LIST YOUR HOME FOR FREE

When you're in the process of buying or selling a home, there's a lot to consider. One crucial aspect that often gets overlooked is title insurance. Whether you're a buyer or a seller, understanding title insurance and its importance can save you from potential headaches and financial losses down the road. Understanding Title Insurance Title insurance is a type of indemnity insurance that protects against financial loss from defects in the title to real property. Unlike other forms of insurance that protect against future events, title insurance safeguards against claims for past occurrences. These could include anything from outstanding liens and encumbrances to errors in public records or undisclosed heirs who might emerge with claims to the property. Learn more Risk of Claims For buyers, purchasing a property without title insurance is akin to walking a tightrope without a safety net. Even after conducting thorough due diligence, hidden issues can surface long after the transaction is complete. Imagine discovering years later that the previous owner had unpaid property taxes, or worse, that someone else has a legal claim to your home. Without title insurance, you would be responsible for resolving these issues yourself, which can be both time-consuming and costly. Sellers also benefit from title insurance as it provides peace of mind knowing that any claims against the property's title will be handled by the insurance company. This assurance can make your property more attractive to potential buyers who are likely to feel more secure knowing they are protected against unforeseen legal disputes. The Importance of Title Insurance The importance of title insurance cannot be overstated. For buyers, it ensures that you have clear ownership of the property and protects your investment against any legal challenges that may arise. It essentially guarantees that once you've purchased your home, no one else can claim it as theirs. For sellers, having title insurance can expedite the selling process. Buyers are more inclined to proceed with confidence when they know there’s an additional layer of protection in place. Furthermore, it helps avoid any delays in closing due to unresolved title issues. Who Pays for Title Insurance? One common question is who bears the cost of title insurance—the buyer or the seller? The answer varies depending on local customs and negotiations between the parties involved. In some regions, it's customary for the seller to pay for the owner's policy while the buyer pays for the lender's policy if they are taking out a mortgage. In other areas, buyers might cover both policies. It's essential to clarify this during negotiations to avoid any last-minute surprises at closing. In conclusion, whether you're buying or selling real estate, understanding and obtaining title insurance is crucial for protecting your interests. It mitigates risks associated with potential claims on the property and provides peace of mind by ensuring clear ownership. While there may be some costs involved, consider it a small price to pay compared to the financial burden you could face without it. So next time you're navigating a real estate transaction, remember: securing title insurance is not just an option—it's a necessity for safeguarding your investment and ensuring a smooth transfer of ownership. 👉 Visit our guides for more information.

When it comes to selling or buying a home involves a lot of paperwork, and one of the most important documents is the purchase and sale agreement. This contract outlines the terms of the sale, including the final price, key deadlines, and any contingencies that must be met before closing. To help you understand this crucial document, we’ll cover what a purchase and sale agreement is, what it includes, and what happens after it’s signed.So whether you’re selling a home in Boston, MA, or buying a home in Dallas, TX, here’s what you need to know. What is a purchase and sale agreement? In real estate, a purchase and sale agreement, also known as a PSA or P&S, is a legally binding contract that finalizes the terms of a real estate transaction.. It is signed after the buyer and seller reach mutual acceptance on an offer, and states the final sale price and all terms of the transaction. A PSA can vary depending on what state you live in. They typically consist of the final sale price, earnest money details, closing date, title information, and contingencies. Timelines for home inspections, securing financing, and the closing date, along with any other deadlines and anything else the buyer or seller requests, will be detailed in the agreement. What does the purchase and sale agreement consist of? The specific items in this contract vary by state, but will almost always include the following: 1. Parties involved The purchase and sale agreement includes the names of all parties involved in the real estate transaction. This can refer to organizations or individual people. The agreement should include the full names and contact information of all involved parties. 2. Property details The agreement should include a full and detailed description of the property. Details such as the type of property and the address should be included. 3. Final purchase price The PSA will include the  purchase price agreed upon by the buyer and seller. Note that this price might change during negotiations before the closing date. For instance, if the buyer’s home inspection turns up a problem with the home, the buyer may be able to negotiate a reduced purchase price. 4. Earnest money deposit The purchase and sale agreement will include information on the earnest money deposit, such as the dollar amount and instructions for making the deposit. In most areas, the buyer will need to deposit a personal or cashier’s check which is held with a neutral third party. These third-party companies can be escrow companies, title companies, or law firms. They will need to deposit within one to three days of mutual acceptance. 5. Closing date The closing date will be included in the purchase and sale agreement. On this date, the transfer of property is recorded with the local government, and the seller receives payment for the home. While the closing date is specified in the PSA, it may change due to unforeseen events, such as delays in financial paperwork. 6. Title company Information about your title company will be included in the purchase and sale agreement. As the buyer, you always have the right to select a title company. You should talk to your agent or attorney if you have any questions about choosing a title company. 7. Title condition The purchase and sale agreement will include an agreement that the seller will provide a clear or marketable title of ownership to the buyer.  8. Contingencies Contingencies are conditions that must be met in order for the home purchase to be completed. A buyer or seller may cancel a sale if one of the contingencies can’t be met. Here are some examples of common contingencies. 9. Definition of key terms To prevent confusion, key terms in the agreement should be clearly defined. Some parties may use certain terms differently, so clear definitions can clear this up. 10. Dispute resolution This section lays out how the involved parties will resolve any disputes. Mediation and arbitration are two common ways to settle disputes. 11. Penalties for breach of contract If one of the involved parties fails to uphold their end of the agreement without a valid reason, this section clearly outlines the consequences that party will face. Purchase and sale agreement FAQs What’s the difference between a purchase and sale agreement and a purchase agreement? The purchase and sale agreement may sound similar to the purchase agreement, but they are not the same. Here’s the difference between these important real estate documents. Purchase and Sale Agreement (PSA): This document outlines the agreed-upon terms of the real estate transaction, including the sale price, contingencies, and key deadlines. Both parties sign it to confirm their acceptance. Purchase Agreement: This is the final paperwork that both parties sign to complete the sale of the home. After all the terms outlined in the PSA have been met, the purchase agreement is signed, finalizing the real estate transaction. Who drafts the purchase and sale agreement?  The buyer’s agent or a real estate attorney drafts the PSA, depending on state laws. In states where escrow agents handle closings, the buyer’s agent typically prepares the document. In attorney-handled closings, the attorneys draft it. Both the buyer and seller sign it to finalize the agreement. Who pays for the purchase and sale agreement? In most cases, the costs associated with preparing the purchase and sales agreement are left to the buyer. Since it’s considered a closing cost, the buyer and seller can negotiate to split the cost. Sellers may also agree to cover some of the cost as an incentive to the buyer. Are purchase and sale agreements legally binding? Yes, a PSA is a legally binding contract. If any party fails to hold up their end of the agreement, legal action or lawsuits can be pursued to recover any damages. Having a real estate lawyer go over the PSA can lessen the risk of violating the terms of the agreement. What happens after the purchase and sale agreement? Once the PSA is signed: The buyer deposits the earnest money. Inspections, title searches, and financing steps begin. Any contingencies must be met before closing. The final purchase agreement is signed at closing. The process can take several weeks, depending on factors like inspections or financing delays. The post What is a Purchase and Sale Agreement in Real Estate? appeared first on Redfin | Real Estate Tips for Home Buying, Selling & More.

Home prices in 2025 are a couple percentage points above where they were last year at this time. People often ask, “How can it be possible that home prices are still climbing even though the cost of money is so much higher?”There are obviously fewer buyers who can afford these prices.One reason that home prices have stayed elevated is that inventory nationally is still restricted.  On the supply-demand equation, demand is way down, but supply is still surprisingly low in much of the country, as well.If there are too few homes for sale, they don’t have to be affordable to everyone, they only have to be affordable to a few people. But if current trends continue, the inventory shortage will be effectively gone by next spring. Does that mean that home prices will fall? It might.In fact, while home prices are higher than a year ago, inventory has increased at the rate price appreciation has decreased. As more supply becomes available, these homes have to be affordable to more people. I’ve called this a compression in home prices. The 50-year average for annual home price appreciation in the U.S. is more like 5% per year. This year it’s 2%.When inventory finally builds back to the old, normal levels, that result could go to zero or even negative. Mortgage rates are a big variable here. In 2024, we saw a notable increase in buyer demand when mortgage rates got close to 6%. At that time in the fourth quarter, home sales picked up and home prices did too.Six percent is the threshold I’m watching again this year. If we spend any amount of the year at or near 6%, I expect that the inventory, sales and price trends will reverse. Let’s take a look at further late February data for the U.S. housing market.InventoryAvailable inventory of unsold single-family homes in the U.S. climbed this week almost half a percent to just over 640,000. There are 28.7% more homes on the market now than a year ago. This is the supply expansion I was talking about. However, mortgage rates were climbing to their highest level of the year at this time in 2024. Mortgage rates now are lower than they were a year ago.As rates climbed in 2023 in February, March, April, May all the way up to 7.5%, inventory grew each week pretty quickly. By the end of May there were 38% more homes on the market than the year prior. This year, rates are slowly easing down, so the expansion of inventory will be capped a bit.We’re expecting 18% inventory growth by the end of the year. Texas and Florida, which led inventory growth all last year, are now no longer the fastest growing states for unsold inventory. California and Arizona are. California and Arizona have 45% more homes unsold on the market now than a year ago. Texas only has 31% more homes on the market. This is a big shift from the trends of last year. This illustrates which areas are more mortgage rate-sensitive. Texas and Florida exploded in unsold homes when mortgage rates surged and are relatively less impacted now. California has had more of a steady growth in unsold homes. If Texas and Florida are more sensitive to rates, you can imagine what happens later this year if rates fall or rise substantially.In this chart we’re looking at 10 years of inventory across the country. At the far-right end you can see that inventory is starting to inch up for the spring.I’ve highlighted last year when there were only 500,000 single family homes on the market. I’ve also highlighted 2018 when there were 775,000 single family homes on the market that February. Assuming mortgage rates stay higher for this year, we’ll probably see that 2018 level again by next spring. In the inventory chart you can see three distinct phases. The left side of the chart is the last decade mortgage rates were falling for most of the decade. The more rates fall the more we want to own real estate. As we own more, the available inventory of unsold homes decreases. That’s the first phase.During the pandemic, that dynamic got supercharged. Rates dropped to ultra-low levels, so we wanted to own every bit of real estate possible. Inventory hit record lows as we bought everything in sight. Now we’ve had three years of rising interest rates and rising inventory. It looks like after four years of elevated mortgage rates, the market will finally be back to normal levels of unsold homes on the market. That’s next spring. As we approach that threshold of old levels of unsold homes on the market, it raises those questions about home prices. New listingsTo get a lot of homes on the market though we need some sellers. There were only 54,000 new listings of single-family homes unsold this week. That’s not a ton.There were another 10,000 new listings immediate sales which makes 64,000 homesellers. In total, it was another week with fewer home sellers that last year. It’s hard to grow inventory too much when there aren’t many sellers.Unsold new listings amount to 4.8% more than a year ago. Demand is slower so more of the sellers are sitting on the market. There are fewer immediate sales that go directly into contract. In this chart we’re showing those unsold new listings each week. It’s a little more than in 2024 or 2023. I continue to interpret any growth in sellers as a good sign for a healthier housing market. As always with the new listings data, we are vigilant for any signal of a lot of sellers or some kind of flood that would quickly change the supply-demand dynamics.The current thing to keep an eye on is whether a lot of federal government chaos leads to greater unemployment or financial distress for Americans. Does that lead to a change in the number of people who have to sell their house? There are early signs that unemployment in the Washington, D.C., metro is climbing for example. Are those people going to suddenly sell their homes? There’s a time lag between unemployment and inventory. Despite social media hysteria, the Washington, D.C., housing market is not showing signs of a flood of sellers, absolutely none.Here’s what a timeline could look like. Let’s say we see a massive spike in unemployment this spring in 2025. As people lose their jobs, they scramble, they get unemployment insurance, and they look for new work.However, they don’t typically rush to sell their house a week after they lost their job.If the economy has really tanked and you’ve been out of work for months, and future employment looks dubious, then you start to make financial arrangements. Once you’ve been out of work for about six months or more, this is when mortgage payments start being missed. That’s when you start working with the bank. After several months of that process, that’s when the distressed sales begin.When you add it all together it really implies that if major unemployment hits right now, this is 2026 inventory growth. And, while unemployment is on the rise, it’s still pretty low. Americans have jobs. The economy-employment-home sales cycle this time around has an added wrinkle which is homeowners all having ultra-low mortgage rates. So, selling their home would put them in worse cash flow position.In normal recession cycles, homeowners could swap a high mortgage payment for a lower rent payment and help correct the cash flow, but that’s mostly not true now. So, it could be that even if crazy policy changes trigger a big job loss recession, housing inventory gains could be much more limited than you’d expect.We are approaching the total inventory levels where home prices might have to adjust down. Is there any sign of a flood of sellers that will accelerate those inventory gains? As of right now there is not. But we always stay vigilant and measure every week. Home pricesMeanwhile, with greater supply of unsold homes, home prices are just barely positive compared to last year.Home prices are about 2% higher now than in February 2024. This week the median price of the new contracts came in at $385,000. That was down just a smidge from last week and is 2.6% greater than the same week a year ago. Home prices are compressing. Nationally, it is not accurate to say that home prices are falling. They’re higher than last year, but the growth rate is down. In 2024 home prices rose 4% over the year prior, now it’s only about 2%. There have been recent times when home prices fell. It happened in 2022 and you can see it in this chart here.At the left end of the chart is the purple line for 2025. We measured $385,000 as the median price for this week’s home sales contracts. Home prices generally climb for the spring season to peak in June before sliding down in the back half of the year. In 2022, that’s the green line here. There were notable moments when home prices dropped. Home prices adjusted down in June and again in September each time with big mortgage rate spikes. That is not happening now.Here in the spring of 2025, home prices are a little higher than a year ago, but barely. That’s why it looks like a further increase in inventory seems to be required before home prices turn negative nationally.As long as mortgage rates stay elevated, we should be on the watch for this pattern for home prices. If rates spike from here, due to something like inflation coming in high and the yield on the 10-year treasury jumping, then maybe mortgages hit 7.5% again.If that happens, I expect to see home prices adjust down like you can see in the 2022 line here. On the other hand, mortgage rates have been slowly inching lower for about a month. If we get lucky and rates continue to ease down closer to 6%, then the pattern will likely halt and home prices would likely have some resilience like they did last fall.You can see the impact on home prices in the blue line here for 2024. After the brief September dip in mortgage rates close to 6%, enough buyer demand was stimulated that home prices stayed elevated in the fourth quarter. 2024 had the opposite pattern from 2022 at the end of the year. Home salesHome prices inched down this week and home sales also dipped down for the week. We counted 57,000 new contracts pending for single family homes plus another 12,000 condo sales. That’s 6% fewer than last week and 5% fewer home sales than the same week a year ago. Home sales will generally continue to climb weekly for the spring. We should see a rebound to 60,000 or so in next week’s data. What we’re hoping for, though, has not been materializing.In this chart, we’d like to see the purple line for 2025 come in consistently above the blue line for 2024. Growth in home sales would be a good sign for the market and the economy.But since that hasn’t been happening, there are now 313,000 single-family homes in contract, which is fractionally fewer than a year ago. In the fourth quarter of 2024, home sales had built some growth, but that growth is gone now. As I mentioned earlier mortgage rates have been easing lower for a month and are below last year at this time. Rates are still near 7%, though. The bottom line on home sales is that there isn’t yet any sign of growth yet for 2025.Price reductionsMeanwhile, leading indicators for future sales prices also confirm this pattern I’ve been describing. The share of homes on the market with price reductions ticked up again his week by 20 basis points to 33.2%.There are more homes on the market now that have taken price cuts from the original list price than in any recent February. That’s a very clear statement about homebuyer demand versus the available supply in early 2025.I’ve been talking about this data point for several weeks now and the trend continues here into late February. In most years in February, you get fresh new supply and you get initial spring buyer demand. As a result, in many years in Q1 there are usually fewer price cuts each week. This year there are more price cuts each week. In the chart you can see the purple line for 2025. Price cuts are more common now than in previous years and increased for the week. The most obvious contrast is with the green line from 2023 where the market was finding surprising strength. In 2023, price cuts improved all the way to the end of April. This year, it was January when sellers started cutting prices more. Price cuts are measuring the homes on the market now, where sellers see weak demand. A price cut today hopefully generates an offer in March for a sale that closes in April. The price cuts data tells me we have weak home sales pricing for several more months at least. If mortgage rates do not cooperate and are still around 7% or higher by the end of the spring, that’s going to show up in this price cuts data. It’ll also show up in the inventory data and it’ll give us visibility on the possibility of home prices declining for the calendar year of 2025. Stay tuned.