When working with realtors, some words will be said that may confuse you. Here's a few key words that may help you when talking with realtors!
- Adjustable-rate Mortgage
- Interest rates that change periodically. Can start with a lower monthly payment but the changing rates mean that the monthly payments will go up and down.
- Fixed-rate Mortgage
- Interest rate that remains the same. More stability and predictability when it comes to the loans durability.
- Process to develop an accurate opinion of calculate for the property. Use a third party appraiser so the lender can ensure the amount being requested reflects the property's fair market value.
- Fair Market Value
- An accurate representation of a property's value. The price a property would be able to sell for on the open market.
- Buyer's Agent
- Legally licensed to assist buyers during the home buying process.
- Seller's Agent
- Represents the seller of a property during a real estate transaction.
- The final step in the buying/selling process. The closing date is agreed upon by the buyer and seller, typically weeks after the offer is accepted. Ownership is officially transferred and all necessary payments are made.
- Closing Costs
- Expenses incurred by the buyers and sellers to finalize the transaction. May include appraisal fees, taxes, loans origination fees, credit report fees, title insurance, etc. Buyer usually pays 2% - 5% of the purchase price, but closing costs
can be paid by either the seller or buyer.
- Property Deed and Title
- Deed and Title are terms used interchangeably. Title is a concept and not a physical document; represents legal ownership of the home and all the rights that are transferred from seller to buyer. Deed is a physical, legal document the conveys
the title to the new owner after a home is sold; description of the property and identifies the buyer and seller of specific transaction.
- Pre-approval (Homebuyers)
- The lender has already verified their information, checked credit, and approved them for a specific loan amount for up to 90 days.
- Pre-qualification (Homebuyers)
- First step for pre-approval. Meant to give homebuyer an idea of how much of a loan they'll be able to qualify for.
- Title Search
- Examination of public records that show a home’s history, including previous purchases, sales, real property tax, and other types of liens. This information, along with any issues or liens recorded against the property, will be included in
the preliminary report.
- Down Payment
- Amount paid by homebuyer during closing period. Most loans require 20% down payment, some require 5%. Normally the more put down, the smaller mortgage payment.
- The part of the property officially owned by an individual. While the person does have the ownership, the lender has interest in property until it is paid off.
- Step in the buying/selling process. A neutral third party holds something of value during a real estate transaction. Once transaction is completed (closing), the third party will release the value they were holding, typically it is the buyer's
earnest money check.
- Home Inspection
- Non-invasive examination of a home’s condition. After the inspection, the inspector provides the client with a written report of the findings, which the client can use to make informed decisions regarding their pending purchase of the property.
- Homebuyers need to make an offer on a property they want to purchase. An offer can be for the home’s full list price, or what the buyer and their agent consider a fair market value for the home. Buyer’s agents are in charge of putting the
formal offer in writing before submitting it to the seller’s agent. In case the seller opts not to make a counter offer, he or she can approve the offer immediately, which turns it into a purchase contract.
- Seller Disclosure
- Document issued by a home seller to a buyer, outlines any existing issues with the property and other important details buyers need to know about regarding the home. May include repairs performed, details on defective systems or appliances,
history of leaks and other environmental-related issues, etc.
- Multiple Listing Site (MLS)
- collection of over 700 regional databases populated by listings. Each database contains its own set of listings which agents can get access to by paying dues. The MLS is widely considered the most comprehensive service for listings available
- Internet Data Exchange (IDX)
- A set of licenses, regulations, and technologies that allow realtors to access MLS listings, use the listings on their websites, and display the information publicly. “Broker Reciprocity,” a term used interchangeably with IDX, is a rule that
gives collective permission to display listings from the MLS. Brokers who opt into IDX grant other participants the right to display their listings, while also receiving the right to display listings from other participants. IDX is designed
to help agents promote and market listings, attract more leads, and close more sales.
- Probate Sale
- Occur whenever a homeowner passes away without writing a will or leaving the property to someone else. The probate court will authorize an estate attorney to get the services of a real estate agent, who will then be tasked with selling
the property. Compared to a conventional sale, probate sales are usually more complicated, and can take more time to complete.
- Trust Sale
- Homes sold by a trustee and not a private party. This often occurs because the original homeowner has passed away and has assigned their assets into a living trust. Trustees who have never occupied the property for sale are not required to
offer the same disclosures as sellers in a conventional sale.