Key Terms Used in a Real Estate Contract

Business professionals that are experts in the real estate industry tend to take real property terms for granted. We are so well versed in our “lingo”, we forget that the general population might not understand our language. To shed some light on what it all means and to help place buyers and seller in their “comfort” zone, here are some key terms commonly used in a purchase contract.

Agreement of sale – A legal contract between the buyer and the seller of a property. The full terms and conditions of the sale are disclosed, including the sale price and the settlement date. Depending upon the State where the agreement is issued, this document can serve as a land contract or a purchase agreement.

Cancellation clause – A provision in a purchase contract that sets forth the conditions where one or both parties to the real estate contract may utilize to terminate the contract. The clause provides specific details about what constitutes the right to terminate the agreement and names any penalties that may be incurred in the event that the contract is cancelled.

Contingency – A clause in a real estate contract that requires the completion of certain acts before the parties are obligated to perform. An example would be a Home Inspection contingency or financing contingency.

Contract or Offer – An offer is made by the buyer. It becomes a contract once accepted by all parties to the transaction. A contract for the sale of real property must be in writing to be enforceable.

Earnest Money – A deposit or partial payment by the buyer as a demonstration of good faith that he or she is serious about purchasing a home or property. If the buyer fails to meet the contract terms, the earnest money is forfeited. A Title or Escrow Company normally holds earnest monies.

As-Is – A clause which alerts the buyer they are purchasing a home in its existing condition with no expectation of repairs being completed by the seller.

Fixtures – Items which are permanently affixed to the home. An example might be an oven, dishwasher or built-in entertainment center.

Home inspection – An objective review by a licensed third party to determine the condition of a home.

Expanding knowledge and education of the buyer and seller in the purchase of real property is extremely important. This will produce great rewards for all parties concerned in a real estate transaction. It will also create a “comfort” level for the clients and provide a stress-free experience.

Debt Consolidation Key Terms

Debt consolidation occurs with many different types of loans within the broad categories of open-end, closed-end, secured and unsecured credit. Learning about the various terms that distinguish loans can help borrowers ensure they save with debt consolidation.

Debt consolidation involves obtaining a loan or line of credit to pay off multiple high-interest debts. Once consumers eliminate debt, they make monthly payments to the lender, who becomes the only creditor.

Several terms exist that can confuse consumers about the type of loan or credit line they receive for debt consolidation. Open-end loans, also known as revolving credit, provide a line of borrowing that consumers tap into for debt consolidation. Various lenders, such as banks, credit unions and retail stores, offer open-end credit that consumers withdraw by check or credit card.

Closed-end credit provides consumers a fixed amount of money to finance debt consolidation. Consumers direct the entire amount toward paying all debts, and then they make fixed monthly payment for the life of the loan.

Secured credit involves consumers issuing collateral, which the lender can sell if consumers default on the credit. Collateral can be any valuable asset, such as a home, car, boat, whole insurance policy or diamond ring. Secured credit benefits debt consolidation by providing a lower rate than the interest charged on debts.

Unsecured credit does not involve collateral. Instead, lenders impose high interest rates on the unsecured credit extended to consumers for debt consolidation. Lenders charge higher interest rates to compensate for potential losses from consumers who may default.

Does Social Media Help In Getting An Auto Loan?

We live in a world dominated by technology and social media. Whether they are your shared posts, status or your connections, social media platforms play a key role in carving your virtual personality. A well-known fact is that technology is an inevitable yet an integral part of our lives. When it comes to financing your car, social media is building its way and becoming a relevant medium of profiling. For instance, John walked into a dealership to purchase and obtain financing for a car. The quickest and easiest way to search for a tentative background of John would be to get a grasp of his personality on the basis of his behavior on Facebook and Twitter account, respectively. Currently, a small percentage of lenders use social media for judging an individual’s creditworthiness. However, the developing presence of social media is gaining mind share of the lenders.

Can Social Media help in ascertaining the Creditworthiness of an individual?

1) Facebook can build your Credit Circle

The very essence of Facebook lies in networking. A creditworthy profile does not require millions of posts or many friends. However, if you have a genuine profile and do not pose any abnormal social behavior, your profile is likely to get approved for an auto loan. Additionally, the presence of certain contacts in your friend list with a clean history and a strong credit score further add to your creditworthiness. Lenders can look for mutual contacts that have been previous customers. The payment history of the mutual contact can then be used as a basis to judge your creditworthiness. In order to get the most out of your circle, seek a person with a good credit score and make him a cosigner and your auto loan process will become smooth.

2) With LinkedIn, lenders can check your Employment Stability

A stable employment speaks volumes about your personality and trustworthiness. LinkedIn can serve as the best source of obtaining information regarding your job history, duration, professional position and interests. The documentation of an auto loan requires you to display evidence of a source of income through pay stubs. However, there is less proof one can gather regarding the stability of employment. Social media can become a tool to ascertain not only if there is job-hopping, but also the financial strength of the individual. A person with a 500+ connections, long duration of employment history and a considerable profile activity can become a favorable applicant in the eyes of the lender.

Buying a Car: Making the Most of your Social Media Profile

Social media has made its way into the minds of auto buyers as well as lenders. As primary sources of guides, nothing comes above your credit score, current income status and payment history. However, virtual platforms such as Facebook and LinkedIn are starting to occupy mind share in terms of creditworthiness. Once the primary sources of information seem insufficient, lenders may turn to social media to get an idea of your personality. A few helpful ways to make sure your social media positively adds to your credit score is to be careful with your online posts, invite only genuine friends into your virtual circle and to always keep your professional profiles updated.