Home Buyer's Guide- Seattle 2021 - Jeffie

COMMON TERMS MUTUAL ACCEPTANCE – The date buyer and seller have a contract agreement signed by all parties. Mutual acceptance acts as day zero and all timelines begin counting at day one which is the first day following mutual acceptance. EARNEST MONEY – A good faith offering to show your commitment to purchase a home. Earnest money counts towards your down payment and is held by the escrow company facilitating the transaction. Earnest money is commonly between 2% and 5% of the purchase price and due within two days of mutual acceptance unless negotiated otherwise. Earnest money may be retained by the seller as damages if the buyer fails to complete the purchase for a non-contingent reason, such as getting “cold feet”. CONTINGENCY – Any condition or “subject to” clause in the contract allowing the buyer an opportunity to terminate the transaction and obtain a refund of the earnest money. Typical contingencies include financing and home inspection. Each contingency built into the purchase contract has its own timeline which begins at mutual acceptance. A financing contingency may run the entire term of the contract. ESCROW – Impartial third party facilitating the transaction, accounting for monies, and recording final documents showing the sale of the property. SELLER DISCLOSURE – Completed by the seller and made available to the buyer disclosing the existence of material facts or material defects based on seller’s actual knowledge of the property. APPRAISAL – Often referred to as the “Lender’s Appraisal”. A neutral third-party opinion of the value of the property performed by a licensed home appraiser. In a home purchase the appraiser is tasked with finding comparable homes and adding/subtracting value for features to determine if the home is valued at the purchase price. CLOSING COSTS – Fees and costs due by both buyers and sellers at the time of closing. Buyer costs include loan origination fees, title and escrow fees, and prepayment of property taxes and property insurance. TITLE – The story of the house. It tells who owns it and other recorded items against the home such as easements, CCR’s, and liens. DEED – The instrument used to transfer the property from one owner to another. This is a document recorded by the escrow company at closing. HOA – A homeowner’s association is an organization in a planned community, condo, or subdivision. HOA’s usually have monthly or annual fees and rules and regulations restricting what residents can do with their properties.

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Home Buyer’s Guide - Seattle