Whether you’re looking to sell your current property or want to invest in a new one, real estate terms can be confusing — yet are important to know and understand. We’re going to simplify the process by explaining a few of the most common real estate terms that both buyers and sellers need to know.
5 real estate terms for buyers and sellers
- Contract — probably the most important word you should know is contract. A contract is a legal obligation between two parties. In real estate, this is the agreement you and the other party agree on for the property – whether it’s you who is buying or selling you’ll need a contract that outlines all terms of the purchase.
- Closing Costs — When closing costs come into the picture, that means you’ve already completed your entire closing process (completed inspection, signed the contract, completed any underwriting, and had the home appraised). Closing costs are the final payments that are due for all outside parties involved such as your realtor fees and any lawyer fees.
- Appraisal — An appraisal is completed when you’ve found the home you like and have had an appraiser come out to the property. The appraiser is responsible for making sure that the listing price of the home is within reason and that the home is not costing more than its worth.
- Inspection — If there are issues with the home such as termite damage, rotting wood, a broken foundation, or roof damage — an inspector will notice these issues and make you aware of them before you purchase.
- Escrow — You may have heard the saying, “Our home is currently in escrow.” Escrow refers to when a third party is handling the money in the purchase. Normally, there is an escrow agent who handles this at different stages throughout the entire purchase process.
Now that you’re better prepared for your next real estate transaction, you can start reviewing properties online or schedule a viewing with a local realtor to see homes for sale in your area.