You may not be an experienced real estate seller like some people. In fact, most people get involved in just one real estate transaction in their whole life. It’s not surprising, then, that for first time sellers the process can become quite confusing. If this sounds like you, know that you need to understand common real estate terms so you can actively engage in a conversation with your agent or the agent of the buyer.
One way to read up on the common real estate terms is to consult Google. But to save you time, we have spelled out 15 frequently used real estate terms in this article that you may need to use when you put your property on the market.
Breach of Contract
A breach of contract happens when either the seller or the buyer fails to follow the terms of the contract. The contract can be in written or oral form. In real estate, a breach of contract occurs when the buyer tells you, the seller, that they don’t want to buy your house any more because they have found another property that they like better.
This breach may allow you to file a lawsuit against the other party so you can seek damages from them.
This offer to buy a home comes with certain conditions that should be met before the transaction happens. For instance, a potential buyer may make you a contingency offer to buy your home only if they succeed in selling their house. If they fail to sell their house within a certain period, the offer will end and you will have to put your house back on the market.
Cloud on a Title
In real estate, a cloud on the title refers to another ownership claim in the history of the deed related to your property. Often, this claim may occur when someone bought a property but, for someone reason, didn’t record the deed following the correct procedure.
General Warranty Deed
General Warranty Deed guarantees the buyer that the property in question is not subject to any title issues or pending legal actions, and that the seller has full rights to sell or convey it.
After the buyer has accepted the offer, they will hire a home inspector to get a better idea of the condition of the home. The home inspector may take up to 7 days to complete the inspection and issue a report.
Multiple Listing Service (MLS)
An MLS is a huge marketing database developed by real estate brokers. The purpose of this database is to offer correct information about properties that are on the market. Information from this database is shared on the websites of brokers so the public can get the required information as soon as possible.
If you want to get the best offers for your house, make sure your house is listed on the MLS. A real estate agent may be able to help you with this.
If money is owed on your property, a property lien may be put on your property deed. As a result, you can’t transfer the deed until the lien is paid off. As soon as the payment is made, the lien holder will “free” your property deed.
This type of insurance is paid to the mortgage provider or homeowner if someone proves that the house or building is his or her property. If you want to get a loan, you may need to provide Title Insurance with your mortgage lender.
After a property sale is completed, the buyer of your house can occupy your house at the time of closing or on an agreed date. If you want to continue living there until you have bought a new house, you can pay an agreed amount of rent to the buyer.
Appraisal is done to get an estimate of the value of a property based on the written analysis of an appraiser. Usually, buyers require an appraisal to get a better idea of the market value of the property they are going to purchase.
As the name suggests, a buyer’s agent is a real estate professional who guides a buyer throughout the process of buying a property.
Sales contract is a legal agreement with you and the buyer in a real estate transaction. It involves a specific price, time and set of terms. As soon as you accept this agreement, it becomes a legal sales contract.
There is a difference between the deposit and down payment. In a financial transaction, the down payment is a cash amount that the buyer agrees to put up to purchase your house. It can be 5% to 25% of the total value of your property.
If you want to sell your property “as-is”, you want to sell it in the same condition it is now without spending any money on repairs and maintenance. In the case of an as-is contract, the buyer is given enough time to thoroughly inspect your property.
Closing is the final stage in a property transaction. The attorneys or title agent will disperse the funds after having the buyer and the seller sign the legal documents. After the closing, you move out of the house and the new owner moves in.
Understanding these real estate terms is important for you if you want to sell your house without any surprises or confusions in the process. By knowing these terms, you will have a better working relationship with your real estate agent, and as a result, you will have a better chance of finding the best buyer for your house.