The rules and regulations surrounding a real estate transaction vary from state to state, but there are some universal elements that remain the same regardless of location. Since I work exclusively with Columbus, OH home buyers, I focus wholly and completely on the intricacies and details that surround the buyer’s end of the transaction. One of my biggest priorities is to educate my buyer clients about the entire process and ensure that they understand what they are getting themselves in to. As an Exclusive Buyer’s Broker, it’s my pleasure to guide and advise you every step of the way. It’s how I remain a trusted resource for buyers in Columbus real estate.
There are seven terms that every home buyer should know as they begin their home search. Familiarizing yourself with the lingo will help you better understand each phase of the process. These are those seven terms:
Buyer cost sheet. This document, typically given to you by a lender or your Exclusive Buyer’s Agent, includes a list of everything that you will be responsible for paying for during the transaction. This includes inspection fees, appraisal costs, down payment and other prepaid items. By having each cost of the transaction laid out for you, it becomes easier to determine how much home you can actually afford.
Commission authorization. Typically, the seller takes care of the buyer agent’s commission. These terms are negotiable.
Contingency. In a contract, there are typically clauses that, if not adhered to, will void the contract. This results in the buyer’s deposit being returned to them. Home financing and home inspection are two common contingencies that are often found in a buyer’s contract.
Disclosure/disclaimer. In each state, there is a list of information about a property that a seller is required to disclose to the buyer prior to purchase. In the state of Ohio, the only parties who are required to do this are the sellers who actually live in the property for sale. It’s important to adhere to the guidelines set by the state and review each disclaimer carefully before making a decision to buy.
Earnest money deposit. Buyers will typically attach an earnest money check to their initial offer to show that they’re serious about purchasing the property. Once the home goes under contract, this money is put in escrow and is used as part of the down payment at settlement.
Escrow. The escrow account includes the buyer’s deposit and all financial portions of the transaction before, during and after closing. Typically, escrow should be handled by an attorney, real estate broker, or title company. This also refers to prepaid amounts for homeowner’s insurance or property taxes, which your lender will keep track of with each monthly mortgage payment until the bills are due.
Good faith estimate. This isn’t part of the buyer and seller’s contract, however it is very important. The good faith estimate breaks down the estimated costs for closing services, the down payment and prepaid items such as homeowner’s insurance and property taxes. Buyers should use this to hold their lender to the amount promised in certain categories, and they should also use it to know how much money to bring with them to the closing table.
These seven common homebuyer terms will help every Columbus, OH home buyer better understand each phase of their transaction and give them an idea of what they need in order to successfully purchase their dream home. As an Exclusive Buyer’s Broker in the Columbus area, I think it’s important to educate my buyer-clients about these terms in order to help them have an easier, stress-free transaction. The more prepared they are, the more smoothly the process will go.
If you have any questions about the home buyer process, don’t hesitate to contact me and ask! I’d be happy to give you access to our eBook that helps Columbus home buyers stay smart during their search. I hope to hear from you soon!
Andrew Show
Buyer’s Resource Realty Services
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