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- Buyer’s Agent vs. Listing Agent: The buyer’s agent represents the home buyers and the listing agent represents the home sellers.
- Fixed rate mortgage vs. Adjustable rate mortgage: A fixed rate mortgage has a set interest rate for the life of the loan, usually 30 years. An adjustable rate mortgage has a variable interest rate, usually 5, 7 or 10 years.
- Pre-approval letter: A letter from the bank stating an estimate of how much they will lend you. This letter shows home sellers that you will be able to get a loan when needed and also helps to point you in the right direction when house hunting as far as what you can afford.
- Listings: Homes for sale.
- Inspection: After an offer is made on a home, the buyer needs to schedule an inspection which should cost around $500-$800 depending on the market. The inspector will thoroughly go through the home and look at the plumbing, foundation, walls, electrical, heating, and appliances.
- Appraisal: When an application for a mortgage is made, the lender will require an appraisal to be made of the home. A licensed appraiser will determine an estimate of the home’s value based on comparable homes that have sold in the area.
- Contingencies: When an offer is made on a home, it can be stated that certain conditions be met before the deal goes through.
- Offers and contracts: Once you find your dream home, an offer will be made on the property with the assistance of an agent. Choosing an experienced Realtor is key to winning negotiations.
- Closing costs: These are fees that go along with the purchase of a new home. These fees include items such as taxes, loan processing costs, and title insurance and can total about 2%-5% of the purchase price of the home.
- Title insurance: After negotiations are complete and the seller has accepted an offer, a home title report will be received within about a week. Most lenders require title insurance to be paid; title insurers search public records to determine that the home seller had rights to the title and that there are no liens against the home.