If you are buying a home for the first time the experience can be quite overwhelming. There are terms and words that you may not have heard before, or might just not quite be sure what it all means in the context of real estate. Here is some of the most common real estate vocabulary you will come across when buying a home:
Once you find a house you would like to buy you will make an offer. Your agent will send the offer to the seller’s agent. The Seller could accept the offer, decline the offer, or make you a counter-offer.
Purchase & Sale Agreement
Once your offer has been accepted or you accept a counter-offer you will sign the purchase and sale agreement. You are now what is called under contract and enter the contingency period.
Earnest Money is a deposit made to the seller to show the buyer’s good faith in the transaction. The Earnest Money is typically held in a trust or escrow account.
The offer on a home has been accepted, purchase and sale agreement signed, but finalizing the sale is now dependent (contigent) on certain criteria. The criteria are typically appraisal, home inspection and lender/mortgage approval.
An appraisal is a property and/or land valuation that is completed by an appraiser and it determines the market value of the property. This process can take several weeks.
A qualified home inspector of your choice will examine the condition of the property and create an inspection report. You and your real estate agent can be present for the inspection.
The lender requires you to get home owners insurance before closing. You might want to gather 3 or more quotes before choosing an insurance provider. One you chose an insurance, provide the information to your lender.
The title is a bundle of rights in a piece of property. The Title Company will provide a preliminary title report for your review before you accept the property.
Closing Cost refer to fees that are paid at the end of the transaction, either by the seller, the buyer or both. They include insurance, lender expenses, home inspection fee, recording fee and taxes. In San Juan County there is a 1% Land Bank tax and ½% affordable housing tax.
Closing is the final step in a real estate transaction. The closing date is set during the negotiation phase, and is usually several weeks after the offer is formally accepted. This is when you will be signing for the home. The process of signing takes about an hour, give or take.
Once the real estate transaction is closed the documents will be put into the official records at the County Recorder. A lot of times this will be on the same day as the closing, unless the closing took place later in the day. In that case the recording will take place the next business day. You will now receive the keys to your new house!