Know Your Real Estate Terms??
Ok, so you've never bought a home before, or perhaps you're currently renting and are looking to buy your first home. Chances are you need to familiarize yourself with a few "ins and outs" of the real estate world of terms. I know that when my husband and I bought our first home we were clueless! Wait, there's an inspection AND an appraisal? Why aren't they the same thing? Why do we need an escrow when we've been pre-approved, doesn't that mean we are a guaranteed thing? Since our first go around we've now successfully sold a home and bought a new and improved forever home. With a few more experiences under the belt I think it's time to let the rest of the unknowing masses in on a few things I learned in the process. Understanding what you are doing when you jump into home buying and/or selling is pivotal....you have to know the terms!
Here are a few expressions that you will inevitably come across in your real estate adventure: agents (buying AND listing, is there a difference? Um, yes.), pre-approval, listings, inspection, appraisal, offers, closing costs, title insurance, and escrow. Now there are hundreds of other "things" you'll come across, but these are the biggies. So let's break them down in an easier to understand version of "Real Estate for Novices".
#agentscansavetheday - Agents Typically, there are two agents involved when you buy a home; the “buyer’s agent,” who represents you, and the “listing agent,” who represents the home seller.
#youreapprovedisthegoldenterm - Pre-Approval Before you apply for a mortgage or even start looking for a home, you should get a pre-approval letter from your bank, which is an estimate of how much they’ll lend you. This letter will help determine what you can afford, and promises home sellers that you will be able to get a loan when needed.
#listingsfordays - Listings A newbie will want to see "homes" but a real estate agents will refer to homes for sale as “listings.” A “listing” on a website shows information about the home, like the price and number of bedrooms, etc.
#inspectionisnotanappraisal - Inspection & Appraisal After you’ve made an offer on a home, you're going to need to schedule an inspection, the inspector will go through everything with a fine tooth comb, and review things like the plumbing, electrical, foundation, walls, heating, and appliances. On the flip side, when you actually apply for a mortgage, your lender will require an appraisal of the home you want to buy. 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, so you want a HIGH appraisal!
#makemeanofferandgetmeacontract - Offers Once you find your dream home, you’ll make an offer on the property with the help of an agent (hopefully a Team Gatlin one!). When submitting an offer, it’s a good idea to add a personal touch by including a cover letter that explains why you want to buy the home, always a good idea to make a good impression!
#closingcostsarebasicallyheadaches - Closing Costs Word of warning: be prepared to pay a lot of fees when you purchase a home! Normally, closing costs will amount to 2-5% of the purchase price of the home, and that doesn’t include the down payment. Common fees include excise tax, loan-processing costs and title insurance.
#escrowdefintionforrookies - Escrow In the world of real estate, an escrow account is a secure holding area where important items are kept safe by an escrow company until the deal is closed and the house officially changes hands. Escrow is also a contractual arrangement in which a third party—usually the escrow officer or company—retains money and documents until the deal is done and escrow is closed.
Granted, the list of real-life terms goes on and on, but this is a good start! As always, the first and most important thing to do is find yourself a dedicated agent! That we can always help with, give Team Gatlin a call today and let them walk you through the jargon of real estate!
Leading Edge Real Estate Group
1423 Huntsville Highway Fayetteville, TN 37334 (931) 433-4070
Susan Gatlin - Broker/Agent and Team Gatlin Leader (256) 424-5378
Charlie Sullivan - Agent with Team Gatlin (931) 308-5309
Vivian Fisher - Agent with Team Gatlin (931) 224-1928