Home Buying Terms | North Hills Raleigh Real Estate Agent
Are you considering buying a home soon? If so, it might be time to familiarize yourself with a few real estate terms that will help you on your home buying journey. Especially if you're a first time buyer, the terms below can be a bit confusing when you're not sure what they mean. The terms and definitions below are some that you will come in contact with during the home buying process.
Real Estate Terms (courtesy of realestate.com) | North Hills Raleigh Real Estate Agent
Down Payment - The down payment is the percentage of the purchase price that the buyer pays in cash. Depending upon lender, this percentage generally ranges from 3 to 20 percent.
Disclosures - Information about the home that a seller must provide, by law, to a buyer. The number and types of disclosures provided to the buyer depend on region. In California, for instance, the lengthy Transfer Disclosure Statement (TDS) provides the buyer with information from the seller regarding the condition of the property and any repairs or modifications performed.
Deed - The deed is the legal document that provides proof of the transfer of ownership as real property.
Counter Offer - A form that requests the addition or elimination of parts of the original purchase agreement.
Contingency - A section of the purchase agreement that specifies certain conditions that must be met in order for the sale to proceed. Common contingencies in purchase agreements include those for inspections and loan approval.
Comps - Properties that are comparable to the property being analyzed.
CMA (Comparative Market Analysis) - A determination of a home’s market value for the purpose of determining a fair asking price. Real estate brokers compile the CMA by comparing the subject house to those that have recently sold within close proximity. Many times a buyer will request a CMA to ensure he/she is not overpaying for a house. Although the CMA is similar to an appraisal, it will not replace a lender-required appraisal.
Closing Costs - All the additional expenses incurred in financing and purchasing the home. These expenses typically include attorney’s fees, a loan origination fee, escrow impounds, and other miscellaneous charges. Typically, closing costs run 6 percent of the sale price of the house.
Closing - This is where the term “closing table” comes into play, and the process is also known as “settlement.” You, your agent or attorney and the escrow agent, along with the seller and her agent or attorney, sit at a table and finalize the purchase. Sometimes a lender’s representative is present as well.
Certificate of Title - The title certificate is a document that ensures the property being conveyed is legally owned by the seller(s) and that no other party owns any part of it or has any claims, such as liens, against it.
CC&Rs - Covenants, conditions and restrictions. This is where you find out that, no, you can’t paint your front door blue. These documents set out the rules that homeowners must obey.
Appraisal - In a real estate transaction, the appraisal is a determination of the value of a house. The evaluation is required by the lender and prepared by the lender’s choice of an objective and impartial professional appraiser. The appraisal may not be the same amount as whatever selling price a real estate agent may have calculated. If the appraisal is lower, the buyer and seller have several options, including lowering the asking price.
Adjustable Rate Mortgage (ARM) - A mortgage with a fluctuating interest rate. ARMs tend to have lower initial interest rates for a set period of time, and then begin adjusting according to an index. They may adjust monthly, quarterly, annually or longer.
Addendum - A form describing a change or addition to the purchase agreement. Anything added in addendum should be looked at very carefully. Addendums are used for many changes, such as the extension of the closing date.
If you are considering buying a home, contact our North Hills Raleigh real estate agent, today. We are here to help you search for the home of your dreams! For more information on buying a home or to ask our real estate agents any questions, feel free to contact us!