Eleanor Osborn's Blog
If you’re planning on buying a home in the near future and are confused about many of the terms associated with mortgages, you’re not alone. Real estate is its own industry with its own set of processes, terms, and acronyms. If you’re new to the home buying process, there can be somewhat of a learning curve to understand what each of these terms means.
Since buying a home is such a huge investment and life decision, there’s a lot of pressure on home buyers to make sure they get everything right. This makes for a stressful situation for buyers who don’t feel like they understand the terminology of things like mortgages, appraisals, credit reports, and other factors that contribute to the home buying process.
To alleviate some of those concerns and to make the home buying process run more smoothly, we’ve compiled a list of the most common, and most commonly confused, real estate words, terms, and acronyms. That way, when you’re talking things over with your real estate agent or your mortgage lender, you’ll be confident that you understand exactly what’s being considered.
Read on for our real estate terminology glossary.
Adjustable rate mortgage (ARM) - This is one type of home loan. Mortgage rates with this type of loan fluctuate throughout the repayment term of the loan. The fluctuation is based on a market indicator.
Fixed rate mortgage (FRM) - Another type of home loan, a fixed rate mortgage has a rate which does not fluctuate, remaining constant for the life of the term, most commonly 15 or 30 years.
Appraisal - An appraisal is the determination of the value of a property. Appraisals are used when purchasing and selling a home, as well as when refinancing a home loan. Appraisers are required to be licensed or certified in each state and are usually paid for by the lender.
Appreciation - An increase in a property’s value, most commonly due to market inflation, or the general increase in home prices over time.
Depreciation - A decrease in a property’s value, due to either market deflation (uncommon) or the wear and tear on a home that comes with age.
Closing costs - The costs and fees that a buyer is responsible for when purchasing a home or taking out a mortgage. These include underwriting fees, inspections, appraisals, transfer taxes, and more. Closing costs typically range from 2% to 5% of the total loan amount.
Contingency - Home purchases have contracts to protect the interest of the buyer, seller, and lender. Contingencies are provisions designed to protect the buyer or lender should something occur in the time leading up to closing on (or purchasing) the home. One common contingency is the buyer’s right to have a final inspection of the home before closing to ensure no new issues with the home have occurred.
Private mortgage insurance (PMI) - Buyers who cannot afford a down payment of %20 typically are required to take out a private mortgage insurance policy. This policy protects the lender should the borrower default (fail to repay or meet the conditions of their loan).
There's a lot of talk about sustainable home features such as solar panels or energy-efficient appliances. For those passionate about green living, there are many other ways to incorporate eco-friendly features into nearly every aspect of your home. In fact, there are many ways to use sustainable decor to create a house that is welcoming, beautiful and good for the environment.
These are just a few of the sustainable home decor tips and ideas that you can use in your own home:
Use Frames and Wall Art Made From Reclaimed Wood
Reclaimed wood is recycled wood that has often been salvaged from a decaying wooden structure like a barn. By opting for a recycled wood piece that still looks beautiful, you are minimizing the demand for new products that are created in factories that rely on foresting practices that destroy trees by the thousands. In addition, you get a piece that is completely unique from anything else on the market and that is destined to stand the test of time.
Purchase Handmade Art from Local Artists
It might be cheap and easy to head to the local art supply store in order to buy a generic piece of art that will fill the space in your home. However, when you purchase handmade art from local artists, you are supporting your local economy while simultaneously reducing the amount of carbon emissions that would have been created during the production cycle of those mass-made products. You will also end up with a treasured piece of art and support a local artisan.
Invest in Eco-Friendly Rugs
If you have hardwood flooring throughout your home, you may be interested in purchasing some rugs to add comfort, warmth and color to your rooms. It's important to know that there are eco-friendly rugs on the market that are made from sustainable materials, such as recycled plastic or bamboo. These rugs allow you to feel good inside your home while also feeling proud about the efforts you are making to protect the environment.
Go Thrifting for Unique and Interesting Accent Pieces
In order to break the cycle of constantly purchasing new items and throwing old ones out in the trash, you can head to a thrift store to purchase all kinds of decor items for your home. Not only are thrift stores a sustainable place to shop, but they also allow you to get the items that you want for significantly less than you would pay for them brand new.
Find Alternatives to Paraffin Candles
If you are the type of homeowner who always has to have a candle burning, consider making the switch to soy candles. Soy candles burn cleaner than their wax counterparts, and they also last longer. It's a great way to improve the air quality of your home and also create a welcoming space that smells great. Other options include candles made from coconut or oil-burning.
Truly adopting the green lifestyle means considering the ecological impact of every decision you make as a consumer. By using these tips for sustainable home decor, you will be protecting the environment and designing a home that you can be proud to show off and happy to live in.
When your kitchen or another part of your home could use a bit more light, consider adding skylights instead of lamps or light fixtures. Skylights can provide your home with some important benefits. As long as you have these lights properly installed, they can offer the following advantages for your home.
Increase Natural Light
Installing skylights results in more natural lighting in your home. Exposure to natural light is associated with several benefits, including improved mood. This can be a major benefit during winter when it’s hard to get enough exposure to sunlight thanks to shorter days. Natural light from skylights can also create a more pleasant ambiance in your home, resulting in a more cheerful and calming environment. If you’re planning on selling your house, keep in mind that having plenty of natural light can improve your home’s appearance and make a great impression on home buyers during showings and open houses.
Reduce Energy Usage
Skylights can help you save on the amount of energy your home normally uses. With skylights installed, you’ll gain solar heat from the sun during the winter months, which means you won’t have to run your heating system as much. This reduces wear and tear on your heating system and leads to lower heating bills. When it’s warm out, you can open your skylights to get cross-ventilation inside your home, which helps cool it off. Doing this can reduce your air conditioning bills during summer.
Skylights that open up provide your home with improved ventilation. Throughout the day, hot air rises and gathers near the top of a room. This can make rooms feel stuffy and uncomfortable, especially when it’s hot out. Skylights give you a way to release this hot air while also letting in fresh air from outside, resulting in better ventilation and improved indoor comfort.
Make Rooms Feel Bigger
Having a skylight or two in your home can make the room they’re in seem more spacious. While this might not be a concern in a larger home, it can do wonders for smaller homes or older homes that don’t have an open floor plan.
Offer Outdoor Views
Skylights in your ceiling give you a great way to enjoy views of sunny skies during the day and starry skies at night. Depending on where you live and where you have your skylights placed, you might also have good views of forests, mountains or other natural surroundings.
If you buy or sell a home, it is normal to expect negotiations after an initial offer is submitted. However, differentiating between a "fair" counter proposal and an exorbitant offer sometimes can be difficult.
Lucky for you, we're here to help homebuyers and home sellers submit a successful counter offer at any time.
Now, let's take a look at three best practices to help you create a successful counter proposal.
1. Consider Your Counterpart's Perspective
If you are buying a home, consider the seller's perspective. Or, if you're selling a house, evaluate the buyer's perspective. In both scenarios, you can gain insights into what your counterpart might be thinking and tailor your counter offer accordingly.
For example, if a house has been available for several weeks or months, a homebuyer should consider this information as he or she preps a counter proposal. By doing so, a homebuyer can weigh the pros and cons of waiting out a buyer's market and craft an effective counter offer.
On the other hand, if a home seller has several offers in hand, this seller may want to consider submitting a counter offer that matches or exceeds a house's initial asking price. With a seller's market in place, a home seller should have no trouble stirring up plenty of interest in a home, even if a buyer rejects a counter proposal.
2. Evaluate the Housing Market
Take a look at the prices of available houses in your city or town. This housing market data can help you differentiate between a buyer's and seller's market – something that may prove to be exceedingly valuable as you put together a counter offer.
Also, examine the prices of recently sold houses that are similar to the home that you want to buy or sell. By leveraging this housing market data, you can evaluate the prices of similar properties and boost your chances of submitting a competitive counter proposal.
3. Consult with a Real Estate Agent
If you're struggling to create a fair counter offer, it certainly helps to consult with a real estate agent.
Ultimately, a real estate agent is committed to helping homebuyers and home sellers achieve their respective goals. This housing market professional can provide a wealth of housing market data to help a homebuyer or home seller craft a viable offer. Furthermore, a real estate agent is happy to provide honest, unbiased home offer recommendations, ensuring both buyers and sellers can make informed decisions.
Let's not forget about the support that a real estate agent provides throughout the homebuying and home selling journey, either. A real estate agent will be ready to respond to a buyer's or seller's questions without delay. Plus, this housing market professional will go above and beyond the call of duty to ensure all parties involved in a home sale enjoy a seamless experience.
Ready to negotiate a counter offer? Use the aforementioned best practices, and you can quickly and effortlessly create a successful counter proposal.