While you should have a trusted, expert agent on your side to answer all potential questions for you, sometimes you’ll need to know the answers yourself. Whether a friend asks you about how the sale is going or you just want to understand all the terminology, here’s your 101 guide to selling terminology.
Getting your home appraised is one of the steps you need to take before putting it on the market. An appraisal is a careful assessment of the value of your home, commonly determined by recent sales of comparable properties. Depending on the size of your property, it costs between $300-$400.
Just like its meaning in everyday language, appreciation is something positive. Appreciation is the natural rise in property value due to market forces. Appreciation happens in a seller’s market, when inventory is low and demand is high, which drives prices up.
If a buyer tells you they’re bridge-financing, it means they’re getting an interim loan to facilitate the purchase of a new home before the buyer’s current residence sells, so they can use its equity to fund the new purchase. In short, the buyer doesn’t have the money in cash, because their old place hasn’t sold yet.
A building code is a set of rules or regulations that ensure the safety and material compliance of new construction within a municipality. Usually, the main purpose of building codes is to protect public health, safety, and general welfare, as they relate to the construction and occupancy of buildings and structures.
Building codes are often closely tied to plumbing. For example, regulations for proper exhaust fans. Violations of building codes may turn into an issue for the future tenant, so make sure you have a good grasp of these regulations.
Chain Of Title
Chain of title refers to the complete history of ownership for a property. Buyers might want to find out about the chain of title to see how many times the apartment has been sold in the past, as this might suggest some ongoing, underlying issues.
Closing costs consist of all settlement or transaction charges (above and beyond the actual cost of the property) that homebuyers or sellers need to pay at the close of escrow when the property is transferred. This could include an appraisal fee, application fee, attorney fee, credit report fee, home inspection, and a range of many others.
Even though real estate property in New York tends to rise in value, some apartments do depreciate due to factors the owner often can’t control. Depreciation refers to the gradual loss of value of property that occurs through external economic conditions like a changing market, the property’s age, natural wear and tear, or deterioration.
Buyers who intend to finance their purchase need to get pre-approved by their lender, usually the bank. This means that their credit is being checked by the bank and a loan amount is set for them, therefore determining their maximum budget.
Even though this is the buyer’s responsibility, negotiating with someone who has already been pre-approved by their lender gives you security as the seller. After all, you’ll have to start from the beginning and find a whole new prospect if your buyer’s loan happens to be denied.
This is a step that is often taken before getting pre-approved, with a pre-qualification serving as a check up. It is less formal than a pre-approval and consists of a written statement from a loan officer indicating an opinion that the borrower will be able to receive approval for a mortgage loan.
We admit it, selling a home sounds like a time-consuming, lengthy, and tedious activity. Having an experienced broker who will hold your hand along the way, take important steps in negotiating with buyers, and make sure all essential paperwork is brought to the table, will save you a lot of sleepless nights.