What’s the CMA of your home and does the buyer have a plan for paying the closing costs? Does that sound like a lot of mumbo-jumbo? If it does, then it’s time that you get up to date on the latest real estate lingo.
When selling a home, it’s impossible to avoid real estate terminology. Everyone uses it from your real estate agent to your bank loan manager and the home seller. If you don’t know what they’re saying, you could put yourself at risk of a bad deal or an unfortunate misunderstanding that can cause endless trouble for closing the deal.
To help prepare you for the home selling process, we’ve created a complete glossary of real estate terms.
Appraisal — This is an estimate of the property’s worth/value. To determine the value of your home, you’ll need a real estate appraisal with expertise in your geographic area.
Appreciation — Over time, your house should gain in value due to increased marketing demand and inflation. The increased value of your home from when you purchased it is considered its appreciation in value. Depreciation refers to a decrease in value.
Assessed Value — This is the dollar value that a public tax assessor assigns to your home for the purpose of city/state taxes. This value is separate from a home appraisal value or market value.
Assumption of Mortgage — When the purchaser takes over your mortgage obligating, making them personally liable for payment of an existing mortgage.
Closing Costs — These refer to miscellaneous expenses (typically paid by the buyer) to close the deal. Expenses can include mortgage fees, recording fees, title insurance, transfer taxes, credit check fees, commissions, inspection fees, appraisal fees, and more.
CMA: CMA stands for Comparative Market Analysis, also referred to as “comps.” This report looks at similar homes in your area that were sold or are currently on the market and can help you determine an accurate value for your home.
Common Area — When selling a home, you should also mention facilities and space that are included perks. For a condominium, this real estate lingo can refer to a shared pool, parking, laundry, or courtyard. In a house, it can refer to managed homeowners areas.
Counteroffer — If you reject the initial home offer made by the buyer, you can make a revised offer that is more desirable.
Deed — The deed is a written document that transfers the title of your property from one owner to another.
Earnest Money Deposit — You’ll receive this payment from the buyer as an offer that indicates serious interest in your property. It is counted toward the down payment and is refundable.
Equity — This is the difference between your home’s fair market value and the value of your unpaid mortgage.
Escrow —Refers to an account set up by the lender, which holds funds from the buyer pending completion of sale.
Mortgage — A lien of claim against your property that the buyer gives to the lender as security for the money borrowed. When selling, you’ll need to ensure that you can make back your mortgage note.
Multiple Listing Service (MLS) — When selling your home, an MLS is an organization that collects and distributes home sale information to popular listing sites.
Principal — The amount of money you borrowed to buy your home that you must pay back with interest.
Real Estate Agent — A professional with a real estate license who has passed a test as required by the state.
Realtor — This is a real estate agent who is also a member of the National Association of Realtors, meaning they uphold certain standards and codes of ethics.
Real Estate Broker — A real estate agent that has additional education, has passed the state broker’s exam, and meets minimum transaction requirements.
Sales Agreement — Also referred to as an agreement of sale, contract of purchase, or purchase agreement. This is the contract in which the seller agrees to sell and the buyer agrees to buy under specific terms and conditions.
Title — The title is a document that refers to your right of ownership and thus your ability to sell.
Selling your home should never be confusing. Work with a real estate professional who can make the process as easy as possible and help you understand all the real estate terminology that you need to know. Contact me today to get the help you need and deserve.