Essential Real Estate Terms You Should Know

Essential Real Estate Terms You Should Know

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Every industry has its own acronym and real estate is no different. Real estate is full of jargon that can add confusion to an already elusive process. Whether you're selling or buying here are the essential real estate terms you should know.

Asking questions should not be intimidating. Would it help you to know that you’re not alone? Real estate is intimidating and overwhelming for most people. My goal is to make it as simple for you to navigate as possible. Let's dive in:

1) Pending

Once a residential buyer and seller have reached a mutual agreement on the terms of a sale, the property will then be moved from “Active” to “Pending” or “Pending Inspection”. The contract timelines are very important. 

2) Earnest Money (EM)

Once a buyer and seller have reached a 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 or returned.

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 agree 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. It is common for people to borrow against their equity to do property improvements. 

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 an awkward conversation is worth it, guys.

Helping you understand real estate lingo is one of my favorite topics because it is SO important. 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!

All the best,

Carmen Neal Signature

 

 

 

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7 STEPS FOR A STRESS FREE TRANSACTION

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7 Steps To A Stress Free Sale

Learn the 7 Steps to a Stress Free Sale in this post.

7 Steps to a Stress Free Sale

 

You are planning to sell your real estate investment, now or at some point in the future. Most everyone sells eventually. But when it comes down to it, the idea of selling can be so overwhelming!  Where should you start to prepare? I'm going to answer that question for you with my 7 Steps to a Stress Free Sale.

Well, I say seven steps, but in reality it’s more like three very specific categories that are broken down and laid out as clearly as possible. 

Let’s jump in: 

Pre-inspect

99.5% of buyers will want to pay an inspector to take a closer look at the property, so conducting a pre-inspection prior to listing will help you get ahead of the curve and address any potential issues before your house ever lists. Pre-inspecting has the potential to save you money in the long run, and will go far in meeting your goal for a stress free sale. In this category you will address Steps 1 through 3.

1. Walk around the outside of the home and outbuildings.

Make sure all of the exterior light fixtures work, check the siding for damage, and consider painting if there is any exposed wood. Tidy up landscaping while you are out there, too. Curb appeal matters, but paying attention to landscaping also allows you to ward off any potential pests, too. Fix broken gates and latches, too.

2. Look closely at the roof and gutters.

Clear debris and moss, and if there is any sign of damage or leaks, address it. To get a full picture of the roof condition, you will also need to move to step 3.

3. Check out the crawl spaces.

Attic and basement spaces, either full or crawl spaces, are good places to look for signs of problems before they become big. Look for signs of water damage and/or the presence of critters, and take care of it if you find either.

Declutter

The first impression may be the only impression buyers get of your property. If you really want to stand out you need to declutter every single area of the property, including the garage and yard. This category consists of Steps 4 though 6.

4. Address exterior clutter.

Pare down on lawn furniture, and toss some fertilizer and mulch on your freshly manicured plants. Sweep the porch of leaves and debris, and make sure that the exterior entry way is clean and inviting.

5. Take stock of what is in each space, including the attic and the garage.

Don't get bogged down here just yet. I'm going to give you some tips for purging the clutter below. Right now, just walk through and get a feel for what you have, grab any obvious garbage, and get it out.

6. Use the 3-Pile Method to inventory, sort, and clear out the excess.

Work room by room to put EVERYTHING you own, across your entire house, into three piles:

Pile 1: Donate. Think about your floor space as if you were paying price per square foot, because guess what: YOU ARE!

Pile 2: Toss. Be real with yourself here. Think of me saying this in my Mom Voice: “If you treat it like garbage, then it IS garbage.”

Pile 3: Keep. Keep only what you really use or what really matters to you. And if you keep it, it has to have a home. A place for everything and everything in its place, if you will. If it doesn't have a home then I encourage you to make a home for it OR...find its home in pile 1 or 2.

Re-inspect

Once the items in Pile 3 are back in their homes, and the rooms are thoroughly emptied, you’ll want to focus your attention on the finishing touches. This brings us to our final step to prepare you for a stress free sale.

7. Thoroughly assess the condition of interior walls, doors, and fixtures.

Sometimes we spend so much time living in our space that we become blind to the chip in the sheet rock or the door hinge that needs to be re-tightened. The point here is to make the existing features as tidy and functional as possible. 

There you have it, folks: My 7 Steps to a Stress Free Sale. It's all about the preparation. Do the work before you list to minimize surprises and headaches during the sales process. Trust me, it works!

And to help you work the steps, I've put all of this into a handy checklist, along with some of the most common FAQs I get asked. Complete the form below to receive your checklist!

FREE SELLER'S CHECKLIST

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7 STEPS FOR A STRESS FREE TRANSACTION

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Contrary to popular belief you do NOT need to remodel or spend money on consultants or services to sell your property. You simply want to know the condition of what it is you’re wanting to sell.

In fact, spending money on new floors or even paint may not give you the highest return on your investment. Follow these simple and FREE task’s and you’ll be set to cash in on your investment.

I can hear that sigh of relief from my desk!

All the best,

Spring is a Seller’s Paradise

Young children frolic and make faces at the camera in the spring sun

Spring is a Seller's Paradise

Young children frolic and make faces at the camera in the spring sun

After 80 straight days of gloomy weather (yes, seriously…), we finally had a nice stretch of sun hit the west side of Washington State earlier this week. It was glorious! While it appears we have again returned to the classic PNW rain/sun mix for now, that little preview of spring should remind us of one important thing: selling season is nearly upon us!

It’s probably no surprise that real estate listed at the height of spring tends to sell for more than properties listed other times of the year. Buyers are aiming to make a move when it’s most convenient, and the months of May and June are perfect for house hunters—sandwiched between major holiday and travel seasons, with generally mild weather for easy inspections and popping curb appeal, and the school year is wrapping up so disruption on the kiddos is minimized. Spring is a seller's paradise!

In the Fife-Milton-Edgewood area, the average time for a property to be on the market is 46 days. So if a house hunter is looking to be in their new FME home (and your old one!) by the start of summer, your property needs to be on the top of their list for viewings by early May.

But it’s not even March yet, so why am I talking about May and June?

Because…

"When opportunity knocks, it’s too late to prepare." - John Wooden

Listing real estate for sale is not an overnight task. You have to prepare in order to see that proverbial “top dollar.” March and April are the time to get ready.

So where do you start? Preparing to sell, listing and marketing, getting showings, negotiating contracts, moving…it can be overwhelming! But can I tell you something?

I am really good at my job. I can manage all of that craziness, and I can help you do it, too.

Your first step in preparing to list your property is to complete the form below to receive my free Sellers Checklist: 7 Steps to a Stress-free Transaction.

FREE SELLER'S CHECKLIST

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7 STEPS FOR A STRESS FREE TRANSACTION

Learn which improvements will get you the highest return on your investment.

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My goal is to make real estate as simple as possible for you, and this guide will help you know what to prioritize as you prepare your real estate for the busy spring market.

As always, I’m here to help, so contact me if you want to schedule a time to talk specifics about your home and how to sell it for top dollar!

All the best,

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