Mortgage Monday – Real Estate terms you should know
when buying or selling a home!
Whether you are buying or selling you are bound to come across real estate terms you are unfamiliar with. So when you embark on your journey, one of your first stops should be familiarizing yourself with the lingo. To understand the “lingo,” here are many of the most common real estate terms:
Earnest Money – An earnest money deposit (EMD) is the initial funds that a buyer is asked to put down once a seller accepts the buyer’s offer. This shows the seller that the buyer is serious about buying. The amount of the EMD can vary between 1 to 5 percent of the sales price. The EMD is often held by an escrow company.
Down Payment – A down payment is a percentage of your home’s purchase price that you pay upfront when you close your home loan. Typically, you’ll need PMI (Private Mortgage Insurance) if you put down less than 20% of the home’s purchase price.
Back Up Offer – When a buyer is interested in purchasing a property that is already under contract with someone else, that buyer has an opportunity to submit a “backup offer”, in case the first transaction falls apart. A back up offer insures that the seller will have an offer waiting to be accepted if the primary offer doesn’t make it to the close of escrow.
First Right of Refusal – A right of first refusal clause is a superb tool for sellers who are dealing with a home sale contingency. A home sale contingency is a clause that some buyers may add to their offers that state they will buy the home – but only if their home sells first.
Real Estate Broker – Any person, partnership, association, or corporation that sells (or offers to sell), buys (or offers to buy), or negotiates the purchase, sale, or exchange of real estate, or that leases (or offers to lease) or rents (or offers to rent) any real estate or the improvements thereon for others and for a compensation or valuable consideration. A real estate broker may not conduct business without a real estate broker’s license.
Dual Agency – Dual agency is a term that refers to a situation when one real estate agent represents both the home buyer and seller in a transaction. In most transactions, the buyer wants to buy for as little money as possible, while the seller wants to sell for as much money as possible. Those two goals are at odds with one another, which means that a dual agent cannot effectively serve both parties. It’s important to recognize that dual agency does not apply in situations where the buyer and seller are represented by different agents working under the same broker. When this happens, each agent represents his party fully.
Private Mortgage Insurance – The amount paid by a mortgagor for mortgage insurance. This insurance protects the investor from possible loss in the event of a borrower’s default on a loan.
Title Insurance – An insurance policy that protects the insured (buyer or lender) against loss arising from defects in the title.
Home Inspection – An inspection happens when a buyer pays a licensed professional home inspector to come to the home and prepare a report on its condition and any needed repairs. This gives the the buyers an opportunity to fully assess if they want to buy the home as is, or ask the seller to make repairs or offer compensation for them to be fixed.
MLS (Multiple Listing Service) – A multiple listing service (MLS) is a database established by cooperating real estate brokers to provide data about properties for sale. An MLS allows brokers to see one another’s listings of properties for sale with the goal of connecting homebuyers to sellers.
Appraisal – An estimate of the quantity, quality, or value of something. The process through which conclusions about property value are obtained; also refers to the report that sets forth the process of estimation and conclusion of value.
Lucido Global Team knows the real estate process can be quite confusing, even for the most experienced home buyers or sellers. If you are new to the process, Lucido’s hard working and knowledgeable team will guide you through the process helping you understand all the real estate jargon along the way. They are dedicated to making your experience enjoyable and successful, leaving you satisfied and happy with your transaction.
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