Are you drowning in a sea of real estate terms? Are you finding yourself surrounded by all this real estate jargon that has you scratching your head wondering what it all means?
Maybe you’re thinking of taking the plunge into homeownership and doing some preliminary research. Or maybe you’re looking to sell your home and doing some research to see what it will entail.
It is very important to educate yourself on the real estate lingo. It will make you more confident throughout the process and also help you to take note of important milestones.
So, here are 7 real estate terms you should know as you start the buying or selling process.
- Buyer’s Agent vs. Listing Agent
There are usually two agents involved when you buy a home, the buyer’s agent and the listing agent. A buyer’s agent works on behalf of the buyer and helps them to get the best possible price and terms. A listing agent works on behalf of the seller by performing tasks that help to sell a home. These tasks include marketing the home, taking professional photographs, making the home accessible to interested parties and presenting offers to the seller.
A pre-approval is when your lender reviews your financial information and estimates the maximum amount of money you can borrow. This can be very beneficial to get before you apply for a mortgage or even before you start looking for a home. The pre-approval can help you to focus on properties that are within your affordability range.
Real estate agents often refer to homes for sale as ‘listings.’ A listing will usually contain information about the home for sale, such as price, number of rooms and square footage.
- Conditional Offer
A conditional offer refers to an offer to buy a home that is contingent on specific conditions that are put in writing. Examples of conditions that could be put in writing include home inspection and financing.
- Firm Offer
A firm offer refers to an offer to purchase a home with no conditions. This means that the buyer cannot back out the deal if the seller accepts the offer.
- Home Inspection
A home inspection is scheduled after you’ve made an offer on a home. It will usually cost about $350 - $500 to do a home inspection. The home inspector will go through the home and examine things such as the foundation, wall, electrical wiring, heating and appliances.
- Closing Costs
Closing costs are the legal and administrative fees that you need to pay when your house closes. Common fees that make up closing costs include land transfer tax, title insurance and lawyer fees. Typically, you will pay about 1.5 - 2.5% of the final sale price of the home in closing costs. And keep in mind this does not include the down payment amount.