By: KC Sailsbery, Supervising Broker
Here are 10 common Real Estate terms you should know when getting ready to buy or sell a home. Having a good understanding of these terms will help you communicate better with your real estate agent. However, never hold back on asking questions to ensure you clearly understand what is being discussed. A good agent will always be willing to take the time to answer and clarify any questions or concerns you have regarding a real estate transaction.
- An estimate or opinion of the value of a piece of property as of a particular date. (Typically, a lender will require an appraiser to provide an appraisal as part of the loan process.)
- Assessed Value
- The valuation of property for purposes of taxation (This value can be found in the county’s assessor records.)
- Buyer’s Agent
- A real estate agent who works solely on behalf of the buyer to promote their interests with the utmost good faith, loyalty, and fidelity. A written buyer agency agreement is required to be in place that sets forth the duties and obligations of the broker and the buyer.
- Closing Costs
- Expenses incurred in the transfer of real estate in addition to the purchase price; for example, the appraisal fee, title insurance premium, broker’s commission, and conveyance tax (There can be closing costs associated with the loan and the transfer of the property on both the buyer’s and seller’s side of the transaction.)
- Competitive or Comparative Market Analysis: an estimate of a home’s value based on recently sold, similar properties in the immediate area. Real estate agents and brokers create CMA reports to help sellers set listing prices for their homes and to help buyers make competitive offers.
- A home inspection is an examination of a property’s safety and current condition. A buyer arranges and pays for a home inspection and—depending on its findings—may choose to move on to closing, renegotiate the sale price, request repairs, or cancel the sales contract.
- Pre-Approval Letter
- A pre-qualification or pre-approval letter is a document from a lender stating that the lender is tentatively willing to lend to a buyer, up to a certain loan amount. This document is based on certain assumptions and it is not a guaranteed loan offer. But, it lets the seller know that a buyer is likely to be able to get financing. Sellers frequently require a pre-qualification or pre-approval letter before accepting an offer on a house.
- Seller’s Agent
- A real estate agent who works solely on behalf of the seller to promote their interests with the utmost good faith, loyalty, and fidelity. A written listing agreement is required which sets forth the duties and obligations of the broker and the seller. (Also referred to as a Listing Agent.)
- Title Insurance
- Insurance that protects against losses resulting from undiscovered title defects. An owner’s policy protects the buyer, while a mortgagee’s policy protects the lien position of the buyer’s lender.
- Transaction Broker
- A real estate agent who can assist the buyer or the seller or both throughout a real estate transaction by performing terms of any written or oral agreement without being an agent or advocate for any of the parties. No written agreement is required.
Any agent at Colorado Land Co. is ready and willing to answer any questions you may have regarding listing your home or buying a new home or simply to clarify any real estate terms.