Whether you are new or have even purchased a home before there are some basic terms you need to be familiar with to ensure your transaction goes smoothly.
Please for your own benefit, at least know these five items:
1.) Appraisal: A professional analysis to estimate the value of a home. It’s a necessary step in validating the value of the home for both you and your lender to secure your financing.
2.) Pre-Approval Letter: Confirmation from a lender that you qualify for a loan for a certain amount. Please do not confuse this with a pre-qualification letter. All this one does is tell you what a lender thinks they will lend you based on some basic information you provide.
3.) Closing Disclosure: The closing disclosure is what you receive from the title company or lawyer executing the close for you. In this document you will see all the closing costs. Be sure to review all of them and make sure they are correct as any error could be money out of your pocket.
4.) Title Search: This searches the title of the property to ensure that the party selling it does in fact own it. More importantly it discovers if the chain of title is clean and free of any liens.
5.) Inspection Period: When going under contract you will likely have an inspection period to get the property looked at by a professional inspector for any defects or issues. This needs to be done in the time frame listed on the contract others you lose your right to enforce this contingency.
When it comes to buying a property a basic understanding of the common elements of a real estate transaction is important. Trust me, these may seem simple, but many times people let something fall through the cracks and all of a sudden they can’t close.
If you need a complete guide to buying a property check out ScaredyCatGuide to Investing in Rental Properties.