Month: July 2020

Even if you’ve sold a home before, deciphering real estate jargon can still seem impossible. There’s a lot of unique terminology you should know if you want to make the most of your sale, which means it’s crucial to be well-versed in some of the most common home selling terms before you list. If you’re still confused by contingencies or trying to decode disclosures, our glossary of real estate terms is here to get you on track.

15 Home Selling Terms, Explained

Here’s our A to Z list of the most important home selling vocab every seller should be familiar with. If you don’t see a specific term listed here, feel free to give us a call—we’d love to answer your questions!

Appraisal

The estimated market value of your property. Oftentimes a buyer will need to have a home appraised in order to secure financing.

As-Is

Listing a home “as-is” means that you’re selling it in its current state. This term tells buyers that you aren’t willing to make any changes or take money off the price—they will be responsible for handling all repairs.

Closing Costs

This blanket term describes all the extra fees that come with closing on a home, which are usually deducted from the profit you make on the sale. Common closing costs include agent commissions (for you and the buyer), title fees, loan payoff costs, and any outstanding taxes or expenses.

Commission

This is what you’ll pay your agent (and the buyer’s agent) for their services. Commission is often negotiable and tends to be 5 to 6% of a home’s sale price, with around 3% going to each agent. 

Comparative Market Analysis

Often abbreviated as CMA, this detailed evaluation of your home’s value is based on similar properties that have recently sold in your neighborhood.

Contingency

A contingency is a certain condition that must be met before a home is sold. If a contingency is not met, the buyer or seller can exit the deal, typically with no penalties. Financing, home inspections, and appraisals are just a few common contingencies.

Disclosures

Disclosures refer to any specific defects in a home that you’re legally obligated to share with a buyer. Required disclosures vary from state to state and even town to town, but your agent should be familiar with the most common types in your area.  

Earnest Money

This is a security deposit submitted by a buyer after they’ve put in an offer to show that they’re serious about purchasing your home. The money is typically applied towards their closing costs if the sale moves forward. 

Escrow

An escrow account is normally set up by a lender to hold earnest money until the sale of a home. However, escrow accounts can also be used by lenders to hold real estate taxes and insurance premiums as you pay off your mortgage.

For Sale by Owner

Sometimes abbreviated as FSBO, this is when a homeowner tries to sell their property without the help of an agent, usually to avoid paying commission.

Real Estate Agent

A real estate agent is someone who has passed a real estate exam and possesses a license that allows them to buy or sell homes in a specific area.

Real Estate Broker

Real estate brokers are agents who have received additional education, passed a broker exam, and completed a certain number of transactions. Most agents work under the supervision of a broker.

Realtor®

A Realtor® is an agent or broker who is a member of the National Association of Realtors. Realtors® are required to follow a strict code of ethics and pay annual membership dues.

Staging

Staging is the process of styling and updating your home for potential buyers. It can involve cleaning, repainting, decluttering, making repairs, and moving around furniture to make your space look its best. 

Under Contract

When a home is under contract, the seller has accepted an offer from a buyer, and that buyer has the exclusive right to purchase the property.

Thinking About Selling Soon?

If you’re getting ready to list your home, we can help you navigate every step of the process. Just reach out to us to learn more about the services we offer to our sellers, and let us know if you have any questions. We’d be happy to lend you our expertise! 

As you search for your next home, you’ll probably encounter more than a few neighborhoods that have their own homeowners associations. Often abbreviated as HOAs, these groups usually consist of a few elected residents, although they may also be run by an outside management company or developer.

While they tend to get a bad rap, HOAs actually have quite a few benefits you might not have considered—but they aren’t always the right fit for everyone.

Should You Buy in a Neighborhood with an HOA?

In a nutshell, an HOA’s job is to act as a governing body for a neighborhood. They typically set rules, maintain the community, and may offer certain amenities, like pools or landscaping. However, these perks don’t come free—homeowners have to pay dues to cover an HOA’s services.

Not sure if you want to live in a community with a homeowners association? Here are a few pros and cons to keep in mind before making a move.

Pro: Increased resale value

Believe it or not, an HOA can significantly impact a home’s resale value when you move again. On average, single family homes that are part of a local association sell for 4% more than ones that aren’t—for a home worth $300,000, that’s a gain of $12,000.

Con: More rules to follow

Perhaps the biggest gripe that many homeowners have about HOAs is having to follow certain rules, especially when it comes to your home’s appearance. In order to maintain property values and a uniform look to the neighborhood, HOAs often restrict personalizations like paint colors, fences, or landscaping.

Associations may also have certain limitations on pets, noise, yard signs, home improvements, or trash removal. Violating the rules can sometimes result in hefty fines, so be sure you read up on an HOA’s restrictions to avoid any penalties.

Pro: A beautiful neighborhood

All those rules may seem irksome, but they do serve a purpose. HOA regulations are designed to make your neighborhood a beautiful and desirable place to live. You’ll never have to deal with eyesores like an overgrown lawn or lingering litter anymore, either!

Con: Additional fees

Most associations charge dues that vary depending on the services and amenities they provide. It’s not uncommon to see fees of over $1,000 per year—definitely an expense you’ll want to factor into your monthly budget.

Wondering what these dues cover? They usually go towards maintenance, an emergency fund, or amenities. If you live in a condo or active adult community, they can also cover utilities and exterior maintenance.

Pro: Extra amenities 

If you want to live somewhere with plenty of amenities right at your doorstep, an HOA neighborhood may be a great fit. Many homeowners associations pay to maintain community pools, tennis courts, playgrounds, and much more. Larger subdivisions may even have their own golf courses, restaurants, or clubhouses that are for residents only! 

Con: Risks of poor management

Almost every HOA is governed by residents, sometimes with the help of a management company. Unfortunately, a poorly managed association can be a nightmare for homeowners, especially if the HOA is responsible for maintaining major aspects of the community.

Homeowners associations also have the authority to increase dues without warning—and if they don’t have the money to pay for a big expense, they may even order a special assessment to cover the costs.

Bottom Line: Do your research!

In a recent survey by the Community Associations Institute, a whopping 85% of homeowners said they had a positive experience living in a community with an HOA. However, it’s still crucial to consider your own individual circumstances before making a decision. 

Be sure to read an association’s rules or bylaws, and take a good look at the neighborhood before you buy. If you have any questions, just ask your agent!

Take Your Next Steps

If you’re ready to make a move, we’d love to guide you through every step of the buying process! Just get in touch with us today to get started—we look forward to teaming up and helping you find your next dream home.