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Couples Guide to Buying

First Time Home Buyers Guide

Lakes Country Realty

House Hunting Like a Pro

House Hunting Like a Pro

Real Estate Terms Photo

Real Estate Dictionary of terms

It’s one thing to buy a house on your own, but it is an entirely new adventure altogether when buying a home as a couple. You will need to make these big decisions together and learn how to compromise to be successful. Lakes Country Realty has helped many couples buy a home, so we’ve witnessed the ups and downs along the way. We’ve been there through the arguments, the death glares, and the awkward silent treatments, but we’ve also been there for the excited smiles and happy tears when the couples finally find their dream home together, keys in hand.
Buying a house as a couple is truly a journey and it’s okay to feel a little trepidation about taking the first steps. If you’re looking to buy a place with your special someone, some preparation and seasoned advice can make all the difference. Grab your partner, pour two glasses (or three or four) of whatever you enjoy drinking, and settle in to go over our list of important considerations for couples looking to buy a home to make the process as hassle free and fun as possible. The more you know now, the better off you’ll be as a couple while searching for your new home together.

Needs & Wants

It’s a good idea for each of you to make a list of your wants separately before going over them together. This way you’ll each have an honest idea of what the other one is looking for in your new home. Write down your preferred number of bedrooms, bathrooms, amenities, features, available outdoor space, parking situation, and ideal size. Once you’ve each completed your own list, go out to your favorite restaurant and go over both lists together. The goal is to come up with one single wish list by the end of dinner that both of you could be happy with in a home. If you feel like this may lead to an argument, you may want to share a meal at home instead..lol.

We have had clients that come to us with one of them wanting to buy a hobby farm in Scandia and the other a condo in Forest Lake or one wanting to build on acreage in Taylors Falls while the other wants to be in their favorite neighbourhood in Lindstrom or Chisago City. Do not fret if you find that you both have differences of opinions regarding your ideal situation. If your lists cannot be combined because your goals are so different, just bring both lists with you to meet with your agent. Your agent will be an impartial professional and will be able to focus on a solution that allows you both to check off as many boxes on your lists as possible. Don’t feel upset with your partner for wanting something different than you do; just remember that you love each other, and that we will help you find a solution!

Type of Home

As a couple, you need to decide what type of home you’re looking to buy. The most popular types of homes are condos, townhouses, and single-family houses. This step can become a roadblock due to the many advantages and disadvantages each type of home has to offer, so if you get stuck, let your real estate agent in on the dilemma and he or she should be able to help you narrow it down by location, price, and lifestyle.
In our experience, when clients are very location sensitive, they are more open to different types of homes if it will put them in their ideal neighborhood or school district. A good agent will give you what we like to call a Reality Based Perspective Analysis, which means your agent will show you what is available and how it matches up with your various criteria, so you can adjust your expectations and desires. If you keep an open mind, your agent will be able to show you recent sales and then you will be able to narrow or broaden your goals.

Neighborhood

Think about the activities that each of you enjoy, both together and separately. Does your partner love running in the park with your dog? Do you start your days with walks to your favorite cafe? The neighborhood you choose will ultimately have the biggest effect on your lifestyle. You need to decide how important it is to be close to parks, shops, and restaurants —or maybe you’d rather have your privacy with a big backyard further from town. Take the time to explore each other’s top neighborhood choices to get a real feel for what it would be like to live there.

A Fixer Upper vs. Move-In Ready

Some people look forward to a challenge when buying a home and are willing to get into some serious DIY to make it their own. Others want a house that’s move-in ready. You and your partner need to decide which option is best for you. Make sure to factor unknowns into your budget as renovations can be tricky to know exactly what they’re going to cost and sometimes opening up a project reveals other things that need to be addressed. For instance, if he wants a hands-on project but you don’t, you can find a place that just needs cosmetic changes; it still takes some handy work, but not nearly as much time or energy as full on renovations. Think remodel vs reno.

Lakes Country Realty has options for trusted vendors to assist you.

Style

In a dream world, couples will always want the same style of home and see eye-to-eye on all the finishes. Realistically, this isn’t that common. Sit down as a couple to go over your preferred style of home and decor. Do you want a modern home or something more traditional or maybe rustic? Do you like upgraded floors and counter tops, or do you prefer the character of the home’s original finishes? If you’re not entirely sure what style you prefer most or what options are even available, ask your realtor to give you the rundown. A good real estate agent will be able to find you a home that combines both of your favorite styles or at least finds a happy medium that you both can live with.

Time frame

How long do you plan on being in this house as a couple? Is this your forever home or just a stepping-stone? If you have an idea how long you plan on living in your new home, it will help you make decisions about the price, the size, and the type of home that would suit you best. It will also make compromising easier because you will know just how long you will have to live with your choices. Many couples get stuck on trying to find their forever home, but the reality is that the majority of people in the Chisago Lakes area cannot afford their forever home the first time around. Focus on the next five years instead of where your unborn children may be going to school. We’ve found that most of our clients in this area move about every five to eight years.

Kids

It may be a little early in your relationship to talk about kids (or maybe you already have six children), but it is something you should consider when looking to buy a house as a couple. Do you have a plan to start a family in the next few years? If so, that will have an impact on your choices regarding the size of your home, type of home, and your wish list. It will also affect your choice of neighborhoods and schools.

Pets

Do you already own pets together? If so, this will greatly affect your home search almost as much as having children would. If you have dogs, you’ll need to consider yard space and nearby parks. Maybe you’re hoping to get a pet together after moving in, and if you do you’ll need to make sure the type of place you’re looking to buy accepts the type of pet you’d like. Some condominiums don’t allow dogs over a certain weight or only cats, for example.

Commute
Do you both work outside of the home? You’ll need to consider commute times to each of your workplaces. If one of you telecommutes, this may be a good area to compromise in—let your partner live closer to the office, but make sure you get your open-floor plan too! And of course reliable Internet!

Who’s in Charge of What?

Buying a home alone or as a couple still requires maintenance and upkeep. Who is going to be responsible for what in your new home? If you wanted that big yard for your dog, are you willing to tend to it? If your partner wanted more square footage, are they willing and able to keep it all clean? It’s a good idea to have this conversation before buying the house to avoid future disagreements and frustrations.

Budget

The upside to buying a home as a couple can mean dual incomes, and therefore a bigger budget. However, there is usually one half of the couple who wants to spend more or less than the other half. This is very common and the contrast of perspective actually balances out the relationship, just like when one of you wants to get to the airport a few hours in advance and the other hopes to just arrive before the boarding door closes (and you end up meeting somewhere in the middle). Contrast is healthy, so focus on understanding the other person’s position by communicating your fears and concerns.

We recommend focusing on the monthly payment instead of the total sales price when you have this conversation because it is hard to envision the budget from such a macro view. For example, if the spouse concerned about spending too much money says, “We just cannot afford a $450,000 mortgage,” it is helpful to respond with something along the lines of, “I promise to listen completely to your concerns over our budget so we do not end up with a payment that you are uncomfortable with,” and then narrow the focus down to a monthly affordability perspective. Often a disagreement about the budget is actually just a misunderstanding. Perhaps the issue is really just not understanding the breakdown of the monthly payment and the tax savings. Another thing to consider, if you do not have children yet but are planning to in the future, is if one of you wants to stay home with the kiddos while they’re young, or at least have that option. It’s heartbreaking to watch a couple not be able to make that choice because they are locked into a mortgage payment that requires both of them to work. However, never discount your partner’s feelings; this is a big decision and with the help of your lender and your agent, you will get on the same page together. The budget is one of the most important things you will have to compromise on because it will dictate every other choice you’ve made in buying a home.

Financing

Aside from the budget, how will you pay for the mortgage, taxes, maintenance, and closing fees? Where will the down payment come from? Sometimes the in-laws offer to make the down payment on a new house as a gift or there is an inheritance. More often than not however, you scrimped and saved to be able to reach this dream. Whatever your situation, we recommend you open a joint bank account if you don’t already have one, or devote an account solely to house expenses so everything is planned for in advance.

Legalities

Most people think about worst case scenarios after a loved one gets sick or injured. Why not have peace of mind from the beginning? Find an attorney and draft a Will or a Living Trust so your loved ones future is taken care of should the worst happen. No one moves into a place together planning on the worst, but it happens. It’s better to have the conversation today than trying to figure out what you’ll do when you’re in the middle of loss. Better safe than sorry, right?

Selling Your Existing Home(s)

Often enough, we have clients who each owned separate homes and are now looking to buy a new place together. That means each person has to deal with the process of selling their current home. This can require precise timing and a lot of patience. Thankfully, a great realtor will be able to help coordinate these sales with the purchase of your new home and make sure neither of you ends up homeless or paying two mortgages. Lakes Country Realty can offer expert advice that can be very helpful in this situation.

After considering all of these steps in the process of buying a home as a couple, are you still confident and ready to start this journey together?
Lakes Country Realty has an intimate understanding of all of the compromises a couple is required to make to be successful home buyers, and many of us on the team have already been through it ourselves. If you’re ready to buy a home as a couple and want a dynamo realtor on your side, contact us now to set up an appointment!


First Time Home Buyers Guide

Lakes Country Realty

First-time home buyers guide

There’s a lot you should know before buying a home in the Chisago Lakes area or any other area, especially if you’ve never done it before! Odds are that buying a home will be the single largest investment you ever make during your lifetime, so the more you know going into the home buying process, the better off you will be in your decision making. Explore our First-Time Home Buyer’s Guide to be the most prepared, most knowledgeable, and most confident first-time home buyer you can be.

Understanding the Lingo There is a lot of real estate jargon used in the industry that can leave buyers feeling like they don’t understand what their agents or lenders are actually saying. Your agent will not want you to just smile and nod when you are secretly unsure — never hesitate to ask questions. If you want to get a jumpstart on the lingo used in real estate before you meet with your agent, be informed by reading through our Home Buyers dictionary of common terms.

Step 1: Drafting Your Dream Team

We understand how time-consuming the home-buying process can be, but you can make it easier on yourself by choosing not to do it alone! Start drafting your dream team first and surround yourself with people who will support you every step of the way. You’ll want to choose a superstar real estate agent who will put your best interests first and work exclusively for you. You will also need a lender, but your agent should be able to recommend one for you, as well as an experienced real estate settlement company to assist with ensuring your property has a clear title that is insured against any future issues. It’s also a good idea to pull in a family member or friend to accompany you when house hunting, they know you best and will help keep you focused during the search. Ask people you know for professional references, or reach out to Lakes Country Realty to find out who you can trust

Step 2: Knowing Who to Bench

People often have strong opinions about the home buying process, and though they may love and care about you, it is important to understand that their experience is unique to them and their situation. Your home buying experience will differ from others’ experiences, and that’s okay. We often encourage you to include those closest to you in the process, but never feel pressured by anyone to not go after what you truly want, even if they’re your family. If your loved ones have concerns, schedule a conference with your dream team so you can discuss it as a group. Your agent may be able to alleviate their concerns right away or come up with a solution that will make everyone happy. Don’t put too much weight in the opinions of other buyers because they are likely projecting their own fears onto you. Just because they made bad investments doesn’t mean you will.

Step 3: Pre-Qualifying for a Mortgage

We highly recommend that you find out how much the bank will lend you before diving into the search for your first home. This way you’ll know your budget up front and be able to narrow your search, saving you time and energy. It only takes an easy, five minute phone conversation with one of our trusted lenders to get you pre-qualified for a mortgage; a lender will need to look at proof of income, a summary of your debts, your credit history, and then figure out how much your ideal down payment will be to get you pre-approved. Then you will be given a pre-approval in writing that is valid for about 90 days (assuming you don’t buy a Tesla or do anything else that could impact your credit in this time frame), which will also include your current interest rate. Once you’re pre-approved for a mortgage, you will be more certain of what you can afford and be able to make better decisions when starting the search for your perfect home.

Step 4: Developing Your Wish

List It helps to know your budget before house hunting, but it is also critical that you make a wish list of all your wants and needs. You need to determine your can’t-live-withouts, your great-to-haves, and your nope-no-way-no-hows. It’s hard to get what you want if you don’t know what you want, so we recommend making a list to direct your search. Ask yourself, how many bedrooms/bathrooms do I need? How would I use them? Do I want to entertain outdoors, will I need a space for that? What finishes speak to my personal style? Do I want a large or small house, a townhouse, or a condo? Do I want to live alone, or would I prefer roommates? Location is another big decision.

The Reality Based Perspective Analysis

When you work with Lakes Country Realty to buy a house, there is an additional step in the home-buying process that most other agents skip right over, and that is what we like to call the Reality Based Perspective Analysis. The average agent immediately starts looking for active listings and never thinks to check out recently sold properties in the area. Thankfully, we’re not the average agent. We’ve developed a tried and true process of analyzing your wish list to find recently sold homes that match your criteria, so that we can help you identify the type of home you would have bought and better target our search. By having real life examples of homes you would have purchased, we’ll better understand your priorities and motivations, and be able to study the statistics of each sale to inform our search going forward. If we can’t find a recently sold home that you would have bought, that lets us know that you may need to rethink your criteria and make some compromises to find your dream home. This information will make you feel more confident when looking at homes and prevent you from wasting any valuable time searching for something that doesn’t exist.

Step 5: House Hunting

If you’ve made it this far, give yourself a pat on the back because you’ve cut out a lot of the work and are now ready for the fun of house hunting for your dream home! A good realtor will immediately start sending you custom listings that match up with your wish list and budget. When you work with Lakes Country Realty, you get Instant Access to listings which gives you a leg up on the competition. We recommend previewing listings online before visiting them in person, as this can save you precious time. Make sure to ask a lot of questions about listings because this is your chance to really get a true feel for the neighborhoods and refine your criteria. Make sure to keep an open mind when house hunting; once you’re ready to visit the homes in person, you may walk into a home and just know that it’s the one for you, whether your wish list matches up exactly or not. We’re here to help you every step of the way!

Step 6: Making an Offer

First off, a heartfelt congratulations is in order because if you’re ready to make an offer, then you must have found your dream home — how exciting! Now you’ve almost reached the end of the home-buying process and it’s time to make a well-crafted offer to seal the deal. First you’ll need to draft a contract. The type of contract will depend on the state you are buying in, but thankfully Minnesota and Wisconsin are fairly straight forward (but have very different contracts). Each of these are legally binding documents containing the price, any necessary inclusions (existing furniture or appliances), your preferred closing date, and any further conditions that need to be met to make the deal final. This is a critical piece of the puzzle. We also recommend that you write the seller a love letter to boost your chances of having your offer accepted. Once this offer is submitted, the seller has three options: they can accept the offer, reject the offer, or counteroffer. Back-and-forth negotiations can seem nerve-wracking, but your realtor should be a pro at negotiating and make you feel at ease. If you find yourself in an outright bidding war, your realtor should know how to play it right to win you your dream home.

Step 7: Putting Down a Deposit & Meeting Conditions

As mentioned above in Step 5, conditions are certain requirements included within the contract that have to be met in order for the deal to go through. In the offer, there may have been a particular financing condition, a request for a home inspection, or an appraisal contingency. Whatever the conditions may be, you will need to read through the fine print (We live for this stuff) and make sure you fulfill all of them. You will also need to put down a deposit (Earnest Money) that will be applied to your down payment and closing costs. This is then held in escrow until closing

Step 8: Closing the Deal

We hope you’ve started packing because you’re nearly a new homeowner! Now you just have to seal the deal. Closing officially represents the point at which complete ownership and possession of the home is transferred from the seller to you, the home buyer. Your entire team will be involved in the closing process to tie up any and all loose ends. Then you’ll receive the keys and be ready to move into your dream home. Not too shabby for a first-time home buyer, eh? Great job!


House Hunting Like A Pro

House Hunting Like a Pro

Arguably, the most fun step throughout the home-buying process is the search itself. Today, the majority of house hunting is done online. There are numerous listing websites available for home buyers to utilize in their search. Even social media platforms now advertise homes for sale. However, old fashioned house hunting methods are still viable in today’s market too. Visiting open houses with your agent, cruising neighborhoods for “For Sale” signs, and hearing about homes for sale by word of mouth are still effective ways to find your dream home.

House Hunting Online

In this day and age, you can see so many more houses while searching for your home online than anyone was ever able to see in the past. There are hundreds of listing websites available which can make it difficult to know where to look. Thankfully, we know some great listing websites and are happy to point you that way:

  • realtor.com —As one of the most well known listing websites, we have to include it as one of the better sources for finding houses online. Like its competitors, it has an extensive inventory, but most of the listings are not theirs to advertise. You’ll have to go through extra steps to target a specific listing found on this website.
  • zillow.com — Zillow is a good resource for searching for homes online because it contains listings nationwide. However, Zillow’s feed is often a day or more behind real time MLS listings.
  • lakescountryrealty.com — Our top recommendation for looking for homes online would of course be to use the free Keri Shull Online Home Search tool. If you hesitate to take our word for it, try it out for yourself. The Property Search tool provides hundreds of listings all over the Chisago Lakes Area as well as Greater Minnesota and Western Wisconsin, and you can filter your search by specifying a variety of criteria regarding the home you want. It will even show you nearby schools, area statistics, and demographics.

Dos and Don’ts for House Hunting Online

We also have some general dos and don’ts for searching for homes online:

  • Don’t get caught up in the small things like paint color or staging — these are quick fixes and you can customize the house to your liking once it’s yours!
  • Don’t rely solely on listing photos. Photographs don’t always do the house justice and it could look totally different in person.
  • Do read between the lines of the listing. The descriptions can be misleading with tricky phrasing, so be sure to read through carefully.
  • Do remember that the asking price is not the same as the sales price. In competitive markets, the sales price can be quite higher than the original asking price.
  • Don’t forget HOA fees and other maintenance fees if you’re looking at a condo or town home. These extra fees can make a big difference in your overall budget.

Lakes Country Realty

When you work with Lakes Country Realty, you can obtain Instant Access to hundreds of homes in the area just like a realtor would, which allows you to find out about new listings immediately when they go on the market and before the general public has a chance to view them! This will truly give you an edge on the competition. Learn more about our Instant Access and sign up today.

House Hunting in Person

Online listings can help narrow down your search, but you will never get the true feel of a home unless you see it in person. By arranging a personal tour, you give yourself the opportunity to get a real feel for the neighborhood, ask questions on the spot, and tweak your wishlist. Sometimes the only true way to know if a house is for you — with or without a wishlist —is to walk into the home and know that it is the one for you. Your agent can arrange private tours for you to view houses on the market or you can attend open houses. Not all properties will host open houses, so don’t rely on them as your sole method of visiting houses in your search. Working with a top real estate agent like those at Lakes Country Realty can guarantee that you will visit homes in person on your schedule and not miss out on a home by waiting around for the open house.

Here are our trusted dos and do nots to keep in mind when searching for homes in person:

  • Don’t get caught up in things you can change. Just like when house hunting online, look past the aspects that need touch-ups and see the big picture.
  • Do take your own photos and notes. Just don’t post online.
  • Do make a plan ahead of time. You’ll probably have more than one target neighborhood, so plan out your route accordingly to make your search as efficient as possible.
  • Don’t fall for a house based purely on the staging. Remember that the furniture probably doesn’t come with the house; make sure to imagine your own pieces fitting into the space.
  • Don’t ignore the neighborhood. It happens to everyone. They get caught up in the house and overlook a bad neighborhood. The location is just as important as the house itself, maybe more so.
  • Do wear slip on/off shoes to protect the house you’re seeing and keep the floors clean. You may be the one buying this house, so do as you’d want
  • Don’t let your realtor do the driving. You’ll be driving to and from this home a lot if you purchase it. Driving yourself gives you a feel for what that will be like and lets you discover first hand any inconveniences that are on your route.
  • Do further investigate things you consider as drawbacks to the house. If it’s on a busy street, come back at rush hour to see how loud it is.
  • Don’t only house hunt in person when the weather is nice. Every house looks better on a sunny day. Experience the home at varying times of the day.

Move Up Buyers Guide

Move Up Buyers Guide

If you’ve purchased a home before and are looking for your next home, chances are you could be a move-up buyer. You may be looking for a bigger house or a better neighborhood, and of course, we’ve got a guide for that too. Take a look at our top 10 tips for move-up buyers before you start the search for the next place you call home.

  1. Buying or Selling – Which Comes First? Whether you should buy first or sell first comes down to which type of property you currently call home and where it’s located. Buying first may be the right for you if your current area is hot and trending or your home is uniquely desirable — it will undoubtedly sell fast in this case and not be an issue if you choose to buy first. If your current home’s location or the home itself is less than desirable, it may take longer to sell and you may want to make selling your current home the first priority. You should also take into account your personal financial situation; you don’t want to get stuck paying two mortgages, and may not qualify to, if you’ve already put away that money for your next house or go above your budget for your new home without knowing how much you will get for your current home. Thankfully, an experienced real estate agent and knowledgeable lender will help advise you on buying or selling first.
  1. How Big of a Move-Up Is Right for You? So, you have decided that it’s time for more space and/or a better location, but you need to also think about your budget. Remember that there are settlement fees, transfer fees, real estate commissions, moving costs, and more to consider when deciding how big of a move-up is enough for you. Our team can put together an estimate of all the fees for you so you know exactly what you will net on the sale of your current home that you can apply to the purchase of a new home. Decide what factors are most important to you— the location or the size of the house. This will enable you to make the most financially out of your move.
  1. What’s Changed? Think about your true motivations for moving up. Ask yourself what’s changed that is impacting the decision to look for your next house. Did you start a new relationship or recently marry(or planning to marry)? Are you expecting a child? Did you recently get a furbaby who needs more yard? Did you change careers? Do you plan to be in your new home for life or just for a year or two? By answering these questions, you will be able to have a clearer picture of your motivations behind your decision and make the best move possible for your situation. Be an informed move-up buyer.
  1. What Do You Like & Dislike About Your Current Neighborhood? Is it difficult for you to think of negatives concerning your current neighborhood? If yes, you may want to try and find a new, bigger home in the same area. However, if you can make a detailed list of all the things you dislike about your current location in five minutes, you should start looking for areas that flip those cons into pros. Just be open-minded enough to make compromises because your ideal next home may not be exactly what you envision yourself living in right now.
  1. What Do You Like and Dislike About Your Current Home? This isn’t your first time buying a home, you’ve made it through the buying process before and now you know even more than you did the first time. Start by making a list of all the things that convinced you to buy the home you’re currently living in and compare it to what you want and need now. Maybe you’ve accumulated a lot more stuff now and need more storage, or perhaps your first home came with a pantry that you couldn’t see yourself living without in your new home. Use your experience to your advantage in deciding what you don’t want and what you have to have in your next home. Maybe you want to build a new home, we can help with that as well!
  1. How Big of a Move-Up is Big Enough? When buying or building your next home, it’s normal to feel compelled to push for more space this time around, but think about how much space you really need. Make sure to also think about where you need the space — would you like a garage to store all of your outdoor equipment, a basement for the kids to play in, or more bedrooms and bathrooms for a growing family? Don’t sacrifice the location you really want for more space than you actually need. This is something a professional realtor can help you with in your search for your next home. A great agent will go over recent solds as well as active listings. This enables you to have all the sales statistics of what actually happened in the market recently so you feel better prepared when your perfect home for you comes on the market. You will also be able to identify the neighborhoods you are most likely to buy in which is extremely helpful so our team can start pursuing off-market opportunities.
  1. What Kind of Homeowner Are You Now & What Kind of Homeowner Do You Want to Be? It is common for first-time home buyers to choose a condo or townhouse to avoid taking on too much responsibility when buying their first home, but it is also not uncommon for it to be the other way around. Maybe you’ve been feeling overwhelmed owning a single-family home and having to keep up with all of the maintenance costs. Perhaps you’re actually looking for a condo or townhome as a move-up buyer for a more convenient lifestyle, but you should always be honest with yourself to make the best decision for your lifestyle.
  1. What Can You Afford to Spend? Move-up buyers need to figure out the budget first in order to know what they can afford to pay for their next house, much like the first important step in buying your first home. Think about how much more you can reasonably afford to spend than the first time around without giving up the lifestyle you want. Just keep in mind that the next house will likely come with a larger down payment than the first house, higher taxes, and higher utilities.
  2. Are You Ready to Sell Your Current Home? Some move-up buyers don’t even know they’re move-up buyers right away. You may not be actively looking for a new home when your next home finds you! That’s why it is so important to prepare your home now if you see yourself moving up any time in the future. Then you’ll be ready to sell when the time comes and reduce the chances of missing out on your next dream home. We recommend having our team come tour your home so you don’t spend money on things that are unnecessary and will not net you a higher price. Even if you’ve just moved into a “starter” home we can help you save thousands by advising which projects will yield you the biggest return on your investment.
  3. Is Now the Right Time to Move-Up? When you’ve set your heart on moving up, it can be hard to hear from a professional in the market that sometimes the best decision is to wait. If buying the next house now will strain you financially, hold out until you’ve saved enough extra cash for your next home. We recommend estimating how much the new mortgage would be on your move-up home and start saving up for it now. Many times clients overestimate how much they will really need to make a move, so getting the details is very important. If you’re not entirely sure if now is the right time, call Lakes Country Realty and let us help you decide if you’re ready to be a move-up buyer.

Real Estate Terms

Real Estate Dictionary of Terms

Adjustable Mortgage Rate (ARM)

A mortgage loan whose interest rate adjusts according to a market index. This means that as the interest rate goes up or down, so does your mortgage payment.

ALTA
A final listing of the costs of the mortgage transaction. It provides the sales price and down payment, as well as the total settlement costs required from the buyer and seller.

Amortization
A term used to describe the process of paying off a loan over a predetermined period of time at a specific interest rate. The amortization of a loan includes payment of interest and a portion of the outstanding principal balance during each payment cycle.

Appraisal
The amount a professional appraiser determines your home and its property to be worth.

Bridge Loan
A short-term loan collateralized by the buyer’s present home (which is usually for sale) that allows the proceeds to be used for closing on a new house before the present home is sold. Also known as “swing loan”.

Condominium
One unit in a complex of many. When you purchase a condominium, you solely own what is inside your walls and you jointly own the hallways, exterior, and common areas. You also pay a monthly fee for the management of these areas.

Closing Costs
The cost required to officially charge the ownership of the property. Buyers and sellers have different costs they are responsible for at closing.

Credit Rating/Score
The score that tells a borrower how much of a credit risk you will be. Credit Report A report detailing a borrower’s credit history. A few items shown are the amount of the borrower’s debt, their timeliness of making payments, and their credit rating.

Deed
The document that legally transfers the title of a property to the purchaser. Default Violation of a mortgage contract Density The number of homes that a local jurisdiction allows to be built on a certain acre of land.

Earnest Money
A “good faith” deposit submitted with a purchase offer to show that the potential home buyer is serious about buying the house. Ideally 1%.

Elevation
The exterior of a specific model. A floor plan may have multiple elevations for you to choose from, each with varying architectural styles, building materials and exterior treatments.

Escrow
When a third party handles funds or documents for the buyer, seller or both.

Equity
What your home is valued at after the balance of what you owe is subtracted.

Fixed Rate Mortgage
A mortgage that has an interest rate that stays the same for the life of the loan. This means your monthly payment will remain constant.

Good Faith Estimate
An estimate, given to the borrower by their lender, to show what settlement costs they will be responsible for and how much they will be.

Hazard Insurance
Insurance against damage to your home from vandalism, fire and other hazards. You are required to carry insurance equal to the value of your home.

Home Inspection
A professional inspection of a home to review the condition of the property. The inspection should include an evaluation of the plumbing, heating and cooling systems, roof, wiring, foundation and pest infestation.

Homeowner’s Association
An association that manages the care of common areas of a community. The home owner pays a monthly or quarterly fee to this association for maintenance costs.

Homeowner’s Insurance
Insurance that covers personal liability and hazards for a home and the contents inside of it.

Interest
The amount you pay to the lender for borrowing money. A portion of this becomes part of your monthly mortgage payment.

Lien
The claim against the property that has to be paid off when you sell a property.

Lifetime Payment Cap
The highest or lowest a payment on an Adjustable Rate Mortgage can reach for the life of the loan.

Lock-in Period
The amount of time the lender agrees to lock in an interest rate for the purchaser prior to settlement.

Mortgage Insurance
Insurance needed for mortgages with low down payments (usually less than 20% of the price of the home).

Note
A document that states a debt exists and the repayment terms.

Options
Items you can choose to add on to your home. Options add to the price of the house, but allow you to personalize your home (e.g. tile floors, fireplace, etc).

PITI
Principal, Interest, Taxes, and Insurance. The four main parts of your monthly mortgage payment.

Planned Community
A community where several builders offer a variety of home styles in many price ranges. There are usually amenities in the community such as recreational facilities and shopping.

Points
A charge by the lender to increase the amount of interest yield on a loan. Each point is 1% of the loan amount.

Prepayment
When you pay part or all of your loan before it’s matured.

Principal
The amount you borrow for your loan. This amount does not include interest.

Punch List
A builder’s list of changes or corrections to be made on a buyer’s home.

Real Estate Broker
A Realtor who has earned a broker’s license can employ real estate agents, as well as represent buyers and sellers.

Title
The certificate or deed that proves a person legally owns the property.

Title Insurance
Insurance that protects the lender or the buyer against any loss that comes out of disputes over who owns a property.

Title Search
When title records are searched to make sure the seller is the legal owner of the property. It also checks whether there are any outstanding claims or liens.

Walk-Through
A buyer’s final inspection of the home before settlement to look for any problems that need to be fixed by the seller.