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Understanding Real Estate Terminology: A Glossary for Sellers

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.

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