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Must Know Terms If You’re Purchasing a House

It is important to be familiar with certain terms when it comes to buying or selling your home. Some terms may get confusing, so it is key to be knowledgeable about what realtors or buyers and sellers may be talking about. Here are a few key terms to know when buying a house. These terms were posted on the Huffington Post and written by Ann Brenoff.

  1. Open House: Open houses are when agents put signs up outside to lure people into looking at the house. Surprisingly enough, houses do not actually gain buyers on this day. The purpose for open houses is for real estate agents to gain more clients who are not already being represented by someone.
  2. Active listing: The process by which a house is listed in the market. Yet, no offers have been made, nor has an offer been accepted.
  3. Contingencies: Contingencies are escape clauses. They are clauses that state that if a potential buyer will agree to pay the amount agreed upon, unless there is a major repair that needs to be addressed and will cost a significant amount of money. Another reason may be that a bank loan is denied.
  4. Seeking backup: The search for a second potential buyer in case the current contract fails. Becoming a backup buyer means that you are officially done looking for other homes in the market and if the current buyer backs out, the house is yours. Keep in mind, if you back out, there is a chance you will lose your deposit.
  5. Multiple bidding situations: This happens when a house is either too good to be true, or it is listed under market value. It is important to communicate with your agent on strategies to make a strong offer to a seller. In the end, the offer that offers the most money will get the house.
  6. Disclosures: Disclosures are a list of things that you will want to know about the house. These things could vary from a past flood, mold problem, or even a death in the house. As a buyer, you want to make sure that you are familiar with the disclosures of the house
  7. Escrow: An escrow is a third-party official that oversees the process of the purchase. To put it into perspective, escrow must be closed for a house to be official “sold.” The costs for escrow are split between the two parties.
  8. Inspections: Inspections are vital before purchasing a home. It is important to know facts you may have missed. Inspections will cost money, but they are well worth it. Inspectors may be able to inform you about something that may cause you to withdraw from going through with the contract.
  9. Title: A title is a document which states your ownership of the house. A title will allow you to use that property and make any changes to it, if desired.
  10. Property deed: These are NOT titles. Deeds are legal documents that allow the transfer of a title of a home.

References

Brenoff, Ann. “Don’t Buy A House If You Don’t Know What These 10 Words Mean.” The Huffington Post, TheHuffingtonPost.com, 19 Dec. 2017, www.huffingtonpost.com/entry/real-estate-terms-first-time-buyer_us_5a329dd2e4b00dbbcb5b8e07.

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