Purchasing a home, whether for the first time or the tenth, is a complex and often intimidating experience. There is the large financial commitment of course, but there is also interaction with various professionals including (but not limited to) REALTORS®, lawyers, home inspectors, bankers and others. As with any profession, real estate has its own distinctive vocabulary and terminology which can seem mysterious to the uninitiated. To help dispel some myths, here are a few core terms used when buying or selling a home.
• Closing date: As expected this simply means the date on which the money changes hands during the real estate transaction.
• Possession: The actual date (and time) of when the buyer receives the keys to their new property. This is the final stage of the process and will occur once the closing has completed.
• Conditions: Buying a home is far more complex than purchasing a loaf of bread. As a result, there are often requests in place within the sales contract for specific actions to occur before the sale can complete. Sometimes referred to as “Subject to Clauses” these conditions could be anything from having a home inspection completed, to the removal of a derelict automobile from the backyard. Conditions are specific to each property.
• Deposit: This is the funding provided by the purchaser and held in trust by the real estate agent when writing the initial offer to purchase. This money is refundable if the purchaser fails to meet the subjects required to complete the sale. An example of this would be a purchaser being denied financing by their banking institution.
It’s hoped that by understanding some of the common terms the process of buying or selling a home will become less of a mystery and more of the important milestone in your life that it really is.