Through your real estate investment journey, there would be various kinds of terms used which would be very unfamiliar and might be difficult to understand. Having a basic understanding of important real estate terms before beginning your real estate journey would help you navigate the buying process effortlessly giving you the peace of mind you need. Whether it’s your first time buying, or just for conversation sake, there are lots of interesting terms used by real estate professionals you should know. Here are ten real estate terms you should know before you start looking for a home:
1. Listings: This term is used by real estate agents frequently to refer to home for sale. It gets its name from the fact that these homes are often “listed” on a website. A listing often provides information about the home.
2. Inspection: Once a potential buyer makes an offer, home inspections are required. The aim of an inspection is to check if every feature of the property is up to standard. Issues that may turn up during an inspection may factor into the negotiation on a final price. A home buyer who fails to carry out a property inspection may run into surprise costly repairs down the road.
3. Appraisal: When applying for a mortgage, the lender would require an appraisal of the home you want to buy. The home’s value would be estimated by a licensed appraiser based on comparable homes that have sold in the area and an investigation of the property.
4. Buyer’s agent: This is a term used to describe an agent who represents the buyer in the home-buying process. On the other side is the listing agent, who represents the seller.
5. Closing: This refers to a meeting which finalizes the sale of the property. At the closing, the final documents are signed by the buyer and sellers. The buyer makes a down payment and pays closing costs.
6. Offer: This is the initial price offered by a prospective buyer to the seller. A seller has the option of accepting the offer, rejecting it or countering with a different offer.
7.Title Insurance: After all the negotiations are done and the seller has accepted your offer, title insurance is often required as part of the closing costs. It covers research into public records to ensure that the title is free and clear, and ready for sale. If you purchase a home and find out later that there are liens on the home, you’ll be glad you had title insurance.
8. Real estate agent: A real estate agent is a professional with a real estate license who works under a broker and assists both buyers and sellers in the home-buying process.
9. Realtor: A Realtor is a real estate agent who specifically is a member of the National Association of Realtors. There are certain codes of standards and ethics which NAR has and every member must adhere to.
10. Titles: This is the official government given document allotted to a particular property.