Many new terms will be heard in conversation with your real estate agent, mortgage broker, friends, and others during the home buying process. See below some of the most commonly used terms to understand when buying real estate. (Source)
- Buyer beware (also known as caveat emptor): The buyer alone is responsible for assessing the quality of a purchase before buying.
- In its present condition: the new, less frightening way to say “as is.” Basically a “take it or leave it” home sale.
- Earnest money: a home buying deposit given to the seller to show that a prospective buyer is serious about buying the house. This money is forfeited if the buyer does not follow through with the purchase and sale agreement.
- Pre-approval: a lender has looked closely at both your credit report and your income and determined that you qualify for a loan. The lender will tell you the maximum amount of loan it will make, which loan programs you qualify for, and will discuss the interest rates it will offer for different types of loans.
- Pre-qualification: loan pre-qualification does not typically include an analysis of your credit report or an in-depth look at your true ability to buy a home. The term means that someone has taken a general look at your income and expenses and plugged them in to a debt-to-income ratio formula. It does not guarantee a loan.
- Contingency: a condition that must be satisfied before a contract is legally binding (e.g. the sale is contigent upon home buyers sale of their current home within 1 month).
If you are buying a home, consider using DoorFly.com to find a real estate agent and earn a home buyer rebate.
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