A residential real estate purchase is the purchase of property intended for the primary use of private family housing. Properties that fit into this category include single family homes, townhomes, and condominiums. The most common transactions are ones where the buyer purchases the property for their own primary residential use. A property being purchased as a vacation home, second home, or a home planned for use as a single dwelling rental also qualifies as a residential purchase. Additionally, a real estate investor who is looking to make income from a residential property may purchase a dwelling for the purpose of housing tenants in exchange for rent. Residential dwellings such as single family homes, townhouses, condominiums, or duplexes are all classified as residential real estate transactions, even when the goal is to rent out the living space for income.
When entering into a residential property purchase, the buyer is typically an individual or a pair of individuals using their personal income, personal assets, credit history, and financial background to gain a mortgage loan and ultimately pay off that loan to own the home outright. Residential buyers are afforded many options in terms of the type of loan, the interest rates available, and the overall payment structure. These transactions can typically be done with a conventional loan or one of the other popular residential loan types. The lender will also require a buyer to purchase lender’s Title insurance. This insurance protects the investment of the lender. It is recommended that a buyer also purchase owner’s Title insurance to protect themselves against a financial loss as well.