Real Estate Vocab

10 Real Estate Terms Every Seller Should Know

 

Asking questions can be intimidating! But would it help you to know that you’re not alone? Say you have a classmate named Amanda, and  Amanda always raises her hand in class and asks the questions you’re thinking. Wouldn’t that encourage you to raise your hand and ask questions, too? Well, consider Amanda’s hand raised! 🙋 Here are the most commonly misunderstood real estate terms and phrases.  

1) Pending

Once a buyer and seller have reached mutual agreement on the terms of a sale, the property will then be moved from “Active” to “Pending”. 

2) Earnest Money (EM)

Once a buyer and seller have reached mutual agreement on a contract, the buyer will then deposit a set amount into an escrow account. This earnest money (EM) shows the seller that the potential buyer is EARNEST about buying the property. When the property closes, the EM is then put towards the buyer’s down payment.

3) Escrow

Escrow is a term that refers to a third party that is hired to handle the transaction, the exchange of money and any related documents. Placing Earnest Money, for example, into escrow means to place it in the hands of a third party until certain conditions are met; once the transaction has closed the escrow company will disburse the funds appropriately. 

4) Appraisal

An appraisal is an assessment done by a certified appraiser to determine the value of the property. The appraisal is usually based on an analysis of comparable sales of similar homes nearby. 

5) Dual Agency

Dual Agency is when one agent represents both the buyer and the seller, instead of just one or the other. Depending on state laws, real estate agents are able to represent both the buyer and the seller in the same transaction. There are some states that do not allow dual agency.

6) Bank Owned & Short Sale

When a property owner defaults on their mortgage, the lender will sometimes allow the seller to sell as a short sale. That means that the bank has agreed to let the home be sold for less than the balance on the current owner’s loan. A bank owned property is when a  lender won’t agreed to sell the property for less than what is currently owed on it, so the property has been foreclosed on and is now “Bank Owned.”

7) Comparative Market Analysis (CMA)

A CMA is an analytic report to help real estate agents strategize what the hyper local market is doing in order to determine your property value. The analysis is conducted based on the active, pending, and sold values of similar properties in the same area within a specific time frame. The CMA report should help you in understanding what a realistic listing price is, and whether or not you’re buying a property for the right price.

8) Commission

Real Estate agents are paid on commission. This is an agreed upon % of the sale price which is then divided between the selling and listing agent, it is typically 6%. Once a transaction closes, the seller will pay the originally agreed upon percentage of the purchase price from the net proceeds of the sale. In Washington State, the seller pays 100% of the real estate commissions.

9) Equity

A property owner’s Equity is the difference between the fair market value of the property and the amount still owed on its mortgage or other liens.

10) Encumbrance

An encumbrance is a claim against, limitation on, or liability against real property. Encumbrances can restrict the owner’s ability to transfer title to the property or lessen its value. Having the awkward conversation is worth it, guys.

Helping you understand real estate lingo is one of my favorite topics because it is SO important, and because real estate holds a special place in my heart. If you have any Real Estate questions, or pain points in your Real Estate journey, I would love to break it down into bite-sized pieces and serve you up a hot plate of awesome.

Leave a comment with any other terms or resources that you would find helpful!

5 Things To Avoid When Selling

5 Things To Avoid When Selling

 

Put your bright yellow buyers cap on with me and imagine you’re searching for a new home. A place you can be comfortable inviting your friends over for a birthday party, or hosting the next family holiday. You’re scrolling through the different properties online and decide to go see a few in person… now ask yourself, what differentiates the properties to you? What helps you filter the properties you just want to see online and which you are compelled to see in person?

 

After decades of witnessing just about every listing faux pas, misstep, and bad marketing strategy out there, I’ve compiled the top 5 things to avoid when selling your property. Let’s get your listing from one they just want to see online, to one they are compelled to see in person!

1. Waiting to market

In today’s modern social media world, there are plenty of ways to create intrigue before your house actually goes live on the MLS. Preliminary marketing and preparation is just as important as the actual marketing itself! Make sure your property is marketed and targeted on social media platforms and to the right audiences.

2. Showing only by appointment

Having people coming in and out of your house all day long is not the only alternative to showing by appointment only. But I gotta’ tell you, the most common reasons a listing doesn’t get shown is because there is a “by appointment only” requirement for the listing. There are plenty of legitimate reasons to want by appointment only, but if there are only a few hours each day the house is accessible to be shown then the likelihood of the buyer viewing and making an offer on another home goes up dramatically. To ease the anxiety of showings, I’ve come up with a sellers care package, but just understand that if you require an appointment, there are some buyers that will never even get the chance to see your property in real life.

3. Bad photos

We all know that a picture says a thousand words. Having clear photos is critical to communicating a properties value to prospective buyers. Not only do you need clear, well cropped photos, but you need photos of the right areas! Places like kitchens, living rooms, and areas of the property that stand out should be the only photos listed. You want to encourage them to come and see more!! Not give it all up at first glance. Striking the right balance is extremely important.

4. Ignoring Curb Appeal

Thanks to shows like Fixer Upper, the DIY craze has inspired and empowered an entire generation to take on rehabbing their homes instead of buying brand new. What this means to existing properties is that they no longer need to take a shot in the dark and replace the floor coverings. Or remodel the kitchen before someone will want to buy. The one thing that people will notice right away, and draw them to come inside and see more is the first impression. The curb appeal! Add some cemetery to the front porch. Consider painting your door a bold, bright color. Clear out the dead plants, and maybe spread some grass seed. Remember… first impressions may be all you get when selling, so make it count!

5. Not working with a professional

Everyone knows someone who sells real estate. The threshold for entry is entirely to low. If you’re serious about selling your property for top dollar, work with someone who has a heart to serve, and the background to cover your ASSet 😉 If you have a friend that is a real estate agent, check out the 6 questions you should ask yourself before working with a friend or family member in the biz.  

Here’s the deal, if you want to sell your property for top dollar, you need to speak with someone who can help reduce your anxiety, help you take calculated risks, and bring you from just another property on the market to a property that will actually sell.

Get the 7 secrets to a stress free transaction here! 

Market Update: January 2019

 Market Update: January

Welcome to 2019! 

Though changes are happening in the market, the year ahead is full of possibilities.  To paraphrase the Disney movie Up: Adventure Awaits!

Changing Prices:

More listings coming to market mean more competition. The dramatic appreciation left buyer's in sticker shock last year. Now that inventory is increasing, we are staring to see the price of available properties stabilizing. 

Average days on market

Slowing Appreciation:

Over the past 12 months, we have seen dramatic price spikes in King & Pierce county. Buyers were offering full price, and getting beat out by people paying far above asking price. Now the market is starting to shift. The chart below is the home price percentages appreciation projections from Home Price Expectation Survey, Zelman & Associates, Mortgage Bankers Association, Freddie Mac, the National Association of Realtors, and Fannie Mae.

Appreciation going forward

Preparing for Selling:

The rental market has been flooded, which has driven up the price of rentals. The rental price increase has caused people to rethink the cost of buying. Loan applications have increased to 5.5% in the past three months. This means renters have been saving and are starting to prepare to purchase. Demand for well priced houses is still in high demand.

The bottom line is that a changing market is not a bad thing. It is a sign that our economy is starting to stabilize. If you have been considering selling, now is a great time. There is a pent up demand for well priced, existing homes.

Do you have any questions about how these stats will be affecting you?

Fill in the information below, and I would be happy to help find a strategy that will fit your needs.

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All the best!