Like any specialized area, real estate comes with some language and abbreviations specific to the profession. Whether you are in Somerset in Locust Grove, Amissville in Culpeper, or Unionville in Orange, as a buyer or seller, these are some real estate terms you might hear and will want to be familiar with their meaning.
Frequently Used Real Estate Terms
Addendum: When a buyer or seller needs to make a change to the contract, an addendum is completed explaining what the change is and with signatures. It is an addition to the original contract.
Active: An available home for sale is designated as active.
Active Under Contract: A home that has a contract on it, but the buyers have yet to complete all their contingencies. Sometimes, sellers will accept backup offers if their current one falls through.
MLS: The Multiple Listing Service is the database of homes for sale in your area. Realtors® use the MLS to share information about listings and search for listings for buyers. There are many different MLS throughout the country.
Appraisal: An appraisal is the mortgage lender’s (when a buyer is obtaining a mortgage) evaluation of the value of a home. An appraisal determines if the contract price of the home meets what the value is.
Buyer’s Agent: The real estate agent representing the buyer.
Seller’s Agent: The real estate agent representing the seller.
Closing: The date that the sale is final.
Closing Costs: Closing costs are the fees charged by the title company, insurance, HOA’s, taxes, and other costs associated with the sale/purchase of the home. These must be paid when the property is transferred from seller to buyer.
CMA: Comparative Market Analysis is used to determine the market value of your home.
Contingency: During the buying and selling process, a contingency is a part of the agreement that must be met in order for the home sale to continue. For example, a home inspection completed in so many days is a contingency. If it is not completed, then the contract can be exited. Contingencies can vary from one contract to another.
DOM: Days on the market
EMD: Earnest Money Deposit is an initial deposit buyers put down on the home after the contract is accepted by the sellers and buyers.
Easement: The legal right to use another’s land for a specific purpose. Easements are used to permit access to roads, water, or utilities.
Foreclosure: The process a mortgage lender goes through to repossess a property after the owners have stopped making mortgage payments. Banks will then sell the home. Buying a foreclosure can take longer than a typical real estate transaction.
Pre-approval: Being pre-approved for a mortgage means that a buyer has spoken with a mortgage lender and given the lender financial documents. The lender has determined the amount of money the buyer has to spend on a house.
Home Inspection: An inspection of the condition of the home completed by an independent home inspector. Usually attended by the buyers, the home inspection can be a contingency or informational depending on the contract.
Mortgage: A home loan that is used to pay for the purchase of a property.
Short Sale: A home listed for sale for a price lower than the mortgage is a short sale. These are used by home owners to avoid going into foreclosure. The time it takes to purchase a short sale home can greatly vary.
Walk-through: A final inspection of the home by the buyers just before closing.
There are a lot more real estate terms out there, but this list is a great start. Looking for more real estate info for first time home buyers? Check the blogs below.
