Buying a home is an exciting milestone. The process can be overwhelming in itself, but sometimes you can get lost with the real estate terminologies. Don’t get caught saying, “What does it mean?” during a home purchase transaction. Here are words home buyers should know.
OFFER: Also known as a sales contract. It is a proposal made to an owner of a property or seller by a potential buyer to purchase the property under stated terms.
ESCROW: The holding of documents and money by a neutral third party prior to closing.
CLOSING COSTS: The miscellaneous fees at the end of the transaction that buyers and sellers normally pay during the transfer of ownership of the property. Common closing costs include escrow fees, title insurance fees, document recording fees, and real estate commissions.
HOME INSPECTION: An objective examination of the physical structure and systems of a property by a qualified home inspector. The home buyer traditionally pays for the cost of a home inspection.
ANNUAL PERCENTAGE RATE (APR): The annual cost of a mortgage, including interest, loan fees, and other costs, stated as a percentage of the loan amount.
EARNEST MONEY: The deposit given by a buyer to a seller (held in escrow) to show that the buyer is serious about purchasing the home. Earnest money usually is generally refundable to homebuyers in the event a contingency of the sales contract cannot be met.
TITLE: A legal concept relating to ownership of property. Indicates “fee’’ position of lawful ownership and right to property. “Bundle of Rights” possessed by an owner. It is a combination of all elements constituting proof of ownership.
MORTGAGE: A legal document that pledges a property to the lender as security for payment of a debt.
MORTGAGE INSURANCE: Money paid to insure the mortgage when the down payment is less than 20 percent. This is only charged on certain types of loans, such as FHA loans.
SIGNING: Schedule closing as soon as you receive approval from your lender. This is when you will be signing for the home.
RECORDING: The process of placing a document on file with a designated public official for public notice. This is the day after signing. The ownership of the property will then be transferred to the buyer. This is also the day you will receive your keys!
If you have any questions or if you are seeking an experienced agent to support you in your purchase, feel free to reach out to the team at Broadpoint Properties.