The 10 Most Important Real Estate Terms You Need to Know When Buying or Selling

Real Estate Terms You Need to Know When Buying or Selling

The real estate world is filled with many specific terms for the job, relationships, processes, and references that make up the real estate industry.

At first, these terms may seem daunting and confusing, especially when you are looking into buying or selling a home.

Nonetheless, even with a professional by your side, it always helps to be able to understand the terms being thrown around during the process of buying or selling a home.

10 Real Estate Terms to Know

To help ease your mind and be more informed, here is a list of ten of the most important real estate terms you need to know when moving forward with buying or selling a home.

Real Estate Agents and REALTORS®

Real estate agents and REALTORS® work very similarly if not identical jobs in most cases. They both help assist either the buyer or seller of a home during the buying or selling process.

Where normal agents and REALTORS® differ is in their qualifications. Both are required to enroll and educate themselves in the field to complete their real estate license exam.

REALTORS® take it one step further as they are members of the National Association of REALTORS®, which holds their agents to higher standards to maintain their status.

Listing Agent and Buyers Agent

When buying a home, two agents are typically involved. There is the “listing agent” who represents the home seller, and the “buyer’s agent” who represents the home buyer.

It’s also important to note that the term “dual agency” is when one agent represents the home seller and buyer within the same transaction. Do note that this practice is illegal in some states.

Mortgage

A mortgage is an agreement between the buyer of a home and a lender that lends them money in order to purchase the home.

In this agreement, the lender allows the buyer to borrow money for the home. When a mortgage is agreed upon, the buyer will be required to pay back the sum over a specific period of time.

Pre-Approval Letter

A pre-approval letter is a document from your bank that gives you an estimate of how much they will loan you to purchase a house.

This is important to help understand what you can afford, and it will also ensure sellers that you are a fit buyer. It is important to note that a pre-approval letter may not guarantee that you will be fully approved. However, getting pre-approved does show that you are serious and are very likely to have the finances needed to cover the purchase.

Home Inspection

A home inspection is often done after you make an offer on a home. The inspector will go through every part of the house to make sure everything is in working order and safe.

They will review the foundation, electrical, plumbing, and more to ensure everything works as stated. If the inspector finds something is wrong or not working, you can use this to negotiate with the seller to either fix the problem or reduce the price of the home.

Appraisal

An appraisal for a home is the process in which an appraiser determines the fair value of the home. Appraisals are professionally done and unbiased whenever a mortgage is involved in the buying or selling process of a home.

Appraisals help buyers of homes in Sun City Summerlin Las Vegas (and other parts of the country) make sure they aren’t overpaying for a home, but sometimes sellers may feel that the appraisal is unfair. In many cases, a second appraisal can be done as well to ensure it is correct or within reason.

As-Is

Selling a house “as-is” means that the house is being sold in its current condition. There are a lot of things this could reference.

A lot of the time, houses are sold as-is because the seller is not willing to pay for repairs to the house that are needed. Sometimes the house is sold as-is because the seller may not have enough time to wait for the house to be repaired.

The point here is that if you do buy a house as-is, you are almost always responsible for what needs to be repaired in the house.

Offers and Counteroffers

An offer is what a buyer, and sometimes their agent, submits to the seller of a home. When buying real estate in Sun City Anthem (or elsewhere), the price of the offer reflects what the buyer and their agent consider to be a fair asking price. The offer can be for the full asking price, more than, or less than the home.

A counteroffer is when either the seller or buyer provides an offer in response to the other party's previous offer. Counteroffers are used to find a middle ground that the buyer and seller can hopefully agree on.

Closing Costs

Closing costs refer to the fees you are required to pay when purchasing a house. Fees that are a part of closing costs include taxes, loan processing, and title costs.

Closing costs usually come in between 2-5% of the price of the home, and some costs can be negotiated. You can negotiate with your lender on the total price of closing costs, and you can also negotiate with the seller to cover part of or all of the closing costs of the house.

Property Title and Deed

In real estate, a property title is a right an owner has to the ownership, control, and responsibility of their property. There isn’t any specific paperwork that certifies a title, but this is where deeds come in.

A deed is a legal document that transfers the title from one person to another. In most cases, deeds are used to transfer the title from the seller of a home to the buyer of said home.

Conclusion - Important Real Estate Terms to Know

Like we said, getting a full understanding of these terms can be a lot to process. On top of that, these ten real estate terms are just a small selection of information within the real estate world, but they are a great start to getting your head wrapped around the idea.

For additional terms, check out our real estate financial terms glossary.

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