Real Estate Lingo to Know
If you have been looking to buy or sell you’ve probably heard some terms that outside of real estate, you’ve never heard. This breakdown will have you out there understanding and sounding like an expert in no time!
Pro tip: If you’re looking for a specific word, hit Control+F and type that word into the search bar that pops up!
Under Contract Terms
Under Contract -
All parties have agreed on terms, have signed the contract, and the signed contract has been delivered to both the buyer and seller. Payment of the escrow deposit is expected but it is not a requirement to make a binding contract.
Escrow -
The escrow money, escrow deposit, or good faith deposit is money that is offered with an offer, or as soon as an offer is accepted, to show the seller that you are serious about moving forward with the purchase of the home. Because you forfeit this deposit if you back out of the purchase for any reason not allowed in the contract, the larger the escrow deposit, the more seriously your offer is taken.
Do I need an inspection?
I always recommend that you have an inspection done, In the scheme of things, paying a few hundred dollars to have peace of mind that there are no hidden dangers or problems is well worth the money.
How much are inspections?
The cost of the home inspection depends on the size of the house and additional inspections requested, such as swimming pool, septic tank, termites, insurance four-point (HVAC, plumbing, roof, and electrical,) wind mitigation, and sometimes radon. An average home inspection, without additional inspections, is about $300.
What if my loan doesn’t get approved?
If we are putting an offer in then you would have already been pre-approved. Although it does happen, as long as you have been forthcoming with all of the information requested by your lender, it’s unlikely it will. Make sure you do not change jobs, purchase big-ticket items, take out any new loans, or open any new credit accounts while your mortgage is being processed. If your loan does fall through, find out why and talk with your lender about changing to a different type of loan.
When can I start moving?
When you have the keys! When you are financing your purchase, it takes four to six weeks for your loan to be processed. Once the lender gives the all-clear, closing is scheduled. You will sign your loan documents and both parties will sign documents transferring ownership to you. Unless other arrangements have been agreed upon by both parties, the sellers should have completely vacated the home when they sign the closing papers. You can have your belongings ready to move, and a moving company scheduled before you go to closing. At closing, you will receive the documentation you need to provide utility companies with proof of your new residence.
Vocab to Know
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The property is actively for sale and on the market. The sellers may have received offers but have not accepted any yet.
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The sum in cash that you can afford to pay at the time of purchase. A conventional loan down payment is usually 20% of the sales price, but other types of financing require as little as 3.5% to 15%. A mortgage lender can tell you what types of loans you qualify for.
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A listing has expired and is no longer active, usually because it didn’t sell in the amount of time agreed upon by the listing agent and the owner of the home. If you see an expired listing, the owner may still be interested in selling.
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This property was under contract with another buyer and their contract fell through, so it is active again.
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This mortgage’s interest rate will never change, even if the term of the loan is 30 years.
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After an introductory period that could be 3, 5, 7 or 10 years, the interest rate on an adjustable-rate mortgage will be adjusted by the lender in accordance with current interest rates.
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A CMA compares the sales price of similar properties in the area to help determine the price of a property.
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The fees that the buyer and seller will owe associated with the home-buying process, such as the real estate brokerage commission and title insurance. Most are paid by the buyer, but the seller pays for some.
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A provision of the contract that keeps the agreement from being fully legally binding until a certain condition is met. For example, the purchase of a home can be contingent on the buyer selling their home first.
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For sale by owner - often pronounced “fisbo”
The owner of the home has it listed without agent representation. A buyer’s agent can usually still show the home, as many FSBOs will agree to work with agents representing a buyer.
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Multiple Listing Services
The MLS is the organization real estate brokers use to search for and list properties. They collect, compile, and distribute all information about homes listed for sale. Membership isn’t open to the general public, although selected MLS data may be sold to real estate listing websites.
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The property owner has accepted an offer and are under contract with a buyer. Their agreement may be contingent upon a variety of contingencies: inspections, appraisal, financing, and more. The home is not sold just yet.
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After you make a down payment, the rest o the money you owe on your home is call the principal. This is what you will be paying monthly and paying interest on.
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An insurance policy that protects a mortgage lender’s or owner’s interest in real property from assorted types of fraudulent claims of ownership. This is typically paid for by the buyer.
If you still have questions or didn’t find what you are looking for give me a call, I’m always happy to help!
