Top Five Real Estate Vocab Words for First Time Homebuyers

Become a Real Estate Insider

Every time you dabble in an unfamiliar industry, you’re likely to come across various terms that you may not understand. When looking to buy a home, you’re going to hear realtors, banks,Lendors or lawyers use terms like prequalified, home inspections, and more.

Below are just the top five real estate vocabulary words that you’ll definitely hear when buying your first home.

Prequalified- One of the first things you’ll do when buying a home is get “prequalified.” Getting prequalified is your golden ticket to looking for and putting in an offer on a home. When you’re prequalified, it means you’ve talked with a lender about your income, debts, credit score, and down payment options for buying a home. Once the lender has all this information and pulls your credit, they will be able to give you that special number for a loan you qualify for.

Earnest Money- This is an amount of money that is due to the title company when your offer gets accepted. Earnest money is a down payment to your down payment. This amount is chosen by you and is usually no less then $500. Essentially, earnest money shows just how serious you are about buying the home.

Home Inspection- This is an inspection of the home from the foundation to the roof, so you know as much as you can about the home you’re going to purchase. A home inspector will give you a full report of every little detail from a crack in the foundation to chipped paint. Home inspections are the second action to be taken once your earnest money is deposited. Your realtor will order the inspection. Inspections can cost anywhere between $250-$600, depending on the size of the home and whether or not there’s guest houses, second garages, or water wells.

Appraisal- Required and ordered by the lender, an appraisal is when an appraiser goes out to the subject property and determines its value. This is required because a lender wants to know that they’re not lending you more then what the home is worth. If an appraisal comes back lower then the purchase price, then the seller would have to bring the price down or you retract your offer and walk away. If the appraisal comes in higher then the purchase price, then that’s a win for you! Appraisals are roughly $500 paid by you, the buyer.

Interest Rate- An interest rate is how much interest is paid by borrowers for the money that they borrow. It’s typically a percentage of the sum borrowed. For example, a simple 10% interest means that if you borrows $100, you’ll pay back $110.

These are just a few words that you will hear right out the gate when you decide to buy your first home.If you’re curious to learn more about buying a home, please reach out to one of our realtors or read more articles here.

About the Author:

KYLIE ELLIOTT

FIRST TIME HOMEBUYER SPECIALIST, REALTOR®

928-848-8922 || kylie@prescottrealty.com

Kylie specializes in helping people who want to purchase their first home someday that might be currently feeling overwhelmed, scared, underprepared, lost or uneducated. She’s passionate about guiding her clients through a journey that’s exciting, fun and super rewarding! Kylie believes you shouldn’t have to go through it feeling alone.

Top Five Real Estate Vocab Words For First Time Home Buyers 

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