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Arm Yourself with Key Real Estate Terms – frontporchnewstexas.com

Buying or selling a home can be confusing. Whether you live in Hopkins County or in Houston, real estate agents may use vocabulary you aren’t familiar with. I often refer to it as “the foreign language of real estate.” But a good real estate agent helps you understand the steps and process. Don’t be afraid to ask them to slow down and explain what something is and/or how it impacts you. When you decide to buy or sell, here are a few key terms to arm yourself:

1. “Executed Date” – The date all parties sign the contract, both buyers and sellers. This date officially obligates the seller and buyer to fulfill the terms of the contract. Verbal negotiations are not part of the “Executed Date”.

2. “Termination Option”/”Option period” – This time period allows the buyer to get an inspection, negotiate repairs, verify zoning, or do any other due diligence needed to evaluate the house or property. During that time period, the buyer can terminate for any reason. Not exclusive to business-only days or holidays, any day of the week or year can be part of that period. This protects the buyer’s interest by providing time for them to check critical items. However, it is a negotiable option on the contract and doesn’t have to be included. Even though most residential and even commercial contracts contain an option period, when there is a bidding war, some buyers may exclude an option period to try and make their offer more appealing.

3. “Option Fee” – When asking for an “Option Period”, a negotiable fee goes with it and is paid within 3 days of the “Executed Date”. After the due diligence period, if the buyer terminates during the option period, the fee goes to the seller. If the buyer moves forward in the transaction to closing, the buyer receives a credit for the option fee at closing. In other words, the buyer gets the money back (as a credit) if they complete the sale of the property.

4. “Earnest Money” – Also, within 3 business days of an executed contract, “Earnest Money” goes with every contract (with or without an “Option Period”) and is separate from an “Option Fee”. Buyer’s give this money to the title company, letting the seller know they are serious about purchasing the property. It is significantly more than an “Option Fee”. And be aware, if a buyer terminates for no particular reason, they may lose their “Earnest Money”. However, a buyer receive it back if the property doesn’t meet appraisal, the seller doesn’t uphold their part of the contract, or the buyer terminates during the “Option Period”.

5. “Survey” – Establishing legal boundary lines of a property, surveys outline detailed perimeters of the property’s border as well as building locations and other structures on property. It can also show restrictions or conditions of the property such as easements and encroachments. Most lenders require one. So if you are getting a loan, you’ll most likely need a survey. However, that doesn’t mean you have to pay for a new one. Often enough, the seller may have a survey from when they purchased the home or your real estate agent may be able to track one down. In other words, an existing survey may already be available. But if you do have to purchase a new one, prices can drastically range. Some bids for the same property can range from $600 to $2,000 and up. Locating an existing survey will save time and money. But if you have to get a new one, shop around by getting several bids.

Feel free to always ask questions if you do not understand any part of the process. Buying a home or property is exciting but can also be stressful. A good realtor will ensure you are aware of what is in your best interest and will take time to thoroughly explain your options.

About the Contributor: Kati Adair’s strong work ethic continues to serve her clients both locally and nationally. Her success’ credit goes to her recurring customers and new ones she encounters along the way. She ensures her clients receive the best possible experience when buying or selling. Even though she holds a Master’s degree in Educational Leadership, she continually progresses as a realtor, going above and beyond in receiving the nationally recognized Graduate Realtor Institute (GRI) designation. Through the years, Kati has proven to be a top-contender among realtors in Hopkins County. She can be found at the multi-million dollar producing office, Janet Martin Realty.

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