When it comes to buying and selling homes, part of walking the walk is talking the talk. After all, it will be difficult to search for and land your dream home or sell your current home if you aren’t quite sure what all the terms mean.
Below, we’re going to detail 10 of the most important real estate terms you’ll encounter as you look to buy or sell your home. And by learning them all, you’ll have the tools you’ll need to go through either process with confidence.
- Buyer’s Agent vs. Listing Agent
In any home-related deal, there are two agents: the buyer’s agent, who represents the buyer, and the listing agent, who represents the seller. Both will get a percentage of the final sale price of the home as their commission, meaning that you don’t pay your realtor regardless of whether you’re buying or selling.
- Fixed Rate vs. Adjustable Rate Mortgages
Many individuals, including you, might need a mortgage to purchase a home. Fixed rate mortgages have a fixed interest rate for the entire loan (which is generally about 30 years) whereas adjustable rate mortgages have variable rates (which are generally 5, 7, or 10 years).
- Pre-Approval Letter
If a buyer needs a mortgage, it’s important to seek pre-approval from the bank to determine how much they’ll lend. This will determine which properties buyers can consider and show sellers whether or not a buyer is qualified.
Homes that are on the market are commonly known as “listings.” Listings will provide vital information about a property such as the price, number of bedrooms and bathrooms, square footage, and other details.
After making an offer, it’s essential that a buyer gets an inspection on the home they’re interested in. An inspector will evaluate potential issues like plumbing, electric, heating, appliances, the foundation, and more.
Lenders require property appraisals to determine the home’s value. Typically, appraisals are based on the sale prices of homes that have sold in the area as well as the current condition of the property.
Contingencies are included in offers on a home and specify conditions that must be met in order for the deal to get through. Of course, there are other contingencies as well, including:
- Financing Contingency – Demonstrates a buyer’s loan approval.
- Inspection Contingency – Demonstrates inspection results.
- Appraisal Contingency – Demonstrates the appraised value in comparison to what you’re willing to pay.
Offers are often made by agents or attorneys to show sellers the potential offers being made by buyers on a property. It’s common for sellers to counter an offer as well.
- Closing Costs
There are several fees that come with purchasing a home, commonly known as closing costs. Often, closing costs total 2 to 5% of the purchase price of the home (not including a down payment).
- Title Insurance
Once a seller has accepted an offer, buyers should receive a home title report that shows whether or not the seller has rights to the title and there are no liens on a home.
Looking for Assistance in Buying or Selling Your Home?
An agent is an indispensable resource when it comes to buying and selling homes.
And, when you’re looking for more than just terms to negotiate on your dream home or obtain an offer on your current home, United Real Estate can help. Contact us today to get started!