Home Buyers and Sellers Real Estate Glossary

If you want to become a real estate agent, are looking into buying your first home, or learn more about the industry, you need to start from the basics. For understanding a language, we have to know the terminology first. So, before getting into real estate, you must be familiar with some terminology.

Real estate might scare you at first, but it will be effortless to get once you start learning. So, let’s learn a few real estate terms.

Adjustable-rate Mortgage

An adjustable-rate mortgage is a home loan without a fixed interest rate. With an adjustable-rate mortgage, the initial interest rate is adjusted with time. Then, the interest rate used to balance is revised periodically, annually, or monthly.

This can be a risky loan for homeowners who plan to stay in their homes for more than a few years as prices can rise sharply depending on market conditions.

Appraisal

Estimates are required to collect a limited amount of the piece of real estate. During the home sale, the buyer sends an evaluator to obtain an expert opinion on the property’s value. This helps the buyer determine if the property is worth the amount.

Backup Offer

If the buyer wants to purchase a property that is already under contract with another person. In that case, that buyer has the option of submitting a “copy of the repository” if the original work breaks down and the seller accepts; it is a legally binding contract that will put the buyer next to the home buy queue.

Buyer’s Agent and Listing Agent

Usually, there are two agents of both parties involved in a real estate business. The buyer’s agent works for the buyer, whose job is to find the next buyer’s property, representing their interests by negotiating on behalf of that buyer to get the best price and purchase status possible. This agent is a consumer fiduciary. Similarly, the listing agent represents the seller’s interests.

Bill of Sale

A Bill of sale is a document that details property sale or the transfer of property from one party to another. A Bill of sale serves as legal proof that full consideration has been provided to the seller and transferred the property rights to the buyer.

The auction bill sets out the specific terms of the agreement:

• The final sale price
• Buyer and seller names
• Their contact details
• Other essential details related to the auction/sale.

Covenants, Conditions & Restrictions (CC&Rs)

Typically, these are the rules and regulations that place a real estate agency (HOA), a neighbor’s organization, a developer, or a builder that sets any requirements and limits for what a homeowner can do with a property. It may also include monthly, annual fees, or special tests.

Dual Agency

A dual agency is a term for real estate, which means that a single agent represents the buyer and the seller in the same real estate business. A dual agent must travel in a narrow way so that they do not take sides on either side, and they may not disclose confidential information to either party.

Due Diligence

A time period is given to the buyer to thoroughly inspect the premises, usually by hiring experts to inspect the premises, conduct tests, other important factors, to decide how to proceed. These are the steps that everyone must adapt before finalizing an agreement on immovable property. By doing so carefully, you assess the risks associated with the property you plan to purchase.

FHA Loans

The FHA loan is part of a group of loans insured by the provincial government. This means that instead of actually lending money, FHA assures banks and private lenders that they will pay for the losses they may incur if the borrower does not repay the loan in full or on time. 

Short Sale

A short sale is made when the homeowner is in a difficult position to repay the mortgage and, to repay the remaining part of his mortgage, agrees to sell his property for less than the right amount. All the proceeds from this sale go straight to the lender. The lender can go after the homeowner for the remaining balance or forgive the remaining balance.

Real estate is full of terms that are not easy to understand, and it is necessary to know its meaning if you are dealing in real estate. You can cover the whole process of buying a house or selling a property in the layer of confusion if you do not understand the basics. The real estate glossary does not end with these words; there are many words that you got to learn. So, before getting into real estate, get yourself acquainted with such terms.