Basic real estate terms that homebuyers should be familiar with.
If you are buying a home for the first time, then the whole process can seem very overwhelming and intimidating. This is especially true if you don’t understand every other word coming out of your realtor’s mouth. To ensure that you know what’s going on, here are some of the common real estate terms that homebuyers should know.
- Appraisal– An impartial opinion about a home’s value based on data from comparable homes in the area. Appraisals are made by a licensed and certified home appraiser.
- Buyer’s market– Real estate market condition that indicates that the number of homes for sale is greater than the number of buyers. In a buyer’s market, homes remain on the market for a long time, and home prices drop.
- Closing– A meeting where ownership of the home is transferred from seller to buyer. A closing is usually attended by the buyer, the seller, the real estate agents representing both parties, and the lender.
- Down payment– The portion of the home’s purchase price that the buyer must pay up-front. The minimum down payment amount is dependent on the type of loan the buyer has secured.
- Earnest money– A security deposit made by the buyer to assure the seller of their intent to purchase the home.
- Equity– The percentage of the home’s value owned by the homeowner.
- In escrow– A period of time after the buyer has made an offer on the home and the seller has accepted. During this time, the home is inspected and appraised, and the title is searched for liens.
- Seller’s market– Real estate market condition that indicates that the number of buyers is greater than the number of homes for sale. In a seller’s market, home prices go up, and bidding wars are common.
These are some of the common real estate terms that homebuyers should know. Are you getting ready to close on your dream home? Then make sure you have the right homeowners insurance to protect your investment. For assistance with all your home coverage needs, contact the experts at Phocus Insurance in Phoenix, Arizona, today.
