As a home buyer or seller, you should be aware of important real estate terms

As A Home Buyer Or Seller, You Should Be Aware Of Important Real Estate Terms

Real estate appears to have its own language, full of legal and industry words that are heavy on jargon and short on communication at times. This list provides a full overview so that you can ensure your communication is top-notch, whether you’re a new and exciting real estate agent getting up to speed or an experienced agent trying to brush up on some of the more strange real estate phrases.

  • Comparative Market Analysis: A comparative market analysis (CMA) is an in-depth evaluation performed by a real estate agent to identify the estimated worth of a home-based on homes that have previously sold in the same region and are of similar size, condition, age, or features.
  • Appraisal: To determine the approximate worth of a piece of real estate, an appraisal is required. The mortgage lender sends out an appraiser during the home sale to seek a professional assessment of the property’s valuation.This info aids the lender in deciding if the property is worth the loan size sought by the buyer.
  • Equity: The portion of your home that you truly own is referred to as home equity. Your mortgage lender has an interest in the property until it is paid off, even if you “own” it. Subtract your outstanding loan total from the current market value of your home to find out how much equity you have in your home. As you pay down your mortgage or the total value of your property rises, your home equity will rise.
  • Adjustable-Rate Mortgage: Almost every home buyer now gets a mortgage. It enables people to purchase their dream home without having to save for years. The real estate glossary phrase “adjustable-rate mortgage” will appear when you come across the mortgage concept. This is a form of loan in which your interest rate fluctuates over the term. As a result, depending on the market, you may receive lower or higher interest rates than the initial ones. The time interval in which this change occurs is predefined.
  • Fixed-Rate Mortgage: Another phrase for a loan in real estate is “fixed-rate mortgage.” It is the polar opposite of the preceding phrase. You’ll get a fixed rate of interest regardless of what’s going on in the market. As a result, even if the market declines, you will be required to pay a greater interest rate on the loan during its term.
  • Earnest Money Deposit: Earnest money is one of the most important real estate words that every property buyer and seller should be aware of—the earnest money collected by an agent can best be characterized as the glue that holds the deal together. Earnest money, as the name implies, demonstrates to a seller that a buyer is “earnest” or serious about purchasing their home. The amount of earnest money required varies according to where you live in the country. As a general guideline, you should anticipate paying between 1% and 5% of the purchase price in fees.
  • Common Interest Development: Individually owned units, such as condos, townhouses, or single-family homes, share ownership of common amenities like swimming pools, landscaping, and parking. Homeowners’ associations administer common interest developments (also known as community interest developments or CIDs). Members often pay dues to the association on a monthly basis.

These are some of the most important real estate phrases to know for both buyers and sellers. To be honest, not understanding some of this real estate jargon might land you in a lot of trouble. It is critical to be well informed when purchasing or selling a home. When working with real estate brokers, trust your gut. Some great agents are solely concerned with your best interests. Others are only concerned about their next paycheck. 

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