Katie Bauer
512 455 5555
katie.bauer@thebauergroup.com
KW
The ABCs of Homebuying
EVERYTHING YOU NEED TO KNOW
ABOUT HOMEBUYING
— IN ALPHABETICAL ORDER.
An addendum is a document added to the sale contract for a home.
Some states mandate addenda regarding things like septic systems, water wells,
and Homeowners Association fees. An addendum
is different from an amendment.
adjustable rate mortgage (ARM)
Unlike with a fixed-rate loan, the interest rate for an adjustable rate
mortgage (ARM) fluctuates over time. ARMs offer a lower initial rate than
fixed-rate loans, which is why they're often called a "teaser rate".
That low initial rate usually lasts for 5, 7, or 10 years. After that, the new
rate is tied to changes in a common index rate such as Cost of Funds Index
(COFI) and the Constant Maturity Treasuries (CMT). ARMs are sometimes a good
choice for people who only plan to stay in a home for a few years. Talk to your
loan advisor to determine what type of mortgage is best for you.
An amendment modifies the terms of a contract the buyer and
seller have both already signed. (Don't confuse it with an addendum.) Amendments are usually the result
of inspections and surveys, and commonly cover things like price and term
changes. Your real estate agent might, for instance, create an amendment that
states the seller will give you a credit at closing to cover roof repairs.
Amortization refers to the concept of spreading out loan
payments over time. Your lender might share comparisons of 30-year amortization
and 20-year amortization with you so that you can see how different loan terms
might affect your payments and payoff. Mortgage amortization refers to how you
pay off your home loan. At first, more of your payment will be applied to
interest so you don't make much of a dent in the debt. But, over time, that
shifts and you start paying more of the loan principal (the amount of money you
borrowed).
The annual percentage rate (APR) is a broader measure of the
cost of borrowing money than interest rate. The APR reflects your interest
rate, discount points, mortgage broker fees, and other
charges that you pay to get the loan. For that reason, your APR is usually
higher than your interest rate. The Truth in Lending Act of 1968 requires
lenders to disclose a loan's APR to you before you finalize your loan.
An appraisal (aka property valuation ) is an assessment of the
value of a property.
appraisal shortage
An appraisal shortage results when a property is assessed for
less than the contract price. The shortage is the difference between the
contract price and the appraised value.
Sellers listing a home in as-is condition are broadcasting that
they will not fix any issues you discover with the home. A seller might sell a
house as-is because they can't afford to make the repairs or because they're in
a rush to move. That said, you can still get the home inspected. And, as-is
sellers must comply with state and federal disclosure standards, which require
them to tell you about risks such as lead-based paint and asbestos.
Assets are things that are worth money. Assets include cash,
cash equivalents (money market accounts, certificates of deposit, or anything
else you can withdraw as cash), and property. Your net worth is the combination
of your income and your assets.
In some states, attorneys handle real estate closings. In other
states, title companies do. The former is called an attorney state. We
currently do business in Texas, Colorado, and Georgia. Colorado and Texas
are escrow states. Georgia is an attorney state.
So in Georgia, a lawyer processes the title work.
A backup offer is an offer on a house that already has a sale
pending. In other words, the sellers have already accepted an offer, but it
hasn't been finalized. Sometimes home sales fall apart during due diligence
— often because of a contingency. So if you make a backup offer and the
original buyer doesn't get a loan or can't sell their current home, your offer
is ready and waiting.
In real estate, a bridge loan is a short-term loan that allows
you to buy a new home before you sell your old one. Between high interest rates
and large origination fees, bridge loans are expensive. If you get bridge loan,
you'll be making three payments: the mortgage for your old house, the mortgage
for your new house, and the bridge loan payment.
Our Buy before you sell service enables you to make a cash offer on a new home before you even sell your current home. This is the competitive offer upgrade for buyers who are both selling and buying.
A buyer's agent represents you, the buyer, and your best
interests. They guide you through the homebuying process, from house hunting to
closing.
When the supply of homes is greater than the demand for homes,
it is a buyer's market. In a buyer's market, the buyer has the upper hand.
Our Buy with cash service enables you to upgrade your offer to cash using our funds. This is the competitive offer upgrade for buyers who aren’t also selling a home.
Cash reserves are the liquid assets you'll have left over after
you make your down payment and cover closing costs. Liquid assets include your
cash savings and any funds that you could quickly convert into cash. Why does
this matter? Your lender wants to know that you have enough cash on hand to
make one or more mortgage payments. Lenders often consider cash reserves as
part of the pre-approval process.
You officially become a homeowner at closing. It's the final step of a real estate transaction, when the property title transfers from the seller to the buyer. In other words, the seller gets their money and you get your keys. The words closing and settlement are often used interchangeably — they mean the same thing.
The process of closing — transferring the title from the buyer or seller — is a legal transaction. Closings costs include everything from attorney fees to photocopying. States regulate most of the fees associated with closings, so prices don’t vary much. Your loan estimate will include an itemized list of your closing costs.
A closing credit or seller's concession is money the seller
gives to the buyer at closing. Closing credits lower the total amount of money
you'll need to buy a home.
A closing disclosure (CD) is a five-page document your mortgage
lender provides that summarizes your transaction and includes the final loan
terms, your estimated monthly payments, closing costs, and all transaction fees.
You'll review and sign your CD at closing.
Collateral is an asset or property that a lender uses as
security for a loan. If the borrower fails to pay back the loan, the lender can
seize the collateral and sell it to recover some or all of their losses. In the
case of a home loan, the home itself is the collateral.
Real estate agents earn commissions for helping you buy or sell
a home. The typical commission is 5% to 6% of the home's purchase price and is
split between the buyer's agent and the listing agent. Working with us does not change
your relationship with your agent or affect their commission.
Comparables (or comps) are recently sold homes that are similar
to the one you're buying or listing. They should be similar in size, condition,
location, and features. Real estate agents use comps to conduct a comparative
market analysis (CMA) to help you determine how much to pay for a home.
Appraisers use them to help lenders decide how much money to lend you.
Conforming loans are mortgages that meet the underwriting
guidelines set by Fannie Mae and Freddie Mac and satisfy the financing
criteria created by the Federal Housing Finance Agency (FHFA). The most
important of those criteria is loan limit. For 2021, the baseline conforming
loan limit for single-unit properties is $548,250. But there are some
exceptions to this limit, non-contiguous states and territories (Alaska,
Hawaii, Guam and the US Virginia Islands), as well as some counties in the
contiguous United States where the cost of living is very high (Hello,
Manhattan!). Loans that exceed the conforming loan limit are known as jumbo loans. If you want to see the conforming
loan limit in your area, check out the interactive map on
the FHFA's website.
Think of a contingency as an escape hatch in your real estate contract. So, for instance, if you make your home purchase contingent upon getting a loan, you can back out of the contract if your mortgage doesn't come through.
When you make an offer on a home, you sign a contract. Your
agent will write the contract for you and you'll sign it. Once the seller
accepts your offer, the home is "under contract".
A conventional loan (or conventional mortgage) is a loan that is
not backed by a government entity. Conventional loans are the most commonly
used non-government loan product for individuals borrowing under the jumbo loan threshold. There are
conforming and non-conforming conventional loans. Conforming loans meet the requirements
of Fannie Mae and Freddie Mac.
Conveyance is the legal transfer of property from one person to
another. In addition to the home itself, some sellers convey other property
(such as appliances, furniture, or window treatments) to the buyer when they
sell the home.
When a seller is not happy with the buyer's offer, they may make
a counteroffer. Sometimes the purchase price is the sticking point. Other times
the seller's counteroffer may hinge on removing contingencies or changing the closing
date.
Credit pull is just another term for a credit check or credit inquiry. A credit pull assess whether you pay your bills and debts on time. There are two types of credit pulls: soft and hard. Soft credit pulls typically involve a person or company checking your credit as part of a background check. Soft credit pulls do not affect your credit score. Lenders, banks, and other creditors perform hard credit pulls to make a lending decision.
Days on market (DOM) is the number of days a home has been
listed on the local multiple listing service (MLS).
Mortgage companies use your debt-to-income (DTI) ratio to judge
your ability to make your monthly mortgage payment and — ultimately — to pay
off your loan. They calculate it by adding up all of your monthly debt payments
and dividing that total by your gross monthly income (the amount of money you
earn before you take out taxes and any other deductions). Let's say your
monthly mortgage payment will be $2,100 and you have a $450 monthly car payment
and $220 monthly student loan payment. And let's suppose your gross monthly
income is $7,900. Your DTI ratio would be 35% ($2,770/$7,900).
A deed of trust is simply an agreement between the mortgage
lender and the homebuyer, stating that the lender will hold the legal title to the property until the buyer
pays off the mortgage.
A disbursement authorization or DA is a document that gives the
title company or title attorney instructions on how to pay the real estate
agents' commissions.
A down payment is a partial payment you make when you buy a
house. You cannot borrow money for your down payment. Down payments range in
size, typically from 3% to 20% of the purchase price of your home, depending on
what type of mortgage you're getting, what your other financial goals are, and
a few other factors.
Due diligence refers to a brief period of time after your offer
is accepted during which you can inspect and explore your new home before
finalizing the contract. Some states call this an option period or inspection period.
During the due diligence period, most buyers order a home inspection and a
title search, research the school district, and dig into the condo or Homeowners Association (HOA) rules (if
applicable). As a result of your due diligence, you may create a list of
demands and repairs you'll want to the seller to handle. During due diligence,
the seller may continue to negotiate and accept backup offers from other buyers.
Earnest money is a cash deposit that represents your good faith to buy a home. You'll sometimes hear it called an Earnest Money Deposit (or EMD). EMD is not a fee. EMD is applied as a credit to your down payment at closing.
In real estate, when people mention equity they are talking
about home equity. Your home equity is the difference between how much your
home is worth and how much you owe on your home mortgage.
Escrow is a third-party account that holds and then disburses
funds at closing when the home is officially transferred from seller to buyer.
For instance, your earnest money deposit (EMD) is held in
escrow until the title company or closing attorney applies the EMD to the
purchase price of the home at closing. If your home is "in escrow"
that simply means that it's under contract, but you haven't closed yet.
Some buyers use an escrow account to manage property taxes and
homeowners insurance premiums. If you use an escrow account, your monthly
mortgage payment is split three ways to cover principal, interest, and escrow
so you don't have to manage these payments separately.
In some states, title companies handle real estate closings. In other states, attorneys do. The
former is called an escrow state. Texas is an escrow states.
According to the US Department of Justice, "The Fair
Housing Act prohibits discrimination by direct providers of housing, such as
landlords and real estate companies as well as other entities, such as
municipalities, banks or other lending institutions and homeowners insurance
companies whose discriminatory practices make housing unavailable." The
Fair Housing Act is designed to protect people on the basis of:
The FHA is part of the US Department of Housing and Urban
Development. The FHA provides mortgage insurance on loans made by FHA-approved
lenders nationwide. Mortgage insurance protects lenders when borrowers default,
so FHA lenders offer favorable terms to borrowers who might not otherwise
qualify for a home loan.
The Federal National Mortgage Association (FNMA) is better known
by its nickname: Fannie Mae. The US Congress started Fannie Mae in 1938 to
provide access to affordable mortgage loans. But Fannie Mae does not lend money
directly to homebuyers. Instead, it purchase mortgages from lenders, keeping
money flowing in the American housing market. Conventional loans must meet Fannie Mae
guidelines.
Your lender orders the Final Appraisal, which is based on a property inspection and comparables. This appraisal prevents you from overpaying for a home and helps your lender determine how much money to lend you.
To learn more about how appraisals work at Homeward, read
this article and watch
this video.
The interest rate for a fixed-rate mortgage remains the same throughout the term of the loan. The interest rate for a fixed-rate mortgage is locked before the loan closes. (This is very different than an adjustable rate mortgage, which initially offers a lower interest rate that goes up over time.)
The Federal Emergency Management Association (FEMA) and the
National Flood Insurance Program classify every address as high-risk,
moderate-risk, or low-risk zone on a flood zone map. The insurance industry
uses these flood zone maps to determine what kind of flood insurance you're
required to have and how much you'll pay for it.
If you want to better understand flood zones and explore flood
zone maps, check out this helpful page from the National Flood
Insurance Program.
Most homebuyers who use our Buy before you sell service qualify
for Floor Price Certainty, our guarantee that we'll buy your old home if it
doesn't sell on the open market within six months. We base your Floor Price on
publicly available real estate data and current photos of your home. Your Floor
Price is typically 90% to 95% of your home’s market value. We also deduct the
standard 6% agent commission fees. It's like having a guaranteed buyer in
your back pocket, but 99% of our clients sell their homes on the market so they
never have to rely on Floor Price Certainty.
The Federal Home Loan Mortgage Corporation (FHLMC) is better
known by its nickname: Freddie Mac. Like Fannie Mae, Freddie Mac was created by
the US Congress and does not lend directly to borrowers. Instead, Freddie Mac
buys loans from approved lenders, enabling them to provide more loans to
borrowers, which keeps money flowing into the US housing market. After it buys
the mortgages, Freddie Mac bundles the mortgages it buys into securities and
sell those to investors. Conventional loans must meet Freddie Mac
guidelines.
See mortgage gift
See credit pull.
Hazard insurance simply refers to the coverage that homeowners insurance provides for certain
risks including theft, fire, and more.
Most home inspections are conducted by a certified home inspector, who specializes in evaluating a home as part of a sale. The home inspector will examine: heating and cooling systems, plumbing, electrical work, water, sewage, and more. The home inspector also looks for evidence of water, fire, and insect damage or anything else that could affect the value of the property. As the buyer, you'll choose your home inspector and pay for the inspection. Then you'll share the inspection report with your Customer Experience (CX) manager, who — along with your agent — will help you decide on next steps, including requesting repairs or closing credits to cover the cost of repairs.
A Homeowners Association (HOA) is a private organization of
resident members that creates and enforces rules for a neighborhood, building,
or development. While HOA members may share some maintenance responsibilities,
an HOA can also impose additional responsibilities and restrictions on
homeowners. Most HOAs require residents to pay a monthly fee. They may also
impose one-time assessment for larger expenses and initiatives like resurfacing
a parking lot. Before you buy an HOA-governed home, make sure you study the
HOA's rules and covenants and can abide by them.
Your lender will require you to prove that you have homeowners
insurance before closing on your new home. The lender will also require you to
keep your home insured for as long as you have the home loan.
Homeward Cash Offer
A Homeward Cash Offer is an offer that is made on your behalf when
you use Buy before you sell or Buy with cash services. First, we buy
the home you want with cash. Then you buy that home back from us. Because this
offer is cash, it eliminates all major contingencies: home sale, finance, and
appraisal. You will pay a small convenience fee to make a Homeward Cash Offer but
can offset some or all of that fee if you use Homeward Mortgage to finance your
home purchase.
When you make a Homeward Cash Offer, there are actually two
home purchases. First, we buy the home for you. This is the Homeward Purchase.
Then you buy back the home from us. This is the Customer Purchase.
A home warranty (aka residential service agreement) isn't really
a warranty. It's a contract between you (the homebuyer) and a company that
connects you with discounted repairs and replacements for things not covered by
homeowners insurance (the furnace, plumbing, maybe even major appliances).
However, many consumer advocates say they're not as comprehensive or convenient
as they sound. So while there's no reason to turn down a home warranty if
the seller offers you one, you should do plenty of research before buying one
yourself.
Your lender must provide you with an initial closing disclosure
at least three business days before your closing. They do this so you have
enough time to compare the final terms and costs with the loan estimate they provided when you
started working with them. If you find a discrepancy, notify your Loan Advisor.
The interest rate is the cost you will pay each year to borrow
money to finance your home purchase. Your interest rate is expressed as a
percentage rate. Do not confuse interest rate with Annual percentage Rate (APR) .
Interested in learning about Homeward Mortgage's interest rates?
Use this calculator to estimate your
potential monthly mortgage payments and rate options.
A jumbo loan is bigger than a conforming loan. Homes that exceed the local
conforming loan limit require a jumbo loan. If you want to see the conforming
loan limit in your area, check out the interactive map on
FHFA's website.
Your agent will give you the keys to your new home after we
close on the Homeward Purchase. Then you can move into your new home and rent it from us until you finalize your
mortgage and buy it back during the Customer Purchase.
A leaseback(aka sale leaseback) allows you to temporarily rent your new home to the sellers. The most common reason sellers request a leaseback is because they haven't found a new home to move into yet.
In the context of real estate, your lender is the financial
institution that gives you a mortgage or loan to buy a home.
A lien is a creditor's claim against property that they've
loaned you money to buy. If you don't pay the creditor, they can repossess the
property. A mortgage is a type of lien, but as long as you make your mortgage
payment, the lien is just a formality.
To list a property is to officially put it on the market by
including it in the Multiple Listing Service (MLS).
A listing agent (aka seller's agent) is the real estate broker
who represents the seller in a real estate transaction.
A listing agreement is a contract you sign with a real estate
broker, hiring them to act as your agent and represent your best interests
while selling your home.
The Consumer Financial Protection Bureau (CFPB) created the Loan
Estimate (and the Closing Disclosure) to make it easier for you
to shop around and compare mortgage services. Need help reviewing your loan
estimate? Check out the CFPB's Loan Estimate Explainer tool.
Loan-to-value (LTV) ratio is a risk assessment used in the underwriting process. Lenders calculate
your LTV ratio by dividing the loan amount by the lesser of the sales price or
the appraised property value. The higher the LTV, the riskier the loan. Some
lenders require borrowers with an LTV ratio above a certain number to
purchase private mortgage insurance (PMI). If you're
able, you can lower your LTV ratio by putting more money down or restructuring
your loan.
A lock-in period or rate lock is a specific period of time in
which the interest rate a lender quoted you is guaranteed or "locked
in". Rate locks protect you from interest rate fluctuations while you are
finalizing your loan, but they have expiration dates.
low appraisal deposit
Sometimes, a Preliminary Appraisal comes in below the
home's purchase price. If you are willing and able to absorb an appraisal shortage, you may decide to buy the
home anyway. In order to do this, you must deposit additional earnest money
equal to the amount of the appraisal shortage (the difference between the
purchase price and the Preliminary Appraisal value). This low appraisal deposit
becomes part of your earnest money deposit (EMD) and will be
applied to the purchase of the home. You must make the low appraisal deposit
within three days of receiving the Preliminary Appraisal. If the Preliminary
Appraisal Value is equal to or exceeds the appraisal threshold, you don’t have
to make a low appraisal deposit
A mortgage is a type of loan you use to buy or refinance a home.
A multi-family home or multiplex is a single building or a
building complex divided into single residential units, such as duplex,
triplex, or condo. We can help people purchase multi-family homes that include
up to four units. We follow conventional loan criteria for
multi-family homes. So, if the home can be financed with a conventional
mortgage, we can help.
Multiple listing services (MLSs) are private databases created,
maintained, and paid for by real estate agents. Agents use the MLS as a
tool to share and discover information about properties that are for sale. The
MLS helps sellers by making their homes findable and it helps buyers discover
homes that meet their criteria.
Some states have laws requiring sellers to provide this report,
which discloses whether the property being sold is located within an area zoned
for major hazards such as floods, earthquakes and wildfires. Sometimes the
report covers other hazards, including noise from airplanes and military
ordnance, too.
Net income is the amount of money someone "takes home"
after subtracting taxes and other deductions (including social security, health
insurance payments, 401K contributions, etc.) from the total amount of money
they earn (or gross income). That's why some people call it "take
home" pay. Net income includes taxable wages, tips, and income from
investments.
In real estate, an offer is the contract that the buyer presents to the
seller, spelling out the proposed terms and conditions to purchase the home.
When a seller is not happy with the buyer's offer, they may make
a counteroffer. Sometimes the purchase price is the sticking point. Other times
the seller's counteroffer may hinge on removing contingencies or changing the closing
date.
The Texas residential real estate contract includes a
termination option, but buyers must pay the seller a fee to have this option.
The option fee gives the buyer the right to terminate within a certain number
of days of the contract being signed by both parties. Buyers pay this option
fee to give themselves time to do due diligence work, including
inspections. If the buyer terminates, the seller keeps the option fee to
compensate them for their time and trouble.
Option period refers to a brief period of time (usually five or
six days) after your offer is accepted during which you take a closer look at
your new home to discover any issues or red flags. Other states call this an
inspection period or due diligence. During the option period, most
buyers order a home inspection and a title search and dig into the Homeowners Association (HOA) or condo
rules (if applicable). During the option period, you may make a list of demands
and repairs you want to be done before closing. The seller may continue to
negotiate and accept backup offers from other buyers during
the option period.
origination fee
Mortgage lenders charge an origination fee to cover the costs of
processing your loan. The origination fee includes everything
from underwriting to document prep.
Public Utility District. A PID (Public
Improvement District) is a defined geographical
area established to provide specific types of improvements
or maintenance within the area which are financed by assessments against the
property owners within the area. Chapter 372 of the Texas Local Government Code
authorizes the creation of PIDs by cities.
PITI is short for payment, interest, taxes, and insurance — and
is meant to reflect the true monthly cost of owning a home. Estimating your
PITI can tell you whether a certain home is really within your budget. You can
find PITI calculators on the web. To use them, you'll need to have estimates
for: the price of your new home and your down payment, mortgage rate, property
taxes, and homeowners insurance premium.
Points (aka discount points) offer a way to pay more for your
mortgage upfront so that you pay less over the long term. Paying points on a
loan gives you a lower interest rate than you would get with a
zero-point loan from the same lender You pay points at closing (and they
increase your closing costs). One point equals one percent of the loan amount,
so one point on a $300,000 mortgage would cost $3,000. But you can pay partial points,
too. Not sure whether paying points makes sense for you? Talk to your Loan
Officer.
During a pre-approval, the lender underwrites you by checking your credit score and reviewing your bank statements and other financial documents. A pre-approval carries more weight with sellers than a pre-qualification because a pre-approval is based on verified information rather than self-reported data.
A pre-qualification is an estimate of how much house you can
afford. Lenders base your pre-qualification on basic financial information that
you self-report. They do not underwrite you, review any financial documents, or
do a hard credit pull, which makes pre-qualification less reliable than a pre-approval. But it's still a good place to
start when you begin looking for a home. Some homebuyers find it helpful to get
a pre-qualification letter, which shows sellers and their agent that you're
already working with a lender.
Principal is the amount of money you borrow to buy your home.
For instance, if you buy a house for $350,000 and you make a $70,000 down payment, your principal is $280,000.
Private mortgage insurance (PMI) is a type of mortgage insurance
your lender may require you to buy when you take out a conventional loan and
make a downpayment of less than 20% of the home's purchase price. Most
homebuyers pay PMI as a monthly premium that is added to their mortgage
payment. Keep in mind that PMI protects your lender, not you.
A proof of funds letter is a document the buyer provides the
seller to show that the buyer has the money to pay for upfront costs like a
downpayment or closing costs. When you are making a cash offer — and paying for
the entire purchase upfront — a proof of funds letter showing that you have
enough cash to buy the home is even more important.
Purchasing Fund
When you make a Homeward Cash Offer, you may see
"Purchasing Fund" listed as the buyer on the Homeward Purchase contract (in Texas and
Georgia) or as the party who holds the title to your new home (in Colorado).
Purchasing funds are special-purpose entities we own and use to purchase the
homes we buy on our customers' behalf.
A quick close is a real estate transaction that closes much
faster than the average transaction. (In 2019, the average home sale closed in
50 days according to Realtor.com). The Homeward Cash Offer is a quick close
because there is no lender involved and it eliminates every major contingency.
Sellers generally prefer quick closes because the sooner the sale closes,
the sooner they get their money.
A Realtor is a licensed real estate salesperson who belongs to
the National Association of Realtors, a trade group, which has its own
the Code of Ethics. Some
Realtors are brokers. Brokers are managers that run an agency and supervise a
salesforce of agents. Some Realtors are agents. They are salespeople who work
for brokers.
Refinancing is replacing one mortgage with another to gain some benefit. People refinance for a shorter-term loan, a lower interest rate, or to consolidate debt with one lender.
You’ll pay rent from the day we purchase your new home on your
behalf (the Homeward Purchase) until the day you purchase
it back from us (the Customer Purchase). We prorate your rent by
the day and defer your rent payments until closing. We do not mark up rent, we
simply pass along the cost of holding the home for you.
See home warranty.
RESPA is short for Real Estate Settlement Procedures Act, first
passed by the US Department of Housing and Urban Development (HUD) in 1972.
RESPA is now regulated by the Consumer Financial Protection Bureau (CFPB).
RESPA governs closing processes and costs with the hope of providing
transparency to consumers and eliminating illegal payments such as kickbacks
and referral fees.
Sellers are legally obligated to tell buyers about any problems
that might impact the property price or the buyer's safety. These disclosures
are documented in what's called a seller's disclosure. Most seller disclosures
are regulated by state law.
When the demand for homes is greater than the supply of homes,
it is a seller's market. In a seller's market, the seller is usually in a
position of power. See buyer's market.
See credit pull.
Staging or home staging refers to the process of physically
preparing a home to market or advertise it through photography, video, and
in-person showings. Professional stagers do everything from decluttering to
redecorating. Prices for home staging vary widely, depending on the scope of
the work. According to a report from the National Association of Realtors
(NAR), 25% of buyer's agents and 22% of seller's agents said that staging a home
increases the offer price by 1% to 5%. In the same report, more than half of
seller's agents said that staging decreases the amount of time a home spends on
the market.
A survey (also known as a property survey or boundary survey) is
a professional inspection and mapping of your property's boundaries. Some
markets require a survey when you buy a home, some don't.
You will pay property taxes on your new home. These taxes are
assessed by your local government and are based on their appraisal of your
property's value. The IRS sometimes calls this a "real estate tax".
For an accurate estimate of the property taxes you'll pay on your new home,
call the local assessor's office or check out their website.
The title to your home is not a single document. Instead, the word title refers to several documents and the concept that gives property owners their ownership rights. The title to a property changes hands with each new owner and is transferred with a deed. Title also includes a physical description of the property and shows whether there are any liens or claims against the property from a creditor. Once you buy a home, for example, your mortgage will show up on the title as a lien.
Title insurance protects you and your lender from any future
claims against the ownership of your property. Your mortgage company will
require you to have title insurance.
Underwriting is the process lenders use to assess your income,
assets, and debt in order to approve you for a mortgage. During the
underwriting process, your lender will review your financial documents,
including W-2s, bank statements, and more.
Loans from the Department of Veterans Affairs, commonly called
VA loans, are designed to make it easier for active-duty military personnel,
veterans, and eligible surviving spouses to become homeowners. The VA
guarantees a portion of the loan so that private lenders will give you more
favorable terms. For more information about VA loans, visit the department's website.
A walkthrough is exactly what it sounds like: the buyer walks
through their new home after the seller has moved out — usually right
before closing. This gives the buyer a chance to
confirm that any repairs the seller agreed to have been completed, that
everything that was supposed to convey did, and that the home is in the same
(or better) condition than it was in when the buyer put it under contract.
See home warranty.
The Homeward Cash Offer, which enables you to use
our cash and your agent to buy your next home, can be the X factor in your real
estate transaction. The Homeward Cash Offer eliminates the home sale, finance,
and appraisal contingencies, making it more attractive to sellers and helping
buyer negotiate better terms.
To learn why a Homeward Cash Offer is better, watch this video.
Congrats on your new home — and yard! The American Society
of Landscape Architects (ASLA) recommends that homeowners invest 10% percent of
their home's value in landscaping.
Zoning laws dictate how land can be developed. There are
residential zones, commercial zones, and mixed-use zones — among others. Zoning
laws sometimes also dictate how you can use your land, the size of your lot,
how tall a building can be, and how far back a house should be from the
property line.
