The ABC's Of Buying A Home

With the spring real estate market about to hit its seasonal high, buyers and sellers will be flocking onto the scene. If you will be buying a home this spring, whether for the first-time or not, it’s helpful to identify a few real estate basics that every buyer should know.

by Melina Gillies, Coldwell Banker

A: Appraisal

A statement that indicates the official value of a property.

B: Bridge Loan

A short-term interim loan that is made to a buyer to purchase a new home before they have sold their current home and can use the equity towards the new purchase.

 

C: Closing Costs

Costs paid over and above the selling price of a property — this includes legal and administrative fees to finalize a home purchase and can typically run several thousand dollars when buying a home.

D: Debt to Income Ratio

Used by lenders and is calculated by determining an individual’s total debt compared to total income.

E: Equity

In real estate terms, equity is the difference between the total value of a property and the amount left owed on the mortgage.

F: Fixture

Something movable that is physically attached to a home, such as a light fixture or wall shelf. Unless specifically excluded from a contract, a fixture is deemed to remain with the house upon sale.

G: Government Loan

A government run program that provides purchasing assistance for first-time and other qualified buyers to assist in entering the real estate market.

H: Home Inspection

One of the most important aspects of the home buying or selling process, a home inspection is a visual accounting of a home’s current condition, which is completed before the sale of a home is finalized.

I: Insurance

A must-have item for purchasers, the cost of home insurance and required coverage should be obtained by all buyers prior to purchasing a home.

J: Joint Tenancy

The ownership of a property held joint by two or more individuals to whom ownership passes upon the death of one of the parties.

K: Knob and Tube

A rudimentary system of electrical wiring, used up to the 1950s and consists of tubes held in place by porcelain knobs. A home containing knob and tube may have difficulty securing home insurance and is a consideration for potential buyers to have replaced.

L: Liens and Encumbrances

A lien is a form of security which can be held for the payment of debt. Encumbrances are other restrictions on the property including setbacks, and right-of-ways that can complicate the sale process.

M: Mortgage

A loan to cover the purchase of a home, usually amortized over several decades.

N: Non-Load Bearing Wall

When considering a home for renovation, a non-load bearing wall is one that doesn’t support the structure of a home, thus can be removed.

O: Offer

The legal contract to purchase or sell a home.

P: Property Tax

A mandatory fee paid yearly to a local government body for basic services such as garbage and street lighting.

R: Real Estate Agent

A highly skilled real estate professional who assists buyers and sellers during the sale process.

S: Survey

A map showing the official boundaries of a property.

T: Title Search

An administrative search to ensure that no liens or other encumbrances exist on a property.

U: Utilities

Fees paid for services such as water, sewer, electricity, and gas, which are part of a home’s annual operating costs.

V: Vendor

The seller of a home.

W: Walk-Through

A private, agent-guided tour of a property for sale.

Y: Yard

The physical space surrounding a house that requires upkeep and maintenance.

Z: Zoning

The regulation that determines the use of buildings and other areas, such as residential, commercial, or agricultural.

(Note: The letters Q and X were purposefully omitted.)