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Friday, March 18, 2016

Ten Common Legal Terms for First Time Homebuyers

Buying a home is the biggest purchase most people make in their lifetime.  However, understanding all of the industry terms associated with buying a home can be confusing - especially for first-time homebuyers.  

 

Here’s a quick reference that first time homebuyers can use to empower themselves with the right vocabulary:

  1. Agent: In real estate, a realtor is usually the first person to come to mind when someone mentions their “Agent.”However, in legal terms, an “agent” may refer to anyone who represents or acts on behalf of another.

     

  2. Certificate of title: The opinion of the status of title to a property provided by an attorney or title company. This certificate does not offer the protection given by title insurance.

     

  3. Closing costs: Fees incurred in a real estate transaction which may be paid by the borrower and/or seller during a closing. Closing costs typically include the loan origination fee, attorney's fees, title insurance, appraisal and items that must be prepaid, such as taxes and insurance.

     

  4. Contingency: A condition that must be satisfied before a contract becomes legally binding (before the sale can close).

     

  5. Deed: A legal document that transfers a property from one owner to another. The deed contains a description of the property, and should be signed, witnessed and given to the buyer at the closing.

     

  6. Encumbrance: An encumbrance could include a claim, lien or unpaid taxes on the proptery, affecting the title and lessening the property value.

     

  7. Escrow: A neutral third party that holds money and/or documents until the escrow instructions are fulfilled.

     

  8. Fair Housing Act (FHAct): Prohibits discrimination in real estate transactions due to race, color, religion, sex, handicap, familial status (families with children), or national origin. It applies to mortgage lending as well as other aspects of real estate transactions, including sales and rentals, real estate brokerage, and appraisals.

     

  9. Failure to Disclose: “Failure to Disclose" cases arise when sellers cover up problems in an effort to sell the property for more than it's worth

     

  10. Fee simple: Absolute ownership of real property (both land and home).

First-time homebuyers between the age of 25 and 24 – Millennials – represented almost one third of the homebuyers in 2015, according realtor.com’s chief economist Jonathan Smoke.   Freddie Mac’s chief economist, Sean Becketti, has predicted that interest rates will remain at “historically low levels” in 2016, making this year a great time to invest in a home.  If you are considering buying a home this year, contact experienced real estate attorney Scott Mayfield today at smayfield@smithwelchlaw.com  or call him at 770-358-3630.

 

Any representations regarding the law in this Blog is made available for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and the Blog publisher. The Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.


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