Terms that you may hear
Amendments: A change – either to alter, add to, or correct – part of an agreement without changing the principal idea or essence.
Appraisal: An estimate of value of property resulting from analysis of facts about the property; an opinion of value.
Assumption: Taking over another person’s financial obligation taking title to a parcel of real property with the buyer assuming liability for paying an existing bite secured by a deed of trust against the real property.
Beneficiary: The recipient of benefits, often from a deed of trust, usually the lender.
Close of Escrow: Generally the date the documents are recorded and title passes from seller to buyer. On this date, the buyer becomes the legal owner and the title insurance becomes effective.
Comparable Sales: Sales that have similar characteristics as the subject real property, used for analysis in the appraisal. Commonly called “comps”.
Deed of Trust: An instrument used in many states in place of a mortgage.
Deed Restrictions: Limitations in the deed to a parcel of real property that dictate certain uses that may or may not be made of real property.
Earnest Money Deposit: Down payment made by a purchaser of real property as evidence of good faith; a deposit or partial payment.
Easement: A right, privilege or interest limited to a specific purpose that one party has in the land of another.
Hazard Insurance: Real estate insurance protecting against fire, some natural causes, vandalism, etc. depending upon the policy. Buyer often adds liability insurance and coverage for personal property.
Impounds: A trust type of account established by lenders for the accumulation of borrower’s funds to meet periodic payments of taxes, mortgage insurance premiums and/or future insurance policy premiums, required to protect their security.
Legal Description: A description of land recognized by law, based on government surveys, spelling out the exact boundaries of the entire parcel of land. It should so thoroughly identify a parcel of land that it cannot be confused with any other.
Lien: A form of encumbrance that usually makes a specific parcel of real property the security for the payment of a debt or discharge of an obligation. For example, judgments, taxes, mortgages, deeds of trust.
Mortgage: The instrument by which real property is pledged as security for repayment of a loan.
PITI: A payment that combines principal, interest, taxes, and insurance.
Power of Attorney: A written instrument whereby a principal gives authority to an agent. The agent acting under such a grant is sometimes called an “Attorney-in-Fact”.
Purchase Agreement: The purchase contract between the buyer and seller. It is usually completed by the real estate agent and signed by the buyer and seller.
Quitclaim Deed: A deed operating as a release, intending to pass any title, interest or claim which the grantor may have in the property, but not containing any warranty of a valid interest or title by the grantor.
Recording: Filing documents affecting real property with the County Recorder as a matter of public record.
Making an Offer
When buying a house, there is always the worry that you are either paying too much or the house has “hidden” defects. It’s easy to avoid problems like this with a savvy real estate agent. There are many details to consider and among them, the most important questions:
How long do you plan to live here?
Does the home meet your needs?
Negotiations on price set aside, you must carefully consider the type of financing and costs you can possibly avoid or request the sellers to pay. With so many variables and circumstances, it’s critical to make sure you like the house and ask your agent to help advise on all other issues.
Should I start low and negotiate?
It’s important to know the market conditions and details of the home at that present time first. Consider the question of whether there are competing offers? How long as the home been offered for sale? Ask these questions and more about the property, review comparable sales and then decide if this home fits your needs. Consult with your agent before making an offer, after all we are here to help!
Why do I need a broker/agent? Can’t I do it myself?
The advantage of having a good real estate broker/agent far exceed the costs of the commission they receive. Sales commissions differ depending on property type and conditions, and an agent/broker will always negotiate a better deal and protect your interests through the transaction.
At THE PRICE TEAM, we know the ins and outs of real estate. We know where to save you money, and can prevent any unnecessary mistakes or expenditures.
How long does closing usually take?
Escrow and closing can get lengthy, usually between 30 – 45 days, and every transaction has a different timeline.
What is a home warranty? Do I need one?
With a home warranty, you’re covered against a mechanical breakdown of a covered component for a full year (such as electrical or plumbing), beginning on the day of closing. You pay only a standard deductible for each claim.
We highly recommend purchasing a home warranty. A home warrant provides coverage generally not offered by homeowners insurance, connects you with a network of qualified contractors, has standard deductibles that limit your costs and can always be renewed for subsequent years so you can enjoy the protection for as long as you own your home (eligibility subject to underwriting criteria).
Either a buyer or a seller can pay the cost of the policy as negotiated at the time of the sale.
What is Title Insurance?
Title insurance is different from other types of insurance in that it protects you, the insured, from a loss that may occur from matters or faults from the past. Unlike car or life insurance, that cover any losses in the future, title insurance does not cover future faults. You pay a one-time premium, and the title insurance protects you from risks or undiscovered interests.
There are two principle forms of title insurance, a lender’s policy and a homeowner’s policy.
- What is a Lender’s Policy?
A lender’s policy protects the mortgage holder. If there is a fault in the tittle that results in a loss, the mortgage holder will be paid back.
- What is a Homeowner’s Policy?
A homeowner’s policy protects you, the purchaser, against a loss that may occur from a fault in your ownership or interest you have in the property. You should protect the equity in your new home with a title policy.
- What does a Homeowner’s Policy provide?
A homeowner’s policy provides protection from a financial loss due to demands that may be charged against the title to your home, up to the cost of the title policy. It also protects from payment of legal costs if the title insurer has to defend your title against a covered claim and a payment of successful claims against the title to your home covered by the policy, up to the cost of the policy.
- There are many insurance companies to choose from, so make sure to ask your attorney, escrow company or real estate agent to help you make the right decision.
Don’t get overwhelmed!
As an agent, we want to you make the best choice possible and be comfortable and confident with your offer. Allow us to provide you with copies of contracts and disclosures well in advance of your decision to purchase!
By the time you locate a home that fits your needs, THE PRICE TEAM will have you fully educated and ready. We ask every buyer to attend an individual counseling session with us before we get started, so feel free to contact us now for a no hassle interview.