Like any industry, the real estate world has a slew of terms that first-time buyers might not be familiar with. Understanding terms like these allows you to be prepared for your time on the market. Ready to advance your real estate expertise? Take a look at the top jargon used in the industry below.  

Appraisal – An appraisal is an approximation of a home’s current value based on a range of factors such as the price of similar properties in the area.

Appreciation – Appreciation is used to describe the increase in a property’s value over time.

Closing – Closing refers to the final step of a real estate transaction when a property is finally transferred from the seller to the buyer. 

Down payment – The down payment is the amount of money a buyer has saved in order to purchase a property. Down payments can typically range from five to 20% of the home’s cost.

Equity – Equity is calculated by taking the difference between the amount owed to a lender and the market value of a property.

Escrow – During the home buying process, your money will be placed “in escrow” and is protected by a third party until the real estate transaction is closed.

Fair market value – Fair market value means the amount a property would sell for in a competitive market, or when a seller and buyer can agree on the price of a property.

Home inspection – A home inspection involves the evaluation of a property’s condition, including electrical work, roofing and plumbing before closing day.

Homeowner’s Association (HOA) – When a group of homeowners in a community join in paying fees that cover the maintenance of the entire property.

Mortgage – A mortgage is a loan that is used to purchase a home or other form of real estate.

Pre-approval – The pre-approval process involves a potential lender or bank reviewing an individual’s finances, including their income, assets and credit history, to determine how much money can likely be borrowed.

Right of Refusal – A lease or contract might include the “right of first refusal” to note that an individual has the right to put an offer on a property before it is listed on the market by a seller.

Title – A Title is a legal document that states who has owned a property in the past and notes any liens associated with the property.

Under contract – Under contract refers to a prospective buyer and seller reaching an agreement on a property. At this early stage, both parties are in alignment with the terms of the deal, including the property’s price and closing date.

Are you ready to put your real estate knowledge to the test? Contact me at AmyChapman@michaelsaunders.com if you’re interested in buying or selling a home or condo in Sarasota.