If you are hoping to sell your house fast in North Carolina, there are some real estate terms you should become familiar with. Below, we’ve compiled some of the lesser-known terms you might hear when selling your house in North Carolina. Please feel free to reach out to us if there is anything else you would like to know about the selling process. We are happy to answer all of your questions. (984) 206-3532
Appraised Price
The appraised price is the value of your home determined by a professional appraiser. The appraiser assesses your property and compares it to similar properties in the area to determine its market value. This figure is often used by lenders to ensure that the home is worth the amount of the mortgage loan being applied for.
In a fast sale, the appraised price can influence negotiations and offers, as buyers might be more hesitant if the appraisal is lower than the agreed sale price. Conversely, a higher appraised value can justify a higher sale price and may expedite the sale.
Assessed Value
The assessed value is the value assigned to your property by a local tax assessor for the purpose of calculating property taxes. This value may not always align with the current market value or appraised price of your home.
Assessors use various methods and criteria, often including property size, location, and improvements, to determine this value. While it helps in setting your property taxes, the assessed value is generally not used in real estate transactions. However, it can give you a rough idea of how your home compares to others in the area.
Carrying Costs
Carrying costs are the ongoing expenses associated with owning and maintaining a property while it’s on the market. These costs can add up, especially if your home takes a while to sell. Key carrying costs include:
- Mortgage Payments: Regular payments on your home loan, which may include principal, interest, taxes, and insurance.
- Property Taxes: Taxes levied by local governments based on your property’s assessed value.
- Insurance: Homeowner’s insurance to protect against damage or loss, which is typically required by lenders.
- Utilities: Costs for services such as electricity, water, and gas.
- Maintenance and Repairs: Upkeep and repairs needed to keep the property in good condition and attractive to buyers.
- HOA Fees: If your property is in a community with a homeowners association, there may be regular fees for community maintenance and amenities.
Clear Title
A clear title means that a property is free of any legal claims, liens, or disputes that could affect its transfer of ownership. It signifies that the seller has the right to sell the property and that the buyer will receive full ownership without any encumbrances.
A clear title is important because it ensures:
- No Liens or Encumbrances: There are no outstanding debts or claims against the property, such as unpaid taxes or mortgages.
- Ownership Verification: The seller is the rightful owner and has the legal authority to transfer ownership.
- No Legal Disputes: There are no ongoing legal issues or disputes that could affect the property’s title.
Comparative Market Analysis
A Comparative Market Analysis (CMA) is a tool used by real estate agents to determine the fair market value of a property by comparing it to similar homes that have recently sold, are currently on the market, or were previously listed but didn’t sell.
Here’s how a CMA works:
- Selection of Comparables: The agent identifies comparable properties (comps) in your area. These should be similar in size, condition, location, and features.
- Analysis of Data: The agent reviews the sale prices of these comparable properties, along with their features, to gauge how they compare to your home.
- Adjustment for Differences: The agent adjusts the sale prices of the comps to account for differences between them and your property, such as size, condition, and location.
- Price Recommendation: Based on this analysis, the agent provides a recommended listing price for your home.
A CMA helps set a realistic price that is competitive in the current market, potentially leading to a quicker sale. It’s different from an appraisal, which is performed by a licensed appraiser and used for official purposes like securing a mortgage.
Contingencies
Contingencies are conditions or requirements that must be met for a real estate transaction to proceed. They are often included in an offer or purchase agreement to protect both the buyer and seller. Here are common types of contingencies:
- Inspection Contingency: Allows the buyer to have the home inspected for issues like structural problems or needed repairs. If significant problems are found, the buyer can negotiate repairs, request a price reduction, or back out of the deal.
- Appraisal Contingency: Requires the home to be appraised at or above the purchase price by a professional appraiser. If the appraisal is lower, the buyer might need to renegotiate the price or withdraw the offer.
- Financing Contingency: Ensures the buyer can secure a mortgage loan. If the buyer fails to get approved for financing, they can withdraw from the contract without penalty.
Covenant
A covenant formal agreement in which one party gives the other certain assurances. An example would be covenants of warranty in a warranty deed.
Delinquency
A delinquency occurs when a homeowner defaults on their loan. This is when a lender will actively begin the collections process, even initiating foreclosure.
Disclosures
A disclosure is a document that the seller provides the buyer, letting them know about any problems, defects, or known issues with the property. Failing to disclose a problem with your home can be considered fraud.
Encumbrance
An encumbrance is a claim against the property that restricts its transfer or use. A property lien is considered an encumbrance.
Foreclosure
A foreclosure occurs when a homeowner fails to make their mortgage payment, typically for 90 days. The owner waives all rights to the property and the home becomes the possession of the bank.
Inclusions
Inclusions are personal property that is included in the home sale. This can be things like appliances, furniture, or outdoor items.
Market Value
Market value is a valuation of the property in which the parties are free of pressure to complete the transaction and all details of the house are known. It can be formulated by finding the average between the highest price a buyer would pay and the lowest price a seller would accept.
Mechanic’s Lien
A mechanic’s lien is a lien against the property which will secure the payment of contractors, laborers, and those who provide materials.
Negative Amortization
While amortization refers to paying off your loan, negative amortization happens when the payments you are making aren’t enough to cover the interest and the amount you owe becomes greater as opposed to less.
Quitclaim Deed
A quitclaim deed transfers the interest in real property from one person to another.
Sale-Leaseback
A sale-leaseback occurs when a buyer purchases a property and then leases it back to the occupant.
Short Sale
A short sale occurs when an owner sells their property for less than what is owed, allowing the lender to recoup some of the cost of the loan as an alternative to foreclosure.
Title
The title refers to who has legal ownership and who can legally use the property. Just like a car, it is how you claim ownership of the property.
Title Defect
A title defect is when there is an adverse claim, somewhere in the chain of ownership. It can have an impact on who has legal rights to the property.
Waiver
Voluntarily giving up a right, claim or privilege. It removes liability for the other party in the agreement.
When trying to sell your house fast in North Carolina, you will likely hear a lot of real estate jargon thrown your way. It’s important to know what is being said and how the terms used will impact you. Do your homework before selling your house fast in North Carolina so you don’t miss something you should have been aware of!