I have a book that is over 500 pages long, which is full of real estate terms! There are definitely a lot of terms to know when you buy or sell a home! Of course, your Realtor will guide you through the process and explain any terms that are unfamiliar to you; however, here's a list of 5 real estate terms that are important to know:
Closing Costs
When a home is sold, both the Buyer and the Seller will have closing costs. If the Buyer is getting a loan to purchase the house, there will be fees charged by the title company and their lender. Common Buyer closing costs are the title escrow fee, title insurance, appraisal fee, home insurance & loan fees. Common Seller fees are the title escrow fee and title insurance. In addition, real estate taxes are prorated to the buyer and seller depending on the close of escrow date.
Due-Diligence
An expressed or implied requirement stating that a person use good-faith efforts to perform obligations under a contract. For example, the Buyer must show due diligence during the inspection period and inspect the home thoroughly within the specified time.
Contingencies
Items in a contract that require the completion of a certain act. For example, the purchase contract is contingent upon the Buyer obtaining financing as well as the home appraising for the sales price.
Escrow
The process is where a third party (title company) holds money (such as earnest money) and documents until all terms and conditions are met and the sale closes.
Settlement Statement
A form created by the title company that shows the settlement fees of the transaction and who pays them, either the seller or the buyer. This statement must be approved by all parties, including the buyer's lender, before closing. This form is set to be replaced August 1st 2015, by the Closing Disclosure.
