Wednesday, September 14, 2022 / by Ana Baldner
When it comes to dipping your toe in the Real Estate World, the first thing you'll notice is the abundance of industry specific terms that seem to come up frequently and may seem like foreign concepts. Terms you probably haven't ever heard of before! Skipping over the meanings of these words can keep you from understanding crucial information about your favorite listings.
Here we made you a quick “cheat sheet” with a bunch of common Real Estate Terms. Keep these in mind, and it'll help you out when browsing for properties or closing on your own home.
As-Is: The home may need repairs or renovations that the seller will not complete before or as part of the sale. As-is also refers to the condition of the property at the time the offer was written and should something happen to the property from the time the offer was written to closing which alters this condition, then the seller must bring back the property to its “as-is” condition OR the seller is required to release the buyer from their obligation to purchase.
Blind offer: When a buyer makes an offer on a home without having seen it even when it is possible to see it. Commonly used in competitive markets and areas so that the buyer’s offer is more likely to be first and accepted.
Backup offer: When a buyer submits an offer on a home that is already under contract with someone else. This has the benefit of being the first in line if the current contract falls through.
Comps: Homes that have recently sold and are comparable to the one that is currently on the market in terms of location, size, and features. This analysis helps REALTORS and sellers determine the asking price of a home.
Contingency: This is a condition that must be met before the sale of the property is finalized and closed. Some common examples are inspections, appraisal and financing.
DOM: Days On Market. The number of days the property has been listed. If this value is on the higher end it might be considered a “Stale” Listing.
EMD: Earnest Money Deposit. Also referred to as a “good faith” deposit. It is the initial fund of money a buyer is asked to provide once the seller accepts their offer. It shows the seller is serious about buying the property and will put down money to prove it. This number can vary between 1-5% of the sales price and is held by the escrow company
FSBO: For Sale By Owner. This means the property is being sold by the current owner. No REALTOR is involved
Handyman Special: This home will need some work and renovation before moving in. This can range from a complete gut job and major structural issues to minor, more “cosmetic” updates.
Market value: The going rate for a home given its stats. Location, size, condition, and most importantly, supply and demand at the time all affect this number. This value changes as the market changes.
MLS: Multiple Listing Service. A database open to REALTORS that is not accessible by the general public. It includes listings in specified areas.
Pre-qualification: A Mortgage lender’s estimate of the amount a homebuyer can expect to be approved for when getting a loan. This is a quick assessment of the buyers financial situation based only on information a buyer provides the lender. Not based on any verification or proof.
Rent-back: An arrangement where the buyer agrees to rent the home to the current homeowner after the sale of the property. Buyer becomes the landlord and the current homeowner becomes the tenant. The terms are negotiated prior to closing and involve a lease deposit, daily rental rate and set length of time.
Serious buyers only: Only arrange a viewing if you are genuinely interested in purchasing the property.
Stale listing: A property that has remained on the market for longer than expected. A listing being stale may cause buyers to assume there is something wrong with the property.
Turnkey: Refers to a home that is move-in ready. No issues would prevent the buyer from moving in immediately, although the buyer may want to make cosmetic changes due to personal preferences
All these new terms may seem scary at first! Make sure to reach out to your REALTOR with any confusion, questions or concerns and they will help you through the process.