By: Sutharsan Mahadevan
REAL ESTATE TERMS EVERY BUYER AND SELLER SHOULD KNOW
Tags: Real Estate, Sellers, Buyers, Real Estate Terms
Whether you’re selling your third home or buying your first, the real estate industry is full of new things to learn. From complicated terminology to confusing acronyms, buying and selling homes can get a bit overwhelming if you don’t know the lingo.
Below, we’ve put together a list of some of the more common terms and acronyms you’ll likely hear as you navigate the buying and selling process.
REAL ESTATE TERMINOLOGY FOR BUYERS AND SELLERS
Appraisal – The appraisal is an estimate of a home’s worth. It is conducted by a trained professional who looks at things like the value of similar homes that have sold in the area, square footage, and the home’s condition to determine its value.
Contingency – a stipulation in the real estate contract that places a condition on the buyer’s willingness to proceed with the purchase. If a contingency isn’t satisfied, the buyer may back out of the sale or get their earnest money back.
Down Payment – Money paid upfront by the buyer to the seller usually ranging from $0-20 percent of the purchase price.
Greatschools Rating – greatschools.org provides details of school districts so parents can make informed decisions about the schools their children attend. This website is especially helpful for homebuyers with children looking to buy homes in good school districts.
Homeowner’s Association (HOA) – an organization that manages housing complexes and communities and enforces rules for the properties within.
List Price – the price of a home as set by the seller and/or his listing agent.
The Multiple Listing Service (MLS) – a collection of databases that lists homes for sale. Only licensed real estate agents can list homes on the MLS, and each agent pays dues to become a member of each one.
Net Proceeds – the amount of money a seller ends up with after selling a home once agent fees and closing costs are paid.
Pre-approval – an analysis by a lender of a buyer’s ability to repay a loan. Getting a pre-approved mortgage tells you how much home you can afford.
Short Sale – when a seller sells his home for less than his mortgage balance. This is usually the last step before a foreclosure.
Title – a legal document that shows rightful ownership of a property. Once a property is sold, the buyer receives an updated title that shows his name as the rightful owner.
Upfront Costs – includes all the costs a buyer pays including earnest money, inspection fee, and the appraisal fee.
VA Loans – mortgage loan options offered by the U.S. Department of Veteran Affairs that cater to former and current members of the military and their families.
Walkthrough – the last inspection of a home, done by the buyer and his agent, before the closing takes place.
Zero Lot-line Property – a building that sits on the property line on at least one side.
This list isn’t all-inclusive as there are many terms in the real estate industry. It does, however, contain some of the more common words and acronyms you’ll come across as an average buyer or seller of residential real estate. If you hear any terms not on this list that you don’t know, be sure to ask your agent for an explanation before committing to anything.