Here’s a glossary of commonly used real estate terms, along with simple explanations, to help first-time sellers in Onalaska, WI navigate the real estate world with confidence:
1. Appraisal:
An evaluation of a property’s value conducted by a professional appraiser to determine its fair market value.
2. Closing Costs:
Expenses incurred during the closing process, such as attorney fees, title insurance, taxes, and loan fees.
3. Comparative Market Analysis (CMA):
An analysis prepared by a real estate agent that compares the prices of similar properties in the area to determine an appropriate listing price.
4. Contingency:
A condition that must be met before a real estate contract becomes binding. For example, a buyer may include a financing contingency to ensure they can secure a loan.
5. Equity:
The difference between the current market value of a property and the outstanding mortgage balance.
6. Listing Agreement:
A contract between a seller and a real estate agent that outlines the terms and conditions of listing the property for sale.
7. Multiple Listing Service (MLS):
A database that real estate agents use to share information about properties for sale, allowing for broader exposure to potential buyers.
8. Pre-approval:
The process of obtaining a lender’s commitment to provide a mortgage loan for a specific amount, based on a borrower’s creditworthiness and financial information.
9. Title:
A legal document that establishes ownership of a property.
10. Escrow:
A neutral third party (usually an escrow company) that holds funds and documents during a real estate transaction until all conditions are met.
11. Earnest Money:
A deposit made by a buyer to demonstrate their intention to purchase the property. It is held in escrow until the transaction is completed.
12. Contingent Offer:
An offer to purchase a property that depends on certain conditions being met, such as the sale of the buyer’s current home.
13. Home Inspection:
A thorough examination of a property’s condition conducted by a professional inspector to identify any issues or defects.
14. Down Payment:
The upfront payment made by a buyer towards the purchase of a property, typically a percentage of the total sale price.
15. Deed:
A legal document that transfers ownership of a property from one party to another.
16. Title Insurance:
Insurance that protects against any defects or disputes regarding the ownership of a property.
17. Homeowners Association (HOA):
An organization that manages and enforces rules and regulations for a community or condominium complex. Membership and fees may be required.
18. Amortization:
The gradual repayment of a mortgage loan through regular payments over a specified period, typically in monthly installments.
19. Seller’s Market:
A market condition in which there are more buyers than available properties, often resulting in increased home prices and bidding wars.
20. Appraisal Contingency:
A clause in a purchase agreement that allows the buyer to renegotiate or withdraw their offer if the property appraisal is lower than the agreed-upon price.
Remember, if you encounter any unfamiliar terms or have questions during the real estate process, don’t hesitate to ask a real estate agent from Raven Realty or other professionals involved in the transaction. They are there to help you understand and make informed decisions.
