What Is an Active Listing?

Older House in Hollywood Lakes Neighborhood in Hollywood, FL
Older House in Hollywood Lakes neighborhood in Hollywood, FL

What does it mean, when people say active listing?

Active listing in real estate means that a property is on the market and available for sale right now.

If a homebuyer like the property, there is an opportunity to make an offer to buy this home.

The property owner may have received offers to buy home already, but none have yet been accepted. This means that there is an opportunity for buyer to make a proposal and write an offer to purchase the home.

What Is an Assessed Value?

What is an assessed value in real estate
Condo buildings in Downtown Hollywood. Hollywood, FL

Assessed value is the dollar value assigned to a home by a tax assessor. This assessed value of the home is used to calculate real estate taxes.

Here in Broward a public tax assessor is called Broward County Property Apraiser and Marty Kiar has this postion right now.

Assessors provide assessed valuations annually, which gives the basis for a property owner’s annual property tax. The assessed value ususally changes from year to year, so the property tax also changes every year.

The assessed value takes into account the overall quality of the home, property values, square footage, home features and market conditions. it takes into consideration comparable home sales and inspections of the property.

 

What Is a Homeowners Association (HOA)?

Condo Building at Young Circle, Downtown Hollywood, FL
Condo building at Young Circle, Downtown Hollywood, FL

People often ask me about homeowners association. It is a common question from a first time homebuyers especially.

What is a homeowners association ( another short name is HOA )? So, the homeowners association is an organization that is legally permitted to manage and maintain the common areas in the community. Those common areas can be landscaping, pool, clubhouse, gym, parks, and streets, etc.

If you are buying a condo or a townhouse, there are other shared areas there too. Condo units and townhouses share common walls in between the units. The condo building ussually has stairs, hallways, maybe even elevators. There can be a parking lot or even a shared garage. Those are all common areas shared by all the people living in the condo building.

If a person is looking to buy a single family home in a neighborhood with shared common areas—such as a swimming pool, walking trails, gym, even security gates and sidewalks in front of each house—usually these areas are maintained by a homeowners association.

HOA helps to keep up the look of the community and makes sure it functions smoothly. HOA helps to maintain property values

 

What is an FHA Loan?

 

House in Hollywood, FL
Older house in East Hollywood neighborhood in Hollywood, FL

An FHA loan is a home loan, that is insured by the Federal Housing Administration (FHA). Loans are made by FHA-approved lenders.

FHA loans are very popular among first time home buyers, because they require a smaller a down payment and lower closing costs.

FHA loans allow a down payment of as little as 3.5% on a mortgage, with the credit score is 580 points and above. This can make it possible for lower- and middle-income borrowes to buy a house. But the buyer has to pay mortgage insurance.

The FHA mortgage insurance provides safety to the lenders lenders, just in case mortgage borrowers fail to pay the mortgage. The borrowers has to pay insurance premiums.

Just remember, that the lower credit score, the higher interest rate for the mortgage will be.

What is an Escalation Clause?

Building in downtown Fort Lauderdale , FL.
Building in downtown Fort Lauderdale, FL

When buying a house you have to decide what price to offer. But sometimes the offer to buy a home includes the escalation clause.

What is an escalation clause in real estate? When a property buyer uses the escalation clause, he says :” I will pay for the property XXX dollar amount. But if the homeowner receives another offer for the house, I will increase my offer by Y dollar amount up to the amount of Z”.

In order to understand this, lets look at the example with numbers. Buyer A writes an offer for the house at $100,000. Buyer’s real estate agent adds an escalation clause to an offer. In this case, if there is another offer for the house, an escalation clause will increase Buyer’s A offer in increments of $2,000 above the competitor’s offer, up to the amount of $110,000.

If there is no other offer from differnet buyer, so the Buyer A offer for the property is $100,000.

If a buyer B writes an offer of $101,000 for the seller, then buyer A offer is increased authomatically by $2,000 from $101,000 and now is $103,000.

If there is buyer C who offers $112,000 for the property, then buyer A maximum offer of $110,000 is less, and buyer C gets the property.