Home Ownership Basics
How much are closing costs?
Typically, closing costs range between 2% and 5% of a home’s purchase price. That means closing costs for a $200,000 house could be anywhere from $4,000 to $10,000. These fees vary depending on your state, loan type, and mortgage lender, so it’s important to keep an eye on the costs. If you see any fees that were not on the original loan estimate or notice that your closing costs are significantly higher, immediately seek clarification with your lender and/or real estate agent.
Why is San Francisco's housing market so expensive?
To put it bluntly, housing in San Francisco is scarce, which creates an expensive housing market. There simply is a limited supply of available units. As well as the lack of supply is a dearth of development opportunities. Its location on a peninsula also means new housing is difficult to build. Short supply and high demand means that landlords and home sellers can command higher prices. Finally, a thriving tech industry attracts new people to the area, further tightening the supply and driving up demand.
Which natural disasters are most likely to impact homeowners?
Coastal areas like Miami, New Orleans, and Houston are the likeliest to get hit by hurricanes, storm surge, and flooding, while areas with a significant rise of seismic activity—the West Coast and Hawaii—are the likeliest to experience earthquakes and tsunamis, according to NOAA. When hit by a natural disaster, homeowners are quickly faced with a difficult situation and hard decisions. Often they have lost possessions, a community, and their profession. In the worst cases they may have lost loved ones. During this harsh time, they will possibly have to fight with the insurer of their property for coverage.
How does curb appeal affect sale price?
Several relatively inexpensive things—a new paint job, sprucing up landscaping, or replacing small things such as outdated light fixtures or numbers on a mailbox—can boost a property’s curb appeal. Although these features aren’t quantified as easily as square footage, curb appeal is key in determining a property’s value. A house with ideal curb appeal may be valued higher than one with the same size, bedroom range, and location simply because it will appeal more readily to a prospective buyer.
What are some snags that can crop up in an appraisal?
Whether you are buying or selling a home, you have a vested interest in the appraisal process. For conventional loans, lenders expect the appraiser to check a range of the home’s conditions: appliances and mechanical systems, quality of roofing and foundation, landscaping, plumbing, basement, and swimming pool, among others. Occasionally, during the appraisal the “subject to” flag might come up. This points out issues or problems to be inspected before the loan can be approved. The reason these items are sometimes flagged is because the appraiser isn’t an expert in that area and wants a more definitive opinion.
Is a home insurance broker necessary?
As an intermediary between an insurance shopper and various insurance companies, a home insurance broker can be useful if you have an unusual or hard-to-insure property or if you don't have time to shop on your own. You might want to use an insurance broker if you’re looking for the best possible price on a policy or if there is something unusual about the property you want to insure. For instance, some insurance companies won't write policies for certain homes or areas, such as those that could be impacted by tornadoes or hurricanes.
Abstract of Title
Abstract of title records the transaction history of a property or other asset and provides an official provenance. Typically, an abstract of title for a property begins with the initial grant deed, and includes all subsequent changes in ownership including transfers, liens, and legal actions.
An assignor—a person, company, or other entity—is the party that legally transfers rights or benefits to another individual, the assignee. The assignment of rights often happens upon death in order to manage someone’s estate, or through a power of attorney to deal with an individual's legal or financial affairs.
Commonly used in the real estate industry, the term amenities, or features of a property, are used in listings. One of the most important amenities for most residential buyers is location. Commercial property developers have expanded the types of amenities they offer in their buildings to remain competitive.
Principal, Interest, Taxes, Insurance—PITI
PITI, an acronym for principal, interest, taxes, and insurance, or the sum components of a mortgage payment, helps both buyer and lender determine the affordability of an individual mortgage. Mortgage lenders generally prefer the PITI to be equal to or less than 28% of a borrower's gross monthly income.
Usually referred to as a condo, a condominium is an individually owned unit in a complex or building of units. The condo owner owns the space inside the unit and shares an ownership interest in the community property—the floor, walls, sidewalks, stairwells, and exterior areas. Condo owners are generally required to make monthly payments to a condominium association in charge of property upkeep.
Homeowners Protection Act
Before the Homeowners Protection Act of 1988, designed to reduce the unnecessary payment of private mortgage insurance, many homeowners had problems canceling private mortgage insurance. The act covers all private, residential mortgages purchased after July 29, 1999.
Homeowners Association Fee
Homeowners association fees, usually collected monthly, are used to maintain and improve amenities, property maintenance, and repairs. Fees are almost always levied on condominium owners, but some neighborhoods of single-family homes may also have them.