Sometimes, it may seem la like real estate has its own language. Not understanding some crucial terms can have a negative impact on you.
Here are ten essential real estate terms you should really know. If you have any more questions, talk to your Lakeland Florida real estate agent, and they’ll provide some clarifications.
Appraisal – The estimated value of a property. Sellers will set a particular price for a listing, and then a professional appraisal will review it to see if it’s warranted. Banks require this process to see if they’ll give the buyer a loan.
Assessed value – The estimated value of a property given by a governing authority to measure applicable taxes.
Closing costs – Fees related to the entire real estate transaction, which can include lawyer rates, credit reports, paperwork, appraisal fees, deed recording fees, or other fees needed to complete a transaction.
Contingencies – Conditions that must be met for the transaction to close. The contingencies can depend on each case, but can generally include a home inspection contingency (meaning if the inspector finds certain issues, the deal is nulled), or even financing contingency (the sale goes through only if the buyer’s loan is approved).
Due diligence – The responsibility of both parties to research and understand their legal obligations before deciding to start the selling process. It is usually the time where the buyer also makes the home inspection.
Escrow – An unbiased third party that monitors the transaction. It can come up at various times of the transaction, such as the closing, where the escrow agent may review the paperwork to see if everything’s in order.
Home Inspection – A professional examination of the property, made on the buyer’s expense. A home inspector will take a thorough look at the property and analyze any issues it may have (in terms of foundation, roof, electrical, etc.).
Offer/counter-offer – Buyers generally need to make a formal offer in writing on the property they want to buy. If the seller does not accept it, they will issue a formal counteroffer.
Sales contract – A legally binding agreement between the buyer and the seller. The sales contract must specify the price and terms of the sale, and contain the binder or purchase agreement (the limited time period) for it to be viable.
Seller concession – Incentives offered by the seller to buyers to purchase their homes. There are different types of concessions, such as closing cost assistance, or home warranties. Sellers often give these concessions when they feel the buyer may be backing out of the deal, as a way to keep them on and finish the transaction.
Though these terms aren’t enough to make you fluent in the language of real estate, they’re certainly the ones you’ll most likely have to deal with.
If you need extra help with selling or buying property, RE/MAX Experts can help.