Real Estate Glossary
Buying a home can be confusing, there’s a lot involved. To complete a sale, there’s lots of paper work. To start looking at homes, you need to find the best Bend Realtor. There’s a lot to decide, and understanding exactly what you’re looking at can be difficult. We’re here to define some common real estate terms, so that you can walk away with the perfect home or property for you.
Getting pre-approved for a mortgage is crucial before you begin seriously looking for homes. A mortgage pre-approval typically comes in a letter. Getting pre-approved helps you know how much you can borrow, and lets you know the price range of home you can afford. When you’re pre-approved it shows sellers that you already have financing in place, and can speed up the homebuying process.
Multiple Listing Service (MLS)
Sometimes your house search will include using MLS. A multiple listing service, or MLS, is a database that Bend Oregon Realtors use to access all of the homes and properties listed in your area. It also includes information on those properties in your area, and can be a great resource to use in finding new listings.
Getting your home appraised lets you know how much your home, or a potential property, has in estimated value. This helps determine what kind of mortgage you can be approved for.
Appreciation and Depreciation
Over time the value of your home can change. It’s mostly dependent on the current real estate market. If your house appreciates, it’s gaining value over time. If it depreciates, your property has lost value over time. In most markets, and with most properties, this will fluctuate.
This is a small deposit that you put down when you an offer on a house. Essentially, it’s a show of good faith, and lets the seller know that you have intent to go through with the purchase of the home. When you put this money down it’s typically held by an escrow agent, until the sale is completed or finalized. A typical amount of earnest money is 1 to 2 percent of the property’s price. The benefit of earnest money is that if the sale is completed, the earnest money goes toward the down payment on the house. If the sale is not completed, due to the seller rejecting the offer, the money comes right back to you.
Down payments are an important process of buying a home. Rather than paying the total amount of the home, you can pay a down payment on the price of the home. If you’re working with a lender, it shows that you are planning financially to afford the home. Down payments can be anywhere from 3 to 20 percent of the total price. Down payments are usually required so that a lender can provide a home loan, which covers the rest of the cost of the property.
If you put funds down on a property, like earnest money, this money goes into escrow. This also applies to documents. When these documents or funds are put down on a property, it’s then held by a third party, like an escrow agent, until the sale goes through.
A contingency can seem like a scary term, but it’s not. It just means that there are conditions that need to be met in order for the sale to go through. Most contingencies have to do with results of home inspections. If you make an offer on a potential property, with a contingency on the home inspection, and you find that there’s a lot of damage to one of the systems in the home, you might require it to be fixed by the current owner, before the sale is finalized. Because you had a contingency in place, you can walk away from the contract without being required to go through with the sale, if the current owner refuses to fix anything.