3 Key Terms To Know When Buying A New Home
Posted on: 28 June 2019
Buying a new home can be an exciting process. However, if you are new to home ownership, the purchase can be a bit overwhelming. From securing financing and hiring a real estate agent to making an offer after viewing numerous properties, it is easy to see how a buyer can become stressed. Thankfully, help is available. This guide will give you a few key terms you need to understand when buying a new home.
Contingency
"Contingency" may be a term you hear when writing up and having your offer accepted. Basically, your offer is stating you will purchase the home for the priced stated in the offer, as long as a few contingencies are met.
For example, the home must pass an inspection without issues or different repairs must be made before closing. Another example of a contingency would be related to financing.
As long as contingencies are met on your and the seller's end, closing the home sale should not be a problem.
Allowance
During the purchase or construction of a new home, you may hear the term "allowance". An allowance is a sum of money designated by the builder, which should be used towards the purchase of different items for the home.
A builder may state you have a specific sum of money, or allowance, to guide you, when choosing light fixtures for the interior and exterior of your house. Or, you may have an allowance designated for appliances, flooring, and plumbing fixtures.
Even though many buyers are able to find options that are within their allowance, it is possible to go over the set amount. If this does occur, buyers can choose to pay the difference out of pocket or have the overage added to the total sale price of the home.
Builder Warranty
When buying a new home, you will want to understand the warranty, especially since the new home will have numerous warranties that you will need to keep organized.
Your builder will provide their own warranty, which will cover basic problems, for a specific period of time. In addition, the builder warranty will cover any underlying or structural issues that may arise, for a longer period of time. You will need to ask your specific builder for detailed information pertaining to their warranty.
Of course, other warranties will also be included. Each contractor will most likely offer a warranty for issues and labor within a set period of time, as well.
Having warranties in place will help protect you from unnecessary maintenance and repairs while giving you peace of mind.
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