For many first-time homebuyers, knowing common real estate terms can help prevent the feeling of information overload. Once you learn the language real estate agents use, you may feel much more comfortable in your quest to find your dream home.
Here are some helpful real estate terms to know:
You’re likely to encounter the term “contingent” when house hunting on major search engines or a multiple listing service.
This word shows up as a status on listings where a prospective buyer or buyer’s agent has made an offer and the property owners, or sellers and seller’s agent, has accepted the offer.
However, contingent status indicates there are additional criteria for the closing of the sale, such as additional home inspections, appraisals or mortgage approval.
Escrow refers to a third party temporarily holding on to a portion of money involved in the property sale. The money is typically held in a dedicated escrow account, and during this time the house might be referred to as “in escrow.”
Escrow accounts are a tool used to mitigate financial risk for both the homebuyer and home seller during the real estate transaction.
Earnest money is the money added to an escrow account or trust as a sign of good faith in the transaction. A seller might require earnest money as a way to ensure the buyer is sufficiently motivated and qualified to go through with the purchase.
While it’s often added to the third-party account early in the process, earnest money is entirely different from a down payment.
There are many types of “value” in the real estate lexicon, but appraisal value specifically refers to the results of a professional appraisal.
The key difference between appraisal value and other property value terms like “fair market value” and “assessed value” is the appraisal value is based on a specific time point (typically during the sale or refinancing process). This means appraisal values can change over time and from one appraisal to the next.
Closing costs are the final expenses due at the end of the home-buying process. Some services you’ll need to pay for as part of the closing costs include credit reports, mortgage insurance, property taxes, homeowners association dues and legal processing fees.
Closing costs are separate from monthly mortgage payments, but are often paid to your mortgage lender.
While these are only a few important terms to know, they can be extremely helpful in understanding both complex and basic real estate concepts. The more you develop your real estate vocabulary, the better your home search experience will be.
For any other real estate terms you may have come across and have questions about, your real estate agent will be able to help break them down into more digestible tidbits.
Susan Shuxian Hu has been a dedicated realtor serving in Silicon Valley since 2010. With great passion, outstanding negotiation skills and due diligence, she has helped many buyers and sellers in their real estate needs. Living in West San Jose for more than 14 years, she has broad knowledge in Cupertino, West San Jose, Los Altos and Saratoga. She has enormous patience working with buyers and never tired of showing all possible properties that may fit client’s needs. Clients appreciate her best service to their satisfaction. She specialized in luxurious real estate purchase in Los Altos, Cupertino, Saratoga and Palo Alto. She also helped friend and past client’s referral working in San Francisco, Foster City and far reached Bay Area.
Susan Shuxian Hu was graduated in East China Normal University in Shanghai with bachelor and master degrees in Bio science. She came to US in 1989 and earned her Ph.D. in Molecular Genetics in Texas A&M University in 1996. After one year of postdoc in Southern Florida University in Tampa, she moved back to Orlando with her family and started working in Lucent Technologies. In 2002, Susan moved to California, Silicon Valley joined a start-up company. Since then she worked in high tech Corporation till 2009. Driven by her dream job pursuing, she found her passion working in sales by helping people in real estate after one year of education in De Anza business and real estate law study. Since then, she has been serving many people in Bay Area for their real estate needs.
With bilingual advantage, she has been actively working with Chinese immigrants as well as local engineers and residents. With rich high tech background and connection with Chinese community, Susan has served in luxurious real estate in last a couple of years.