Some General Real Estate Terms (post 2)

 This is my second post on real estate term.  See my previous post for other terms.

This posts terms are: Home sale contingency, MLS, HOA, and subject to home inspection.

First is home sale contingency.  When a buyer puts a clause in the contract to let the seller know that a condition to purchasing their home is for them to first sell the buyer's current home.  This is used when the buyer would not be approved for a second mortgage or need the money for the down payment instead of using any savings first.  This can stall the closing of the home depending on the market.

Next is MLS or multiple listing service.  It is a database that allows Realtors to add listings (land and homes) to include information about the property, photos, etc.  Other Realtors can then view the listings and see what is currently on the market as well as what similar properties have sold for.

HOA is one term you might be familiar with.  A Home Owners Association is a private association for communities or condominiums.  When you buy a home in an HOA you pay dues, either monthly or annually, and agree to follow their rules.  If you violate the rules or don't pay your dues, they can put a lien on your property and can also foreclose on the property.  The dues usually go toward maintaining community areas such as swimming pools, ponds, children's playgrounds, etc.  They can dictate which items are prohibited on your property such as boats, RV, sheds, etc.  They can require pre-approval before planting trees, require specific colors for fencing, etc.  These requirements are to maintain a specific appearance of the neighborhood.

Finally, what does subject to inspection mean? When submitting an offer on the property the buyer should state the purchase is subject to inspection meaning if a licensed inspector finds an issue with the home the buyer could back out of the contract.  The buyer could also negotiate with the seller to have repairs made or lower the final price of the home so the buyer can make repairs later.

All information has been gleamed from the book called The Language of Real Estate and a website ran by Open Door.

If you have any terms that you would like explained just let me know and I can include them in the next post with definitions.