Understanding the local real estate market and negotiation process can be overwhelming for first-time homebuyers. Unfamiliarity with the terminology often adds to the confusion. To help you remain calm and prepare to find your dream dwelling, below is a quick guide in real estate lingo.

What Are Common Real Estate Terms?

1. Escrow

As a buyer, you will write an earnest money check when you place an offer. A third party will hold this check—such as a title company or real estate attorney—while you negotiate terms with the seller. This period is called escrow. It is in place to keep the seller from having your check if there are issues with the deal, and you don’t get the deed before paying for the house.

2. Appraisal

To get approval for a mortgage loan, the lender will require a house appraisal first. A licensed appraiser accounts for the condition of the property, purchase price, and sale price of similar area homes to determine the overall value. A lender needs this information to make sure the house isn’t worth less than the sale price. If the buyer defaults on the loan, it is more challenging to sell the property to recoup the loan costs. 

3. Closing Costs

In addition to the price of the house, there are additional fees when completing the sale. The buyer and the seller must both pay closing costs. On the buyer’s end, this includes mortgage application fees, running credit reports, deed filing, and paying broker charges. The seller uses a percentage of the proceeds from the sale to pay the real estate commission.

For help navigating the real estate market in St. Charles County, MO, and the surrounding communities, contact Christine Williams Realtor®-Coldwell Banker Gundaker. The licensed realtor follows local housing trends and will help you buy a house that is within your price range. You can view recent home sales online, or call (314) 882-7050 to start your house hunt. Find event announcements on Facebook.