Here at the Home Bros., we know that buying a house or property can be REALLY tough. We strive to make sure that EVERY transaction you make with us is smooth, easy, fun and educational. With the speed that real estate moves now adays, it’s important to us that all of our clients and customers understand the words that Realtors can toss out there. Knowledge is power and we want to make sure you are in the know.
The next few blogs we do will focus on some of these terms, specifically in the Offer to Purchase. This will make sure you know what we are talking about and help you to feel more at ease whether you are buying OR selling a home. If you have any questions or want more info, send us an email at firstname.lastname@example.org or drop a comment below!
- A mortgage is a specific loan used to purchase a home or property. Money is borrowed against the property value and the borrower agrees to pay back the lender a certain amount of money over a certain period of time
- This is generally the first step when “thinking” about buying. Often confused with pre-approved. Pre-qualified simply means getting general information on rates and terms without getting information specific to the buyer. Often expressed as “you may qualify for,” “terms like” and “rates as low as.” At this point, you have not filled out any in-depth applications or had a credit check.
- A pre-approval means you have filled out an application with a lender, often times including employment status and history, income, general non-public information and a credit check. Often accompanied by a pre-approval letter listing specific maximum loan amount and term you could qualify for. This is not a guarantee for any loan but means you are approved for a loan.
- Money down
- This is the amount of cash money brought into a real estate transaction and used as initial equity for a property. Depending on the mortgage type, money down is not always required but may be suggested.
- Earnest Money
- Money provided by the buyer to show commitment to an offer. This money either accompanies the offer or is provided within a certain time period to the selling broker’s trust or the broker’s title company. This is not required but often suggested. A general rule of thumb is earnest money should be enough that it won’t be easily walked away from. If the buyer walks away from a deal without cause, this money is forfeitable and awarded to the seller.
- Offer to Purchase
- An offer brought by a buyer to a seller for the purchase or land or property at a particular/specific price. May contain specific requirements to complete a transaction. Non-binding until both parties agree on terms.
Thanks for checking out our post! The important thing to know is that your Realtor should ALWAYS have your back. Please ask us or your Realtor about the terms above and how they are important to you and your property! Check back soon for Part 2 of Real Estate terms EVERYONE should know!