Have you ever wondered what all those real estate terms really mean when you’re buying or selling a house? Words like “appraisal,” “escrow” and “contingency” can sound intimidating, but understanding them is important for making informed decisions and successful real estate experiences.

We believe that knowledge is power and having the right CENTURY 21 Judge Fite Company real estate professional by your side makes all the difference. We’ve put together a guide to help you decode some of the most common real estate terms.

Buyer Terminology

APPRAISAL

Determining the value of real property using objective data as of a specific date.

CLOSING & COSTS

The final stage of a real estate transaction where ownership transfers from seller to buyer according to the terms in the contract or escrow agreement. In addition, down payment and closing costs may be needed from buyer depending on the contract terms.

COMMISSION

Compensation paid to real estate brokerages for real estate services. The scope of service varies per relationship type and may include facilitation, advice, negotiation and contract development.

CONTINGENCY/CONTINGENCIES

Conditions that must be met before a contract becomes legally binding or a sale is completed.

EARNEST MONEY

A deposit from the buyer to show commitment and compensate the seller if the contract isn’t fulfilled.

ESCROW

A system where a neutral third-party holds money on behalf of transaction parties until certain conditions are met.

INSPECTION

A limited examination of a home providing a snapshot of the property condition at the time of inspection.

MORTGAGE

A legal document promising a property to a lender as collateral for a debt.

MORTGAGE LENDER

Financial institutions issuing loans, managing the whole process from application to funding.

OPTION FEE

A buyer-paid fee for an option period, allowing assessments before finalizing the purchase.

OPTION PERIOD

A provisional period allowing buyers to “option out” of a contract, losing only the “option fee” but not the earnest money.

TITLE COMPANY

Examines and insures title claims for real estate purposes.

Seller Terminology

LISTING AGREEMENT

A listing agreement is a contract between a property owner and a real estate brokerage that determines your wants and needs and authorizes the brokerage to market and sell the property.

LOAN PROCESS & UNDERWRITING

The lender works to approve the buyer’s loan and orders an appraisal, providing the appraiser with comparable sales and property information.

NETWORKING AND NEGOTIATION

Marketing your house to multiple groups, organizations and potential buyers.

PROFESSIONAL STAGING

Home staging is the process of preparing a property for sale by enhancing its appearance to appeal to potential buyers.

COMPETITION

Buyers compare your property to all others for sale, both new and pre-owned, to determine its value based on available and sold properties in your area.

MARKET VALUE

Market value is the estimated price a property would sell for in the current market based on factors like location, condition and competition.

MULTIPLE OFFERS

Multiple offers occur when more than one buyer submits an offer on a property, giving the seller a choice of offers to consider.

COUNTEROFFER

A counteroffer is a response from the seller to a buyer’s offer with changes to the terms, such as price or contingencies.

UNDER CONTRACT

The buyer deposits earnest money with the title company, completes a property inspection, and negotiates any necessary repairs.

CLOSING & FUNDING

This stage includes signing closing documents, a final walk-through of the house, arranging key exchange, terminating utility services, and securing funding.

Understanding real estate terminology is critical to making informed decisions and enjoying a smooth buying or selling experience. Our dedicated real estate professionals, equipped with award-winning training, are here to guide you through every step of the process.

We want to make your real estate journey successful and joyful. Are you ready to start your exciting journey with a trusted professional by your side? Find your REALTOR® for life at CENTURY 21 Judge Fite Company today.

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