The goal for every real estate transaction is to sign a contract. To ensure you are finalizing a Healthy real estate deal, it’s important to understand all of the terms. The legally binding contract outlines the expectations for both the buyer and the seller. You need to know these terms before signing on the dotted line:
Terms and Definitions
Closing costs — Additional fees that are not included in the purchase price. They are costs that need to be transferred to the buyer upon closing and responsibility of who is responsible should be outlined in the contract, including recording fees, transfer tax, escrow fees, title search fees and title insurance.
Contingency — When a contract offer has been made and accepted but certain requirements must be met prior to closing. Contingencies in a contract can apply to both buyers and the sellers. Here are two examples:
- The buyer may have to sell their current home before closing.
- The seller may have to complete repairs or any issues found during a home inspection.
Home Inspection — A home inspection is a thorough report on the condition of a property. A certified home inspector usually conducts the inspection when a home is on the market to be sold.
Earnest Money — The payment made to the seller to show good faith at the time of signing the contract.
Encumbrance — A claim against a property by a party that is not the owner. This can impact the transferability of the property and restrict its free use until it’s lifted.
Escrow – A buyer’s good faith deposit. It is held until conditions of the sale agreement are met.
Seller Assist — When the seller is asked to pay for some of the closing costs.
Transfer Tax — A one-time tax or fee imposed by a state or local jurisdiction upon the transfer of real property.
Conclusion
Do you have a question about real estate transactions? Contact us and a Healthy Real Estate and Associate expert will happily help you navigate the real estate market?
