Top 10 Real Estate Terms to Know
New to the home search? Here are some terms that will come up that you may be helpful to know:
Let's start with the basics!
Selling Broker: If you are a buyer, your agent is the 'selling broker.' At first it sounds a little backwards, but think of it as the buyer's broker is the one that is showing the homes and really 'selling' the properties to their buyers.
Listing Broker: Also called the 'listing agent,' this agent is contracted to help the seller sell their home! When a property is posted on the NWMLS to be sold, it is called a 'listing,' so the agent who manages that listing is the 'listing agent.' The listing agent can be a helpful resource for information, and if you are interested in that listing, your own agent will be communicating with them regularly.
Showing: If you have found a listing online that you want to see in person, you can talk to your agent about booking a private time slot to view the property together. Showings are typically 15-30 minutes long, and they provide a great opportunity to walk the property in person and see if it would be a good fit for you.
As a you move along in the home buying process, you might hear these terms come up:
Seller Pre-Inspection: A seller will sometimes pay an inspector to do a ‘pre-inspection’ of the home so that they have something to share with prospective buyers. This can help streamline the home-buying process for everyone.
Offer Review Date: Sometimes a seller will decide to ask all prospective buyers to submit offers on the same day and review them all at once. Always be sure to have your agent reach out to the listing agent to make sure that they will be honoring the review date or see if they are willing to accept early offers.
Rent Back: If the sellers need more time in the home after the sale closes, they will sometimes ask for a rent back. This is an additional clause in the agreement that dictates how long they are allowed to rent the property back from the new sellers, how much rent will be charged, and anything else that needs to be clarified.
Seller Disclosure: Form 17 is a disclosure that the sellers fill out to be best of their ability. It is required for every residential transaction. This is a great way to find out what defects are already known about the property.
Earnest Money: Getting ready to put in an offer on a home? Part of your offer will be your earnest money, a sum of money provided by the buyer before closing that is typically held by the closing agent (escrow). This money is considered to be the 'good faith deposit,' meaning that if for some reason you were to back out of the deal, the seller would get to keep your earnest money. Depending on the purchase price, a rule of thumb for earnest money is to put down 2%-3%.
Escrow: Who/what is escrow? Also referred to as the closing agent, escrow is a neutral third party that holds the earnest money/other funds until the purchase and sale agreement has been fulfilled, and handles the final closing documents.
Contingencies: When writing up an offer, there is the opportunity to include various contingencies, or stipulations, that are required to be met for further steps to happen. Some of the more common contingencies are financing, inspection, or title contingencies.
We hope these explanations help you navigate the world of real estate.
Questions? Reach out in the comments section below or send a message to Sarah Leland directly!
Written by Sarah Leland
Sarah Leland grew up in Seattle and is proud to call it her home. Sarah is a real estate broker for RPA and enjoys helping clients find their perfect home, as well as using her marketing expertise to help sellers properly promote their property. Reach out with any questions and she will be happy to help!