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Top 10 Real Estate Terms

By
Real Estate Agent with Royal Lepage Nanaimo Realty

Top 10 Real Estate Terms

Are real estate terms or abbreviations throwing you for a loop?

Here are the top 10 most often used real estate terms and what they really mean:

1.  Agent - also known as a Buyer's Agent or Seller's Agent, this is the professional, licensed individual who represents you in the sale or purchase of your real estate.  You should expect to receive the same level of professionalism from your agent as you would from any other professional.

Real estate terms2.  Appraisal - if your real estate purchase is being financed your lender will often order an appraisal from an independent, third party to verify that the amount of money being given to a buyer to purchase a property doesn't exceed what other buyers have been paying for a similar property.

3.  CMA - or 'comps', a shortened term for 'comparables'.  CMA is an abbreviation for 'comparable market analysis' or 'comparative market analysis'.  Simply put, comps are what homes as similar to yours as possible have been selling for as recently as possible.  A seller's agent will run 'comps' to determine a market listing price, and a buyer's agent will prepare a CMA to see what other buyers have been paying for similar property.

4.  Property Tax Assessment - is how the local taxing authority values your home for property taxing purposes.  It's important to note that the assessed value of a house is not the same thing as the market value or the appraised value of your home.

5.  Deposit or Earnest Money - will almost always accompany a purchase offer contract, and will show the buyer's good faith in making his offer.  Often times the amount of the earnest money will be in proportion to the sales price of the property - you realtor can guide you as to whether an offered earnest money amount is too low or is fair for the market that you are in.

6.  Contingencies or subjects - almost all contracts of purchase & sale will have them.  Another way to think of a contingency is that an offer to purchase is made 'contingent on' or 'provided that'.  Some examples of 'subjects' are financing contingencies, inspection contingencies and insurance contingencies.

7.  Inspections - are one type of contingency.  As a rule of thumb a buyer should inspect those things that are important to her to determine what repairs or defects there are in a house, and to determine whether or not the price being paid for the house is fair.

8.  FSBO - is short for 'for sale by owner' where a home owner has chosen to sell her home by herself and not put it on the MLS.  There's nothing wrong with FSBOs, but if you're buying one it's a good idea to have your buyer's agent to guide you since you'll still want to do the normal inspections and have contingencies in your contract of purchase & sale that will protect you.

9.  MLS - means 'multiple listing service' and can be thought of as a one-stop resource for real estate for sale in your market.  FSBOs won't be on the MLS but odds are the majority of homes for sale will be.  The MLS is also used by your realtor to prepare a CMA and will also assist your lender in developing an appraisal.

10.  Closing - This is the day that both sellers and buyers are waiting for, the day when the Title is transferred and recorded and the mortgage is funded, and the home changes hands.

 

Comments (1)

Jean Hanley
Coldwell Banker Kivett Teeters - Hemet, CA
Specializing in Folks Who Want To Buy/Sell Homes

Lynn, this is really a nice breakdown, for buyers, sellers and even new agents alike.

Dec 12, 2013 09:02 AM