Last week we covered some basic real estate vocabulary terms. Well this week, we’re going to step it up a notch and cover some more intermediate terms. Honestly, I had a really hard time determining what should be considered a “basic” term versus an “intermediate” term. The ones we’ll go over today tend to be vocab you won’t need to know or use until you’re in the process of buying or selling your home.
Moving on to the Intermediate Vocab:
Appraisal: A licensed appraiser will estimate a home’s market value based on comparable recent sales. Appraisals are done on behalf of the home buyer’s lender. The appraisal is compared to the final sale price to ensure that the appraised price of the home is equal or greater to the final sale price.
Foreclosure: The process of transferring the right of home ownership from the homeowner to the bank or lender. This occurs when the homeowner is no longer able to make mortgage payments and defaults on their loan.
Inspection: A licensed inspector will go through the house to discover any potential issues or repairs that need to be made before a buyer purchases the home. After inspection, the buyer will have a chance to negotiate with the sellers to cover the costs of certain repairs. General inspections include plumbing, electrical, foundation and structure, water heater, air conditioner, furnace, and home appliances.
Multiple Listing Service (MLS): A local or regional service that compiles all available real estate for sale online and provides detail for each listing to brokers and licensed agents.
Pre-Approval: A letter from a broker or lender certifying that they have reviewed a buyer’s finances and are willing to lend a specific amount of money to purchase a home. This does not guarantee a loan, but it provides the buyer with general guidelines for how much they can spend on a home. Frequently sellers may expect buyers to be pre-approved since this will mean less risk in entering an agreement to sell their home.
Short Sale: This is a home that is listed at a lower price than what is owed on the mortgage. A homeowner that is selling their home as a short sale is doing so to avoid going into foreclosure. Buyers should note that a short sale can take longer to close as there is usually more than one party that owns the mortgage, and they must all be in agreement.
Walk Through: A walk through is the final inspection of the home by a buyer prior to closing documents being signed. The buyers complete a walkthrough to make sure that any requested repairs from the inspection have been made.