Have you ever had a conversation with an experienced professional using terms that you may not fully recognize? Don’t worry, when it comes to talking Real Estate, we have you covered!
Below are common used terms you will come across when working with a Real Estate professional for your home transaction:
Pre-Qualification Letter: This is a letter that you will receive from a lender of your choice with the amount of money you are approved to purchase a home.
Earnest Money: This is your good faith money deposited into a brokerage trust account and can be used as a credit in the closing of a transaction. This amount is typically between one and five thousand dollars.
Escrow: This is the financial arrangement that a third party ( trust account) will safekeep the funds (Earnest Money) pending the completion of the home transaction.
Due Diligence Period: This is the amount of days from the contract binding date to inspect the home and request repairs and come to an agreement with all parties within the contract.
Contingency: This is a provision/conditions to the stipulations within your Real Estate Purchase and Sale agreement, that will make the agreement null/void if a certain event were to occur.
These are the most common Contingencies within a purchase and sale agreement:
Due diligence contingency: This is typically the first contingency within the transaction. This contingency is when the buyer has the opportunity to fully inspect the property.
Financing contingency: This is typically the second contingency within the transaction. This contingency is when the buyer’s lender fully approves the loan.
Appraisal contingency: This is typically the last step within the transaction. This contingency is when the bank sends an appraiser out to the property to ensure the home’s worth.
During these contingency periods its imperative to make sure everything is on track and if any issues arise from inspection and appraisal reports, that they get negotiated to reach a win-win resolution.
Now that you are keyed in on frequent used Real Estate terms you are ready to start your Real Estate transaction with Hubert Tate and Company of Keller Williams Realty!
