Real Estate Terms Made Simple

Dated: October 17 2018

Views: 97

Every industry has its own jargon and real estate is no exception. Real Estate Professionals are used to using these terms but sometimes, we forget that consumers might be in the dark! So, if you are buying or selling real estate, here is a list of the most common terms used.

Addendum - a form used to make changes to the purchase agreement after it's been accepted by both the buyer and the seller. 

Appraisal - a report of the estimated value of the property from a qualified third party to ensure it is worth its price.

Closing - the official recording by the County's Recorder's Office of the property's transfer to the new owner.

Counteroffer - a response submitted when the seller doesn’t agree with the terms of the purchase agreement.

Disclosures - forms used to disclose information that may affect the homes' comfort, enjoyment and safety. In Alaska, the most important disclosure is the Residential Real Property Transfer Disclosure Statement.

Earnest Money Deposit - the deposit of money submitted after the offer has been accepted to let the seller know you are earnest to purchase the home. This will generally be applied to the down payment or closing costs in closing.

Escrow - the disinterested party that holds and distributes purchase funds in accordance with the demands of the agreement. It can also be referred as the period from contract writing and acceptance.

Equity - the difference between the market value and what is owed on the home.

MLS – means Multiple Listing Service where real estate properties available are listed for sale.

PITI – it’s just the short for the components of mortgage payment - principle, interest, taxes and insurance.

Preapproval - the initial evaluation from the preliminary financial information of how much a buyer may be qualified to borrow. This is not a guarantee of loan approval but can give seller more confidence with the buyer.

RESPA – the Real Estate Settlement Procedures Act of 1974 that requires lenders to provide borrowers a disclosure of the loan costs in a timely manner.

Title - legal document highlighting the current and proper ownership of the property including its ownership and transfers. It can also be referred as a Title Deed.

Underwriting - evaluation of the buyer's financial ability to obtain and repay the loan which normally includes credit check and property appraisal.

Knowing these terms will help you understand crucial parts of real estate transactions. Knowing is always better. And most importantly, hiring a real estate professional who is not only knowledgeable in the Alaska Real Estate Market but also truly cares to guide and help you in every step of the way is essential to a stress-free and smooth transaction.

We’d love to help you buy or sell real estate. Call (907) 570-6757 or 907-720-4663. 

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Homes by Vanna

Vanna has called Alaska home for the past 15 years. As a mother, real estate investor and previous business owner, Vanna brings many different perspectives when working for her clients. She has been a....

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