For first time home-buyers (and even some seasoned home-buyers alike) the entire buying process can sometimes get confusing. While making the decision to become a home owner is a big one in itself it can be even more daunting when you don’t understand some of the lingo that goes along with buying a house. The two best things that you can do is to 1.) find a realtor that recognizes this is a big and scary process and will explain it to you every step of the way and 2.) to become familiar with some of the terms used in the home buying process. Below I have picked the top 5 that I feel like most people may not fully understand. If you have any other questions about terms or buying a home please feel free to contact me!
addendum: This refers to a specific form that describing a change or addition to the purchase agreement. These can include changes made after an inspection or the extension of a closing date.
comps: These are properties that are comparable to the property being analyzed.
earnest money: This is money given from the buyer to the seller to prove their intent to purchase the home/property. The amount of the earnest money varies but if the sale is finalized this money is included into the down payment of the home. If however, the sale does not go through (due to not fault of the seller) then the seller keeps the earnest money as compensation.
escrow: The escrow process assures that the purchase funds are released and that the transfer of the house is completed. The escrow company is a neutral third party to the process and uses the purchase agreement and other associated documents as instructions.
GFE: The Good Faith Estimate is a form provided to borrowers by lenders. It is required by law and allows borrowers to compare the rates and terms of multiple lenders when shopping for a home loan. The GFE must include a list of all fees associated with the mortgage loan and it must be provided to the borrower within three days of loan application.