Thinking about buying a home? If so, you’ll probably eventually think about selling a home as well (that’s typically how it goes). Today I wanted to bring you a short list of common real estate vocabulary that will be beneficial to you as we start your home buying journey!
Active Contingent: a seller has accepted a buyer’s offer to purchase a home, but there are still contingencies and terms to be met before the contract is fully executed and the purchase is completed
Adjustable Rate Mortgage (ARM): the interest rate is tied to a financial index, making monthly mortgage payments go up and down over time
Annual Percentage Rate: the percent of interest charged on your home loan
Appraisal: we talked about this here!
Appreciation: the increase in value of a property brought on by market changes over time, as opposed to owner-driven improvements
Assessed Value: the value assessed to your property for tax purposes
Balloon Mortgage: a long-term mortgage that starts small, and has a large payment due at maturity
Closing Costs: buyer and seller associated costs other than the purchase/sale price of the home
Commission: a percentage of sales price of the home that is paid to both listing agent and selling agent
Comparables: the “comps” or the set of homes that have the most similarity to the potential home for sale/home to purchase in question
Contingencies: conditions that must be met in order to fulfill the purchase contract, both sides of the transaction will likely have contingencies that must be met
Counteroffer: the seller’s response to a buyer’s offer to purchase
Deed: the legal document that transfers ownership of a home from the seller to the buyer
DTI (Debt to Income) Ratio: the ratio a lender looks at to see if a borrower’s income, assets and debts support the home loan to purchase
Down Payment: a percent of money put town toward the purchase of your home
Earnest Money: commonly thought of as “good faith” money, money that accompanies an offer to purchase a home, goes toward your down payment at closing
Equity: the difference in the market value of the home versus what is owed on the home
Escrow: two meanings, one is similar to the above mentioned earnest money, and the second is the time period from when the contract is ratified to fully executed and the home closes
HOA (Home Owners Association) fee: in certain neighborhoods or communities, a monthly fee for common areas and amenities (common in condos and townhomes)
Home Inspection: we talked about this here!
Market Value: the price a buyer is willing to pay for a home
Renovation: we talked about this here!
This is just a short list, if you’re interested in learning more about real estate, terminology, or buying and selling; please let me know! I’m ready to help!
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