Yang Wanglong Business Housing Terms 101 For First Home Buyers

Housing Terms 101 For First Home Buyers

First home buyers often find themselves in unfamiliar territory when purchasing property. Between loan applications, credit checks and the protocol for viewing properties and making offers, purchasing real estate is a world of its own. One of the biggest areas of confusion comes down to terminology. Realtors, lenders, builders and the like seem to have their own language, which can be confusing to an outsider. More importantly, it can be costly.

Many of the housing terms first home buyers hear end up costing money. Fees, taxes and insurance come in many forms and they all spell greater cost for the buyer. Brush up on these terms so you understand what is going to cost you money and why. An informed purchaser is a confident purchaser.

Terms To Know

Here are some terms you’ll need to understand house buyers in Houston during your home-buying process. There are many, many real estate terms that you’ll become familiar with; here, we’ve focused on terms that have some kind of cost to the buyer associated with them.

• Appraisal. An estimate of a property’s value as determined by a professional property appraiser. Typically involves a physical inspection of the property and neighbourhood along with an evaluation of market trends and an analysis of recent sales in the area. The buyer pays the fee for the appraisal. Lenders require appraisals before approving a purchase loan.

• Deposit. The amount of money the buyers put down towards the home price at closing. Typically 10-20% of the purchase price.

• Holding Deposit. This is a portion of the deposit that is presented to the seller along with the offer to purchase the property. It is typically 1% of the sale price. Once the offer has been accepted the deposit is held in a trust account and used at closing.

• Home Inspection. The buyer has the option of paying a professional home inspector to inspect the property for defects after the offer has been accepted. The lender may require home inspections.

• Stamp Duty. This is a tax over and above the purchase price that is paid to the state government and used to fund public services. Rates vary between the states in Australia, but the tax can be quite heavy. It is based on a percentage of the purchase price of the property.

• Household Insurance. This is insurance coverage that is paid annually to cover the cost of repairs/rebuilding the home and replacing the content in the even it is damaged or burglarized.