There are a few common real estate terms that you should understand when you’re planning to buy or sell property. You will come across a lot of these terms so having a good understanding of real estate terms is imperative. Common real estate language isn’t difficult to comprehend, and knowing the lingo can make it much easier to converse. In the long run it makes home buying and selling a much easier process too.
Commonly Used Real Estate Terms
• Appraisal – One of the first terms you may hear is appraisal. An appraisal is an estimated value of the property that is determined by qualified appraisers. Your lender will need the appraisal of your property before you can get a mortgage loan.
• Closing – A closing is where the actual sale or purchase of real estate happens. All of the documents for a mortgage are signed and the real estate transaction is officially finalized between the buyer and seller.
• Closing Costs – The amount of money that refers to all of the costs related to the purchase of property is a closing cost. Closing costs normally include agent fees, lawyer fees, survey fees, origination fees, taxes, and title insurance fees.
• Contingency – Contingencies are conditions that have to be met before the sale of real estate can become legally binding. This includes a home inspection. If major problems are revealed then the contingency gives the buyer the right to back out of a sale without losing any money.
• Down Payment – A down payment’s an amount of money paid out of pocket toward the purchase of property before a lender offers you a loan to cover the price. This amount can vary contingent on the kind of mortgage taken out.
• Earnest Money Deposit – This type of deposit is that amount of money you include with an offer suggested on a house as proof of your good faith. This type of deposit can account for 1 to 2% of the purchase price. Escrow agents usually hold the deposit until a sale goes through, then the money will go toward a down payment. If a seller rejects an offer, the money returns to the buyer.
• Listings – Homes listed for sale are called listings. Listings include the basic details about a home for sale such as the square footage, the price, and the number of bedrooms.
• Multiple Listing Service – An MLS is a big database of property listed for sale that real estate agents can access. It provides them with comprehensive information about a lot of properties that currently are on the market.
• Title Insurance – Title insurance is a type of insurance that protects the buyer and lender against losses that could occur over any dispute over a property’s ownership.
A Working Knowledge Helps You Understand Real Estate Processes
There are still more terms that you need to understand, and you will learn those from your real estate agent when the time comes. Until then you’ll have a working knowledge of the terms that are used the most. Of course if you have any questions you can count on your agent to provide you with the best answers.