your First Home” to learn more about determining if now is the right time to buy for you.

What are real estate inspections?

Real estate inspections are when a professional inspector looks at a property to make sure it is in good condition.

They will look for any potential problems that could affect the safety or value of the property.

They will also check things like the roof, plumbing, and electrical systems to make sure they are in good working order.

An inspection can help protect buyers from buying a property with hidden problems.

There are a number of inspection types including home inspection, pest inspection, roof inspection, and more.

Your Realtor will help you decide which inspections are appropriate for your situation.

What is a Jumbo Loan?

Conforming loan limits are $647,200 for most of the U.S., so anything above this would be a jumbo loan.

Jumbo loan requirements are stricter and there are more requirements you will need to satisfy.

Find out more about jumbo loans here.

The interest rate on a mortgage loan you pay to borrow that money when buying a home.

The lower the rate, the better.

Mortgage rates vary daily, so you don’t have any particular rate until the lender “locks in the loan” securing that rate for your home purchase.

The rate you qualify for is based on your personal financial situation and the type of loan you are applying for.

What are Natural Hazards Disclosure Reports?

Natural hazards disclosure reports are reports that tell potential buyers about any natural hazards near a property.

These hazards can include things like flooding, earthquakes, and wildfires.

The report will also include information about potential risks associated with these hazards and what the buyer can do to protect their property.

The report is usually provided by the seller before the sale is finalized.

What is an offer to purchase?

Typically just an “offer”, is when a buyer proposes certain terms and presents these terms to the seller.

When you make an offer on a house, you and your agent will discuss the terms of your offer and submit the offer to the home seller’s agent.

Your offer may be accepted, or rejected, or the seller may submit a counteroffer.

What is a Pre-Approval Letter?

It is a letter from a lender indicating you qualify for a mortgage of a specific amount.

Getting Pre-Approved

You’ll fill out a mortgage application, provide documents, and bank statements, get a copy of your credit report, etc.

Getting pre-approved is what you need to do before starting a home search. The person selling your dream home will want to make sure you really are qualified to buy. Most sellers aren’t willing to accept your offer with only a pre-qualification.

What is getting Pre-Qualified?

You contact a lender, provide a bit of financial information to them, and they tell you about how much you can afford to buy. That’s about it. It’s usually done over the phone, and your credit report is not needed at this point.

WARNING!  It’s NOT a promise of a loan. You are not guaranteed any particular interest rate. And you are not ready to purchase a home. What you have is an idea of what you may be able to buy. It’s a starting point, and a good way to start planning.

You’ll want to get a Pre-Approval Letter from your lender before you start shopping for a home.

One of the first steps in purchasing a home is getting either pre-approved or pre-qualified for a mortgage. Unless of course, you’re buying with all cash. 😁

It’s very easy to get confused between the two things. So, should you get Pre-Qualified or Pre-Approved for a mortgage loan?

Without getting into too much detail, we’ll give you just the essentials to understanding the difference, not the complete procedure for each.

Pre-Qualified

This is the simpler of the 2 processes. You contact a lender, provide a bit of financial information to them, and they tell you about how much you can afford to buy. That’s about it. It’s usually done over the phone, and your credit report is not needed at this point.

WARNING! 🔥 It’s NOT a promise of a loan. You are not guaranteed any particular interest rate. And you are not ready to purchase a home. What you have is an idea of what you may be able to buy. It’s a starting point, and a good way to start planning.

Check out Investopedia for a more in-depth explanation if you’re curious. https://www.investopedia.com/articles/basics/07/prequalified-approved.asp

Pre-Approved

This one is where the rubber meets the road. Paperwork, and plenty of it. You’ll fill out a mortgage application, provide documents, bank statements, get a copy of your credit report, etc.

It takes more time and there are more questions. It’s best to start with plenty of time before you plan to start looking for a home. That way you can deal with finding the papers you thought were in that one file cabinet, get your updated investment info, and try to fix any credit issues you may have.

Getting pre-approved is what you need to do before starting a home search. The person selling your dream home will want to make sure you really are qualified to buy. Most sellers aren’t willing to accept your offer with only a pre-qualification.

Again find out more here. https://www.investopedia.com/articles/basics/07/prequalified-approved.asp

Conclusion

Save yourself some heartache, heartbreak, and hair-tearing-out. Get pre-approved before shopping for homes.

Better yet, call me, Libby Guthrie at 925-628-2436 and I’ll answer your questions about getting started, and if you like, I’ll connect you with the right lender for your situation.

Just so you know, before my 25 years as a real estate agent and broker, I spent 15 years in mortgage banking. I know what I’m talking about and I love to share my expertise with you and your family.

Contact me today, share this article with a friend, and please, share it on your favorite social site. Thanks!

What is a Purchase and Sale Agreement?

Often just a “purchase agreement”, it is the written contract between the buyer and seller that outlines the terms of the sale.

 The completion and signing of a purchase agreement effectively places both the buyer and seller (as well as the property in question) “under contract.”

Does a real estate purchase agreement need to be notarized?

No, a real estate purchase agreement does not require notarization to be valid as it is not filed with county records.

Buying a home is one of the most important purchases you’ll ever make. We’re here to help you understand the home-buying process so you know what to expect. Today, we’re talking about what you need to do before you even begin.

What can I afford?

Figuring out what you can afford will determine the course of your home-buying process. This all depends on a few different factors including how much you make a year, how much you pay towards your debt every month, and how much of a down payment you expect to make.

Other things to consider are your debt-to-income ratio, property tax, loan term and interest rate, home insurance, and possibly monthly Home Owners Association (HOA) dues. All of this can add up!

Zillow has a good home affordability calculator that can get you started.

What do I want?

Make a list of your wants and work from there. Maybe you have young children and want a friendly neighborhood with kids that play on the street. Perhaps you are older and enjoying retirement and want to walk out to the golf course.

Ask yourself what’s important to you and the way you live and work. Do you want good schools? Nice parks? Lots of shopping with great restaurants? Questions like these will help you narrow down what you’re looking for.

How’s my credit?

Unless you’re going to be buying your home for cash, you are going to need to finance it. It’s important to pick the right lender, but even before all that, you need to review your credit situation. After all, your lender will look at your credit and so should you!

You can start the process on your own by getting a copy of your credit report. There are a lot of different ways to do this. Credit Karma is a popular free website that gives you an updated credit report every month. This is a great way to keep track of precisely what is going on with your credit.

Once you have the credit report, take a good look at it. Make sure that everything is correct and up to date. If you notice anything wrong, work to correct those immediately. If your credit isn’t great, there are ways to improve it.

Remember: the better your credit, the better your mortgage rates will be. A reasonable mortgage rate can save you a lot of money in the long run.

Need more help? Give me a call! I’m an expert on credit and mortgage information and may be able to help you better understand your situation.

An individual who provides services in buying and selling homes.

Real estate professionals are there to help you through the confusing paperwork, find your dream home, negotiate any of the details that come up, and so you know exactly what’s going on in the housing market.

There are several types of real estate professionals including Realtors^®, real estate agents, and real estate consultants.

Here are 6 questions and answers about looking for your first home to buy.

What should I do when I see a house online that I like?

Call the agent you are working with to find your home. It’s best that you work with one real estate agent throughout your search because that person learns what you like and dislike and will invest a lot of time vetting properties for you. That person also represents your best interests only. When you call the agent advertising the home, you are dealing with the seller’s agent, so, while they can assist you, they are also trying to get the best price for the seller.

Can you show me a house if it’s not your listing?

Yes, I can show you any house listed in our MLS system. As mentioned above, working with me as your agent ensures that your interests are protected.

How do we write an offer?

When you find the property you want to make an offer on, I will run a Comparative Market Analysis (CMA) to help you determine a fair offer amount. I will also guide you through the additional terms of the contract, such as the escrow amount, closing date, and any additional terms you want to be added to the offer. I will write the offer on a contract form and submit it to the seller’s agent.

What if I want to back out of a contract?

You always have the right to back out of the purchase, but you may lose your escrow deposit. If the contract is contingent on a property inspection, you usually have the right to cancel for any reason during the inspection period. Once the inspection period has passed, you cannot back out and keep your deposit unless the seller agrees, or an additional term has not been met.

That said, the ability to back out of a contract will depend on the details of the offer and the specifics of the contract. We will discuss these details before submitting an offer.

What happens if there are other offers on the house I love?

If a seller receives multiple offers on their home, usually their agent will inform the buyer’s agent that multiple offers have been received and the buyers have another opportunity to alter their original offer to present their “highest and best” offer.

Keep in mind that many factors may influence the seller in addition to the offer price, such as the down payment amount, closing date, and inspection terms.

What happens when my offer gets accepted?

Once both parties have agreed on all terms and signed the contract, your escrow deposit must be made and you should schedule the home inspection. Your lender will receive a copy of the contract and will begin processing your mortgage application.

Your agent will further discuss the full process with you at that time.

What are seller concessions?

They are incentives to motivate buyers to purchase a home.

Seller concessions, also known as seller contributions or seller-paid closing costs, refer to financial incentives that a home seller may offer to a homebuyer to help them cover some of the expenses associated with buying a home.

These concessions are typically negotiated as part of the sales contract and can take a variety of forms, such as paying for some or all of the buyer’s closing costs, providing a credit toward the buyer’s down payment, or offering to pay for repairs or improvements to the property.

What is a Seller Disclosure?

A Seller Disclosure or Disclosures provide Information about the property about significant renovations, water damage, pest damage, etc.

The required disclosures vary by state, so be sure to talk about this with your agent.

What is a Settlement Statement?

A settlement statement, also known as a HUD-1, is a document that lists all the costs associated with buying or selling a home.

It includes the purchase price, loan fees, taxes, insurance, and any other costs that need to be paid at closing.

This document will be given to the buyer and seller at the closing of the real estate transaction.

Really good agents will also send you a copy of your HUD-1 right before tax time to make sure you take advantage of any tax-deductible expenses from the purchase or sale of your home.

What is the Title of a house or property?

Title (aka Title Deed) refers to the legal document that shows the history of ownership and transfers of property – proving you are the current and rightful owner of the property.

A title, also known as a title deed, is a document that shows who owns a piece of property.

When someone buys a house, they get a title deed that shows they are the owners.

The title deed has the names of the people who bought the house and is signed and notarized so it is legally valid.

What is Title Insurance? 🤔

Most lenders require title insurance, which protects them from claims such as liens, easements, and flawed records that can come up even years after a transaction.

💡 TIP: Buyers can also purchase their own “owner’s title insurance,” a one-time fee that protects them from any financial burdens, such as back taxes.

Although you may cringe at another cost, this is an important one that protects your ownership rights!

Our best advice? Contact our team for a ✨ free consultation ✨ to ensure you don’t miss any critical legal requirements if you’re buying or selling!

A townhouse is a type of housing where several people own separate units in a larger building or complex. Each unit is owned by an individual and the common areas, such as the lobby, pool, and gym, are shared by everyone who lives in the building.

Townhouses are often popular because they are usually smaller than single–family homes and offer amenities like a pool or gym that single–family homes don‘t.

What is the difference between a condo and a townhouse?

A condo is a type of housing where several people own separate units in a larger building or complex. Each unit is owned by an individual and the common areas, such as the lobby, pool, and gym, are shared by everyone who lives in the building.

A townhouse is similar to a condo, but it is usually smaller and more like a single–family home. Townhouses may have more amenities like a private backyard or a garage.

An Active Property

The property is actively for sale and on the market. The sellers may have received offers but have not accepted any yet.

When an offer is accepted the property will become Pending the completed sale.

If the contract falls through, typically the property will go Active again.

A professional analysis used to estimate the current value of the home in the real estate market.

This is a necessary step in validating a home’s worth to you and your lender as you secure financing.

All parties to the transaction hope the appraisal will come in at the same amount as the listing price.

If the appraisal comes in low, your options include backing out of the sale, having your agent appeal the low value, paying the difference in value in cash, and renegotiating the offer.

What does As-is mean?

A contract or offer clause stating that the seller will not repair or correct any problems with the property. Also used in listings and marketing materials.

In other words, selling a house as-is means that a buyer will get the property in its exact, current condition without any additional repairs or upgrades.

What is a backup offer?

When an offer is accepted contingent on the fall through or voiding of an accepted first offer.

Sellers may accept backup offers if they are not confident about the offer they have accepted.

Consider it a safety net for the seller if the current offer does not close.

There are also benefits for buyers.

Although it might seem like a long shot, putting an offer on a house that’s under contract actually has a reasonable chance of scoring you a home. Deals fall through for all kinds of reasons, so if you’re in the backup position, you’ll lock things in and keep a home from going back on the market.

As usual, discuss putting in a backup offer with your Realtor.

Close of escrow is the final step in the real estate transaction. It is when the buyer pays the seller for the property and all the documents are signed.

After close of escrow, the title deed is transferred to the new owner and the keys are given to the buyer.

The escrow company then sends the money to the lender and all the parties involved in the transaction.