One of the most exciting events you may go through in life is buying a house, yet this event can be very overwhelming and confusing too, especially if you are a first-time homebuyer. Because of this, it's important to understand certain terms used in real estate before you start the process of looking at homes for sale, and here are three important terms you should understand.
Full-disclosure
One term to learn about before you buy a house is full-disclosure. Anytime a person lists a home for sale, the person must fill out a form called a full-disclosure. This form lets you know the condition of most parts of the home, and it is the form that you will need to read thoroughly to find out if the home has defects the seller knows about. Sellers are legally required to let buyers know if there are defects in a home; and if there are, you will read them on this form.
Contingency
A contingency is another common term in real estate, and this is an important one to understand before making an offer on a house. A contingency is something you can add to the purchase offer you make on a home, and it requires something in order for the sale to go through.
For example, you can write on the contract that the purchase offer is contingent upon a good home inspection. If the home inspector finds a problem, you have a way to get out of the contract without losing anything.
There are many types of contingencies you can add to your purchase offer, and your real estate agent can help you choose the right ones to add.
Earnest money
You should also understand the concept of earnest money. Earnest money is a term used in real estate to refer to the money a buyer puts down when making an offer on a house. You cannot make an offer on a house without putting money down, and the earnest money you put down will show the seller that you are serious about buying the house. You can only get this money back if you back out of the deal for a legal reason, such as a contingency that falls through.
If you are a first-time homebuyer, it's important to understand these terms and what they mean before you buy a house. To find out more about buying a house, talk to an agent in your city today.
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