Here are the top 10 most often used real estate terms and
what they really mean:
1. Agent is the
professional, licensed individual who represents you in the sale or purchase of
your real estate. You should expect to
receive the same level of professionalism from your agent as you would from any
other professional.
2. Appraisal - Your
lender will often order an appraisal from an independent, third party to verify
that the amount of money being given to a buyer to purchase a property doesn't
exceed what other buyers have been paying for a similar property.
3. CMA is an abbreviation for 'comparative market
analysis'. Comps are what homes similar to yours have been selling for over the
past 6-12 months. The seller's agent
runs 'comps' to determine a market listing price, and the buyer's agent
prepares a CMA to see what other buyers have been paying for similar property.
4. Property Tax
Assessment Is how the local taxing authority values your home for property
taxing purposes. Keep in mind that the assessed value of a house is not the
same thing as the market value or the appraised value of your home.
5. Deposit almost
always accompanies a purchase offer contract, and will show the buyer's good
faith in making his offer. The amount of
the deposit money is generally in proportion to the sales price of the
property. Your realtor will guide you as
to whether the offered deposit amount is fair for the market that you are in.
6. Contingencies or
subjects are in almost all contracts of purchase & sale. A contingency is
when an offer to purchase is made 'contingent on' or 'provided that'. Some examples of 'subjects' are financing
contingencies, inspection contingencies and insurance contingencies.
7. Inspections are
one type of contingency. The buyer should
get an inspection done to determine what repairs or defects there are in a
house, and to determine whether or not the price being paid for the house is
fair.
8. FSBO is short for
'for sale by owner' where a home owner has chosen to sell her home by herself
and not put it on the MLS. If you're
buying one, it's a good idea to have your agent guide you because you'll still
want to do the normal inspections and have contingencies in your contract of
purchase & sale that will protect you.
9. MLS means 'multiple
listing service' and can be thought of as a one-stop resource for real estate
for sale in your market. FSBOs aren’t on
the MLS but the majority of homes for sale usually are. The MLS is also used by your realtor to
prepare a CMA and will also assist your lender in developing an appraisal.
10. Closing is the
day that both sellers and buyers are waiting for, when the Title is transferred
and recorded and the mortgage is funded, and the home changes hands.