Real Estate Glossary

Here is a glossary of key terms and jargon related to real estate and home selling.

We hope you find this helpful!

Exit Strategies

Quick Cash Offer:

a straightforward and expedited approach to selling a property, often provided by real estate investors or companies specializing in quick home sales. In this process, a homeowner receives an immediate cash offer for their property, typically below market value, in exchange for a swift and hassle-free transaction. The benefit of a quick cash offer is the speed of the sale, allowing homeowners to bypass the traditional selling process, including listing the property on the market, waiting for potential buyers, and enduring negotiations. While the offer may be lower than what could be achieved through a traditional sale, it provides sellers with the advantage of a rapid and guaranteed sale, making it a viable option for those in need of quick funds or facing distressing circumstances.

Sell with Realtor on MLS:

the conventional method of selling a property through the assistance of a licensed real estate agent who lists the property on the Multiple Listing Service (MLS). The MLS is a comprehensive database used by real estate professionals to share property information with a wide network of agents and potential buyers. When a property is listed on the MLS, it gains visibility to a larger pool of potential buyers, increasing the chances of attracting offers and achieving a competitive sale price. Working with a realtor on MLS involves various stages, including property preparation, pricing, marketing, showings, negotiations, and the final closing process. While this method may involve realtor fees and longer timelines, it offers sellers access to a broader market and professional guidance throughout the sale.

Seller Financing:

also known as owner financing or seller carryback, is a financing arrangement in which the property seller acts as the lender and provides financing to the buyer for the purchase of the property. Instead of obtaining a traditional mortgage from a bank or lending institution, the buyer makes regular payments directly to the seller over an agreed-upon period. This arrangement can benefit buyers who may have difficulty qualifying for a conventional loan and sellers who want to attract a wider range of potential buyers and earn interest on the sale.

Taking Over Payments Subject to the Existing Mortgage:

a real estate transaction in which a buyer acquires ownership of a property while assuming responsibility for the existing mortgage held by the seller. In this arrangement, the buyer agrees to make ongoing mortgage payments directly to the lender on behalf of the seller. The buyer does not secure a new loan or mortgage but rather continues the payment obligations under the existing terms and conditions of the mortgage. This type of transaction can be advantageous for buyers who may not qualify for a new mortgage due to credit or financial reasons. It allows them to acquire a property without the need for traditional financing, while the seller benefits by transferring the mortgage responsibility to the buyer and potentially avoiding foreclosure or other financial challenges.

Novation Agreement:

a legal contract that replaces one of the parties in an existing contract with a new party, thereby transferring the rights and obligations of the original party to the new party. In the context of real estate, a novation agreement may be used when there is a change in ownership or when a buyer assumes the responsibilities of an existing mortgage from the seller. This agreement effectively releases the original party from their obligations and transfers them to the new party, ensuring a smooth transition of responsibilities and ensuring all parties involved are in agreement with the changes.

Glossary of Real Estate Terms

1. Appraisal: An assessment of a property's value by a licensed appraiser, used to determine its market worth.

2. Closing Costs: Fees associated with finalizing a real estate transaction, including legal fees, taxes, title insurance, and more.

3. Comparative Market Analysis (CMA): An evaluation of a property's value based on similar properties recently sold in the same area, used by real estate agents to determine a suitable listing price.

4. Equity: The difference between a property's market value and the outstanding balance of any loans or mortgages on it.

5. For Sale By Owner (FSBO): A property listed for sale by the owner without involving a real estate agent or broker.

6. Home Inspection: A thorough examination of a property's condition, identifying potential issues or repairs needed before the sale.

7. Listing Agent: A real estate agent who represents the seller and is responsible for listing and marketing the property.

8. Mortgage: A loan used to finance the purchase of real estate, with the property itself serving as collateral.

9. Pre-Approval: A lender's commitment to provide a loan up to a certain amount, based on the borrower's creditworthiness and financial situation.

10. Realtor: A licensed real estate professional who is a member of the National Association of Realtors and adheres to a strict code of ethics.

11. Title: The legal ownership of a property, confirmed by a title search to ensure no liens or claims against it.

12. Earnest Money: A deposit made by the buyer to show their commitment to purchasing the property, typically held in escrow until the sale is finalized.

13. Escrow: A neutral third party that holds funds and documents during a real estate transaction until all conditions are met.

14. Down Payment: The initial payment made by the buyer toward the purchase price of the property, typically a percentage of the total amount.

15. Conveyance: The transfer of legal ownership of a property from the seller to the buyer.

16. Short Sale: A sale where the proceeds fall short of the balance owed on the mortgage, requiring lender approval for the sale to proceed.

17. Buyer's Market: A market condition where there are more properties for sale than buyers, giving buyers an advantage in negotiations.

18. Seller's Market: A market condition where there are more buyers than properties for sale, giving sellers an advantage in negotiations.

19. Assessed Value: The value of a property assigned by a local government for tax purposes.

20. Deed: A legal document that transfers ownership of a property from one party to another.

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