Q: Active

An Active Property The property is actively for sale and on the market. The sellers may have received offers but have not accepted any yet. When an offer is accepted the property will become Pending the completed sale. If the contract falls through, typically the property will go Active again.

Q: Active Contingent

What Does Active-Contingent Mean? 🤔 Along the same vein as a contingent offer, we often get the question about the meaning of “active contingent” in real estate. Active contingent is one of a variety of status updates given to a home listing. If a property has an active contingent label, it means the seller has accepted an offer from a buyer. But the home sale has certain contingencies that need to be met, and the seller is taking backup offers in case the first deal does not go through. Similar to contingencies being protection for the buyer, having the listing be active contingent offers protections for the seller. Having a home be active contingent can influence a buyer to release contingencies prematurely, or when they shouldn’t be, just so the “other guy” doesn’t get the house. This would be a mistake! Buying and selling real estate can be a very emotional time. Relying on your agent to guide you through the process is the best way to end in a result that you will be happy with! --------------- EDIT THIS Active contingent in real estate is a status of a property listing indicating that it is under contract, but that the sale is contingent on certain conditions being met. These conditions may include the sale of the buyer’s current home, the receipt of satisfactory inspection reports, or the approval of a loan. If the conditions are not met, the listing may revert to active status.

Q: Adjustable-Rate Mortgage (ARM)

What is an Adjustable-rate mortgage (ARM)? After an introductory period that could be 3, 5, 7, or 10 years, the interest rate on an adjustable-rate mortgage will be adjusted by the lender in accordance with current interest rates and your loan agreement. For instance, a 5/1 ARM will have a fixed rate for the first five years, then the rate will vary based on a variety of factors. Your lender will explain the details before you accept the loan. Typically, the interest rate on ARMs are lower for the fixed period which makes your payments more affordable during that period. However, the interest rate will generally go up along with your monthly payment after the rate is adjusted. Homeowners consider ARMs riskier as you can't predict what mortgage rates will be in the future.

Q: Amortization

What is Amortization ? Amortization of a mortgage refers to the process of paying off your home loan in regular monthly payments over a fixed period of time, usually 30 years. Do you know what kind of mortgage you have? Do you know whether your payments are going to increase over time? 📈 “Amortization” is the term used for the schedule of mortgage installment payments over a period of time. Typically, a buyer’s amortization schedule is one payment per month over 15 or 30 years. 📢 Important: 📝 There are both adjustable and fixed-rate mortgages. With an adjustable rate, the lender can increase the rate on a predetermined schedule, which would impact your amortization schedule. 📝 With a fixed rate, your payments with remain the same for the life of the loan, unless you refinance or there are changes to taxes or insurance.

Q: As-is

What does As-is mean? A contract or offer clause stating that the seller will not repair or correct any problems with the property. Also used in listings and marketing materials.

Q: Back on Market

What does Back on Market mean? The property was under contract with another buyer and their contract fell through, so it is Active again.

Q: Backup Offer

What is a backup offer ? When an offer is accepted contingent on the fall through or voiding of an accepted first offer.

Question 1

2-1 Buydown

Libby Guthrie · Accepted Answer

Worried about rising mortgage rates? A 2-1 buydown could make a home purchase more affordable.

This type of financing agreement offers a lower interest rate for the first two years of the mortgage, typically a 2% discount in the first year and 1% in the second year.

For example, if you lock in a 6.5% 30-year mortgage with a 2-1 buydown, the first year’s rate might be 4.5%, while the second year’s rate would be 5.5%. After that, the rate would go up to 6.5% for the remainder of the loan.

Sometimes motivated home builders or sellers will offer to cover the cost of a 2-1 buydown as an incentive.

Interested in learning more about 2-1 buydowns and other homebuyer incentives we’re seeing in the market? Reach out for a free consultation!

Question 2

Active

Libby Guthrie · Accepted Answer

An Active Property

The property is actively for sale and on the market. The sellers may have received offers but have not accepted any yet.

When an offer is accepted the property will become Pending the completed sale.

If the contract falls through, typically the property will go Active again.

Question 3

Active Contingent

Libby Guthrie · Accepted Answer

What Does Active-Contingent Mean? 🤔

Along the same vein as a contingent offer, we often get the question about the meaning of “active contingent” in real estate.

Active contingent is one of a variety of status updates given to a home listing. If a property has an active contingent label, it means the seller has accepted an offer from a buyer. But the home sale has certain contingencies that need to be met, and the seller is taking backup offers in case the first deal does not go through.

Similar to contingencies being protection for the buyer, having the listing be active contingent offers protections for the seller.

Having a home be active contingent can influence a buyer to release contingencies prematurely, or when they shouldn’t be, just so the “other guy” doesn’t get the house. This would be a mistake!

Buying and selling real estate can be a very emotional time. Relying on your agent to guide you through the process is the best way to end in a result that you will be happy with!

--------------- EDIT THIS

Active contingent in real estate is a status of a property listing indicating that it is under contract, but that the sale is contingent on certain conditions being met.

These conditions may include the sale of the buyer’s current home, the receipt of satisfactory inspection reports, or the approval of a loan.

If the conditions are not met, the listing may revert to active status.

Question 4

Adjustable-Rate Mortgage (ARM)

Libby Guthrie · Accepted Answer

What is an Adjustable-rate mortgage (ARM)?

After an introductory period that could be 3, 5, 7, or 10 years, the interest rate on an adjustable-rate mortgage will be adjusted by the lender in accordance with current interest rates and your loan agreement.

For instance, a 5/1 ARM will have a fixed rate for the first five years, then the rate will vary based on a variety of factors. Your lender will explain the details before you accept the loan.

Typically, the interest rate on ARMs are lower for the fixed period which makes your payments more affordable during that period. However, the interest rate will generally go up along with your monthly payment after the rate is adjusted.

Homeowners consider ARMs riskier as you can't predict what mortgage rates will be in the future.

Question 5

Amortization

Libby Guthrie · Accepted Answer

What is Amortization?

Amortization of a mortgage refers to the process of paying off your home loan in regular monthly payments over a fixed period of time, usually 30 years.

Do you know what kind of mortgage you have? Do you know whether your payments are going to increase over time? 📈

“Amortization” is the term used for the schedule of mortgage installment payments over a period of time. Typically, a buyer’s amortization schedule is one payment per month over 15 or 30 years.

📢 Important:

📝 There are both adjustable and fixed-rate mortgages. With an adjustable rate, the lender can increase the rate on a predetermined schedule, which would impact your amortization schedule.

📝 With a fixed rate, your payments with remain the same for the life of the loan, unless you refinance or there are changes to taxes or insurance.

Question 6

Appraisal

Libby Guthrie · Accepted Answer

A professional analysis used to estimate the value of the home.

This is a necessary step in validating a home's worth to you and your lender as you secure financing.

Question 7

As-is

Libby Guthrie · Accepted Answer

What does As-is mean?

A contract or offer clause stating that the seller will not repair or correct any problems with the property. Also used in listings and marketing materials.

Question 8

Assumable Mortgage

Libby Guthrie · Accepted Answer

What is an Assumable Mortgage?

A home loan that allows the buyer to take over, or assume, the seller’s mortgage at the original terms, including interest rate.

Mortgage rates have remained stubbornly high.

But did you know that homebuyers can take over certain types of mortgages from the seller—at their original interest rates? These loans are called assumable mortgages.

Many fixed-rate mortgages can be assumed; most variable-rate loans cannot.

If you have an assumable mortgage with a low interest rate, it could be a selling point for your home. However, there are some important factors to consider. Reach out for a free consultation to learn more!

Question 9

Back on Market

Libby Guthrie · Accepted Answer

What does Back on Market mean?

The property was under contract with another buyer and their contract fell through, so it is Active again.

Question 10

Backup Offer

Libby Guthrie · Accepted Answer

What is a backup offer?

When an offer is accepted contingent on the fall through or voiding of an accepted first offer.

Question 11

BPO

Libby Guthrie · Accepted Answer

What is a BPO? 🤔

A Broker Price Opinion (BPO) in real estate is a professional estimation of a property's value.

It's an essential tool used by real estate brokers like me, providing an in-depth analysis of market trends and comparable sales data in a specific area.

This quick and cost-effective report greatly helps financial institutions, investors or property owners make informed decisions regarding potential sales, purchases, or refinancing.

Essentially, a BPO in real estate is a comprehensive snapshot of a property's worth in the current market.

Banks and lenders who hold REO properties often hire a Realtor to perform a BPO on those properties. It usually is the first step in managing and selling the bank owned home.

Question 12

Bridge Loan

Libby Guthrie · Accepted Answer

What is a bridge loan?

This short-term financing option can help you bridge the gap between buying a new home and selling your old one. It enables you to tap into your existing home equity before you’ve sold.

However, there are some issues to consider before you apply for a bridge loan:

👉 The interest rates and fees are usually higher than typical home loans. 👉 The equity from your current home will be used to secure the loan. 👉 The credit requirements are often greater for bridge loans than for standard financing.

If you think you may need to “bridge the gap” between buying a new home and selling your current one, give us a call. We can discuss your options and refer you to a lender who can help.

📲 865-364-0200 📩 Libby@guthriegrouphomes.com

Question 13

Buyer’s Agent

Libby Guthrie · Accepted Answer

Buyer’s agent: The agent who shows the buyer’s property, negotiates the contract, or offer, and works with the buyer to close the transaction.

Question 14

Cancelled

Libby Guthrie · Accepted Answer

A canceled status on a multiple listing service (MLS) means that the listing agreement between the seller and the listing agent has been cancelled:

The property is no longer available for showings 🏡
The relationship between the seller and the listing agent ends 🙅🏼‍♀️
The listing will not show up as expired in the future 👍🏼
Also, the seller is free to relist the property with another broker 🏠

📜 To relist the property, the seller will need to get a new listing agreement with the broker.

A canceled listing differs from a withdrawn listing, so the listing contract is still in effect, but the property is not being marketed. A withdrawn listing can be for many reasons, including:

The seller changed their mind 🤷🏼‍♂️
The seller wants to make improvements to the home 🔨🔦
Also, the seller may want a break from showing the home 😪

More About a Cancelled Listing

❎ When a real estate listing is cancelled, it means that the property which was previously available for sale is no longer on the market.

This could be because of a variety of reasons - the owner may have decided not to sell, the agreement with the real estate agent may have ended, or the property may have been taken off the market for improvements or repairs.

🚫 The cancellation implies that the property is no longer actively seeking potential buyers.

👩🏼Libby Says...

In my experience, the home seller may have unrealistic expectations about selling their home. They may expect more money than the home is worth. They may think the property will sell quickly without doing any repairs, staging or preparing the home for the market.

Having an agent that is honest with the seller is paramount to a fast sale for the most amount of money. I help sellers manage their expectations and have realistic goals for the sale of their property.

If you want honest advice about selling your home, give me a call right away. 🤙🏼

~ Libby

📲 865-364-0200 📧 Libby@guthriegrouphomes.com

Libby Guthrie, REALTOR Keller Williams 865-966-5005 Guthrie Group Homes, Knoxville TN Real Estate https://gghknoxville.com/

Question 15

Capitalization Rate (Cap Rate)

Libby Guthrie · Accepted Answer

Capitalization Rate aka Cap Rate

An equation to estimate the potential return on an investment in the real estate market. Calculated by dividing net annual income by property market value.

Interested in investing in real estate?

You’ll need to understand cap rates.

A property’s cap rate (or capitalization rate) is an estimate of its rate of return. To find a property’s cap rate, divide the net annual income you expect it to generate by its current market value.

Cap rates are a great tool for comparing properties, but they don’t tell the whole story! You also need to account for financing costs, management expenses, and more.

Are you searching for an investment property that will pay off? We can help! Contact us today for a free consultation.

Question 16

Close of Escrow

Libby Guthrie · Accepted Answer

[caption id="attachment_2676" align="alignnone" width="1200"]

Close of Escrow[/caption]

The close of escrow is a critical final step in the real estate transaction process. Here's how it works:

Offer and Acceptance

The process begins when the buyer makes an offer on a property and the seller accepts it. This agreement outlines the terms of the sale, including the purchase price and any conditions that need to be met.

Escrow Account

Once the offer is accepted, an escrow account is established. This is a neutral third-party account where funds related to the sale, such as the buyer's earnest money deposit, are held securely. The escrow agent, often a title company or attorney, manages this account.

Due Diligence

During the escrow period, both parties perform due diligence. The buyer typically conducts a home inspection, secures financing, and reviews any disclosures provided by the seller. The seller works to satisfy any contingencies outlined in the purchase agreement.

Title Search and Insurance

A title search is conducted to ensure there are no liens or claims against the property. Title insurance is purchased to protect the buyer and lender against potential future disputes over property ownership.

Final Walkthrough and Closing Disclosure

Before closing, the buyer usually performs a final walkthrough to ensure the property is in the agreed-upon condition. The buyer also receives a Closing Disclosure, which outlines the final terms of the loan and the costs involved in the transaction.

Closing

The close of escrow involves signing the final paperwork, including the deed, loan documents, and settlement statement. The buyer transfers the remaining funds to the escrow account, and the escrow agent disburses the funds to the seller and other parties as necessary.

Transfer of Ownership

Once all documents are signed and funds are distributed, the title is recorded with the local government, officially transferring ownership to the buyer. The keys to the property are handed over, completing the transaction. 🔑

The close of escrow signifies the end of the buying process, making the buyer the official new owner of the property. 🍾

Question 17

Closing

Libby Guthrie · Accepted Answer

Closing: The end of a transaction where documents are signed, and funds are dispersed.

Should I accept a contingent offer on my house?

If you are both buying and selling, should you take a contingent offer on the property you are selling? Typically, the answer is yes. But this is a decision you should discuss thoroughly with your Realtor®. Every situation is unique, so having an experienced agent is essential for determining if this is the right move for your situation.

* Contingent – occurring or existing only if (certain circumstances) are the case; dependent on.

Question 26

Contract

Libby Guthrie · Accepted Answer

A real estate contract is a legally binding agreement between two parties for the sale and purchase of a property.

It outlines the price, terms, and conditions of the sale.

Question 27

Conventional Loan

Libby Guthrie · Accepted Answer

What is a Conventional Loan?

A conventional loan is any mortgage loan that is not insured or guaranteed by the government. Conventional loans can be conforming or non-conforming.

Question 28

Conventional Sale

Libby Guthrie · Accepted Answer

Conventional sale: When the property is owned outright and has no mortgage.

Conventional sales are often smoother transactions than those that require financing as there is no dependence on the buyer receiving a loan to purchase the property.

Question 29

Counteroffer

Libby Guthrie · Accepted Answer

A counteroffer is a response to a buyer's original offer on a house to make changes that better fit a seller's goals.

A counteroffer is one step closer to an accepted offer!

A counteroffer shows that the seller is willing to work with the buyer, but on slightly different terms (usually a change in the price or contingencies).

Here’s how your real estate agent can help you navigate a counteroffer:

☑️ Buyers, we negotiate on your behalf and provide guidance on how to get your offer accepted.

☑️ Sellers, we help you stay clear of red flags and make sure you accept the right offer.

Negotiation is a BIG part of what we do as real estate pros! Connect with our team to learn more about how we provide 5-star representation for our clients.

Question 30

Credit Score

Libby Guthrie · Accepted Answer

A number ranging from 300-850 that's based on an analysis of your credit history.

Your credit score helps lenders determine the likelihood you'll repay future debts.

You'll need a score of 620 or better, but you'll get better financing rates with a score of 720 or higher.

Question 31

Curb Appeal

Libby Guthrie · Accepted Answer

What is Curb Appeal? 🤔

Curb appeal is the attractiveness of a property viewed from the street, the exterior allure that grabs the attention of prospective buyers or tenants. It's a crucial factor in real estate as it creates the first impression, invests the onlooker with a sense of expectation, and sets the tone for what's to come. Curb appeal often lays the emotional groundwork that can significantly influence a potential buyer or tenant's decision.

The concept of curb appeal goes beyond just a clean facade; it's about a harmonious mix of multiple elements that together create a compelling and inviting outdoor space. This includes aspects like landscaping, exterior design, front entrance, lighting, driveway, and walkways, each carrying its own weight and contributing to the overall allure.

To create excellent curb appeal, focus on the following suggestions:

1. Landscaping: This is often the most noticeable aspect of curb appeal. A well-maintained lawn, fresh greenery, and vibrant flowers can drastically enhance your home's appearance. Choose low-maintenance, native plants for sustainability and attractiveness.

2. Exterior Design and Maintenance: Ensure your home's exterior is in good repair. Fresh paint, clean windows, and a well-maintained roof are essential. Opt for colors and design elements that complement the home's style and surroundings.

3. Front Entrance: Make your front door inviting. Consider it as a focal point that grabs attention, from its color to its hardware to any surrounding elements like plants or decorations.

4. Lighting: Good outdoor lighting can provide a warm, welcoming ambiance while highlighting the home's best features. Investing in professionally designed lighting not only attracts potential buyers or tenants at night but also amplifies security.

5. Driveway and Walkways: A clean, well-maintained driveway and walkways go a long way in boosting curb appeal. Opt for materials that complement your home and landscape.

6. Outdoor Elements: Details like a mailbox, house numbers or a creatively designed welcome mat can add additional charm to your home's exterior.

7. Seasonal Decor: Occasional touches in sync with seasons or holidays can make the house appear cared for and loved, adding significantly to its allure.

Remember, curb appeal is about creating a sense of harmony and coherence, where every element is integrated seamlessly, leading to a compelling and inviting visual narrative that convinces the potential buyer or tenant about the value and potential of the property.

Question 32

Days on market (DOM)

Libby Guthrie · Accepted Answer

Days on market (DOM) means the number of days a home has been listed on the market.

The number of days the property has been on the market may reflect the desirability and/or pricing of the home.

If the home has been on the market too long, the property may be stale.

Question 33

Debt-to-Income (DTI) Ratio

Libby Guthrie · Accepted Answer

Debt-to-Income (DTI) Ratio is a financial term that compares a person’s recurring monthly debt payments (credit cars, car loans, etc.) to their gross monthly income.

Lenders use the DTI ratio to assess a person's ability to manage the payments and repay the money they have borrowed.

It is generally calculated by dividing total recurring monthly debt by gross monthly income, and it is expressed as a percentage.

A lower DTI ratio is preferable as it shows you have a good balance between debt and income.

Question 34

Deed

Libby Guthrie · Accepted Answer

In real estate, a deed is a document that shows who owns a piece of property. When someone buys a house, they get a deed that shows they are the owners.

This is not the same as a Deed of Trust.

Question 35

Deed of Trust

Libby Guthrie · Accepted Answer

A Deed of Trust is like a mortgage. It is an agreement between a borrower (you) and a lender (a bank or other financial institution).

Question 36

Deposit

Libby Guthrie · Accepted Answer

What is The Deposit 🤔

The Deposit is an amount of money from the home buyer to the home seller, paid in good faith to show dedication to purchasing the property. 🏡

IMPORTANT FACTS 👇🏼

💰The amount varies by market 💰Goes towards the purchase of your home 💰Protects the seller if a buyer backs out 💰A buyer may get this money back – due to failed inspections or contingencies

Our best advice? When it comes to buying in a low inventory, competitive market, it’s essential to partner with a Buyer’s Agent who understands how to make your offer stand out to sellers 🥊

Contact our team for a ✨ free consultation ✨ to learn more about how to write a winning offer!

Question 37

Disclosure Statement

Libby Guthrie · Accepted Answer

What is a Disclosure Statement? 🤔

A legally binding document in which the seller reveals any potential flaws and issues the buyer needs to know about the property.

Also known as a “Seller’s Disclosure,” this is a legal document that outlines any known flaws that a home seller is aware of that could negatively impact the home’s value 🏡

💡 TIP: Buyers should scrutinize this document closely with their real estate agent to fully understand the condition of a home.

Our best advice? When it comes to buying a home, make sure you get an inspection to confirm what has been disclosed is accurate and discuss any potential deal breakers with your agent.

The three rules of this document are disclose, disclose, disclose.

Question 38

Down Payment

Libby Guthrie · Accepted Answer

What is a down payment?

The sum in cash that you can afford to pay at the time of purchase of a home or property.

A conventional loan down payment is usually 20% of the sales price, but other types of financing require as little as 3.5% to 15%. Some 0% down programs are also available.

A mortgage lender can tell you what types of loans you qualify for.

Question 39

Dual Agency

Libby Guthrie · Accepted Answer

Dual Agency The representation of opposing principals (buyers & sellers) at the same time.

That is, one real estate agent represents both the buyer and the seller in one transaction (sale of a home).

Question 40

Due Diligence

Libby Guthrie · Accepted Answer

What is Due Diligence?

When a homebuyer investigates facts about the physical and financial condition of the property and its area before they make an offer and after their contract is accepted.

When buying a home, it’s extremely important to do your “due diligence.” During this period, you’ll look into the condition of your chosen property and compare it to other homes like it to make sure it’s really a good fit.

Due diligence is reasonable steps taken by a person in order to satisfy a legal requirement, especially in buying or selling real estate.

As your agent, we’ll guide you through this process by pointing out and addressing any of the home’s red flags so you feel completely confident about your purchase.

Question 41

Earnest Money

Libby Guthrie · Accepted Answer

What is Earnest Money? 🤔

A deposit made to a seller that represents a buyer's good faith to buy a home. It's typically around 1% - 5% of the sale price.

Earnest money is a deposit from the buyer to the seller, made in good faith to show dedication to purchasing the property 🏡

IMPORTANT FACTS 👇

💰 The amount varies by market 💰 Goes towards the purchase of your home 💰 Protects the seller if a buyer backs out 💰 A buyer may get this money back – due to failed inspections or contingencies

💡 TIP: In a seller’s market, you may consider making your earnest money non-refundable.

Our best advice? When it comes to buying in a low inventory, competitive market, it’s essential to partner with a Buyer’s Agent who understands how to make your offer stand out to sellers 🥊

Question 42

Easement

Libby Guthrie · Accepted Answer

What is an easement? 🔎🏡

A right to cross or otherwise use someone else's land for a specified purpose.

The term often crops up after buyers have made an offer on a home that’s been accepted, at which point a title search brings up the easement—which is essentially the legal right for someone else to use the property, or part of the property for a specific purpose.

Say what? You bend over backward to buy a home and now you have to share?! Don’t worry, in most cases, it’s not as bad as it sounds.

Types of Easements:

📝 Right of way: This is where a neighbor may need to pass through the property via a driveway to access the main road, a neighborhood playground, or a community feature (like a lake).

📝 Utility maintenance: This easement is typically granted to utility companies to run power and cable lines on a property.

📝 HOAs/condos: If you live in a condo or home managed by a homeowners association, odds are these institutions own much of the property—while residents have rights to pass through.

Question 43

Equity

Libby Guthrie · Accepted Answer

The equity in a home or property is the difference between how much your home is worth and how much you owe on your mortgage.

So if your home is worth $500,000 and you owe $450,000 on your mortgage, your equity in the home is $50,000.

Question 44

Escalation Clause

Libby Guthrie · Accepted Answer

An escalation clause is a clause in a real estate contract that allows the purchase price of a property to increase if a certain condition is met.

For example, if the buyer's offer is accepted but the seller receives a higher offer, the buyer can choose to increase their offer by a specified amount.

Question 45

Escrow

Libby Guthrie · Accepted Answer

Escrow as it relates to real estate is a process of holding money and documents in a secure account while two parties complete a purchase.

Escrows are usually held by a Title and Escrow company.

This gives the buyer and seller peace of mind that the transaction is safe and that the buyer will not be able to take the money and run.

The escrow account ensures that the buyer has the necessary funds and that the seller will receive them when the transaction is complete.

Question 46

Expired

Libby Guthrie · Accepted Answer

What is an expired listing?

A real estate listing that has expired and is no longer active, usually because it didn’t sell in the amount of time agreed upon by the listing agent and the owner of the home.

Other reasons for a listing to expire are the asking price was not met, or there were other issues with the property.

If you see an Expired listing, the owner may still be interested in selling. Ask your agent about it.

Question 47

FAQs

Libby Guthrie · Accepted Answer

FAQs or Frequently Asked Questions provide answers to the most commonly asked questions from Home Buyers and Home Sellers about Real Estate, on Guthrie Group Homes, Knoxville TN.

However, depending on the website you are on, the FAQs for that site will be about the content that site covers.

Question 48

FHA

Libby Guthrie · Accepted Answer

What is the FHA?

The FHA (Federal Housing Administration) is an agency of the US government that provides insurance for mortgages. The FHA also sets rules and standards for lenders.

Question 49

FHA Loan

Libby Guthrie · Accepted Answer

What is an FHA Loan?

An FHA loan is a loan that is backed by the Federal Housing Administration. It is designed to help people buy a home who may not have the money to make a big down payment.

Question 50

FICO Score

Libby Guthrie · Accepted Answer

A FICO score is a type of credit score that indicates a person's creditworthiness.

Named after the Fair Isaac Corporation, which created the scoring model, a FICO score ranges from 300 to 850.

Financial institutions use this score to determine the likelihood of a person repaying their debts.

The higher the score, the lower the perceived risk.

It is calculated based on various factors, including payment history, amounts owed, length of credit history, types of credit used, and new credit.

Maintaining a high credit score can help individuals secure loans at competitive interest rates.

Question 51

Final Walkthrough

Libby Guthrie · Accepted Answer

What is a Final Walkthrough?

A final walkthrough in real estate is when a buyer goes through the property one last time before the closing.

The walk-through is one of the last steps in the homebuying process, but you shouldn’t rush it! Here are a few things to check during your final walk-through:

💡 Are all items included in the sale (e.g. light fixtures and appliances) in place and operational? 🚿 Are all major systems working properly? ⚒️ Have all requested repairs been completed? 🗑️ Has the seller removed all personal items and debris? 🚪 Was any significant damage done during the seller’s move out?

Want more expert guidance on the homebuying process? Reach out for a free consultation.

📲 865-364-0200 📧 libby@guthriegrouphomes.com

Question 52

Fixed-rate Mortgage

Libby Guthrie · Accepted Answer

What is a fixed-rate mortgage?

This mortgage's interest rate will never change, even if the term of the loan is 30 years.

Fixed-rate mortgages typically have a term of 15 or 30 years.

Homeowners prefer this type of loan as it has a lower amount of risk compared to variable-rate loans, and the monthly payment remains the same for the life of the loan.

Question 53

Foreclosure

Libby Guthrie · Accepted Answer

What is a Foreclosure?

When the lender takes ownership of a property due to failed payments by the buyer.

A foreclosure is when the lender takes ownership of a property due to failed payments by the buyer. It's a legal process that can be complex and time-consuming. If you're facing foreclosure, it's important to understand your rights and options.

Question 54

FSBO

Libby Guthrie · Accepted Answer

What is an FSBO?

FSBO stands for "For Sale by Owner". Often pronounced "fizbo" by real estate agents.

The owner of the home has it listed without an agent or brokerage representation.

The buyer's agent can usually still show the home, as many FSBOs will agree to work with agents representing a buyer.

Be wary of FSBOs since rarely does the homeowner have the requisite knowledge, experience, and understanding needed to sell a property.

Question 55

HELOC

Libby Guthrie · Accepted Answer

What is a HELOC?

A HELOC (Home Equity Line of Credit) is a type of loan that allows a homeowner to borrow against the equity in their home.

Question 56

Home Equity Loan

Libby Guthrie · Accepted Answer

What is a Home Equity Loan?

A home equity loan — sometimes called a second mortgage — is a loan that's secured by your home.

Unlike a HELOC, a home equity loan is a fixed amount. You receive a lump sum of money which is often used to purchase the home. It may also be used to consolidate other debt like credit card debt, at a lower interest rate.

Question 57

Home Inspection

Libby Guthrie · Accepted Answer

What is a Home Inspection?

A home inspector examines your home for integrity - such as the HVAC system, electrical, plumbing, attic, flooring, foundation, etc.

Question 58

Homeowners Association (HOA)

Libby Guthrie · Accepted Answer

What is a Homeowners Association (HOA)?

A homeowners association (HOA) is an organization that makes and enforces rules and guidelines for a subdivision, planned community, or condominium building.

Like many relationships, it's complicated.

A homeowners association (HOA) is a non-profit organization that takes care of the common areas in a planned community.

HOA fees pay for things like landscaping, snow removal, and repairs to common areas.

A Homeowners Association is an organization made up of homeowners who live in a specific neighborhood or development. The HOA is responsible for maintaining common areas and enforcing rules and regulations.

When you buy a home in a development that has an HOA, you agree to the terms and conditions (rules) of the HOA. CC&Rs.

A homeowners association (HOA) is a private organization that manages and governs a residential community, such as a planned neighborhood, condominium building, or townhouse complex. HOAs are responsible for:

Creating and enforcing rules

HOAs establish rules and guidelines to maintain uniformity and protect property values. These rules can include requirements for yard items, door colors, and car storage.

Collecting fees

HOAs collect monthly or annual dues from residents to pay for common area maintenance and services.

Providing amenities

HOAs can offer amenities like swimming pools, gyms, snow removal, and security.

Running the community

HOAs are typically run by a board of directors made up of elected volunteers.

HOAs can be beneficial because they help maintain the neighborhood and preserve property values. However, some people find the rules to be overly restrictive. HOAs can impose fines on homeowners who don't comply with the rules, and in extreme cases, they can even force foreclosure. --------------------

Cornell Law

Many HOAs have very particular guidelines like preventing any items being in the yard, requiring doors to be a specific color, requiring cars to always be in the garage, or even requiring flower beds to have specific flower colors. As such, it is very important that homeowners look at the CC&Rs for the property they potentially buy.

When homeowners break a restriction or do not pay fees, the HOA will have specific remedies set in the CC&Rs such as fines or even forcing the home to be foreclosed on in extreme circumstances, ranging widely among different HOAs. Some laws limit how HOAs can punish homeowners such as limiting foreclosure actions to when the homeowner acts unruly, but these laws vary greatly from state to state and city to city. Further, some federal and state laws may prevent the enforcement of restrictions by HOAs that become unconscionable or against public policy. For example, federal laws prohibit HOAs from banning homeowners from having a service animal. https://www.law.cornell.edu/wex/homeowners%27_associations_%28hoas%29#:~:text=Many%20HOAs%20have%20very%20particular,unconscionable%20or%20against%20public%20policy.

Investopedia

https://www.investopedia.com/terms/h/hoa.asp#:~:text=A%20homeowners%20association%20(HOA)%20is%20an%20organization%20that%20makes%20and,impose%20fines%20on%20noncompliant%20homeowners.

Bankrate

https://www.bankrate.com/real-estate/what-is-an-hoa/

Rocket Mortgage

https://www.rocketmortgage.com/learn/hoa#:~:text=Homeowners%20associations%2C%20more%20commonly%20known,keep%20the%20entire%20neighborhood%20appealing.

Question 59

How Do I Know If It's Time to Buy Instead of Rent?

Libby Guthrie · Accepted Answer

If you know where you want to live, have a steady and secure income, and are ready for the responsibilities of homeownership, then it might be time to invest in a home.

Read "5 Questions to Ask Before Purchasing Your First Home" to learn more about determining if now is the right time to buy for you.

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Question 60

Inspections

Libby Guthrie · Accepted Answer

What are Inspections?

Real estate inspections are when a professional inspector looks at a property to make sure it is in good condition.

These may include home, pest, and roof inspections.

Question 61

Jumbo Loan

Libby Guthrie · Accepted Answer

What is a Jumbo Loan?

Conforming loan limits are $647,200 for most of the U.S., so anything above this would be a jumbo loan.

Jumbo loan requirements are stricter and there are more requirements you will need to satisfy.

Find out more about jumbo loans here.

Question 62

Lender

Libby Guthrie · Accepted Answer

What is a Lender?

A (mortgage) lender is a bank or other financial institution that provides loans to people who want to buy a home.

Lenders include traditional banks, mortgage brokers, credit unions, and dedicated mortgage lenders like Rocket Mortgage^®. We usually recommend using a mortgage broker as they can "shop around" for the best loan for your circumstances.

Banks like Wells Fargo or Bank of America can only lend money to you with their in-house loans and those loan program guidelines.

When Realtors talk about lenders, they are referring to mortgage lenders.

Sometimes the homeowner can be the lender where you make the morgage payements to the homeowner instead of a bank or mortgage lender.

Occasionally, the buyer can assume the mortgage from the current homeowner.

Lenders in general offer other loans like personal loans, business loans, etc.

They can be an individual, group, or financial institution that provides money to a borrower with the expectation that you will pay them back, plus interest and fees, in the future.

Lenders include banks, private lenders, insurance companies, government agencies, credit unions, or non-bank lenders.

Question 63

Listimate™

Libby Guthrie · Accepted Answer

What is a Listimate™?

A Listimate™ is a home value estimate based on our proprietary system of determining a home's value, or the dollar value of a home if listed for sale at the time of the estimate.

We created this system based on over 30 years of experience in retail residential real estate resale properties.

We consider Listimates™ as the true current market value of a specific property. If you decide to list your home with Guthrie Group Homes, your Listimate™ will be the price we recommend you use as the asking price for your home.

How is a Listimate™ different from Zillow's Zestimate?

We suggest you read our article "Comparative Market Analysis vs. Zestimate".

How Accurate Is It?

Our track record speaks for itself. 99% of our listings sell at or above the asking price, and they sell fast!

Question 64

Listing

Libby Guthrie · Accepted Answer

What is a Listing?

In real estate, the word “listing” is typically used to refer to the for-sale home or property itself, although it technically means the agreement between the broker and the owner of the home to market and sell the property.

When you hire a Realtor to sell your house, that is referred to as "taking a listing".

This is not the same as listing the property on the MLS (Multiple Listing Service), however, when an agent takes a listing, they usually list it on the MLS.

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