Real Estate Process

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Real estate process

Whether buying or selling, the real estate process is basically the same. The only difference is your perspective of the transaction. Listed below is the general process that happens for people looking to buy a home.

Understanding common terms

Like any other industry, real estate has its own language. Here are some common terms that you may hear from your agent or see in a contract.

  • Closing items – these are the necessary costs associated with purchasing a home. They may be paid by the buyer, the seller or some combination, depending on the type of mortgage.
  • 3B/1B – indicates a home with 3 bedrooms and 1 full bath. These numbers will vary across different homes.
  • Contingency – This is a condition of the contract that prevents one party from being bound by the contract until the condition can be met. For instance, people that currently own a home and place an offer on a second home may have a contingency that their contract to buy the new home will not be binding until they sell their existing home.
  • Listing – formal agreement between a property owner and real estate agent to advertise the home for sale.
  • CMA – market analysis of comparable homes in the area. A real estate agent will use this report to determine fair market value for the home.

Looking for the Right Home

There are many factors that go into the decision of buying a home. Obviously, the number of people that will live in the home will dictate the number of bedrooms and bathrooms. Proximity to work locations or schools will also be important. Living in a condo where there is no yard maintenance will be a dream for some, while living outside the suburbs on 5 or 10 acres will be more appealing to others. A home should never be purchased based on a single item such as price or location. Take into account everything that will impact your living arrangement.

Advantages of using a Real Estate Agent

There are numerous advantages for using a real estate agent. First and foremost, they have access to all of the properties available for sale within your area. Oftentimes, an agent may also know of a few homes for sale not listed in the general database. An agent can negotiate a good contract for you and offer some research in to the potential home to make sure there are no problems.

Tax Advantages

Lots of information is available about the tax advantages to owning a home. Suffice to say, that when you purchase the home you may be able to deduct some of the expenses from your tax amount. While you are making payments on the home you may qualify to deduct mortgage interest. When the home is sold any costs such as the real estate agent’s commission and fees charged by the title agent can be deducted from the profit of the transaction.

Putting an Offer on a House

When you and your real estate agent have found the home you want, it is time to prepare an offer to purchase. The agent will likely have a formal purchase contract that can used to put together your offer. The contract will lay out specific terms such as the suggested selling price, anticipated date of closing, legal description of the property, kind of deed, and expectations for who pays the closing costs. Listen to your real estate agent and take their advice under consideration. They understand the market and will be able to guide you towards a fair price and a good deal.