15 Real Estate Terms You Should Know
Real Estate Glossary
Navigating through the home buying process can feel like using a map without a key, chances are upon your first meeting with a real estate agent you will come across a lot of terms and verbiage you aren’t familiar with. Knowing what your real estate agent is talking about will lead to a more comfortable and confident experience.
Here are 15 terms that will help to ensure you are in the know when you embark on your real estate endeavors:
1. Appraisal
A written justification of the price paid for a property, primarily based on an analysis of comparable sales of similar homes nearby.
2. Appraised Value
An appraised value is the opinion of a property’s fair market value, based on an appraiser’s knowledge, experience, and analysis of the property. Since an appraisal is based primarily on comparable sales, and the most recent sale is the one on the property in question, the appraisal usually comes out at the purchase price.
3. Appraiser
An appraiser is an individual qualified by education, training, and experience to estimate the value of real property and personal property. Although some appraisers work directly for mortgage lenders, most are independent.
4. Assessed Value
The assessed value is the valuation placed on a property by a public tax assessor for purposes of taxation.
5. Assessment
The placing of a value on property for the purpose of taxation.
6. Assessor
A public official who establishes the value of a property for taxation purposes.
7. Closing
A closing has different meanings in different states. In some states, a real estate transaction is not considered “closed” until the documents record at the local recorder’s office. In others, the “closing” is a meeting where all of the documents are signed and money changes hands.
8. Comparable Sales
Comparable sales are recent sales of similar properties in nearby areas and used to help determine the market value of a property. Also referred to as “comps.”
9. Condominium
A type of ownership in real property where all of the owners own the property, common areas and buildings together, with the exception of the interior of the unit to which they have a title. Often mistakenly referred to as a type of construction or development, it actually refers to the type of ownership.
10. Home Inspection
A thorough inspection by a professional that evaluates the structural and mechanical condition of a property. A satisfactory home inspection is often included as a contingency by the purchaser.
11. Homeowners’ Association
A nonprofit association that manages the common areas of a planned unit development (PUD) or condominium project. In a condominium project, it has no ownership interest in the common elements. In a PUD project, it holds title to the common elements.
12. Homeowner’s Warranty
A type of insurance often purchased by homebuyers that will cover repairs to certain items, such as heating or air conditioning, should they break down within the coverage period. The buyer often requests the seller to pay for this coverage as a condition of the sale, but either party can pay.
13. Pre-qualification
This usually refers to the loan officers written opinion of the ability of a borrower to qualify for a home loan, after the loan officer has made inquiries about debt, income, and savings. The information provided to the loan officer may have been presented verbally or in the form of documentation, and the loan officer may or may not have reviewed a credit report on the borrower.
14. Real estate agent
A person licensed to negotiate and transact the sale of real estate.
15. Realtor
A real estate agent, broker or an associate who holds active membership in a local real estate board that is affiliated with the National Association of Realtors.
Still feeling a lost? Henderson’s team of professional real estate agents are here to help. Contact us today to schedule a meeting.