If you’re a first-time homebuyer, you’ll hear your real estate agent use many terms throughout the buying process. Buying a house can be a complicated legal transaction. But taking the time to learn some of the terminologies can help you make the best financial decisions for you and help understand what kind of contract you’re signing. 

4 Common Real Estate Terms to Know

1. Contingency

When your offer is accepted on a home, there is a clause in the contract that says the deal is only binding if certain conditions are met. These are contingencies. The most common contingencies are your application for a loan being approved, the inspection being acceptable, and the appraisal value being close to your offer. Your real estate agent will help you sort out any contingencies should you encounter a roadblock. 

2. Earnest Money Deposit

An earnest money deposit is an amount of money you put down with your offer. It’s a good faith offering to show the home seller that you’re serious about your offer. If it’s accepted, then the money counts toward your downpayment. If your offer is refused, it’s refunded back to you. Typically, an earnest money deposit amount is around 1% to 2% of the purchase price. 

3. Closing Costs 

Closing costs usually come to an additional 2-5% of the purchase amount, and excludes your down payment. It includes mortgage fees, recording fees, title insurance, excise tax, and loan-processing costs. Be sure to ask your real estate agent and lender any questions, so you can keep track of exactly what is being paid.

4. Title Insurance

Once the seller accepts your offer, you will receive a home title report. Most lenders will require that paying for this report is part of your closing costs. Title insurers look into the history of your home’s title to make sure the seller had legal rights to sell it and has no open liens on it. 

The real estate agents at The Justice Group in Oak Ridge, NC, will help you purchase a house fast. Whether you’re selling or looking to buy, their staff has over 18 years of experience making their clients happy. They handle both commercial property and residential real estate services, from open houses to home appraisals. If you’re in the market, you can put your trust in their award-winning service. For more information, call (336) 324-5716 or visit them online today.