If you’re preparing to buy or sell, you may hear terms during the process with which you’re unfamiliar. Whether you’ve been involved in many real estate transactions or are a real estate novice, some definitions may leave you perplexed. So before you engage in your next purchase, sale, or investment, brush up on your real estate vocabulary so you can confidently talk the talk. Consider the below your ultimate real estate glossary.
Appraisal: An estimate of how much a home is worth. A mortgage lender orders an appraisal, and the appraiser, a third party, evaluates the property to determine the market value to confirm the loan amount is accurate.
Clear title: A clear title means that the property doesn’t have any type of lien, building code violations or bad surveys.
Closing: The closing is the final stage of the real estate transaction and is when the property is legally transferred from the seller to the buyer.
Closing costs: The homebuyer pays the closing costs on or by the closing date. These costs are approximately five percent of the purchase price.
Comparable sales: Also known as comps, these are similar properties that have sold in the area to help the appraiser assess how much the property is worth.
Home inspection: Conducted by a home inspector, a home inspection examines the overall property to assess the condition of features such as the foundation, roof and heating system. The inspection identifies any major issues that could impact the home’s value.
Interest: Interest is a percentage and the profit a mortgage lender in exchange for providing the loan
Listing: A property on the market and available to purchase.
Listing agent: A real estate professional who represents the property owners to help them sell their property.
Listing agreement: This legally binding contract permits a real estate agent to sell the listing on behalf of the client.
Mortgage: A mortgage loan is an agreement between the buyer and the mortgage lender. A mortgage loan is used to finance a piece of property.
Multiple listing service (MLS): MLS’s are digital databases that real estate professionals create and maintain, and they provide current information about local listings.
Open house: An open house is an event at the property that allows the real estate agent to show the home to prospective buyers and other real estate professionals. An open house is typically included in the property’s marketing plan.
Pocket listing: A pocket listing is a property for sale but isn’t actively listed in the MLS.
Realtor: Not all real estate agents are Realtors, as a Realtor is a real estate professional who is a member of the National Association of Realtors (NAR), a trade association for real estate professionals. To become a Realtor, the real estate professional must agree to abide by a strict Code of Ethics.
Refinancing: Refinancing occurs when a homeowner seeks to replace the property’s current mortgage loan with a new one to get a better interest rate.
Staging: Staging a home means organizing a home’s interior to optimize its appeal to a broad range of potential buyers.
