If you’re a first-time homebuyer or even a repeat buyer, you realize real estate has a language all its own. Understanding some of the “lingo” can help you navigate the process a little easier. Learning just a few critical terms will better position you to ask the right questions and make the best decisions.
- Buyer’s Market – A real estate climate where the number of listings outnumbers qualified buyers.
- Seller’s Market – A real estate climate where the number of qualified buyers outnumbers the properties listed for sale.
- Contingencies – Specific conditions of an offer that protect the buyer against unexpected situations, such as inspection, loan, and appraisal issues.
- Earnest Money – A sum of money deposited by the buyer when the seller accepts their offer. Subject to any contingencies, this money protects the seller from a buyer who changes her mind.
- Escrow Agent – A neutral 3rd party who manages the paperwork in states where attorneys are not responsible for concluding a purchase contract.
- Closing Costs – Both buyer and seller must pay certain fees to conclude the sale.
- Conforming Loan – A loan that meets specific guidelines set by Fannie Mae and Freddie Mac.
- Jumbo Loan – A loan in an amount that exceeds the limits set by Fannie Mae and Freddie Mac.
- PMI – Private mortgage insurance is a fee charged if the borrower’s down payment was less than 20%.
These are just a few of the common terms you will hear used in the real estate industry. If you are involved in a real estate transaction, learn a bit of the common lingo. Doing so will help you understand the process better and make your home sale or purchase a smooth one.