New to the homebuying world? It may be time to update your vocabulary! To make sure that you are ready for the homebuying process, browse these terms related to real estate, building or buying a new home, or browsing homes near you on the Parade of Homes.
Building Codes: A collection of rules and regulations adopted by a local or state jurisdiction to govern the construction of buildings.
Certificate of Occupancy: Often referred to as a “CO,” this is a certificate issued by a local authority indicating that a home meets building code requirements.
Change Order: A written alteration to a previously signed contract for construction work. These modifications may change the home’s features, finishes, or floor plans and can addd to both the cost and length of time it takes to construct a home.
Contractor: A company providing building services. Oftentimes, a newly built home will have a general contractor along with specialty and subcontractors who handle specific, unique elements of the building process.
Escrow: A legal arrangement in which a third party temporarily holds money or property until a specified condition has been fulfilled.
HERS Index: This Residential Energy Services Network (RESNET) Home Energy Rating System (HERS) scores homes against an index of average U.S. new home’s energy efficiency HERS of 100. The lower the score, the more energy efficient the home.
Home Warranty Program: A program that provides insurance for repairing or replacement services on a home’s major components, such as appliances and systems in the home, for a limited time.
Homeowner’s Association (HOA): An association to which homeowners belong if they own a home within the boundaries of the association. Members pay dues and follow the rules set by the association.
Home Performance Report (HPR): An easy-to-understand document that serves as the energy “window sticker” for a home, allowing buyers to compare home energy scores in the same manner as they compare miles-per-gallon information when they buy a new car.
Parade of Homes: A free, self-guided tour of new construction homes scattered through-out the the Twin Cities. Presented by Housing First Minnesota, the Twin Cities Parade of Homes has been running for more than 70 years and is the largest in the nation. Homebuilders enter their homes in the tour twice a year—once in the spring and once in the fall.
Permit: A written authorization issued by a city or county government authority to build a house or proceed with a particular phase of the building process.
Punch List: A list of usually minor tasks to be completed at the end of a project. This list is created by the general contractor, project manager, or homebuyer and may include things such as an area that needs another coat of paint or missing trim in one section.
Spec Home: Speculative, or spec homes, are built by builders without a purchase contract and with the goal of attracting a buyer during or shortly after construction. Some spec homes are complete, while others are still available to be personalized by the buyer’s selections.
The Parade of Homes provides you with a unique experience to view some of the best homes in your area. Whether you’re looking to build a new construction home, in the market to buy in the next few years, or just want to see what new home trends are out there, the Parade of Homes can help you narrow down what you’re looking for. We hope to see you on the tour!