Buying and selling a house can be intimidating when you are unsure of the industry jargon or terminology. We have prepared a cheat-sheet with important real estate terms so that you know what the professionals are talking about.
A payment plan that allows you, the borrower, to pay off your mortgage by combining interest and principal in your payments, rather than just paying off the interest first.
The estimate of the value of your property made by an impartial expert. This does not take the place of an inspection.
A licensed person or entity that represents you, as the buyer or seller, in the purchase or sale of real estate, usually for a commission.
A meeting where the transfer of sold property is finalized. Here, the buyer will sign the mortgage documents and pays the closing costs, and the seller will sign the deed. This is also known as the settlement.
A clause in an agreement that prevents things from being legally binding unless a condition is met. The most common contingencies on a purchase contract are the right to have a home inspection before buying the home.
A claim against real property given by the buyer to the lender as security for money borrowed. Mortgages are used to make real estate purchases without paying the entire value of the purchase up front.
The amount of money borrowed to buy your home. It is the amount of money that you need to pay back, plus interest.
One point is equal to one percent of the amount of the mortgage loan. As a buyer, you can buy discount points paying more money up front in exchange for a lower interest rate.
9. Real Estate Agent
A professional who has earned a real estate license in their state. Becoming a real estate agent usually requires a minimum number of hours of classes and a test, though requirements vary by state. Agents work under the supervision of a broker.
A real estate agent that is a member of the National Association of Realtors, upholding the standards and ethics of the organization. Not all agents are Realtors.
11. Real Estate Broker
A real estate agent that has taken their education beyond the agent level and passed a state broker’s exam as well as meet the minimum number of transactions required by their state.
Are there other terms that stumped you? Let us know and we will add them to our guide!