When you start the process of buying or selling a property, it can be very overwhelming- especially for first-time homebuyers! You really need someone by your side to help guide you along in your Real Estate journey. One step you can take to ensure less questions is understanding different terms you may see while going over contracts or even when in negotiations. Here are some helpful need-to-know Real Estate terms when starting this exciting journey.
Most Important Terms To Know
- Appraisal: A written analysis of the estimated value of a property. A qualified appraiser does this assessment. This action is usually completed once the seller has accepted an offer and is a requirement of the buyer’s lending institution.
- Buyer’s agent: An agent that specializes in helping clients purchase properties. A buyer’s agent can either pair clients with properties or help clients find properties. They have the best interest of the buyer in mind during the transaction process.
- Closing costs: Fees that are paid at the closing of a Real Estate transaction. Closing costs are decided in negotiations of a transaction and can be paid by the buyer, seller, or both.
- Commission: Fees charged by either the broker or agent for their work on negotiating the transaction. It is normally a percentage of the price of the property decided upon before the sale and is paid by the seller.
- Contingencies: A condition such as property inspections that must be met before a contract is legally binding.
- Conventional loan: A loan not insured or guaranteed by the federal government. It usually has fixed terms and rates.
- Escrow: An item of value, money, or documents deposited with a third party to be delivered upon the fulfillment of a condition.
- Fair market value: The highest price a buyer would pay, and the lowest a seller would accept.
- FHA: A mortgage insured by the Federal Housing Administration (FHA). Also known as a government mortgage.
- Fixed rate mortgage: A type of mortgage with a fixed or locked in rate for the entire term of the loan.
- FSBO: A property which is for sale by the owner.
- Listing agent: Agents that help homeowners sell their home. They negotiate the best possible price and terms for the home seller.
- Lender: An organization or person that lends money.
- Pre-approved: Getting pre-approved by a mortgage company will give you a better idea of how much you can afford/ how much you can expect to be given in terms of a loan.
- Title: A legal document proving a person’s ownership of a property.
Need help understanding additional terms? Or maybe now you are familiar with some phrases, you are ready to take the next step in your Real Estate journey. Contact me today to get started!