Don’t get confused by these common real estate terms.
If you are in the process of buying your first home, then the learning curve can be very steep. One of the things that may be throwing you for a loop is the unfamiliar terms and phrases that your realtor keeps throwing out. To minimize your confusion, here are some common real estate terms defined.
- Appraisal– An impartial opinion about a home’s value based on data from comparable homes in the area. Appraisals are made by a licensed and certified home appraiser.
- Buyer’s market– Real estate market condition that indicates that the number of homes for sale is greater than the number of buyers. In a buyer’s market, homes remain on the market for a long time, and home prices drop.
- Closing– A meeting where ownership of the home is transferred from seller to buyer. A closing is usually attended by the buyer, the seller, the real estate agents representing both parties, and the lender.
- Down payment– The portion of the home’s purchase price that the buyer must pay up-front. The minimum down payment amount is dependent on the type of loan the buyer has secured.
- Earnest money– A security deposit made by the buyer to assure the seller of their intent to purchase the home.
- Equity– The percentage of the home’s value owned by the homeowner.
- In escrow– A period of time after the buyer has made an offer on the home and the seller has accepted. During this time, the home is inspected and appraised, and the title is searched for liens.
- Seller’s market– Real estate market condition that indicates that the number of buyers is greater than the number of homes for sale. In a seller’s market, home prices go up, and bidding wars are common.
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