The ABC’s of Buying a Home
The spring real estate market is about to hit its seasonal high. If you will be buying a home this spring, whether for the first-time or not, it’s helpful to identify a few real estate basics that every buyer should know.
A statement that indicates the official value of a property.
B: Bridge Loan
A short-term interim loan that is made to a buyer to purchase a new home before they have sold their current home and can use the equity towards the new purchase.
C: Closing Costs
Costs paid over and above the selling price of a property — this includes legal and administrative fees to finalize a home purchase and can typically run several thousand dollars when buying a home.
D: Debt to Income Ratio
Used by lenders and is calculated by determining an individual’s total debt compared to total income.
In real estate terms, equity is the difference between the total value of a property and the amount left owed on the mortgage.
Something movable that is physically attached to a home, such as a light fixture or wall shelf. Unless specifically excluded from a contract, a fixture is deemed to remain with the house upon sale.
G: Government Loan
A government run program that provides purchasing assistance for first-time and other qualified buyers to assist in entering the real estate market.
H: Home Inspection
One of the most important aspects of the home buying or selling process, a home inspection is a visual accounting of a home’s current condition, which is completed before the sale of a home is finalized.
A must-have item for purchasers, the cost of home insurance and required coverage should be obtained by all buyers prior to purchasing a home.
J: Joint Tenancy
The ownership of a property held joint by two or more individuals to whom ownership passes upon the death of one of the parties.
K: Knob and Tube
A rudimentary system of electrical wiring, used up to the 1950s and consists of tubes held in place by porcelain knobs. A home containing knob and tube may have difficulty securing home insurance and is a consideration for potential buyers to have replaced.
L: Liens and Encumbrances
A lien is a form of security which can be held for the payment of debt. Encumbrances are other restrictions on the property including setbacks, and right-of-ways that can complicate the sale process.
A loan to cover the purchase of a home, usually amortized over several decades.
N: Non-Load Bearing Wall
When considering a home for renovation, a non-load bearing wall is one that doesn’t support the structure of a home, thus can be removed.
The legal contract to purchase or sell a home.
P: Property Tax
A mandatory fee paid yearly to a local government body for basic services such as garbage and street lighting.
R: Real Estate Agent
A highly skilled real estate professional who assists buyers and sellers during the sale process.
A map showing the official boundaries of a property.
T: Title Search
An administrative search to ensure that no liens or other encumbrances exist on a property.
Fees paid for services such as water, sewer, electricity, and gas, which are part of a home’s annual operating costs.
The seller of a home.
A private, agent-guided tour of a property for sale.
The physical space surrounding a house that requires upkeep and maintenance.
The regulation that determines the use of buildings and other areas, such as residential, commercial, or agricultural.
(Note: The letters Q and X were purposefully omitted.)