If you’ve spent any time in the world of real estate either buying, selling or just looking, there was probably one or two times when your agent said something you didn’t understand.
Home buying and selling can be complicated, but Savvy + Co Real Estate and all its agents are experts at decoding the mysteries (and the lingo) of home ownership to their clients. Find out in person at their next First-Time Home Buyer event at Legion Brewery 6-8 p.m. on March 21. Trivia starts at 7 p.m. and the great people who know tons about buying and selling will be there all night.
Ready, set, lingo translation.
Term: Buyer’s Market
Translation: A buyer’s market is a situation in which housing supply exceeds demand, giving buyers an advantage over sellers in price negotiations. Think back to when the real estate market was in a slump and there was lots of inventory (houses for sale).
Term: Seller’s Market
Translation: A seller’s market is a situation in which housing demand exceeds supply and sellers have an advantage over buyers in price negotiations. Much of Charlotte and surrounding areas are in in a seller’s market of course there are always exceptions. Keep in mind you could have a seller’s market for homes under $300,000 and a buyer’s market for homes in the one million-plus range. Various areas have individual market conditions. That’s why it is best to talk to your friends at Savvy + Co. Real Estate.
Terms: Pending or Under Contract – Show
Translation: When an offer has been made on a listing and accepted, but the actual sale is dependent on the buyer meeting specific criteria during the Due Diligence Period which is typically an appraisal, home inspection or mortgage approval. According to Savvy + Co. approximately 30 percent of contracts (deals) fall apart during this stage so you many want to submit a back up offer.
Term: Earnest Money Deposit
Translation: This is the initial deposit held in escrow to show you are a serious buyer. Earnest money deposits are given back to the buyer if they walk away from the sale within the Due Diligence timeframe. Once the Due Diligence period ends, you loose your earnest money.
Term: Due Diligence
Translation: Due diligence is money you pay the seller when you sign a contract to investigate the property and make sure you want to move forward with the purchase. Similar to Option Money where you are paying for an option to purchase the property. The amount is negotiable and depends on the length of time you are asking the seller to keep the property off the market for you to investigate. This is the time to solidify the loan, get appraisals and find out about repairs that you may or may not want to take on.
Term: Pre-Qualified and Pre-Approved
Translation: A pre-approval is much stronger than a pre-qualification. Pre-qualified means a buyer has submitted some basic information to the bank and the bank has responded with how much money they are qualified to spend on the home. Pre-approved means the buyer has taken another step in the process by completing the mortgage application and submitting documentation proving employment, income, etc. After submission, the bank writes a letter saying the buyer is conditionally approved for a specific loan amount.
Term: Title Company
Translation: A company specializing in examining and insuring titles to real estate.
Term: Title Search
Translation: A title search is done by the closing attorney and it is a search of records to see if any liens or encumbrances are on the title to the property. For example if the seller purchased a furnace and still owed money on the unit. The company that supplied the furnace might have a lien on the property.
Term: Title Insurance
Translation: This is an insurance policy that protects the buyer in the event something was missed during the title search. The title insurance company will go to court on your behalf if something shows up down the line. For example if you buy a house and one day the furnace company knocks on your door and says you never paid for the furnace. Under this circumstance, the title insurance would pay for the mistake of not finding the lien.
Now that you are up on the lingo you might have more questions, or you might want to share your real estate knowledge at the next trivia night. We say start March 21at Legion Brewery where you can show off your skills and learn tons about the home buying process in a cool environment. See you there!