Did you see Part 1 of this series? In this post, we continue looking at real estate terminology you should know about. This time we look at terms that are helpful for buyers!
The California Department of Real Estate has published a comprehensive glossary with the legal definitions for most terms involved in transactions. While authoritative and accurate, Mosaik Real Estate feels its clients should have access to these terms in plain language.
Let’s start with an easy one…simply put, while the interest rate of a fixed-rate mortgage stays the same throughout the lifespan of your loan, having an adjustable-rate mortgage means your interest rate may go up or down. Because of today’s record low rates, we currently recommend fixed-rate mortgages to almost all of our buyers.
These are three ways of showing to a seller that you can afford to buy their house. However, some give you more purchasing power than others:
These are monthly dues paid to a Homeowners’ Association (HOA) — which exist between residents of a subdivision, planned community, or condominium — to cover ongoing maintenance and improvements. HOA fees can vary drastically depending on the amenities of the property, covering things like door staff, pools, etc. Also, HOA fees are considered when seeking a preapproval; as such, the higher the HOA fees for a particular property, the lower maximum list price you can afford.
Contingencies are clauses in a real estate contract outlining certain conditions that must be met by either the buyer or the seller in order to move forward with the transaction. By waiving contingencies, buyers can make their offers more competitive in low inventory markets like the Bay Area.
While some use these terms interchangeably, each reflects a distinct part of the transaction. Let’s look at what each one means:
Again, these definitions just scratch the surface of everything that goes into the experience of buyers. As such, please get in touch with any questions!
This series will conclude in Part 3, where we’ll be sharing terms that all sellers should know.
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You’ve got questions and we can’t wait to answer them.