Buying and selling a home can be quite confusing, especially if you aren’t familiar with much of the vocabulary you hear being used throughout the process. Every industry has its own jargon, and real estate is no exception. As such, before you start house hunting or list your property, it’s worth learning some of the vocabulary. This will help you communicate better with your agent and ensure you know exactly what’s taking place as you get ready to make a major financial transaction. Here are a few terms you’re likely to come across.
Real Estate Terminology for Beginners
Every home is unique due to its characteristics, condition, and construction. When a property is listed on the market, an appraisal is performed to determine its estimated value based on certain criteria. Appraisal reports help to decide an asking price, mortgage options, and taxation issues.
2. Closing Costs
Closing costs are incidental expenses associated with the completion of a home sale. They may cover a variety of fees, such as taxes, the appraisal, loan processing, legal help, the title search, and title insurance. These costs are paid at closing.
These are certain conditions that must be fulfilled before a real estate transaction can be completed. Common contingencies include the home inspection (that nothing major is damaged or broken), financing (that the buyer is approved for a loan), and the appraisal (that the appraised value is close to the offered amount).
4. Earnest Money
Once a buyer indicates their interest in purchasing a home, they will pay a percentage of the sale price to the seller, which is to be held in escrow until closing. This payment is referred to as earnest money and is used to help indicate that the buyer has a serious intent to purchase.
Escrow refers to a financial arrangement in which a neutral third party holds and regulates any payments that are made as part of the real estate transaction. Lenders may also require buyers to deposit money into an escrow account to ensure payment of homeowners insurance and property taxes.
Real estate lingo can sound like a foreign language to those who have never bought or sold a home before. Fortunately, you can count on the professionals at RPP Sold Team of RE/MAX Plus to explain any terms you don’t understand so you’re able to make decisions with confidence. Over the years, they have helped numerous clients throughout Monroe County, NY, achieve their buying and selling goals. Call (585) 623-1500 to set up an appointment, or visit them online to view their current property listings.