Sometimes REALTORS® can become immune to industry terminology and may forget clients don’t understand what some words mean or how they can impact their decisions. Never fear! Here is a list of some of the most common real estate industry terms and their definitions:
Buyer’s Agent: The agent who represents the interests of the buyer.
Listing Agent: The agent who represents the interests of the seller.
Real Estate Agent: A professional who is licensed by their state to sell real estate. This usually requires a minimum number of classes and a test.
REALTOR®: A real estate agent who is a member of the National Association of REALTORS®. This normally means they have to uphold a specific code of ethics and conduct of the organization. Not all agents are REALTORS®.
Real Estate Broker: A real estate agent who has furthered their education beyond the agent level, has successfully passed a state broker’s exam and has met the minimum number of transactions required by their state.
Contingencies: Conditions that are placed on an offer on a home. For example, you can declare that the offer is contingent on the results of an inspection report or contingent on the appraisal of the home being close to your offer.
Closing Costs: Miscellaneous expenses that can include, but are not limited to, commissions, mortgage fees, recording fees and title insurance. These fees are habitually paid by the buyer but can be part of the negotiation and made the seller’s responsibility.
Fixed Rate Mortgage: A mortgage loan where the interest rate is one, fixed rate that doesn’t change over the lifetime of the loan.
Adjustable Rate Mortgage: A mortgage loan where the interest rate can change during the liftetime of the loan.
Amortization: A system of paying the mortgage that combines the interest and principal instead of just paying off the interest first.
Seller Financing: A loan provided by the seller to the purchaser where the purchaser makes payments over a specified time at an agreed-upon interest rate, rather than the buyer obtaining a loan through a bank.
Chain of Title: A sequence of historically documented transfers of a title to a property.
Tax Sale: A forced sale of a property, normally by the government, for unpaid taxes by the owner.