Common Real Estate Terms Explained

Credit: Unsplash/Getty Images   Whether you are buying or selling a property, it is essential to have a basic understanding of the common terms and abbreviations you often hear in real estate. At Lysi Bishop Real Estate, we strive to ensure buyers and sellers are educated and prepared so they can navigate the process with confidence. Here’s a list of some of the most commonly used terms we see in the industry:   Intermountain Multiple Listing Service (IMLS) The Intermountain Multiple Listing Service (IMLS) (also often referred to as “MLS”) is a secure database of properties for sale that is used by real estate agents in the Intermountain West region of the United States. You can use the public-facing search portion of their website to find homes for sale, and members (agents) can use the full IMLS access to conduct detailed property searches for their clients and to list properties for sale.   Listing A listing is simply a property that is for sale and is often represented by a “listing agent” or “seller’s agent.” When browsing real estate websites such as IMLS, or a real estate team, you are looking at listings of properties for sale. View Listings on the Lysi Bishop Real Estate search page here   Live VS On Market VS Active “Live”, “On Market”, and “ Active” are all terms used when a property is for sale on the market.   CMA  A Comparative Market Analysis (CMA) is a detailed report that is prepared by a real estate agent or team that provides an estimate of a property's value based on recent sales of comparable properties in the area. This is NOT the same as an appraisal or an instant “home estimate” that many websites provide using an algorithm. Request a Complimentary CMA on your property here   Pending or Sale Pending When a property is listed as pending, it means that the seller has accepted an offer from a buyer. This does not mean the property has been sold. During this period, the buyer is finalizing inspections and financing. Depending on the contractual agreement between the buyer and seller, the buyer can terminate the sale during the pending process and the seller can put the house back on the market as an active listing. The property may continue to be marketed during this time. Other interchangeable terms are “Under Contract” or “Offer Accepted.”   Contingency A contingency often refers to a clause in the purchase and sale agreement (PSA) that specifies terms that must be met before the sale can be completed. They protect the buyer and seller by giving them the right to terminate the contract if the terms are not met without penalty.  We advise all of our clients to discuss with their agent what contingencies are available to them before signing a contract.   Appraisal VS Inspection Appraisals and inspections are commonly mistaken for each other when actually they are both very different: Appraisal: A process by which a certified appraiser determines the value of a property based on location, condition, size, recent upgrades, and recent sales of comparable properties in the area also known as ‘comps’. Inspection : An examination of a property's physical condition by a licensed inspector. This inspector will evaluate the condition of the property's working systems and structure. A quality inspector will provide a detailed report and feedback on every area of the property (including electrical, plumbing, and foundation). Some agents have a list of inspectors in their contacts, but it’s always good to conduct your own research to select a qualified inspector when selling or buying a home.   Lien According to Idaho law, a lien is a legal claim or right or charge against a property that is used as security (collateral) for a creditor or lender who expects payment from the seller. For example, if a homeowner has not paid their property taxes, a lien may be placed on the property to secure payment.  There are many different kinds of liens, but be aware that most mortgage lenders will not approve a mortgage if a property has any outstanding liens. Most often, properties cannot be sold until the lien(s) have been paid.  In the State of Idaho, liens are public information, if you aren’t sure if your property has a lien on it, you can search on the Secretary of State Office website.   Earnest Money Also called a “good faith deposit,” earnest money is a deposit of money from the buyer made in earnest to demonstrate their commitment to purchasing a property. It is often due within days of an accepted offer. It is typically held in escrow and will often be applied to the purchase price at closing. Who Keeps the Earnest Money? : If the buyer backs out of a signed and accepted offer, the seller keeps the earnest money. However, if the seller backs out of the offer, the money returns to the buyer. Having clear contingencies in place will help protect the seller and buyer in these situations.   Escrow Escrow is where a neutral third party holds funds and documents related to a real estate transaction. This often includes the buyer's earnest money deposit, purchase and sale agreement, and title documents. These funds and documents are held in escrow (typically set up by a lender) until the sale is completed.   Title Insurance Title insurance is a policy that protects the buyer and lender against issues that might come up with the property's title. The State of Idaho does not require title insurance, but your lender may require you to purchase title insurance to protect the buyer and the lender’s own interests from liens or disputes over ownership. For example, if there is a claim against the property the title insurance will often defend the buyer and pay for covered losses. If you have any additional questions or unique concerns not found here, please contact your real estate agent today. Find Me a Real Estate Agent  

View more

How Interest Rates Impact Affordability

The Federal Reserve has been on a mission to dampen rising inflation by increasing borrowing interest rates. These increases are impacting borrower's affordability in their mortgage loans. The impact for each buyer will depend on their interest rate, home price, and down payment. However, all buyers in every price point will be under pressure with climbing rates and economic uncertainty. Click here for current mortgage loan rates for a 30-year fixed loan. Higher interest rates equate to two things: 1) higher mortgage payment 2) less buying powerThe image below illustrates how even a minor quarter percentage point can increase the monthly mortgage payment by $70-75 (for a $500,000 30-year fixed loan). The quarter percentage increase may not seem like much incrementally, but you can see the big difference when it's a full percentage point (nearly $300 more per month). Keep in mind the interest rates don't include the taxes and insurance and the actual obligation will be higher.   That $300 a month could be anything to you: the ability to buy a larger or higher priced home in a neighborhood you want, daycare expenses, retirement savings, or rainy day funding. To see the effects even further, let's look back at 2020 when interest rates were at their lowest. The chart below details the impact of rising mortgage rates on 30-yr mortgage payments with both a 10% and 20% down payment (excluding taxes and insurance). graph courtesy of realtor.com   If you've been thinking about waiting to see if the market cools off, the increase in interest rates may very well off-set any savings you would see in purchase price. We recommend reaching out to an experienced and local lender to discuss your best options. Call us at (208) 870-8292 or email at info@lysibishop.com to get connected with a real estate professional to get started.  

View more

Design Trends in 2023

Interior design in 2023 is less about trends, and more about creating spaces that feel and look good, not just today… but for years and years to come. With that in mind, here are a few “trends” that are timeless enough to invest in, that we think you’ll start to see more of this year.  IN: Wood/Warm Tones OUT: Monochromatic/minimalist  For the past several years, we have seen white everywhere. And for good reason… white is classic, clean, timeless, and inoffensive to pretty much everyone. However, too much white can often feel devoid of any personality or warmth, which is why the “all white” look is losing momentum going into 2023.  A seamless alternative that adds warmth leans into colors and textures found in nature. An organic material palette is arguably more everlasting than “all white” if done well. Think brown, beige, green, black, wood, stone, brick, etc. This year is all about resisting the urge to paint all natural materials white, and taking advantage of textures that add depth to your home. Think of it like this… there is nothing more beautiful than going on a hike and being surrounded by trees, rocks, grass, dirt, flowers, etc… now imagine looking around and seeing everything covered in a thick layer of white paint… IN: Curated Interiors OUT: Themed Interiors   When selecting finishes and furnishings, elevate your home by mixing styles, eras, and textures. Focus on filling your home with details that you truly love vs following a specific trend. Going all in on the farmhouse, ultra-Modern, boho, or vintage aesthetic will not only date everything in your home as soon as that trend cycle is over but can make your home feel mass-produced and cold.  An effective way to create a timeless space is to focus on opposites and contrast. Mix light and dark, old and new, feminine and masculine, patterned and neutral, and most importantly… displaying things that mean something to you. This curated approach will look fresh for much longer.  IN: Molding OUT: Accent Walls  Accent walls have been everywhere for the past few years, creating an easy, cost-effective way to add personality to your home in just a short weekend. However, the splash of color can sometimes make a room feel unfinished and arbitrary.  Wall molding is a tried and true way to bring your walls to life, adding texture, depth, and a subtle piece of historical charm. There are countless styles of wall molding but think of it as anything that adds visual interest to your wall... This can be done with heavy trim work, wainscoting, wall paneling, box beam ceilings, chair rail, etc.  IN: Space to spread out OUT: Open Floorplans The open floor plan concept was introduced in the 70’s, an idea that allowed homes with smaller footprints to have an open space to host and entertain guests without owning the largest house in the neighborhood.  Since the 70’s this open concept has become standard for building today. You would be hard pressed to find a home built within the past 15+  years that doesn’t contribute to some kind of open floorplan, however covid changed the way we live in our homes and highlighted some discrepancies in this ever so popular layout.  Humans have always needed the sense of comfort and privacy that defined rooms provide, but with the increase in remote work and school, it has become even more necessary. The combination of living quarters makes working, studying, reading, talking on the phone, or entertaining much more difficult with the backdrop of pots and pans banging…. The need for privacy may explain the rise of man caves and she-sheds that have been built in the past few years. Additionally, large continuous spaces are much harder to keep clean. Messes and smells are no longer isolated, but can be easily tracked throughout the entire living quarters… keeping a tidy home is more difficult, or I guess harder to hide!  Lastly, open living spaces hinder the ability to cultivate different feelings throughout your home. Say you want a white open kitchen, but would prefer a dark and moody living space, and found the perfect wallpaper for your dining room… The idea of giving off a different feel in each space can be challenging. 

View more