Many professions and industries have their own language and jargon. Speak to your doctor and you may hear, “There was a fracture of the right patella,” and although you may hear blah, blah blah, he is telling you that your knee cap is broken. Here are some real estate terms and phrases that you may not understand:
Good Faith Estimate
When you purchase a home, you will receive a good faith estimate that includes approximately the amount needed to close on the home. This is only an estimate – which can change at the time of closing.
A pre-approval is exactly as it reads – a pre-approval! If a home buyer has changes to their credit or in employment, this may affect their ability to close on the mortgage for the home. (Home buyers do not have the loan for the home until they have closed and should be very conservative with spending habits.)
Comparative Market Analysis vs Comps
A comparative market analysis (CMA) is a report that uses various factors such as active listings, pending home sales, sold home information as well as withdrawn, cancelled and expired listings. The information compares similar size, age, amenities, upgrades and location. (“Comps” refer to prices paid for recently sold homes that are comparable in size, style and location.)
MLS is a multiple listing service platform where homes are listed for sale by real estate agents or brokers. It is not the place homes go to be sold. There is more to selling a home than just placing the information into MLS.
A licensed real estate agent is a professional who helps people buy or sell homes. They are affiliated with a real estate broker and receive a commission based on the services they provide during the process.
When the demand for homes is less than the supply of homes, the advantage shifts to the buyer.
When the demand for homes is more than the supply of homes, the advantage shifts to the seller.
The price at which a home seller will sell a home and a home buyer is willing to pay.
A short-term loan used to cover the financial gap between buying and selling homes.