By: Coldwell Banker Ronan Realty

IMPORTANT REAL ESTATE TERMINOLOGY

Tags: REAL ESTATE, TERMS, GLOSSARY, TERMINOLOGY, APS, CONTINGENCIES, BUYER'S AGENT, LISTING AGENT, SELLER'S AGENT, SELLING AGENT, CLOSING, DUE DILIGENCE, MLS, PRE-APPROVAL, PRE-QUALIFICATION

 

Whether you’re buying your first home or an experienced seller, it’s easy to get lost in the real estate jargon. While it comes naturally for REALTORS® to use these terms, they are often misunderstood and can add an additional layer of confusion to an already complex process. We’ve compiled a list below of 14 real estate terms that every homeowner (or soon-to-be homeowner) should know to help guide you through the process. 
 
Agreement of Purchase and Sale (APS)
An agreement of purchase and sale is a written contract between the buyer and seller, outlining the terms of the sale/purchase. Once the APS is formalized, the home will now be considered “under contract”.
 
Buyer’s Agent/Selling Agent
The buyer’s agent is a licensed real estate professional who locates the buyer’s next property. The buyer’s agent will represent their client’s real estate needs, negotiate on their behalf to secure the best purchase price, and will act as the buyer’s trustee throughout the entire purchasing process.

 
Closing
Closing takes place once all the required documents have been signed, all monies have been conveyed, and full lender’s approval has been given. This means that the home’s sale is considered final, and the buyers will now be given access to the property as the new homeowners.
 
Comparative Market Analysis (CMA)
A comparative market analysis is a report on recent comparable home sales in the area, given from an agent to their client. A CMA can be used to assess a property's current value, as well as for drafting up an acceptable offer on a property.
 
Contingencies
Contingencies are conditions that must be met in order to finalize the sale of a property.
 
Due Diligence
Due diligence is a period of time provided in the agreement of purchase and sale that allows the buyer to fully examine the property. In this time, the buyers will be able to run tests, have the property inspected, or any other type of investigation they may wish prior to proceeding with the purchase.
 
Equity
Equity is the amount of ownership a homeowner has in their home. This can be calculated by looking at the market value of the home, and subtracting any additional mortgages or liens. The sum is the amount of equity the homeowner has in their home.
 
Listing Agent/Seller’s Agent
The listing agent is a licensed real estate professional who markets the seller’s property. The listing agent will represent their client’s real estate needs, negotiate on their behalf to obtain the best sale price, and will act as the seller’s trustee throughout the entire selling process.
 
MLS
MLS (or Multiple Listing Service) is a database that real estate personnel have access to in order to access or add information about properties that are for sale in the region. When listed for sale, the home’s information is uploaded into MLS by the listing agent and the home is given a unique MLS number. When working with buyers, the buyer’s agent will use MLS to view homes that are available, and will filter through the available listings based on the wants and needs of their client.
 
Pre-Qualification
Pre-qualification is given by a lender, and is an estimate of the amount a buyer can expect to be approved for throughout the loan process. This is a quick assessment, and is based solely off any information the buyer is able to give the lender, no proof required.

 
Pre-Approval
Pre-approval is the application process that allows a lender to determine a buyer’s financial situation by looking into the buyer’s credit score, ability to repay, and debt-to-income ratio. Once completed, the buyer will receive a letter stating the loan amount they have been pre-approved for, as well as the sales price they have been approved for.
 
Probate Sale
A probate sale occurs when the homeowner passes away without having drawn up a will, leaving the property uninherited. In this case, an estate attorney would hire a real estate agent to sell the home.
 
REALTOR®
A REALTOR® is a licensed real estate agent that is a member of the National Association of REALTORS® (NAR). The REALTOR® has a high standard of practice, and must uphold the Code of Ethics of the association. They are responsible for holding other REALTORS® accountable when serving the public.
 
Title Search
A title search uses public records to discover the history of the home, including past sales, tax history, and other types of liens regarding the property.
 
Information for this blog post comes from the following sources;
https://www.opendoor.com/w/blog/real-estate-terms-you-should-know
https://www.inman.com/real-estate-glossary

 

1 Message Us On Facebook Message us on Facebook!
close