Key Terms and Concepts:

Financing:

• Down Payment: The initial upfront payment made by the buyer, typically expressed as a percentage of the property’s purchase price, demonstrating financial commitment and reducing the loan amount.
• Mortgage: Various types of mortgages exist, including fixed-rate and adjustable-rate mortgages, as well as FHA loans, each with distinct features and suitability based on individual financial circumstances.
• Closing Costs: Additional expenses incurred during the property transaction, covering appraisal fees, title insurance, and legal fees, typically ranging from 2% to 5% of the property’s purchase price.

Property Ownership:

• Title: The legal documentation establishing ownership rights to a property, with different types such as clear title and joint tenancy, each carrying implications for ownership and transferability.
• Deed: A legal document transferring ownership of the property from the seller to the buyer, ensuring a clear and valid transfer of title.
• Encumbrances: Legal claims or restrictions on the property, such as liens or easements, which may impact the buyer’s ownership rights or use of the property.

Property Details:

• Square Footage: The measurement of a property’s floor area, determining its size and often influencing its price and utility.
• Home Inspection: A thorough examination of the property’s condition, structure, and systems, conducted by a professional inspector to identify any potential issues or defects.
• HOA Fees: Fees paid by homeowners to a homeowners’ association for maintenance and amenities, if applicable to the property, impacting ongoing ownership costs.

Offer and Negotiation:

• Contingency: Conditions included in the purchase offer that must be met for the sale to proceed, such as securing financing or satisfactory home inspection results.
• Earnest Money: A deposit made by the buyer to demonstrate serious intent to purchase the property, held in escrow until the closing of the transaction.
• Counteroffer: A response from the seller to the buyer’s offer, proposing modifications to the terms of the sale, initiating negotiation between the parties.