WHAT DO ALL THESE REAL ESTATE TERMS MEAN IN IDAHO FALLS
This blog is to define the terms that you so often here thrown around when buying or selling a home. Most of these terms without enough context do not make any sense!! This will be a growing list as I run into more I forgot to put in initially. If you have any questions as usual just ask!
(Note: Some of the below definitions can vary in different states and these are as they are used In Idaho.)
Earnest Money – Money given by the sellers to show that they are committed to the transaction. This money has protections in place to protect it in most events. (discuss with your agent what these are exactly). Generally runs between .5% and 1% of the home home purchase price.
Closing Costs – Money paid for the closing of the property usually includes the appraisal, title fees, closing fees, mortgage origination fees, and if your the seller this is when commissions are paid to the listing brokerage.
Appraisal – This is when the bank sends out a third party to assess the value of a home. the appraisers job is not to find true market value it is simply to make sure the home that the bank are giving a loan on meets the expected value for that loan program.
Inspection – The event where you or the professional you as the buyer generally hire and pay to check the home. Inspectors vary greatly in skill and thoroughness I recommend getting an inspection done by a true professional. The point of this part of the sales process is to make sure that there are not surprises in the condition of the home and if there are things the new buyer is not satisfied with those objections are negotiated.
Due Diligence – The general term for all the dates and steps of the transaction making sure that you are as informed as possible and in
Title Company – The company that issues the title insurance policy guaranteeing free and clear title. Also the company that closes the transaction ie. sends all funds to the proper party and files all paperwork with the proper entity.
Escrow – An item of value, money, or documents deposited with a third party to be delivered upon the fulfillment of a condition. For example, the earnest money deposit is put into escrow until delivered to the seller when the transaction is closed.
Listing Agent – The Realtor that has the home listed on the MLS and represents the Seller in the transaction.
Buyers Agent/ Selling Agent – The Realtor that represents the buyer in the transaction. Depending on the state the term selling agent can be used as either the buyers or sellers agent.
Terms – The word used to describe the general agreements of the contract. Often used as all dates and conditions excluding purchase price of the home ie. earnest money amount, inspection date and closing date.
Short Sale – A short sale is when the home value has gone lower then what the seller owes on the loan and they cant sell it for what they owe and you try to get the bank to take less then is owed on the home to satisfy it. In these events having an agent is critical to navigate the negotiation with the bank. Doing a Short Sale is not always the best option, tell me about your situation and I will help you through!
Foreclosure – This is an owner of a home does not make the payments to the bank and the bank seizes the property to sell and satisfy the loan amount.
HUD Home – HUD (Housing and Urban Development) homes are ones that were FHA loans and foreclosed and are now owned by the HUD Department of the government.
VA – Veterans Affairs loans are ones that you must have served in the military to get. they are great loans but need a little more car to make sure that everything goes smoothly.
USDA – United States Department of Agriculture does do home loans, they are designed to help rural properties finance. USDA loans have an income cap on them that varies by the county. These loans are typically 0 down.
A good agent will help educate you to these and all the other terms and sayings that come along with your transaction. I would love the opportunity to help you find a home and to help explain all of these in detail!
Thank you for reading!
The Group Real Estate