Real estate has a language all its own, and it’s easy to get lost in the lingo. We want to help. Here are seven terms you’ll likely encounter in the home buying and selling process.
1. Appraisal
The assessed value of a home or property. A licensed appraiser evaluates a home and weighs it against similar, local properties before assigning an estimated value.
2. Certificate of title.
A legal document that identifies the owner of a property.
3. Escrow.
An account where all closing costs are collected while the lender approves the deal. An escrow service functions to ensure that both the buyer and seller meet their obligations.
4. Contingencies.
Certain conditions that must be met before an offer can proceed. They’re negotiated between buyers and sellers and provide protection for both parties. These conditions might include a specified time frame for inspection, an expected minimum appraisal amount, or time for the buyer to sell their own home.
5. Inspection.
A report from an objective professional that evaluates the structure (e.g. foundation and walls) and systems (e.g. plumbing and heating) of a house. Based on the inspector’s findings, you may be able to negotiate for a reduced price on the home.
6. Listing.
Legally, this represents the right of a real estate agent to handle the sale of a property. For most buyers, however, it’s used to refer to available homes on the market and the details that accompany each property.
7. Pre-approval letter.
An official document from your bank that estimates how much they’ll lend you for your home purchase. It helps you gauge your budget and shows sellers that you have what you need to buy the home.