If you're buying a home, there are some new words you're going to hear. A lot. We're here to help with this list of real estate lingo you'll need to know.
Whether you're buying your first home or haven't been active in the real estate market in some time - you may find yourself hearing some unfamiliar real estate terms.
Don't let these new terms stop you from making the investment of a lifetime in your dream home. We'll help you understand the real estate lingo in a less intimidating way. Then you can start on your buyer's journey worry free!
Real Estate Lingo Key Terms
Annual Percentage Rate or APR: The total cost of borrowing money to pay for your new home. The APR includes everything from the interest rate, bank fees and other charges you, being the borrower, must pay. Because the total cost is tallied in the APR, it may be higher than your interest rate.
Appraisal: An impartial report used to determine the actual value of a property. A mandatory step in the home buying process as lenders use data to verify your home's worth.
Buyers Agent: A licensed professional that works on behalf of the home buyer as they buy a property.
Cash Reserve: Money needed as proof that you've socked away enough cash to make your monthly mortgage payments moving forward. Acceptable reserves include money in checking/ savings accounts, mutual funds, and retirement savings.
Closing Costs: Costs that go beyond the actual sale price of your home. These costs include loan preparation fees, title insurance, title searches, credit report charges and other various items. You'll pay them at the time of closing on your home's sale.
Comps: No these aren't freebies thrown in to sweeten the deal on your new home - though that would be nice! Comps or data on recently sold properties in the general area you're looking to buy in. Realtors pull these reports to give you an idea of what you should be paying.
Disclosures: Statements from the seller to inform would-be buyers about any flaws with the home. These can include renovations done without proper permits, bad roofing or various other elements. Disclosure laws differ from state to state so ask your realtor to clarify any questions you may have about disclosures when buying a home.
Escrow: A holding period, where funds or earnest money is kept until an agreement is reached between the seller and buyer and the deal is considered closed.
Listings: Real estate agents often refer to homes for sale as "listings". Ask your agent if their website has a page dedicated to current homes for sale. The listings on their site will tell you information about the property such as sale price and square footage.
Offer: Once you've decided on a home to buy, you'll make an offer to the seller detailing the price of purchase as well as any conditions you may have. If the seller accepts then a contract of sale is produced by their agent.
Hopefully, we've simplified the real estate lingo you're most likely to come across on your home buying adventure. Now, you can go confidently on your way to home ownership.
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