5 Real Estate Terms All Buyers and Sellers Need to Know
Whether buying or selling a home, a lot of specialized terminology gets thrown around. Not knowing all of those terms can leave people confused and make it so conversations are constantly stopped in order to define words. Because of this, buyers and sellers need to know all of the important real estate terminology before they start working with a real estate agent. Here are some of the most important words and phrases that everyone should be familiar with.
An appraisal of a home is an important step to both buying and selling. An appraisal is when an unbiased home appraiser comes to the home in order to give as accurate a value estimate as they can. The seller can use this appraisal to price their home, and the buyer will need to get the home appraised before closing to ensure the home is worth the money they’re borrowing for their mortgage.
After the seller has accepted an offer on the home comes the final stage of the selling process: closing. The buyer and seller agree to meet with their agents in order to finalize the sale of the home. At closing, the buyer and seller will sign any final paperwork, and the seller will hand over the keys to the home. At the end of the closing, the buyer is officially the new owner of the home.
Buyer’s and Seller’s Markets
In the housing market, there can be buyer’s markets and seller’s markets. In a buyer’s market, there are more homes for sale than there are buyers looking for homes. This tends to bring prices down, making it the most advantageous time to buy a home. On the other hand, a seller’s market is the opposite: there are more buyers looking for homes than there are homes for sale, which tends to drive prices higher.
When a buyer purchases their home, they have the option to also purchase a home warranty to protect it. Homeowners can typically purchase a warranty in year-long intervals, and the warranty will cover the home’s major appliances in case they break. The advantage of having a home warranty is that the warranty holder will pay for the repairs, and the homeowner will only have to pay for a smaller service fee, creating the potential to save money. Sellers can also purchase a home warranty for their home to entice buyers. Before purchasing a home warranty, the homeowner should make sure to thoroughly read what it covers to ensure they’re getting what they want.
Similar to a home appraisal, a home inspection is done by an unbiased third-party. However, instead of deciding a fair market value for the home, the home inspector looks for damage and problems within the home. The home inspection will take place shortly after the seller has accepted an offer on the home. The buyer will have a set amount of time to hire an inspector, and if the inspector finds something wrong with the home, it can open up the price to renegotiations if there is a lot of unseen damage that would be costly to repair.
It’s important for both buyers and sellers to know all of the important terminology that comes with participating in the real estate market. This is only a brief selection of some of the most common terms that affect both buyers and sellers, but there are plenty more out there to be learned.