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Health & Fitness

Top 10 Most Used Terms In Real Estate Transactions Defined

If you are in the process of buying and/or selling I am sure there are terms that have been used that made you go huh?... So let me explain some of them to you in no particular order. You can never have enough knowledge when it comes to Real Estate!
Purchase Agreement This is the form that will be completed by the buyer when they are ready to make an offer on a home. There are lots of terms in the agreement so please make sure your Realtor goes over every one of them!
EMD - An EMD is an earnest money deposit. This is given in the form of a check to let the seller know you are serious about buying their home. It can be in any amount and can differ based on the sellers wants as well as the market in your area. The EMD will be credited to the buyer at closing as long as the sale goes through.
Broker Compliance Fee - All Brokers will charge a compliance fee for any real estate transaction. Every Broker is different in the amount they charge. The fee can be paid by the client or the Real Estate Agent. This fee helps pay for the filing and completion of paperwork. If you are interviewing agents you should ask what their Broker's compliance fee is as some can be hundreds of dollars more than others.
Closing Date - The closing date you agree to on the purchase agreement is not set in stone it is just an estimate as to when you will be sitting at the closing table. Usually the closing date will be set for 30-45 days from the date you sign the agreement depending on your financing and other items.
Commission - A lot of buyers think that they have to pay a Realtor to work for them. This is NOT TRUE! If you are in the market to purchase start interviewing Realtors to help you with the process. The seller will pay any commission that is owed to the Realtors working on the transaction. The usual commission in the area is 3% for the listing agent and 3% for the buyer's agent.
CCS - CCS means that it is contingent upon something and they will still continue to show the home. It could be contingent upon financing, an inspection, or many other things. You cannot technically buy a home that is CCS but you can put in a back up offer in case the first one falls through.
Short Sale - A short sale means the property is not in foreclosure but that they would like to sell their property for less than what they owe. The terms must be agreed upon by the seller as well as whoever holds their mortgage. This process can take months so be prepared to wait if you are entering into a short sale. 
Foreclosure - This means that the bank has taken the home and they are selling it for either what they need out of the home or what they think it is worth. You can still get a great deal by buying a foreclosure but the amount of them in the area has decreased dramatically.
Transfer Taxes - These are important because in every transaction the state and local transfer taxes must be paid. Most of the time the seller will pay the transfer taxes but there are certain circumstances where the buyer must pay them. In Michigan the state transfer taxes are $7.50 per $1,000 sales price and local $1.10 per $1,000 sales price.
Seller Net Proceeds - If you are selling your home your Realtor should give you a net proceeds document. This will lay out all costs of selling your home as well as all credits. If you do not have one make sure you ask your agent today and get one! You should know the estimated net you will receive when your home sells.
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