Real Estate Terms You Should Know

Buying or selling a home can be a complex and sometimes overwhelming experience, especially if you are not familiar with the terms and jargon commonly used in the real estate industry. To help you navigate the process, here is a list of important words and definitions every home buyer or seller should know:

1. Appraisal: An assessment of a property’s value, typically conducted by a licensed professional, to determine the market value of a home.
2. Closing costs: The expenses associated with buying or selling a home, such as title insurance, attorney fees, and closing fees.
3. Escrow: A neutral third party who holds funds and documents during a real estate transaction, ensuring that the transaction is completed according to the terms agreed upon by the buyer and seller.
4. Equity: The difference between the value of a property and the amount still owed on the mortgage.
5. Mortgage: A loan used to purchase a home, typically requiring a down payment and regular payments over a set period of time.
6. Closing: The final step in a real estate transaction, where the buyer and seller sign the necessary documents and transfer ownership of the property.
7. Title: A legal document proving ownership of a property.
8. Under contract: A property that has an accepted offer but has not yet closed.
9. Zoning: Restrictions on how a property can be used, including what types of buildings can be constructed and how they can be used.
10. Home inspection: A detailed examination of a property by a licensed professional to assess its condition and identify any potential issues.
11. Earnest money: A deposit made by the buyer to show their commitment to purchasing the property, usually held in escrow until closing.
12. Real estate Purchase Contract: A legal document outlining the terms and conditions of the purchase of a property, including the sale price, closing date, and contingencies.
13. Contingencies: Conditions that must be met before the purchase of a property can be completed, such as a satisfactory home inspection or the buyer obtaining financing.
14. Special assessments: Additional fees imposed by the government or a homeowners association for specific improvements or repairs to a property.
15. HOA (Homeowners Association): A organization of homeowners in a particular community that manages and maintains common areas and enforces certain rules and regulations.
16. Home Warranty: A contract that covers the repair or replacement of certain home systems and appliances in the event of a breakdown.
17. Subject to Sale: A clause in a purchase contract that allows the buyer to purchase a property contingent upon the sale of their current home
18. Homeowners Insurance: An insurance policy that protects a homeowner from financial loss in the event of damage to their property or liability for injuries sustained on their property.
19. Title Policy: An insurance policy that protects the buyer and lender from financial loss due to defects in the property’s title.
20. Closing Costs: The various fees and expenses associated with purchasing a property, such as appraisal fees, title insurance, and attorney’s fees.
21. Mortgage: A loan used to purchase a property, typically requiring the borrower to make monthly payments until the loan is fully repaid.
22. Addendum: A document that is added to a purchase contract to provide additional information or clarify certain terms of the agreement. It is used to make changes, additions, or corrections to the original contract. It is legally binding and becomes a part of the contract once it is signed by all parties.
23. Addendum: A document that is added to a purchase contract to provide additional information or clarify certain terms of the agreement. It is used to make changes, additions, or corrections to the original contract. It is legally binding and becomes a part of the contract once it is signed by all parties.
24. Counter Offer: A response to an offer made on a property by the seller, that modifies the original terms of the offer, such as the purchase price, closing date, or contingencies. The counter offer is presented to the buyer, who can then accept, reject, or make a counter offer of their own. The process of making counter offers continues until both parties reach a mutual agreement or the negotiations fall through.
    Response Deadline: A specific date and time by which the other party must respond to an offer or counter offer. This deadline is typically included in the purchase contract and is used to establish a time frame for negotiations to occur. It also allows the buyer or seller to move on to another offer if the other party fails to respond by the deadline.
25. Wet Signature: A physical signature, usually made with ink, on a legal document. This is in contrast to an electronic signature, which is made using digital means. In real estate some legally binding documents, need to have wet signatures to make them legally valid.
26. Open House: An open house in real estate refers to a scheduled event in which a property, typically a house or apartment, is made available for prospective buyers to view and explore. These events are typically held on weekends and are often organized by the listing agent or the current homeowner. Open houses provide an opportunity for buyers to see a property in person without the need for a scheduled appointment.

By familiarizing yourself with these terms, you will be better equipped to make informed decisions and navigate the real estate process with ease.

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