14 Terms You Should Know When Buying a House - Pinellas County

Dated: April 26 2022

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Real estate terminology

Buying a house can be an overwhelming experience, especially if you’re buying your first home. There are many acronyms and jargon that can seem intimidating at first, but once you learn the proper terms, the process becomes easier. Here are 14 real estate terms you should know when buying a house.



Appraisal 

An appraisal is an estimate of a home’s current market value, as determined by an appraiser who compares your property to others in your area. It’s used as an indication of how much your home might sell for on today’s market—and it affects what you pay in closing costs and loan interest. If you’re thinking about buying or selling a home, make sure you know what an appraisal is and how it can affect your bottom line.

 

Assessed value

This is what your county’s assessor values your property at, and it’s usually based on how much similar properties in your area have sold for. It isn’t necessarily an indication of what you could get for your house if you put it on the market, but it gives you a general idea of what kind of price range to look for. Assessed value is determined by using comparable sales data and geographic features of each property (such as lot size and location).

 

Buyer's Agent

If you're planning to buy a house, chances are you'll need to hire an agent—an individual who is specifically trained and licensed to act on your behalf. Agents are paid by their clients (i.e., buyers), but they're required by law to be unbiased and honest in their dealings with sellers. And agents can often negotiate better deals than buyers could manage on their own because they work with multiple sellers in any given market area and know what kinds of terms other sellers are offering.

 

Closing Cost

A fee incurred at closing, typically to cover lender and title company expenses. Closing costs are paid by either buyer or seller. Most people choose to have their lender pay closing costs so there’s less money they need to come up with before they move in. On average, closing costs range from 2%-5% of the purchase price.

 

Contingencies

To wit, contingencies are circumstances that either the buyer or seller (or both) must fulfill in order for the transaction to go through. For example, a buyer may make an offer on a home, but the offer is contingent on them either being able to sell their current home first or being able to find a mortgage.

 

EMD - Earnest Money Deposit

The EMD is what you pay when you submit an offer on a home. It’s earnest money, which is refundable if you back out of your offer. In other words, if you decide to go with another home or don’t close on your original choice, the seller will return your deposit to you. The EMD may be anywhere from 1% - 5% of your total purchase price and typically includes closing costs as well.

 

FHA loan

An FHA loan is another type of government-backed loan for which your credit score and income play less of a role. (Income does matter though.) It’s perfect for first-time homebuyers and people with lower credit scores. A conventional loan would be more likely to approve you if you make at least 3.5 times your annual income, but an FHA loan doesn’t have such stringent requirements.

 

Fixed-rate mortgage 

Your interest rate won’t fluctuate during your loan. Some loans, such as those offered by FHA, will stay fixed for up to 30 years. These are great if you plan on staying in your home long-term; however, many people choose a more flexible option, like an adjustable-rate mortgage (ARM), which has lower rates than fixed-rate mortgages but adjusts every year or so.

 

Home inspection

A home inspection is an independent analysis of your home. The inspector will look at all aspects of your home, from its foundation to its electrical wiring and everything in between. They’ll assess any repairs needed or maintenance tasks that are recommended by doing things like checking for mold and structural problems. They’ll also test basic systems like plumbing, heating, cooling, and electrical equipment; they might even simulate rainstorms to determine if gutters and downspouts work properly.

 

Pre-approval 

Getting pre-approved for a mortgage is one of those ways in which you can improve your chances of getting what you want from real estate agents, sellers and sellers’ agents. If you are pre-approved for a loan, that means that your lender has checked your credit and other financial details, determined how much money you can borrow and possibly even offered you an interest rate.

 

Pre-qualification

Before you start looking for houses, you want to get pre-qualified by your bank or mortgage lender. That way, you’ll know what kind of house and price range you can afford so that when you begin touring homes, you won’t waste time on properties that are out of your price range. Your real estate agent will provide you with details about lenders in your area as well as information about local interest rates, home prices and property taxes. (more...)

 

Sales contract

A sales contract is also known as an agreement of purchase and sale. It serves as proof that a binding agreement has been made to sell or buy real estate. It includes details such as price, dates and times, financing information and signatures from both buyer and seller. After your offer has been accepted, you will receive your copy of the contract, along with further instructions on how to proceed. A sales contract is typically valid for 30 days, though you can choose to extend it up to 60 days if necessary.

 

Seller’s agent

The representative for the person selling the property's real estate. They work for the seller, promoting their property to potential buyers and negotiating on their behalf.

 

Title insurance

This type of insurance is obtained to guard against unknown lien claimants that might arise to the property. In addition, the home will have to be searched for any encumbrances before the property is able to receive title insurance.

Any data in this article shall be considered educational in nature and is in no way financial advice. Mangrove Bay Realty is here to answer any questions that you may have about selling your home or buying a Short Term Rental Property  in Pinellas County, FL. We’re on your side, so just let us know if there’s anything else we can do for you! CALL us at (727) 404-5530 or contact us at Mangrovebayrentals@gmail.com


Related Blogs:

Short Term Rental Restrictions
Short Term Rental Zoning Map - Pinellas County


 

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Troy Nowak

Success in real estate stems from experience, integrity, knowledge, and most importantly, relationships. A successful real estate professional navigates many waters for their clients, and I am here to....

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