Real Estate Terminology to Know

Working in home sales for any length of time, most real estate professionals will agree to the fact that we can easily take for granted that our clients do not speak “agent”. I have made it a priority and work hard to educate my customers. However, when you’re buying or selling a home for the first (or second, or third) time there are invariably terms that will arise in conversation or paperwork that you should familiarize yourself with.

Here are 3 FAQ’s in regards to real estate terminology:

1.) Is “under contract” the same as “sold”? Should you put in an offer? No. This is not a sold property, however this means that a buyer has made an offer and the seller has accepted. They cannot entertain any other offers unless the contract falls through.

2.) Who pays the agent’s commission? How much is it and how is it paid? Typically, the seller pays, but (like most things in life) it’s negotiable. Commissions usually vary between 3-6%, but that’s negotiable too. This fee is not added to the sale price but rather subtracted from the proceeds at closing.

3.) Are short sales and foreclosures the same thing? No. In recent years, more folks have become acquainted with the difference in these terms because they or someone they know have undergone one process or the other. A short sale is a negotiation between the mortgagee and the lender where the latter agrees to take a lesser amount for the property than what is owed. Foreclosure occurs when the mortgagee is in default and the lender does not agree to take a lesser amount. Neither situation is ideal, but a short sale is always favorable to a foreclosure as it bears less impact on credit.

And the list goes on…but this is a great start!

Have any specific questions I can answer for you, please don’t hesitate to reach out!