Original Publish Date: September 9, 2019
The world of real estate is full of jargon. In fact, if you’ve ever bought or sold a home with a traditional agent before, you were probably told at various stages that the agent would “take care of it” or that you should “not worry about that because it’s complex”.
At Homie, we are happy to “take care of it” for you but our goal is also to educate you along the way to give you more confidence and transparency into the home buying and selling journey. After all, it turns out that the world of real estate is digestible and straight forward, and we want to make it that way for every buyer and seller.
The first step is getting down the lingo. Here are the top ten real estate vocabulary words to know before you buy or sell a home.
1. Home Value Report
A value report (you might know it as a Competitive Market Analysis or CMA) is crafted by someone who evaluates the value of your home and makes a recommendation on your listing price. The price is determined based on the price that similar homes have sold for in your area, among other factors. This report is used to help you understand how much your home is worth. At Homie, our Home Value Reports are calculated by dedicated, local specialists. This helps our agents advise our clients on the right price to list their homes. Ultimately it’s your choice but you’ll have all the data to make the best choice based on your home and circumstances.
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Escrow is essentially a third party holding an account for you during real estate transactions. This account will be using to move funds between a buyer and seller. Earnest money, property taxes, and insurance are often “held in escrow”. Usually the title company that you end up going with offers these escrow services.
As a home buyer or seller, you’ll be hearing these words a lot. A tour and a showing are the same thing. As a seller, your listing agent will coordinate with a buyer’s agent to bring potential buyers to your home. The buyer’s agent is responsible for taking clients in person to the homes. People rarely buy houses without seeing it in person so tours are an essential part of the selling process. This is your chance to see the property in person, but it’s also your time to check out the neighborhood and surrounding area.
There are essentially two types of agents in a real estate transaction. These are known as buyer’s and listing agents. They are licensed by their state to help facilitate real estate transactions for their clients.
Homie is a licensed brokerage with a large team of experienced real estate agents. While technology can make it more efficient and affordable, agents are the oil that helps the real estate engine move. Buyers and sellers can do it on their own, but we think that everyone should have access to professionals for a low flat fee. After all, that’s why Homie exists.
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Everyone has a unique sense of style, and your style might be one of a kind, which means that you probably want to stage your home when you’re selling. Staging is when a professional interior designer either comes in and rearranges your furniture or brings in different furniture and decor to make your home more appealing to the masses. This helps potential buyers envision what the house could be for them.
As a seller, this is what you receive when someone wants to buy your home. If Homie is helping you list your crib, you will receive all offers via email and the platform. Your listing agent will also call you to share the good news and explain all the ins and outs of the offer. Offers contains the amount the buyer is willing to pay, along with any other asks of the buyer. You DO NOT have to accept the first offer, and you can entertain multiple offers. Your Homie listing agent will advise you on everything about the offers you receive.
As a buyer, this is what you and your buyer’s agent work on together to purchase a house. The main piece of info you’ll be focused on is the purchase price. Your buying agent will help you get everything in order. Once it’s complete, your buyer’s agent will then forward it to the listing agent. Your offer contains all the legal stuff that a contract usually does, but you might also consider adding in some personal information about your family. Everyone loves a good story, and yours might help you win your dream home!
An offer is not the final say in the sale of a home. It’s not uncommon for offers to fall through. Sometimes things don’t work out, and that’s OK!
7. Counter Offer
A counter offer is what goes down when someone puts in an offer and the seller decides they want to tweak the conditions of the sale.
Buyer puts in initial offer-> Seller receives offer-> Seller considers offer-> Seller sends counter offer to Buyer
There can be a number of reasons to justify submitting a counter offer, from a compromise on the offer price to a shorter close timeline. It’s within the rights of the seller to send a counter offer, and it’s within the rights of the buyer to reject the counter offer. This is a negotiation, after all. The back and forth of offers and counter offers is not done by the buyers or sellers themselves. This is all done via the buying and listing agents in close collaboration with the buyer and seller parties.
8. Due Diligence Period
After an offer is accepted, the due diligence period begins. This refers to a period of time in which the home for sale is thoroughly looked over. Everyone wants to make sure they’re getting the most out of the home. This is the time when the buyers can walk through the home and really kicks the tires. The buy side also brings in an inspector that they trust. An inspector looks at EVERYTHING, from foundations to the roof to light switch plates to plumbing and beyond.
The results of the inspection are recorded and put into a report. There may be some issues with the home, and if so, that information will be turned over to the sellers. At this point, the seller may opt to fix the issue themselves or to strike a deal by reducing the sale price with the idea that the buyer will fix the issue after the transaction is complete.
Always remember: The buyer can back out of the deal during this period, for any reason.
9. Earnest Money
Think of this as your official statement of interest in buying a home. This is the money the buyer puts down when they have a serious intent for purchasing a home. If the buyer pulls out of the deal after the financing and appraisal deadlines are met, the seller keeps the earnest money. This helps keep everyone committed and honest. This money goes toward your purchase of the home in the end but until that point, it is held in escrow.
Closing is when you close the deal and officially buy or sell a home. Money changes hands, you sign lots of paperwork, you finalize your loan, you’re a homeowner. Congrats! You just closed on your home. This part of the process can be a bit time consuming. Stretch your wrists and practice your autograph because you’ll be doin’ a lot of signing. There will be a title and escrow company that works with your real estate agent to make it simple.
11. BONUS: Homie
Here at Homie, we are making home buying and selling simpler, affordable, and transparent. We are doing away with high commissions and helping people buy and sell for less moola. Every buyer and seller has a dedicated team of agents, attorneys, and other real estate professionals on their side to help them find and buy their dream home or sell their current one. We’ve got your back.
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