Buyer’s market: In a buyer’s market, you need to be priced slightly lower than the competition, because there are more homes for sale than there are buyers in the market.
Seller’s market: In a seller’s market, you can add about 10 percent to a comparable sale, since inventory is limited and buyers are competing for fewer homes.
Neutral market: In a neutral real estate market, there’s a good balance between the number of buyers and the number of homes for sale. In this market, you’ll want to keep an eye on nearby comparables to make sure your pricing is similar.
National Association of Realtors (NAR) – National Association of Realtors. The National Association of Realtors (NAR), whose member brokers are known as Realtors (member agents are known as Realtor associates), is a North American trade association for those who work in the real estate industry.
Appraisals– An appraisal is a professional appraiser’s opinion of value. The preparation of an appraisal involves research into appropriate market areas; the assembly and analysis of information pertinent to a property; and the knowledge, experience, and professional judgment of the appraiser.
CMA– The ‘comparative market analysis,’ or CMA, is the old standby marketing tool for agents trying to win listings. The agents try to demonstrate their value by pulling sales numbers they claim only they have access to and assemble a set of recent and pending home sales that provide context for pricing your house.
MLS-Multiple Listing Service.
DU Letter: A DU or desktop underwriter presents a fairly complete financial picture of the borrower. It is an automated underwriting system that Fannie Mae has approved but it is also used for FHA loans. The initial summary shows the borrowers’ ratios, both front-end and back-end ratios. The front end is the percentage of mortgage payment, including taxes and insurance, against the borrower’s gross monthly income. This number is often referred to as the housing expense ratio. This is by far more comprehensive than a pre-approval letter and will drastically improve your clarity on the buyers financial situation.
Pre-approval letter– A mortgage preapproval letter documents how much mortgage you can borrow, which loan product you have and your interest rate.
Proof of funds– A proof of funds letter is a document that is given to a property seller from the potential buyer that verifies and provides proof to a seller of a property that the funds to purchase their property are available and ready to be used toward the purchase.
inspection period- The Inspection Period is the specified amount of time agreed upon by both parties in which the Buyer may examine the property before purchase. The time frame selected for the Buyer may range and must be agreed upon by all parties at the beginning of the transaction.
Contingency clause- A contingency clause defines a condition or action that must be met for a real estate contract to become binding. A contingency becomes part of a binding sales contract when both parties (i.e., the seller and the buyer) agree to the terms and sign the contract. Common contingencies seen in a real estate sales contracts are inspection contingencies, appraisal contingencies and financial contingencies.
financing contingency– is a clause in a home purchase and sale agreement that expresses that your offer is contingent on being able to secure financing for the house. Typically a buyer uses this clause to establish a set period of time to apply for a mortgage and/or close on the loan.
Appraisal contingency-says the house must be appraised at the sale price or higher, which will help you secure a mortgage. If the agreed upon sales price is above the appraisal price, the buyer either will have to come out of pocket to pay the difference or the parties will have to renegotiate and if the parties cannot come to an agreement, then mutually cancel the contract. Keep in mind that appraisal price is relatively stardard amongst most financial institutions so if seller is set on a certain price, make sure to stipulate that in writing into contract prior to accepting offer in order not to lose time and money.
Inspection contingency- requires the home to pass an inspection. Most homes inspection periods are anywhere from 5-15 business days. This varies and can be negotiated.
Abstact of title: An abstract of title is a written history of all the recorded documents and proceedings related to a specific property. All liens, encumbrances, encroachments, and claims should be on this report. Only things on record at the courthouse will be found, but normally anything not recorded is not as big of a threat, and you can buy title insurance to cover unknown title defects. An attorney or a specialist at searching county records normally does this. In Florida, each county varies as to who pays for this at closing but like anything else in the contract, it can be negotiated.
Easements: It is common for there to be easements for utilities. Easements are often worded as a certain number of feet along a property line which are reserved for installation and repair of sewer, water lines, etc. You don’t want to build a deck over this space, as the easement allows the utility to tear it up to do their work.
HOA restrictions and covenants: You need to know what you can and cannot do with or on your property, so these are important rules to read, as you’re bound by them.
Homeowner association (HOA) liens: If you don’t pay your HOA dues, they can put a lien against the property.
liens: If property taxes are in arrears, there could be tax liens on the property. They take precedence over other liens, and you can lose the property if they’re not paid.
Surveys and notes: If there are encroachments on your property, they will show up in surveyor notes. An example would be the neighbor building a new fence a foot into your property line.
