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Let’s Buy or Sell a House! Part 3 – Real Estate Defined

December 23, 2009

Now that you’re ready to make the move into buying or selling real estate, what do you need to know about the process?  In Part 3 of my 3-part series on real estate definitions, let’s talk about some steps in the overall process for buying or selling a home.

Home Equity: Home equity is the value of ownership in a home that represents the current market value of the house — minus any remaining mortgage payments. This growing value is contingent on the property owner paying off the mortgage and the market value of the property appreciating.  When a home is purchased, every dollar put towards the down payment is immediately transferred to the equity in the home.  This is one of the many reasons why saving for a down payment is so important – a significant down payment helps homeowners build equity more quickly.   For example, a home buyer who puts nothing down needs a year of 20 percent appreciation to have as much equity in his property as a buyer who put 20 percent down in a stable market.

Appraisal: A home appraisal is a survey of a home by a licensed professional for his or her opinion of the property‘s value (i.e., what a home will likely sell for on the open market). In most cases, an appraisal is done for a bank when a home buyer is applying for a loan for the home. The home appraisal is a detailed report that looks at such items as the condition of the home, the neighborhood and what similar homes in that neighborhood are selling for. An appraisal is not a home inspection. Appraisers only look for major concerns; they do not examine the home’s full condition (i.e., examine the roof, appliances, etc.). An appraisal also differs from a Broker’s Price Opinion (BPO) or Competitive Market Analysis (CMA), which provide an estimate of a home’s value by making comparisons to similar properties in the area and what they were listed and sold for.  This is usually done for free by the prospective listing agent.  To learn more about appraisals, visit the consumers section of www.appraisalfoundation.org.

Home InspectionHome inspection is a visual inspection of the structure and components of a home by a qualified professional to find items that are not performing correctly or items that are unsafe. A home inspector’s report will review things, such as the condition of the home’s heating and cooling systems, interior plumbing and electrical systems; the roof, attic, and visible insulation; walls, ceilings, floors, windows and doors; the foundation, basement, and visible structure. While the inspection is not meant to be a tool for re-negotiations, many times it becomes one.  Homebuyers should be sure to make a list of items they think should be addressed and present them to their real estate agent in a timely manner.  Often times, the seller will agree to have the problems repaired before closing or accept a new offer that deducts the cost of repairs.

Closing: Closing, or settlement as it sometimes referred to, is the final step in completing a real estate transaction.  The closing date, set during the negotiation phase, usually takes place several weeks after an offer is formally accepted. At this time, ownership of the property is transferred to the buyer and any costs incurred by either the buyer or the seller beyond the price of the property itself are paid.  These additional expenses are known as closing costs and might include recording fees, attorney fees, title insurance premium, etc. Closing typically takes three weeks to 45 days depending on variables such as delays in obtaining documents, clearing title defects, inspection repairs, etc.

 

I hope my 3-part series “Real Estate Defined” helped to clear up some of the mysteries surrounding the terms we read and hear about every day. 

As a real estate professional with vast experience in the industry, I bring value to the entire home buying or selling process.  I can analyze data, share expertise, and handle all the legwork (AND paperwork) involved in a real estate transaction.

I look forward to helping you take the next step when you are ready to buy or sell a home.

 

___________________________________________________________________ 

Patty Cunningham, Realtor®
Coldwell Banker Preferred
390 Waterloo Blvd, Suite 101
Exton, PA 19341
 O. 610.363.6006
F. 484.356.0540
C. 610.659.4669 
email: pcunningham@cbpref.com
web: http://www.pattycsellshomes.com                                     
blog: https://pcunning.wordpress.com/                                        
                                                                                                                         
                                                                                                                        
Access my Business Directory here:
http://pattycunningham.com/realestate/contractor%20referrals.pdf

Oh, by the way…  I’m never too busy for one of your referrals!  

* Honored as the winner of the CARTUS Cup and the CARTUS Master’s Cup for the highest overall performance & service delivery in the world’s top performing broker relocation network
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Ranked #1 in Pennsylvania & Delaware, and #7 internationally of all Coldwell Banker affiliate companies
* Cartus Platinum Recognition Award for outstanding service and performance at all levels
* “Highest Overall Satisfaction for Home Sellers Among National Full Service Real Estate Firms” by J.D. Power & Associates in their 2009 Home Buyer/Seller Study

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