Words Wednesday | Part 3

Words Wednesday

Part 3

It is very important to understand the terminology used during a real estate transaction whether you are buying or selling.  I will post a blog each Wednesday (Words Wednesday) with a few real estate terms.  If you have any questions or are ready to buy or sell, please do not hesitate to call or email me. Cheryl Clossick (734)709-1683 or cheryl@cherylclossick.com.

Inspection:

Completed by a licensed inspector, this inspection usually takes about 3 hours and it is a very good idea for the buyer to attend so you can see firsthand the types of things the inspector will have on the report. Shortly after the physical inspection is complete, the inspector will email you a copy of the report with pictures.  It is usually about 40 pages.  This report is for the buyer only and does not go to the bank or the seller unless the buyer wants it to.  The report is used as a tool for the buyer to decide if they are still moving forward with the purchase of the home.  Unless it is a new construction home, it is expected that there will be items on the report and sometimes a lot of items.  It is up to the buyer to decide if there are too many or if they would like to ask the seller to fix some items or even ask for a credit to repair items after closing.  As the seller, you have the option to agree to fix or give a credit as requested or negotiate something different or just say No, home is sold as is.

Appraisal:

An appraised value is an evaluation of a property’s value based on a given point in time that is performed by a professional appraiser during the mortgage origination process. The appraiser is usually chosen by the lender, but the appraisal is paid for by the borrower. If the home does not appraise at purchase price, then the seller and buyer must decide how to move forward.  Is the buyer bringing the difference to closing? Is the seller reducing the price to the appraised value? Are they meeting in the middle? If the appraised value is the purchase price or higher that is great.

Financing:

If for some reason the mortgage lender decides the buyer does not qualify for the mortgage.  The buyer can withdraw from the contract without consequences.

Mutual Release:

If one of these three contingencies (inspection, appraisal, financing) are not met the buyer can withdraw from the contract without consequences.  For the contract to be voided, both parties must sign a mutual release stating that all parties are released from the contract.

Contingency Removal:

Each contingency is typically removed as they are completed per the contract.  Within a set number of days after the inspection is completed, the buyer responds.  If there is nothing the buyer is looking for regarding inspection only, the inspection contingency is removed.

Stay Tuned.  Next Wednesday we will go over Fixed Rate Mortgage, Adjustable Rate Mortgage, Pre-approval letter, Closing Costs, Title Insurance.

Please feel free to contact me about any of these terms or about your personal real estate needs.

Cheryl Clossick, REALTOR

Associate Broker, GRI, ABR, SRES, ePro, CRS, RCC, RSC, SFR

Exceeding Your Expectations, Neighborhood to Neighborhood, Because I Care

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