Before you start the whole home buying process, having a basic understanding of basic real estate concepts will give you peace of mind and can also save you a fortune in the future. We have gathered ten real estate terms that you should know before you start looking for your new home:
When you buy a home, there are two agents involved: the buyer’s agent (represents you) and the listing agent (represents the home seller). There are cases wherein there is only one agent representing both sides of the transaction and it is called a ‘dual agency’. It is best you avoid this one.
Adjustable/Fixed Rate Mortgages
‘Fixed rate’ and ‘adjustable rate’ mortgages are included in conventional loans. A fixed rate mortgage is the one that has a predetermined interest rate throughout the life of a loan and the most common are for 30 years. An adjustable rate mortgage, on the other hand, comes with a variable interest rate and the most common are for 5, 7 or 10 years.
Before applying for a mortgage or even start looking for a new home, a pre-approval letter from the bank should be acquired first. This is to have an estimate of how much the bank will lend you. Having this letter will help you determine what you can afford, and it also ensures home sellers that when needed, you will be able to get a loan.
Real estate agents often refer to homes for sale as ‘listings’. A ‘listing’ on a website would show information about the home such as the price and number of bedrooms.
After you have made an offer on a home, the next thing you should do is to schedule an inspection. A professional inspector will go through every corner, every nook and cranny to review things like the electrical, plumbing, heating, foundations, walls, and appliances.
When you apply for a mortgage, a lender will require an appraisal of the home you are eyeing to buy. A licensed appraiser will then estimate the home’s value based on comparable houses that have sold in that area as well as an investigation of the property.
When putting an offer on a home, there are certain conditions you can specify and those must be met before the deal goes through – these are what we call contingencies. There are different types of contingencies and experienced real estate agents like Daniel and Bonnie Wan can definitely go through all of them with you.
For your real estate concerns, setup an appointment with Daniel and Bonnie Wan today!