There is a lot of technical terminology in Real Estate. It can be very confusing and overwhelming, especially if you are new to buying or selling a home.
🏘️ Below is a list of some of the most used real estate terms that you may want or need to know along your trek to real estate happiness.
But don’t worry, there won’t be a quiz. 😅
Frequently Asked Real Estate Questions:
What is a backup offer?
When an offer is accepted contingent on the fall through or voiding of an accepted first offer.
What is a bridge loan?
This short-term financing option can help you bridge the gap between buying a new home and selling your old one. It enables you to tap into your existing home equity before you’ve sold.
However, there are some issues to consider before you apply for a bridge loan:
👉 The interest rates and fees are usually higher than typical home loans.
👉 The equity from your current home will be used to secure the loan.
👉 The credit requirements are often greater for bridge loans than for standard financing.
If you think you may need to “bridge the gap” between buying a new home and selling your current one, give us a call. We can discuss your options and refer you to a lender who can help.
📲 865-364-0200
📩 Libby@guthriegrouphomes.com
Buyer’s agent: The agent who shows the buyer’s property, negotiates the contract, or offer, and works with the buyer to close the transaction.
A canceled status on a multiple listing service (MLS) means that the listing agreement between the seller and the listing agent has been cancelled:
- The property is no longer available for showings 🏡
- The relationship between the seller and the listing agent ends 🙅🏼♀️
- The listing will not show up as expired in the future 👍🏼
- Also, the seller is free to relist the property with another broker 🏠
📜 To relist the property, the seller will need to get a new listing agreement with the broker.
A canceled listing differs from a withdrawn listing, so the listing contract is still in effect, but the property is not being marketed. A withdrawn listing can be for many reasons, including:
- The seller changed their mind 🤷🏼♂️
- The seller wants to make improvements to the home 🔨🔦
- Also, the seller may want a break from showing the home 😪
More About a Cancelled Listing
❎ When a real estate listing is cancelled, it means that the property which was previously available for sale is no longer on the market.
This could be because of a variety of reasons – the owner may have decided not to sell, the agreement with the real estate agent may have ended, or the property may have been taken off the market for improvements or repairs.
🚫 The cancellation implies that the property is no longer actively seeking potential buyers.
👩🏼Libby Says…
In my experience, the home seller may have unrealistic expectations about selling their home. They may expect more money than the home is worth. They may think the property will sell quickly without doing any repairs, staging or preparing the home for the market.
Having an agent that is honest with the seller is paramount to a fast sale for the most amount of money. I help sellers manage their expectations and have realistic goals for the sale of their property.
If you want honest advice about selling your home, give me a call right away. 🤙🏼
~ Libby
📲 865-364-0200
📧 Libby@guthriegrouphomes.com
Libby Guthrie, REALTOR
Keller Williams 865-966-5005
Guthrie Group Homes, Knoxville TN Real Estate
https://gghknoxville.com/
The close of escrow is a critical final step in the real estate transaction process. Here’s how it works:
Offer and Acceptance
The process begins when the buyer makes an offer on a property and the seller accepts it. This agreement outlines the terms of the sale, including the purchase price and any conditions that need to be met.
Escrow Account
Once the offer is accepted, an escrow account is established. This is a neutral third-party account where funds related to the sale, such as the buyer’s earnest money deposit, are held securely. The escrow agent, often a title company or attorney, manages this account.
Due Diligence
During the escrow period, both parties perform due diligence. The buyer typically conducts a home inspection, secures financing, and reviews any disclosures provided by the seller. The seller works to satisfy any contingencies outlined in the purchase agreement.
Title Search and Insurance
A title search is conducted to ensure there are no liens or claims against the property. Title insurance is purchased to protect the buyer and lender against potential future disputes over property ownership.
Final Walkthrough and Closing Disclosure
Before closing, the buyer usually performs a final walkthrough to ensure the property is in the agreed-upon condition. The buyer also receives a Closing Disclosure, which outlines the final terms of the loan and the costs involved in the transaction.
Closing
The close of escrow involves signing the final paperwork, including the deed, loan documents, and settlement statement. The buyer transfers the remaining funds to the escrow account, and the escrow agent disburses the funds to the seller and other parties as necessary.
Transfer of Ownership
Once all documents are signed and funds are distributed, the title is recorded with the local government, officially transferring ownership to the buyer. The keys to the property are handed over, completing the transaction. 🔑
The close of escrow signifies the end of the buying process, making the buyer the official new owner of the property. 🍾
Closing: The end of a transaction where documents are signed, and funds are dispersed.
See also Close of Escrow.
What are Comparable Sales? 🤔
Known in real estate as “comps,” comparable sales are the sales prices of similar homes and are based on the following:
☑️ Lot size
☑️ Condition
☑️ Age & Construction
☑️ Square footage
☑️ Close proximity
☑️ Time frame of the sale
When it comes to buying or selling, both place high importance on comps to determine a home’s value.
Contact our team for a ✨ free consultation ✨ to learn more about what homes are selling for in your area.
In real estate, a contingent offer is an offer made on a property, which says that certain conditions must be met in order for the sale to be completed.
In real estate, a contingent* offer is an offer made on a property, which says that certain conditions must be met in order for the sale to be completed.
These contingencies usually involve the home appraisal (the home value determined by an appraisal), home inspection, and receiving approval for your mortgage.
They may also include an offer contingent on the sale of the home the buyer (you) needs to sell before purchasing the new property.
Contingencies offer important protection for home buyers and are rarely waived.
Should I accept a contingent offer on my house?
If you are both buying and selling, should you take a contingent offer on the property you are selling? Typically, the answer is yes. But this is a decision you should discuss thoroughly with your Realtor®. Every situation is unique, so having an experienced agent is essential for determining if this is the right move for your situation.
* Contingent – occurring or existing only if (certain circumstances) are the case; dependent on.
A real estate contract is a legally binding agreement between two parties for the sale and purchase of a property.
It outlines the price, terms, and conditions of the sale.
Conventional sale: When the property is owned outright and has no mortgage.
Conventional sales are often smoother transactions than those that require financing as there is no dependence on the buyer receiving a loan to purchase the property.
A counteroffer is a response to a buyer’s original offer on a house to make changes that better fit a seller’s goals.
A counteroffer is one step closer to an accepted offer!
A counteroffer shows that the seller is willing to work with the buyer, but on slightly different terms (usually a change in the price or contingencies).
Here’s how your real estate agent can help you navigate a counteroffer:
☑️ Buyers, we negotiate on your behalf and provide guidance on how to get your offer accepted.
☑️ Sellers, we help you stay clear of red flags and make sure you accept the right offer.
Negotiation is a BIG part of what we do as real estate pros! Connect with our team to learn more about how we provide 5-star representation for our clients.
What is Curb Appeal? 🤔
Curb appeal is the attractiveness of a property viewed from the street, the exterior allure that grabs the attention of prospective buyers or tenants. It’s a crucial factor in real estate as it creates the first impression, invests the onlooker with a sense of expectation, and sets the tone for what’s to come. Curb appeal often lays the emotional groundwork that can significantly influence a potential buyer or tenant’s decision.
The concept of curb appeal goes beyond just a clean facade; it’s about a harmonious mix of multiple elements that together create a compelling and inviting outdoor space. This includes aspects like landscaping, exterior design, front entrance, lighting, driveway, and walkways, each carrying its own weight and contributing to the overall allure.
To create excellent curb appeal, focus on the following suggestions:
1. Landscaping: This is often the most noticeable aspect of curb appeal. A well-maintained lawn, fresh greenery, and vibrant flowers can drastically enhance your home’s appearance. Choose low-maintenance, native plants for sustainability and attractiveness.
2. Exterior Design and Maintenance: Ensure your home’s exterior is in good repair. Fresh paint, clean windows, and a well-maintained roof are essential. Opt for colors and design elements that complement the home’s style and surroundings.
3. Front Entrance: Make your front door inviting. Consider it as a focal point that grabs attention, from its color to its hardware to any surrounding elements like plants or decorations.
4. Lighting: Good outdoor lighting can provide a warm, welcoming ambiance while highlighting the home’s best features. Investing in professionally designed lighting not only attracts potential buyers or tenants at night but also amplifies security.
5. Driveway and Walkways: A clean, well-maintained driveway and walkways go a long way in boosting curb appeal. Opt for materials that complement your home and landscape.
6. Outdoor Elements: Details like a mailbox, house numbers or a creatively designed welcome mat can add additional charm to your home’s exterior.
7. Seasonal Decor: Occasional touches in sync with seasons or holidays can make the house appear cared for and loved, adding significantly to its allure.
Remember, curb appeal is about creating a sense of harmony and coherence, where every element is integrated seamlessly, leading to a compelling and inviting visual narrative that convinces the potential buyer or tenant about the value and potential of the property.
Days on market (DOM) means the number of days a home has been listed on the market.
The number of days the property has been on the market may reflect the desirability and/or pricing of the home.
If the home has been on the market too long, the property may be stale.
What is a Disclosure Statement? 🤔
A legally binding document in which the seller reveals any potential flaws and issues the buyer needs to know about the property.
Also known as a “Seller’s Disclosure,” this is a legal document that outlines any known flaws that a home seller is aware of that could negatively impact the home’s value 🏡
💡 TIP: Buyers should scrutinize this document closely with their real estate agent to fully understand the condition of a home.
Our best advice? When it comes to buying a home, make sure you get an inspection to confirm what has been disclosed is accurate and discuss any potential deal breakers with your agent.
The three rules of this document are disclose, disclose, disclose.
The representation of opposing principals (buyers & sellers) at the same time.
That is, one real estate agent represents both the buyer and the seller in one transaction (sale of a home).
What is Earnest Money? 🤔
A deposit made to a seller that represents a buyer’s good faith to buy a home. It’s typically around 1% – 5% of the sale price.
Earnest money is a deposit from the buyer to the seller, made in good faith to show dedication to purchasing the property 🏡
IMPORTANT FACTS 👇
💰 The amount varies by market
💰 Goes towards the purchase of your home
💰 Protects the seller if a buyer backs out
💰 A buyer may get this money back – due to failed inspections or contingencies
💡 TIP: In a seller’s market, you may consider making your earnest money non-refundable.
Our best advice? When it comes to buying in a low inventory, competitive market, it’s essential to partner with a Buyer’s Agent who understands how to make your offer stand out to sellers 🥊
An escalation clause is a clause in a real estate contract that allows the purchase price of a property to increase if a certain condition is met.
For example, if the buyer’s offer is accepted but the seller receives a higher offer, the buyer can choose to increase their offer by a specified amount.
What is a Listimate™?
A Listimate™ is a home value estimate based on our proprietary system of determining a home’s value, or the dollar value of a home if listed for sale at the time of the estimate.
We created this system based on over 30 years of experience in retail residential real estate resale properties.
We consider Listimates™ as the true current market value of a specific property. If you decide to list your home with Guthrie Group Homes, your Listimate™ will be the price we recommend you use as the asking price for your home.
How is a Listimate™ different from Zillow’s Zestimate?
We suggest you read our article “Comparative Market Analysis vs. Zestimate“.
How Accurate Is It?
Our track record speaks for itself. 99% of our listings sell at or above the asking price, and they sell fast!
What is a Listing Agent?
The real estate agent who represents the home seller during a real estate transaction.
What is the market value of a home?
It’s the highest price in terms of dollars that a property will bring in a competitive and open market.
Did you know that some properties are never listed publicly?
Known as pocket listings, these properties are sold “off-market.” The broker chooses who to share the listing with—usually an exclusive list of clients and agents.
Typically, pocket listings are used to enhance the seller’s privacy. They are especially popular for ultra-luxury listings or when the seller is a public figure.
However, not everyone supports the practice. In fact, the U.S.-based National Association of Realtors (NAR) requires its members to post listings on the MLS, in most cases—although the legality of NAR’s policy is currently being challenged in the U.S. judicial system.
Curious to find out what strategy we would recommend to sell your home in today’s market? Reach out for a free consultation.
The written contract between the buyer and seller that outlines the terms of the sale.
What are Seller Concessions?
Incentives to motivate buyers to purchase a home.
What is a Seller Disclosure?
Information about the property like major renovations, water damage, pest, etc.
Once you have made your offer and the offer is accepted by the seller, the following questions may arise.
What does “under contract” mean?
Under contract means that all parties have agreed on terms, have signed the contract, and the signed contract has been delivered to both buyer and seller. Payment of the escrow deposit is expected but is not a requirement to make a binding contract.
What is escrow?
The escrow money, escrow deposit, or good faith deposit is money that is included with an offer, or as soon as an offer is accepted, to show the seller that you are serious about moving forward with the purchase of the home.
Because you forfeit this deposit if you back out of the purchase for any reason not allowed for in the contract, the larger the escrow deposit, the more seriously your offer is taken.
This is not the same as the down payment.
Do I need an inspection?
We always recommend that you have a home inspection done. In the grand scheme of things, paying a few hundred dollars to have peace of mind that there are no hidden dangers or problems is well worth the money.
The inspections you may need or want will vary depending on the home you are buying and the contract terms. Your agent will thoroughly discuss the inspections with you once your offer is accepted.
How much are inspections?
The cost of the home inspection depends on the size of the house and additional inspections requested, such as swimming pool, septic tank, termite/pets report, insurance, four-point (HVAC, plumbing, roof, and electrical,) wind mitigation, and radon. An average home inspection, without additional inspections, is about $300.
I will give you my recommendations for inspectors, but you can choose your own if you wish.
What if my loan doesn’t get approved?
If you have gone through the pre-approval process and have been forthcoming with all the information requested by your lender, it’s unlikely you will be turned down, but it does happen.
Make sure you do not change jobs, purchase big-ticket items on credit, take out a car or boat loan, or open any other new credit accounts while your mortgage is being processed.
If your loan does fall through, talk with your lender about changing to a different loan type.
When can I start moving?
When you have the keys! When you are financing your purchase, it takes four to six weeks for your loan to be processed. Once the lender gives the all-clear, closing is scheduled. You will sign your loan documents and both parties will sign documents transferring ownership to you.
Unless other arrangements have been agreed upon by both parties, the sellers should have completely vacated the home when they sign the closing papers. You can have your belongings ready to move, and a moving company scheduled before you go to closing.
At closing, you will receive the documentation you need to provide utility companies with proof of your new residence.
