One of the most common entries in people’s bucket lists would be to buy their very own house. That is good and all, but there are real estate laws that you need to be aware of as well and such laws are different depending on the state or country you are in.
Now, you might be scared of the notion, but real estate law is actually not that hard to know. In this article, I will talk about the things that you need to know about the subject matter, especially if you are planning to acquire property any time soon.
What is Pre-Qualification?
To make this easier for you to understand, think about this as a measure of how favorable you are in the eyes of the sellers of the property. For you to be pre-qualified for a real estate purchase, you will need to confer with your lender so that they will tell you if you are financially capable of acquiring some property or not.
Once you are qualified, you are then given some specific documents that you can present to the seller- giving them full confidence that you actually have the capacity to buy the property without defaulting.
What is a Mortgage?
The reality is that not a lot of people are able to buy a house with their own money right from the get-go. What I mean is that no one has enough cash to buy a house right off the bat, which means that they may have to borrow some money from a financial institution.
Mortgage, in essence, is what you get after making an initial deposit on a house while a financial institution (most commonly a bank) would provide you with the money necessary for you to pay everything off in due time.
Basically, the extra financing that they will provide will have to be paid by the buyer of the property. Keep in mind that you not only have to pay them what they’ve given you but it is also paid with interest as well.
What is ‘Offer to Purchase’?
Now, let’s say that you’ve come across a house that you really want to buy and you see that the listing price is something that you can afford. The next logical step that the buyer must do would be to place an offer. In essence, the buyer has all of the power when it comes to purchasing a property. Although the seller would put a listing price, the purchasing power and the amount that the buyer intends to place as their initial offer would be what is known as the ‘offer to purchase’.
What this basically does is that it tells the seller that you are serious in getting the property. Do note that it is refundable, but the terms would have to be agreed upon by both parties.
What is ‘Closing’?
Basically, purchase a property- may it be a piece of land or a house- is considered a transaction. ‘Closing’ the transaction just means that everything is settled.
In this sense, all of the financial and legal documents are taken care of, the initial downpayment has been made, and the title is now transferred to the buyer.