Real Estate Lingo

If you’re currently shopping for a home, then you’ve probably ran across a couple of words or abbreviations that were a little confusing to you. All of the real estate verbiage can be a little hard to keep track of – but you’ve come to the right place!

Check out some of the common real estate vocabulary below, and their simple definitions.

  • AMC (Appraisal Management Company) – This is a company that worked independently from a lender. Once notified by a lender, they will order a home appraisal.
  • Appraisal: This is an impartial opinion of the value of a home, prepared by a licensed and certified appraiser. They come to the conclusion based on data about comparable homes in the area, as well as their own walk-through of the home.
  • Back-End Ratio: This is one of two debt-to-income ratios that a lender will analyze to determine a borrower’s eligibility for a home loan. This ratio compares the borrower’s monthly debt payments to gross income.
  • Closing: A meeting which ownership of a home is transferred from seller to buyer. This usually includes the buyer, seller, real estate agents, and the lender. (psst..and us!).
  • CD (Closing Disclosure): This document is sent to the buyer three days before closing. The document lists all terms of the loan – the amount, interested rate, monthly payment, mortgage insurance, monthly escrow amount, and closing costs.
  • Contingencies: These are written into a home purchase contract that protect the buyer if any issues come up with financing, home inspections, etc.
  • Earnest Money: A security deposit made to the seller of the buyer’s intent to purchase.
  • In Escrow: This period of time takes place after a buyer has made an offer on a home and the seller has accepted. During this (may take 30 days or longer) the home is inspected and appraised, and the title searched for liens.
  • Tax Lien: This is the government’s legal claim against property when the homeowner fails to pay a tax debt.
  • Title Insurance: This protects the buyer and lender if any person or entity steps forward with a claim that was attached to the property before the seller transferred legal ownership of the property. (psstt..hey – we do this!).

These are just some of the few real estate vocabs you might run across along your home purchasing journey. But this list is a great jumping off point to gain the confidence you need to keep on shopping!

For more real estate guides, stop by Alliance Title’s Blog.

The Process for Purchasing a Foreclosed Home

You’ve been searching for homes, and you’ve been seeing foreclosed homes for sale – what does this mean, and how do you purchase one?

Let’s look at the quick facts:

Simple Definition

Sadly, foreclosed homes are seized and put up for sale by the bank that gave the original owner a loan. The home is now owned by the bank.

Pre-foreclosure

This is the first stage in the process before officially declaring a home foreclosed. The original owner has been given legal notice that the process has begun; the only way to avoid the final stage is to sell the property before the mortgage holder takes ownership of it.

If you’re wanting to purchase a home in pre-foreclosure, it usually means approaching the owner and offering to buy it outright. It’s especially important that you remember that the original owner might be running on many emotions – so it’s critical to be understanding.

Foreclosure Auction

If the original owner was not able to sell the home during the pre-foreclosure stage, it will probably go up for sale in a foreclosure auction. Usually these are very fast, so there might not be much time to research the property beforehand.

Bank Owned Property or Real Estate Owned (REO)

When the home has been passed to this stage, patience is important. The bank’s eventual goal is to sell it to make back the unpaid loan amount. Many things need to happen first before a potential buyer can enter this purchasing arena – so if you’re looking to buy quickly, this is probably not for you.

Pros and Cons of Purchasing a Foreclosed Home

Pros:

  • Lower prices
  • Title is cleared from the bank

Cons:

  • Not much time for research – banks usually sell “as-is”, which might mean more repairs within the home
  • Depending on the state, the original homeowner can have up to 12 months to reclaim ownership of their home, which would leave your process of buying the home halted

Purchasing a foreclosed home is not for the faint of heart – and if you’re interested or in the process of doing so, it’s important that you have the right real estate agent to help you through the legal jargon.

For more real estate guides, stop by Alliance Title’s Blog.

Down Payments: How Much is Enough?

If you’re trying to enter the real estate arena, then you know just how difficult it can be to save for a down payment. After all – you’ve been told that the more you put down, the better off you’ll be in the long run.

But how much is “enough”? What price is attainable for you? Being a first-time homebuyer has its challenges, but it also has many programs to help you jump through those hoops.

Check out our tips for down payments below:

First, what is a down payment?

Down payments are the cash you pay upfront when making a large purchase – in this scenario, that purchase is your home. A 10% down payment on a $300,000 home would be $30,000.

This payment is your contribution toward the purchase and ownership of the home; however, the lender provides the rest of the money (that you did not put towards the home) to buy the property.

How much?

Here’s the honest truth: putting down at least 20% on a home will greatly increase your chances of getting approved for a mortgage at a nice rate, and you’ll avoid the mortgage insurance. So a 20% down payment on that $300,000 home we mentioned earlier would be $60,000.

Take a deep breath – that’s a lot of money! If you have the means to do so, then please do so! However, for most people, putting 20% down is a lot more difficult. Fortunately, there are programs that can help you!

There are a variety of mortgages, and they all require different down payments. You just have to find the best one for you!

VA Loans: Usually do not require a down payment. These are guaranteed by the U.S. Department of Veterans Affairs, and are only for current and veteran military service members and eligible surviving spouses.

USDA Loans: The U.S. Department of Agriculture’s Rural Development Program handles these. They also have no down payment requirement. USDA loans are for rural and suburban home buyers who meet the program’s income limits, among other requirements.

FHA Loans: Handled by the Federal Housing Administration, these loans range, but require as little as 3.5% down. Going back to the $300,000 home example, a 3.5% down payment would be $10,500.

History

Your lender will also offer you better mortgage loan rates if you do your work and your research. Your credit history matters, as well as comparing lenders! Pstt…we’ve got some tips for you on a previous Mortgage Shopping guide.

The Facts

Like we mentioned before, the more you’re able to put down, the better (financially-speaking) you will be. You usually receive a better interest rate, lower fees, more equity in your home faster, and a lower monthly mortgage payment.

If you have the time and the means, save for that 20% down payment.

However, that might not be the case for everyone. Check out the various loans we mentioned above and see if any of them match your needs and what you’re able to contribute towards.

Finding the right down payment amount for you takes some work:

  • Use a mortgage calculator and play around with different down payment options to see how it affects the monthly mortgage amount
  • Set a budget and stick to it

For more real estate guides and tips, check out Alliance’s Blog.

Real Estate Tip of the Week: 2021 Design Trends

Homeowners and homebuyers are always looking to the next big thing – so home design and trends are constantly changing.

What can we expect for 2021? Houzz, a home-design website, has already made predictions as to what buyers and owners will be on the hunt for in terms of purchasing or updating. If you want to be the real estate agent these home seekers go for, then this list below should help you out.

Check out five of Houzz’s predictions here:

Multi-Zone Kitchen

Kitchens usually have three work zones between the fridge, sink, and range. However, more homeowners are adding additional work points, which Houzz refers to as a “work trapezoid.” These areas might help with baking, prepping and chopping, or other designated areas like snacks, drinks, or supplies.

Sconce Lighting

Sconce lighting is traditionally known as a bracket mounted on the wall that is used to hold a source of light. Homeowners are wanting to apply “swing-arm” sconce fixtures. Houzz notes that these type of lighting elements help add a bit of shimmer from metal finishes and helps break up walls of cabinets or tile.

Updating Bathroom Design

Bathrooms are now becoming the space in the room for evoking a “relaxing vibe” to help reduce stress. Some updates have been adding steam showers, aromatherapy shower heads, and elements to hold beverages.

Home Offices and Nooks

Obviously with the pandemic and most employees working from home, homeowners are requesting home offices where there will be an efficient space for work.

Video Conference-Worthy Backgrounds

In addition to requiring office spaces, some homeowners are also wanting an aesthetically pleasing background for all of the new video meetings. Whether that’s a built-in bookcase, a reading nook, or a pop of color, this new design trend is all about making things look pretty.

What home design trends are you most looking forward to in 2021?

For more real estate tips, check out Alliance’s Blog.

Real Estate Tip of the Week: Updating Tech to Reach Clients

As you all know, COVID has made a direct impact on how we all conduct business. It became imperative – essentially overnight – to have technology that would easily help the consumer continue business with you.

It’s almost been 10 months of change, so why not take a look and see what consumers are still needing, and how we can keep adapting – digital-wise, that is.

Moxtra, a firm that offers digital solutions, recently surveyed 1,500 small businesses and customers. Their findings showcase just how important “digital resilience” is, not only during the pandemic, but in today’s digital age in general.

Here are their findings:

  • Consumers want digital connections from small businesses. 84% of those surveyed said they’d consider seeking an alternative provider if digital capabilities were lacking.
    • Think: communication access to employees (email, social media messaging, chat box, etc.), mobile-friendly website, user-friendly websites, etc.
  • Consumers love small businesses (66% said the pandemic has made them more likely to use local business in the future), but if technology doesn’t remain a top priority, it can be a problem for clients to support them.
  • For small businesses, it may be difficult to create a seamless transition to a digital-friendly platform.

Understanding that technology is important to bridge between business and consumer isn’t the problem, but rather, making sure the transition has been, and will be, seamless for companies and clients. Technology is a necessity for both employee and consumer alike.

How has your company evolved through the pandemic?

For more real estate news, stop by Alliance’s Blog.

Real Estate Tip of the Week: Understanding the Housing Market Supply

If you’re currently in the market to purchase a home, you can attest to how confusing understanding the housing market is. Is it up? Is it down? Are experts worried? Are they jumping for joy?

Numbers, statistics, and contracts are thrown your way – and sometimes it can get overwhelming to understand where you fit in it all.

Don’t stress – you’ve come to the right place. We’ve got a few tips for you below to help you better understand where the market currently is, and how you can get a better idea of how it all works.

Buyer and Seller Markets

If you’re purchasing a home while it’s a buyer’s market (inventory is high, but there is a shortage of interested buyers; i.e., supply exceeding demand), then that means you have quite a lot of power. Lower prices, better closing dates, etc. are possibly on the table for you.

A seller’s market (many buyers, but low on inventory; i.e., demand exceeding supply) changes a little for the buyer – the seller might be receiving multiple offers, which would make it competitive for the buyer.

Each type of market has its pros and cons for both seller and buyer.

Inventory & Monthly Supply

Currently, the monthly supply for new homes is at 3.3 months. Why does this matter? Well, builders like to see monthly supply below 6.5 months to feel confident and continue building. If supply ever goes over 6.5 months, builders will pause in their building.

Lower mortgage rates also help builder confidence, because they know that lower rates means more buyers.

What 2021 Might Bring

Experts agree that we could be seeing real home-price growth in 2021. Most believe that mortgage rates won’t raise significantly within this next year (meaning it should stay below 4.5%).

Real estate doesn’t need to be intimidating – with Alliance’s Blog & your real estate agent, you’ll be armed with the knowledge you need!

Real Estate Tip of the Week: Improving Your Website

If you have your own real estate blog or website, then you understand all of the hard work that goes into it. Not only that, but you also understand how essential it is to continue to update and modify your website to reach new audiences and engage potential clients.

But where do you even begin when it comes to improving your site? We’ve got a couple of quick tips to help you get up and running.

Local Keywords

You have your platform, ideas, and audience you want to reach – how do you make your website a top contender? Make sure you’re using local keywords.

Local keywords will help your SEO strategy, and your website will rank higher with Google if used properly (pst! We have an article on SEO, here). Make sure your website is utilizing the keywords your local audience would be using to search for their home.

For example, if you’re a real estate agent in Boise, Idaho, your local keywords might look something like:

  • Boise real estate
  • Boise homes for sale
  • Boise real estate agent
  • Boise real estate listings

These phrases should be utilized on pages throughout your site to help drive more audiences to your blog.

Reviews

Potential clients will almost always search for testimonials and reviews of your business before ultimately deciding to work with you – so be the one to highlight reviews on your page!

These could include written testimonials or video interviews! Each time you close with a client, be sure to use your marketing strategy to remind them about leaving a review for you.

Active Page

You have the site, you have the blog – so make sure you keep it running! Consumers can quickly tell if a website has lost its spark; keep your site up-to-date by blogging regularly.

Accessibility

Your website needs to also be accessible through different platforms. 89% of new home shoppers use a phone to search during the home buying process. That’s a lot of people…so you’ll want to make sure your website can format correctly to their screen.

For more real estate tips and tricks, stop by Alliance’s Blog.

Real Estate Tip of the Week: Factors that Influence Your Home Value

Wondering how an appraiser might value your home? Appraisers have a variety of categories they work through while walking through your home.

There are elements that raise or lower the value of your house – so, what are they?

Location

When you purchased your home, you thought a lot about where it was in relation to work, family or friends, your children’s schools, etc. – but appraisers look at different categories when it comes to the location of your home.

They’re looking at:

  • The quality of schools
  • Employment options
  • Proximity to shopping, entertainment, and recreational centers

Sometimes a home’s location is more important than the size of the house!

Home Size

Speaking of home size – this is still an important factor when it comes to appraising your home’s value.

The value of a home is estimated in price per square foot. If a 3,000 square foot home sold for $300,000, the price per square foot would be $200.

Features

The added elements to your home will also add to its value. Your home’s garage, fireplace, backyard, patio, etc. all can increase the price of your home.

Interior & Exterior

Obviously, what goes inside and outside of your home matters. Appraisers look for high-end materials that buyers are searching for. Think hardwood floors, stainless steel appliances, stone or fiber-cement siding, updated roof and plumbing, etc.

Your home is something to build upon – if you’re looking to sell, it’s important that you research and see where your home might land in its value.

Understanding and Improving Your Credit Score

One of the biggest hurdles you will have to jump through when purchasing a home is organizing your finances – and the one that might be most intimidating? Your credit score.

Having a good credit score will improve your responsibility to potential lenders; and if you want the best deal, a strong credit score is best.

Credit scores range, so it’s important to know where you fall. If you’re below a “good” credit score, luckily, there are ways to bring it back up.

Understanding Scores

Here are the scores lenders look at and categorize:

Perfect Credit Score: 850

Excellent Credit Score: 760-849

Good Credit Score: 700 to 759

Fair Score: 650 to 699

Low Score: 649 and below

Lenders generally look for a score of 660 or higher before they consider a mortgage loan.

Improving Your Score

Don’t fret! There are ways to help improve and adjust your credit score.

You can request a free credit report once a year from TransUnion, Equifax, and Experian through this website.

Review your credit report for any errors – if there is an error on one of your accounts, you’ll need to refute the error with the bureau by providing documentation. Credit bureaus usually have 30 days to investigate the error.

CUR – Credit Utilization Ratio

This ratio showcases how much you owe compared with the amount of available credit you have. If you have a $10,000 credit limit on your credit card, and you have a balance of $9,000, you’ve utilized 90% of your credit, which drags down your score.

Tackling what you owe is a major step in improving your score. Paying on time, and (if you can) paying more than your minimum balance, can help build up that perfect payment history that you need.

Real Estate Tip of the Week: Texting Tips for Agents

To text, or not to text?

In this day and age, and with the majority of homebuyers falling into the Millennial generation, texting wouldn’t hurt.

Emails roughly have a 6% response rate, whereas texting has a response rate of 45%! If you’re looking to get in touch with your client, pass along important information, and overall become more approachable – then texting is the way to go.

Check out our texting tips for the real estate agent:

Text during hours you’d call

No one wants to receive a text from someone that isn’t a friend or family member after 11pm. Unless your text is an absolute emergency, be sure to only send texts to your client during business hours.

Thank you text

A thank you goes a long way – and it’s a great way to confirm your upcoming meeting! Thank your client for their time, and let them know what they can expect at your face-to-face meeting. Confirm location, date, and time.

Texts to check materials

If you have valuable market information that you send out to clients via email, mail, social media, etc., it wouldn’t hurt to send your buyer or seller a quick text letting them know to keep an eye out for it, and if they have any questions to reach out to you!

This can also be great if you’ve sent along important (and thorough) information on a neighborhood your client has been interested in. Your text can follow something along these lines:

“Hello [Client Name]! I just emailed you important information on a community I think you might like! Let me know if you have any questions!”

Keep it fun and short

Depending on your client, try and switch up how you interact in the conversation! Send a GIF (if appropriate), or send a short video of yourself confirming your meeting the next day. Keeping texts light and fun can help you seem more approachable and relatable (and not some big scary real estate agent!).

For more real estate tips and tricks, stop by Alliance’s Blog here.