12 Real Estate Terms to Know

Having a basic understanding of important real estate concepts during your home buying or selling process will help you feel much more at ease. Of course your Real Estate agent is there to make sure you understand the entire process but having your own knowledge of the basics will give you great peace of mind. Here are twelve real estate terms to become familiar with. Make sure to contact a Nothnagle Real Estate Agent if you have further questions!

1. Appraisal — The estimated value of the property as determined by a qualified appraiser. Lenders require an appraisal of a property before providing the mortgage loan to the buyer.
2. Appreciation — The amount that a property has increased in value over a specific time.
3. Buyer’s Agent vs. Listing Agent  — There are usually two agents involved when you buy a home; the “buyer’s agent,” who represents you, and the “listing agent,” who represents the home seller.
4. Closing — The closing is the scheduled day on which the sale of the property is officially finalized. The buyer signs all the mortgage documents and pays the closing costs and the seller completes the transaction with the buyer.
5. Closing Costs — The closing costs refer to all of the costs associated with the final sale of a property, all of which must be made by the closing date. These costs typically include agent fees, origination fees, lawyer fees, title insurance fees, survey fees and taxes.
6. Contingency — A condition that must be met before the contract between the buyer and the seller becomes legally binding. A common contingency is the home inspection. If the home inspection reveals major problems, then the contingency allows the buyer to walk away from the contract without losing money.
7. Depreciation — The amount that a property has declined in value over a specific time.
8. Down Payment — The down payment is the amount of money you pay toward a property out of pocket before your lender provides you with the mortgage loan to cover the rest of the property’s price. The down payment varies depending on the type of mortgage you take out as well as a number of other factors. It can be anywhere from 3 percent of the total cost to 20 percent.
9. Escrow — The escrow is a deposit of funds or documents that are held by a neutral third party (often an escrow agent) until the sale goes through.
10. Mortgage Pre-Approval Letter — Buyers can get approved for a home loan (known as a mortgage) before they find a property they want to invest in. This is known as being pre-approved for a mortgage. This lets buyers know how much they can borrow. They can use the mortgage pre-approval letter to show sellers that they have the financing in place to purchase the home, which often gives them a leg up on competing buyers.
11. Multiple Listing Service — The Multiple Listing Service (MLS) is a large database that real estate agents have access to that provides detailed information about most of the properties that are currently on the market.
12. Title Insurance — This insurance helps to protect the lender and the buyer against any losses that occur due to a dispute over the property’s ownership.