Real Estate Terms
A step by step process for listing your home!
Real estate terms are not always straight forward and understandable. In fact, they can be rather obtuse at times. When you are considering selling your home, you want to know everything. Having the basics down is key to understanding the process and what to expect. It will also allow you to ask the right questions to your agent, and know what to expect. Below you will find some basic real estate terms and a step by step breakdown of how to get your home listed and sold.
Where to begin:
The first step is an easy one. Understand what your motivation for moving really is. Is it work related? Do you need more space? Are you tired of the neighbors? Whatever it may be, make sure everybody involved knows why you are considering listing your home.
Are you going to use a Realtor?
Some homeowners understand real estate terms and feel comfortable with going the for sale by owner route. However, there is quite a bit of risk to consider. What is the value of your home? How will you market it? Are you familiar with the paperwork? These are just a few items to consider. Having an experienced Realtor on your side to handle these tasks, explain real estate terms, and potential pitfalls is a valuable resource.
Also, your equity is at stake. Equity is a common real estate term, and one you’ll definitely want to consider. Some food for thought, According to the Realtors association survey & statistics for 2018 FSBOs accounted for 7% of home sales in 2017. The typical FSBO home sold for $200,000 compared to $265,000 for agent-assigned home sales.
Selecting a Realtor.
Everybody has a friend or family member in real estate for the most part. Although, your friend or relative may not be your best choice. There are so many Realtors and agents, how do you choose the one for you? Make a list of what is important and what you want. When you meet with an agent ask them questions like:
- are you full time?
- What are your limitations on showings?
- Are you familiar with the area?
- Are your commissions negotiable?
- How do you handle difficult situations?
Know what answers you’d like to hear, but allow them to explain if they differ. Expect your Realtor to explain all real estate terms in a manner that makes sense to you.
Understand the VALUE of your home
When you select your realtor, they will provide you with a competitive market analysis (CMA). This isn’t an exact valuation of your home, as the sales price determines that. However, a good Realtor will be very close and explain to you how they came to the estimated valuation. Typically they’ll give you a high, mid, and low valuation based on comparable sold properties in your area.
Keep in mind you, as the owner, decide what price to list the home at. As a Realtor I am here to give you the information and advise you on what may or may not happen at the price you choose. I will also provide you with a Seller’s Net Sheet. This will provide you with your estimated proceeds you’ll receive after all expenses have been deducted. Expenses may include: prorated taxes, final utility bills, title closing fees, commissions, seller credits, etc.
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Make fixes & prepare for photos
Your home may be just the way you like it, but the trick is making it the way a buyer will love it! This means making repairs your Realtor can advise you on. Cleaning and decluttering is the next step. Make sure your home feels warm and inviting for buyers to fall in love with. The real estate term, staging, refers to making your home presentable to potential buyers. Make sure to stage or have it staged for photos. Here are a few suggestions to get started:
Take down your family photos as much as possible. This helps to protect your privacy and keep you safe.
Limit rooms to the essentials: furniture, lighting, some small decorations.
Start packing unessential items and storing them out of the way in the garage or storage area.
Make beds in the morning before leaving the home. Buy some air fresheners.
- Hide or lock up valuables, prescription meds, and personal items.
Lending & new home!
This is the fun part! If lending is needed for your replacement property, your Realtor will have some resources to recommend. There are plenty of options for financing your new home. Click here to see them.
Once the financing is all sorted, you will know your home search parameters. If you haven’t already found your new property. I can help you find your dream home!
Have you heard the real estate term, contingent? This is a tool we use to ensure you’re not left homeless. When you put your home on the market it will be listed with a contingency. This means you will only sell your current home if you find a suitable replacement before a certain time.
The real estate term, referral applies here. Your listing agent is a great resource to tap into. They will help find a trustworthy Realtor who can help you buy or rent your new property in your new location. They may receive a referral commission from the broker who helps you buy, but typically you don’t pay that fee.
There are many transactions where you will close on your sale in the morning and your purchase in the afternoon. It takes a skilled Realtor to coordinate this many moving parts.
There is also a real estate term post closing occupancy agreement. This may be used on the home your selling as an agreement to allow you to rent back the house after closing for a limited time. This can afford you the time to close on your new home if necessary.
Real Estate Terms to know when you're selling!
- Equity: This real estate term refers to your money! It’s the value of your home through an appraisal or sale minus the amount you still owe on the home. Some people don’t have a mortgage, so the price of their home is all equity.
- Appraisal: A valuation performed by an appraiser to determine the market value of your property.
- Market Value: This real estate term often gets misinterpreted As Realtors, we don’t determine the price of your home. The market determines the price by what buyers are willing to pay for the property and surrounding, comparable properties.
- Closing costs: These are fees charged at closing for the sale of your home. These are negotiable on how they are split between buyer and seller. Fees may include but are not limited to: prorated taxes, title fees, unpaid utilities, transfer fees, HOA fees, etc.
- Contingencies: This real estate term refers to conditions that have to be met in order for the purchase of a home to be finalized. For example, there may be contingencies that the loan must be approved or the appraised value must be near the final sale price.
- Home warranty: This warranty protects from future problems to things such as plumbing and heating, which can be extremely expensive to fix. There are also home warranties which cover appliances if needed.
- Exclusions: These are personal items written in the contract the seller excludes from the sale of the home. For example, clothes washer and dryer or raised garden boxes.
There are many more real estate terms that apply to your home sale. Don’t worry, your Realtor will be familiar with the real estate terms you’ll need to know. However, you will want to find a Realtor who is adept at explain these real estate terms in a way you understand. Some of the terms can be complicated, but a good Realtor will make them relate to you and your sale.
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