5 Home-Buying Terms to Know
Buying a home is an exciting feat, but it comes with its fair share of challenges. To reach the pinnacle of finding your dream home, you must first navigate and understand crucial home-buying terms. From mortgages to home inspections, there are several critical home-buying terms to know as you navigate the complex world of real estate.
If you are in need of a real estate vocabulary lesson before buying a home, Mark Spain Real Estate has got you covered! Our expert listing agents offer exclusive industry insight to help you comprehend critical real estate terminology. Read below for our glossary of home-buying terms to know before starting your house hunt.
5 Home-Buying Terms to Know
A counteroffer is a response to an initial offer that the seller has deemed inadequate. If you’ve made an offer on a home, and the seller wants to negotiate, they will respond with a counteroffer for you to consider. For example, if the seller’s asking price is $500,000, and you offer $460,000, they may respond with a counteroffer of $480,000. In response, you may counteroffer $475,000. Buying a home typically involves negotiating various counteroffers until both parties agree on a final sale price.
A home inspection one of the most important home-buying terms to know, as it is a detailed evaluation of a home’s structural components before it is sold. Potential buyers have a home inspected before purchasing to ensure the house is free of foundational effects. Inspectors survey crucial areas like walls, ceilings, flooring, windows, lighting, water, and plumbing to ensure the home is in good condition before the buyer signs on the dotted line. If you are buying a home, note on your offer contract that your purchase is contingent on the home inspection results. This way, you can negotiate repair terms with the seller if you discover structural defects.
A title document, one of the most commonly used home-buying terms, is the official ownership of real estate or personal property. If you are buying a home, the title of your new home will be officially transferred to you once the transaction is complete. Typically, home buyers will purchase title insurance when dealing with real estate transactions. As a buyer, title insurance protects you from any financial loss that could occur if there are existing disputes over the ownership of your new property.
Earnest Money Deposit
An earnest money deposit demonstrates your “good faith” as a buyer. Once a seller accepts your offer, you will provide them with an earnest money deposit to prove your intention to abide by the sale agreement and ultimately purchase the home. Once the real estate transaction has successfully processed, and everyone has signed on the dotted line, you will receive your earnest money back. However, if you fail to meet specific deadlines in your contract or walk away from the deal altogether, you could lose your earnest money entirely. As a buyer, your earnest money depends on your specific contract, but they usually account for 1-3% of the property’s sale price.
Escrow involves holding funds or documents with an objective third party until a specific date is reached or condition is met. In real estate cases, buyers may store significant payments in escrow until the home purchase is finalized. From down payments to earnest money deposits, keeping these critical funds in escrow for safekeeping can be helpful. Once the purchase is complete, many buyers also hold portions of their mortgage payments in escrow to cover property tax and home insurance.
Learn Home-Buying Terms with Mark Spain Real Estate
If you want to buy or sell a home, Mark Spain Real Estate is here to help! With decades of valuable industry experience, our team will help you navigate some of the most popular real estate markets in the southeast, including Atlanta, Dallas, Raleigh, and more. And for sellers seeking a competitive cash offer, check out our Guaranteed Offer Program to close on your home in just 21 days!
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