I've had several clients ask... what does that mean? Some of the words we use can be totally foreign and we forget that so I decided to type of a list of some of the words you will hear during the buying process.... These are my definitions, my own way of explaining them.... Here we go.
Loan officer/Lender: The person you will call to get pre-approved and that will handle all of your financial things during the entire process. They are the professionals! Listen to them and do what they say...
Inspector: The person you hire to check out the condition of the home you are purchasing usually during the inspection period on your contract. The inspector will thoroughly check out the house and give you a report so you know exactly what you are buying.
Appraiser: The person that you (if not using a lender) or your lender will hire to get the value of your house. They gather information based on market, condition, location, etc... They are the professionals!
Offer: an offer is something we submit on a contract form that doesn't become a legal binding contract until both parties sign (buyers and seller) Sellers can look at other offers at this time and can choose one to accept. So until the offer is accepted others are able to submit offers as well.
Accepted offer or Contract: once the seller accepts all the conditions of the offer and signs it the offer then becomes a contract. They can accept back up offers but it is a legal binding contract and back up doesn't come into play until the contract is not fulfilled by the parties. Your agent will explain this to you.
Contingency: This can come in many forms on a contract. Some of the most common are inspection contingency, financial contingency, having a current house to sell contingency... meaning something could come up or happen that can cause the contract to not be able to be fulfilled... for instance, if your current house does not sell then with that type of contingency you are not obligated to buy the second house or for some reason down the line you are not able to get the loan due to unforeseen circumstances beyond your control. Of course you need to read your contract carefully because not all contracts are alike and there may be some verbiage that locks you in without a contingency. Consult with your agent about this and understand what you are agreeing to.
Electronic signatures: Now days it seems everyone is going this route because of it's convenience. I personally like it but there is nothing that replaces the face to face explanation of a contract or meeting.
Escrow payment: This has different meanings but I'm going to explain what escrow means in regards to your monthly payment. Along with your mortgage loan payment monthly you will have your homeowners insurance and property taxes tacked on to your monthly note (its the yearly payment of these things divided by 12 months). That is called escrow, money held by a third party to pay it on your behalf. This is so you will not have a lump sum to pay at the end of the year, it will be paid by your mortgage company with the money they gathered throughout the year. Sometimes the amounts can go up depending on if taxes and insurance increase.
As is: This means the seller offers house in it's present, existing condition to prospective buyers. You can, however, as a buyer ask the seller to fix certain things found in your inspection of the property. The sellers have the option of fixing it or letting you out of contract if you cannot accept the condition. But, after closing the house is as is. Yours.
Property Disclosure (PDD): This is a document that all sellers must complete when selling their house. It is several pages and it documents all the known defects or history of the house by the seller. This disclosure needs to be read and understood, you will have to sign off on it when submitting an offer.
Flood zone: These are classified by FEMA (Federal Emergency Management Agency)... there are a few: X, A, AE, etc.... your mortgage company will require you to have flood insurance if your house is in one of the zones other than X. With all the disaster of flooding we've just had, houses that were in zone X flooding as well as the others, we will just have to wait to see how this is handled. But, it looks like no matter what "zone" you are in, it may be a good idea to go ahead and get flood insurance anyway. FEMA can change the maps (zoning) at anytime to include or exclude areas in or out of a flood zone. Be aware of that.
Ok, that's just a few words we use during the transactions, if you have any other questions regarding the home buying process please give me a call... 225-405-8187.
NOTE; these explanations are my own translations, it is HIGHLY recommended you consult with your REALTOR to clarify the information for your understanding. UNDERSTAND YOUR CONTRACT AND WHAT YOU ARE SIGNING! Your REALTOR should be able to answer all your questions or get the information for you. I cannot express it enough, READ AND UNDERSTAND YOUR CONTRACT!
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